Document:

Exhibit 10.1

 

	
 
    	
EXECUTION COPY
    
	
 
    

 

SECURITIES PURCHASE AGREEMENT

 

by and among

 

TRIBUNE PUBLISHING COMPANY,

 

MERRICK MEDIA, LLC

 

and

 

MICHAEL W. FERRO, JR.

 

Dated as of

February 3, 2016

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
1.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
PURCHASE AND SALE OF   STOCK
    	
5
    
	
 
    	
 
    	
 
    
	
 
    	
2.1.
    	
Sale and Issuance of   Common Stock
    	
5
    
	
 
    	
2.2.
    	
Purchase Price
    	
5
    
	
 
    	
2.3.
    	
Closing
    	
5
    
	
 
    	
2.4.
    	
Closing Deliveries
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
REPRESENTATIONS AND   WARRANTIES OF THE COMPANY
    	
6
    
	
 
    	
 
    	
 
    
	
 
    	
3.1.
    	
Organization, Good   Standing and Qualification
    	
6
    
	
 
    	
3.2.
    	
SEC Reports; Financial   Statements
    	
6
    
	
 
    	
3.3.
    	
Authorization;   Enforceable Agreement
    	
7
    
	
 
    	
3.4.
    	
Litigation
    	
8
    
	
 
    	
3.5.
    	
Taxes
    	
8
    
	
 
    	
3.6.
    	
Subsidiaries
    	
8
    
	
 
    	
3.7.
    	
Governmental Consents
    	
8
    
	
 
    	
3.8.
    	
Permits and Licenses
    	
8
    
	
 
    	
3.9.
    	
Valid Issuance of   Shares and Common Stock
    	
9
    
	
 
    	
3.10.
    	
Capitalization
    	
9
    
	
 
    	
3.11.
    	
Investment Company Act
    	
9
    
	
 
    	
3.12.
    	
Agreements
    	
9
    
	
 
    	
3.13.
    	
Compliance with Other   Instruments
    	
10
    
	
 
    	
3.14.
    	
Compliance with Laws
    	
10
    
	
 
    	
3.15.
    	
Insurance
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
REPRESENTATIONS AND   WARRANTIES OF THE INVESTOR
    	
10
    
	
 
    	
 
    	
 
    
	
 
    	
4.1.
    	
Private Placement
    	
11
    
	
 
    	
4.2.
    	
Organization
    	
12
    
	
 
    	
4.3.
    	
Power and Authority
    	
12
    
	
 
    	
4.4.
    	
Authorization;   Enforceability
    	
12
    
	
 
    	
4.5.
    	
No Default or Violation
    	
13
    
	
 
    	
4.6.
    	
Legal Proceedings;   Orders
    	
13
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
REPRESENTATIONS AND   WARRANTIES OF MWF
    	
13
    
	
 
    	
 
    	
 
    
	
 
    	
5.1.
    	
Power and Authority
    	
13
    
	
 
    	
5.2.
    	
Authorization;   Enforceability
    	
13
    

 

i

 

	
6.
    	
CONDITIONS TO THE   INVESTOR’S OBLIGATIONS AT CLOSING
    	
13
    
	
 
    	
 
    	
 
    
	
 
    	
6.1.
    	
Representations and   Warranties
    	
14
    
	
 
    	
6.2.
    	
Performance
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
CONDITIONS TO THE   COMPANY’S OBLIGATIONS AT CLOSING
    	
14
    
	
 
    	
 
    	
 
    
	
 
    	
7.1.
    	
Representations and   Warranties
    	
14
    
	
 
    	
7.2.
    	
Performance
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
COVENANTS
    	
14
    
	
 
    	
 
    	
 
    
	
 
    	
8.1.
    	
Efforts
    	
14
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
VOTING
    	
15
    
	
 
    	
 
    	
 
    
	
 
    	
9.1.
    	
Voting Agreement as to   Certain Matters
    	
15
    
	
 
    	
9.2.
    	
Ability to Vote on All   Other Matters
    	
15
    
	
 
    	
9.3.
    	
Termination of Voting   Agreement
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
RESTRICTIONS ON SHARE   TRANSFER AND ACQUISITION
    	
16
    
	
 
    	
 
    	
 
    
	
 
    	
10.1.
    	
Share Acquisition   Limitation
    	
16
    
	
 
    	
10.2.
    	
Initial Transfer   Restriction
    	
16
    
	
 
    	
10.3.
    	
Continuing Transfer   Restriction
    	
16
    
	
 
    	
10.4.
    	
Prohibited Transferees
    	
16
    
	
 
    	
10.5.
    	
Notice of Transfers;   Right of First Offer
    	
17
    
	
 
    	
10.6.
    	
Termination of   Restrictions
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
BOARD MATTERS
    	
17
    
	
 
    	
 
    	
 
    
	
 
    	
11.1.
    	
Board Nomination
    	
17
    
	
 
    	
11.2.
    	
Termination of   Nomination Rights
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
INDEMNIFICATION
    	
18
    
	
 
    	
 
    	
 
    
	
 
    	
12.1.
    	
Survival
    	
18
    
	
 
    	
12.2.
    	
Indemnification of   Investor by the Company
    	
19
    
	
 
    	
12.3.
    	
Indemnification of the   Company Indemnified Parties by Investor
    	
19
    
	
 
    	
12.4.
    	
Special Rule for   Fraud, Intentional Misrepresentation and Willful Misconduct
    	
20
    
	
 
    	
12.5.
    	
Notice and Defense of   Third-Party Claims
    	
20
    
	
 
    	
12.6.
    	
Notice of   Non-Third-Party Claims
    	
22
    
	
 
    	
12.7.
    	
Determination of Loss   Amount
    	
22
    
	
 
    	
12.8.
    	
Manner of Payment
    	
22
    
	
 
    	
12.9.
    	
Exclusive Remedy
    	
22
    

 

ii

 

	
13.
    	
PUBLICITY
    	
23
    
	
 
    	
 
    	
 
    
	
14.
    	
MISCELLANEOUS
    	
23
    
	
 
    	
 
    	
 
    
	
 
    	
14.1.
    	
Governing Law
    	
23
    
	
 
    	
14.2.
    	
Submission to   Jurisdiction; Venue; Waiver of Trial by Jury
    	
23
    
	
 
    	
14.3.
    	
Enforcement of   Agreement
    	
24
    
	
 
    	
14.4.
    	
Successors and Assigns
    	
24
    
	
 
    	
14.5.
    	
No Third Party   Beneficiaries
    	
24
    
	
 
    	
14.6.
    	
No Personal Liability   of Directors, Officers, Owners, Etc.
    	
24
    
	
 
    	
14.7.
    	
Entire Agreement
    	
24
    
	
 
    	
14.8.
    	
Notices, Etc.
    	
24
    
	
 
    	
14.9.
    	
Delays or Omissions
    	
26
    
	
 
    	
14.10.
    	
Expenses
    	
26
    
	
 
    	
14.11.
    	
Amendments and Waivers
    	
26
    
	
 
    	
14.12.
    	
Counterparts
    	
26
    
	
 
    	
14.13.
    	
Severability
    	
26
    
	
 
    	
14.14.
    	
Titles and Subtitles
    	
27
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Exhibit A
    	
 
    	
Form of Registration   Rights Agreement
    	
 
    
	
Exhibit B
    	
 
    	
Form of   Confidentiality and Recusal Agreement
    	
 
    
	
Exhibit C
    	
 
    	
Form of Press   Release
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule   3.6
    	
Subsidiaries
    	
 
    

 

iii

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of February 3, 2016, by and among TRIBUNE PUBLISHING COMPANY, a Delaware corporation (the “Company”), MERRICK MEDIA, LLC, a Delaware limited liability company (“Investor”), and MICHAEL W. FERRO, JR., an individual resident in the State of Illinois (“MWF”). Each of the Company, Investor and MWF are sometimes referred to herein, individually, as a “Party” and, collectively, as the “Parties”.

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, 5,220,000 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), on the terms and conditions contained herein;

 

WHEREAS, as consideration for the issuance and sale of Common Stock by the Company, the Investor shall pay to the Company cash in the amount of $44,370,000;

 

WHEREAS, in connection with such sale and purchase, the Company is willing to make certain representations and warranties and to agree to observe certain covenants set forth herein for the benefit of the Investor, and the Investor will rely on such representations, warranties and covenants as a material inducement to its purchase of the Common Stock;

 

WHEREAS, in connection with such sale and purchase, the Investor is willing to make certain representations and warranties, and to agree to observe certain covenants set forth herein for the benefit of the Company, and the Company will rely on such representations, warranties and covenants as a material inducement to its sale of the Common Stock; and

 

WHEREAS, in connection with such sale and purchase, the Company is willing to grant certain governance rights as set forth herein to the Investor.

 

NOW THEREFORE, in consideration of the premises and of the respective representations, warranties, covenants and conditions contained herein, the Parties agree as follows:

 

1.                                      Definitions

 

The following terms shall have the respective meanings for all purposes of this Agreement:

 

“Affiliate” shall mean (a) with respect to an entity, any Person controlling, controlled by or under common control with such entity; and (b) with respect to an individual, any immediate family member of such individual, whether by blood or marriage (including spouses, children, parents and siblings). For purposes of this definition, “control” (including “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of securities, partnership or other ownership interests, by contract or otherwise.

 

 

“Ancillary Agreements” means the Confidentiality and Recusal Agreement, the Registration Rights Agreement and any additional agreements deemed necessary by the Parties to effect the transactions contemplated hereby.

 

“Board” means the Board of Directors of the Company, as now or hereafter constituted from time to time.

 

A “Change of Control” shall be deemed to have occurred (a) if any Person or group shall acquire beneficial ownership of more than 50% of the Voting Stock issued and outstanding, (b) upon consummation of a merger or consolidation of the Company into or with another Person in which the stockholders of the Company immediately prior to the consummation of such transaction (including a series of related transactions) shall own less than 50% of the voting securities (or have the right to appoint less than 50% of the members of the board of directors) of the surviving Person (or the parent of the surviving Person where the surviving Person is wholly owned by the parent Person) immediately following the consummation of such transaction (including a series of related transactions), (c) upon the consummation of, in one or a series of related transactions, the sale, transfer or lease (but not including a lease by pledge or mortgage to a bona fide lender of the Company) of all or substantially all of the assets of the Company to another Person, or (d) if a majority of the members of the Board are not Continuing Directors. “Continuing Directors” means, as of any date of determination, any member of the Board who:  (i) was a member of the Board on the date hereof (including, for this purpose, MWF); or (ii) was nominated for election or elected to the Board with the approval of a majority of the Continuing Directors who were members of the Board at the time of such nomination or election.

 

“Contract” shall mean any contract, agreement, arrangement or understanding, whether written or oral and whether express or implied.

 

“Governmental Authority” shall mean any foreign governmental authority, the United States of America, any state of the United States and any political subdivision of any of the foregoing, and any agency, instrumentality, department, commission, board, bureau, central bank, authority, court or other tribunal, in each case whether executive, legislative, judicial, regulatory or administrative, having jurisdiction over the Investor, MWF or the Company, any of the Company’s Subsidiaries or their respective property.

 

“Indebtedness” shall mean, as to any Person, without duplication: (a) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services; (b) any other indebtedness which is evidenced by a promissory note, bond, debenture or similar instrument; (c) any obligation under or in respect of outstanding letters of credit, acceptances and similar obligations created for the account of such Person; (d) all capital lease obligations of such Person; (e) all indebtedness, liabilities, and obligations secured by any Lien on any property owned by such Person even though such Person has not assumed or has not otherwise become liable for the payment of any such indebtedness, liabilities or obligations secured by such Lien; (f) any obligation under or in respect of hedging agreements and (g) all contingent obligations and synthetic indebtedness of such Person.

 

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“Knowledge” (i) of the Company shall mean the actual knowledge after due inquiry of the following individuals:  Jack Griffin, Julie Xanders and Sandy Martin and (ii) of Investor shall mean the actual knowledge after due inquiry of MWF.

 

“Liability” shall mean means any direct or indirect liability, indebtedness, obligation, commitment, claim, guaranty or endorsement of or by any Person of any type, whether accrued, absolute, contingent, matured, unmatured, liquidated, unliquidated, known or unknown.

