<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
COMMISSION FILE NUMBER 1-9329
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PULITZER PUBLISHING COMPANY
(Exact name of registrant as specified in its charter)
------------------------------
DELAWARE 430496290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
900 NORTH TUCKER BOULEVARD, ST. LOUIS, MISSOURI 63101
(Address of principal executive offices)
(314) 340-8000
(Registrant's telephone number, including area code)
NO CHANGES
(Former name, former address and former fiscal year, if changed since last
report)
------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
YES /X/ NO / /
------------------------------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING 4/30/96
-------------------- --------------------------
COMMON STOCK 4,742,432
CLASS B COMMON STOCK 11,669,412
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<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
<TABLE>
<CAPTION>
First Quarter Ended
March 31,
-----------------------
OPERATING REVENUES - NET: 1996 1995
------ ----
<S> <C> <C>
Publishing: (Unaudited)
Advertising $39,913 $37,954
Circulation 19,039 18,776
Other 7,237 7,071
Broadcasting 49,517 44,722
------- -------
Total operating revenues 115,706 108,523
------- -------
OPERATING EXPENSES:
Publishing operations 32,938 28,576
Broadcasting operations 16,271 15,613
Selling, general and administrative 39,492 37,871
St. Louis Agency adjustment 1,758 3,288
Depreciation and amortization 6,741 6,709
------- -------
Total operating expenses 97,200 92,057
------- -------
Operating income 18,506 16,466
Interest income 1,428 1,259
Interest expense (2,389) (2,712)
Net other expense (708) (457)
------- -------
INCOME BEFORE PROVISION FOR INCOME
TAXES 16,837 14,556
PROVISION FOR INCOME TAXES 6,596 5,703
------- -------
NET INCOME $10,241 $8,853
======= ======
EARNINGS PER SHARE OF STOCK
(COMMON AND CLASS B COMMON): $ 0.62 $ 0.54
======= ======
WEIGHTED AVERAGE NUMBER OF SHARES
(COMMON AND CLASS B COMMON STOCK)
OUTSTANDING 16,398 16,290
======= ======
</TABLE>
See notes to consolidated financial statements.
2
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PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $112,569 $100,380
Trade accounts receivable (less allowance for doubtful
accounts of $2,192 and $2,009) 59,885 64,524
Inventory 4,987 6,190
Prepaid expenses and other 8,624 7,041
Program rights 6,209 8,824
-------- --------
Total current assets 192,274 186,959
-------- --------
PROPERTIES:
Land 11,781 11,779
Buildings 60,999 60,794
Machinery and equipment 174,550 173,165
Construction in progress 11,722 8,745
-------- --------
Total 259,052 254,483
Less accumulated depreciation 140,069 135,296
-------- --------
Properties - net 118,983 119,187
-------- --------
INTANGIBLE AND OTHER ASSETS:
Intangible assets - net of applicable amortization 115,566 117,470
Receivable from The Herald Company 42,918 43,696
Other 32,000 27,761
-------- --------
Total intangible and other assets 190,484 188,927
-------- --------
TOTAL $501,741 $495,073
======== ========
</TABLE>
(Continued)
3
<PAGE> 4
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---------- -----------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $12,627 $14,145
Current portion of long-term debt 14,250 14,250
Salaries, wages and commissions 9,822 11,757
Income taxes payable 7,275 2,618
Program contracts payable 6,386 8,664
Interest payable 2,287 3,415
Pension obligations 1,023 1,023
Other 4,878 2,234
-------- ---------
Total current liabilities 58,548 58,106
-------- ---------
LONG-TERM DEBT 114,500 114,500
-------- ---------
PENSION OBLIGATIONS 25,362 24,631
-------- ---------
POSTRETIREMENT AND POSTEMPLOYMENT
BENEFIT OBLIGATIONS 93,334 92,856
-------- ---------
OTHER LONG-TERM LIABILITIES 5,404 6,209
-------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 25,000,000 shares
authorized; issued and outstanding - none
Common stock, $.01 par value; 100,000,000 shares authorized;
issued - 4,754,340 in 1996 and 4,704,268 in 1995 47 47
Class B common stock, convertible, $.01 par value; 50,000,000
shares authorized; issued - 20,445,050 in 1996 and
20,474,050 in 1995 205 205
Additional paid-in capital 126,036 125,539
Retained earnings 266,141 260,816
-------- ---------
Total 392,429 386,607
Treasury stock - at cost; 16,975 and 16,712 shares of common
stock in 1996 and 1995, respectively, and 8,775,638 shares of
Class B common stock in 1996 and 1995 (187,836) (187,836)
-------- ---------
Total stockholders' equity 204,593 198,771
-------- ---------
TOTAL $501,741 $495,073
======== =========
</TABLE>
(Concluded)
See notes to consolidated financial statements.
4
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PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
First Quarter Ended
March 31,
--------------------
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $10,241 $8,853
Adjustments to reconcile net income to net cash provided by
operating activities:
Non-cash items:
Depreciation 4,781 4,743
Amortization of intangibles 1,960 1,966
Incremental increase in postretirement and postemployment
benefit obligations 478 518
Changes in assets and liabilities which provided (used) cash:
Trade accounts receivable 4,640 4,185
Inventory 1,203 (1,996)
Other assets (414) (380)
Trade accounts payable and other liabilities (3,787) (2,588)
Income taxes payable 4,657 336
Program rights - net of contracts payable (46) 82
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 23,713 15,719
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,570) (5,247)
Increase in notes receivable (4,993) 215
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (9,563) (5,032)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (2,458) (2,206)
Proceeds from exercise of stock options 497 781
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (1,961) (1,425)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 12,189 9,262
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 100,380 77,084
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $112,569 $ 86,346
======== ========
</TABLE>
See notes to consolidated financial statements.
5
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PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ACCOUNTING POLICIES
Interim Adjustments - In the opinion of management, the accompanying
unaudited consolidated financial statements contain all adjustments,
consisting only of normal recurring adjustments, necessary to present
fairly Pulitzer Publishing Company's financial position as of March 31,
1996 and the results of operations and cash flows for the three month
periods ended March 31, 1996 and 1995. Results of operations for interim
periods are not necessarily indicative of the results to be expected for
the full year.
Fiscal Year and Fiscal Quarters - The Company's fiscal year and first
fiscal quarter end on the Sunday coincident with or prior to December 31
and March 31, respectively. For ease of presentation, the Company has
used December 31 as the year end and March 31 as the first quarter end.
Earnings Per Share of Stock - Earnings per share of stock have been
computed using the weighted average number of common and Class B common
shares outstanding during the applicable period.
2. DIVIDENDS
In the first quarter of 1995, two dividends of $0.135 per share were
declared, payable on February 1, 1995 and May 1, 1995. In the second
quarter of 1995, a dividend of $0.135 per share was declared, payable on
August 1, 1995. In the third quarter of 1995, a dividend of $0.135 per
share was declared, payable on November 1, 1995. In the first quarter of
1996, two dividends of $0.15 per share were declared, payable on February
1, 1996 and May 1, 1996.
In addition, a five-for-four stock split (payable in the form of a 25
percent common and Class B common stock dividend) was declared by the
Company's Board of Directors on January 4, 1995. The dividend was
distributed on January 24, 1995 to stockholders of record on January 13,
1995.
6
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PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. BUSINESS SEGMENTS
The Company's operations are divided into two business segments, publishing
and broadcasting. The following is a summary of operating data by segment
(in thousands):
<TABLE>
<CAPTION>
First Quarter Ended
March 31,
-----------------------
1996 1995
----- -----
(Unaudited)
<S> <C> <C>
Operating revenues:
Publishing $ 66,189 $ 63,801
Broadcasting 49,517 44,722
-------- --------
Total $115,706 $108,523
======== ========
Operating income (loss):
Publishing $ 4,798 $ 6,154
Broadcasting 14,995 11,372
Corporate (1,287) (1,060)
-------- --------
Total $ 18,506 $ 16,466
======== ========
Depreciation and amortization:
Publishing $ 1,122 $ 1,017
Broadcasting 5,619 5,692
-------- --------
Total $ 6,741 $ 6,709
======== ========
Operating margins
(Operating income to revenues):
Publishing (a) 9.9% 14.8%
Broadcasting 30.3% 25.4%
</TABLE>
(a) Operating margins for publishing stated with St. Louis Agency
adjustment added back to publishing operating income.
7
<PAGE> 8
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. ACQUISITION OF PROPERTIES
Subsequent to the end of the first quarter, on May 4, 1996, the Company
entered into an agreement to purchase the stock of Scripps League
Newspapers, Inc. ("SLN"), a privately owned company that publishes 16 daily
newspapers serving smaller cities, primarily in the West and Midwest, and a
number of non-daily publications. The purchase includes all of the
operating assets of the newspapers as well as working capital and
intangibles. The agreement gives SLN the option of excluding three smaller
daily newspapers and two non-daily publications from the sale and is
subject to various closing conditions. Depending upon the actual number of
papers the Company purchases, the purchase price will range from $230
million to $240 million, including about $25 million in working capital. It
is anticipated that the SLN acquisition will be financed by a combination
of cash and borrowings from banks and an institutional lender. The Company
anticipates a July 1, 1996 closing date for the acquisition.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's operating revenues are significantly influenced by a number
of factors, including overall advertising expenditures, the appeal of
newspapers, television and radio in comparison to other forms of advertising,
the performance of the Company in comparison to its competitors in specific
markets, the strength of the national economy and general economic conditions
and population growth in the markets served by the Company.
The Company's business tends to be seasonal, with peak revenues and
profits generally occurring in the fourth and, to a lesser extent, second
quarters of each year as a result of increased advertising activity during the
Christmas and spring holiday periods. The first quarter is historically the
weakest quarter for revenues and profits.
CONSOLIDATED
Operating revenues for the first quarter of 1996 increased 6.6 percent, to
$115.7 million from $108.5 million for the first quarter of 1995. The increase
reflected gains in both broadcasting and publishing revenues.
Operating expenses, excluding the St. Louis Agency adjustment, for the
1996 first quarter increased 7.5 percent, to $95.4 million from $88.8 million
in the first quarter of 1995. The increase was primarily attributable to
increased newsprint costs of $3.1 million and higher overall personnel costs of
$2.1 million.
Operating income in the 1996 first quarter increased 12.4 percent, to
$18.5 million from $16.5 million in the first quarter of 1995. The 1996
increase reflected higher operating income in the broadcasting segment,
resulting from increased advertising revenues.
Interest expense decreased to $2.4 million in the 1996 first quarter from
$2.7 million in the first quarter of 1995 due to lower debt levels. The
Company's average debt level for the 1996 first quarter decreased to $128.8
million from $143 million in the first
9
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quarter of 1995. The Company's average interest rate for the first quarter of
1996 decreased slightly to 7.4 percent from 7.6 percent in the 1995 first
quarter. Interest income increased $169,000 due to a higher average balance of
invested funds in the 1996 first quarter.
The effective income tax rate for the first quarter of 1996 was 39.2
percent, unchanged from the prior year first quarter. It is expected that, on
an annual basis, the effective tax rate for 1996 will be in the 39 percent
range, approximately the same as the effective rate for the full year of 1995.
Net income in the 1996 first quarter increased 15.7 percent to $10.2
million, or $0.62 per share, compared with $8.9 million, or $0.54 per share, in
the first quarter of 1995. The gain in net income reflected an increase in the
broadcasting segment's operating profits, primarily as a result of higher
advertising revenues.
PUBLISHING
Operating revenues from the Company's publishing segment for the first
quarter of 1996 increased 3.7 percent, to $66.2 million from $63.8 million in
the first quarter of 1995. The increase reflected higher advertising revenues,
particularly classified, at both newspaper properties.
Newspaper advertising revenues increased $2 million (5.2 percent) in the
first quarter of 1996. Higher advertising volume generated $1.9 million of the
1996 first quarter increase while slightly higher average rates contributed
approximately $100,000. The average rates for the 1996 first quarter were
affected by a significant increase in part run advertising inches which more
than offset declines in full run inches. In the first quarter of 1995, both
the St. Louis Post-Dispatch ("Post-Dispatch") and The Arizona Daily
Star ("Star") implemented rate increases for most advertising categories,
ranging from 4 percent to 6 percent and 6 percent to 8 percent, respectively.
In November 1995, additional rate increases, ranging from 7.5 percent to
9.5 percent, were implemented at the Star. On January 1, 1996, rate increases,
averaging 6 percent for
10
<PAGE> 11
most advertising categories, were implemented at the Post-Dispatch.
Circulation revenues increased $263,000 (1.4 percent) in the first quarter
of 1996. The benefit ($785,000) of circulation price increases was offset by
revenue declines ($522,000) due to average circulation decreases. Average
daily and Sunday circulation of the Post-Dispatch for the first quarter of 1996
was 322,221 and 540,850 compared to 333,212 and 555,693 for the corresponding
1995 period, decreases of 3.3 percent and 2.7 percent, respectively. Effective
February 5, 1995, the home-delivered price of the Sunday Post-Dispatch was
increased $1.00 per month. In addition, the home-delivered price of the daily
Star was increased $0.80 per month, effective March 27, 1995. Operating
expenses (including selling, general and administrative expenses and
depreciation and amortization) for the publishing segment, excluding the St.
Louis Agency adjustment, increased 9.7 percent to $59.6 million for the 1996
first quarter compared to $54.4 million for the same period in the prior year.
The higher expense resulted primarily from increased newsprint cost of $3.1
million, reflecting the impact of newsprint price increases, and higher overall
personnel costs of $1.2 million. Operating income from the Company's publishing
activities for the first quarter of 1996 decreased 22 percent to $4.8 million
from $6.2 million due primarily to increased newsprint cost which exceeded
revenue gains for the quarter .
Higher newsprint prices added approximately $3.1 million to 1996
first-quarter newsprint expense ($1.7 million after giving effect to the St.
Louis Agency adjustment). Since the most recent price increase on September 1,
1995, the Company's average cost per metric ton for newsprint has remained in
the range of $745. The Company has negotiated somewhat lower prices with some
of its newsprint suppliers effective June 1, 1996. On a 52-week basis, the
Company's 1995 annual newsprint cost and metric tons consumed, after giving
effect
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to the St. Louis Agency adjustment, were approximately $31.5 million and 46,700
tons, respectively.
BROADCASTING
Broadcasting operating revenues for the first quarter of 1996 increased
10.7 percent, to $49.5 million from $44.7 million in the first quarter of 1995.
Local and national spot advertising increased 8.8 percent and 15.4 percent,
respectively. The first quarter of 1996 included increased political
advertising of approximately $1.2 million.
Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) for the first
quarter of 1996 increased 3.5 percent, to $34.5 million from $33.4 million in
the first quarter of the prior year. The increase was primarily attributable to
higher overall personnel costs of $1 million.
Operating income from the broadcasting segment increased 31.9 percent to
$15 million from $11.4 million, due to increased advertising revenues.
LIQUIDITY AND CAPITAL RESOURCES
Outstanding debt, inclusive of the short-term portion of long-term
debt, as of March 31, 1996, was $128.8 million, unchanged from the balance at
December 31, 1995. The Company's borrowings consisted of fixed-rate senior
notes with The Prudential Insurance Company of America ("Prudential"). On
April 22, 1996, the Company made a scheduled repayment of $14.3 million under
its Senior Note Agreement maturing in 1997.
The Company's Senior Note Agreements with Prudential require it to
maintain certain financial ratios, place restrictions on the payment of
dividends and prohibit new borrowings, except as permitted thereunder.
On May 4, 1996, the Company entered into an agreement to purchase the
stock of Scripps League Newspapers, Inc. ("SLN"), a privately owned company
that publishes 16 daily newspapers serving smaller cities, primarily in the
West and Midwest, and a
12
<PAGE> 13
number of non-daily publications. The agreement gives SLN the option
of excluding three smaller daily newspapers and two non-daily publications from
the sale and is subject to various closing conditions. Depending upon the
actual number of papers the Company purchases, the purchase price will range
from $230 million to $240 million, including about $25 million in working
capital. It is anticipated that the SLN acquisition will be financed by a
combination of cash and borrowings from banks and an institutional lender.
As of March 31, 1996, commitments for capital expenditures were
approximately $8.2 million, relating to normal capital equipment replacements.
Capital expenditures to be made in fiscal 1996 are estimated to be
approximately $22 million. Commitments for film contracts and license fees as
of March 31, 1996 were approximately $27.3 million. In addition, as of March
31, 1996, the Company had capital contribution commitments of approximatley
$6.3 million related to investments in two limited partnerships.
At March 31, 1996, the Company had working capital of $133.7 million
and a current ratio of 3.28 to 1. This compares to working capital of $128.9
million and a current ratio of 3.22 to 1 at December 31, 1995. The Company
generally expects to generate sufficient cash from operations to cover ordinary
capital expenditures, film contract and license fees, working capital
requirements, debt installments and dividend payments.
13
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PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On May 4, 1996, the Company entered into an agreement to purchase the
stock of Scripps League Newspapers, Inc. ("Scripps League"). Summary
information concerning the acquisition is included in Note 4 to the
Consolidated Financial Statements included in Item 1 of this report. The terms
of the purchase are more fully described in the Stock Purchase Agreement filed
as Exhibit 2 of this report.
Financial statements and pro forma financial information related to the
Scripps League acquisition required by Item 7. (a) and (b) of the Securities
and Exchange Act Form 8-K are not available at the time of this filing but will
be filed within 60 days.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this report:
2 Stock Purchase Agreement by and among Pulitzer Publishing Company
and Mr. Edward W. Scripps, Mrs. Betty Knight Scripps, and the
Edward W. Scripps and Betty Knight Scripps Charitable Remainder
Unitrust dated as of May, 4, 1996
27 Financial Data Schedule
(b) Reports on Form 8-K. The Company did not file any reports on Form 8-K
during the quarter for which this report was filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PULITZER PUBLISHING COMPANY
(Registrant)
Date: May 15, 1996 /s/ Ronald H. Ridgway
---------------------------------------
(Ronald H. Ridgway)
Director; Senior Vice-President-Finance
(on behalf of the Registrant and
as principal financial officer)
14
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EXHIBIT INDEX
EXHIBIT NUMBER TITLE OR DESCRIPTION
2 Stock Purchase Agreement by and among Pulitzer Publishing
Company and Mr. Edward W. Scripps, Mrs. Betty Knight
Scripps,and The Edward W. Scripps and Betty Knight Scripps
Charitable Remainder Unitrust dated as of May 4, 1996.
27 Financial Data Schedule
15
<PAGE> 1
STOCK PURCHASE AGREEMENT
BY AND AMONG
PULITZER PUBLISHING COMPANY
AND
MR. EDWARD W. SCRIPPS
MRS. BETTY KNIGHT SCRIPPS, AND
THE EDWARD W. SCRIPPS AND
BETTY KNIGHT SCRIPPS
CHARITABLE REMAINDER UNITRUST
DATED AS OF MAY 4, 1996
<PAGE> 2
CONTENTS
<TABLE>
<S> <C>
ARTICLE I.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II.
PURCHASE AND SALE OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1 Transfer of the Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III.
THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.2 Deliveries by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3 Deliveries by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.4 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.6 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.7 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.8 Investment Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.9 Financial Ability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.1 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.4 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
SECTION 5.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.6 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.7 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.3 Company Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.4 No Conflict or Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.6 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.7 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.9 Legal Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Environmental Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Environmental Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(d) Release of Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . 23
(e) Underground Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(f) Asbestos, PCBs, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.12 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.13 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.14 Employee Benefit Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.15 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.16 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.17 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.18 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.19 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.20 Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.21 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.22 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.23 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.24 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.25 Computer Programs and Software . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.26 Family Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.27 No Illegal or Improper Transactions . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.28 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.29 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
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<TABLE>
<S> <C>
SECTION 6.30 Circulation, Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII.
CONDUCT OF BUSINESS PENDING THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.1 Maintenance of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.2 Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VIII.
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.1 Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.2 Certain Minority Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.3 Non-Stock Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.4 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.5 Filings; Other Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.6 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.7 Directors' and Officers' Indemnification. . . . . . . . . . . . . . . . . . . . . . 38
SECTION 8.8 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.9 Certain Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(a) Sales and Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Tax Returns and Payment of Taxes for Periods through the Closing Date . . . . . 40
(c) Tax Refunds and Credits. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(d) Indemnification for Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(e) Charitable Contribution and Net Operating Loss Carryforwards . . . . . . . . . 42
(f) Tax Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(g) Mutual Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.10 Excluded Assets and Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.11 Other Owned Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE IX.
CONDITIONS TO CONSUMMATION OF THE STOCK PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.1 Conditions to Each Party's Obligations . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.2 Conditions to Obligations of Sellers . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 9.3 Conditions to Obligations of Purchaser . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE X.
</TABLE>
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<TABLE>
<S> <C>
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.1 Termination by Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.2 Termination by Either Purchaser or the Scripps . . . . . . . . . . . . . . . . . . 47
SECTION 10.3 Termination by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.4 Termination by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.5 Effect of Termination and Abandonment . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XI.
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.1 Survival of Representations, Warranties and Agreements; Indemnification . . . . . 49
SECTION 11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.3 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.4 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.5 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.6 Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.8 Choice of Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.9 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.10 No Punitive Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.11 Drafting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.12 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.13 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.14 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.15 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.16 Severability; Validity; Parties in Interest . . . . . . . . . . . . . . . . . . . 58
SECTION 11.17 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
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<PAGE> 6
EXHIBITS
A. Exhibit 1.18(a) Form of General Escrow Agreement
B. Exhibit 1.18(b) Form of Ownership Escrow Agreement
C. Exhibit 3.2(g) Form of Release of Claims by Sellers against
each member of the Company Group
D. Exhibit 7.2(d) Form of Release of Claims by the Company Group
against Sellers
E. Exhibit 9.2(e) Form of Legal Opinion of Fulbright & Jaworski
L.L.P.
F. Exhibit 9.3(f) Form of Legal Opinion of Wilmer, Cutler &
Pickering
G. Exhibit 9.3(j) Form of Covenant Not To Compete
<PAGE> 7
SCHEDULES
1. Schedule 1.26 Knowledge of Company Group
2. Schedule 2.2 Ownership of Common Stock
3. Schedule 2.2(d) Working Capital Adjustments
4. Schedule 5.5 Seller Litigation
5. Schedule 6.1 Company Group
6. Schedule 6.3(a) Company Subsidiaries
7. Schedule 6.3(b) Minority and Other Interests
8. Schedule 6.3(c) Other Company Interests
9. Schedule 6.3(d) Company Non-Stock Interests
10. Schedule 6.3(g) Excluded Subsidiaries' Business
11. Schedule 6.5 Taxes
12. Schedule 6.6(a) Real Property (Owned)
13. Schedule 6.6(b) Real Property (Leased)
14. Schedule 6.6(c) Rights of Ingress and Egress
15. Schedule 6.6(d) Owned Real Property Compliance
16. Schedule 6.6(e) Owned Real Property Laws Compliance
17. Schedule 6.7 Personal Property
18. Schedule 6.8 Company Litigation
19. Schedule 6.9 Legal Compliance
20. Schedule 6.10 Environmental Matters
21. Schedule 6.11(a) & (b) Company Insurance
22. Schedule 6.12 Intellectual Property
23. Schedule 6.13 Labor Matters
24. Schedule 6.14(a) Company Plans
25. Schedule 6.14(b) Benefit Plan Issues
26. Schedule 6.14(c) Multiemployer Pension Plans
27. Schedule 6.14(d) Modifications to Plans and Arrangements
28. Schedule 6.14(e) Benefit Penalties and Returns
29. Schedule 6.14(i) Severance
30. Schedule 6.16 Certain Changes or Events
31. Schedule 6.17 Contracts
32. Schedule 6.18 Undisclosed Liabilities
33. Schedule 6.20 Prepaid Expenses
34. Schedule 6.21 Accounts Payable and Accrued Expenses
35. Schedule 6.23 Guarantees
36. Schedule 6.24 Bank Accounts
37. Schedule 6.25 Computer Programs and Software
38. Schedule 6.26 Family Contracts
39. Schedule 6.28 Certain Company Fees
40. Schedule 6.30 Circulation and Cash Flow
41. Schedule 7.2(c) Excluded Assets and Subsidiaries
42. Schedule 9.3(l) Certain Contracts and Obligations
<PAGE> 8
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of May 4, 1996, by and among Pulitzer Publishing Company, a Delaware
corporation ("Purchaser"), Mr. Edward W. Scripps, Mrs. Betty Knight Scripps
(collectively, Mr. and Mrs. Scripps are referred to herein as the "Scripps"),
and The Edward W. Scripps and Betty Knight Scripps Charitable Remainder
Unitrust (the "Trust" and, collectively with the Scripps, the "Sellers" and
each a "Seller").
WHEREAS, Scripps League Newspapers, Inc., a Delaware corporation (the
"Company"), is engaged primarily in the newspaper business through a network of
Subsidiaries (as hereinafter defined); and
WHEREAS, Sellers wish to sell, and Purchaser wishes to purchase, all of
the issued and outstanding shares of the Common Stock of the Company upon the
terms and subject to the conditions set forth in this Agreement; and
WHEREAS, the Board of Directors of Purchaser has approved the Stock
Purchase upon the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein, the parties hereto agree
as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used herein shall have the meanings ascribed to them in
Article I unless such terms are defined elsewhere in this Agreement.
1.1 "Acquisition Proposal" means any proposal to purchase or acquire any
equity securities or (except in the ordinary course of business) assets of, or
merge, combine or enter into any similar transaction with any member of the
Company Group.
1.2 "Action" means any action, suit, arbitration, inquiry, proceeding or
investigation.
1.3 "Cash Adjustment" has the meaning given it in Section 2.2(b) of this
Agreement.
1.4 "Closing" has the meaning given it in Section 3.1 of this Agreement.
<PAGE> 9
1.5 "Closing Date" has the meaning given it in Section 3.1 of this
Agreement.
1.6 "Code" means the Internal Revenue Code of 1986, as amended.
1.7 "Common Stock" means the Class A non-voting common stock, par value
$1.00, and Class B voting common stock, par value $1.00, of the Company.
1.8 "Company Business" means the newspaper business engaged in by the
Company Group as of the date of the Closing.
1.9 "Company Business Owned Real Property" has the meaning given to it in
Section 6.6(a) of this Agreement.
1.10 "Company Group" means the Company and the Subsidiaries other than the
Excluded Subsidiaries.
1.11 "Company Plan" means each "employee benefit plan" (as defined in
Section 3(3) of ERISA), whether or not subject to ERISA and any other employee
benefit, bonus, fringe benefit, deferred compensation, equity based
compensation, severance and welfare plan, employment or severance agreement and
any similar arrangement that is maintained or contributed to by any member of
the Company Group for the benefit of any employee or former employee or
director or former director of any member of the Company Group, in such
capacity, and any other plan for which any member of the Company Group could
incur liability under Section 412 of the Code or Title IV of ERISA other than
Multiemployer Pension Plans.
1.12 "Contracts" has the meaning given it in Section 6.17.
1.13 "Environmental Claims" means any and all claims, actions, causes of
action, or other written notices by any person or entity alleging potential
liability (including, without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or civil or criminal penalties) arising
out of or resulting from (i) the presence or release into the environment of
any Hazardous Material at any location, whether or not owned or operated by the
Company or any Subsidiary or any Seller, or (ii) circumstances forming the
basis of any violation of any Environmental Laws.
1.14 "Environmental Laws" means any and all applicable federal, state,
local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, judicial orders, decrees, codes, injunctions, permits,
consent decrees, consent orders and governmental
- 2 -
<PAGE> 10
restrictions, now in effect, relating to human health, the environment
or to emissions, discharges or releases of pollutants, contaminants, Hazardous
Materials or wastes into the environment, including without limitation ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Materials or
wastes or the clean-up or other remediation thereof.
1.15 "Environmental Permits" means any and all permits, licenses,
authorizations, certificates and approvals of governmental authorities relating
to or required by Environmental Laws and necessary or proper for the business
of the Company and the Subsidiaries as currently conducted.
1.16 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.17 "Escrow Agent" means NationsBank as escrow agent under the General
Escrow Agreement or Ownership Escrow Agreement, as the case may be.
1.18 "Escrow Agreements" means those certain escrow agreements,
substantially in the form of Exhibits 1.18(a) and (b), dated as of the Closing
Date, by and among the Scripps, Purchaser, and the Escrow Agent. The Escrow
Agreement in the form of Exhibit 1.18(a) is referred to herein as the "General
Escrow Agreement." The Escrow Agreement in the form of Exhibit 1.18(b) is
referred to herein as the "Ownership Escrow Agreement."
1.19 "Excluded Assets and Subsidiaries" means the assets and Subsidiaries
listed on Schedule 7.2(c).
1.20 "Excluded Subsidiaries" means the Subsidiaries listed on Schedule
7.2(c).
1.21 "Family Contracts" shall have the meaning given it in Section 6.26 of
this Agreement.
1.22 "GAAP" means generally accepted accounting principles.
1.23 "Government Entity" means any foreign, federal, state, or local court
or tribunal or administrative, governmental or regulatory body, agency,
commission, division, department, public body or other authority.
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<PAGE> 11
1.24 "Hazardous Materials" means any and all toxic, radioactive, caustic
or otherwise hazardous substances, including petroleum, its derivatives,
by-products and other hydrocarbons, and any and all substances having any
constituent elements displaying any of the foregoing characteristics,
including, without limitation, any and all substances regulated under
Environmental Laws.
1.25 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
1.26 "Knowledge of the Company Group" means to the actual knowledge of any
person who, as of the date of execution of this Agreement or the Closing Date,
as the case may be, is (i) an officer or director of any member of the Company
Group, (ii) the publisher of any newspaper published by any member of the
Company Group, or (iii) a person who is listed on Schedule 1.26.
1.27 "Knowledge of the Purchaser" means to the actual knowledge of any
officer or director of the Purchaser.
1.28 "Knowledge of a Seller" means to the actual knowledge of such Person.
1.29 "Laws" has the meaning given it in Section 6.6(e).
1.30 "Leased Real Property" has the meaning given it in Section 6.6(b) of
this Agreement.
1.31 "Lien" means any mortgage, security interest, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge, preference, priority or other security agreement, option, warrant,
attachment, right of first refusal, preemptive, conversion, put, call or other
claim or right, restriction on transfer (other than restrictions imposed by
federal and state securities laws), or preferential arrangement of any kind or
nature whatsoever (including any restriction on the transfer of any assets, any
conditional sale or other title retention agreement, any financing lease
involving substantially the same economic effect as any of the foregoing and
the filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction).
1.32 "Losses" has the meaning given it in Section 11.1(b)(i).
1.33 "Material Adverse Effect" means a material adverse effect on the
business, assets, liabilities, revenues, costs and expenses, income before
provision for income taxes, operations or condition, financial or otherwise, of
the members of the Company Group taken as a whole, other than changes or
effects resulting from (i) changes attributable to
- 4 -
<PAGE> 12
conditions affecting the newspaper business generally, (ii) changes in
general economic conditions, (iii) cyclical changes that are consistent with
the past operating history of the Company Business, or (iv) changes
attributable to the announcement or pendency of this transaction. In
determining whether any individual event would result in a Material Adverse
Effect, notwithstanding that such event does not of itself have such effect, a
Material Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other then existing events would result in a
Material Adverse Effect.
1.34 "Multiemployer Pension Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
1.35 "Owned Real Property" shall have the meaning given it in Section
6.6(a) of this Agreement.
1.36 "Person" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
Government Entity.
1.37 "Personal Property" shall have the meaning given it in Section 6.7 of
this Agreement.
1.38 "Purchaser Benefit Plan" means any "employee benefit plan" (as
defined in Section 3(3) of ERISA), and all other employee benefit, bonus, and
fringe benefit plans, programs, or agreements of the Purchaser in effect as of
the date hereof.
1.39 "Purchase Price" has the meaning given it in Section 2.2(a) of this
Agreement.
1.40 "Stock Purchase" means the purchase of Common Stock by Purchaser from
Sellers under this Agreement.
1.41 "Subsidiaries" means the subsidiaries of the Company listed in
Schedule 6.3(a).
1.42 "Taxes" means any and all taxes, levies or other like assessments,
charges or fees (including estimated taxes, charges and fees), including,
without limitation, income, corporation, add-on minimum, ad valorem, advance
corporation, gross receipts, transfer, excise, property, sales, use,
value-added, license, payroll, employment, severance, pay as you earn,
withholding on amounts paid by or to the relevant party, social security and
franchise or other governmental taxes or charges, imposed by the United States
or any state, county, local or foreign government or subdivision or agency
thereof; and such term shall include any interest, penalties or additions to
tax attributable to such taxes.
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<PAGE> 13
1.43 "Tax Return" means any report, return, statement or other written
information required to be supplied to a taxing authority in connection with
Taxes.
1.44 "Working Capital Adjustment" has the meaning given it in Section
2.2(c) of this Agreement.
ARTICLE II.
PURCHASE AND SALE OF COMMON STOCK
SECTION 2.1 Transfer of the Common Stock. Upon the terms and subject
to the conditions hereof, at the Closing, Purchaser will purchase from Sellers,
and Sellers will sell, transfer and deliver to Purchaser, all of their
respective shares of Common Stock for their respective pro rata portions of the
Purchase Price specified in Section 2.2, free and clear of all Liens.
SECTION 2.2 Purchase Price. Subject to the following sentence,
Purchaser agrees to pay to Sellers the Purchase Price (as hereinafter defined)
by wire transfer or other delivery of immediately available funds at the
Closing. Of the Purchase Price payable to the Scripps, Ten Million Dollars
($10,000,000.00) shall be deposited by Purchaser at the Closing with the Escrow
Agent pursuant to the General Escrow Agreement, and Eleven Million Dollars
($11,000,000.00) shall be deposited by Purchaser at the Closing with the Escrow
Agent pursuant to the Ownership Escrow Agreement. The Purchase Price shall be
allocated among Sellers as indicated in Schedule 2.2 (as amended by written
agreement of Sellers from time to time). As used in this Agreement, the
following terms have the following meanings:
(a) "Purchase Price" means the result obtained by: (i) adding Two
Hundred Fifteen Million Dollars ($215,000,000.00); (ii) adding the Cash
Adjustment; (iii) adding the Working Capital Adjustment; (iv) subtracting
long-term debt, net of long-term debt due within one year, of the Company Group
as of the Closing Date, as determined by the Company from the Company Group's
books and records; (v) subtracting One Million Six Hundred Thousand Dollars
($1,600,000.00) if Scripps Marin Publishing Co. is an Excluded Subsidiary; (vi)
subtracting Four Million Three Hundred Thousand Dollars ($4,300,000.00) if
Scripps Vermont Publishing Co. is an Excluded Subsidiary; (vii) subtracting One
Million One Hundred Thousand Dollars ($1,100,000.00) if Record-Gazette, Inc. is
an Excluded Subsidiary; (viii) subtracting One Million Eight Hundred
Thirty-five Thousand Dollars ($1,835,000.00) if Perry County Publishing Co. is
an Excluded Subsidiary; (ix) subtracting One Million Four Hundred Fifty
Thousand Dollars ($1,450,000.00) if Midway Driller, Inc. is an Excluded
Subsidiary; and (x) subtracting any amounts reserved on the Closing Date
Balance Sheet (as
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<PAGE> 14
defined below) for buying out or acquiring the Minority Owned Shares (as
defined in Section 6.3(e)) or Common Stock held by (or formerly held by)
persons other than Sellers and not otherwise included in clauses (iii) or (iv)
of this Section 2.2(a).
(b) "Cash Adjustment" means the amount of cash on hand in the Company
Group's accounts as of the Closing Date. For purposes of the Closing, the
amount of the Cash Adjustment shall be estimated on the basis of the most
current information then available and the Purchase Price shall be calculated
on the basis of that estimate, but $325,000 of the Purchase Price shall be held
in escrow under the General Escrow Agreement pending a final determination of
the Cash Adjustment. The final amount of the Cash Adjustment shall be
determined by the Company from the Company Group's books and records and
reported in writing to all parties hereto within thirty (30) days after the
Closing Date. Purchaser and the Scripps shall have the right, upon written
request made within five (5) business days after receiving such report, to
review or have its auditors review the Company's determination of the final
amount of the Cash Adjustment, including the books and records on which such
determination was based. If Purchaser or the Scripps disagree with the
Company's determination of the final amount of the Cash Adjustment, they shall
meet to attempt to resolve such disagreement. If any such disagreement remains
unresolved as of the thirtieth (30th) day after receipt of the report, the
final amount of the Cash Adjustment shall be determined by a firm of
nationally-recognized, independent auditors selected jointly by Purchaser and
the Scripps, and the decision of such auditors shall be final and binding on
all parties. Within five (5) business days after the Cash Adjustment is
finally determined, the escrowed funds shall be distributed and each party
shall make any additional payments necessary to place all parties in the
positions they would have occupied if the amount of the Cash Adjustment (as
finally determined) had been known on the Closing Date (without payment of
interest).
(c) "Working Capital Adjustment" means the result obtained by subtracting
the Company's consolidated Net Working Capital (as defined below) as reflected
in the Company's September 30, 1995 audited consolidated financial statements
from the Company's consolidated Net Working Capital on the Closing Date, in
each case after taking into account the pro forma balance sheet adjustments in
the manner contemplated by Schedule 2.2(d) (the "Pro Forma Adjustments"). For
purposes of the Closing, the amount of the Working Capital Adjustment shall be
estimated on the basis of the most current information then available and the
Purchase Price shall be calculated on the basis of that estimate.
(i) For purposes hereof, "Net Working Capital" means the difference
between (1) the consolidated pro forma Current Assets of the Company (as
defined below), excluding cash, after taking into account the Pro Forma
Adjustments and (2) the consolidated pro forma Current Liabilities of the
Company (as defined below), after taking into account the Pro Forma
Adjustments. For purposes hereof, "Current Assets of the Company" shall mean
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the sum of consolidated (A) trade accounts receivable (less allowance
for discounts and doubtful accounts), (B) income taxes receivable, (C) the
current portion of any deferred income tax asset, (D) notes receivable, (E)
newsprint inventory (reflected at actual cost thereof after giving effect to
all the discounts received with respect thereto), and (F) prepaid expenses made
in the ordinary course of business; and "Current Liabilities of the Company"
shall mean the sum of consolidated (G) accounts payable, (H) accrued
liabilities, (I) deferred subscription revenue, (J) long-term debt due within
one year, and (K) current income taxes payable, if any.
