TRIBUNE COMPANY
Underwriting Agreement
New York, New York
April 7, 1999
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center - North Tower
New York, New York 10281-1209
Dear Sirs:
Tribune Company, a Delaware corporation (the "Company"), proposes to sell
to the underwriters named in Schedule II hereto (the "Underwriters"), for whom
you are acting as representative (the "Representative"), the number of its
securities identified in Schedule I hereto (the "Initial Securities"), to be
issued under an indenture, dated as of April 1, 1999 (the "Indenture"), between
the Company and Bank of Montreal Trust Company, as trustee (the "Trustee"). As
described in Section 2(b) hereof, the Company has granted the Underwriters the
option to purchase all or any part of an additional amount of securities (the
"Option Securities") identified in Schedule I hereto solely to cover over-
allotments, if any. The Initial Securities and the Option Securities are
collectively referred to herein as the "Securities."
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form (the file number of which is set forth in Schedule I
hereto), which has become effective, for the registration under the Act of
the Securities. Such registration statement, as amended at the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the
Act and complies in all other material respects with said Rule. The Company
proposes to file with the Commission pursuant to Rule 424 under the Act a
supplement to the form of prospectus included in such registration
statement relating to the Securities and the plan of distribution thereof
and has previously advised you of all further information (financial and
other) with respect to the Company to be set forth therein. Such
registration statement, including the exhibits thereto, as amended at the
date of this Agreement is hereinafter called the "Registration Statement";
such prospectus in the form in which it appears in the Registration
Statement is hereinafter called the "Basic Prospectus"; and such
supplemented form of prospectus, in the form in which it shall be filed
with the Commission pursuant to Rule 424 (including the Basic Prospectus as
so supplemented) is hereinafter called the "Final
Prospectus". Any preliminary form of the Final Prospectus, which has
heretofore been filed pursuant to Rule 424 is hereinafter called the
"Preliminary Final Prospectus." Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the date of this Agreement, or the issue date
of the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the date of this Agreement, or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(b)(i) As of the date hereof, (ii) when the Final Prospectus is first
filed or transmitted for filing pursuant to Rule 424 under the Act, (iii)
when, prior to the Closing Date (as hereinafter defined in Section 3), any
amendment to the Registration Statement becomes effective (including the
filing of any document incorporated by reference in the Registration
Statement), (iv) when any supplement to the Final Prospectus is filed with
the Commission and (v) at the Closing Date: (x) the Registration Statement,
as amended as of any such time, and the Final Prospectus, as amended or
supplemented as of any such time, and the Indenture will comply in all
material respects with the applicable requirements of the Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
Exchange Act and the respective rules thereunder, (y) the Registration
Statement, as amended as of any such time, will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading and (z) the Final Prospectus, as amended or supplemented as of
any such time, will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to (x) that part of the Registration Statement which shall
constitute the Statements of Eligibility (Form T-1) under the Trust
Indenture Act of the Trustee or (y) any information contained in or omitted
from the Registration Statement or the Final Prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representative specifically for use in connection
with the preparation of the Registration Statement or the Final Prospectus.