 

“Lien” shall mean any mortgage, pledge, charge, encumbrance, security interest, collateral assignment or other lien or restriction of any kind, whether based on common law, constitutional provision, statute or contract, and shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions.

 

“Losses” shall mean any and all losses, liabilities, Proceedings, causes of action, costs, damages (including lost profits, diminution of value, consequential damages, special damages, incidental damages, punitive damages, exemplary damages or other unforeseen damages and regardless of whether or not the amount thereof has been calculated utilizing any multiple or similar valuation methodology) or expenses, whether or not arising from or in connection with any Third-Party Claims (including interest, penalties, reasonable attorneys’, consultants’ and experts’ fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing).

 

“Material Adverse Effect” means any change, circumstance, development, occurrence, event or effect (each, a “Company Effect”) that, when considered either individually or together with all other Company Effects, is or would reasonably be expected to be materially adverse to (a) the business, properties, assets, Liabilities, consolidated results of operations or financial condition of the Company and its Subsidiaries, taken as a whole or (b) the ability of the Company to consummate the transactions contemplated hereby and by the Registration Rights Agreement; provided that any such Company Effect resulting or arising from any of the following matters shall not be considered when determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur:

 

(a)                                 any change, circumstance, development, occurrence, event or effect generally affecting the businesses or industries in which the Company and its Subsidiaries operate;

 

(b)                                 any conditions affecting the United States general economy or the general economy in any geographic area in which the Company or its Subsidiaries operate or developments or changes therein or generally the financial and securities markets and credit markets in the United States;

 

(c)                                  political conditions, including acts of war (whether or not declared), armed hostilities and terrorism, or developments or changes therein;

 

(d)                                 any conditions after the date hereof resulting from natural disasters;

 

(e)                                  changes after the date hereof in any Laws or GAAP;

 

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(f)                                   any action taken or omitted to be taken by or at the written request or with the written consent of the Investor;

 

(g)                                  any announcement of this Agreement or the transactions contemplated hereby, in each case, solely to the extent due to such announcement;

 

(h)                                 changes after the date hereof in the market price or trading volume of Common Stock or any other equity, equity-related or debt securities of the Company or its Affiliates (it being understood that the underlying circumstances, events or reasons giving rise to any such change can be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur);

 

(i)                                     the fact that the Company has failed to meet any internal or public projections, forecasts, estimates or guidance for any period (it being understood that the underlying circumstances, events or reasons giving rise to any such failure can be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur); or

 

(j)                                    any Company Effect arising out of or resulting from any legal claims or other Proceedings made by any of the Company’s stockholders (on their own behalf or on behalf of the Company) arising out of or related to this Agreement;

 

provided, however, that Company Effects set forth in clauses (i), (ii), (iii), (iv) and (v) above may be taken into account in determining whether there has been or is a Material Adverse Effect if and only to the extent such Company Effects have a disproportionate impact on the Company and its Subsidiaries, taken as a whole, relative to other companies operating in the same businesses and industries in the United States.

 

“Person” shall mean any individual, corporation, limited liability company, partnership, trust, unincorporated organization, Governmental Authority or any other form of entity.

 

“Proceeding” shall mean any action, claim, suit, investigation or proceeding (including, without limitation, a partial proceeding, such as a deposition), whether commenced or threatened in writing.

 

“Representatives” means, with respect to any Person, the officers, directors, employees, agents, accountants, advisors, bankers and other representatives of such Person.

 

“Subsidiary” of any Person shall mean any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) (a) such Person or a subsidiary of such Person is a general partner or (b) more than fifty percent (50%) of (i) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (ii) the interest in the capital or profits of such partnership, joint venture or limited liability company or (iii) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

4

 

“Tax Returns” shall means all returns, declarations, reports, forms, estimates, information returns and statements required to be filed in respect of any Taxes with a taxing authority (including any schedules thereto or amendments thereof).

 

“Taxes” shall mean all federal, state, county, local, foreign and other taxes (including, without limitation, income, profits, premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem, severance, capital levy, production, transfer, withholding, employment, unemployment compensation, payroll-related and property taxes, import duties and other governmental charges and assessments), whether or not measured in whole or in part by net income, and including deficiencies, interest, additions to tax or interest and penalties with respect thereto.

 

“Transfer Agent” shall mean Computershare, the Company’s transfer agent.

 

“Voting Stock” means capital stock of the Company of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect one or more Board members of the Company (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

 

2.                                      Purchase and Sale of Stock.

 

2.1.                            Sale and Issuance of Common Stock. Subject to the terms and conditions of this Agreement, the Investor agrees to purchase at the Closing, and the Company agrees to issue and sell to the Investor at the Closing, an aggregate of five million two hundred twenty thousand (5,220,000) shares of Common Stock at a purchase price of $8.50 per share (the “Per Share Price”). The shares of Common Stock to be issued and sold by the Company to the Investor pursuant to this Agreement are collectively referred to herein as the “Shares.”

 

2.2.                            Purchase Price. The aggregate purchase price for the Shares shall be equal to $44,370,000 (the number of Shares multiplied by the Per Share Price (the “Purchase Price”) and shall be paid at Closing by the Investor to the Company, which payment shall be made by wire transfer of immediately available federal funds to an account designated by the Company.

 

2.3.                            Closing. The consummation of the purchase and sale of the Shares and other transactions contemplated hereby (the “Closing”) shall take place at the offices of Latham & Watkins LLP, 330 N. Wabash Ave, Chicago, Illinois, at 3:00 p.m., Chicago time, on the date hereof (the “Closing Date”), or at such other time and place as the Company and the Investor shall mutually agree.

 

2.4.                            Closing Deliveries. At the Closing:

 

(a)                                 the Company shall deliver, or cause to be delivered, to the Investor:

 

(i)                                     evidence from the Transfer Agent of the issuance of the Shares in the name of the Investor by book entry on the stock ledger of the Company;

 

5

 

(ii)                                  a copy of the duly adopted resolutions of the Board (A) expanding the size of the Board by one (1) director, (B) appointing MWF as a director of the Company, and (C) naming MWF as the non-executive Chairman of the Board;

 

(iii)                               a registration rights agreement, in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), duly executed and delivered on behalf of the Company;

 

(iv)                              a Confidentiality, Conflict of Interest and Recusal Agreement, in the form attached hereto as Exhibit B, duly executed and delivered by the Company (the “Confidentiality and Recusal Agreement”); and

 

(v)                                 evidence that notice of the issuance of the Shares has been delivered to the New York Stock Exchange.

 

(b)                                 The Investor shall deliver, or cause to be delivered, to the Company;

 

(i)                                     the Registration Rights Agreement, duly executed and delivered on behalf of the Investor;

 

(ii)                                  the Confidentiality and Recusal Agreement, duly executed and delivered by MWF; and

 

(iii)                               payment in full of the Purchase Price.

 

3.                                      Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor that, except (x) as otherwise disclosed or incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2014 or its other reports and forms filed with or furnished to the Securities and Exchange Commission (the “Commission”) under Sections 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after December 28, 2014 and before the date of this Agreement (all such reports covered by this clause (x) collectively, the “SEC Reports”), or (y) as set forth in the Schedules hereto:

 

3.1.                            Organization, Good Standing and Qualification. Each of the Company and its Subsidiaries is duly organized, validly existing and in good standing under the Laws of the state of its incorporation, has all corporate power and authority to own its properties and conduct its business as presently conducted, and is duly qualified to do business and in good standing in each state in the United States of America where its business requires such qualification, except where such failure to be in good standing, have such corporate power and authority or to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. True and accurate copies of the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each as amended and in effect as of the date hereof, have been made available to the Investor.

 

3.2.                            SEC Reports; Financial Statements. The Company has filed all reports required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) for the 12 months preceding

 

6

 

the date hereof on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates (or, if amended or superseded by a filing prior to the Closing Date, then on the date of such filing), the SEC Reports filed by the Company complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, including the Sarbanes-Oxley Act, and none of the SEC Reports, when filed (or, if amended or superseded by a filing prior to the Closing Date, then on the date of such filing) by the Company, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or, if amended or superseded by a filing prior to the Closing Date, then on the date of such filing).  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements, the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP or may be condensed or summary statements, and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.  All material agreements to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any Subsidiary are subject are included as part of or identified in the SEC Reports, to the extent such agreements are required to be included or identified pursuant to the rules and regulations of the SEC. To the Company’s Knowledge, as of the date hereof, none of the SEC Reports is subject to ongoing SEC review or outstanding investigation.

 

3.3.                            Authorization; Enforceable Agreement.

 

(a)                                 The Company has full right, power, authority and capacity to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby.  All corporate action on the part of the Company necessary for the authorization, execution, and delivery of this Agreement and those Ancillary Agreements to which the Company is a party, the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale, and delivery of the Shares being sold hereunder has been taken, and this Agreement and each of such Ancillary Agreements, when executed and delivered by the Company, assuming due authorization, execution and delivery by the Investor or MWF, as applicable, constitutes and will constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, subject to: (i) Laws limiting the availability of specific performance, injunctive relief, and other equitable remedies; (ii) bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect generally relating to or affecting creditors’ rights; and (iii) limitations on the enforceability of the indemnification provisions contained herein (the “Enforceability Exceptions”).  The sale of the Shares is not subject to any preemptive rights or rights of first offer.

 

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(b)                                 On or prior to the date hereof, the Board has duly adopted resolutions (i) evidencing its determination that the transactions contemplated hereby are in the best interests of the Company and its stockholders, and (ii) approving this Agreement and those Ancillary Agreements to which the Company is a party and the transactions contemplated hereby and thereby; and, as of the date hereof, such resolutions have not been rescinded, modified or withdrawn in any way.

 

3.4.                            Litigation.  Except as disclosed in the SEC Reports, there is no action, suit, claim, or Proceeding, or, to the Knowledge of the Company, inquiry or investigation, before or by any court, public board, government agency, self-regulatory organization or body pending or, to the Knowledge of the Company, threatened against or affecting the Company or any Subsidiary of the Company that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

3.5.                            Taxes.  Each of the Company and its Subsidiaries has (a) timely filed all Tax Returns required to have been filed (including any validly obtained extensions), and all such Tax Returns were correct and complete in all material respects and were prepared in substantial compliance with all applicable Laws, (b) timely paid all Taxes due and payable except for those which are being contested in good faith by appropriate proceedings and in respect of which adequate reserves with respect thereto are maintained in accordance with GAAP, and (c) complied, in all respects, with all applicable Laws relating to the withholding of Taxes and has timely collected or withheld and paid over to the proper Governmental Authority all amounts required to be so collected or withheld and paid over, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

3.6.                            Subsidiaries.  As of the date hereof, the Company has no Subsidiaries other than those listed in Schedule 3.6 hereto.  The Company owns, directly or indirectly, all of the issued and outstanding shares of capital stock of or all other equity interests in each of the Company’s Subsidiaries, free and clear of all Liens, and all of such shares or equity interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights.

 

3.7.                            Governmental Consents.  No consent, approval, order, or authorization of, or registration, qualification, declaration, or filing with, any federal, state, or local governmental authority on the part of the Company is required in connection with the offer, sale, or issuance of the Shares or the consummation of any other transaction contemplated hereby, except for the following:  (a) the compliance with other applicable state securities Laws, which compliance will have occurred within the appropriate time periods therefor; and (b) the filing with the Commission of such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement.  Assuming that the representations of the Investor set forth in Section 4 below are true and correct, the offer, sale, and issuance of the Shares in conformity with the terms of this Agreement are exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), and all applicable state securities Laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemptions.

 

3.8.                            Permits and Licenses.  The Company and each of its Subsidiaries possess all permits and licenses of Governmental Authorities that are required to conduct its business, except for such permits or licenses the absence of which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

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3.9.                            Valid Issuance of Shares and Common Stock.  The Shares being purchased by the Investor hereunder, when issued, sold, and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions under this Agreement and under applicable state and federal securities Laws.