(ii) The final amount of the Working Capital Adjustment shall be
determined by the Company from the Company Group's books in accordance with
GAAP applied consistently with the Company's historical practices and, in
particular but without limitation, will include the Pro Forma Adjustments and
all other adjustments (including adjustments normally made at year-end)
necessary to present fairly the Net Working Capital on a pro forma basis as at
such time and date and shall be reported in writing to all parties hereto
within thirty (30) days after the Closing Date. Purchaser and the Scripps
shall have the right, upon written request made within five (5) business days
after receiving such report, to review or have its auditors review the
Company's determination of the final amount of the Working Capital Adjustment,
including the books and records on which such determination was based. If
Purchaser or the Scripps disagree with the Company's determination of the final
amount of the Working Capital Adjustment, they shall meet to attempt to resolve
such disagreement. If any such disagreement remains unresolved as of the
thirtieth (30th) day after receiving such report, the final amount of the
Working Capital Adjustment shall be determined by a firm of nationally
recognized independent auditors selected jointly by Purchaser and the Scripps,
and the decision of such auditors shall be final and binding on all parties.
If such auditing firm shall determine that any component of Net Working Capital
as of the Closing Date was calculated consistent with the Company's past
practice but was not in accordance with GAAP, it shall recalculate the Net
Working Capital as of September 30, 1995 so as to bring that amount in
accordance with GAAP and the Working Capital Adjustment shall be determined as
the difference between such recalculated amounts (it being the parties' intent
that the Working Capital Adjustment be used to take into account certain
changes in the Company's working capital position between September 30, 1995
and the Closing Date, and that claims that the Company's financial statements
were not prepared in accordance with GAAP shall be resolved through
indemnification for a breach of a representation or warranty contained in
Article VI). Within five (5) business days after the Working Capital
Adjustment is finally determined, each party shall make any additional payments
necessary to place all parties in the positions they would have occupied if the
amount of the Working Capital Adjustment (as finally determined) had been known
on the Closing Date (without payment of interest).
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(d) As soon as practicable after Closing, the Company shall prepare, from
the books and records of the Company and Subsidiaries, a draft consolidated
balance sheet of the Company Group as of 11:59 p.m. on the date immediately
preceding the Closing Date, after taking into account the Pro Forma Adjustments
(the "Closing Date Balance Sheet"). The Closing Date Balance Sheet will be
prepared in accordance with GAAP applied consistently with the Company's
historical practices and, in particular but without limitation, will include
the Pro Forma Adjustments and all other adjustments (including adjustments
normally made at year end) necessary to present fairly the financial position
of the Company Group on a pro forma basis as at 11:59 p.m. on the date
immediately preceding the Closing Date. The Company will deliver a draft of
the Closing Date Balance Sheet in writing to all the parties hereto within
thirty (30) days after the Closing Date. Purchaser and the Scripps have the
right, upon written request made within five (5) business days after receiving
such draft, to review or have its auditors review the Company's draft of the
Closing Date Balance Sheet, including the books and records on which such draft
was based. If Purchaser or the Scripps disagree with the Company's draft of
the Closing Date Balance Sheet, they shall meet to attempt to resolve such
disagreement. If any such disagreement remains unresolved as of the thirtieth
(30th) day after receipt of the report, the form of the Closing Date Balance
Sheet shall be determined by a firm of nationally recognized independent
auditors selected jointly by Purchaser and the Scripps, and the decision of
such auditors shall be final and binding on all parties.
ARTICLE III.
THE CLOSING
SECTION 3.1 Closing Date. The Scripps shall as promptly as practicable
notify Purchaser, and Purchaser shall as promptly as practicable notify the
Scripps when the conditions, contained in Article IX hereof, to such party or
parties' obligation to effect the Stock Purchase have been satisfied. The
closing of the Stock Purchase (the "Closing") shall take place at the offices
of Wilmer, Cutler and Pickering, 2445 M Street, Washington, D.C., on July 1,
1996 (the "Closing Date"), and shall be effective as of 12:01 a.m. on the
Closing Date, unless another date, effective time, or place is agreed to in
writing by Purchaser and the Scripps.
SECTION 3.2 Deliveries by Sellers.
Sellers shall deliver to Purchaser the following at the Closing:
(a) stock certificates representing (i) all the issued and then
outstanding shares of Common Stock, accompanied by stock powers duly executed
in blank or duly
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executed instruments of transfer, in each case with signatures guaranteed by a
national bank or member firm of the New York Stock Exchange, and with all
necessary stock transfer and other documentary stamps attached, and any other
documents that are necessary to transfer to Purchaser good and marketable title
to such shares of Common Stock free and clear of all Liens, and (ii) all the
issued and then outstanding shares of capital stock of the Subsidiaries (other
than Excluded Subsidiaries) free and clear of all Liens;
(b) good standing certificates for each member of the Company Group from
the state of organization and from each other state in which it is qualified to
do business, dated as of a date no more than ten (10) days before the Closing
Date;
(c) resignations as officers, directors, and employees of such officers,
directors and employees of the Company Group, as Purchaser may request;
(d) the certificate of Sellers described in Section 9.3 hereof;
(e) all other documents, certificates, instruments or writings required to
be delivered by Sellers or the Company Group at or prior to the Closing
pursuant to this Agreement or otherwise required in connection herewith;
(f) a FIRPTA affidavit pursuant to Section 1445(b)(3) of the Code,
executed by Sellers; and
(g) a release of any and all claims whatsoever as of the Closing against
each member of the Company Group and its officers, directors, employees and
agents, in substantially the form of Exhibit 3.2(g), executed by Sellers.
SECTION 3.3 Deliveries by Purchaser.
Purchaser shall deliver to Sellers the following at the Closing:
(a) the Purchase Price in accordance with Section 2.2;
(b) a certified copy of any necessary resolutions of Purchaser evidencing
approval of this Agreement and the transactions contemplated hereby;
(c) the certificate of an officer of Purchaser described in Section 9.2
hereof; and
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<PAGE> 18
(d) all other documents, certificates, instruments or writings required
to be delivered by Purchaser at or prior to the Closing pursuant to this
Agreement or otherwise required in connection herewith.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF
PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
SECTION 4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation and has the corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted or presently proposed to be
conducted, except where the failure to be so organized, existing, and in good
standing or to have such power and authority would not, individually or in the
aggregate, prevent or materially delay the Closing.
SECTION 4.2 Authority. Purchaser has the corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated hereby have been
duly authorized by the Board of Directors of Purchaser, and no other corporate
proceedings on the part of Purchaser are necessary to authorize this Agreement
or the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Purchaser and (assuming this Agreement
constitutes a valid and binding obligation of Sellers) constitutes a valid and
binding agreement of Purchaser, enforceable against Purchaser in accordance
with its terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally from time to
time in effect and to general equitable principles.
SECTION 4.3 Consents and Approvals. Except for applicable requirements
of the HSR Act, no filing with, and no permit, authorization, license, consent
or approval of, any Government Entity is necessary for the execution, delivery
and performance of this Agreement or the other documents contemplated hereby by
Purchaser and the consummation by Purchaser of the transactions contemplated by
this Agreement.
SECTION 4.4 No Conflict or Violation. Neither the execution, delivery
or performance of this Agreement, nor the consummation of the transactions
contemplated
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<PAGE> 19
hereby, will (i) conflict with or result in any breach of any provisions of the
Certificate of Incorporation or the By-Laws of Purchaser, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination,
cancellation, vesting, payment, exercise, acceleration, suspension, revocation
or modification) under, any of the terms, conditions or provisions of any note,
credit agreement, bond, mortgage, deed of trust, security interest, indenture,
lease, license, contract, agreement, plan or other instrument or obligation to
which Purchaser is a party or by which it or any of its properties or assets
may be bound or affected, or (iii) violate any judgment, order, writ,
injunction, decree,statute, law, ordinance, rule or regulation applicable to
Purchaser or any of its properties or assets, except, in the case of clauses
(ii) and (iii), for such violations, breaches, defaults, or rights of
termination, cancellation, acceleration, creation, imposition, suspension,
revocation or modification as to which requisite waivers or consents have been
or will be obtained by Purchaser on or prior to Closing and copies of which
have been or will be delivered to Sellers.
SECTION 4.5 Litigation. There is no claim, suit, action, proceeding or
investigation (whether at law or equity, before or by any federal, state or
foreign court, tribunal, commission, board, agency or instrumentality, or
before any arbitrator) pending or, to the Knowledge of Purchaser, threatened
against or affecting Purchaser, the outcome of which would in any manner impair
the ability of Purchaser to perform its obligations hereunder or against the
transactions contemplated by this Agreement.
SECTION 4.6 Certain Fees. Purchaser has not entered into, nor will
enter into, during the term of this Agreement, any agreement, arrangement or
understanding with any Person that will result in the obligation of Sellers to
pay any finder's fee, brokerage commission or similar payment in connection
with the transactions contemplated hereby.
SECTION 4.7 Disclosure. No representation or warranty by Purchaser in
this Agreement or any Exhibit or Schedule hereto, or in the certificate
described in Section 9.2 hereof, contains or will contain an untrue statement
of material fact, or omits or will omit to state a material fact necessary to
make the statements contained herein or therein, in light of the circumstances
in which they were made, not misleading.
SECTION 4.8 Investment Representation. Purchaser acknowledges that the
shares of Common Stock are not registered under the securities laws of any
jurisdiction and that it is acquiring the shares of Common Stock for its own
account, and not with a view to the distribution thereof. Purchaser is a
sophisticated investor with knowledge and experience in financial matters and
has received certain information from the Scripps concerning the Company and
certain members of the Company Group. Purchaser is purchasing the shares of
Common Stock for investment purposes and not with the intention of reselling or
distributing such stock; provided, however, that the foregoing representation
shall in no way limit
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<PAGE> 20
Purchaser's right to dispose of all or any portion of the shares of Common
Stock, at any time, at Purchaser's sole discretion.
SECTION 4.9 Financial Ability. Purchaser is financially capable and
has, or will have upon the Closing Date, sufficient cash and other resources
available to complete the transactions contemplated by this Agreement upon the
terms and conditions set forth in this Agreement.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each of the Scripps jointly and severally represents and warrants, and
the Trust individually represents and warrants, to Purchaser as follows:
SECTION 5.1 Ownership. Such Seller holds of record and owns
beneficially the number of shares of Common Stock set forth next to his, her,
or its name in Schedule 2.2, free and clear of any Liens. No Seller is a party
to any voting trust, proxy, or other agreement, commitment or understanding
with respect to the voting, dividend rights or disposition of any capital stock
of the Company. The shares of Common Stock owned by Sellers are the only
issued and outstanding shares of Common Stock or other capital stock of the
Company. At the Closing, good and marketable title to the shares of Common
Stock being sold by such Seller will pass to Purchaser, free and clear of all
Liens.
SECTION 5.2 Authority. Such Seller has the power and authority to
enter into this Agreement and to carry out his, her, or its respective
obligations contemplated hereby. This Agreement has been duly and validly
executed and delivered by such Seller and (assuming this Agreement constitutes
a valid and binding obligation of Purchaser and the other Sellers) constitutes
a valid and binding agreement of such Seller, enforceable against him, her, or
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general equitable
principles.
SECTION 5.3 Consents and Approvals. Except for applicable requirements
of the HSR Act, no filing with, and no permit, authorization, license, consent
or approval of, any Government Entity is necessary for the execution, delivery
and performance of this Agreement or the other documents contemplated hereby by
such Seller and the consummation by such Seller of the transactions
contemplated by this Agreement.
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<PAGE> 21
SECTION 5.4 No Conflict or Violation. Neither the execution, delivery
or performance of this Agreement by such Seller, nor the consummation by such
Seller of the transactions contemplated hereby, nor compliance by such Seller
with any of the provisions hereof, will (a) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, vesting, payment,
exercise, acceleration, suspension, revocation or modification) under, any of
the terms, conditions or provisions of any note, credit agreement, bond,
mortgage, deed of trust, security interest, indenture, lease, license,
contract, agreement, plan or other instrument or obligation to which such
Seller is a party or by which he, she, or it, or any of his, her, or its
properties or assets may be bound or affected, or (b) violate any judgment,
order, writ, injunction, decree, statute, rule or regulation applicable to such
Seller or any of his, her or its properties or assets, except for such
violations, breaches, defaults, or rights of termination, cancellation,
acceleration, creation, imposition, suspension, revocation or modification as
to which requisite waivers or consents have been or will be obtained by such
Seller or the Company on or prior to Closing and copies of which have been or
will be delivered to Purchaser.
SECTION 5.5 Litigation. Except as set forth in Schedule 5.5, there is
no claim, suit, action, proceeding or investigation (whether at law or equity,
before or by any federal, state or foreign commission, court, tribunal, board,
agency or instrumentality, or before any arbitrator) pending or, to the
Knowledge of such Seller threatened against or affecting such Seller, the
outcome of which would in any manner impair his, her, or its ability to perform
his, her, or its obligations hereunder or against the transactions contemplated
by this Agreement.
SECTION 5.6 Certain Fees. Such Seller has not entered into, nor will
enter into during the term of this Agreement, any agreement, arrangement or
understanding with any Person that will result in the obligation of Purchaser
to pay any finder's fee, brokerage commission or similar payment in connection
with the transactions contemplated hereby.
SECTION 5.7 Disclosure. No representation or warranty by such Seller
in this Agreement or any Exhibit or Schedule hereto, or in the certificate of
such Seller described in Section 9.3 hereof, contains or will contain an untrue
statement of material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.
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<PAGE> 22
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY GROUP
The Scripps, jointly and severally, represent and warrant to Purchaser
as follows concerning the Company Group:
SECTION 6.1 Organization. Each member of the Company Group is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation and has the corporate power and authority
and all necessary governmental licenses, permits, authorizations and approvals
to own, lease and operate its properties and to carry on its business as it is
now being conducted or presently proposed to be conducted. Each member of the
Company Group is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary. Schedule 6.1 constitutes a list of all jurisdictions
in which each member of the Company Group is so qualified. Complete and
correct copies of the Certificate of Incorporation, as in effect to date, and
By-laws, as in effect on the date hereof, of the Company, have been delivered
to Purchaser.
SECTION 6.2 Capitalization. The authorized capital stock of the
Company consists of (a) 50,000 shares of the Class B Common Stock (of which
25,896 shares are outstanding as of the date of this Agreement), and (b)
2,450,000 shares of the Class A Common Stock (of which 233,689 shares are
outstanding as of the date of this Agreement). There are no stock options to
acquire any Common Stock. All the issued and outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable, are free
of preemptive rights, were not issued in violation of the terms of any
agreement or other understanding binding upon or known to the Company and were
issued in compliance with all applicable federal or state securities or "blue
sky" laws. Except as set forth above, there are no shares of capital stock of
the Company issued or outstanding nor any options, warrants, subscriptions,
calls, rights (contingent or otherwise), convertible securities or other
agreements or commitments pursuant to which any Seller or the Company are or
may become obligated to issue, transfer, sell, redeem, repurchase or otherwise
acquire any shares of the Company's capital stock or any securities or rights
convertible into or exchangeable or exercisable for any such shares.
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<PAGE> 23
SECTION 6.3 Company Subsidiaries.
(a) Schedule 6.3(a) sets forth the name of each of the Subsidiaries, the
state or jurisdiction of its incorporation, and a list of all jurisdictions in
which such Subsidiary is qualified as a foreign corporation to do business.
(b) Except as set forth in Schedule 6.3(b), the Company is, directly or
indirectly, the record and beneficial owner of all of the outstanding shares of
capital stock of each of the Subsidiaries, there are no proxies with respect to
any such shares, and no equity securities of the Company or any Subsidiary are
or may become required to be issued by reason of any options, warrants, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or exchangeable or exercisable for,
shares of any capital stock of any of the Subsidiaries, and there are no
contracts, commitments, understandings or arrangements by which the Company or
any of the Subsidiaries is or may be bound to issue, transfer, redeem, purchase
or sell additional shares of capital stock of any Subsidiary or securities
convertible into or exchangeable or exercisable for any such shares. All of
such shares so owned by the Company are validly issued, fully paid and
nonassessable and, except as set forth in Schedule 6.3(b), are owned by it free
and clear of all Liens.
(c) Except for the Subsidiaries and as set forth in Schedule 6.3(c), the
Company does not directly or indirectly own any equity or similar interest in,
or any interest convertible into or exchangeable or exercisable for any equity
or similar interest in, any corporation, partnership, joint venture or other
business association or entity.
(d) Except as set forth in Schedule 6.3(d), no member of the Company Group
has any agreements or understandings with any Person which would obligate such
member of the Company Group to make payments to such Person pursuant to any
"Non-Stock Interests" or other similar interests, rights, commitments or
arrangements.
(e) Schedule 6.3(b) contains a true and correct list of the record and
beneficial owners of all shares of capital stock of the Subsidiaries which are
not owned by the Company (the "Minority Owned Shares") and their respective
percentage interests in the Subsidiaries. Schedule 6.3(b) correctly states
whether or not a member of the Company Group has a right to repurchase the
Minority Owned Shares.
(f) Except as set forth in Schedule 6.3(b), no member of the Company Group
has any agreement with any Person which would grant the member the right, or
obligate such member, to repurchase Minority Owned Shares.
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<PAGE> 24
(g) Except as set forth in Schedule 6.3(g), none of the Excluded Assets
and Subsidiaries (other than the Designated Subsidiaries (defined below)), as
of the Closing Date, publishes a newspaper or engages in activities that are
material to the newspaper business engaged in by the Company Group.
SECTION 6.4 No Conflict or Violation. Neither the execution, delivery
or performance of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) conflict with or result in any breach of any
provisions of the Certificate or Articles of Incorporation, as the case may be,
or the By-Laws of any member of the Company Group, (ii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation,
vesting, payment, exercise, acceleration, suspension, revocation or
modification) under, any of the terms, conditions or provisions of any note,
credit agreement, bond, mortgage, deed of trust, security interest, indenture,
lease, license, contract, agreement, plan or other instrument or obligation to
which any member of the Company Group is a party or by which any of them or any
of their properties or assets may be bound or affected, (iii) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to any
member of the Company Group or any of their properties or assets, (iv) result
in the creation or imposition of any Lien on any asset of any member of the
Company Group or (v) cause the suspension, revocation or modification of any
permit, license, governmental authorization, consent or approval necessary for
any member of the Company Group to conduct its business as currently conducted,
except, in the case of clauses (ii), (iii), (iv) and (v), for such violations,
breaches, defaults or rights of termination, cancellation, acceleration,
creation, imposition, suspension, revocation, or modification as to which
requisite waivers or consents have been or will be obtained by the Scripps or
the Company on or prior to Closing and copies of which have been or will be
delivered to Purchaser.