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(c) As of the date hereof and at the Closing Date:
(i) each of the Company and Chicago Tribune Company, Orlando
Sentinel Communications Company, Sun-Sentinel Company and Tribune
Broadcasting Company (individually, a "Designated Subsidiary" and
collectively, the "Designated Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Basic
Prospectus (as of the date hereof) or the Final Prospectus (as of the
Closing Date), and is duly qualified or licensed to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction where the character of the properties owned or leased or
the nature of the activities conducted by such corporations,
respectively, makes such qualifications or licensing necessary, and
where the failure to be so qualified or licensed might materially
adversely affect the financial condition, assets, operations or
prospects of the Company and its subsidiaries considered as one
enterprise;
(ii) all the outstanding shares of capital stock of each
Designated Subsidiary have been duly and validly authorized and issued
and are fully paid and non-assessable, and, except as otherwise set
forth in the Basic Prospectus (as of the date hereof) or the Final
Prospectus (as of the Closing Date), all outstanding shares of capital
stock of the Designated Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest and any other security interests, claims,
liens or encumbrances;
(iii) the Indenture has been duly authorized, executed and
delivered and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (except
to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws of general applicability
relating to or affecting the enforcement of creditors' rights and by
the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law));
the Indenture has been duly qualified under the Trust Indenture Act;
and the Securities have been duly authorized and, when executed by the
Company and authenticated by the Trustee in accordance with the
provisions of the Indenture and delivered to and paid for by the
purchasers thereof, will constitute legal, valid and binding
obligations of the Company, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
laws of general applicability relating to or affecting the enforcement
of creditor's rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and will be entitled to the benefits of the
Indenture;
(iv) the financial statements of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Basic Prospectus (as of the
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date hereof) or the Final Prospectus (as of the Closing Date) present
fairly the financial position of the Company and such consolidated
subsidiaries as at the dates indicated and the results of their
operations for the periods specified; except as stated therein, said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis;
(v) to the best knowledge of the Company, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of the Designated Subsidiaries of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Basic Prospectus (as of the date hereof) or the Final
Prospectus (as of the Closing Date), and there is no franchise,
contract or other document of a character required to be described in
the Registration Statement or Basic Prospectus (as of the date hereof)
or the Final Prospectus (as of the Closing Date), or to be filed as an
exhibit, which is not described or filed as required;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) no consent, approval, authorization or order of any court
or governmental agency or body, domestic or foreign, is required for
the consummation of the transactions contemplated herein except such
as have been obtained under the Act and the Trust Indenture Act and
such as may be obtained under the blue sky laws of any jurisdiction in
connection with the sale of the Securities as contemplated by this
Agreement and such other approvals as have been obtained; and
(viii) none of the execution of the Indenture, the issuance and
sale of the Securities, the consummation of any other of the
transactions herein contemplated or the fulfillment of the terms
hereof will conflict with, result in a breach of, or constitute a
default under the charter or by-laws of the Company or the terms of
any indenture or other agreement or instrument to which the Company or
any of the Designated Subsidiaries is a party or bound, or any order,
decree, rule or regulation known to the Company to be applicable to
the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator, domestic or
foreign, having jurisdiction over the Company or any of its
subsidiaries.
(d) The Company confirms as of the date hereof, and at the Closing
Date, that the Company is in compliance with all provisions of Section 1 of
Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of Doing
Business with Cuba, and the Company further agrees that if it commences
engaging in business with the government of Cuba or with any person or
affiliate located in Cuba after the date the Registration Statement becomes
or has become effective with the Commission or with the Florida Department
of Banking and Finance (the "Department"), whichever date is later, or if
the information reported in the Basic, Preliminary Final or the Final
Prospectus, if any, concerning the Company's business
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with Cuba or with any person or affiliate located in Cuba changes in any
material way, the Company will provide the Department notice of such
business or change, as appropriate, in a form acceptable to the Department.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto, the number of Initial Securities set forth opposite such
Underwriter's name in Schedule II hereto.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
the Company hereby grants an option to the Underwriters, to purchase from
it any or all of the Option Securities at the same price as is to be paid
by the Underwriters for the Initial Securities plus, in the case of the
Option Securities, accrued interest, if any, from the Closing Date to the
Option Closing Date (as defined below). The option hereby granted will
expire thirty (30) days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representative to
the Company setting forth the number of Option Securities as to which the
Underwriters are then exercising the option and the time, date and place of
payment and delivery for such Option Securities. Any such time and date
(each an "Option Closing Date") shall be determined by the Representative
but shall not be later than seven (7) full business days nor earlier than
two (2) full business days after the exercise of said option, nor in any
event prior to Closing Date unless otherwise agreed upon by the
Representative and the Company.
