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DISTRIBUTION AGREEMENT

Distribution Agreement

DISTRIBUTION AGREEMENT | Document Parties: TRIBUNE CO | TMCT II, LLC | FORTIFICATION HOLDINGS CORPORATION | WICK HOLDINGS CORPORATION | EAGLE NEW MEDIA INVESTMENTS, LLC | EAGLE PUBLISHING INVESTMENTS, LLC You are currently viewing:
This Distribution Agreement involves

TRIBUNE CO | TMCT II, LLC | FORTIFICATION HOLDINGS CORPORATION | WICK HOLDINGS CORPORATION | EAGLE NEW MEDIA INVESTMENTS, LLC | EAGLE PUBLISHING INVESTMENTS, LLC

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Title: DISTRIBUTION AGREEMENT
Governing Law: Delaware     Date: 9/22/2006
Industry: Printing and Publishing    

DISTRIBUTION AGREEMENT, Parties: tribune co , tmct ii  llc , fortification holdings corporation , wick holdings corporation , eagle new media investments  llc , eagle publishing investments  llc
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Exhibit 10.3

EXECUTION COPY

DISTRIBUTION AGREEMENT

By and Among

TMCT II, LLC,

TRIBUNE COMPANY,

FORTIFICATION HOLDINGS CORPORATION,

WICK HOLDINGS CORPORATION,

EAGLE NEW MEDIA INVESTMENTS, LLC,

EAGLE PUBLISHING INVESTMENTS, LLC,

CHANDLER TRUST NO. 1,

and

CHANDLER TRUST NO.2

September 21, 2006

 



DISTRIBUTION AGREEMENT

This Distribution Agreement (the “Agreement”), dated as of September 21, 2006, is by and among TMCT II, LLC, a Delaware limited liability company (the “Company”), Tribune Company, a Delaware corporation (“Tribune”), Fortification Holdings Corporation, a Delaware corporation (“Fortification”), Wick Holdings Corporation, a Delaware corporation (“Wick”), Eagle New Media Investments, LLC, a Delaware limited liability company (“Eagle 1”), Eagle Publishing Investments, LLC, a Delaware limited liability company (“Eagle 2” and, collectively with Tribune, Fortification, Wick and Eagle 1, the “Tribune Members”), Chandler Trust No. 1 (“Trust 1”) and Chandler Trust No. 2 (“Trust 2” and, collectively with Trust 1, the “Trust Members”).  The Tribune Members and the Trust Members are collectively referred to herein as the “Members.”  Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Amended and Restated Limited Liability Company Agreement of the Company, dated as of September 3, 1999 (as further amended on August 14, 2000 and August 28, 2002, the “Operating Agreement”).

R E C I T A L S

WHEREAS, the Company desires to make distributions to Tribune, Eagle 1 and Eagle 2 (the “Distributions”); and

WHEREAS , concurrently with the Distributions, the Members desire to amend and restate the Operating Agreement.

A G R E E M E N T

NOW, THEREFORE , in consideration of the mutual promises, covenants and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

Distribution

1.1          Distribution .   On the Closing Date (as defined below), the Company shall make distributions to (a) Tribune in respect of the Interest held by Tribune by delivering to Tribune (i) certificates representing 11,107,595 shares of the common stock, $.01 par value per share, of Tribune (the “Common Stock”) and (ii) certificates representing in the aggregate 488,429 shares of any combination of the Series D-1 Preferred Stock, no par value, of Tribune (the “D-1 Preferred Stock”) and the Series D-2 Preferred Stock, no par value, of Tribune (the “D-2 Preferred Stock” and, collectively with the D-1 Preferred Stock, the “Preferred Stock”), (b) Eagle 1 in respect of the Interest held by Eagle 1 by delivering to Eagle 1 (i) certificates representing 6,529,444 shares of Common Stock and (ii) certificates representing in the aggregate 52,940 shares of any combination of the D-1 Preferred stock and the D-2 Preferred Stock and (c) Eagle 2 in respect of the Interest held by Eagle 2 by delivering to Eagle 2 (i) certificates representing 11,542,423 shares of Common Stock and (ii) certificates representing in the aggregate 84,703 shares of any combination of the D-1 Preferred Stock and the D-2 Preferred Stock.  All such shares shall be distributed, transferred and delivered to Tribune, Eagle 1 and Eagle 2 free and clear of any lien (statutory or other), claim, charge, security interest,

 



pledge, hypothecation, assignment, conditional sale or other title retention agreement, preference, priority or other security agreement or preferential arrangement of any kind or nature.  Concurrently with the Distributions, the Members will enter into a Second Amended and Restated Limited Liability Company Agreement for the Company in the form attached hereto as Exhibit A (the “Amended Operating Agreement”).  Each of the Members acknowledges and agrees that the sole interest of such Member in the Company following the Closing Date shall be the Interest of such Member as provided in, and governed by, the terms of the Amended Operating Agreement.