SECTION 6.5 Taxes. Except as set forth in Schedule 6.5:
(a) each member of the Company Group has (i) duly filed (or there have
been filed on its behalf) with the appropriate Government Entities all Tax
Returns required to be filed by it on or prior to the date hereof, all of which
such Tax Returns were correct and complete in all respects and (ii) duly paid
in full or made provision in accordance with GAAP on the Closing Date Balance
Sheet (or there has been paid or provision has been made on its behalf) for the
payment of all Taxes for all periods ending through the date hereof;
(b) each member of the Company Group has withheld and paid all taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party;
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<PAGE> 25
(c) no federal, state, local or foreign audits or other administrative
proceedings or court proceedings are presently pending with regard to any Taxes
or Tax Returns of any member of the Company Group;
(d) the income Tax Returns of all members of the Company Group have been
examined by the Internal Revenue Service and the applicable state or local tax
authorities for all periods through and including 1991 (or the applicable
statutes of limitation for the assessment of income Taxes for such periods have
expired), and no deficiencies were asserted as a result of such examinations
that have not been resolved and fully paid; no member of the Company Group has
granted any requests, agreements, consents or waivers to extend the statutory
period of limitations applicable to the assessment of any Taxes for which any
member of the Company Group may be liable;
(e) there are no Tax liens outstanding against any assets, properties or
business of any member of the Company Group;
(f) no member of the Company Group has filed a consent under Section
341(f) of the Code to be treated as a collapsible corporation;
(g) no member of the Company Group has made any payments, is obligated to
make any payments or is a party to any agreement which under certain
circumstances could obligate it to make any payments which will not be
deductible under Section 280G of the Code;
(h) no member of the Company Group has been a member of an affiliated
group of corporations filing a consolidated federal income Tax Return or has
any liability for the Taxes of any person under Section 1.1502-6 of the
Treasury Regulations (or any similar provision of state, local or foreign law),
as a transferee or successor, by contract or otherwise;
(i) correct and complete copies of all income Tax Returns, examination
reports and statements of deficiencies assessed against or agreed to by any
member of the Company Group since January 1, 1990 have been made available to
Purchaser for its review;
(j) the aggregate unpaid Taxes of the members of the Company Group did
not, as of September 30, 1995, exceed the reserve for Tax liability (rather
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the Company's audited consolidated
September 30, 1995 balance sheet (after taking into account the Pro Forma
Adjustments), and the aggregate unpaid Taxes of the members of the Company
Group do not exceed that reserve as adjusted for payments and accruals made
through the Closing Date in accordance with the past custom and practice of the
members of the Company Group in filing their Tax Returns; and
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<PAGE> 26
(k) no member of the Company Group is a party to any tax sharing, tax
indemnity or other agreement or arrangement relating to Taxes with any Person.
SECTION 6.6 Real Property.
(a) Schedule 6.6(a) lists all real property owned, whether or not used, by
the members of the Company Group (the "Owned Real Property"). Schedule 6.6(a)
also identifies all Owned Real Property that is used in connection with the
Company Business (the "Company Business Owned Real Property"). Owned Real
Property other than Company Business Owned Real Property is referred to herein
as "Other Owned Real Property." Except as further set forth in Schedule 6.6(a)
and except for utility easements and public rights of way, and Liens for
current taxes not yet due and payable, each member of the Company Group has
good and marketable title in fee simple in its Owned Real Property, free and
clear of all Liens.
(b) Schedule 6.6(b) lists all real property leased, whether or not used,
by the members of the Company Group (the "Leased Real Property"). Schedule
6.6(b) also identifies all Leased Real Property that is used in connection with
the Company Business (the "Company Business Leased Real Property"). Except as
set forth in Schedule 6.6(b), each member of the Company Group has a valid and
existing lease or sublease for and is in peaceful and undisturbed possession of
all Company Business Leased Real Property. All leases covering any of the
Leased Real Property are valid and enforceable in accordance with their
respective terms, are in full force and effect, and there is not under any such
lease any default by any member of the Company Group or, to the Knowledge of
the Company Group, by any landlord or lessor under any such lease, or any
condition, event or act which, with the giving of notice or lapse of time, or
both, would constitute such a default. With respect to any Company Business
Leased Real Property, no member of the Company Group has received any notice of
any violation of any applicable zoning ordinance, building code, use or
occupancy restriction, or violation of any thereof, or any condemnation action
or proceeding with respect thereto.
(c) Except as set forth in Schedule 6.6(c), each member of the Company
Group has good and valid rights of ingress and egress to and from all Company
Business Owned Real Property and all Company Business Leased Real Property from
and to the public street systems for all usual street, road and utility
purposes.
(d) Except as set forth in Schedule 6.6(d), all buildings, structures,
improvements, fixtures, facilities, equipment, all components of all buildings,
structures and other improvements included within the Company Business Owned
Real Property, including but not limited to the walls, roofs and structural
elements thereof and the heating, ventilation, air conditioning, plumbing,
electrical, mechanical, sewer, waste water, storm water, paving
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and parking equipment, systems and facility included therein, and other
material items of tangible property and assets at any of the Company Business
Owned Real Property (collectively, the "Tangible Assets") (i) are usable in the
ordinary course of the Company Business; and (ii) have been maintained in a
reasonably prudent manner in the ordinary course of the Company Business. No
maintenance or repair to the Company Business Owned Real Property or any
Tangible Assets has been unreasonably deferred. Presently there is, and as of
the Closing will be, no water, chemical or gaseous seepage, diffusion or other
intrusion into said buildings, including any subterranean portions, that would
impair Purchaser's beneficial use of the Company Business Owned Real Property
or the Tangible Assets. No member of the Company Group has transferred any air
rights or development rights relating to the Company Business Owned Real
Property.
(e) Except as set forth on Schedule 6.6(e), the construction, use and
operation of the Company Business Owned Real Property comply in all material
respects with all applicable statutes, rules, regulations, ordinances, orders,
writs, injunctions, judgments, decrees, awards or restrictions of any
Government Entity having jurisdiction over any of the Company Business Owned
Real Property or the Company Business (including, without limitation,
applicable statutes, rules, regulations, orders and restrictions relating to
zoning, land use, safety, health, employment and employment practices and
access by the handicapped) (collectively, "Laws"), covenants, conditions,
restrictions, easements, disposition agreements and similar matters affecting
the Company Business Owned Real Property, and, effective as of the Closing,
Purchaser shall have the right under all applicable Laws to continue the use
and operation of the Company Business Owned Real Property in the conduct of the
Company Business and/or in the manner it was operated by the members of the
Company Group without dependence on the granting of any special permit,
exception, approval or variance. No member of the Company Group has received
any notice of any violation (or claimed violation) of or investigation
regarding any Laws which has not been remedied or cured.
(f) Except as set forth on the surveys made available to Purchaser, none
of the buildings, structures and other improvements located on the Company
Business Owned Real Property, the appurtenances thereto or the equipment
therein or the operation or maintenance thereof, or the conduct of the Company
Business, violates any restrictive covenant or encroaches on any property owned
by others or any easement, right of way or other encumbrance or restriction
affecting such Company Business Owned Real Property in any material respect nor
does any building or structure of any third party encroach upon the Company
Business Owned Real Property or any easement or right of way benefitting the
Company Business Owned Real Property. The Company Business Owned Real Property
and its continued use, occupancy and operation as used, occupied and operated
in the conduct of the Company Business does not constitute a nonconforming use
under any applicable Law.
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<PAGE> 28
(g) No member of the Company Group has received notice of, or otherwise
has Knowledge of, any pending or threatened condemnation, fire, health, safety,
building, zoning or other land use regulatory proceedings pertaining to the
Company Business Owned Real Property, nor has any member of the Company Group
received notice of any pending or threatened special assessment proceedings
affecting any of the Company Business Owned Real Property.
(h) All water, sewer, gas, electric, telephone and drainage facilities,
and all other utilities required by any applicable Law or by the use and
operation of the Company Business Owned Real Property in the conduct of the
Company Business are installed to the property lines of the Company Business
Owned Real Property, are connected pursuant to valid permits to municipal or
public utility services or proper drainage facilities, are fully operable and
are adequate to service the Company Business Owned Real Property in the
operation of the Company Business and to permit full compliance with the
requirements of all Laws in the operation of the Company Business. To the
Knowledge of the Company Group, no fact or condition exists which could result
in the termination or material reduction of the current access from the Company
Business Owned Real Property to existing roads or to sewer or other utility
services presently serving the Company Business Owned Real Property.
(i) All licenses, permits, certificates, easements and rights of way,
including proof of dedication, required from any Government Entity having
jurisdiction over the Company Business Owned Real Property for the use and
operation of such Real Property in the conduct of the Company Business and/or
in the manner it was operated by the members of the Company Group and to ensure
vehicular and pedestrian ingress to and egress from the Company Business Owned
Real Property have been obtained.
(j) No portion of the Company Business Owned Real Property or the Company
Business Leased Real Property has suffered any damage by fire or other casualty
which has not heretofore been completely repaired and restored to its original
condition.
(k) The Scripps have delivered to Purchaser true, correct and complete
copies of all title insurance policies and surveys in the possession of the
Company Group with respect to the Owned Real Property.
SECTION 6.7 Personal Property. Each member of the Company Group owns,
leases or otherwise possesses adequate rights to use such items of personal
property that are being used in the conduct or operation of the Company
Business (the "Personal Property"). Schedule 6.7 sets forth (A) all items of
Personal Property owned by any member of the Company Group, except for items
having an original cost of less than $10,000.00, and (B) all leases of Personal
Property of the Company Group, except items whose aggregate annual rental cost
is less than $3,000.00. Except as set forth on Schedule 6.7, each member of
the
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Company Group has good and marketable title to all Personal Property used
by it, free and clear of all Liens, except for and subject only to (i) Liens
for taxes not yet due or payable and (ii) leases. All material machinery and
equipment owned or leased by any member of the Company Group and used in the
operation of the Company Business (A) is usable in the ordinary course of the
Company Business; and (B) has been maintained in a reasonably prudent manner in
the ordinary course of the Company Business.
SECTION 6.8 Litigation. Except as set forth in Schedule 6.8, and
except for matters covered by Section 6.10, there is no claim, suit, action,
proceeding or investigation (whether at law or equity, before or by any
federal, state, local or foreign commission, court, tribunal, board, agency or
instrumentality, or before any arbitrator) pending or, to the Knowledge of the
Company Group, threatened against or affecting any member of the Company Group
or any of their respective assets or properties. No member of the Company
Group is subject to any continuing court or administrative order, writ,
injunction or decree applicable to it or its properties and assets.
SECTION 6.9 Legal Compliance. To the Knowledge of the Company Group,
except as set forth in Schedule 6.9, and except for matters covered by Section
6.10, each member of the Company Group has conducted its operations in
compliance in all material respects with all applicable Laws of any Government
Entity. Except as set forth in Schedule 6.9, and except for matters covered by
Section 6.10, no member of the Company Group has received any written complaint
or notice from any Government Entity alleging that it has violated any law
(including rules, regulations, codes, laws, injunctions, judgments, orders,
decrees, rulings and changes thereunder) and, to the Knowledge of the Company
Group, no such complaint or notice is threatened.
SECTION 6.10 Environmental Matters.
(a) Compliance.
(i) To the Knowledge of the Company Group, except as set forth
in Schedule 6.10, each member of the Company Group is in compliance with all
applicable Environmental Laws.
(ii) To the Knowledge of the Company Group, except as set forth
in Schedule 6.10, no member of the Company Group has received any written
communication from any Person or Government Entity that alleges that any member
of the Company Group is not in compliance with applicable Environmental Laws.
(b) Environmental Permits. To the Knowledge of the Company Group,
except as set forth in Schedule 6.10, each member of the Company Group has all
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Environmental Permits necessary for the conduct and operation of its
business, and all such permits are in good standing or, where applicable, a
renewal application has been timely filed and is pending agency approval, and
each member of the Company Group is in compliance with all terms and conditions
of all such Environmental Permits and is not required to make any expenditure
in order to obtain or renew any Environmental Permits.
(c) Environmental Claims.
(i) Except as set forth in Schedule 6.10, there is no Environmental
Claim pending or, to the Knowledge of the Company Group, threatened against any
member of the Company Group, or against any real or personal property or
operation that any member of the Company Group owns, leases or manages, in
whole or in part.
(ii) To the Knowledge of the Company Group, except as set forth in
Schedule 6.10, no member of the Company Group has received notice that it or
any other member of the Company Group is liable for any response, removal,
investigative, or remedial costs under the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Section 9601
et seq., or under any similar state statute.
(iii) To the Knowledge of the Company Group, except as set forth in
Schedule 6.10, all Hazardous Materials generated by any member of the Company
Group have been transported, stored, treated, or disposed of by carriers or
treatment, storage and disposal facilities authorized or permitted under all
applicable Environmental Laws.
(iv) To the Knowledge of the Company Group, except as set forth in
Schedule 6.10: (a) each member of the Company Group has fully complied with
all applicable provisions of any Environmental Laws that condition, restrict or
prohibit the transfer, sale, lease or closure of any property for environmental
reasons; (b) no member of the Company Group is required to place any notice or
restriction relating to the presence of Hazardous Materials in any instrument
or deed to the Owned Real Property or other real property leased or operated by
it; (c) no environmental Lien has attached to any member of the Company Group,
any portion of the Owned Real Property or any real property leased or operated
by any member of the Company Group; and (d) no governmental actions have been
taken or are in progress that could subject any or all of the foregoing to any
such Lien.
(d) Release of Hazardous Materials. To the Knowledge of the Company
Group, except as set forth in Schedule 6.10, there has not been any release of
Hazardous Materials at or from any facility or real property owned, operated or
leased by any member of the Company Group.
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<PAGE> 31
(e) Underground Storage. To the Knowledge of the Company Group, except
as set forth in Schedule 6.10: (a) there are not now any underground storage
tanks on or at the Owned Real Property or any other real property leased or
operated by the Company or any member of the Company Group; (b) any underground
storage tanks and associated piping described in Schedule 6.10 are being
operated in compliance with all applicable Environmental Laws; and (c) any
removal of underground storage tanks or any remediation associated with such
removal conducted by or on behalf of any member of the Company Group was
conducted in accordance with applicable Environmental Laws.
(f) Asbestos, PCBs, Etc. To the Knowledge of the Company Group, except
as set forth in Schedule 6.10, no polychlorinated biphenyls ("PCBs"),
asbestos-containing material ("ACM"), or urea formaldehyde insulation is
present at any of the Owned Real Property or other real property currently
leased or operated by any member of the Company Group in such condition or
under such circumstances as would reasonably be expected to give rise to an
Environmental Claim, and each member of the Company Group has complied in all
material respects with all regulatory requirements relating to the storage,
removal, disposal or release, if any, of ACM or PCBs located on the Owned Real
Property or any other real property leased or operated by it or any other
member of the Company Group.
SECTION 6.11 Insurance.
(a) Except as set forth in Schedule 6.11(a), no member of the Company
Group has received any notice of cancellation or termination with respect to
any material insurance policy.
(b) All material insurance policies of each member of the Company Group
are valid and enforceable policies, which policies (or comparable ones) have
been in effect continuously since January 1, 1990. Schedule 6.11(b) contains a
description of all insurance policies maintained by each member of the Company
Group on its assets and on its respective operations and personnel. Such
description includes the insurance carrier, the amount of premiums thereunder,
the type of coverage and limits of coverage of such policies and the expiration
dates of the current premium periods thereunder. Such insurance is of the
kinds, covering such risks and in such amounts and with such deductibles and
exclusions as are consistent with past business practices of each member of the
Company Group.
SECTION 6.12 Intellectual Property. Each member of the Company Group
owns or possesses, and has taken all actions necessary to record, preserve and
protect, adequate and enforceable long-term licenses or other rights to use
without payment all copyrights, patents, trade names, trade secrets,
trademarks, franchises and similar rights now owned, used or employed by any
member of the Company Group in connection with the Company Business, including,
without limitation, the names used by each publication of each
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member of the Company Group and all Company Group trade names, trademarks and
logos, that previously have been used in the conduct or operation of the
Company Business (the "Intellectual Property"). Schedule 6.12 sets forth a
true and complete list and summary description of all the Intellectual
Property.
SECTION 6.13 Labor Matters. Except as set forth in Schedule 6.13:
(a) no member of the Company Group is engaged in any unfair labor
practices as defined in the National Labor Relations Act or other applicable
law, ordinance or regulation, and each member of the Company Group is in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment, wages,
hours of work and occupational safety and health;
(b) there is no unfair labor practice charge or complaint pending or
threatened against any member of the Company Group before the National Labor
Relations Board nor is there any grievance or any arbitration proceeding
arising out of or under collective bargaining agreements pending or threatened,
and there is no basis for any such charge, complaint or grievance;
(c) there is no labor strike, lockout, slow-down, employment related
arbitration, or work stoppage pending or threatened against any member of the
Company Group;
(d) no member of the Company Group has experienced any significant work
stoppage nor has any member of the Company Group been a party to any
proceedings before the National Labor Relations Board for the past three years
or been a party to any arbitration proceeding arising out of or under
collective bargaining agreements for the past three years;
(e) there is no charge or compliance proceeding actually pending or
threatened against any member of the Company Group before the Equal Employment
Opportunity Commission or any state, local or foreign agency responsible for
the prevention of unlawful employment practices; and
(f) no member of the Company Group has any written or unwritten
personnel policy, nor is any member of the Company Group bound by any
employment contract. None of the employees of any member of the Company Group
is or will be entitled to any severance or other compensation because of the
transactions contemplated by this Agreement or otherwise. No member of the
Company Group has received notice of the intent of any Government Entity
responsible for the enforcement of labor or employment laws to conduct an
investigation, and no such investigation is in progress; and the employees of
any member of the Company Group are not represented by any labor union nor are
there any
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collective bargaining agreements or any other types of agreements with labor
unions otherwise in effect with respect to such employees and no union
organizational campaign is in progress and no question concerning
representation exists respecting such employees.
SECTION 6.14 Employee Benefit Plans; ERISA.
(a) Schedule 6.14(a) lists each Company Plan. The Scripps have
heretofore made available to Purchaser, if applicable, true and complete copies
of each of the following documents: (i) a copy of each such Company Plan
(including all amendments thereto) or a description of each unwritten plan;
(ii) a copy of the Forms 5500 filed with the Internal Revenue Service with
respect to each such Company Plan for the last two years; (iii) a copy of the
actuarial report, if any, with respect to each such Company Plan for the last
two years; (iv) if the Company Plan is funded through a trust or any third
party funding vehicle, a copy of the trust or other funding agreement
(including all amendments thereto) and the latest financial statements thereof;
(v) the most recent determination letter received from the Internal Revenue
Service with respect to each Company Plan that is intended to be qualified
under Section 401 of the Code; (vi) the most recent summary plan description;
and (vii) any forms filed with Pension Benefit Guaranty Corporation and any
Forms 5310 or 5330 filed with the Internal Revenue Service within the last
three years.
(b) Except as set forth in Schedule 6.14(b), (i) none of the Company
Plans is or has been subject to Title IV of ERISA, (ii) there is no outstanding
or contingent liability under Title IV of ERISA with respect to any Company
Plan; (iii) full and timely payment has been made of all amounts that each
member of the Company Group is required to pay as a contribution to the Company
Plans; (iv) each of the Company Plans that is intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified; and (v) no Company
Plan provides benefits, including, without limitation, death or medical
benefits (whether or not insured), with respect to current or former employees
of members of the Company Group beyond their retirement or other termination of
service (other than (1) coverage mandated by Section 4980B of the Code, (2)
death benefits or retirement benefits under any funded "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, which is a
qualified plan under Section 401(a) of the Code, and (3) deferred compensation,
severance, vacation or other welfare benefits accrued and identified as
liabilities on the books of the members of the Company Group).