3. Delivery and Payment. (a) Delivery of and payment for the Initial
Securities shall be made at the location, in the currency, on the date and at
the time specified in Schedule I hereto (or such later date not later than five
business days after such specified date as the Representative shall designate),
which date and time may be postponed by agreement between the Representative and
the Company as provided in Section 8 hereof (such date and time of delivery and
payment for the Initial Securities being herein called the "Closing Date"). In
addition, in the event that any or all of the Option Securities are purchased by
the Underwriters, delivery of such Option Securities and payment of the purchase
price for such Option Securities shall be made at the above-mentioned location,
on each Option Closing Date as specified in the notice from the Representative
to the Company. Delivery of the Securities shall be made to the Representative
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representative of the purchase price thereof to
or upon the order of the Company by wire transfer in immediately available (same
day) funds. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representative shall otherwise instruct.
4. Agreements. The Company agrees with the several Underwriters that:
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(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus) to the Basic Prospectus unless
the Company has furnished to the Representative for its review a copy
thereof prior to filing. Subject to the foregoing sentence, the Company
will cause the Final Prospectus to be filed (or transmitted for filing)
with the Commission pursuant to Rule 424. The Company will promptly advise
the Representative (i) when the Final Prospectus shall have been filed (or
transmitted for filing) with the Commission pursuant to Rule 424, (ii) when
any amendment to the Registration Statement relating to the Securities
shall have become effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or amendment of or supplement to
the Final Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend or supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly will
prepare and file with the Commission, subject to the Company furnishing to
the Representative for its review a copy thereof prior to filing, an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representative an earnings statement or
statements (which need not be audited) of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(d) The Company will furnish to the Representative and to counsel for
the Underwriters, without charge, one signed copy of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto) and
each amendment thereto which shall become effective on or prior to the
Closing Date and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary Final
Prospectus and the Final Prospectus and any amendments thereof and
supplements thereto as the Representative may reasonably request. The
Company will pay the expenses of printing all documents relating to the
offering.
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(e) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representative may
designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities, will arrange for the determination
of the legality of the Securities for purchase by institutional investors
and will pay the fee of the National Association of Securities Dealers,
Inc., if any, in connection with its review of the offering; provided,
however, that the Company shall not be required to effect or maintain any
such qualification in any jurisdiction that would result in it having to
execute or file a general consent to service of process under the laws of
such jurisdiction or to qualify to do business as a foreign corporation in
such jurisdiction.
(f) Through the 45th day after the date of this Agreement, the
Company will not, without the consent of the Representative, directly or
indirectly, offer, sell, offer to sell, grant an option for the sale of or
otherwise dispose of any of (i) the Securities, any securities of the
Company convertible into or exchangeable for the Securities or any
securities of the Company exchangeable for, convertible into or for which
the principal amount thereof or payment thereon is referenced to the price
of or dividend rate on shares of common stock of America Online, Inc., a
Delaware corporation ("AOL") or (ii) shares of common stock of AOL owned by
the Company; provided, however, that the foregoing shall not prohibit the
Company from taking any of the foregoing actions in connection with any
exchanges or redemptions of the Securities or in connection with any tender
offer or exchange offer for all or a portion of the outstanding shares of
common stock of AOL.
5. Conditions to the Obligations of the Underwriters. (a) The obligations
of the Underwriters to purchase the Initial Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and as
of the Closing Date, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(i) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been instituted
or threatened; and the Final Prospectus shall have been filed or
transmitted for filing with the Commission pursuant to Rule 424 not
later than 5:00 p.m., New York City time, on the business day
following the date hereof.