 

3.10.                     Capitalization.  The authorized capital stock of the Company consists of 300,000,000 shares of Common Stock and 30,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”).  As of the close of business on February 2, 2016, there were an aggregate of 26,235,779 shares of Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding.  All issued and outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable and have been issued in compliance with state and federal securities Laws.  Other than those granted pursuant to the stock plans described in the SEC Reports, (i) there are no options, warrants, calls, rights, convertible securities, commitments or agreements (which, for purposes of this Agreement, shall be deemed to include “phantom” stock or other commitments that provide any right to receive value or benefits similar to capital stock or other similar rights) of any character to which the Company is a party or by which the Company is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or obligating the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement, (ii) there are no outstanding contractual obligations of the Company or any other Person to repurchase, redeem or otherwise acquire any shares of capital stock of the Company, and (iii) there are no outstanding securities of any kind convertible into or exchangeable or exercisable for the capital stock of the Company.  There are no statutory or contractual preemptive rights or rights of first offer or refusal or similar rights with respect to any shares of capital stock of the Company, and there are no declared and unpaid dividends or distributions on any shares of capital stock of the Company.

 

3.11.                     Investment Company Act.  Neither the Company nor any of its Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, or, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act.

 

3.12.                     Agreements.  The Company has previously disclosed in the SEC Reports true, correct and complete copies of each Contract or agreement which is a “material contract” within the meaning of Item 601(b)(10) of Regulation S-K to be performed in whole or in part after the date of this Agreement required to be disclosed under applicable Law prior to the date hereto (each, a “Company Significant Agreement”).  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:  (i) each of the Company Significant Agreements is valid and binding on the Company and its Subsidiaries, as applicable, and in full force and effect; (ii) the Company and each of its Subsidiaries, as applicable, are in compliance with and have performed all obligations required to be performed by them to date under each Company Significant Agreement; and (iii) as of the date hereof, neither the Company nor any of its Subsidiaries has received notice of any material violation or default (or any

 

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condition which with the passage of time or the giving of notice or both would cause such a violation of or a default) by any party under any Company Significant Agreement nor, to the Company’s Knowledge, has such notice been threatened.

 

3.13.                     Compliance with Other Instruments.  The Company is not in violation or default of any provision of its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, each as amended and in effect as of the Closing.  The execution, delivery, and performance of and compliance with this Agreement and the Ancillary Agreements and the issuance and sale of the Shares will not (a) conflict with or violate any provision of the Company’s Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, (b) conflict with or violate any applicable Law (which conflict or violation would be material to the Company and its Subsidiaries taken as a whole) or any applicable judgment, order or decree of any Governmental Authority, or (c) conflict with or result in any breach of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right to termination, acceleration or cancellation under any Company Significant Agreement or result in the creation of any material mortgage, pledge, Lien, encumbrance, or charge upon any of the properties or assets of the Company, or the suspension, revocation, impairment or forfeiture of any material permit, license, authorization, or approval applicable to the Company, its business or operations, or any of its assets or properties.

 

3.14.                     Compliance with Laws.  Except with respect to Laws regarding Taxes, which are addressed in Section 3.5, neither the Company nor any of its Subsidiaries is in violation of any applicable federal, foreign, state, local or other Law, statute, regulation, rule, ordinance, code, convention, directive, order, judgment or other legal requirement of any Governmental Authority (collectively, “Laws”), except where such violation would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or a material adverse effect on the ability of the Company and its Subsidiaries, taken as a whole, to conduct their businesses in the ordinary course of business consistent with past practices.  Except with respect to Laws regarding Taxes, which are addressed in Section 3.5, neither the Company nor any of its Subsidiaries is, to the Company’s Knowledge, being investigated with respect to, or been threatened to be charged with or given notice of any violation of, any applicable Law, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or a material adverse effect on the ability of the Company and its Subsidiaries, taken as a whole, to conduct their businesses in the ordinary course of business consistent with past practices.

 

3.15.                     Insurance.  The Company and each Subsidiary is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses and locations in which the Company and each Subsidiary is engaged.

 

4.                                      Representations and Warranties of the Investor.  The Investor hereby represents and warrants to the Company that, as of the date hereof and as of the Closing:

 

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4.1.                            Private Placement.

 

(a)                                 The Investor is (i) an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act; (ii) aware that the sale of the Shares to it is being made in reliance on a private placement exemption from registration under the Securities Act and (iii) acquiring the Shares for its own account.

 

(b)                                 The Investor understands and agrees that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act, that such Shares have not been and, except as contemplated in this Agreement, will not be registered under the Securities Act and that such Shares may be offered, resold, pledged or otherwise transferred only (i) in a transaction not involving a public offering, (ii) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), (iii) pursuant to an effective registration statement under the Securities Act, or (iv) to the Company or one of its subsidiaries, in each of cases (i) through (iv) in accordance with any applicable securities Laws of any State of the United States, and that it will notify any subsequent purchaser of Shares from it of the resale restrictions referred to above, as applicable.

 

(c)                                  The Investor understands that, unless sold pursuant to a registration statement that has been declared effective under the Securities Act or in compliance with Rule 144 thereunder, the Company may require that the Shares will bear a legend or other restriction substantially to the following effect (it being agreed that if the Shares are not certificated, other appropriate restrictions shall be implemented to give effect to the following):

 

“THE SECURITIES EVIDENCED HEREBY WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  THE HOLDER OF SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN A TRANSACTION NOT INVOLVING A PUBLIC OFFERING, (II) PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (IV) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL NOTIFY ANY SUBSEQUENT PURCHASER OF SUCH SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.  SUCH SECURITIES MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE SECURITIES PURCHASE AGREEMENT, DATED AS OF FEBRUARY 3, 2016.”

 

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(d)                                 The Investor, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  The Investor understands that the Investor must bear the economic risk of this investment in the Shares indefinitely, and is able to bear such risk and is able to afford a complete loss of such investment.

 

(e)                                  The Investor acknowledges that the Investor and/or its Representatives (i) have conducted its own investigation of the Company and the terms of the Shares, (ii) have had access to the Company’s public filings with the Commission and to such financial and other information as it deems necessary to make its decision to purchase the Shares, and (iii) have been offered the opportunity to conduct such review and analysis of the business, assets, condition, operations and prospects of the Company and its Subsidiaries and to ask questions of the Company and received answers thereto, each as deemed necessary in connection with the decision to purchase the Shares.  The Investor further acknowledges that it has had such opportunity to consult with their own counsel, financial and tax advisors and other professional advisers as is sufficient for purposes of the purchase of the Shares.

 

(f)                                   The Investor understands that the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

 

(g)                                  Except for the representations and warranties contained in Section 3 of this Agreement, the Investor acknowledges that neither the Company nor any Person on behalf of the Company makes, and the Investor has not relied upon, any other express or implied representation or warranty with respect to (i) the Company or any of its Subsidiaries or (ii) any other information provided to the Investor or any of its Representatives in connection with the transactions contemplated by this Agreement.

 

4.2.                            Organization.  The Investor is duly organized, validly existing and in good standing as a limited liability company under the Laws of the State of Delaware, except where such failure to be in good standing would not reasonably be expected to have, individually or in the aggregate, a material adverse effect.

 

4.3.                            Power and Authority.  Investor has full right, power, authority and capacity to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance hereof.

 

4.4.                            Authorization; Enforceability.  The execution, delivery and performance of this Agreement and each Ancillary Agreement to which Investor is a party has been duly authorized by all necessary action on the part of the Investor, and this Agreement and each such Ancillary Agreement has been duly executed and delivered by the Investor and, assuming due authorization, execution and delivery of this Agreement or such Ancillary Agreement by the Company, as applicable, this Agreement and each applicable Ancillary Agreement constitutes a valid and binding obligation of the Investor, enforceable against it in accordance with its terms, except to the extent that the enforcement thereof may be limited by the Enforceability Exceptions.

 

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4.5.                            No Default or Violation.  The execution, delivery, and performance of and compliance with this Agreement and each of the applicable Ancillary Agreements will not (a) result in any default or violation of the operating agreement or any other governance documents of or applicable to the Investor, (b) result in any default or violation of any agreement relating to any material Indebtedness of the Investor or any of its Affiliates or under any mortgage, deed of trust, security agreement or lease to which it or he is a party or in any default or violation of any material judgment, order or decree of any Governmental Authority, or (c) be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any such provision, require any consent or waiver under any such provision, or result in the creation of any mortgage, pledge, Lien, encumbrance, or charge upon any of the properties or assets of the Investor pursuant to any such provision, or the suspension, revocation, impairment or forfeiture of any material permit, license, authorization, or approval applicable to the Investor or any of its Affiliates, or any of their respective businesses or operations, assets or properties pursuant to any such provision; except, in the case of clauses (b) and (c), for such defaults, violations or conflicts that would not reasonably be expected to have a material adverse effect on the ability of the Investor to consummate the transactions contemplated hereby or thereby.

 

4.6.                            Legal Proceedings; Orders.  There is no action, suit, claim, or Proceeding pending or, to the Knowledge of Investor, threatened against or affecting Investor or any of its Affiliates that (a) could reasonably be expected to adversely affect the ability of the Investor to consummate the transactions contemplated by this Agreement or any of the applicable Ancillary Agreements, or (b) challenge or that could reasonably be expected to prevent, impede, hinder, delay, make illegal, impose limitations or conditions on, or otherwise interfere with, any of the transactions contemplated by this Agreement or any of the applicable Ancillary Agreements.

 

5.                                      Representations and Warranties of MWF.  MWF hereby represents and warrants to the Company that, as of the date hereof and as of the Closing:

 

5.1.                            Power and Authority.  MWF has full right, power, authority and capacity to execute, deliver and perform his obligations under this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance hereof.

 

5.2.                            Authorization; Enforceability.  The execution, delivery and performance of this Agreement and each Ancillary Agreement to which MWF is a party has been duly authorized by MWF, and this Agreement and each such Ancillary Agreement has been duly executed and delivered by MWF and, assuming due authorization, execution and delivery of this Agreement or such Ancillary Agreement by the Company, as applicable, this Agreement and each applicable Ancillary Agreement constitutes a valid and binding obligation of MWF, enforceable against him in accordance with its terms, except to the extent that the enforcement thereof may be limited by the Enforceability Exceptions.

 

6.                                      Conditions to the Investor’s Obligations at Closing.  The obligation of the Investor to purchase the Shares at the Closing is subject to the fulfillment (or waiver by the Investor) on or before the Closing of each of the following conditions:

 

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6.1.                            Representations and Warranties.  The representations and warranties of the Company contained in Section 3 shall be true and correct as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (other than such representations and warranties that by their terms speak as of a certain date, which shall be true and correct as of such certain date), except where the failure to be so true and correct without giving effect to any qualifications and limitations as to “materiality” or “material adverse effect” set forth therein, individually or in the aggregate, would not have a material adverse effect.

 

6.2.                            Performance.  The Company shall have performed and complied in all material respects with all agreements, obligations, and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

 

7.                                      Conditions to the Company’s Obligations at Closing.  The obligations of the Company to the Investor under this Agreement are subject to the fulfillment (or waiver by the Company) on or before the Closing of each of the following conditions by the Investor:

 

7.1.                            Representations and Warranties.  The representations and warranties of the Investor contained in Section 4 and MWF contained in Section 5 shall be true and correct as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (other than representations and warranties that by their terms speak as of a certain date, which shall continue to be true and correct as of such certain date) except where the failure to be so true and correct without giving effect to any qualifications and limitations as to “materiality” or “Material Adverse Effect” set forth therein, individually or in the aggregate, would not have a Material Adverse Effect.

 

7.2.                            Performance.  The Investor shall have performed and complied in all material respects with all agreements, obligations, and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

 

8.                                      Covenants.  The Company and the Investor hereby covenant and agree, for the benefit of MWF and the other Parties and their respective assigns, as follows:

 

8.1.                            Efforts.  Upon the terms and subject to the conditions set forth in this Agreement, the Parties shall each use their commercially reasonable efforts to promptly (a) take, or to cause to be taken, all actions, and to do, or to cause to be done, and to assist and cooperate with the other Parties in doing all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the transactions contemplated by this Agreement; (b) obtain from any Governmental Authority and/or other third parties any actions, non-actions, clearances, waivers, consents, approvals, permits or orders required to be obtained in connection with the authorization, execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement; and (c) execute and deliver any additional instruments necessary to consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, the Company shall use all commercially reasonable efforts to (x) obtain all necessary permits and qualifications, if any, or secure an exemption therefrom, required by any state or country prior to the offer and sale of the Shares, (y) cause such authorization, approval, permit or qualification to be effective as of the Closing and (z) promptly following the consummation of the transactions contemplated by this

 

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Agreement, execute and deliver customary indemnification agreements for each of the Company’s directors, including MWF.

