Exhibit 10.2
[EXECUTION COPY]
SECURITIES PURCHASE
AGREEMENT
by and among
TRIBUNE COMPANY,
EGI-TRB, L.L.C.
and
SAMUEL ZELL
Dated as of April 1, 2007
SECURITIES PURCHASE
AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated
as of April 1, 2007 (the “ Agreement ”), among
Tribune Company, a Delaware corporation (the “ Company
”), EGI-TRB, L.L.C., a Delaware limited liability company
(“ EGI-TRB ”) and Samuel Zell, as guarantor
(“ Guarantor ”).
W I T N E S
S E T H :
WHEREAS, concurrently herewith,
GreatBanc Trust Company, not in its individual or corporate
capacity, but solely as trustee (the “ ESOP Fiduciary
”) of the Tribune Employee Stock Ownership Trust, which forms
a part of the Tribune Employee Stock Ownership Plan (the “
ESOP ”), Tesop Corporation, a Delaware corporation
wholly owned by the ESOP (“ Merger Sub ”), the
Company and, for limited purposes, EGI-TRB, have entered into that
certain Agreement and Plan of Merger (the “ Merger
Agreement ”) pursuant to which, subject to the terms and
conditions therein, the Merger Sub will be merged with and into the
Company (the “ Merger ”), with the Company
surviving the Merger and becoming wholly owned by the ESOP (the
“ Surviving Corporation ”).
WHEREAS, capitalized terms used but
not otherwise defined herein shall have the meaning given to them
in the Merger Agreement.
WHEREAS, concurrently herewith, the
Company, EGI-TRB and the ESOP Fiduciary, on behalf of the ESOP,
have entered into that certain Investor Rights Agreement (the
“ Investor Rights Agreement ”) pursuant to which
the parties thereto will have certain rights and obligations, among
others, regarding the Surviving Corporation following the
Merger.
WHEREAS, concurrently herewith, the
Company, EGI-TRB and the ESOP Fiduciary, on behalf of the ESOP,
have entered into that certain Registration Rights Agreement (the
“ Registration Rights Agreement ”) pursuant to
which the Company has granted EGI-TRB and the ESOP certain
registration rights.
WHEREAS, pursuant to the terms and
subject to the conditions set forth in this Agreement, the Company
desires to sell to EGI-TRB, and EGI-TRB desires to purchase from
the Company, as soon as practicable following the execution and
delivery of this Agreement, (i) an aggregate of 1,470,588
newly-issued shares (the “ Purchased Shares ”)
of the Company’s common stock, par value $0.01 per share (the
“ Company Common Stock ,” which term shall also
apply to the common stock, par value $0.01 per share, of the
Surviving Corporation following the Merger) and (ii) an unsecured
subordinated exchangeable promissory note in the principal amount
of $200,000,000, which shall be exchangeable at the option of the
Company, or automatically under certain circumstances, into
5,882,353 shares of Company Common Stock (the “
Exchangeable Note Shares ”), subject to adjustment as
provided therein, and otherwise in the form attached hereto as
Exhibit A (the “ Exchangeable Note
”).
WHEREAS, pursuant to the terms and
subject to the conditions set forth in this Agreement, the Company
desires to sell to EGI-TRB, and EGI-TRB desires to purchase from
the Company, immediately following the consummation of the Merger,
(i) an unsecured
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subordinated promissory note in the
principal amount of $225,000,000 and otherwise in the form attached
hereto as Exhibit B (the “ Note ”) and
(ii) warrants to purchase 43,478,261 shares of Company Common Stock
(“ Warrants ”) pursuant to a Warrant Agreement
in the form attached hereto as Exhibit C (the “
Warrant Agreement ”).
WHEREAS, the Company and EGI-TRB
desire that Samuel Zell be appointed to the Board of Directors of
the Company at the First Closing (as defined below), and be elected
to serve as the Chairman of the Company’s Board of Directors
effective as of, and from and after, the Second Closing Date (as
defined below).