(ii) The Company shall have furnished to the Representative the
opinion of Sidley & Austin, special counsel for the Company, dated the
Closing Date, to the effect that:
(A) each of the Company and the Designated Subsidiaries has
been duly incorporated and is validly existing as a corporation
in
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good standing under the laws of the jurisdiction in which it is
incorporated, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus;
(B) all the outstanding shares of capital stock of each
Designated Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable, and, to the
knowledge of such counsel, except as otherwise set forth in the
Final Prospectus, all outstanding shares of capital stock of each
Designated Subsidiary are owned by the Company, either directly
or through wholly owned subsidiaries, and are free and clear of
any perfected security interests, claims, liens or encumbrances;
(C) the Securities and the Indenture conform in all
material respects to the description thereof contained in the
Final Prospectus; the holders of outstanding shares of capital
stock of the Company do not have preemptive rights to subscribe
for the Securities under the Company's Certificate of
Incorporation, By-laws or the General Corporation Law of the
State of Delaware;
(D) the Indenture has been duly authorized, executed and
delivered by the Company, and constitutes a legal, valid and
binding instrument enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
of general applicability relating to or affecting the enforcement
of creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law); the Indenture has been duly
qualified under the Trust Indenture Act; and the Securities have
been duly authorized, executed and delivered by the Company (and
assuming due authentication by the Trustee in accordance with the
provisions of the Indenture) will constitute legal, valid and
binding obligations of the Company, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws of general applicability relating to or
affecting the enforcement of creditors' rights and by the effect
of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law), and will be entitled to the benefits of the Indenture;
(E) to the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator
involving
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the Company or any of its Designated Subsidiaries of a character
required to be disclosed in the Registration Statement which is
not disclosed in the Final Prospectus as so required, and there
is no franchise, contract or other document of a character
required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit to the Registration
Statement, which is not described or filed as required; and the
statements included or incorporated in the Final Prospectus with
respect to any such action, suit, proceeding, franchise, contract
or other document fairly summarize the matters required to be
disclosed or described;
(F) the Registration Statement and any post-effective
amendments thereto have become effective under the Act; to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, as amended, has been
issued, no proceedings for that purpose have been instituted or
threatened; the Registration Statement, the Final Prospectus and
each amendment thereof or supplement thereto as of their
respective effective or issue dates (in each case, other than the
financial statements, financial data and supporting schedules
included or incorporated by reference therein and other than the
Trustee's Statement of Eligibility on Form T-1 (the "Form T-1"),
as to which such counsel need express no opinion) complied as to
form in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder;
and although such counsel has not independently verified, is not
passing upon and assumes no responsibility for the accuracy,
completeness or fairness of statements contained in the
Registration Statement or any amendment thereof or the Final
Prospectus or any amendment or supplement thereof and such
counsel has relied, to the extent that such counsel may properly
do so in the discharge of such counsel's professional
responsibilities as experienced securities law practitioners,
upon the judgment and statements of officers and representatives
of the Company with respect to facts necessary to the
determination of materiality, nothing has come to such counsel's
attention which causes such counsel to believe that the
Registration Statement or any amendment thereof (other than the
financial statements, financial data and supporting schedules
included or incorporated by reference therein and other than the
Form T-1, as to which such counsel need express no belief), at
the time it became effective and at the date of this Agreement,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that
the Final Prospectus, as amended or
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supplemented (other than the financial statements, financial data
and supporting schedules included or incorporated by reference
therein and other than the Form T-1, as to which such counsel
need express no belief), at the Closing Date, includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(G) this Agreement has been duly authorized, executed and
delivered by the Company;
(H) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under the Act and the Trust Indenture Act
and such as may be required under the securities or blue sky laws
of any jurisdiction in connection with the sale or offer for sale
of the Securities by the Underwriters as contemplated by this
Agreement and such other approvals (specified in such opinion) as
have been obtained;
(I) none of the execution of the Indenture, the issuance
and sale of the Securities, the consummation of any other of the
transactions herein contemplated or the fulfillment of the terms
hereof will result in a breach of, or constitute a default under,
the charter or by-laws of the Company or the terms of any
indenture or other material agreement or instrument known to such
counsel and to which the Company or any of its Designated
Subsidiaries is a party or bound, or any order, decree, rule or
regulation known to such counsel to be applicable to the Company
or any of its Designated Subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its Designated
Subsidiaries; and
(J) such counsel confirms the statements contained in the
Prospectus under the caption "Certain United States Federal
Income Tax Considerations" as to the principal anticipated
Federal income tax consequences of the ownership of the
Securities for the purposes and to the extent set forth therein.