 

9.                                      Voting.

 

9.1.                            Voting Agreement as to Certain Matters.  From and after the date hereof until the later of (x) the third anniversary of the date hereof and (y) the first anniversary of the date that MWF (or a Replacement Director appointed in accordance with Section 11.1) ceases to serve on the Board due to (1) the resignation or refusal to stand for re-election of such Person, or (2) the Investor’s decision not to designate a Replacement Director following the death or disability of such Person (such period, the “Voting Standstill Term”), without the prior approval of a majority of the Continuing Directors, each of the Investor, MWF and their respective Affiliates who now or hereafter own or have the right to vote or direct the vote of any shares of the Common Stock (collectively, the “Investor Group”):

 

(a)                                 shall in any election of directors or at any meeting of the stockholders of the Company called expressly for the removal of directors, the Investor will vote, and cause the Investor Group to vote, all Shares that it is entitled to vote, whether now owned or hereafter acquired (collectively, the “Voting Securities”) as follows: (i) in favor of any nominee or director designated by the Nominating and Governance Committee of the Board (provided, that such designation is consistent with the terms of this Agreement); and (ii) against the removal of any director designated by the Nominating and Governance Committee of the Board; and

 

(b)                                 shall not conduct, participate in or support in any way any proxy solicitation regarding (a) the removal or election of directors or (b) any transaction that would effect a Change of Control of the Company.

 

9.2.                            Ability to Vote on All Other Matters.  Except as expressly provided in Section 9.1, each member of the Investor Group will be entitled to vote all of its Voting Securities in its sole discretion on any other matter submitted to or acted upon by the stockholders of the Company.

 

9.3.                            Termination of Voting Agreement.  The provisions of this Section 9 and the Voting Standstill Term shall terminate upon the earliest to occur of any one of the following:

 

(a)                                 the date that (i) MWF (or the Replacement Director) is not nominated by the Board for re-election as a director of the Company, (ii) MWF (or the Replacement Director) is removed as a director of the Company (except as set forth in clause (c) below) and (iii) the date that MWF or the Replacement Director has not been re-elected to the Board in the event that the Company has not recommended MWF’s or the Replacement Director’s re-election (except as set forth in clause (c) below);

 

(b)                                 the date that is six (6) months following the date that MWF (or the Replacement Director) ceases to serve on the Board after such Person is not re-elected as a director of the Company; provided, that the Company has recommended that the shareholders vote “for” the election of MWF (or the Replacement Director);

 

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(c)                                  the date that is nine (9) months following the date that MWF (or the Replacement Director) (i) is removed as a director of the Company or (ii) has not been re-elected to the Board in the event that the Company has not recommended MWF’s (or the Replacement Director’s) re-election; provided, that such removal or failure to recommend re-election is a result of any breach of applicable duty owed by MWF (or the Replacement Director) to the Company or any material violation of material Law);

 

(d)                                 the date of a Change of Control effected without the prior written approval of the Board in its sole discretion; and

 

(e)                                  if MWF is removed or replaced as Chairman of the Board and thereafter resigns from the Board within ten (10) days of such removal or replacement (and the Investor does not designate a Replacement Director), the date that is six (6) months following the date that MWF ceases to serve on the Board.

 

10.                               Restrictions on Share Transfer and Acquisition.

 

10.1.                     Share Acquisition Limitation.  From and after the Closing, without the prior written approval of the Board in its sole discretion, the Investor hereby agrees that, until the third (3rd) anniversary of the Closing Date, the Investor shall not, and the Investor shall cause the Investor Group not to, directly or indirectly, acquire any equity (or equity-linked or convertible) securities of the Company, or any interest therein, if such acquisition results or could reasonably be expected to result in the Investor Group Beneficially Owning more than twenty-five percent (25%) of the Company’s then outstanding shares of Common Stock.

 

10.2.                     Initial Transfer Restriction.  From and after the Closing and until the third (3rd) anniversary of the Closing (the “Initial Restriction Period”), the Investor shall not, and the Investor shall cause the Investor Group not to, without the prior written approval of the Board in its sole discretion, transfer, assign or convey, directly or indirectly, any Shares, or any interest therein, to any Person, other than to other members of the Investor Group or their respective equityholders; provided that any such equityholder who receives Shares pursuant to this Section 10.2 shall be subject to the restrictions set forth in Section 9 and this Section 10 as if such equity holder were a member of the “Investor Group”.

 

10.3.                     Continuing Transfer Restriction.  Following the Initial Restriction Period, the Investor shall not, and the Investor shall cause the Investor Group not to, without the prior written approval of the Board in its sole discretion, transfer, assign or convey, directly or indirectly, more than twenty-five percent (25%) of the original number of Shares in any consecutive twelve (12) month period.

 

10.4.                     Prohibited Transferees.  The Investor shall not, and the Investor shall cause the Investor Group not to, transfer, assign or convey, directly or indirectly through a series of related transactions, any shares of the Common Stock or any interest therein if and to the extent such transfer (a) would result in any Person Beneficially Owning more than 4.9% of the then outstanding shares of Common Stock or (b) is made to a material competitor of the Company in any of its then-existing primary geographical markets; provided, however, that the foregoing

 

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restriction shall not apply to open-market transactions or to any subsequent transfer by a transferee (other than a member of the Investor Group) otherwise permitted hereunder.

 

10.5.                     Notice of Transfers; Right of First Offer.

 

(a)                                 In the event that any member of Investor Group desires to sell any Shares representing at least one percent (1%) of the then-outstanding shares of Common Stock in a transaction or series of related transactions, then such member of the Investor Group shall, and the Investor shall cause such member to, first, prior to consummating such sale, give prior written notice to the Company of such intent and specify the aggregate number of shares which the Investor Group is proposing to sell (the “ROFO Notice”).  Within seven (7) days from the date of receipt of the ROFO Notice, the Company may either decline in writing to offer to buy such shares, or may propose in writing a price (not less than the then-current ten day volume average weighted price per share of the Common Stock) at which the Company offers to buy all (but not less than all) of such shares (the “Company Offer”).  The Investor Group shall have seven (7) days after receipt of the Company Offer to either accept in writing the Company Offer or to decline in writing the Company Offer.  If the Investor Group declines the Company Offer, the Investor Group may thereafter, for a period of thirty (30) days after the date of the Company Offer and subject to any other restrictions under this Section 10, sell or enter into an agreement to sell any of the shares covered by the ROFO Notice at a price no less than the lesser of (i) (A) the price specified in the Company Offer, or (B) the market price of such shares based on the closing price per share of the Company’s Common Stock on the trading day immediately prior to the consummation of such transaction (in each case without regard to any reasonable and customary underwriters’ discounts or commissions applicable to such transaction).  To the extent shares are to be transferred to the Company pursuant to this Section 10.5(a), the Investor Group shall cause such Shares to be transferred free and clear of all Liens, claims, encumbrances and other restrictions (other than as set forth in this Agreement) and shall be deemed to have represented that the Investor Group has full right, title and interest in and to such Shares and has all necessary power and authority and has taken all necessary actions to sell such Shares.  The closing of any transfer pursuant to this Section 10.5(a) shall occur in accordance with the terms and provisions of the offer and this Agreement.

 

(b)                                 Any proposed transfer by the Investor Group not consummated within the time periods set forth in this Section 10.5 shall again be subject to this Section 10.5 and shall require compliance by the Investor Group with the procedures described in this Section 10.5.  The exercise or non-exercise of the rights of the Company under this Section 10.5 with respect to any proposed transfer shall not adversely affect its rights with respect to subsequent transfers by the Investor Group under this Section 10.5.

 

10.6.                     Termination of Restrictions.  Upon the termination of the provisions of Section 9 in accordance with Section 9.3, the restrictions on transfer set forth in Sections 10.2 and 10.3 and the right of first offer in Section 10.5 shall automatically terminate; provided, however, that the restrictions set forth in Section 10.1 or Section 10.4  shall remain in effect.

 

11.                               Board Matters.

 

11.1.                     Board Nomination.

 

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(a)                                 Concurrently herewith, MWF shall be elected as a Director of the Company by the Board and shall be named as the non-executive Chairman of the Board.

 

(b)                                 In the event that MWF is unable (e.g., for health-related reasons) to continue to serve as a member of the Board, the Investor shall be entitled to designate one individual for election to the Board at each annual and special meeting of the Company’s shareholders at which Directors are to be elected as part of the slate of nominees recommended by the Board, subject to the reasonable prior approval of the Board’s Nominating & Governance Committee, and the Board shall use commercially reasonable efforts to have such individual elected as a member of the Board (such individual, a “Replacement Director”).  Thereafter, in the event that any Replacement Director previously nominated and elected in accordance with this Section 11.1(b) is unable or unwilling to continue to serve as a member of the Board, the Investor shall be entitled to designate another Replacement Director in accordance with this Section 11.1(b).

 

11.2.                     Termination of Nomination Rights.  The rights set forth under Section 11.1 above shall terminate if and when the provisions of Section 9 are terminated in accordance with Section 9.3(a).  In addition, the rights set forth under Section 11.1 above shall terminate if and when the Investor Group ceases to Beneficially Own at least seventy-five percent (75%) of the original number of the Shares.

 

12.                               Indemnification.

 

12.1.                     Survival. Subject to the limitations contained in this Section 12, all representations, warranties covenants and agreements contained in this Agreement shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby.  Notwithstanding anything herein to the contrary, the Investor will not be liable with respect to any claim for indemnification pursuant to Section 12.3(a)(i), and the Company will not be liable with respect to any claim for indemnification pursuant to Section 12.2(a)(i), unless written notice of such claim is delivered to the Investor or the Company, as the case may be, prior to the applicable Survival Date (if any).  For purposes of this Agreement, the term “Survival Date” shall mean such date which is twelve (12) months after the Closing; provided that:

 

(a)                                 with respect to the representations and warranties set forth in Section 3.5, the Survival Date shall be the thirtieth (30th) day after the expiration of the applicable statute of limitations (including any extensions thereto to the extent that such statute of limitations may be tolled);

 

(b)                                 with respect to the representations and warranties set forth in Sections 3.1, 3.3, 3.6, 3.10 and 3.11 (such representations, collectively, the “Company Fundamental Representations”), there shall be no Survival Date and such representations and warranties shall survive the Closing indefinitely;

 

(c)                                  with respect to the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 4.4, 5.1, 5.2 (such representations, collectively, the “Investor Fundamental

 

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Representations”), there shall be no Survival Date and such representations and warranties shall survive the Closing indefinitely; and

 

(d)                                 covenants and agreements shall survive the Closing until fully performed or observed in accordance with their terms.

 

(e)                                  The Parties agree that so long as written notice is given on or prior to the Survival Date with respect to such claim, the representations and warranties with respect to such breach shall continue to survive until such matter is finally resolved.

 

12.2.                     Indemnification of Investor by the Company.

 

(a)                                 Obligations of the Company.  The Company agrees to indemnify the Investor, MWF and their respective Affiliates and each of their respective officers, directors, stockholders, managers, members, partners, employees, agents, representatives, successors and assigns (collectively, the “Investor Indemnified Parties”) and hold each of them harmless against any Losses which any of them may suffer, sustain or become subject to, as the result of, arising out of, relating to or in connection with:

 

(i)                                     the breach or inaccuracy by the Company of any representation or warranty made by the Company in this Agreement; or

 

(ii)                                  the breach, non-compliance or non-performance of any covenant, agreement or obligation of the Company contained in this Agreement.

 

(b)                                 Limitations.

 

(i)                                     No amount shall be payable to the Investor Indemnified Parties in satisfaction of claims for indemnification pursuant to Section 12.2(a)(i) unless and until the aggregate amount of all Losses of the Investor Indemnified Parties arising therefrom exceeds $1,000,000 (the “Threshold”), at which time the Company shall indemnify the Investor Indemnified Parties for the full amount of all such Losses from and including the first dollar of all such Losses up to an amount not to exceed the Purchase Price (the “Cap”); provided that the Threshold and the Cap shall not apply with respect to any Losses resulting from, arising out of or relating to breaches of Company Fundamental Representations.