(c) Except as set forth in Schedule 6.14(c), neither the Company nor
any of its ERISA Affiliates is contributing to or is obligated to contribute to
a Multiemployer Pension Plan nor does any member of the Company Group have any
outstanding liability nor, to the Knowledge of the Company Group, any potential
liability that could become a liability of the Company Group after the Closing
Date with respect to any Multiemployer Pension
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<PAGE> 34
Plan. Neither the Company nor any of its ERISA Affiliates has incurred or
expects to incur any liability under Title IV of ERISA with respect to any
Multiemployer Pension Plan.
(d) Except as set forth in Schedule 6.14(d), no member of the Company
Group has, since January 1, 1996, made any commitment (i) to create any
additional Company Plan or to modify in any material respect any existing
Company Plan covering employees engaged in its businesses or (ii) to create or
modify in any material respect any salary, bonus, and/or profit-sharing
arrangement covering such employees.
(e) No member of the Company Group and no Company Plan (nor any trust
created thereunder nor any trustee or administrator thereof) has engaged in any
transaction, taken any action, or failed to take any action in connection with
which any member of the Company Group could be subject (whether directly or
indirectly or as indemnitor) to any liability (whether actual or contingent) or
civil penalty assessed pursuant to Sections 409, 502(c), 502(i), 502(l), or
4071 of ERISA or tax or penalty imposed pursuant to Sections 4971, 4972, 4975
to 4980A, or 5000 of the Code. Except as set forth in Schedule 6.14(e), all
returns and reports that were required to be filed with any Government Entity
with respect to Company Plans have been filed on a timely basis and were
correct and complete, and all other disclosure obligations for those plans have
been met.
(f) There are no pending, threatened, or anticipated claims (other than
routine claims for benefits) by, on behalf of, or against any Company Plan. No
Company Plan is presently under audit or examination (nor has notice been
received of a potential audit) by the Internal Revenue Service, the Department
of Labor, or Pension Benefit Guaranty Corporation, nor are there any matters
pending with respect to any Company Plan with the Internal Revenue Service
under its Voluntary Compliance Resolution program, its Closing Agreement
Program, or other similar programs.
(g) Each Company Plan has been operated in all material respects in
accordance with its terms and with applicable Law.
(h) No liability under Title IV of ERISA has been or is expected to be
incurred by any member of the Company Group with respect to any ongoing, frozen
or terminated "single-employer plan," within the meaning of Section 4001(a)(15)
of ERISA (a "Title IV Pension Plan"), currently or formerly maintained by any
of them, or any single-employer plan (an "ERISA Affiliate Plan") of any entity
that is considered one employer with the Company under Section 4001 of ERISA or
Section 414 of the Code (an "ERISA Affiliate"). Neither any Company Plan which
is a funded employee pension benefit plan ("Pension Plan") nor any ERISA
Affiliate Plan has an "accumulated funding deficiency" (whether or not waived)
within the meaning of Section 412 of the Code or Section 302 of ERISA. No
member of the Company Group has provided, or is required to provide, security
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to any Pension Plan or to any ERISA Affiliate Plan pursuant to Section
401(a)(29) of the Code. Neither the Company nor any ERISA Affiliate is, or,
within the last seven years has been, a participating employer under a multiple
employer plan within the meaning of Section 4063 or 4064 of ERISA.
(i) Except as set forth in Schedule 6.14(i), the consummation of the
transactions contemplated by this Agreement will not (i) entitle any employee
to severance pay, unemployment compensation or any other payment or (ii)
accelerate the timing of any payment or the vesting of any rights or increase
the amount of any compensation due any employee or former employee. Each
Company Plan may be unilaterally amended or terminated without liability except
as to benefits accrued thereunder prior to the amendment or termination.
SECTION 6.15 Financial Statements. The Company has delivered to
Purchaser the audited consolidated balance sheets as of September 30, 1994 and
1995, and the related consolidated statements of income, changes in
stockholders' equity and cash flows of the Company and Subsidiaries for the
fiscal years then ended, together with all schedules and notes thereto (the
"Audited Financial Statements"). The Company has also delivered to Purchaser
the unaudited consolidated balance sheets of the Company and Subsidiaries as of
December 31, 1994 and 1995 (the "Quarterly Balance Sheets"), and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for the three-month periods ended December 31, 1994 and 1995, together
with all schedules and notes thereto, and will deliver to Purchaser comparable
statements for the period ended March 31, 1996 as soon as the same have been
prepared (collectively, the "Unaudited Financial Statements"). The Audited
Financial Statements and the Unaudited Financial Statements fairly present, or
will fairly present, in conformity with GAAP applied on a consistent basis in
accordance with past practice (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and Subsidiaries
as of the respective dates thereof and the results of their operations and
their cash flows for the periods then ended. The notes to the Unaudited
Financial Statements for the periods ended December 31, 1995 and March 31, 1996
shall be prepared in a manner consistent with the notes to the Audited
Financial Statements heretofore delivered.
SECTION 6.16 Absence of Certain Changes or Events. Except as set forth
in Schedule 6.16, since September 30, 1995, each member of the Company Group
has conducted its business in the ordinary and regular course consistent with
past practices, and there has not been:
(i) any Material Adverse Effect;
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(ii) any material damage, destruction or casualty loss, not covered by
insurance, to any material asset or property of the members of the Company
Group taken as a whole;
(iii) any entry into any employment agreement, deferred compensation or
other similar agreement or any arrangement with any of its officers or
employees; any increase in the rate or terms of the compensation payable or to
become payable to employees of the Company or any member of the Company Group,
except increases occurring in accordance with customary practices or in
accordance with existing collective bargaining or employment agreements, or any
modification in employee benefits, or any borrowing of money from the Company
or any member of the Company Group by any employee of the Company or any member
of the Company Group (other than routine travel and similar advances);
(iv) any waiver by any member of the Company Group of any rights or
claims having value, except rights or claims not in excess of $10,000.00 or
that were waived in the ordinary course of business and consistent with past
practice;
(v) any failure to collect the accounts receivable or to pay the
accounts payable and other current liabilities of any member of the Company
Group in any manner other than consistent with past practice;
(vi) any sale, assignment, lease, transfer or other disposition, or the
execution of any agreement for the sale, assignment, lease, transfer or other
disposition, of any assets, except in the ordinary course of business and
consistent with past practice;
(vii) any change by any member of the Company Group in accounting or
bookkeeping methods, principles or practices, except as required by GAAP;
(viii) any borrowing of money, including any increase or extension of
purchase money credit by any member of the Company Group or any increase in the
liabilities of any member of the Company Group from those reflected in the
Audited Financial Statements, other than current liabilities incurred in the
ordinary course of business and consistent with past practice;
(ix) any transaction with any other member of the Company Group or with
any officer or director (including their respective family members) of or with
any affiliate of any member of the Company Group, other than in the ordinary
course of business and consistent with past practice;
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(x) any declaration or payment of any stock dividend or other non-cash
distribution on or with respect to, or any redemption or purchase or other
acquisition of, the capital stock of any member of the Company Group; or
(xi) any agreement, arrangement or understanding, whether oral or
written, to do any of the foregoing matters listed in clauses (i) through (x)
inclusive.
SECTION 6.17 Contracts. Schedule 6.17 lists or describes all unexpired
written or oral contracts, leases, agreements, arrangements, commitments,
instruments or understandings ("Contracts") of every nature to which any member
of the Company Group is a party or to which it or any of its assets or
properties are bound, except those Contracts (a) entered into in the ordinary
course of business and which may be terminated by any member of the Company
Group with less than thirty-two (32) days notice without obligation being
incurred by it, (b) for the sale of advertising or publication services for
cash and with not more than twelve (12) months remaining in their present
terms, (c) for the purchase by any member of the Company Group of any
materials, supplies, equipment or services for less than $25,000.00 per year,
(d) for the sale of any printing service for less than $25,000.00 per year, (e)
for the purchase or improvement of any fixed or capital assets for less than
$10,000.00, (f) for the sale of any fixed or capital assets after September 30,
1995 for less than $5,000.00 as to any individual item, (g) Company Plans
listed in Schedule 6.14(a), and (h) not otherwise required to be listed on any
other Schedule and obligating any member of the Company Group to pay not more
than $25,000.00 in remaining payment obligations and containing no material
non-monetary obligations of, or restrictions applicable to, any member of the
Company Group or any of its assets or properties. Notwithstanding the
exceptions set forth in the preceding sentence, Schedule 6.17 lists or
describes all Contracts of every nature to which any member of the Company
Group is a party or to which it or any of its assets or properties are bound if
such Contract (i) expires after, and is not terminable at the discretion of the
Company Group prior to, December 31, 1998, and (ii) obligates any member of the
Company Group (1) to pay more than $100,000.00 in remaining payment
obligations, or (2) to perform material non-monetary obligations.
True and complete copies of all written contracts listed in Schedule 6.17
have been made available to Purchaser. Each such contract is a valid and
binding obligation of each member of the Company Group that is a party to such
contract, enforceable in accordance with its terms except as its enforceability
may be limited by bankruptcy, insolvency, moratorium, or other laws relating to
or affecting creditors' rights generally, and the exercise of judicial
discretion in accordance with general equitable principles, and are in full
force and effect. No member of the Company Group nor, to the Knowledge of the
Company Group, any other party to any of such contracts is (with or without the
lapse of time or the giving of notice, or both) in material violation thereof
or in material default thereunder.
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SECTION 6.18 Absence of Undisclosed Liabilities. To the Knowledge of
the Company Group except as set forth in Schedule 6.18, the Company Group has
no liabilities of any kind whatsoever, either accrued, absolute, contingent,
determined or determinable or otherwise, and no existing condition, situation
or set of circumstances that could reasonably result in such a liability
including, without limitation, documentary or standby letters of credit, bid or
performance bonds, or customer or third party guarantees, except: (a)
liabilities reflected or reserved against in the Audited Financial Statements
not heretofore paid or discharged, (b) liabilities incurred, consistently with
past business practice, in or as a result of the normal and ordinary course of
business since September 30, 1995 (none of which is a liability for breach of
contract, breach of warranty (other than chargebacks incurred in the ordinary
course of business and consistent with past practice), tort, infringement claim
or lawsuit) which, individually or in aggregate, could not reasonably be
expected to have a Material Adverse Effect, or (c) liabilities listed in any
Schedule to this Agreement that are specifically identified as liabilities.
There are no asserted claims for indemnification by any Person against any
member of the Company Group under any law or agreement or pursuant to the
Articles of Incorporation or By-laws (or similar organization documents) of any
member of the Company Group, and neither the Scripps nor any member of the
Company Group is aware of any facts or circumstances that might give rise to
the assertion of such a claim against any member of the Company Group
thereunder.
SECTION 6.19 Accounts Receivable. All accounts receivable of the
Company Group that were outstanding as of the date of the Audited Financial
Statements or that arose after the date of the Audited Financial Statements
have arisen only in the ordinary course of business, consistent with past
practice, and have been reflected in the Audited Financial Statements or will
be reflected in the Unaudited Financial Statements (to the extent not
previously collected or written off), in accordance with GAAP, as consistently
applied by the Company Group.
SECTION 6.20 Prepaid Expenses. Except as provided in Schedule 6.20,
all prepaid expenses of the Company Group reflected on the Audited Financial
Statements under "Current Assets" and all expenses prepaid by the Company Group
subsequent to September 30, 1995 were prepaid in accordance with the regular
business practices of the Company Group, consist of expenses that were incurred
in the ordinary course of business of the Company Group consistent with past
practice, and are valued at reasonable amounts based on the ordinary course of
business of the Company Group within the past six months. There has not been
any material write-down or write-off of, or other adjustment to, such prepaid
expenses since September 30, 1995, except for amortization in the ordinary
course of business.
SECTION 6.21 Accounts Payable. Except as set forth in Schedule 6.21,
all accounts payable and accrued expenses of the Company Group reflected on the
Audited
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Financial Statements and all accounts payable and accrued expenses incurred by
the Company Group subsequent to September 30, 1995 were incurred in the
ordinary course of business consistent with past practice.
SECTION 6.22 Inventory. All inventory of the Company Group reflected
on the Audited Financial Statements and all inventory acquired by the Company
Group subsequent to September 30, 1995 were acquired and have been maintained
in accordance with the regular business practices of the Company Group, consist
of items of a quality and quantity usable in the ordinary course of the Company
Business, consistent with past practice, and are valued on a LIFO basis in
accordance with GAAP. There has not been any material write-down or material
write-off of, or other adjustment to, such inventory since September 30, 1995,
except for LIFO adjustments in accordance with GAAP.
SECTION 6.23 Guarantees. Except as set forth in Schedule 6.23 or on
the Audited Financial Statements, and except for the Company's obligations as a
member of the Company Group, the Company is not directly or indirectly, (i)
liable, by guarantee or otherwise, upon or with respect to, (ii) obligated by
discount or repurchase agreement or in any other way to provide funds with
respect to, or (iii) obligated to guarantee or assume, any debt, dividend or
other obligation of any Person, except endorsements made in the ordinary course
of business in connection with the deposit of items for collection.
SECTION 6.24 Bank Accounts. Schedule 6.24 attached hereto contains a
complete and correct description of all banking, safe deposit box and lockbox
arrangements currently maintained by the members of the Company Group, all
powers of attorney in connection with such arrangements, and the names of all
Persons authorized to draw thereon or to have access thereto.
SECTION 6.25 Computer Programs and Software. Except as set forth in
Schedule 6.25, the technology consisting of computer programs and software used
by the Company Group, and any and all present and prior versions, new releases
and derivative products related thereto or resulting therefrom (the "Software")
(i) are licensed by the Company Group under valid license agreements, (ii)
constitute original works for hire compiled or prepared by employees of the
Company Group within the scope of their employment, the right, title and
interest (including copyright to such Software) being vested in the Company
Group or (iii) are works prepared or performed by consultants to the Company
Group, all right, title and interest in and to such Software having been
transferred and being vested in the Company Group, with no royalties or other
payments due in respect thereof. The Company Group has all documentation
necessary to enforce its rights in the Software. Except as set forth in
Schedule 6.25, there are no copies of source code for any of the Software
described in subparagraph (ii) or (iii) above at any location other than the
Company
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Group and all copies of such source code will be relinquished to the
control of Purchaser at Closing.
SECTION 6.26 Family Contracts. Schedule 6.26 sets forth all
outstanding written contracts, agreements, and commitments, other than
employment contracts and compensation arrangements, by and between any of the
Sellers, any of the Scripps' relatives or family members, or trusts for their
benefit, as one party, and any member of the Company Group, as the other. All
contracts, agreements, and commitments, written or oral, including all
employment contracts and compensation arrangements by and between any member of
the Company Group on the one hand and any of the Sellers, the Scripps'
relatives or family members, or trusts for their benefit on the other, are
referred to collectively as the "Family Contracts."
SECTION 6.27 No Illegal or Improper Transactions. No Seller or member
of the Company Group has, nor, to the Knowledge of the Company Group, has any
director, officer or employee of the Company Group, directly or indirectly,
used funds or other assets of any member of the Company Group, or made any
promise or undertaking in such regard, for (a) illegal contributions, gifts,
entertainment or other expenses relating to political activity; (b) illegal
payments to or for the benefit of governmental officials or employees, whether
domestic or foreign; (c) illegal payments to or for the benefit of any Person,
or any director, officer, employee, agent or representative thereof; or (d) the
establishment or maintenance of a secret or unrecorded fund; and, to the
Knowledge of the Company Group, there have been no false or fictitious entries
made in the books or records of any member of the Company Group.
SECTION 6.28 Certain Fees. Except as disclosed in Schedule 6.28, no
member of the Company Group or any of their respective officers, directors or
employees has entered into, or will enter into, during the term of this
Agreement, any agreement, arrangement or understanding with any Person to pay
any finder's fee, brokerage commission or similar payment in connection with
the transactions contemplated hereby. No member of the Company Group will have
any liability for the fees of Goldman, Sachs & Co. or Wilmer, Cutler &
Pickering after the Closing. If a payment to either such party is made at the
Closing by the Company, the Closing Date Balance Sheet will be made to reflect
the payment of such fees.
SECTION 6.29 Disclosure. No representation or warranty concerning any
member of the Company Group in this Agreement or any Exhibit or Schedule
hereto, or contained in any certificate or instrument delivered or to be
delivered by or on behalf of any member of the Company Group pursuant to this
Agreement, contains or will contain an untrue statement of material fact, or
omits or will omit to state a material fact necessary to make the
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statements contained herein or therein, in light of the circumstances in which
they were made, not misleading.
SECTION 6.30 Circulation, Cash Flows. The information set forth on
Schedule 6.30 is true and correct.
ARTICLE VII.
CONDUCT OF BUSINESS PENDING THE CLOSING
The Scripps, jointly and severally, covenant that between the date of
this Agreement and the Closing Date:
SECTION 7.1 Maintenance of Business. They shall cause each member of
the Company Group to (i) conduct its business (including, but not limited to,
making loans, paying directors, officers and employees, including any salary,
bonus, or other compensation policy, disposing or acquiring assets, and
incurring liabilities) only in the ordinary course, consistent with past
practice, (ii) use its best efforts to preserve its business organizations
intact, to retain the services of its present officers and employees and to
preserve the good will of the suppliers and customers and others having
business relations with it, (iii) pay and perform all of its debts, obligations
and liabilities as and when due and all leases, agreements, contracts and other
commitments to which it is a party in accordance with the terms and provisions
thereof, (iv) comply in all material respects with all laws that may be
applicable to its business, (v) not make any noncash distributions or dividends
to its stockholders other than as contemplated by this Agreement, and (vi)
comply with its stated official accounting policies with respect to charge-offs
and loss provisions. Subject to the foregoing, any transaction or action that
is not in the ordinary course of business, consistent with the Company Group's
past practice, shall be subject to the prior written consent of Purchaser.