WHEREAS, the Company, EGI-TRB and
Guarantor desire to make certain representations, warranties,
covenants and agreements specified herein in connection with this
Agreement.
NOW, THEREFORE, in consideration of
the foregoing and the representations, warranties, covenants and
agreements contained herein, and intending to be legally bound
hereby, the Company, EGI-TRB and Guarantor agree as
follows:
ARTICLE I
SALE AND PURCHASE
Section
1.1
Sale and Purchase of the Purchased Shares and Exchangeable
Note . On the terms and subject to the conditions set
forth in this Agreement, the Company hereby agrees to sell to
EGI-TRB at the First Closing (as defined below), and EGI-TRB agrees
to purchase from the Company at the First Closing, (a) the
Purchased Shares at a price of $34 per share for an aggregate
purchase price of $50,000,000 (the “ Purchased Shares
Purchase Price ”) and (b) the Exchangeable Note for an
aggregate purchase price of $200,000,000 (the “
Exchangeable Note Purchase Price ”).
Section
1.2
Sale and Purchase of the Note and Warrants . On the
terms and subject to the conditions set forth in this Agreement,
the Company hereby agrees to sell to EGI-TRB at the Second Closing
(as defined below), and EGI-TRB agrees to purchase from the Company
at the Second Closing, (i) the Note for an aggregate purchase price
of $225,000,000 (the “ Note Purchase
Price ”) and (ii) the Warrants for an aggregate purchase
price of $90,000,000 (the “ Warrants
Purchase Price ”).
ARTICLE II
CLOSING DATES; DELIVERIES
Section
2.1
First Closing .
(a)
The closing of the purchase and sale of the Purchased Shares and
the Exchangeable Note (the “ First Closing ”)
shall take place at the offices of Wachtell, Lipton, Rosen &
Katz, 51 West 52 nd Street, New York, New
York at 10:00 a.m., local time, on a date to be specified by the
parties (the “ First Closing Date ”) which shall
be no later than the third business day after the satisfaction or
waiver of the conditions set forth in Article VI (other
than
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those conditions that by their
nature are to be satisfied at the First Closing, but subject to the
satisfaction or waiver of such conditions), or at such other place,
date and time as the Company, EGI-TRB and Guarantor may agree in
writing.
(b)
At the First Closing, (i) the Company shall deliver to EGI-TRB
(A) certificates representing the Purchased Shares, (B) the
Exchangeable Note, duly executed on behalf of the Company, and (C)
the item contemplated to be delivered at the First Closing under
clause (c) of Section 6.3 and (ii) EGI-TRB shall deliver to the
Company (A) the Purchased Shares Purchase Price and the
Exchangeable Note Purchase Price by wire transfer of immediately
available funds to an account designated in writing by the Company
not later than two business days prior to the First Closing Date,
and (B) the item contemplated to be delivered at the First Closing
under clause (c) of Section 6.2.
Section
2.2
Second Closing .
(a)
The closing of the purchase and sale of the Note and the Warrants
(the “ Second Closing ”) shall take place,
subject to the satisfaction or waiver of the conditions set forth
in Article VII (other than those conditions that by their nature
are to be satisfied at the Second Closing, but subject to the
satisfaction or waiver of such conditions), at the offices of
Wachtell, Lipton, Rosen & Katz, 51 West 52 nd Street, New York, New
York, immediately following the consummation of the Merger (the
“ Second Closing Date ”).
(b)
At the Second Closing, (i) the Company shall deliver to EGI-TRB the
Note and a copy of the Warrant Agreement, each duly executed on
behalf of the Company, and (ii) EGI-TRB shall deliver to the
Company (A) the Note Purchase Price and the Warrants Purchase Price
by wire transfer of immediately available funds to an account
designated in writing by the Company not later than two business
days prior to the Second Closing Date, and (B) a copy of the
Warrant Agreement, duly executed on behalf of EGI-TRB.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
Except as disclosed in the
disclosure schedule delivered by the Company to EGI-TRB and
Guarantor immediately prior to the execution of this Agreement (the
“ Company SPA Disclosure Schedule ”), the
Company represents and warrants to EGI-TRB and Guarantor as
follows:
Section
3.1
Authority; No Violation .