 

(ii)                                  In no event shall the aggregate amount of all payments made by the Company in satisfaction of claims for indemnification pursuant to this Agreement exceed the Purchase Price.

 

12.3.                     Indemnification of the Company Indemnified Parties by Investor.

 

(a)                                 Obligations of the Investor.  The Investor hereby agrees to indemnify the Company and its Affiliates (including the Company and each of its Subsidiaries) and each of their respective officers, directors, stockholders, managers, members, partners, employees, agents, Representatives, successors and assigns (collectively, the “Company Indemnified Parties”) and hold each of them harmless from and against and pay on behalf of or reimburse any such Company Indemnified Party in respect of the entirety of any Loss which such Company

 

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Indemnified Party may suffer, sustain or become subject to, as a result of, arising out of, relating to or in connection with:

 

(i)                                     the breach or inaccuracy of any representation or warranty of the Investor contained in Section 4 of this Agreement or of MWF contained in Section 5 of this Agreement; and

 

(ii)                                  the breach, non-compliance or non-performance of any covenant, agreement or obligation of the Investor contained in this Agreement.

 

(b)                                 Limitations.  No amount shall be payable to the Company Indemnified Parties in satisfaction of claims for indemnification pursuant to Section 12.3(a)(i) unless and until the aggregate amount of all Losses of the Company Indemnified Parties arising therefrom exceeds the Threshold, at which time the Investor shall indemnify the Company Indemnified Parties for the full amount of all such Losses from and including the first dollar of all such Losses up to an amount not to exceed the Cap; provided that the Threshold shall not apply with respect to any Losses resulting from, arising out of or relating to breaches of Investor Fundamental Representations.

 

12.4.                     Special Rule for Fraud, Intentional Misrepresentation and Willful Misconduct.  Notwithstanding anything in this Section 12 to the contrary, in the event of any breach of a representation, warranty, covenant, agreement or obligation by any Party that results from intentional misrepresentation or willful misconduct or constitutes fraud, by or on behalf of (x) the Investor or MWF (including any intentional misrepresentation, willful misconduct or fraudulent act committed by any Affiliate, officer, director, employee or agent of the Investor in connection with the consummation of the transactions contemplated by this Agreement) or (y) the Company (including any intentional misrepresentation, willful misconduct or fraudulent act committed by any Affiliate, officer, director, employee or agent of the Company or any willful misconduct on the part of any of them in connection with the consummation of the transactions contemplated by this Agreement), then (a) such representation, warranty, covenant, agreement or obligation will survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and will continue in full force and effect for the period of the applicable statute of limitations without regard to any Survival Date, (b) the limitations set forth in this Section 12 shall not apply to any Loss that the Company Indemnified Parties or the Investor Indemnified Parties may suffer, sustain or become subject to, as a result of, arising out of, relating to or in connection with any such breach, and (c) none of such Losses shall be subject to or shall count towards the satisfaction of the Threshold or the Company Threshold, as applicable, or the Cap.

 

12.5.                     Notice and Defense of Third-Party Claims.

 

(a)                                 If a Party seeks indemnification under this Section 12 with respect to any Proceeding brought against it by a third party (a “Third-Party Claim”), such party (the “Indemnified Party”) shall promptly give written notice to the other party (the “Indemnifying Party”) after receiving written notice of such Third-Party Claim, describing the Third-Party Claim, the amount thereof (if known and quantifiable), and the basis thereof; provided that any failure to so notify or any delay in notifying the Indemnifying Party shall not relieve the

 

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Indemnifying Party of its or his obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure or delay.  With respect to any Third-Party Claim which, if adversely determined, would entitle the Indemnified Party to indemnification pursuant to this Section 12, the Indemnifying Party shall be entitled, at its sole cost and expense, (i) to participate in the defense of such Third-Party Claim giving rise to the Indemnified Party’s claim for indemnification or (ii) at its option (subject to the limitations set forth below), to assume control of such defense and appoint lead counsel reasonably acceptable to the Indemnified Party.  Notwithstanding the foregoing, the Indemnifying Party shall not have the right to assume control of such defense if the Third-Party Claim which the Indemnifying Party seeks to assume control (A) seeks non-monetary relief, (B) involves criminal or quasi-criminal allegations, (C) involves a claim which, if adversely, determined, would be reasonably expected to establish a precedent, custom or practice adverse to the continuing business interests or prospects of the Indemnified Party, (D) seeks Losses in excess of the Cap or (E)  involves a claim that, in the good faith judgment of the Indemnified Party, the Indemnifying Party failed or is failing to vigorously prosecute or defend (each of the foregoing, an “Exception Claim”).

 

(b)                                 In the event that (i) the Indemnifying Party fails to elect to assume control of the defense of any Third-Party Claim in the manner set forth in Section 12.5(a) or such Third-Party Claim is or at any time becomes an Exception Claim, the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third-Party Claim in any manner it may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, any Indemnifying Party in connection therewith).

 

(c)                                  If the Indemnifying Party is controlling the defense of any Third-Party Claim in accordance with Section 12.5(a), (i) the Indemnified Party shall nonetheless have the right to participate in the defense of such Third-Party Claim giving rise to the Indemnified Party’s claim for indemnification at the Indemnifying Party’s sole cost and expense, (ii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to or cease to defend such Third-Party Claim without the prior written consent of the Indemnified Party (which consent shall not be withheld unreasonably); provided that the Indemnified Party shall have no obligation of any kind to consent to the entrance of any judgment or into any settlement unless such judgment or settlement (A) is for only money damages , the full amount of which shall be paid by the Indemnifying Party, (B) includes, as a condition thereof, an express, unconditional release of the Indemnified Party from any liability or obligation with respect to such Third-Party Claim and (C) would be reasonably expected , in the good faith judgment of the Indemnified Party, to establish a precedent, custom or practice materially adverse to the continuing business interests or prospects of the Indemnified Party.

 

(d)                                 Irrespective of which Party controls the defense of any Third-Party Claim, the other Parties will, and will cause any non-party Affiliate to, cooperate with the controlling party in such defense and make available to the controlling party all witnesses, pertinent records, materials and information in such non-controlling party’s possession or under its control relating thereto as is reasonably required by the controlling party.  The Parties agree that all communications between any party and counsel responsible for or participating in the defense of any Third-Party Claim shall, to the extent possible, be made so as to preserve any applicable attorney-client or work-product privilege.

 

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12.6.                     Notice of Non-Third-Party Claims.  If an Indemnified Party seeks indemnification under this Section 12 with respect to any matter which does not involve a Third-Party Claim, the Indemnified Party shall give written notice to the Indemnifying Party promptly after discovering the liability, obligation or facts giving rise to such claim for indemnification, describing the nature of the claim in reasonable detail, the amount thereof (if known and quantifiable), and the basis thereof; provided that any failure to so notify or any delay in notifying the Indemnifying Party shall not relieve the Indemnifying Party of its or his obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure or delay.  If the Indemnifying Party does not notify the Indemnified Party in writing within thirty (30) days from its receipt of the indemnity notice that the Indemnifying Party disputes such claim, the Indemnifying Party shall be deemed to have accepted and agreed to indemnify the Indemnified Party from and against the entirety of any Losses described in the indemnity notice.  If the Indemnifying Party has delivered an indemnity dispute notice to the Indemnified Party, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution to such dispute.  If the Indemnifying Party and the Indemnified Party cannot resolve such dispute within thirty (30) days after delivery of the indemnity dispute notice, such dispute shall be resolved by litigation in an appropriate court of competent jurisdiction/ in accordance with Section 14.2.

 

12.7.                     Determination of Loss Amount.  The right to indemnification and the payment of Losses of any Indemnified Party pursuant to this Section 12, or the availability of any other remedies contemplated hereby or otherwise available to the Indemnified Parties at law or in equity, based upon any representation, warranty, covenant, agreement or obligation of the Investor contained in or made pursuant to this Agreement will not be affected by any investigation made by or on behalf of any Indemnified Party or its Affiliates, or the knowledge of any such Indemnified Party’s (or its Affiliates’) officers, directors, stockholders, managers, members, partners, employees or agents, with respect to the accuracy or inaccuracy of, or compliance or non-compliance with, any such representation, warranty, covenant, agreement or obligation at any time prior to or following the Party’s entrance into this Agreement.

 

12.8.                     Manner of Payment.  Any indemnification payment pursuant to this Section 12 shall be effected by wire transfer of immediately available funds to an account designated by the Investor or the Company, as the case may be, within three (3) Business Days after the determination of the amount thereof, whether pursuant to a final judgment, settlement or agreement among the Parties.

 

12.9.                     Exclusive Remedy.  The Parties hereby agree that, from and after the Closing Date, the indemnification provisions set forth in this Section 12 are the exclusive provisions in this Agreement with respect to the liability of the Company or the Investor for the breach, inaccuracy or nonfulfillment of any representation or warranty or any pre-Closing covenants, agreements or other pre-Closing obligations contained in this Agreement and the sole remedy of the Company Indemnified Parties and the Investor Indemnified Parties for any claims for breach of representation or warranty or pre-Closing covenants, agreements or other pre-Closing obligations arising out of this Agreement or any Law or legal theory applicable thereto; provided that nothing herein shall preclude any Party from seeking any remedy based upon fraud, intentional misrepresentation or willful or criminal misconduct by any other Party (including any fraud, intentional misrepresentation or willful or criminal misconduct committed by any officer, director, employee or agent of the Investor or the Company) in connection with the consummation of the transactions contemplated by this Agreement.

 

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13.                               Publicity.  Within three (3) Business Days of the date hereof, the Company shall issue a press release substantially in the form of Exhibit C hereto.  No other written public release or written announcement concerning the purchase of the Shares contemplated hereby shall be issued by any Party without the prior written consent of the other Parties (which consent shall not be unreasonably withheld), except as such release or announcement may be required by Law or the rules or regulations of any securities exchange, in which case the Party required to make the release or announcement shall, if such release or announcement contains information materially different from the press release set forth on Exhibit C, and to the extent reasonably practicable, allow the other Parties reasonable time to comment on such release or announcement in advance of such issuance.  The provisions of this Section 13 shall not restrict the ability of a Party to summarize or describe the transactions contemplated by this Agreement in any prospectus or similar offering document so long as the other Parties are provided a reasonable opportunity to review such disclosure in advance.

 

14.                               Miscellaneous.

 

14.1.                     Governing Law.  This Agreement shall be governed in all respects by the Laws of the State of New York without regard to choice of laws or conflict of laws provisions thereof that would require the application of the Laws of any other jurisdiction.

 

14.2.                     Submission to Jurisdiction; Venue; Waiver of Trial by Jury.  Each of the Parties irrevocably submits to the exclusive jurisdiction of any United States Federal court sitting in the County of New York, in the State of New York, over any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby (or, solely to the extent that no such United States Federal court has jurisdiction over such Proceeding, to the exclusive jurisdiction of any New York State court sitting in the County of New York, in the State of New York, with respect thereto).  Each of the Parties irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of venue of any such Proceeding brought in such a court and any claim that any such Proceeding brought in such a court has been brought in an inconvenient forum.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION.

 

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14.3.                     Enforcement of Agreement.  The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the Parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any Federal court sitting in the County of New York, in the State of New York (or, solely to the extent that no such Federal court has jurisdiction over such Proceeding, in any New York State court sitting in the County of New York, in the State of New York), this being in addition to any other remedy to which they are entitled at law or in equity.  Additionally, each Party irrevocably waives any defenses based on adequacy of any other remedy, whether at law or in equity, that might be asserted as a bar to the remedy of specific performance of any of the terms or provisions hereof or injunctive relief in any action brought therefor.

 

14.4.                     Successors and Assigns.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the Parties.

 

14.5.                     No Third Party Beneficiaries.  Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person (other than the Parties) any rights, remedies, obligations or Liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including without limitation any partner, member, stockholder, director, officer, employee or other beneficial owner of any Party, in its own capacity as such or in bringing a derivative action on behalf of a Party) shall have any standing as a third party beneficiary with respect to this Agreement or the transactions contemplated hereby, other than the Indemnified Parties identified in Section 12 hereof.

