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Exhibit 2(p)
DOCUMENT ESCROW AGREEMENT
Northern News Company
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This agreement is made and entered October 9, 1996, among United
Magazine Company, an Ohio corporation ("UNIMAG"), Northern News Company, a
Michigan corporation ("NORTHERN"), and Xxxxx & Xxxxxxxxx ("ESCROW AGENT").
BACKGROUND INFORMATION
----------------------
A. Unimag and Northern are parties to an Asset Transfer and Exchange
Agreement (the "EXCHANGE AGREEMENT") effective July 29, 1996, and certain other
documents executed in connection with the transactions contemplated by the
Exchange Agreement (the "ADDITIONAL DOCUMENTS").
B. Unimag and Northern desire to consummate the Exchange (defined in
the Exchange Agreement) and the other transactions contemplated by the Exchange
Agreement upon the satisfaction of certain conditions (as described in Section
7.5 of the Exchange Agreement and as also described more fully in this
agreement).
C. Unimag and Northern desire to deposit the Additional Documents into
escrow with the Escrow Agent, to be held by the Escrow Agent upon the terms and
subject to the conditions of this agreement. Any and all agreements,
instruments, and other documents delivered to Escrow Agent to be held by it
pursuant to the terms and subject to the conditions of this agreement are
sometimes referred to hereinafter, collectively, as the "CLOSING DOCUMENTS".
D. Escrow Agent is willing to serve as the escrow agent upon the terms
and subject to the conditions of this agreement.
STATEMENT OF AGREEMENT
----------------------
The parties to this Agreement (each a "PARTY," and collectively, the
"PARTIES") hereby acknowledge the accuracy of the above Background Information
and, in consideration of the mutual covenants and agreements set forth in this
agreement, the Parties agree as follows:
Section 1. Unless otherwise defined in this agreement, all capitalized
words and phrases in this agreement shall have the same meanings as set forth in
the Exchange Agreement.
Section 2. Unimag and Northern have executed and/or delivered to Escrow
Agent and Escrow Agent hereby acknowledges receipt of the agreements and
documents described on Exhibit A.
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Section 3. Unimag has executed and/or delivered to Escrow Agent and
Escrow Agent hereby acknowledges receipt of the documents and instruments
described on Exhibit B.
Section 4. Northern has executed and/or delivered to Escrow Agent and
Escrow Agent hereby acknowledges receipt of the documents and instruments
described on Exhibit C.
Section 5. Unimag and/or Northern, as the case may be, may hereafter
deliver to Escrow Agent various other agreements, instruments, and other
documents to be held upon the terms and subject to the conditions of this
agreement. Upon delivery of such items to Escrow Agent, they shall become
Closing Documents under this agreement.
Section 6. Unless Unimag and Northern otherwise agree and together
instruct Escrow Agent in writing accordingly, the delivery of the Closing
Documents out of escrow shall be subject to the fulfillment of the following
conditions:
(a) Unimag shall have consummated the escrow closings of the
Xxxxx Acquisition, the Michiana Acquisition, all of the Xxxxxxx
Companies Acquisitions, and the acquisition of The Xxxxxx X. Xxxxx News
Co., Central News Co., and Newspaper Sales, Inc. (collectively, the
"XXXXX COMPANIES"). Such escrow closings shall have been completed no
later than November 15, 1996, and shall be upon terms and conditions
substantially similar to the Escrow Closing under the Exchange
Agreement and this agreement (hereinafter referred to as this "ESCROW
CLOSING"). This condition shall be satisfied by delivery to Escrow
Agent of certificates executed by Unimag and by Xxxxx, by Michiana, by
each of Ohio Periodical Distributors, Inc., The Xxxxxxx Companies,
Wholesalers Leasing Corp., and Read-mor Book Stores, Inc.
(collectively, the "XXXXXXX COMPANIES"), and by each of the Xxxxx
Companies, respectively (for the Xxxxx Acquisition, the Michiana
Acquisition, each of the respective Xxxxxxx Companies Acquisitions, and
each of the respective Xxxxx Companies acquisitions), in the form
attached hereto as Exhibit D, certifying that the escrow closing for
the Xxxxx Acquisition, the Michiana Acquisition, each of the respective
Xxxxxxx Companies Acquisitions, and each of the respective Xxxxx
Companies acquisitions have been completed, the date completed, and
that such escrow closing was upon terms and conditions substantially
similar to this Escrow Closing. Each certificate shall also be executed
by Northern for the purpose of evidencing Northern's acknowledgement
and agreement to the certifications set forth in that certificate.