(a)
The Company has all requisite corporate power and authority to
enter into and to consummate the transactions contemplated by this
Agreement, the Investor Rights Agreement, the Registration Rights
Agreement, the Exchangeable Note, the Note and the Warrant
Agreement (such agreements and instruments being hereinafter
collectively referred to as the “ Company Transaction
Documents ”). The determinations, approvals and
resolutions by the Board of Directors of the Company are sufficient
to render inapplicable to the Merger the restrictions on
“business combinations” contained in Section 203
of the General Corporation Law of the State of Delaware
and, to the knowledge of the Company, no “fair
price,”
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“moratorium,”
“control share acquisition,” “business
combination” or other similar antitakeover statute or
regulation enacted under state or Federal laws in the United States
applicable to the Company is applicable to EGI-TRB and Guarantor as
a result of this Agreement or the Merger Agreement or transactions
contemplated hereby or thereby. No other corporate
proceedings on the part of the Company are necessary to authorize
the Company Transaction Documents or the consummation of the
transactions contemplated thereby. This Agreement, the
Exchangeable Note, the Investor Rights Agreement and the
Registration Rights Agreement have been duly and validly executed
and delivered by the Company and, assuming that this Agreement, the
Investor Rights Agreement and the Registration Rights Agreement
constitute the legal, valid and binding agreements of the other
parties thereto, this Agreement, the Exchangeable Note, the
Investor Rights Agreement and the Registration Rights Agreement
constitute the legal, valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective
terms. The Note, the Exchangeable Note and the Warrant
Agreement, when executed and delivered by the Company, and assuming
that the Warrant Agreement constitutes the legal, valid and binding
agreement of the other party thereto, will constitute the legal,
valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms.
(b)
The execution, delivery and performance by the Company of the
Company Transaction Documents and the consummation of transactions
contemplated thereby by the Company do not and will not require any
consent, approval, license, authorization, order or permit of,
action by, filing with or notification to any Federal, state, local
or foreign governmental or regulatory agency, commission, court,
body, entity or authority (each, a “ Governmental
Entity ”), other than compliance with the applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the “ HSR Act ”) with respect
to the exchange of the Exchangeable Note into Company Common Stock
or the exercise of the Warrant for Company Common
Stock.
(c)
The execution, delivery and performance by the Company of the
Company Transaction Documents and the consummation by the Company
of the transactions contemplated thereby do not and will not (i)
contravene or conflict with the organizational or governing
documents of the Company, any of its Subsidiaries or any Company
Joint Ventures, (ii) assuming compliance with the matters
referenced in Section 3.1(b), contravene or conflict with or
constitute a violation of any provision of any Law binding upon or
applicable to the Company or any of its Subsidiaries or any of
their respective properties or assets, (iii) conflict with,
contravene, result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any material
obligation or to the loss of a material benefit under, or to
increased, additional, accelerated or guaranteed rights or
entitlements of any person under, any loan, guarantee of
indebtedness or credit agreement, note, bond, mortgage, indenture,
lease, agreement, contract, instrument, permit, concession,
franchise, right or license to which the Company or any of the
Company’s Subsidiaries is a party or by which any of their
respective properties or assets are bound, or (iv) result in
the creation of any liens, claims, mortgages, encumbrances,
pledges, security interests, equities or charges of any kind (each,
a “ Lien ”), other than any such Lien (A) for
Taxes or governmental assessments, charges or claims of payment not
yet due, being contested in good faith or for which adequate
accruals or reserves have been established on the most recent
consolidated balance sheet included in Company SEC Documents filed
prior to the date hereof,