 

14.6.                     No Personal Liability of Directors, Officers, Owners, Etc.  No director, officer, employee, incorporator, stockholder, managing member, member, general partner, limited partner, principal or other agent of the Investor or the Company shall have any Liability for any obligations of MWF or the Investor under this Agreement or for any claim based on, in respect of, or by reason of, the respective obligations of MWF, the Investor or the Company hereunder.  Each Party hereby waives and releases all such Liability.  This waiver and release is a material inducement to each Party’s entry into this Agreement.

 

14.7.                     Entire Agreement.  This Agreement, together with all exhibits and disclosure letters hereto, and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement among the Parties with regard to the subjects hereof and thereof and supersede all prior agreements and understandings between the Parties with respect thereto,  other than the Confidentiality Agreement, dated as of January 16, 2016, by and among the Company, Merrick Ventures, LLC and MWF (the “Confidentiality Agreement”).

 

14.8.                     Notices, Etc.  Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, return receipt requested, facsimiled, emailed or delivered by hand or by messenger, addressed:

 

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(a)                                 if to the Investor, to:

 

Merrick Media, LLC

350 North Orleans Street, 10th Floor

Chicago, IL  60654

Attention:  Chief Executive Officer

Facsimile No.:

Email: ferro@merrickventures.com

 

With a copy to:

 

Jenner & Block LLP

353 North Clark Street

Chicago, IL  60654

Attention:  Mark A. Harris

Facsimile No.: (312) 923-8584

Email: mharris@jenner.com

 

(b)                                 if to MWF, to:

 

Michael W. Ferro, Jr.

c/o Merrick Ventures, LLC

350 North Orleans Street, 10th Floor

Chicago, IL  60654

Attention:  Michael W. Ferro, Jr.

Facsimile No.:

Email: ferro@merrickventures.com

 

With a copy to:

 

Jenner & Block LLP

353 North Clark Street

Chicago, IL  60654

Attention:  Mark A. Harris

Facsimile No.: (312) 923-8584

Email: mharris@jenner.com

 

(c)                                  if to the Company, to:

 

Tribune Publishing Company

202 W. 1st Street

Los Angeles, CA 90012
                                                  Attention: Julie K. Xanders, General Counsel

Facsimile No.:  (213) 237-4401

Email: Julie.Xanders@tribpub.com

 

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With a copy to:

 

Latham & Watkins, LLP
 330 North Wabash Avenue, Suite 2800 
 Chicago, IL 60611
 Attention:  Mark D. Gerstein/Thomas E. (Ted) Keim, Jr.
 Facsimile No:  (312) 993-9767

 

or in any such case to such other address, facsimile number or email address as a Party may, from time to time, designate in a written notice given in a like manner.  If notice is provided by mail, it shall be deemed to be delivered 2 business days after proper deposit in a mailbox; if notice is delivered by hand, messenger or overnight courier service, it shall be deemed to be delivered upon actual delivery; and if notice is delivered by facsimile or email, it shall be deemed to be delivered upon actual receipt by the recipient as evidenced by electronic or other means.

 

14.9.                     Delays or Omissions.  No delay or omission to exercise any right, power, or remedy accruing to any Party upon any breach or default of another Party under this Agreement shall impair any such right, power, or remedy of such Party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent, or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing or as provided in this Agreement.  All remedies, either under this Agreement or by Law or otherwise afforded to any Party, shall be cumulative and not alternative.

 

14.10.              Expenses.  The Company, MWF and the Investor shall bear their own expenses and legal fees incurred on their behalf with respect to this Agreement and the transactions contemplated hereby; provided, that the Company shall reimburse MWF and the Investor for such expenses and legal fees up to $150,000 in the aggregate.

 

14.11.              Amendments and Waivers.  Any provision of this Agreement may be waived only by a written instrument signed by the Party so waiving such covenant or other provision, and this Agreement may be amended only by a written instrument duly executed by, the Company, MWF and the Investor.

 

14.12.              Counterparts.  This Agreement may be executed in any number of counterparts and signatures may be delivered by facsimile or in electronic format (i.e., “.pdf”), each of which may be executed by less than all Parties, each of which shall be enforceable against the Parties actually executing such counterparts, and all of which together shall constitute one instrument.

 

14.13.              Severability.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement and the balance of this Agreement shall be enforceable in accordance with its terms.

 

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14.14.     Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

	
 
    	
 
    	
 
    
	
 
    	
THE   COMPANY:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TRIBUNE   PUBLISHING COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jack Griffin
    
	
 
    	
 
    	
Name:   Jack Griffin
    
	
 
    	
 
    	
Title:   President and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   INVESTOR:
    
	
 
    	
 
    	
 
    
	
 
    	
MERRICK   MEDIA, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
Merrick Venture   Management, LLC

its Sole Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael W. Ferro, Jr.
    
	
 
    	
 
    	
Name:   Michael W. Ferro, Jr.
    
	
 
    	
 
    	
Title:   Manager
    
	
 
    	
 
    	
 
    
	
 
    	
MWF:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Michael W. Ferro, Jr.
    
	
 
    	
MICHAEL   W. FERRO, JR.
    
				

 

SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

 

 

EXHIBIT A

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

A-1

 

EXHIBIT B

 

FORM OF CONFIDENTIALITY AND RECUSAL AGREEMENT

 

B-1

 

EXHIBIT C

 

FORM OF PRESS RELEASE

 

C-1Exhibit 10.2

 

	
 
    	
 
    	
EXECUTION COPY
    
	
 
    
	
 
    
	
REGISTRATION RIGHTS AGREEMENT
    
	
 
    
	
by and between
    
	
 
    
	
Tribune Publishing   Company
    
	
 
    
	
and
    
	
 
    
	
Merrick Media, LLC
    
	
 
    
	    

    
	
 
    
	
Dated as of February 3,   2016
    
	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
Section 1
    	
CERTAIN DEFINITIONS
    	
1
    
	
Section 2
    	
REGISTRATION
    	
4
    
	
Section 3
    	
SUSPENSION PERIODS
    	
5
    
	
Section 4
    	
REGISTRATION PROCEDURES
    	
5
    
	
Section 5
    	
REGISTRATION EXPENSES
    	
9
    
	
Section 6
    	
INDEMNIFICATION
    	
10
    
	
Section 7
    	
SECURITIES ACT   RESTRICTIONS
    	
12
    
	
Section 8
    	
TRANSFERS OF RIGHTS
    	
12
    
	
Section 9
    	
MISCELLANEOUS
    	
13
    

 

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 3, 2016, by and between TRIBUNE PUBLISHING COMPANY, a Delaware corporation (the “Company”), and MERRICK MEDIA, LLC, a Delaware limited liability company (the “Holder”).  Each of the Company and Holder are sometimes referred to herein, individually, as a “Party” and, collectively, as the “Parties”.

 

W I T N E S S E T H:

 

WHEREAS, the Company, Holder and Michael W. Ferro, Jr. are parties to that certain Securities Purchase Agreement, of even date herewith (as the same may be amended from time to time, the “Purchase Agreement”), pursuant to which the Company has issued and sold to Holder an aggregate of 5,220,000 shares of the Company’s common stock; and

 

WHEREAS, in connection with the consummation of the transactions contemplated by the Purchase Agreement, the Parties desire to enter into this Agreement in order to provide Holder with certain registration rights in respect of such shares.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties to this Agreement hereby agree as follows:

 

SECTION 1
 CERTAIN DEFINITIONS

 

1.1          As used in this Agreement, the terms below shall have the meanings specified below:

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person.  For purposes of this definition, “control” (including, with correlative meaning, the terms “controlling” and “controlled”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

 

“Affiliate Transferee” shall have the meaning specified in Section 8.

 

“Agreement” shall have the meaning specified in the preamble to this Agreement, including all amendments, modifications and supplements thereto and any exhibits or schedules to any of the foregoing, and shall refer to this Agreement as the same may be in effect at the time such reference becomes operative.

 

“beneficially own” means, with respect to any Person, securities of which such Person or any of such Person’s Affiliates, directly or indirectly, has “beneficial ownership” as determined pursuant to Rule 13d-3 and Rule 13d-5 of the Exchange Act, including securities beneficially owned by others with whom such Person or any of its Affiliates has agreed to act together for the

 

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purpose of acquiring, holding, voting or disposing of such securities; provided that a Person shall not be deemed to “beneficially own” (a) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates until such tendered securities are accepted for payment, purchase or exchange; (b) any security as a result of an oral or written agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding:  (i) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the Exchange Act; and (ii) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report).

 

“Business Day” means a day other than a Saturday, a Sunday or a day on which commercial banking institutions in the State of New York are authorized or obligated by law to close.

 

“Company” shall have the meaning specified in the preamble to this Agreement.

 

“Company Shares” means shares of the Company’s common stock, par value $0.01 per share, and any securities into which such shares may hereinafter be reclassified.

 

“Effective Period” shall have the meaning specified in Section 2(b).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“FINRA” means the Financial Industry Regulatory Authority.

 

“Governmental Entity” means any federal, state, local or foreign court, government or political subdivision or department thereof, or any governmental administrative or regulatory body.

 

“Holder” shall have the meaning specified in the preamble to this Agreement.  References herein to the Holder shall apply to Affiliate Transferees who become Holders pursuant to Section 8; provided that (a) all obligations of the Holder and its Affiliate Transferees hereunder shall be joint and several; and (b) for purposes of all thresholds and limitations herein, the actions of the Affiliate Transferees shall be aggregated.

 

“Indemnified Party” shall have the meaning specified in Section 6(c).

 

“Indemnifying Party” shall have the meaning specified in Section 6(c).

 

“NYSE” means the New York Stock Exchange.

 

“Person” means an individual, corporation, partnership, trust, limited liability company, branch of any legal entity, unincorporated organization, joint stock company, joint venture, association, other entity or Governmental Entity.

 

“Prospectus” means the prospectus or prospectuses (whether preliminary or final) included in any Registration Statement and relating to Registrable Securities, as amended or supplemented, and including all material incorporated by reference in such prospectus or prospectuses.

 

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“Purchase Agreement” means the agreement specified in the first recital hereto, as such agreement may be amended, supplemented or otherwise modified from time to time.

 

“Purchase Price” shall have the meaning specified in the Purchase Agreement.

 

“Registrable Securities” means, at any time, (a) Company Shares issued to the Holder pursuant to the terms of the Purchase Agreement; and (b) any Company Shares or any other security issued by the Company after the date hereof in respect of the Company Shares referenced in clause (a) by way of a share dividend or share split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization, in either case until the earliest to occur of (i) a Registration Statement covering such Company Shares has been declared effective by the SEC and such Company Shares have been sold or otherwise disposed of pursuant to such effective Registration Statement, (ii) such Company Shares are otherwise transferred (other than by the Holder to an Affiliate thereof), the Company has delivered a new certificate or other evidence of ownership for such Company Shares not bearing any restricted legend and such Company Shares may be resold without subsequent registration under the Securities Act, or (iii) such Company Shares are repurchased by the Company or a Subsidiary of the Company.

 

“Registration Expenses” shall have the meaning specified in Section 5(a).

 

“Registration Statement” means any registration statement of the Company that covers Registrable Securities pursuant hereto filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related prospectus, pre- and post-effective amendments and supplements to such registration statement and all exhibits and all material incorporated by reference in such registration statement.

 

“Rule 144” means such rule promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.

 

“Shelf Registration Statement” means a Registration Statement of the Company filed with the SEC on either (i) Form S-3 (or any successor form or other appropriate form under the Securities Act) or (ii) if the Company is not permitted to file a Registration Statement on Form S-3, an evergreen Registration Statement on Form S-1 (or any successor form or other appropriate form under the Securities Act), in each case for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (or any similar rule that may be adopted by the SEC) covering all of the Registrable Securities, as applicable.

 

“SEC” means the Securities and Exchange Commission.

 

“SEC Reports” shall have the meaning specified in Section 4(a)(vi).

 

“Securities Act” means the Securities Act of 1933, as amended.