(b) The Agreement (with all of its schedules and exhibits) and
the Exchange shall have been finally approved by Unimag's Board of
Directors. This condition shall be satisfied by delivery to Escrow
Agent of resolutions of Unimag's Board of Directors providing such
approval, certified by Unimag's Secretary.
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(c) The Exchange, the Michiana Acquisition, the Xxxxx
Acquisition, the Xxxxxxx Companies Acquisitions (except for the
acquisition of Read-mor Book Stores, Inc.), and the Xxxxx Companies
acquisitions shall have been approved by the affirmative vote of the
shareholders of Unimag entitled to exercise voting power over at least
a majority of the outstanding common shares, without par value, of
Unimag. This condition shall be satisfied by delivery to Escrow Agent
of a certificate executed by the inspector of elections for this
shareholders' meeting, in the form attached hereto as Exhibit E,
certifying that the Exchange, the Michiana Acquisition, the Xxxxx
Acquisition, the Xxxxxxx Companies Acquisitions (except for the
acquisition of Read-mor Book Stores, Inc.), and the Xxxxx Companies
acquisitions were approved by the affirmative vote of shareholders
entitled to exercise voting power over at least a majority of the
outstanding common shares of Unimag.
(d) A 1 for 10 reverse stock split of the outstanding common
shares, without par value, of Unimag shall have been effected. This
condition shall be satisfied by delivery to Escrow Agent of a
certificate from the Ohio Secretary of State certifying the
effectiveness of an amendment to Unimag's articles of incorporation,
which has a provision providing for such reverse stock split.
(e) Unimag, Northern, and the former shareholders of the
MacGregor News Agency, Inc., a Michigan corporation ("MACGREGOR"),
shall have entered into a Release of Pledge of Stock and Security
Agreement and Consent to transfer of Assets (the "MACGREGOR AGREEMENT")
in a form substantially similar to the form of the MacGregor Agreement
attached as Exhibit F (any revisions to the MacGregor Agreement must be
approved by Unimag's legal counsel). This condition shall be satisfied
by delivery to Escrow Agent of (i) a fully executed MacGregor
Agreement, and (ii) all of the certificates for the shares of stock of
MacGregor (the "MACGREGOR SHARES") endorsed for transfer to Unimag.
Notwithstanding anything in this agreement to the contrary, this
condition may not be waived or altered in any manner by Unimag and/or
Northern and Escrow Agent will disregard any instructions from Unimag
and/or Northern which may attempt to waive or alter this condition.
Section 7. Upon the satisfaction of the conditions set forth in Section
6 by Escrow Agent's receipt of all of the certificates described in Section 6,
the Parties will attend the Closing (as contemplated by the Exchange Agreement)
and Escrow Agent will distribute (a) the Debenture Agreement counterpart
signature pages listed on Exhibit A and the Shareholder Voting Agreement
counterpart signature pages listed as item 1 on Exhibit C to the Trustee with
instructions to distribute fully executed copies of the Debenture Agreement and
the Shareholder Voting Agreement (once all of the closings have been completed)
to (i) Xxxxxxxx X. Xxxxxxx (who shall represent Michiana and its shareholders
for purposes of receipt of such documents), (ii) Xxxxxxx Xxxxx, Xx. (who shall
represent Xxxxx and its shareholders for purposes of receipt of such documents),
(iii) Xxxxxx X. Xxxxxxx (who shall represent the Xxxxxxx Companies and their
shareholders for purposes of receipt of such documents), and (iv) Xxxxxx X.