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(B) which is a carriers’,
warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other similar lien arising in the ordinary
course of business, (C) which is disclosed on the most recent
consolidated balance sheet of the Company or notes thereto or
securing liabilities reflected on such balance sheet or (D) which
was incurred in the ordinary course of business since the date of
the most recent consolidated balance sheet of the Company (each of
the foregoing, a “ Permitted Lien ”), upon any
of the properties or assets of the Company or any of the
Company’s Subsidiaries, other than, in the case of clauses
(ii) and (iii), any such items that would not reasonably be
expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
Section
3.2
Authorization . The Purchased Shares have been duly
authorized by the Company, and when the Purchased Shares are issued
in accordance with this Agreement against payment therefor, such
Purchased Shares will be validly issued, fully paid and
nonassessable. The Company Common Stock issuable upon
exercise of the Warrants (the “ Warrant Shares
”) has been duly authorized by the Company, and when the
Warrant Shares are issued in accordance with the Warrants against
payment therefor, such Warrant Shares will be validly issued, fully
paid and nonassessable. The Exchangeable Note Shares have
been duly authorized by the Company, and when they are issued in
accordance with the terms of the Exchangeable Note, such
Exchangeable Note Shares will be validly issued, fully paid and
nonassessable. None of the Purchased Shares, the Exchangeable
Note Shares or the Warrant Shares will be issued in violation of
the preemptive or other similar rights of any securityholder of the
Company nor will they trigger any anti-dilution or similar rights
under any instrument or agreement to which the Company is subject
or bound.
Section
3.3
Finders or Brokers . Except for Morgan Stanley &
Co. Incorporated, Merrill Lynch & Co., Inc. and Citigroup
Global Markets Inc. (the “ Company Financial Advisors
”), neither the Company nor any of its Subsidiaries has
employed any investment banker, broker or finder in connection with
the transactions contemplated by this Agreement who might be
entitled to any fee or any commission in connection with or upon
consummation of the transactions contemplated hereby. The
Company has made available to EGI-TRB an accurate and complete
summary of the fee arrangements with the Company Financial
Advisors.
Section
3.4
Private Placement . Subject to the accuracy of
EGI-TRB’s representations set forth in this Agreement, the
offer, sale and issuance of the Purchased Shares, the Exchangeable
Note, the Note and the Warrants as contemplated by this Agreement
are exempt, and the issuance of the Warrant Shares upon the
exercise of the Warrants and the Exchangeable Note Shares upon
exchange of the Exchangeable Note will be exempt, from the
registration requirements of the Securities Act of 1933, as amended
(the “ Securities Act ”).
Section
3.5
Rights Plan . The Board of Directors of the Company
has resolved to, and the Company promptly after the execution of
this Agreement will, take all action necessary to render the rights
to purchase shares of Series A Junior Participating Preferred Stock
of the Company, issued pursuant to the terms of the Rights
Agreement, dated as of December 12, 1997, as amended, between the
Company and Computershare Trust Company, N.A. (formerly First
Chicago Trust Company of New York), as Rights Agent, inapplicable
to the execution and operation of this Agreement, the Merger
Agreement and the transactions contemplated thereby.
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Section
3.6
Merger Agreement Representations and Warranties .
Reference is hereby made to the representations and warranties of
the Company set forth in Sections 3.1, 3.2, 3.4 through 3.12, and
3.14 through 3.25 of the Merger Agreement (the “ Merger
Agreement Representations and Warranties ”). The
Company hereby makes, subject to the qualifications set forth in
the introduction to Article III of the Merger Agreement, each of
such Merger Agreement Representations and Warranties to EGI-TRB and
Guarantor as if each of such Merger Agreement Representations and
Warranties were hereinafter set forth in full.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
EGI-TRB AND GUARANTOR
EGI-TRB and Guarantor jointly and
severally represent and warrant to the Company as
follows:
Section
4.1
Qualification, Organization, Subsidiaries, etc .