Such counsel may limit its opinion to matters involving the
application of the laws of the States of Illinois and New York, the General
Corporation Law of the State of Delaware and the federal laws of the United
States and, in rendering such opinion, may rely as to
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matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
(iii) The Representative shall have received from Mayer, Brown &
Platt, counsel for the Underwriters, such opinions, dated the Closing Date,
with respect to the issuance and sale of the Securities, the Indenture, the
Registration Statement, the Final Prospectus and other related matters as
the Representative may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(iv) The Company shall have furnished to the Representative a
certificate of the Company, signed by the Chairman of the Board, the
President or any Vice President and by the principal financial or
accounting officer of the Company, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, the Indenture and this
Agreement and that:
(A) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(B) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(C) since the date of the most recent financial statements
included in the Final Prospectus, there has been no material adverse
change in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus.
(v) At the Closing Date, PricewaterhouseCoopers LLP shall have
furnished to the Representative a letter or letters, dated as of the
Closing Date, in form and substance satisfactory to the Representative and
PricewaterhouseCoopers LLP, confirming that they are independent
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder, and stating in
effect that:
(A) in their opinion, the consolidated financial statements
(including financial schedules) of the Company and its subsidiaries
examined by and reported on by them and included or incorporated by
reference in the Registration Statement and the Final Prospectus
comply as to form in all
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material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations thereunder with respect to registration statements on Form
S-3;
(B) on the basis of procedures of review in accordance with
standards established by the American Institute of Certified Public
Accountants (but not an audit in accordance with generally accepted
auditing standards) consisting of:
(I) reading the minutes of meetings of stockholders and the
Board of Directors of the Company as set forth in the minute
books through a specified date not more than five business days
prior to the date of delivery of such letter;
(II) reading the latest available unaudited interim
consolidated financial data of the Company and its consolidated
subsidiaries included or incorporated by reference in the
Registration Statement or the Final Prospectus and the latest
unaudited interim financial data made available by the Company
and its subsidiaries; and
(III) making inquiries of certain officials of the Company
who have responsibilities for financial and accounting matters
regarding the specific items for which representations are
requested below;
nothing has come to their attention as a result of the foregoing
procedures that caused them to believe that:
(1) the unaudited interim consolidated financial data of the
Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement and the
Final Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and
regulations thereunder;
(2) any material modifications should be made to said
unaudited consolidated financial data of the Company and its
consolidated subsidiaries for it to be in conformity with
generally accepted accounting principles;
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(3)(a) with respect to the period subsequent to the date of
the most recent financial statements (other than any capsule
information), audited or unaudited, included or incorporated by
reference in the Registration Statement and the Final Prospectus,
at the date of the latest available interim financial data and at
a specified date not more than five business days prior to the
date of delivery of such letter, except as otherwise disclosed in
the Final Prospectus or incorporated by reference and except when
such data is not prepared by or available from the Company, there
was any change in the common stock or long-term debt of the
Company and its consolidated subsidiaries or any decreases in
consolidated total assets, net current assets (working capital)
or stockholders' investment as compared with amounts shown in the
latest consolidated balance sheet included or incorporated by
reference in the Registration Statement or the Final Prospectus
or (b) for the period from the date of the most recent financial
statements included or incorporated by reference in the
Registration Statement or the Final Prospectus to a specified
date not more than five business days prior to delivery of such
letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated
operating revenues, operating profit, income before income taxes
or in the total or per-share amounts of net income, except in all
instances for changes or decreases which the Registration
Statement and the Final Prospectus disclose have occurred or may
occur, or as set forth in such letter accompanied by an
explanation thereof;
(4) with regard to the Company and its consolidated
subsidiaries, the amounts included in any unaudited "capsule"
information included or incorporated by reference in the
Registration Statement or the Final Prospectus do not agree with
the corresponding amounts in the audited or unaudited
consolidated financial statements from which such amounts were
derived or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus;
(D) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or
-13-
statistical information derived from the general accounting records of
the Company and its subsidiaries and subject to the Company's system
of internal accounting controls relating to the preparation of the
financial statements) set forth or incorporated by reference in the
Registration Statement and the Final Prospectus, as amended or
supplemented, including Exhibit 12 to the Registration Statement and
the information included or incorporated in Items 1, 6 and 7 of the
Company's Annual Report on Form 10-K and in "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
included or incorporated by reference in any of the Company's
Quarterly Reports on Form 10-Q, agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of legal
interpretation; and
(E) if unaudited pro forma financial statements are included or
incorporated by reference in the Registration Statement and the Final
Prospectus, on the basis of a reading of the unaudited pro forma
financial statements, carrying out certain specified procedures,
inquiries of certain officials of the Company and the acquired company
who have responsibility for financial and accounting matters, and
proving the arithmetic accuracy of the pro forma financial statements,
nothing came to their attention which caused them to believe that the
pro forma financial statements were not properly compiled on the pro
forma bases set forth in the notes thereto.