Xxxxx (who shall
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represent the Xxxxx Companies and their shareholders for purposes of receipt of
such documents), (b) the documents listed in Exhibit B to an officer of
Northern, and (c) the documents listed in Exhibit C, the MacGregor Agreement,
and the certificates for the MacGregor Shares, endorsed for transfer to Unimag,
to an officer of Unimag. If instructed to do so by a Party entitled to receive
documents, the Escrow Agent may deliver such documents to another person or
entity. Unimag and Northern hereby acknowledge that the closings for the Xxxxx
Acquisition, the Michiana Acquisition, the remaining Xxxxxxx Companies
Acquisitions, and the Xxxxx Companies acquisitions will be held shortly after
the Closing.
Section 8. If all of the conditions set forth in Section 6 have not
been satisfied by December 31, 1996, or such later date as Unimag and Northern
may agree to and so instruct Escrow Agent in writing, then Escrow Agent shall
(a) destroy the Closing Document described in Exhibit A, (b) return the Closing
Documents described in Exhibit B to Unimag, except for item 10, which the Escrow
Agent shall destroy, (c) return the Closing Documents described in Exhibit C and
the MacGregor Shares to Northern (with the MacGregor Shares owned by Xx. Xxxxxx
to be returned to him), except for items 5, 12, and 13, and the MacGregor
Agreement, all of which Escrow Agent shall destroy; and all of the Closing
Documents shall be deemed void and of no further force and effect.
Notwithstanding the foregoing, the Exchange Agreement shall be deemed terminated
and both Unimag and Northern shall remain responsible for their costs and
expenses associated with the transactions contemplated by the Exchange Agreement
in accordance with the provisions of Section 10.10 of the Exchange Agreement.
Section 9. In the event of any dispute between or among any of the
Parties relating to distribution of the Closing Documents by Escrow Agent or any
other matter, Escrow Agent may submit the matter to any court of competent
jurisdiction in an interpleader or similar action. Any and all costs incurred by
Escrow Agent in connection therewith, including reasonable attorneys' fees and
costs, shall be shared equally by Unimag and Northern. Escrow Agent shall
perform any acts ordered by any court of competent jurisdiction without any
liability or obligation to any other Party by reason of such act.
Section 10. Escrow Agent shall have no liability to any other Party, or
such Party's successor or assigns, or to any person or entity claiming under or
in the right of any other Party, based upon or on account of any action taken or
omitted by Escrow Agent, unless such action or omission shall have been the
result of Escrow Agent's gross negligence or intentional misconduct.
Notwithstanding the foregoing to the contrary, in no event shall the Escrow
Agent be liable to any party for acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram, facsimile transmission or other
paper or document believed by Escrow Agent to be genuine and correct and to have
been signed or sent by the proper person or persons. Unimag and Northern shall,
jointly and severally, hold harmless and indemnify Escrow Agent from and against
any and all losses, liabilities, damages, claims, suits, actions, costs, and
expenses (including attorneys' fees) which may be asserted against or incurred
by Escrow Agent as a result of it serving as escrow agent under this agreement.
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Section 11. Instructions to Escrow Agent shall be addressed to:
Xxxxx & Xxxxxxxxx
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
and shall be deemed to have been delivered to the Escrow Agent when delivered
personally, by facsimile (which is confirmed), mailed by registered or certified
mail (return receipt requested), or delivered to Federal Express, United Parcel
Service, or any other nationally recognized express delivery service.
Section 12. The Parties hereby: (a) designate the Court of Common Pleas
of Franklin County, Ohio, as a court of proper jurisdiction and venue for any
actions or proceedings relating to this agreement; (b) irrevocably consent to
such designation, jurisdiction and venue; and (c) waive any objections or
defenses relating to jurisdiction or venue with respect to any action or
proceedings initiated in the Court of Common Pleas of Franklin County, Ohio.
Section 13. The rights and obligations of the Parties under this
agreement shall be construed and resolved in accordance with the laws of the
State of Ohio, exclusive of conflict of laws principles. This agreement shall be
binding upon, inure to the benefit of, and be enforceable by and against the
respective successors and permitted assigns of the Parties. This agreement may
be executed in one or more separate counterparts, which, when read together,
shall be as fully-effective as a single, executed counterpart and all of which
shall constitute one and the same document.