EGI-TRB is a limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and has all requisite limited liability company power
and authority to own, lease, hold and operate its properties and
assets and to carry on its business as presently conducted and is
qualified to do business and is in good standing in each
jurisdiction where the ownership, leasing, holding or operation of
its assets or properties or conduct of its business requires such
qualification, except where the failure to be so organized, validly
existing, qualified or in good standing, or to have such power or
authority, would not, individually or in the aggregate, reasonably
be expected to prevent or materially delay or materially impair the
ability of EGI-TRB to consummate the transactions contemplated by
this Agreement (a “ EGI-TRB Material Adverse Effect
”).
Section
4.2
Authority; No Violation .
(a)
Each of EGI-TRB and Guarantor has all requisite power and authority
to enter into and to consummate the transactions contemplated by
this Agreement, the Investor Rights Agreement, the Registration
Rights Agreement and the Warrant Agreement (such agreements being
hereinafter collectively referred to as the “ EGI-TRB
Transaction Documents ”). The execution and
delivery of the EGI-TRB Transaction Documents and the consummation
of the transactions contemplated thereby have been duly and validly
authorized by Guarantor and by the sole member of EGI-TRB, and no
other limited liability company proceedings on the part of EGI-TRB
are necessary to authorize the EGI-TRB Transaction Documents or the
consummation of the transactions contemplated thereby. This
Agreement has been duly and validly executed and delivered by
EGI-TRB and Guarantor and, assuming this Agreement constitutes the
legal, valid and binding agreement of the other parties thereto,
this Agreement constitutes the legal, valid and binding agreement
of EGI-TRB and Guarantor, enforceable against EGI-TRB and Guarantor
in accordance with its terms. The Investor Rights Agreement
and the Registration Rights Agreement have been duly and validly
executed and delivered by EGI-TRB and, assuming the Investor Rights
Agreement and the Registration Rights Agreement constitute the
legal, valid and binding agreements of the other parties thereto,
the Investor Rights Agreement and the Registration Rights Agreement
constitute the legal, valid and binding agreements of EGI-TRB,
enforceable against EGI-TRB in accordance with their
respective
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terms. The Warrant Agreement,
when executed and delivered by EGI-TRB, and assuming that the
Warrant Agreement constitutes the legal, valid and binding
agreement of the other party thereto, will constitute the legal,
valid and binding agreement of EGI-TRB, enforceable against EGI-TRB
in accordance with its terms.
(b)
The execution, delivery and performance by EGI-TRB and Guarantor of
the EGI-TRB Transaction Documents to which they are parties and the
consummation of the transactions contemplated thereby by EGI-TRB
and Guarantor do not and will not require any consent, approval,
license, authorization, order or permit of, action by, filing with
or notification to any Governmental Entity, other than compliance
with the applicable requirements of the HSR Act with respect to the
exchange of the Exchangeable Note into Company Common Stock or the
exercise of the Warrant for Company Common Stock.
(c)
The execution, delivery and performance by EGI-TRB and Guarantor of
the EGI-TRB Transaction Documents to which they are parties and the
consummation by EGI-TRB and Guarantor of the transactions
contemplated thereby do not and will not (i) contravene or conflict
with the organizational or governing documents of EGI-TRB, (ii)
assuming compliance with the matters referenced in
Section 4.2(b), contravene or conflict with or result in
violation of any provision of any Law binding upon or applicable to
EGI-TRB or Guarantor or any of their respective properties or
assets, or (iii) result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any material
obligation or to the loss of a material benefit under, or to
increased, additional, accelerated or guaranteed rights or
entitlements of any person under, any loan, guarantee of
indebtedness or credit agreement, note, bond, mortgage, indenture,
lease, agreement, contract, instrument, permit, concession,
franchise, right or license to which EGI-TRB or Guarantor is a
party or by which any of their properties or assets are bound, or
(iv) result in the creation of any Lien (other than Permitted
Liens) upon any of the properties or assets of EGI-TRB or
Guarantor, other than, in the case of clause (ii) through (iv), any
such items that would not, individually or in the aggregate,
reasonably be expected to have an EGI-TRB Material Adverse
Effect.