 

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“Subsidiary” means, as to a Person, any corporation, partnership, limited liability company or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or other interests having by their terms voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly beneficially owned or controlled by such Person.

 

“Suspension Period” shall have the meaning specified in Section 3.

 

“Termination Date” means the earliest to occur of (i) the first date on which there are no Registrable Securities subject to this Agreement, and (ii) the sixth (6th) anniversary of the effectiveness of the initial Shelf Registration Statement filed pursuant to Section 2(a).

 

1.2          Interpretation.  When a reference is made in this Agreement to an article, section, exhibit or schedule, such reference shall be to an article or section of, or an exhibit or schedule to, this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”  Unless the context otherwise requires, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All terms defined in this Agreement shall have the defined meanings herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine genders of such term.  Any agreement, instrument or statute defined or referred to herein or any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified, supplemented or replaced, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor agreements, instruments or statutes.  Any agreement or instrument referred to herein shall include reference to all exhibits, schedules and other documents or agreements attached thereto or incorporated therein.

 

SECTION 2
 REGISTRATION

 

(a)           Registration Statement.  The Company shall file with the SEC a Shelf Registration Statement covering the resale of all of the Registrable Securities in accordance with a plan of distribution to be reasonably agreed between the Parties, and shall use reasonable best efforts to cause the Registration Statement to be declared effective no later than the earlier to occur of (i) the third (3rd) anniversary of this Agreement and (ii) sixty (60) days after the termination of the transfer restrictions set forth in Section 10.2 and 10.3 of the Purchase Agreement in accordance with Section 10.6 of the Purchase Agreement.

 

(b)           Effective Period of Registration Statements.  With respect to any Registration Statement, the Company shall use reasonable best efforts to keep such Registration Statement effective under the Securities Act (or, to the extent such Registration Statement expires, to file an additional Registration Statement with respect to the Registrable Securities) until the date and

 

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time at which all Registrable Securities are either sold, provided that no obligations in this Section 2(b) shall continue beyond the Termination Date (the “Effective Period”).

 

(c)           Purchase Agreement Restrictions.  Nothing in this Agreement shall affect the provisions of the Purchase Agreement related to Company Shares, which shall apply independently hereof in accordance with the terms thereof.

 

SECTION 3
 SUSPENSION PERIODS

 

The Company may (i) delay the filing or effectiveness of the Shelf Registration Statement or (ii) prior to the pricing of any offering of Registrable Securities pursuant to a Registration Statement delay such offering (and, if permitted, withdraw any Registration Statement that has been filed), but in each case described in clauses (i) and (ii) only if the Company’s Board of Directors determines in its reasonable judgment (A) that proceeding with such an offering would require the Company to disclose material information that would not otherwise be required to be disclosed at that time and that the registration or offering to be delayed would, if not delayed, materially adversely affect the Company and its subsidiaries taken as a whole, or materially interfere with, or jeopardize the success of, any pending or proposed material transaction, including any debt or equity financing, any acquisition or disposition, any recapitalization or reorganization or any other material transaction or announcement, whether due to commercial reasons, a desire to avoid premature disclosure of information or any other reason.  Any period during which the Company has delayed a filing, effectiveness or an offering pursuant to this Section 3 is herein called a “Suspension Period.”  The Company shall provide prompt written notice to the Holder of the commencement and termination of any Suspension Period (and any withdrawal of a Registration Statement pursuant to this Section 3) but shall only be obligated under this Agreement to disclose the reasons therefor if the Holder and the Company have entered into a confidentiality agreement relating to  the disclosure of such information and the Holder requests that the Company disclose the reasons therefor.  The Holder shall keep the existence of each Suspension Period confidential and refrain from making offers and sales of Registrable Securities (and direct each of its Affiliates making such offers and sales to refrain from doing so) during each Suspension Period.  In no event (x) may the Company deliver notice of a Suspension Period to the Holder more than two (2) times during any twelve (12) month period; and (y) shall a Suspension Period or Suspension Periods be in effect for an aggregate of 150 days or more in any twelve (12) month period.

 

SECTION 4
 REGISTRATION PROCEDURES

 

(a)           The Company shall use reasonable best efforts to effect, as and when provided herein, the registration and (if applicable) the sale of such Registrable Securities in accordance with the intended methods of disposition thereof, and, pursuant thereto, the Company shall, as soon as practicable as provided herein:

 

(i)            subject to the other provisions of this Agreement, use reasonable best efforts to cause the Shelf Registration Statement filed pursuant to Section 2 of this Agreement to become effective (unless it is automatically effective upon filing);

 

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(ii)           use reasonable best efforts to prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to comply with the applicable requirements of the Securities Act and to keep such Registration Statement effective for the relevant period required hereunder and to comply with the applicable requirements of the Securities Act with respect to the disposition of all Company Shares covered by such Registration Statement during such period in accordance with the intended methods of disposition set forth in such Registration Statement;

 

(iii)          use reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement, or the lifting of any suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction in the United States;

 

(iv)          deliver, without charge, such number of copies of the preliminary and final Prospectus and any supplement thereto as the Holder may reasonably request in order to facilitate the disposition of the Registrable Securities of the Holder covered by such Registration Statement in conformity with the requirements of the Securities Act and not file any document to which Holder’s counsel may reasonably object;

 

(v)           permit counsel designated by the Holder to review such Registration Statement and all amendments and supplements thereto within a reasonable period of time prior to the filing thereof (but only to the extent any such amendment or supplement is required to be furnished to the Holders), and use reasonable best efforts to reflect in such documents any comments as such counsel may reasonably propose;

 

(vi)          not less than five (5) Business Days prior to the filing of a Registration Statement and not less than three (3) Business Days prior to the filing of any related Prospectus or any amendment or supplement thereto (except for annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any similar or successor reports, including any proxy statements under the Exchange Act (collectively, the “SEC Reports”)), the Company shall furnish to the Holder copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed; provided, however, that (i) the Company shall not be required to furnish to the Holder any prospectus supplement being prepared and filed solely to name new or additional selling securityholders unless such Holder is named in such prospectus supplement, (ii) the Company shall not be required to furnish to the Holder any SEC Report that is incorporated by reference in such Registration Statement if such SEC Report is publicly available on the SEC’s EDGAR system, and (iii) after it has been filed with the SEC, the Company shall furnish a copy of the Registration Statement to the Holder upon written request;

 

(vii)         use reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such U.S. jurisdictions as the Holder reasonably requests and continue such registration or qualification in effect in such jurisdictions for as long as the applicable Registration Statement may be required to be kept effective under this Agreement; provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it or any of its subsidiaries would not otherwise be required to

 

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qualify but for this subparagraph (vii), (B) subject itself or any of its subsidiaries to taxation in any such jurisdiction, or (C) consent to general service of process for itself or any of its subsidiaries in any such jurisdiction;

 

(viii)        notify the Holder and each distributor of such Registrable Securities identified by the Holder, at any time when a Prospectus relating thereto would be required under the Securities Act to be delivered by such distributor, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, at the request of the Holder, the Company shall use reasonable best efforts to prepare, as soon as practical, a supplement or amendment to such Prospectus so that, as thereafter delivered to any prospective purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

(ix)          in the case of any block trade (whether on a principal or agency basis) involving Registrable Securities, whether pursuant to a Registration Statement or otherwise, take all such other customary and reasonable actions as the Holder or the relevant dealer may request in order to facilitate the disposition of such Registrable Securities pursuant to such block trade, including the entry into any agreement for the indemnification of such dealer and the provision of opinions of counsel and comfort letters that are consistent with customary and reasonable practices for such transactions;

 

(x)           use reasonable best efforts to cause all such Registrable Securities to be, or to remain, listed on NYSE or any successor primary securities exchange (if any) on which Company Shares are then listed;

 

(xi)          provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement and, a reasonable time before any proposed sale of Registrable Securities pursuant to a Registration Statement, provide the transfer agent with printed certificates for the Registrable Securities to be sold or such other applicable evidence of such Registrable Securities, subject to the provisions of Section 8;

 

(xii)         make generally available to its shareholders a consolidated earnings statement (which need not be audited) for a period of twelve (12) months beginning after the effective date of the Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earnings statement under Section 11(a) of the Securities Act and Rule 158 thereunder; and

 

(xiii)        promptly notify the Holder:

 

(A)          when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or any post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

 

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(B)          of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for any additional information regarding the Holder;

 

(C)          of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and

 

(D)          of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction.

 

(b)           No Registration Statement (including any amendments thereto) shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading, and no Prospectus (including any supplements thereto) shall contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case, except for any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in reliance on and in conformity with written information furnished to the Company by or on behalf of the Holder, other holder of Company Shares, or any distributor specifically for use therein.

 

(c)           At all times after the Company has filed a Registration Statement with the SEC pursuant to the requirements of the Securities Act and until the Termination Date, the Company shall use reasonable best efforts to continuously maintain in effect the registration statement of Company Shares under Section 12 of the Exchange Act and to use reasonable best efforts to file all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder.

 

(d)           The Company may require the Holder and each distributor of Registrable Securities as to which any registration is being effected to furnish to the Company documentation and information regarding such Person and the distribution of such securities as the Company may from time to time reasonably request in connection with such registration.

 

(e)           The Holder agrees by having Company Shares treated as Registrable Securities hereunder that, upon being advised in writing by the Company of the occurrence of an event pursuant to Section 4(a)(viii), the Holder will immediately discontinue (and direct any other Affiliates making offers and sales of Registrable Securities to immediately discontinue) offers and sales of Registrable Securities pursuant to any Registration Statement (other than those pursuant to a plan that is in effect prior to such time and that complies with Rule 10b5-1 of the Exchange Act) until it is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 4(a)(viii), and, if so directed by the Company, the Holder will deliver to the Company all copies, other than permanent file copies then in the Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

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(f)                                   The Company may prepare and deliver an issuer free-writing prospectus (as such term is defined in Rule 405 under the Securities Act) in lieu of any supplement to a Prospectus, and references herein to any “supplement” to a Prospectus shall include any such issuer free-writing prospectus.  Neither the Holder nor any other seller of Registrable Securities may use a free-writing prospectus to offer or sell any such shares without the Company’s prior written consent.

 

(g)                                  It is understood and agreed that any failure of the Company to file a registration statement or any amendment or supplement thereto or to cause any such document to become or remain effective or usable within or for any particular period of time as provided in Section 2 or 4 or otherwise in this Agreement, due to reasons that are not reasonably within its control, or due to any refusal of the SEC to permit a registration statement or prospectus to become or remain effective or to be used because of unresolved SEC comments thereon (or on any documents incorporated therein by reference) despite the Company’s good faith and reasonable best efforts to resolve those comments, shall not be a breach of this Agreement.

 

(h)                                 It is further understood and agreed that the Company shall not have any obligations under this Section 4 at any time on or after the Termination Date.

 

(i)                                     Notwithstanding anything to the contrary in this Agreement, the Company shall not be required to file a Registration Statement or include Registrable Securities in a Registration Statement unless it has received from the Holder, at least five Business Days prior to the anticipated filing date of the Registration Statement, information and documents reasonably required by the Company to be provided by the Holder.

 

SECTION 5
 REGISTRATION EXPENSES

 

(a)                                 All reasonable expenses incident to the Company’s performance of or compliance with this Agreement, including (i) all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, FINRA filing fees, listing application fees, printing expenses, transfer agent’s and registrar’s fees, (ii) costs of distributing Prospectuses in preliminary and final form as well as any supplements thereto, (iii) fees and disbursements of counsel for the Company and all independent certified public accountants and other Persons retained by the Company (but not including any underwriting discounts or commissions attributable to the sale of Registrable Securities or fees and expenses of counsel and any other advisors representing any underwriters or other distributors), (iv) internal expenses (including, without limitation, all salaries and expenses of the Company’s officers and employees performing legal or accounting duties), (v) fees and expenses of any special experts retained by the Company in connection with such registration and amendments and supplements to a Registration Statement or Prospectus, and (vi) premiums and other costs of the Company for policies of insurance against liabilities of the Company arising out of any public offering of the Registrable Securities being registered, to the extent that the Company elects to obtain and maintain such insurance, shall be borne by the Company (such expenses being herein called “Registration Expenses”).  The Holder shall bear the cost of all underwriting discounts and selling commissions associated with any sale of Registrable Securities and shall pay all of its own costs and expenses, including all fees and disbursements to counsel (and any other advisors) of the Holder and any stock transfer taxes.