SECTION 7.2 Certain Transactions. Except as otherwise contemplated by
this Agreement, without the prior written consent of Purchaser, no member of
the Company Group shall:
(a) incur any indebtedness for borrowed money, or assume, guarantee,
endorse or otherwise become responsible for the obligations of any other Person
or make any loans or advances to any Person except in the ordinary course of
business, consistent with past practice, or as necessary to fund the Company's
or any Subsidiary's obligations incurred in a manner consistent with Section
7.1 of this Agreement or by way of replacement or substitution of existing
borrowings;
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(b) except as required in order to carry out the agreement provided in
Section 8.2 or to enable Sellers to transfer to Purchaser at Closing all issued
and outstanding shares of capital stock of the Subsidiaries listed on Schedule
6.3(b), amend its organizational documents, change the number of authorized or
outstanding shares of its capital stock or issue any capital stock or any
warrants, options, or other rights to subscribe for or to purchase any capital
stock or securities convertible into or exchangeable or exercisable for any
capital stock of the Company or any other member of the Company Group;
(c) except as required in order to carry out the agreement in Section
8.2, mortgage, pledge, or otherwise encumber, or sell, transfer, or otherwise
dispose of any of the properties or assets of the Company Group, other than in
the ordinary course of business consistent with past practice; provided,
however, that:
(i) at Closing, the Company may, without the consent of Purchaser,
transfer to the Scripps the assets and Subsidiaries listed in Schedule 7.2(c)
in redemption of certain shares of the Scripps' Common Stock;
(ii) if the Company has not acquired or otherwise eliminated the
Minority Owned Shares in any of Scripps Marin Publishing Co.; Scripps Vermont
Publishing Co.; Record Gazette, Inc.; Perry County Publishing Co.; and Midway
Driller, Inc. (collectively, the "Designated Subsidiaries") as of the Closing,
each Designated Subsidiary in which there continues to be Minority Owned Shares
shall be deemed to have been added to Schedule 7.2(c), the Company's stock in
each such Designated Subsidiary shall be transferred to the Scripps at Closing,
and the Purchase Price shall be adjusted as provided in Section 2.2(a). If the
Minority Owned Shares in any one or more Designated Subsidiaries are acquired
by the Scripps or otherwise eliminated within sixty (60) days after the
Closing, the Scripps shall so notify Purchaser in writing and Purchaser shall
purchase from the Scripps all of the issued and outstanding stock of each such
Designated Subsidiary at a price equal to the price adjustment specified for
such Designated Subsidiary in Section 2.2(a). The purchase shall be subject to
the terms and conditions of this Agreement to the extent applicable, with such
appropriate modifications to reflect that the Scripps own the shares of capital
stock of such Designated Subsidiary(ies) and as the Scripps and Purchaser may
otherwise agree. The Scripps may give such notice only once and the notice may
cover one or more of such Designated Subsidiaries. Such stock purchase shall
occur as promptly as practicable after such notice is received by Purchaser.
(d) enter into or terminate any material contract or agreement, or make
any material change in any contract, other than in the ordinary course of
business, consistent with past practice; provided, however, that, at Closing,
the Company Group may execute and deliver to Sellers a release substantially in
the form of Exhibit 7.2(d);
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(e) pay any bonuses or increases in salary to its employees, other than
normal bonuses or increases to employees, consistent with past practices
(except that any member of the Company Group may make severance arrangements
with its employees);
(f) pay any remuneration or fees to its directors other than in the
ordinary course of business, consistent with past practice, or other than
normal wages or salaries paid to them as employees;
(g) enter into any new contract of service with any director or
employee other than in the ordinary course of business, consistent with past
practice; or
(h) commit to take any of the actions listed in clauses (a) through (g)
inclusive.
ARTICLE VIII.
ADDITIONAL AGREEMENTS
8.1 Access and Information.
(a) The Scripps shall cause each member of the Company Group to afford
Purchaser and its financial advisors, legal counsel, accountants, consultants,
financing sources, and other authorized representatives reasonable access
during normal business hours throughout the period prior to the Closing Date to
all of its books, records, properties, plants and personnel and, during such
period, to furnish as promptly as practicable to Purchaser all information as
Purchaser reasonably may request, provided that no investigation pursuant to
this Section 8.1 shall affect any representations or warranties made herein or
the conditions to the obligations of Purchaser to consummate the Stock
Purchase.
(b) Purchaser and the Company shall continue to abide by the terms of
the confidentiality agreement between them, dated October 3, 1995 (the
"Confidentiality Agreement").
SECTION 8.2 Certain Minority Interests. The Scripps will cause the
Company Group to acquire and/or eliminate on or before the Closing, at the
Company Group's sole expense, all Minority Owned Shares, except that the
Company need not acquire or eliminate Minority Owned Shares in Designated
Subsidiaries that become Excluded Subsidiaries under the terms of Section
7.2(c). For purposes of this Section 8.2, the Scripps shall be deemed to have
satisfied the terms of the covenant contained in the preceding
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sentence if mergers and/or reverse stock splits that will result in the
elimination of all Minority Owned Shares in accordance with all applicable Laws
have been consummated, even if there are pending court or administrative
proceedings to determine the amounts payable to the holders of such Minority
Owned Shares.
SECTION 8.3 Non-Stock Interests. The Scripps will cause each member of
the Company Group, at the Company Group's sole expense, and without any further
or continuing liability or obligation to any member of the Company Group after
Closing, to terminate and satisfy in full before the Closing, all obligations
of any member of the Company Group with respect to all "Non-Stock Interests" or
similar interests, rights, commitments or arrangements in or relating to any
member of the Company Group, including, without limitation, those listed in
Schedule 6.3(d).
SECTION 8.4 Acquisition Proposals.
(a) Except as contemplated in Sections 7.2(c) and 8.2, from the date
hereof until the termination hereof, Sellers will not, and will cause the
officers, directors, employees and other agents of the Company Group not to,
directly or indirectly, take any action to (i) continue, solicit, initiate or
encourage discussions or negotiations with, or provide any nonpublic
information to any Person, other than Purchaser, and its affiliates concerning
any Acquisition Proposal, (ii) except in the ordinary course of business,
provide information with respect to any member of the Company Group related to
the Company Business to any Person, other than Purchaser, or (iii) enter into
or commit to enter into a transaction with any Person, other than Purchaser,
concerning an Acquisition Proposal. Sellers and the members of the Company
Group shall provide Purchaser with prompt notice of its receipt of an
Acquisition Proposal or other related communications from any third party.
Notwithstanding the foregoing, during any period when there remain Minority
Owned Shares in Scripps Marin Publishing Co., Sellers and the officers,
directors, employees and agents of the Company Group may solicit and negotiate
for the purchase and sale to any Person of substantially all the assets of such
entity or of all of the stock owned by the Company in such entity.
(b) Sellers recognize and acknowledge that a breach by Sellers of this
Section 8.4 will cause irreparable and material loss and damage to Purchaser as
to which it will not have an adequate remedy at law or in damages. Accordingly,
each Seller acknowledges and agrees that specific performance, the issuance of
an injunction or other equitable remedy is an appropriate remedy for any such
breach.
SECTION 8.5 Filings; Other Action. Subject to the terms and conditions
herein provided, as promptly as practicable, the Scripps and Purchaser shall:
(a) make, or cause to be made, all filings and submissions under the HSR Act
and all filings and notifications required by applicable state law, each as
reasonably may be required to be made
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by it in connection with this Agreement and the transactions contemplated
hereby, (b) use their respective best efforts to obtain, or cause to be
obtained, all necessary consents, approvals, waivers, permits or authorizations
prior to the Closing from any Government Entity or other Person in connection
with the consummation by him, her or it of the transactions contemplated
hereby, and (c) use all reasonable efforts to take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary or
appropriate in order for him, her, or it to consummate the transactions
contemplated by this Agreement. In connection with the foregoing, the Scripps
will provide Purchaser, and Purchaser will provide the Scripps, with copies of
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or any of its representatives, on the one
hand, and any Government Entity, on the other hand, with respect to this
Agreement and the transactions contemplated hereby. Each of Purchaser and the
Scripps acknowledges that certain actions may be necessary with respect to the
foregoing in making notifications and obtaining clearances, consents,
approvals, waivers or similar third party actions that are material to the
consummation of the transactions contemplated hereby, and each of Purchaser and
the Scripps agrees to cooperate with one another in exchanging information and
supplying such reasonable assistance as may be reasonably requested by each in
connection with the foregoing. In case at any time after the Closing Date any
further action is reasonably necessary or desirable to carry out the purposes
of this Agreement, the Scripps and the proper officers and/or directors of the
Purchaser and the Company shall take all such action.
SECTION 8.6 Public Announcements. Prior to Closing, Purchaser, on the
one hand, and Sellers, on the other hand, agree that they will not issue any
press release or otherwise make any public statement or respond to any press
inquiry with respect to this Agreement or the transactions contemplated hereby
without the prior approval of the other parties (which approval will not be
unreasonably withheld), except as may be required by applicable law.
SECTION 8.7 Directors' and Officers' Indemnification. With respect to
acts or omissions occurring on or before the Closing, Purchaser agrees to cause
the Company Group to honor (whether or not such provisions continue to be in
effect) or agrees itself to honor (in the event such member of the Company
Group ceases to exist), for a period of two years after the Closing, all rights
of indemnity provided for under the respective certificates of incorporation,
by-laws and indemnification agreements, if any, of the members of the Company
Group applicable to officers and directors of the members of the Company Group
(other than the Scripps, Barry Scripps, and E.W. Scripps III) as of the
Closing. The Scripps acknowledge and agree that, as of the Closing, all rights
to indemnification now existing in favor of them as directors, officers,
employees, and/or stockholders of any member of the Company Group under such
companies' respective certificates of incorporation, by-laws and
indemnification agreements, if any, or otherwise in effect at any time prior to
the Closing Date shall cease and have no further force or effect.
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SECTION 8.8 Employee Benefits.
(a) Only for purposes of determining eligibility and vesting under a
Purchaser Benefit Plan, any employees of any member of the Company Group who
remain employed by any member of the Company Group immediately following the
Closing ("Continuing Employees") will be given service credit for all periods
of employment with a member of the Company Group prior to the Closing. Any
pre-existing condition restrictions imposed with respect to a Continuing
Employee or his or her dependent prior to the Closing under a Company Plan
providing disability, life or health coverage may be imposed by a Purchaser
Benefit Plan providing similar benefits after the Closing (it being understood
that Purchaser does not hereby assume any obligation to provide any employee of
the Company Group with benefits under any Purchaser Benefit Plan). All other
pre-existing condition restrictions with respect to Continuing Employees shall
be waived.
(b) Purchaser agrees that it will cause the members of the Company
Group to comply with the Workers Adjustment and Retraining Notification Act, to
the extent applicable to the Company Group, in connection with actions taken
after the Closing Date.
(c) Prior to Closing, the parties will cooperate with each other in
communicating benefit related matters to employees of any member of the Company
Group, and no such communication shall be made by either party without the
prior consent of the other, which consent will not be unreasonably withheld.
(d) Prior to Closing, the Scripps will cause the Company to terminate
the Scripps League Newspapers, Inc. Employee Benefits Trust Agreement, and to
file or assist with filing all notices, reports, and returns, as required, with
any Government Entity with respect to that termination.
(e) Before the Closing Date, the Scripps will cause the Company to
suspend, effective on or before the Closing Date, the participant loan feature
under the Scripps League Newspapers Retirement and Savings Plan (401(k)), and
no loan made from the date hereof until termination of the participant loan
feature under the aforesaid plan will have a term longer than five (5) years.
(f) No provision of this Section 8.8 will create any third party
beneficiary or other rights in any employee of any member of the Company Group
(including, without limitation, any Continuing Employee) or former employee or
any beneficiary or dependent thereof.
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SECTION 8.9 Certain Tax Matters.
(a) Sales and Transfer Taxes. Subject to the last sentence of this
Section 8.9(a), all sales and transfer Taxes (including stock and real estate
transfer Taxes, if any) incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the Scripps. The Scripps
shall, at their own expense, file or prepare for filing all necessary Tax
Returns and other documentation with respect to all such sales or transfer
Taxes, and, if required by applicable law or if necessary to secure any
applicable exemption, Purchaser shall join in the execution of any such Tax
Returns or other documentation. Notwithstanding the foregoing, real estate
transfer taxes, if any, shall be borne equally by the Scripps on the one hand
and Purchaser on the other.
(b) Tax Returns and Payment of Taxes for Periods through the Closing
Date. The Company shall cause to be prepared and timely filed all Tax Returns
with respect to each member of the Company Group for all Tax periods ending on
or before the Closing Date, and the Company shall cause to be paid when due all
Taxes in respect of such Tax periods. To the extent that the amount of such
Taxes is in excess of the amount accrued for Taxes on the Closing Date Balance
Sheet, the Scripps, jointly and severally, shall pay to Purchaser an amount
equal to such excess within ten (10) days after written notice thereof by
Purchaser. Purchaser shall cause to be prepared and timely filed all Tax
Returns with respect to each member of the Company Group for all Tax periods
ending after the Closing Date, and shall pay when due all Taxes in respect of
such Tax Returns; provided, however, that in the event that the period of any
member of the Company Group with respect to any Tax does not end by reason of
the Closing, the Scripps, jointly and severally, shall pay to Purchaser, within
ten (10) days after written notice thereof by Purchaser, an amount equal to the
liability of such member of the Company Group for the Tax which is attributable
to the portion of such Tax period ending on the Closing Date, to the extent
that the amount of such Taxes is in excess of the amount accrued for Taxes on
the Closing Date Balance Sheet reduced (but not below zero) by the Taxes paid
pursuant to the first sentence of this Section 8.9(b). For purposes of this
Section 8.9(b), whenever it is necessary to determine the liability for Taxes
of a member of the Company Group which is attributable to the portion of a Tax
period which ends on the Closing Date, the determination shall be made on the
basis of the permanent books and records (including workpapers) of such member
of the Company Group and by assuming that such member of the Company Group had
a Tax period which ended at the close of the Closing Date, except that
exemptions, allowances or deductions which are calculated on an annual basis,
such as the deduction for depreciation, shall be apportioned ratably on a daily
basis. Any payment by the Scripps under this Section 8.9(b) shall be deemed an
adjustment to the Purchase Price.
(c) Tax Refunds and Credits. Any Tax refunds that are received by
Purchaser, the Cothe Company, or any member of the Company Group, and any
amounts credited
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against Tax to which Purchaser, the Company, or any member of the Company Group
become entitled, that relate to Tax periods or the portions thereof ending on
or before the Closing Date, other than refunds or credits reflected on the
Closing Date Balance Sheet or arising by reason of the carryback of net
operating losses or Tax credits from Tax periods or the portions thereof ending
after the Closing Date, shall be for the account of Sellers, and Purchaser
shall pay over to Sellers any such refund or the amount of any such credit, net
of any Tax liability attributable to the receipt of such refund or credit,
within fifteen (15) days after receipt thereof or entitlement thereto by
Purchaser, the Company, or such Company Group member.
(d) Indemnification for Taxes.
(i) Notwithstanding any other provision of this Agreement, the
Scripps shall, jointly and severally, pay, indemnify, defend and hold harmless
Purchaser and each member of the Company Group against (A) all Taxes
attributable to any member of the Company Group with respect to any Tax period
ending on or prior to the Closing Date, and (B) all Taxes attributable to any
member of the Company Group with respect to the portion of any Tax period which
begins before and ends after the Closing Date for which the Scripps are
responsible under Section 8.9(b) hereof, less in each case any amount
previously reserved or accrued for Taxes on the Closing Date Balance Sheet.
Notwithstanding any other provision of this Agreement, the obligation of the
Scripps, jointly and severally, to indemnify and hold harmless Purchaser and
each member of the Company Group from Taxes under this Section 8.9(d) shall
begin on the Closing Date and end six (6) months following the expiration of
the statute of limitations applicable to the assessment and collection of any
Taxes for and against which Purchaser and each member of the Company Group are
indemnified and held harmless by the Scripps hereunder, to the extent that a
claim for indemnification hereunder has not theretofore been made in writing.
(ii) In determining the amount of any indemnification payment by the
Scripps pursuant to this Section 8.9(d), there shall be deducted or added,
respectively, from or to the amount to be paid an amount equal to (A) the
present value of any net Tax benefit (federal, state, local or foreign)
realized, or reasonably expected to be realized, by Purchaser or any member of
the Company Group as a consequence of an event giving rise to any payment
pursuant to this Section 8.9(d), or (B) the present value of any net Tax
detriment (federal, state, local or foreign) realized, or reasonably expected
to be realized, by Purchaser or any member of the Company Group as a
consequence of an event giving rise to any payment pursuant to this Section
8.9(d). For purposes of this Section 8.9(d)(ii), "present value" shall be
calculated using the applicable annual Federal mid-term rate, as that term is
defined in the Code, as in effect for the month in which the payment is to be
made. For purposes of this Section 8.9(d)(ii), the amount of any "Tax benefit"
and "Tax detriment" shall be calculated using the highest effective Tax rate
applicable or known to be applicable with
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respect to the Tax period or periods for which the Tax benefit or the Tax
detriment, as the case may be, is reasonably expected to be realized or
incurred.
(e) Charitable Contribution and Net Operating Loss Carryforwards. The
Scripps shall notify Purchaser promptly upon their receipt of any information
relating to a determination by any Tax authority, whether before or after the
Closing Date, which could adversely affect the ability of Purchaser or any
member of the Company Group to deduct the charitable contribution or net
operating loss carryforwards from Tax periods ended on or prior to the Closing
Date which are reflected on the Closing Date Balance Sheet. Further, the
Scripps shall not, without the prior written consent of Purchaser, take any
action after the Closing Date which would reduce the charitable contribution or
net operating loss carryforwards potentially deductible by Purchaser or any
member of the Company Group in Tax periods ending subsequent to the Closing
Date.
(f) Tax Audits.
(i) Purchaser shall notify the Scripps in writing of any
pending or threatened audit or examination by any Tax authority (a "Tax Audit")
or of a Tax assessment for which the Scripps may be liable for indemnification
under Section 8.9(d) hereof within thirty (30) days after Purchaser's receipt of
notice of such pending or threatened Tax Audit or assessment. The Scripps
shall have the right, at their own expense, to control any Tax Audit, initiate
any claim for refund, contest, resolve and defend against any assessment,
notice of deficiency, or other adjustment or proposed adjustment relating to
any and all Taxes for any Tax period of any member of the Company Group ending
on or before the Closing Date; provided, however, that the Scripps shall in no
event take any position in any such proceeding which would subject Purchaser or
any member of the Company Group to any civil fraud or any civil or criminal
penalty, and provided, further, that the Scripps shall not consent, without the
prior written approval of Purchaser, to any change in the treatment of any item
which would affect the Tax liability of Purchaser or any member of the Company
Group for a Tax period ending subsequent to the Closing Date.
(ii) The Scripps and Purchaser shall cooperate fully in
connection with any Tax Audit, claim for refund, assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to any and all
Taxes attributable to any member of the Company Group with respect to any Tax
period which begins before and ends after the Closing Date. The expenses with
respect to such Tax Audit, claim for refund, assessment, notice of deficiency,
or other adjustment or proposed adjustment shall be shared in accordance with
the allocation of the Tax liability at issue, as set forth in Section 8.9(b)
hereof.
(iii) Purchaser shall have the right, at its expense, to control
any other Tax Audit, initiate any other claim for refund, and contest, resolve
and defend against
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any other assessment, notice of deficiency, or other adjustment or
proposed adjustment relating to Taxes for any Tax period ending after the
Closing Date with respect to any member of the Company Group; provided,
however, that Purchaser shall in no event take any position in any such
proceeding which would subject the Scripps to any civil fraud or any civil
criminal penalty, and provided, further, that Purchaser shall not consent,
without the prior written approval of the Scripps, to any change in the
treatment of any item which would affect the Tax liability of the Scripps or of
the Company Group for a period ending on or before the Closing Date.
(g) Mutual Cooperation. The parties shall provide each other with such
assistance as may reasonably be requested by any of them in connection with the
preparation of any Tax Return, any Tax Audit or other examination by any Tax
authority, or any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and provide the other with any records or
information that may be relevant to such Tax Return, Tax Audit or examination,
proceedings or determination. Such assistance shall include making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder and shall include providing
copies of any relevant Tax Returns and supporting work schedules. The party
requesting assistance hereunder shall reimburse the other for reasonable
expenses incurred in providing such assistance. Without limiting in any way
the foregoing provisions of this Section 8.9, Purchaser hereby agrees to
retain, until the appropriate statutes of limitation (including any extensions)
expire, copies of all Tax Returns, supporting work schedules and other records
or information that may be relevant to such Tax Returns of any member of the
Company Group for all Tax periods that include the dates from January 1, 1990
to the Closing Date, inclusive, and that it will not destroy or otherwise
dispose of such records without first providing the Scripps with a reasonable
opportunity to review and copy such records.