Section
4.3
Finders or Brokers . Except for J.P. Morgan Chase,
neither EGI-TRB, nor any of its Subsidiaries nor Guarantor has
employed any investment banker, broker or finder in connection with
the transactions contemplated by this Agreement who is entitled to
any fee or any commission in connection with or upon consummation
of the transactions contemplated hereby.
Section
4.4
Lack of Ownership of Company Common Stock . Except as
contemplated by this Agreement, neither EGI-TRB, nor any of its
Subsidiaries nor Guarantor beneficially owns or, since
December 31, 2006 has beneficially owned, directly or
indirectly, any shares of Company Common Stock or other securities
convertible into, exchangeable into or exercisable for shares of
Company Common Stock. Except for the Voting and Proxy
Agreements entered into in connection with, and contemplated by,
the Merger Agreement, there are no voting trusts or other
agreements or understandings to which EGI-TRB, any of its
Subsidiaries or Guarantor is a party with respect to the voting of
the capital stock or other equity interest of the Company or any of
its Subsidiaries.
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Section
4.5
Accredited Investor .
(a)
Each of EGI-TRB and Guarantor is a financially sophisticated
investor and is an “accredited investor” (as defined in
Rule 501 of Regulation D under the Securities Act) that is
experienced in financial matters. Each of EGI-TRB and
Guarantor understands that the securities purchased hereunder have
not been registered under the Securities Act.
(b)
EGI-TRB is aware that it must bear the economic risk of the
investment contemplated by this Agreement for an indefinite period
of time since, in the view of the Securities and Exchange
Commission, the statutory basis for exemption from registration
under the Securities Act would not be present if such
representation meant merely that the present intention of EGI-TRB
is to hold these securities for a deferred sale or for any fixed
period in the future. EGI-TRB can afford to bear such
economic risk and can afford to suffer the complete loss of its
investment hereunder.
(c)
EGI-TRB is purchasing the securities to be purchased hereunder
(including securities to be acquired on exercise or exchange of
securities purchased hereunder) for its own account, for investment
purposes only and not with a view to, or for resale in connection
with, the distribution or other disposition thereof or with any
present intention of distributing or reselling any portion thereof
in violation of the Securities Act or any other applicable
securities law.
(d)
EGI-TRB acknowledges that (i) it has been provided with such
information as it deems necessary to evaluate the merits and risks
of investing in the securities contemplated by this Agreement
(including, without limitation, financial and other information
regarding the Company), (ii) has read and understands the
restrictions and limitations set forth in this Agreement, and (iii)
has been afforded the opportunity to ask such questions as it
deemed necessary, and to receive answers from, representatives of
the Company concerning the merits and risk of investing in such
securities.
Section
4.6
No Additional Representations .
(a)
Each of EGI-TRB and Guarantor acknowledges that it and its
officers, employees, accountants, consultants, legal counsel,
financial advisors, prospective financing sources and agents and
other representatives (collectively, “ Representatives
”) have received access to such books and records,
facilities, equipment, contracts and other assets of the Company
which it and its Representatives have desired or requested to
review, and that it and its Representatives have had full
opportunity to meet with the management of the Company and to
discuss the business and assets of the Company.
(b)
Each of EGI-TRB and Guarantor acknowledges that neither the Company
nor any other person has made any representation or warranty,
express or implied, as to the accuracy or completeness of any
information regarding the Company furnished or made available to
EGI-TRB, Guarantor or their Representatives except as expressly set
forth in or incorporated by reference into Article III, and neither
the Company nor any other person shall be subject to any liability
to EGI-TRB or any other person resulting from the Company’s
making available to EGI-TRB or EGI-TRB’s use of such
information.
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Section
4.7
Absence of Arrangements with Management . Other than
this Agreement, the Merger Agreement, the other EGI-TRB Transaction
Documents and the agreements contemplated hereby and thereby, as of
the date hereof, there are no contracts, undertakings, commitments,
agreements or obligations between EGI-TRB or Guarantor or any of
their affiliates, on the one hand, and any member of the
Company’s management or Board of Directors, on the other
hand, relating to the transactions contemplated by this Agreement,
the Merger Agreement and the other EGI-TRB Transaction Documents
after the Effective Time.