1.2          Consent to Transactions .   For all purposes of the Operating Agreement, including, without limitation, Section 6.5 of the Operating Agreement, each of the Members hereby agrees and consents to the transactions described in this Agreement, including, without limitation, the Distributions.  Each of the Members further agrees to execute and deliver the Amended Operating Agreement in order to carry out the purpose and intent of this Agreement.  Each of the Members (other than Tribune, Eagle 1 and Eagle 2) acknowledges that the Distributions provided for in this Agreement are being made solely to Tribune, Eagle 1 and Eagle 2 and hereby waives any right it may have to receive a concurrent distribution in accordance with the provisions of Article IX of the Operating Agreement due to or on account of the Distributions.

1.3          Continuation of Company .   Each of the Members hereby agrees that at all times relevant hereto the Company shall continue and shall not be dissolved or deemed dissolved or terminated due to or on account of the Distributions or any of the transactions herein or any other reason.  Each of the Members agrees that it will not claim or assert in any forum a position which is contrary to the purpose and intent of this Section 1.3.

ARTICLE II

Closing

2.1          Closing Date and Location .   Subject to the provisions of this Agreement, the closing of the transactions contemplated hereby (the “Closing”) shall be held on September 22, 2006 or at such other time on or before September 22, 2006 as may be mutually agreed upon in writing by the parties.  The date of the Closing is sometimes referred to herein as the “Closing Date.”  The Closing shall take place at the Offices of Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles, California 90071.

2.2          Deliveries by the Tribune Members .   In addition to, and without limiting any other provision of this Agreement, the Tribune Members agree to deliver or cause to be delivered to the Company and the Trust Members at or prior to the Closing the following:

(a)           Authorizations .   Certified resolutions of the Board of Directors or Managers, as applicable, of each of the Tribune Members authorizing the execution, delivery and performance of this Agreement and the transactions contemplated herein; and

(b)           Amended Operating Agreement A copy of the Amended Operating Agreement duly executed by each of the Tribune Members.

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2.3          Deliveries by the Company   In addition to, and without limiting any other provision of this Agreement, the Company agrees to deliver or cause to be delivered at or prior to the Closing the share certificates to Tribune, Eagle 1 and Eagle 2 described in Section 1.1, in the amounts and at the times indicated in Section 1.1, together with any stock or other applicable powers, duly executed on behalf of the Company, as may be necessary to register the transfer of the shares represented by such certificates.

2.4          Deliveries by the Trust Members   In addition to, and without limiting any other provision of this Agreement, the Trust Members agree to deliver or cause to be delivered to the Company and the Tribune Members at or prior to the Closing a copy of the Amended Operating Agreement duly executed by each of the Trust Members.

2.5          Conditions Precedent .

(a)           Conditions to Obligations of the Company .   The obligation of the Company to consummate the transactions provided for hereby are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the Company:  (i) the representations and warranties made by the Members herein shall be true and correct in all material respects as of the date hereof and (ii) the Members shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Members hereunder through and including the Closing Date, and shall have obtained all approvals, consents and qualifications necessary to complete the transactions described herein.

(b)           Conditions to Obligations of the Tribune Members .   The obligation of the Tribune Members to consummate the transactions provided for hereby are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the Tribune Members:  (i) the representations and warranties made by the Company and the Trust Members herein shall be true and correct in all material respects as of the date hereof and (ii) the Company and the Trust Members shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company and the Trust Members hereunder through and including the Closing Date, and shall have obtained all approvals, consents and qualifications necessary to complete the transactions described herein.

(c)           Conditions to Obligations of the Trust Members .   The obligation of the Trust Members to consummate the transactions provided for hereby are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the Trust Members:  (i) the representations and warranties made by the Company and the Tribune Members herein shall be true and correct in all material respects as of the date hereof and (ii) the Company and the Tribune Members shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company and the Tribune Members hereunder through and including the Closing Date, and shall have obtained all approvals, consents and qualifications necessary to complete the transactions described herein.

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ARTICLE III

Representations And Warranties

3.1          Representations and Warranties of Tribune Members .   Each of the Tribune Members, jointly and severally, represents and warrants to the Company and the Trust Members as follows:

(a)           Organization and Good Standing .  Each of the Tribune Members is duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own its properties and assets and to carry on its business as now conducted and as presently proposed to be conducted.