References to the Registration Statement and the Final Prospectus in the
paragraph (v) are to such documents as amended and supplemented at the date
of the letter.
(vi) Subsequent to the date as of which information is given in the
Registration Statement and the Final Prospectus, there shall not have been
(A) any change or decrease specified in the letter referred to in paragraph
(a)(v) of this Section 5, except as disclosed in the Final Prospectus or
incorporated by reference therein, or (B) any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company and its subsidiaries or AOL, and its subsidiaries, the
effect of which, in any case referred to in clause (Ai) or (B) above, is,
in the judgment of the Representative, so material and adverse as to make
it impractical or inadvisable to proceed with the offering or the delivery
of the Securities as contemplated by the Registration Statement and the
Final Prospectus.
(vii) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Act.
-14-
(viii) Prior to the Closing Date, the Company shall have furnished to
the Representative such further information, certificates and documents as
the Representative may reasonably request.
(b) In the event the Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct in all material respects as of each Option Closing Date, and, on the
relevant Option Closing Date, the Underwriters shall have received:
(i) A certificate, dated such Option Closing Date, of officers of the
Company confirming that the certificate of the officers of the Company
delivered on the Closing Date pursuant to Section 5(a)(iv) hereof remains
true and correct as of such Option Closing Date;
(ii) The favorable opinion of Sidley & Austin, in form and substance
reasonably satisfactory to your counsel, dated such Option Closing Date,
relating to the Option Securities and otherwise to the same effect as the
opinion required by Section 5(a)(ii) hereof;
(iii) The favorable opinion of your counsel, Mayer, Brown & Platt,
dated such Option Closing Date, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section 5(a)(iii)
hereof; and
(iv) A letter from PricewaterhouseCoopers LLP, in form and substance
satisfactory to you and dated such Option Closing Date, substantially the
same in scope and substance as the letter furnished to you pursuant to
Section 5(a)(v) hereof, except that the specified date in the letter
furnished pursuant to this Section 5(b)(iv) shall be a date not more than
five days prior to such Option Closing Date.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and counsel to the Underwriters, this
Agreement and all obligations of the Underwriters hereunder, or in the case of
any condition to the purchase of Option Securities on an Option Closing Date
which is after the Closing Date, the obligation of the Underwriters to purchase
the relevant Option Securities, may be canceled at, or any time prior to, the
Closing Date or the relevant Option Closing Date by the Representative. Notice
of such cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
6 Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 5 hereof is not satisfied or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, including a default under Section 8, the
Company will
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reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including the reasonable fees and disbursements of Mayer, Brown & Platt) that
shall have been reasonably incurred by them in connection with the proposed
purchase and sale of the Securities.
7 Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person who controls any Underwriter
within the meaning of the Act or the Exchange Act against any and all losses,
claims, damages, liabilities or expenses, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, and for the
aggregate amount paid in settlement of any litigation or any investigation or
proceeding by any governmental agency or body, insofar as such losses, claims,
damages, liabilities, expenses or amounts (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representative
specifically for use in connection with the preparation thereof, or arises out
of or is based upon the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of the Trustee, and (ii) such indemnity with respect to the Basic
Prospectus or any Preliminary Final Prospectus shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities which are the subject thereof if such person did not receive a copy
of the Final Prospectus (or the Final Prospectus as amended or supplemented)
excluding documents incorporated therein by reference at or prior to the
confirmation of the sale of such Securities to such person in any case where
such delivery is required by the Act and the untrue statement or omission of a
material fact contained in the Basic Prospectus or any Preliminary Final
Prospectus was corrected in the Final Prospectus (or the Final Prospectus as
amended or supplemented). This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Company by on
or behalf of such Underwriter through the Representative specifically for use in
the preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have.