SECTION 8.10 Excluded Assets and Subsidiaries. The parties acknowledge
that the Excluded Assets and Subsidiaries will not be sold to Purchaser but
instead will be conveyed or otherwise distributed to the Scripps at or before
Closing. Notwithstanding anything to the contrary in this Agreement, such
conveyance or distribution may be structured as a purchase of assets (including
assets of the Excluded Subsidiaries) by the Scripps to occur simultaneously
with the Closing, as a redemption of certain shares of the Common Stock owned
by the Scripps, or in such other manner as the Scripps may reasonably
determine. In addition, the Company shall cancel any debt of such Excluded
Subsidiaries to any member of the Company Group prior to distribution. The
Scripps will be responsible for any Taxes and any other obligations relating
to the conveyance or distribution of Excluded Assets and Subsidiaries to the
Scripps to the extent not reserved for on the Closing Date Balance Sheet.
SECTION 8.11 Other Owned Real Property. At least ten (10) days before
Closing, the Scripps shall provide Purchaser with current surveys and Phase I
environmental
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studies of the Other Owned Real Property. If any such survey or Phase I
environmental study discloses a condition that violates the representations and
warranties in Section 6.6(a) or Section 6.10, Purchaser may elect to exclude
the affected property from the transaction contemplated by this Agreement.
Within five (5) business days of being provided with the information described
in the first sentence of this Section 8.11, Purchaser shall notify the Scripps
in writing whether Purchaser elects to exclude any item of Other Owned Real
Property as provided in the immediately preceding sentence, specifying the
basis for such election. As to any item of Other Owned Real Property that
Purchaser elects to acquire as part of the transactions contemplated by this
Agreement, Sellers shall have no liability to Purchaser for any Losses in
connection with the matters disclosed on the survey and Phase I environmental
study pertaining to such item of Other Owned Real Property (notwithstanding the
representations and warranties contained in Sections 6.6(a) and 6.10). As to
any item of Other Owned Real Property that Purchaser elects to exclude from the
transactions contemplated by this Agreement, such properties shall be deemed to
have been added to Schedule 7.2(c) and constitute Excluded Assets and
Subsidiaries for purposes of this Agreement but there shall be no adjustment to
the Purchaser Price with respect to such properties.
ARTICLE IX.
CONDITIONS TO CONSUMMATION OF THE STOCK
PURCHASE
SECTION 9.1 Conditions to Each Party's Obligations. The respective
obligations of each party to effect the Stock Purchase shall be subject to the
satisfaction at or prior to the Closing of the following conditions:
(a) any waiting period applicable to the consummation of the Stock
Purchase under the HSR Act shall have expired or been terminated, and no action
shall have been instituted by the Department of Justice or Federal Trade
Commission and not withdrawn or terminated that challenges or seeks to enjoin
the consummation of the transactions contemplated hereby;
(b) no statute, rule, regulation, executive order, decree, ruling or
preliminary or permanent injunction shall have been enacted, entered,
promulgated or enforced by any Government Entity that prohibits, restrains,
enjoins or restricts the consummation of the Stock Purchase; and
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(c) no Action shall be pending by or before any Government Entity
against any Seller or any member of the Company Group or Purchaser that seeks
to prohibit, restrain, enjoin or materially and adversely alter the
transactions contemplated by this Agreement; provided, however, that the
provisions of this Section 9.1(c) shall not excuse performance by any party
that has directly or indirectly solicited or encouraged any such Action.
SECTION 9.2 Conditions to Obligations of Sellers. The obligation of
Sellers to effect the Stock Purchase shall be subject to the satisfaction at or
prior to the Closing of the following additional conditions (which may be
waived by the Scripps): (a) Purchaser shall have performed in all material
respects its obligations under the provisions of this Agreement required to be
performed by it at or prior to the Closing; (b) in the reasonable judgment of
the Scripps, the Losses that Sellers would be reasonably likely to incur,
assuming that the Closing occurred, as a result of breaches of the
representations and warranties of Purchaser contained in this Agreement shall
be less than One Million Five Hundred Thousand Dollars ($1,500,000.00) in the
aggregate as of the Closing; (c) Purchaser shall have made such filings and
obtained such permits, authorizations, consents, waivers or approvals required
by it to consummate the transactions contemplated hereby; (d) the Scripps shall
have received the Escrow Agreements, duly executed by Purchaser and the Escrow
Agent; (e) Sellers shall have received an opinion from Fulbright & Jaworski
L.L.P., counsel for Purchaser, dated as of the Closing Date, in form and
substance reasonably satisfactory to Sellers and their counsel (substantially
in the form of Exhibit 9.2(e)); (f) Sellers shall have received the Purchase
Price, instruments and other documents required to be delivered to them
pursuant to Section 3.3 of the Agreement; and (g) Sellers shall have received a
certificate of the Chairman of the Board, the President, an Executive Vice
President, a Senior Vice President or the Chief Financial Officer of Purchaser
as to the satisfaction of the conditions set forth in Section 9.1 (as
applicable to Purchaser) and in this Section 9.2. If the Scripps waive any of
the conditions set forth in this Section 9.2 and elect to close, such decision
shall not waive any rights Sellers may have for indemnification under the
provisions of Section 11 hereof by reason of any breaches of representations,
warranties, covenants, or agreements of Purchaser, or any other matters covered
by such indemnification provisions.
SECTION 9.3 Conditions to Obligations of Purchaser. The obligations of
Purchaser to effect the Stock Purchase shall be subject to the satisfaction at
or prior to the Closing of the following additional conditions (which may be
waived by Purchaser): (a) the Scripps shall have performed in all respects
their obligations under Sections 8.1, 8.2, 8.3, and 8.11 of this Agreement, and
Sellers shall have performed in all material respects their obligations under
the other provisions of this Agreement, required to be performed by them at or
prior to the Closing; (b) the representations and warranties of the Scripps
and/or the Trust contained in Sections 5.1, 5.2, 5.3, 5.4, 6.2, 6.3(b), 6.3(e)
and 6.30 shall be true and correct in all respects; (c) in the reasonable
judgment of Purchaser, (i) the Losses that Purchaser would be reasonably likely
to incur, assuming that the Closing occurred, as a result of breaches of
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the representations and warranties of the Scripps and/or the Trust contained in
this Agreement (other than those in Sections 5.1, 5.2, 5.3, 5.4, 6.2, 6.3(b),
6.3(e), 6.30, and 9.3(c)(ii)) shall be less than One Million Five Hundred
Thousand Dollars ($1,500,000.00) in the aggregate as of the Closing, and (ii)
the Losses that Purchaser would be reasonably likely to incur, assuming that
the Closing occurred, as a result of appraisal actions or similar valuation
proceedings involving the Minority Owned Shares or the interests owned in the
Company of record and/or beneficially (then or previously) by family members of
the Scripps shall be less than Five Million Dollars ($5,000,000.00) in the
aggregate as of the Closing; (d) Sellers and the Company Group shall have made
such filings and obtained such permits, authorizations, consents, waivers, or
approvals required by it to consummate the transactions contemplated hereby;
(e) the Scripps or the Company Group shall have obtained and delivered to
Purchaser all required or appropriate approvals and consents relating to those
leases, contracts and other agreements which have been designated on the
Schedules as "material"; (f) Purchaser shall have received an opinion from
Wilmer, Cutler & Pickering, counsel for the Company Group and Sellers, dated as
of the Closing Date, in form and substance reasonably satisfactory to Purchaser
and its counsel (substantially in the form of Exhibit 9.3(f)); (g) the Company
Group or the Scripps shall have delivered to Purchaser the written resignations
of such directors, officers, and employees of the members of the Company Group
as Purchaser requests in writing to the Scripps, effective as of the Closing,
or shall have otherwise caused the removal and/or termination of such officers,
directors, and employees without further liability or obligation of Purchaser
or any member of the Company Group; (h) each of the Scripps shall have executed
and delivered to Purchaser his or her resignation, in the form as reasonably
agreed by the Scripps and Purchaser, as an officer, director, and employee,
effective as of the Closing without further liability or obligation of any
member of the Company Group or Purchaser; (i) Purchaser shall have received the
Escrow Agreements, duly executed by all parties thereto; (j) Purchaser shall
have received from each of the Scripps a covenant not to compete, substantially
in the form of Exhibit 9.3(j); (k) Purchaser shall have received the
instruments and other documents required to be delivered to it pursuant to
Section 3.2 of the Agreement; (l) all contracts listed on Schedule 9.3(l) shall
have been terminated or assigned, all of the debts and obligations with respect
to such contracts shall have been extinguished to the extent feasible or
otherwise reserved for on the Closing Date Balance Sheet, and no member of the
Company Group or Purchaser shall have any continuing liability or obligation
thereunder in excess of amounts reserved for (other than the obligations
subject to the indemnity by the Scripps under Section 11.1(b)(iii)); and (m)
Purchaser shall have received certificates of Sellers as to satisfaction of the
conditions set forth in Section 9.1 (as applicable to Sellers) and in this
Section 9.3. If Purchaser waives any of the conditions set forth in this
Section 9.3 and elects to close, such decision shall not waive any rights
Purchaser may have for indemnification under the provisions of Section 11
hereof by reason of any breaches of representations, warranties, covenants, or
agreements of any Seller, or any other matters covered by such indemnification
provisions.
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ARTICLE X.
TERMINATION
SECTION 10.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing by mutual written agreement of
Purchaser and the Scripps.
SECTION 10.2 Termination by Either Purchaser or the Scripps. This
Agreement may be terminated and the Stock Purchase may be abandoned by
Purchaser or the Scripps if (a) the Stock Purchase shall not have been
consummated by 5:00 p.m. Eastern Time on August 1, 1996, or (b) a Government
Entity shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable; provided, that the party seeking to
terminate this Agreement pursuant to clause (b) shall have used all reasonable
efforts to remove such injunction, order or decree.
SECTION 10.3 Termination by Sellers. This Agreement may be terminated
and the Stock Purchase may be abandoned at any time prior to the Closing by
Sellers if (a) there has been one or more breaches by Purchaser of any
representations, warranties, covenants, or agreements contained in this
Agreement which would entitle Sellers not to close pursuant to Section 9.2
(provided, however, that Sellers may not terminate this Agreement pursuant to
this Section 10.3(a) unless, within five (5) days of becoming aware of such
breach, Sellers have given written notice of such breach to Purchaser and have
provided Purchaser with fifteen (15) days to cure such breach), or (b) the
results of the Phase I environmental studies, to be undertaken at the sole
expense and control of the Company Group, are such that in the reasonable
opinion of the Scripps the liability of one or more members of the Company
Group under any and all applicable Environmental Laws would exceed Five Million
Dollars ($5,000,000.00). Purchaser shall be entitled to nullify Sellers'
election to terminate this Agreement pursuant to this Section 10.3(b) by giving
written notice to Sellers within five (5) business days after the date of
Sellers' notice of termination to Purchaser (which such notice shall be given
no later than July 15, 1996) that it elects to proceed to close hereunder. If
Purchaser so elects, Losses that are related to conditions that violate
Environmental Laws identified in the Phase I environmental studies up to Five
Million Dollars ($5,000,000.00) in the aggregate shall be allocated among the
parties as provided for below in Section 11, and Losses related to conditions
that violate Environmental Laws identified in the Phase I environmental studies
in excess of Five Million Dollars ($5,000,000.00) shall be assumed by Purchaser
(and Sellers shall have no further liability for such Losses). In the event
that the Agreement is terminated by Sellers pursuant to this
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Section 10.3(b), then the Scripps agree, jointly and severally, to reimburse
Purchaser for its reasonable out-of-pocket expenses incurred in connection
with this Agreement and the transactions contemplated hereby (without regard
to the limitations of Section 11.1(c)).
SECTION 10.4 Termination by Purchaser. This Agreement may be
terminated and the Stock Purchase may be abandoned at any time prior to the
Closing by Purchaser, if there has been one or more breaches by a Seller of any
representations, warranties, covenants, or agreements contained in this
Agreement which would entitle Purchaser not to close pursuant to Section 9.3;
provided, however, that Purchaser may not terminate this Agreement pursuant to
this Section 10.4 unless, within five (5) days of becoming aware of such
breach, Purchaser has given written notice of such breach to Sellers and has
provided Sellers with fifteen (15) days to cure such breach.
SECTION 10.5 Effect of Termination and Abandonment. In the event of
termination of the Agreement and the abandonment of the Stock Purchase pursuant
to this Article X, the terminating party shall give written notice thereof as
promptly as practicable to the other parties to this Agreement and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein: (a) there shall be no liability or
obligation on the part of Purchaser or Sellers or any of their respective
officers and directors, and all obligations of the parties shall terminate,
except for the obligations of the parties pursuant to (i) Sections 6.28, 8.4,
10.3 (last sentence only), 11.2, 11.3, 11.6, 11.7, 11.8, 11.9, 11.10, 11.11,
11.12 and this Section 10.5 or (ii) the Confidentiality Agreement referred to
in Section 8.1(b) hereof; provided, however, that a party who is in material
breach of its representations, warranties, covenants or agreements set forth in
this Agreement shall be liable for damages occasioned by such breach,
including, without limitation, any expenses incurred by the other parties in
connection with this Agreement and the transactions contemplated hereby
(without regard to the limitations of Sections 11.1(c) and 11.1(f)), and (b)
all filings, applications and other submissions made pursuant to the
transactions contemplated by this Agreement shall, to the extent practicable,
be withdrawn from the agency or Person to which made. In the event that this
Agreement is terminated for any reason other than a breach of any
representation, warranty, covenant or agreement of Purchaser hereunder which
would entitle Sellers not to close pursuant to Section 9.2, the Scripps,
jointly and severally, shall reimburse Purchaser for all reasonable
out-of-pocket expenses (including reasonable attorney's fees and costs)
incurred by Purchaser in defending against claims of any kind asserted against
Purchaser or any of its affiliates by any member of the Scripps' family or
trusts for their benefit in connection with this Agreement (including the
negotiation hereof) or the transactions contemplated hereby.
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ARTICLE XI.
GENERAL PROVISIONS
SECTION 11.1 Survival of Representations, Warranties and Agreements;
Indemnification.
(a) The several representations and warranties of the parties contained
in this Agreement (or in any document delivered in connection herewith) shall
be deemed to have been made on the date of this Agreement (except as otherwise
provided therein) and, if the Closing occurs, as of the Closing Date, shall be
deemed to be material and to have been relied upon by Purchaser or Sellers, as
the case may be, notwithstanding any investigation made by Purchaser or
Sellers, shall survive the Closing Date and, except as otherwise specifically
provided in this Agreement, shall remain operative and in full force and effect
for a period of two years following the Closing Date, except as to any matters
with respect to which a bona fide written claim shall have been made or an
action at law or in equity shall have commenced before such date, in which
event survival shall continue (but only with respect to, and to the extent of,
such claim) until the final resolution of such claim or action, including all
applicable periods for appeal; provided, however, that (i) the representations,
warranties, and covenants contained in Sections 5.1, 5.2, 6.2, 6.3(b), 6.3(e),
and this Section 11 shall survive without time limit; (ii) the representations,
warranties, and covenants contained in the Confidentiality Agreement shall
survive as specified therein; (iii) the representations, warranties and
covenants relating to Taxes shall survive until six months following the
expiration of the applicable statutes of limitations relating to claims with
respect thereto (giving effect to any extension thereof by waiver or
otherwise); and (iv) the representations, warranties and covenants relating to
environmental matters and ERISA shall survive for three years following the
Closing Date.
(b) The Scripps, jointly and severally, shall indemnify and hold
harmless Purchaser and its affiliates, officers, directors, stockholders,
employees, agents and successors and assigns at all times after the Closing
from and against:
(i) any and all loss, cost, liability, damage and expense (including
legal and other expenses incident thereto) to the extent not reserved for on
the Closing Date Balance Sheet (each a "Loss" and, collectively, "Losses")
arising out of or resulting from any inaccuracy, misrepresentation or breach of
any representation, warranty, covenant or agreement of Sellers under this
Agreement (including the Schedules and the Exhibits hereto) and the other
documents and instruments delivered in connection herewith; provided, however,
that for purposes of this subsection 11.1(b)(i), all such representations,
warranties, covenants and agreements of the Scripps and/or the Trust shall be
deemed to have been made
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by the Scripps and/or the Trust without any qualification as to materiality or
knowledge; provided further, however, that for purposes of third party claims
subject to indemnification under this subsection 11.1(b)(i), the
representations made in Sections 6.5, 6.6(a), 6.6(e), 6.8, 6.9, 6.10, 6.13 and
6.14(b) shall be deemed to have been made by the Scripps and/or the Trust
without regard to the disclosure matters listed on Schedules 6.5, 6.6(a) (items
marked with asterisks only), 6.6(e), 6.8, 6.9, 6.10, 6.13, and 6.14(b);
(ii) any and all Losses (A) arising out of or resulting from the
operations of, or the acts or omissions of the employees or agents of, any of
the Excluded Subsidiaries or otherwise attributable to the Excluded Assets and
Subsidiaries whether before or after the Closing Date (provided, however, that
this clause (A) of Section 11.1(b)(ii) shall not apply to liabilities of the
Excluded Subsidiaries that result solely from such entities' status before
Closing as members of the Company Group), (B) resulting from any causes of
action or claims of any kind asserted by unaffiliated third parties and (x)
arising from any act or omission of a Seller or any member of the Company Group
on or prior to the Closing Date or (y) otherwise attributable to the
operations, business, assets, or properties of any member of the Company Group
on or prior to the Closing Date, or (C) arising out of the indemnity obligation
of Purchaser described in Section 8.7;
(iii) any and all Losses (1) resulting from any causes of action or
claims of any kind asserted by the holders or former holders of minority
interests in the Company or any of the Subsidiaries and Non-Stock Interests
arising from any action or omission of a Seller or any member of the Company
Group on or prior to the Closing Date or otherwise attributable to (A) the
Minority Owned Shares, (B) any interest in the Company owned (prior to the
Closing) of record or beneficially by family members of the Scripps or trusts
for their benefit, or (C) the Non-Stock Interests (including, without
limitation, claims or causes of action relating to employment), or (2) any
claims by a family member of the Scripps or a trust for their benefit relating
to or affecting in any way whatsoever any member of the Company Group
(including, without limitation, claims or causes of action relating to
employment); and
(iv) all claims, actions, suits, proceedings, demands, assessments,
judgments, costs and expenses (including legal and other expenses incident
thereto) incident to any of the foregoing.
Nothing in this Agreement shall entitle Purchaser to multiple recovery of
Purchaser's Losses for the same matter giving rise to indemnification
hereunder.