 

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(b)                                 The obligation of the Company to bear the Registration Expenses shall apply irrespective of whether a registration, once properly demanded or requested becomes effective or is withdrawn or suspended; provided, however, that Registration Expenses for any Registration Statement withdrawn solely at the request of the Holder (unless withdrawn following commencement of a Suspension Period pursuant to Section 3) shall be borne by the Holder.

 

SECTION 6
 INDEMNIFICATION

 

(a)                                 The Company shall, notwithstanding any termination of this Agreement, indemnify to the fullest extent permitted by law, the Holder and each Person who controls the Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities, judgments, costs (including reasonable costs of investigation) and expenses (including reasonable attorneys’ fees) arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or any amendment thereof or supplement thereto (including any “free writing prospectus” filed by the Company (as defined in Rule 433 under the Securities Act)) or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are made in reliance and in conformity with information furnished in writing to the Company by the Holder expressly for use therein.

 

(b)                                 In connection with any Registration Statement in which the Holder is participating, the Holder shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus, or amendment or supplement thereto, and shall indemnify, to the fullest extent permitted by law, the Company, its officers and directors and each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities, judgments, costs (including reasonable costs of investigation) and expenses (including reasonable attorneys’ fees) arising out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement or Prospectus, or any amendment or supplement thereto (including any “free writing prospectus” as defined in Rule 405 of the Securities Act and required to be filed by the Company with the SEC or retained by the Company under Rule 433 of the Securities Act), or arising out of or based upon any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that the same are made in reliance and in conformity with information furnished in writing to the Company by or on behalf of the Holder expressly for use therein.  The Holder agrees that, unless it has or shall have obtained the prior written consent of the Company, it has not made and will not make any offer relating to the Registrable Securities that would constitute a “free writing prospectus” (as defined in Rule 405 of the Securities Act).

 

(c)                                  Any party entitled to indemnification hereunder (an “Indemnified Party”) shall give written notice to the party indemnifying it (the “Indemnifying Party”) of any claim with respect to which it seeks indemnification promptly after discovery by such Indemnified Party of

 

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any matters giving rise to a claim for indemnification.  Such notice shall describe such claim in reasonable detail.  Failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to an Indemnified Party except to the extent that the Indemnifying Party is actually prejudiced thereby.  The Indemnified Party shall permit such Indemnifying Party to assume the defense of such claim with counsel reasonably satisfactory to the Indemnified Party.  An Indemnifying Party who is entitled to, and elects to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to one local counsel) for parties indemnified (hereunder or otherwise) by such Indemnifying Party with respect to such claim (and all other claims arising out of the same circumstances), unless in the reasonable judgment of any Indemnified Party there may be one or more legal or equitable defenses available to such Indemnified Party that are in addition to or may conflict with those available to another Indemnified Party with respect to such claim, in which case such maximum number of counsel for all Indemnified Parties shall be two rather than one.  If any Indemnifying Party is entitled to, and elects to, assume the defense of a claim, the Indemnified Party shall continue to be entitled to participate in the defense thereof, with counsel of its own choice, but, except as set forth above, the Indemnifying Party shall not be obligated to reimburse the Indemnified Party for the costs thereof.  If the Indemnifying Party assumes the defense of any claim, all Indemnified Parties shall deliver to the Indemnifying Party copies of all notices and documents (including court papers) received by the Indemnified Party related to the claim, and each Indemnified Party shall cooperate in the defense or prosecution of such claim.  Such cooperation shall include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and information that are reasonably relevant to such claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  The Indemnifying Party shall not be subject to any liability for any settlement made by the Indemnified Party without the Indemnified Party’s written consent (but such consent will not be unreasonably withheld).  The Indemnifying Party shall not consent to the entry of any judgment or enter into or agree to any settlement relating to a claim or action for which any Indemnified Party would be entitled to indemnification by any Indemnifying Party hereunder unless such judgment or settlement imposes no ongoing obligations on any such Indemnified Party and includes as an unconditional term the giving, by all relevant claimants and plaintiffs to such Indemnified Party, a release, reasonably satisfactory in form and substance to such Indemnified Party, from all liabilities in respect of such claim or action for which such Indemnified Party would be entitled to such indemnification.  The Indemnifying Party shall not be liable hereunder for any amount paid or payable or incurred pursuant to or in connection with any judgment entered or settlement effected with the consent of an Indemnified Party unless the Indemnifying Party has also consented to such judgment or settlement.

 

(d)                                 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party or any officer, director or controlling Person of such Indemnified Party and shall survive the transfer of securities and the Termination Date but only with respect to offers and sales of Registrable Securities made before the Termination Date or during the period following the Termination Date referred to in Section 4(h).

 

(e)                                  If the indemnification provided for in or pursuant to this Section 6 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in

 

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respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying Person, in lieu of indemnifying such indemnified Person, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying Person on the one hand and of the indemnified Person on the other in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations.  The relative fault of the indemnifying Person on the one hand and of the indemnified Person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying Person or by the indemnified Person, and by such Person’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  In no event shall the liability of the indemnifying Person be greater in amount than the amount for which such indemnifying Person would have been obligated to pay by way of indemnification if the indemnification provided for under Section 6(a) or 6(b) hereof had been available under the circumstances.

 

SECTION 7
 SECURITIES ACT RESTRICTIONS

 

The Registrable Securities are restricted securities under the Securities Act and may not be offered or sold except pursuant to an effective registration statement or an available exemption from registration under the Securities Act.  Accordingly, the Holder shall not, directly or through others, offer or sell any Registrable Securities except pursuant to a Registration Statement or pursuant to an exemption from, or a transaction not subject to, registration under the Securities Act.  Any certificates representing the Registrable Securities may bear a legend (and the Company’s share registry may bear a notation) referencing the restrictions on transfer contained in this Agreement, until such time as such securities have ceased to be (or are to be transferred in a manner that results in their ceasing to be) Registrable Securities as evidenced to the reasonable satisfaction of the Company.  Subject to the provisions of this Section, the Company shall replace any such legended certificates with unlegended certificates promptly upon surrender of the legended certificates to the Company or its designee, in order to facilitate a lawful transfer or at any time after such shares cease to be Registrable Securities.

 

SECTION 8
 TRANSFERS OF RIGHTS

 

If the Holder transfers any Registrable Securities to an Affiliate in accordance with the Purchase Agreement (each such transferee, an “Affiliate Transferee”), the Affiliate Transferee shall, together with all other Affiliate Transferees and the Holder, also have the rights of the Holder under this Agreement with respect to such Registrable Securities (including all of the  Holder’s rights in Section 6), but only if the Affiliate Transferee signs and delivers to the Company a written acknowledgment that it has joined with the Holder and the other Affiliate Transferees as a party to this Agreement and has assumed, severally but not jointly, the rights and obligations of the Holder hereunder with respect to the Registrable Securities transferred to it by the Holder.  Each such transfer shall be effective when (but only when) the Affiliate Transferee has signed and delivered the written acknowledgment to the Company’s reasonable

 

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satisfaction.  Upon any such effective transfer, the Affiliate Transferee shall automatically have the rights so transferred, and the Holder’s obligations under this Agreement, and the rights with respect to the Registrable Securities not so transferred, shall continue.  Notwithstanding any other provision of this Agreement, no Person who acquires securities transferred in violation of this Agreement or the Purchase Agreement, or who acquires securities that are not or upon acquisition cease to be Registrable Securities, shall have any rights under this Agreement with respect to such securities, and such securities shall not have the benefits afforded hereunder to Registrable Securities.

 

SECTION 9
 MISCELLANEOUS

 

(a)                                 Notices.  All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (i) when delivered in person, (ii) five (5) days after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (iii) on the first (1st) Business Day after being sent, prepaid, by FedEx or other nationally recognized overnight delivery service, (iv) upon machine generated acknowledgement of receipt after transmittal by facsimile if so acknowledged to have been received before 5:00 p.m. on a Business Day at the location of receipt and otherwise on the next following Business Day or (v) when delivered by email, if receipt is confirmed, addressed as follows:

 

(i)                                     If to the Company:

 

Tribune Publishing Company

202 W. 1st Street

Los Angeles, CA 90012
 Attention: Julie K. Xanders, General Counsel

Facsimile No.:  (213) 237-4401

Email: Julie.Xanders@tribpub.com

 

with a copy to:

 

Latham & Watkins, LLP
 330 North Wabash Avenue, Suite 2800 
 Chicago, IL 60611
 Attention:  Mark D. Gerstein/Thomas E. (Ted) Keim, Jr.
 Facsimile No:  (312) 993-9767

 

(ii)                                  If to the Holder:

 

Merrick Media, LLC

350 North Orleans Street, 10th Floor

Chicago, IL 60654

Attention: Chief Executive Officer

Facsimile No.:

Email: ferro@merrickventures.com

 

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with a copy to:

 

Jenner & Block LLP

353 North Clark Street

Chicago, IL 60654

Attention: Mark A. Harris

Facsimile No.: (312) 923-8584

Email: mharris@jenner.com

 

or to such other address or addresses as the Parties may from time to time designate in writing.

 

(b)                                 No Waivers.  Any term, condition or provision of this Agreement may be waived to the extent permitted by law in writing at any time by the Party that is entitled to the benefits thereof.  The waiver of any breach of any provision under this Agreement by any Party shall not be deemed to be a waiver of any preceding or subsequent breach under this Agreement.  No such waiver shall be effective unless in writing.

 

(c)                                  Assignment.  Neither this Agreement nor any right, remedy, obligation nor liability arising hereunder or by reason hereof shall be assignable by any Party without the prior written consent of the other Party, and any attempt to assign any right, remedy, obligation or liability hereunder without such consent shall be void, except (i) an assignment, in the case of a merger or consolidation where such Party is not the surviving entity, or a sale of substantially all of its assets, to the entity which is the survivor of such merger or consolidation or the purchaser in such sale; or (ii) an assignment by the Holder to an Affiliate Transferee in accordance with the terms hereof.

 

(d)                                 Rights of Third Parties.  Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the Parties, any right or remedies under or by reason of this Agreement (except as specified in Section 6).

 

(e)                                  Governing Law.  This Agreement, and all claims or causes of action (whether in contract or tort) based upon, arising out of, or related to this Agreement or the transactions contemplated hereby, shall be governed by, and construed in accordance with, the Laws of the State of New York, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.

 

(f)                                   Captions; Counterparts.  The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(g)                                  Entire Agreement.  This Agreement constitutes the entire agreement among the Parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties hereto relating to the subject matter hereof.

 

14

 

(h)                                 Amendments.  This Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing executed in the same manner as this Agreement and which makes reference to this Agreement.

 

(i)                                     Severability.  If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect.  The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Parties.

 

(j)                                    Jurisdiction.  Each of the Parties irrevocably submits to the exclusive jurisdiction of any United States Federal court sitting in the County of New York, in the State of New York, over any action arising out of or relating to this Agreement or the transactions contemplated hereby (or, solely to the extent that no such United States Federal court has jurisdiction over such Proceeding, to the exclusive jurisdiction of any New York State court sitting in the County of New York, in the State of New York, with respect thereto).  Each of the Parties irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such action brought in such a court and any claim that any such action brought in such a court has been brought in an inconvenient forum.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION.

 

[SIGNATURE PAGE FOLLOWS]

 

15

 

IN WITNESS WHEREOF, this Agreement has been duly executed by each of the Parties hereto as of the date first written above.

 

	
 
    	
TRIBUNE   PUBLISHING COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jack Griffin
    
	
 
    	
 
    	
Name:
    	
Jack   Griffin
    
	
 
    	
 
    	
Title:
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MERRICK   MEDIA, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Merrick Venture   Management, LLC

its Sole Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael W. Ferro, Jr.
    
	
 
    	
 
    	
Name:   
    	
Michael   W. Ferro, Jr.
    
	
 
    	
 
    	
Title:
    	
Manager
    

 

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

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