-16-
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (other than local counsel used principally to facilitate local
litigation), approved by the Representative in the case of paragraph (a) of this
Section 7, representing the indemnified parties under such paragraph (a) who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment (after
all rights to appeal have been exhausted) for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel required to be paid by this Section 7(c), the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 90 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such aforesaid request prior to the date of such settlement.
No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could be a party unless such
-17-
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in Section 7 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on
the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of such Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Final Prospectus
bear to the aggregate initial public offering price of such Securities as set
forth on such cover. The relative fault of the Company, on the one hand, and
the Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within
-18-
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Securities set forth opposite their respective names
in Schedule II hereto and not joint.
8 Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the number of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate number
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
number of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate number of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 8, the Closing Date or the Option Closing Date, as the
case may be, shall be postponed for such period, not exceeding seven days, as
the Representative shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
9 Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representative, by notice given to the Company prior
to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's or AOL's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or material escalation of
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it in the case of (i), (ii) or
(iii), in the judgment of the Representative, impracticable to market the
Securities as contemplated in the Final Prospectus.
10 Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Section 6 and 7 hereof shall survive delivery of and payment for the Securities.
The provisions of Sections 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
-19-
11 Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at Tribune Company, 435 North Michigan Avenue,
Chicago, Illinois 60611, attention of David J. Granat, Vice President and
Treasurer (with a copy to the General Counsel of Tribune Company).
12 Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
13 Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
14 Counterparts. This Agreement and any amendments hereto may be
executed in any number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute but one agreement.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
TRIBUNE COMPANY
By: /s/ Crane H. Kenney
----------------------------------------------
Its: Vice President/General Counsel and
Secretary
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Michael O'Grady
--------------------------------
Title: Director
For themselves and the other several Underwriters
named in Schedule II to the foregoing Agreement.
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Schedule I
Underwriting Agreement dated April 7, 1999
Registration Statement No. 333-74961
Representative: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Title, Purchase Price and
Description of Securities
Title: PHONES
Number of Initial Securities: 7,000,000
Overallotment Option: 1,000,000
Issue Price: $157.00
Maturity Date: May 15, 2029
Ratings (Moody's/S&P): A3/A-
Underlying Security: The common stock, par value $.01 per share,
of America Online, Inc., a Delaware
corporation
Cash Payment Period: Quarterly
Quarterly Cash Payment: An amount equal to $0.785 per PHONES (or
2.00% per year of the original principal
amount), plus the amount, if any, of quarterly
cash dividends paid on the reference shares
(as defined in the Final Prospectus)
attributable to each PHONES
Call Option: The sum of (a) the higher of the contingent
principal amount (as defined in the Final
Prospectus) of the PHONES or the sum of the
current market value of the reference shares
plus any deferred quarterly payments of
interest, plus, in either case, the final
period distribution (as defined in the Final
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Prospectus), and (b) $9.42 if such redemption
takes place before May 15, 2000, $6.28 if such
redemption takes place after May 15, 2000, but
before May 15, 2001, $3.14 if such redemption
takes place after May 15, 2001, but before May
15, 2002 or zero if such redemption takes place
on or after May 15, 2002
Form Book entry through DTC
Settlement Form Cash only
Closing Date, Time April 13, 1999 at 9:30 a.m Central Time at the
and Location: offices of Sidley & Austin, One First National
Plaza, Chicago, Illinois 60603
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SCHEDULE II
Number of Number of
Initial Securities Option Securities
Underwriters to be Purchased to be Purchased
-------------- -------------------- --------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................ 3,850,000
Allen & Company Incorporated.................... 700,000
Morgan Stanley & Co. Incorporated............... 700,000
Salomon Smith Barney Inc........................ 700,000
Chase Securities Inc............................ 350,000
J.P. Morgan Securities Inc...................... 350,000
NationsBanc Montgomery Securities LLC........... 350,000
--------- --------------------
Total...................................... 7,000,000 1,000,000
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