Section
4.8
Available Funds . EGI-TRB or Guarantor has available,
or will have available, (a) at the First Closing, all funds
necessary for the payment of the Purchased Shares Purchase Price
and the Exchangeable Note Purchase Price, (b) at the Second
Closing, all funds necessary for the payment of the Note Purchase
Price and the Warrants Purchase Price, and (c) funds that are
otherwise sufficient for the satisfaction of all of EGI-TRB’s
and Guarantor’s obligations under this Agreement.
Section
4.9
FCC Matters . Each of EGI-TRB and Guarantor is
legally, financially and otherwise qualified to acquire control of
the Company under the Communications Act and the FCC Rules, and is
legally, financially and otherwise qualified under the
Communications Act and the FCC Rules to acquire and hold its
interest in Surviving Corporation and, through its interest in
Surviving Corporation, an indirect interest in the Company FCC
Licenses as proposed in and pursuant to the terms of this
Agreement. This representation shall not be deemed an
acknowledgment that EGI-TRB or Guarantor will acquire control of
the Company or the Surviving Corporation by virtue of the
transactions contemplated by this Agreement.
ARTICLE V
COVENANTS AND AGREEMENTS
Section
5.1
Agreement to Vote . EGI-TRB irrevocably and
unconditionally hereby agrees that from and after the date hereof
until the earlier of (a) the consummation of the Merger and
(b) any date of termination of the Merger Agreement in
accordance with its terms (the “ Expiration Time
”), at any meeting (whether annual or special and each
adjourned or postponed meeting) of the Company’s
shareholders, however called, or in connection with any written
consent of the Company’s shareholders, EGI-TRB will
(i) appear at such meeting or otherwise cause its Owned Shares
(as defined below) to be counted as present thereat for purposes of
calculating a quorum and (ii) vote or cause to be voted
(including by written consent, if applicable) all of the Company
Common Stock beneficially owned, or whose vote is otherwise
controlled by proxy or otherwise, by EGI-TRB, including, for the
avoidance of doubt, the Purchased Shares (the “ Owned
Shares ”), (A) for approval and adoption of the
Merger Agreement, whether or not recommended by the Company’s
Board of Directors, and the transactions contemplated by the Merger
Agreement, (B) against any agreement, amendment of any
agreement (including the Company’s certificate of
incorporation or by-laws), or any other action that is intended or
would reasonably be expected to prevent, impede, or, in any
material respect, interfere with, delay, postpone or discourage the
transactions contemplated by the Merger Agreement, other than those
specifically contemplated by this Agreement, the Merger
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Agreement or the other agreements
contemplated thereby and (C) against any action, agreement,
transaction or proposal that would result in a breach of any
representation, warranty, covenant, agreement or other obligation
of the Company in this Agreement, the Merger Agreement or the ESOP
Purchase Agreement.
Section
5.2
Restrictions on Transfers .
(a)
Except as necessary to comply with Section 5.12, EGI-TRB hereby
agrees that, from the date hereof until the third anniversary of
the First Closing Date, it shall not and shall not offer to,
directly or indirectly, sell, assign, give, mortgage, pledge,
hypothecate, hedge, issue, bequeath or in any manner encumber or
dispose of, or permit to be sold, assigned, encumbered, attached or
otherwise disposed of in any manner, whether voluntarily,
involuntarily or by operation of law, with or without
consideration, the Exchangeable Note or any Purchased Shares or
Exchangeable Note Shares (collectively, “ Transfer
”) other than pursuant to this Agreement or the Merger
Agreement (including in the Merger but not including the Offer
contemplated by the Merger Agreement) and except that after the
first to occur of the termination of this Agreement, the
termination of the Merger Agreement or the consummation of the
Merger, EGI-TRB may make Transfers to Permitted Transferees after
compliance with the last sentence of this Section 5.2(a).