(c) (i) Except as otherwise provided in the next sentence of this Section
11.1(c)(i), Sellers shall not be liable to Purchaser, whether under Section
11.1(b) or otherwise, except to the extent that the Losses incurred by
Purchaser arising out of this Agreement
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exceed One Million Five Hundred Thousand Dollars ($1,500,000.00) in
the aggregate. The limitation on the obligation of Sellers to indemnify
Purchaser described in the preceding sentence shall not apply to: (A) any
amount owed by Sellers to Purchaser in connection with the Cash Adjustment or
Working Capital Adjustment described in Section 2.2; (B) any Loss arising out
of a breach by the Scripps and/or the Trust of the covenants made in Sections
8.2, 8.3, and 8.4; (C) any Loss arising out of a breach by the Scripps and/or
the Trust of a representation or warranty relating to ownership of the Common
Stock or the capital stock of the Subsidiaries (other than the Excluded
Subsidiaries); (D) any Loss arising out of a breach by the Scripps and/or the
Trust of a representation or warranty made in Sections 5.2, 5.6, 6.3(b), 6.5,
or 6.28 or of a covenant made in Section 8.9; (E) any Loss arising from a fraud
on Purchaser in connection with this Agreement committed by a Seller or any
other officer or director of any member of the Company Group, or any of the
employees of any member the Company Group listed in Schedule 1.26; (F) any Loss
arising out of the operations of, or the acts or omissions of the employees or
agents of, any of the Excluded Assets and Subsidiaries or otherwise
attributable to the Excluded Assets and Subsidiaries (provided, however, that
this clause (F) of Section 11.1(c)(i) shall not apply to liabilities of the
Excluded Subsidiaries that result solely from such entities' status before
Closing as members of the Company Group); (G) any Loss described in Section
11.1(b)(iii); or (H) any Loss arising out of the indemnity obligation of
Purchaser described in Section 8.7.
(ii) In no event shall Sellers have any liability to Purchaser,
whether under Section 11.1(b) or otherwise, for Losses in excess of the
following limits:
(A) the liability of Sellers for all Losses other than those
specified in Section 11.1(c)(ii)(B) or (C) below ("General Losses"), shall not
exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000.00) in the
aggregate;
(B) the liability of Sellers for all General Losses plus all
Losses arising out of a breach of a representation or warranty in Section 6.10
("Environmental Losses") plus the first Five Million Dollars ($5,000,000.00) of
all Tort Losses, as defined below, shall not exceed Twenty-One Million Five
Hundred Thousand Dollars ($21,500,000.00) in the aggregate; and
(C) the liability of Sellers for the following Losses shall be
unlimited: (I) any amount described in Sections 11.1(c)(i)(A) through (H); and
(II) any uninsured Loss arising from third-party tort claims against any member
of the Company Group arising out of events occurring on or before the Closing
Date ("Tort Losses") to the extent all such Tort Losses exceed Five Million
Dollars ($5,000,000.00) in the aggregate.
(d) Claims for indemnification provided for in Section 11.1(b)
must be submitted in writing to the Scripps and the Escrow Agent: (i) in the
case of claims based on
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representations or warranties of the Scripps and/or the Trust, on or before the
expiration date of such representation or warranty; (ii) in the case of claims
based on breach of covenants or agreements of the Scripps provided for in
Sections 8.1(a), 8.4, 8.5, 8.6, and 8.8, within 180 days after the Closing
Date; (iii) in the case of claims based on breach of covenants or agreements of
the Scripps provided for in Sections 8.1(b), 8.2, 8.3, and 8.9, as well as
claims for indemnification pursuant to Sections 11.1(b)(ii)(A) and (b)(iii), at
any time; (iv) in the case of claims for indemnification pursuant to Section
11.1(b)(iv), no later than the time that the underlying claim for
indemnification must be made pursuant to Sections 11.1(b)(i) through (iii); (v)
in the case of claims for indemnification pursuant to Section 11.1(b)(ii)(B),
within three years after the Closing Date; (vi) in the case of claims for
indemnification pursuant to Section 11.1(b)(ii)(C), within twenty-seven (27)
months after the Closing Date; (vii) in the case of claims based upon fraud,
within the applicable statute of and (viii) in the case of all other claims not
otherwise specifically provided for, within two years after the Closing Date.
Claims not asserted in writing within the foregoing time limits shall be deemed
waived and forever barred. Purchaser agrees that it shall first seek
reimbursement for any Losses under Section 11.1(b) out of the escrow
established under the applicable Escrow Agreement before seeking recovery
directly from the Scripps.
(e) Purchaser shall indemnify and hold harmless Sellers and their
affiliates, officers, directors, stockholders, employees, agents and successors
and assigns at all times after the Closing from and against:
(i) any and all Losses arising out of or resulting from any inaccuracy,
misrepresentation or breach of any representation, warranty, covenant or
agreement of Purchaser under this Agreement (including the Schedules and the
Exhibits hereto) and the other documents and instruments delivered in
connection herewith:
(ii) any and all Losses resulting from causes of action or claims of
any kind asserted by unaffiliated parties arising from any action or omission
of Purchaser or any member of the Company Group after the Closing Date; and
(iii) all claims, actions, suits, proceedings, demands, assessments,
judgments, costs and expenses (including legal and other expenses incident
thereto) incident to any of the foregoing;
Nothing in this Agreement shall entitle Sellers to multiple recovery of
their Losses for the same matter giving rise to indemnification hereunder.
(f) Purchaser shall not be liable to Sellers, whether under Section
11.1(e) or otherwise, except to the extent that the Losses incurred by Sellers
arising out of this Agreement exceed One Million Five Hundred Thousand Dollars
($1,500,000.00) in the
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aggregate and in no event shall Purchaser have any liability to Sellers,
whether under Section 11.1(e) or otherwise, for Losses in excess of Twenty-One
Million Five Hundred Thousand Dollars ($21,500,000.00) in the aggregate. The
limitations on the indemnification obligation of Purchaser contained in the
preceding sentence shall not apply to any amount owed by Purchaser to Sellers
in connection with the Cash Adjustment or Working Capital Adjustment described
in Section 2.2.
(g) Claims for indemnification provided for in Section 11.1(e) must be
submitted in writing to Purchaser (i) in the case of claims based on
representations or warranties of Purchaser, on or before the expiration date of
such representation or warranty; (ii) in the case of claims based on breach of
covenants or agreements of Purchaser provided for in Sections 8.1(a), 8.5, 8.6,
and 8.8, within 180 days after the Closing Date; (iii) in the case of claims
based on breach of covenants or agreements of Purchaser provided for in
Sections 8.1(b) and 8.9, and claims for indemnification pursuant to Section
11.1(e)(ii), at any time; (iv) in the case of claims for indemnification
pursuant to Section 11.1(e)(iii), no later than the time that the underlying
claim for indemnification must be made pursuant to Sections 11.1(e)(i)-(ii),
and (v) in the case of all other claims not otherwise specifically provided
for, within two years after the Closing Date. Claims not asserted in writing
within the foregoing time limits shall be deemed waived and forever barred.
(h) (i) If at any time a party entitled to indemnity hereunder (the
"Indemnitee") shall receive notice of any state of facts that may result in a
Loss of the type described in Section 11.1(b) or (e), the Indemnitee shall
promptly give written notice (a "Notice of Claim") to the party obligated to
provide indemnity hereunder (the "Indemnitor") and, in the case of a claim by
Purchaser against the Scripps, to the Escrow Agent (in accordance with the
terms of the applicable Escrow Agreement) of the discovery of such potential or
actual Loss. A Notice of Claim shall set forth (A) a brief description of the
nature of the potential or actual Loss and (B) to the extent then feasible the
total amount of Loss anticipated (including any costs or expenses which have
been or may be reasonably incurred in connection therewith). Payment of the
amount of actual Loss due the Indemnitee as set forth in a Notice of Claim
shall be made by the Indemnitor or, in the case of a claim made by Purchaser
during the term of an Escrow Agreement, the Escrow Agent to the extent of
available funds in the Escrow Agreement (in accordance with the terms of such
Escrow Agreement) no later than the thirtieth (30th) day after the date of the
Notice of Claim (or such later date as the Indemnitor receives written notice
that an actual Loss has occurred) and, to the extent that there are no such
available funds, by the Indemnitor, unless the provisions of subsection
11.1(h)(ii) or (iii) are applicable thereto. The Indemnitee's failure to
provide copies of documents or to furnish relevant data shall not constitute a
defense (in whole or in part) to any claim by the Indemnitee against the
Indemnitor for indemnification, except and only to the extent that such failure
shall have caused or increased such liability or adversely affected the ability
of the Indemnitor to defend against or reduce its liability.
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<PAGE> 61
(ii) If the Indemnitor shall reject any Loss as to which a Notice of
Claim is sent by the Indemnitee, the Indemnitor shall give written notice of
such rejection to the Indemnitee and, in the case of a claim by Purchaser
against the Scripps, to the Escrow Agent (in accordance with the terms of the
applicable Escrow Agreement) within thirty (30) days after the date of receipt
of the Notice of Claim. Upon such rejection, the parties shall attempt in good
faith to resolve any disagreement, and payment of the amount of actual Loss
shall be made by the Indemnitor or, in the case of a claim made by Purchaser,
the Escrow Agent within five days of mutual resolution of any disagreement. If
any such disagreement remains unresolved as of the forty-fifth (45th) day after
receipt of the Notice of Claim, the dispute shall be determined by an
independent third party selected jointly by Purchaser and the Scripps, and the
decision of such third party shall be final and binding on all parties. If the
Notice of Claim is determined by such third party to be proper, payment of the
amount of Loss due the Indemnitee as set forth in a Notice of Claim shall be
made by the Indemnitor or, in the case of a claim made by Purchaser during the
term of an Escrow Agreement, the Escrow Agent to the extent of available funds
in the applicable Escrow Agreement (in accordance with the terms of such Escrow
Agreement) no later than the fifth (5th) business day after such determination
is rendered and, to the extent that there are no such available funds, by the
Indemnitor.
(iii) If any Notice of Claim relates to any claim made against an
Indemnitee by a third person, the Notice of Claim shall state the nature, basis
and amount of such claim. The Indemnitor shall have the right, at its
election, by written notice given to the Indemnitee and, in the case of a claim
by Purchaser during the term of an Escrow Agreement, the Escrow Agent, to
assume the defense of the claim as to which such notice has been given. Except
as provided in the next sentence, if the Indemnitor so elects to assume such
defense, it shall diligently and in good faith defend such claim and shall keep
the Indemnitee reasonably informed of the status of such defense, and the
Indemnitee shall cooperate fully with the Indemnitor in the defense of such
claim, provided that in the case of any settlement providing for remedies other
than monetary damages for which indemnification is provided, the Indemnitee
shall have the right to approve the settlement, which approval shall not be
unreasonably withheld or delayed. If the Indemnitor does not so elect to
defend any claim as aforesaid or shall fail to defend any claim diligently and
in good faith (after having so elected), the Indemnitee may assume the defense
of such claim and take such other action as it may elect to defend or settle
such claim as it may determine in its reasonable discretion, provided that the
Indemnitor shall have the right to approve any settlement, which approval will
not be unreasonably withheld or delayed.
(i) For purposes of Sections 11.1(b)(i) and 11.1(e)(i), the notice of a
claim and/or the filing or threatening of a suit, action, proceeding, or
investigation after the date hereof by a family member of the Scripps, a trust
for their benefit, Bradley Henke, and/or H-D Holdings, Inc. against Purchaser
or Sellers or the transactions contemplated by this
- 54 -
<PAGE> 62
Agreement shall not constitute an inaccuracy, misrepresentation or breach of any
representation or warranty by any party made as of the Closing. Neither
Section 11.1(a) nor the certificate referred to in Section 9.2(g) or the
certificate referred to in Section 9.3(m) shall be construed as renewing or
reaffirming as of the Closing any of the representations or warranties
contained in Articles IV, V, and VI insofar as they may relate to the notice of
a claim and/or the filing or threatening of a suit, action, proceeding, or
investigation after the date hereof by a family member of the Scripps, a trust
for their benefit, Bradley Henke, and/or H-D Holdings, Inc. against Purchaser
or Sellers or the transactions contemplated by this Agreement.
SECTION 11.2 Notices. All notices, claims, demands and other
communications hereunder shall be in writing and shall be deemed given (a) in
the case of a facsimile transmission, when received by recipient in legible
form and sender has received an electronic confirmation of receipt of the
transmission; (b) in the case of delivery by a standard overnight carrier, upon
the date of delivery indicated in the records of such carrier; (c) in the case
of delivery by hand, when delivered by hand; or (d) in the case of delivery by
first class (registered or certified) mail, upon the expiration of five (5)
business days after the day when mailed (postage prepaid, return receipt
requested), addressed to the respective parties at the following addresses (or
such other address for a party as shall be specified by like notice):
(a) If to Purchaser, to:
Pulitzer Publishing Company
900 North Tucker Boulevard
St. Louis, Missouri 63101
Telefax: (314) 340-3133
Attention: Ronald H. Ridgeway
Senior Vice President-Finance
with a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 63131
Telefax: (212) 752-5958
Attention: Richard A. Palmer, Esq.
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<PAGE> 63
(b) If to Mr. Edward W. Scripps, Mrs. Betty Knight Scripps, or the
Trust:
947 North Ocean Boulevard
Palm Beach, Florida 33480
Telefax: (407) 844-9703
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Telefax: (202) 663-6363
Attention: Duane D. Morse, Esq.
SECTION 11.3 Binding Effect. All of the terms and conditions of this
Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns, heirs, executors, administrators, and legal representatives. Except
as expressly provided in this Agreement, nothing in this Agreement, expressed
or implied, is intended to confer on any person or entity (other than the
parties, or their respective successors and permitted assigns, heirs,
executors, administrators, and legal representatives) any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
SECTION 11.4 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 11.5 Books and Records. Sellers and Purchaser agree that, so
long as any books, records, and files relating to the business, properties,
assets, or operations of the Company Group, to the extent that they pertain to
the operations of the Company or the Subsidiaries prior to the Closing Date,
remain in existence and are available, on and after the Closing Date each party
(at its expense) shall have the right to inspect and to make copies of the same
at any time during business hours for the purpose of complying with regulatory
requirements, meeting auditing needs, or fulfilling similar obligations for
which such books, records, or files are reasonably necessary.
SECTION 11.6 Entire Agreement; Assignment. This Agreement (including
the Schedules and the Exhibits hereto) and the other documents and instruments
referred to herein constitutes the entire agreement and supersedes all other
prior agreements and
- 56 -
<PAGE> 64
understandings (other than those contained in the Confidentiality Agreement,
which are hereby incorporated by reference herein), both written and oral,
among the parties or any of them, with respect to the subject matter hereof.
Neither this Agreement nor any obligation hereunder shall be assignable except
with the prior written consent of the other parties; provided, however, that
Purchaser may assign this Agreement or any of its rights and obligations
hereunder to any wholly-owned subsidiary of Purchaser without the prior written
consent of the other parties.
SECTION 11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the provisions thereof relating to conflicts of law.
SECTION 11.8 Choice of Forum. Any judicial proceeding brought against
any of the parties hereto with respect to this Agreement shall be brought in
any court of competent jurisdiction in the State of Delaware, including the
United States District Court for the District of Delaware, irrespective of
where such party may be located at the time of such proceeding, and by
execution and delivery of this Agreement, each of the parties to this Agreement
hereby consents to the exclusive jurisdiction of any such court and waives any
defense or opposition to such jurisdiction.
SECTION 11.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.10 No Punitive Damages. Notwithstanding anything to the
contrary contained in this Agreement, the parties each acknowledge and agree
that to the greatest extent permitted by law there shall be no punitive damages
awarded by any court, tribunal or administrative or other proceeding arising
out of any dispute between or among any of the parties (including, without
limitation, any dispute alleged between or among any parties based on alleged
fraudulent, willful or dishonest conduct by any party), it being the express
intent of all parties to this Agreement to completely and irrevocably waive any
right to obtain punitive damages in connection with any such proceeding. Each
party acknowledges that prior to agreeing to the foregoing provision it has
consulted with its counsel as to the consequences of such provision.
SECTION 11.11 Drafting. Each party acknowledges that its legal counsel
participated in the preparation of this Agreement. The parties therefore
stipulate that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement to favor any party against the other.
- 57 -
<PAGE> 65
SECTION 11.12 Expenses. Whether or not the Stock Purchase is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses, except as otherwise specified herein.
SECTION 11.13 Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
SECTION 11.14 Waiver. At any time prior to the consummation of the
Stock Purchase, the parties hereto may (a) extend the time for the performance
of any of the obligations or other acts of the other parties hereto, (b) waive
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto and (c) waive compliance with any of the
covenants, agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
SECTION 11.15 Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement. This
Agreement shall become effective when each party hereto shall have received
counterparts thereof signed by all of the other parties hereto.
SECTION 11.16 Severability; Validity; Parties in Interest. If any
provision of this Agreement, or the application thereof to any person or
circumstance is held invalid or unenforceable, in a particular jurisdiction,
the remainder of this Agreement, and the application of such provision to other
persons or circumstances or in any other jurisdiction, shall not be affected
thereby, and to such end, the provisions of this Agreement are agreed to be
severable. Nothing in this Agreement, express or implied, is intended to confer
upon any person not a party to this Agreement any rights or remedies of any
nature whatsoever under or by reason of this Agreement, including without
limitation, any employee or former employee of any member of the Company Group,
any former stockholder of the Company, or any stockholder or former stockholder
of any of the Subsidiaries.
SECTION 11.17 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any provision of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any state or
federal court in the state of Delaware, this being in addition to any other
remedy to which they are entitled at law or in equity.
- 58 -
<PAGE> 66
IN WITNESS WHEREFORE, Purchaser, by its duly authorized representative, on
behalf of itself, and each Seller have caused this Agreement to be executed,
all as of the date first above written.
PULITZER PUBLISHING COMPANY MR. EDWARD W. SCRIPPS
By: /s/ Ronald H. Ridgway /s/ Edward W. Scripps
--------------------------- -----------------------------
Name: Ronald H. Ridgway
Title: Senior Vice President-Finance
Mrs. Betty Knight Scripps
/s/ Betty Knight Scripps
---------------------------
THE EDWARD W. SCRIPPS AND BETTY KNIGHT
SCRIPPS CHARITABLE REMAINDER UNITRUST
By: /s/ Edward W. Scripps
-----------------------
Trustee
By: /s/ Betty Knight Scripps
------------------------
Trustee
By: /s/ Duane D. Morse
------------------------
Trustee
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 112,569
<SECURITIES> 0
<RECEIVABLES> 62,077
<ALLOWANCES> 2,192
<INVENTORY> 4,987
<CURRENT-ASSETS> 192,274
<PP&E> 259,052
<DEPRECIATION> 140,069
<TOTAL-ASSETS> 501,741
<CURRENT-LIABILITIES> 58,548
<BONDS> 114,500
0
0
<COMMON> 252
<OTHER-SE> 392,177
<TOTAL-LIABILITY-AND-EQUITY> 501,741
<SALES> 115,706
<TOTAL-REVENUES> 115,706
<CGS> 49,209
<TOTAL-COSTS> 49,209
<OTHER-EXPENSES> 6,741
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,389
<INCOME-PRETAX> 16,837
<INCOME-TAX> 6,596
<INCOME-CONTINUING> 10,241
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,241
<EPS-PRIMARY> .62
<EPS-DILUTED> 0
</TABLE>