(b)           Due Authorization .  All action on the part of each of the Tribune Members, its officers, directors, members, managers and stockholders necessary for the authorization, execution and delivery of, and the performance of all obligations of such Tribune Member under, this Agreement has been taken.  Each of the Tribune Members has duly authorized, executed and delivered this Agreement, and this Agreement is a valid and binding obligation of each of the Tribune Members enforceable in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally and to general equitable principles.

(c)           No Conflicts .   Neither the execution and delivery of this Agreement or the consummation of any of the transactions contemplated hereby, nor compliance with or fulfillment of the terms, conditions and provisions hereof, by any of the Tribune Members will conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of default or an event creating rights of acceleration, termination or cancellation or a loss of rights under (a) the certificate of incorporation, by-laws, operating agreement or other constitutional documents of such Tribune Member (b) any material agreement, note, instrument, mortgage, lease, license, franchise, permit or other authorization, right, restriction or obligation to which such Tribune Member is a party or any of its respective assets or business is subject or by which such Tribune Member is bound, (c) any order, writ, injunction or decree to which such Tribune Member is a party or any of its assets or business is subject or by which such Tribune Member is bound or (d) any applicable laws affecting such Tribune Member or its respective assets or business.

(d)           Consents No consent, approval or authorization of, declaration to, or filing or registration with, any governmental or regulatory authority, or any other person, is required to be made or obtained by the Tribune Members or any of their affiliates in connection with the execution, delivery and performance by the Tribune Members of this Agreement and the consummation of the transactions contemplated hereby, other than filings that Tribune may make pursuant to the requirements of the Securities Exchange Act of 1934, as amended.

(e)           Representations of Tribune as Managing Member .

(i)            Financial Statements .  Tribune heretofore has delivered to the Members true and correct copies of (A) the Company’s audited balance sheet dated as of December 31, 2004 and unaudited balance sheet dated as of December 31, 2005 and (B) the

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related statements of the Member’s capital accounts for each of the years ended December 31, 2004 and December 31, 2005 (collectively, the “Financial Statements”).  The Financial Statements (1) have been prepared in all respects in accordance with the terms of the Operating Agreement (except that all Financial Statements have been prepared on a tax basis not in accordance with generally accepted accounting principles), (2) are in accordance with the books and records of the Company and (3) fairly present the financial position of the Company as of the respective dates thereof.  The Company keeps books, records and accounts that, in reasonable detail, accurately and fairly reflect in all material respects the transactions and dispositions of assets of the Company.

(ii)           Schedule of Members .  Attached hereto as Exhibit B is a true, complete and accurate copy of the Schedule of Members as of the date hereof as required by the Operating Agreement.

(iii)         Compliance with Operating Agreement .  To the knowledge of Tribune, since January 1, 2005, the Company has been operated in compliance with the Operating Agreement in all material respects.

(iv)          Tax Elections .  No election under Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”), is in effect with respect to the Company.

(f)            Rights Plan None of the transactions contemplated hereby, or the direct or indirect acquisition of beneficial ownership of additional securities of Tribune by the Company or the Trust Members as a result of the consummation of the transactions contemplated hereby, shall cause either of the Trust Members or the Company to be an “Acquiring Person” pursuant to that certain Rights Agreement, between Tribune and First Chicago Trust Company of New York, dated as of December 12, 1997 and as amended by Amendment No. 1 on June 12, 2000 and Amendment No. 2 on September 21, 2006 (the “Rights Plan”).

3.2          Representations and Warranties of Trust Members .   Each of the Trust Members, jointly and severally, represents and warrants to the Company and the Tribune Members as follows:

(a)           Due Authorization .  All action on the part of each of the Trust Members and its trustees necessary for the authorization, execution and delivery of, and the performance of all obligations of such Trust Members under, this Agreement has been taken.  Each of the Trust Members has duly authorized, executed and delivered this Agreement, and this Agreement is a valid and binding obligation of each of the Trust Members enforceable in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally and to general equitable principles.

(b)           No Conflicts .   Neither the execution and delivery of this Agreement or the consummation of any of the transactions contemplated hereby, nor compliance with or fulfillment of the terms, conditions and provisions hereof, by any of the Trust Members will conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of default or an event creating rights of acceleration, termination or cancellation or a loss of rights under (a) the constitutional documents of such Trust Member, (b) any material

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agreement, note, instrument, mortgage, lease, license, franchise, permit or other authorization, right, restriction or obligation to which such Trust Member is a party or any of its respective assets or business is subject or by which such Trust Member is bound, (c) any order, writ, injunction or decree to which such Trust Members is a party or any of its assets or business is subject or by which such Trust Members is bound or (d) any applicable laws affecting such Trust Members or its respective assets or business.

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