Section 14. If the Escrow Agent receives a written notice from any of
the Parties of a dispute as to completion of any of the conditions set forth in
Section 6, and such notice is received prior to the distributions from escrow
set forth in Section 7, then Escrow Agent shall, until such dispute is resolved,
either submit the documents held in escrow to another law firm selected by it to
act as successor escrow agent, or deposit such documents with a court of
competent jurisdiction or continue to retain the documents and act as Escrow
Agent. In the event of such dispute, the escrow documents shall be held by the
Escrow Agent or its successor or the court until otherwise directed in writing
by agreement of the parties or otherwise directed by a court of competent
jurisdiction. In any such event, the parties agree that Xxxxx & Xxxxxxxxx may
continue to represent Unimag in any matter, including any dispute under this
agreement, and the parties hereby waive any conflict of interest of Xxxxx &
Xxxxxxxxx in that regard.
UNITED MAGAZINE COMPANY
By /s/Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, Chairman
[Signatures continued on following page.]
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NORTHERN NEWS COMPANY
By /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Treasurer
XXXXX & XXXXXXXXX
By /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, Partner
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EXHIBIT A
DOCUMENTS DELIVERED BY UNIMAG AND/OR NORTHERN
1. Debenture Agreement dated as of October 9, 1996, among Unimag,
Northern, and certain other parties. (Includes counterpart signature
pages for only Northern and only Exhibits A and B. The remaining
counterpart signature pages and exhibits and Schedule I will be
provided in connection with the other Escrow Closings.)
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EXHIBIT B
DOCUMENTS DELIVERED BY UNIMAG
1. Certified articles of incorporation of Unimag.
2. Good standing certificate of Unimag.
3. Certified code of regulations of Unimag.
4. Incumbency certificate of Unimag.
5. Certificate of president of Unimag.
6. Certified board of directors resolutions.
7. Letters from shareholders of Unimag entitled to vote more than 50% of
Unimag common shares indicating they will vote in favor of the
Exchange.
8. Letter or copy of federal register notice from Federal Trade Commission
terminating HSR Act waiting period.
9. Letter of Xxxxxx Xxxxxxxx LLP with respect to tax effect on Unimag of
the Section 351 exchange.
10. Opinion letter of Xxxxx & Xxxxxxxxx (This document has not been
deposited into escrow. It will be deposited into escrow no later than
October 18, 1996.)
11. Irrevocable instruction letter to Unimag's transfer agent for the
issuance of Unimag Shares to Northern as required by the Exchange.
12. One Senior Debenture to be issued to Northern under the Debenture
Agreement.
13. One Subordinated Debenture to be issued to Northern under the Debenture
Agreement.
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EXHIBIT C
DOCUMENTS DELIVERED BY NORTHERN
1. Shareholder Voting Agreement dated October 9, 1996, among Northern and
certain other parties (Counterpart signature pages for Northern will be
deposited into escrow in connection with the escrow closing for
Xxxxx.).
2. Xxxx of Sale for certain of the Acquired Assets executed by Northern.
3. Assignment of Certain Acquired Assets and Assumption of Assumed
Liabilities executed by Northern and Unimag.
4. Certificates of Title to the Vehicles, endorsed for transfer to Unimag.
(Date of sale, odometer reading, and sale price to be completed at
Closing.)
5. Lease Agreement dated October 9, 1996, between Northern News Company
and Unimag for the Petoskey Warehouse.
6. Certified articles of incorporation of Northern and MacGregor
7. Good standing certificates of Northern and MacGregor.
8. Certified By-laws of Northern and MacGregor.
9. Incumbency certificates of Northern and MacGregor.
10. Certificates of the presidents or other officers of Northern and
MacGregor.
11. Certified resolutions of the boards of directors of Northern and
MacGregor.
12. Opinion letter of Northern's Legal Counsel.
13. Opinion letter of independent legal counsel.
14. MacGregor's minute books and other corporate records.
15. Agreement dated October 9, 1996, between Xx. Xxxxxx and Northern.
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EXHIBIT D
CERTIFICATE OF ESCROW CLOSING
[INSERT NAME OF COMPANY]
The undersigned hereby certify, on behalf of [insert name of Company],
and United Magazine Company, an Ohio corporation ("UNIMAG"), respectively, to
Xxxxx & Xxxxxxxxx, which is the escrow agent under a certain document escrow
agreement dated September ___, 1996 (the "NORTHERN DOCUMENT ESCROW AGREEMENT"),
among Unimag, Northern News Company ("NORTHERN"), and Xxxxx & Xxxxxxxxx, as
follows:
1. The escrow closing (the "_________ ESCROW CLOSING")
contemplated by [insert description of appropriate acquisition
agreement] was completed on [insert date];
2. The _________ Escrow Closing was completed upon terms and
conditions substantially similar to the escrow closing
provided for in the Northern Document Escrow Agreement.