Guarantor and EGI-TRB hereby agree that, from the date hereof until
the third anniversary of the First Closing Date, no membership or
other interest in EGI-TRB shall be issued or otherwise Transferred,
directly or indirectly, and any such issuance or Transfer occurring
thereafter shall comply with Section 5.12; provided ,
however , that in the event of Guarantor’s death prior
to the third anniversary of the First Closing Date, the membership
or other interests of Guarantor in EGI-TRB may be Transferred
subject to Section 5.12 in accordance with Guarantor’s
estate. For purposes of this Section 5.2(a), “
Permitted Transferee ” shall mean any direct or
indirect affiliate of EGI-TRB, Equity Group Investments, L.L.C. or
Samuel Zell; any direct or indirect member of EGI-TRB and any
direct or indirect affiliate thereof; any senior employee of Equity
Group Investments, L.L.C. and any direct or indirect affiliate
thereof; and Samuel Zell and his spouse, lineal ancestors and
descendants (whether natural or adopted), any trust or retirement
account primarily for the benefit of Samuel Zell and/or his spouse,
lineal ancestors and descendants and any private foundation formed
by Samuel Zell. Prior to any Transfer pursuant to this
Section 5.2(a), each Permitted Transferee shall enter into an
agreement in form and substance reasonably satisfactory to the
Company agreeing to be bound by the provisions of this Agreement as
if it were the transferor.
(b)
The certificates for the Purchased Shares and the Exchangeable Note
Shares, if and when issued, will be imprinted with a legend in
substantially the following form:
“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR UNDER APPLICABLE
STATE SECURITIES LAWS, AND ARE BEING OFFERED AND SOLD PURSUANT TO
AN EXEMPTION FROM THOSE LAWS THAT LIMITS THE DISPOSITION AND THE
TRANSFER OF THE SECURITIES. THEREFORE, THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THOSE TRANSFER
LIMITATIONS. THE SECURITIES MAY NOT BE TRANSFERRED UNLESS, IN
THE OPINION OF COUNSEL TO THE COMPANY, REGISTRATION UNDER THE ACT
OR APPLICABLE STATE
11
SECURITIES LAWS IS NOT REQUIRED OR
UNLESS THE SECURITIES ARE SO REGISTERED.”
Section
5.3
Irrevocable Proxy . EGI-TRB hereby revokes any and all
previous proxies granted with respect to its Owned Shares.
Subject to the last two sentences of this Section 5.3, EGI-TRB
hereby irrevocably appoints the Company or its designee as
EGI-TRB’s agent, attorney and proxy, to vote (or cause to be
voted) its Owned Shares in favor of approval of the Merger
Agreement, the Merger and the transactions contemplated by the
Merger Agreement, as applicable, and otherwise in accordance with
Section 5.1 hereof. This proxy is irrevocable and
coupled with an interest and is granted in consideration of EGI-TRB
and the Company entering into this Agreement, the ESOP and the
Company entering into the ESOP Purchase Agreement and the Company,
the ESOP, Merger Sub and EGI-TRB entering into the Merger
Agreement. In the event that EGI-TRB fails for any reason to
vote its Owned Shares in accordance with the requirements of
Section 5.1 hereof, then the proxyholder shall have the right
to vote such EGI-TRB’s Owned Shares in accordance with the
provisions of the second sentence of this Section 5.3.
The vote of the proxyholder shall control in any conflict between
the vote by the proxyholder of EGI-TRB’s Owned Shares and a
vote by EGI-TRB of its Owned Shares. Notwithstanding the
foregoing, the proxy granted by EGI-TRB shall be automatically
revoked upon termination of this Agreement in accordance with its
terms.
Section
5.4
Inconsistent Agreements . EGI-TRB hereby agrees that
it shall not enter into any agreement, contract or understanding
with any person prior to the termination of the Merger Agreement
directly or indirectly to vote, grant a proxy or power of attorney
or give instructions with respect to the voting of EGI-TRB’s
Owned Shares in any manner which is inconsistent with this
Agreement.
Section
5.5
Information . EGI-TRB hereby agrees that all
information provided to it or its Representatives in connection
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