[INSERT NAME OF COMPANY]
Date: September ___, 1996 By__________________________________
Print Name________________________
Its__________________________________
UNITED MAGAZINE COMPANY
Date: September___, 1996 By__________________________________
Print Name________________________
Its__________________________________
[Acknowledgement on the following page.]
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ACKNOWLEDGEMENT
The undersigned hereby acknowledges and agrees, on behalf of Northern,
that the certifications set forth in this certificate satisfy the requirements
of Section 6(a) of the Northern Document Escrow Agreement.
NORTHERN NEWS COMPANY
Date: September ___, 1996 By__________________________________
Print Name________________________
Its__________________________________
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EXHIBIT E
CERTIFICATE OF INSPECTOR OF ELECTIONS
The undersigned, as the inspector of elections for the annual meeting
of shareholders of United Magazine Company, an Ohio corporation ("UNIMAG"), held
on ______________, 1996, hereby certifies to Xxxxx & Xxxxxxxxx that the
acquisitions described below have been approved by the affirmative vote of
shareholders entitled to exercise voting power over at least a majority of the
outstanding common shares of Unimag:
1. The Stock Transfer and Exchange Agreement among Unimag,
Michiana News Service, Inc. ("MICHIANA"), and all of its
shareholders and the acquisition of the stock Michiana in
accordance with the terms of such exchange agreement;
2. The Stock Transfer and Exchange Agreement among Unimag, The
Xxxxx Companies ("XXXXX"), and all of its shareholders and the
acquisition of the stock of Xxxxx in accordance with the terms
of such exchange agreement;
3. The Asset Transfer and Exchange Agreement between Unimag and
Northern News Company ("NORTHERN") and the acquisition of
certain assets and liabilities of Northern in accordance with
the terms of such exchange agreement;
4. The Asset Transfer and Exchange Agreement between Unimag and
Ohio Periodical Distributors, Inc. ("OPD"), and the
acquisition of certain assets and liabilities of OPD in
accordance with the terms of such exchange agreement;
5. The Stock transfer and Exchange Agreement among Unimag, The
Xxxxxxx Companies ("XXXXXXX"), and all of its shareholders and
the acquisition of the stock of Xxxxxxx in accordance with the
terms of such exchange agreement; and
6. The Asset Transfer and Exchange Agreement between Unimag and
Wholesalers Leasing Corp. ("WHOLESALERS") and the acquisition
of certain assets of Wholesalers in accordance with the terms
of such exchange agreement.
7. The Stock Transfer and Exchange Agreement among Unimag, The
Xxxxxx X. Xxxxx News Co., Central News Co., Newspaper Sales,
Inc. (collectively, the "XXXXX COMPANIES"), and all of their
shareholders and the acquisition of the stock of the Xxxxx
Companies in accordance with the terms of such exchange
agreement.
Date: _____________, 1996 ____________________________________
_________________, Inspector of Elections
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EXHIBIT F
RELEASE OF PLEDGE OF STOCK AND SECURITY AGREEMENT
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and
CONSENT TO TRANSFER OF ASSETS
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This Release of Pledge of Stock and Security Agreement, entered into
this ____ day of September, 1996, by and among Xxxxxxx XxxXxxxxx, Xxxxx and
Xxxxx X. Xxxxx, Xxxxx XxxXxxxxx and Xxxxx XxxXxxxxx of Mount Pleasant, Michigan
(hereinafter collectively referred to as "MacGregors"), Northern News Company,
a Michigan corporation (hereinafter referred to as "Northern") and Xxxxxx X.
Xxxxxx, Xx., of Petoskey, Michigan (hereinafter referred to as "Xxxxxx").
WITNESSETH:
WHEREAS, Northern and Xxxxxx have heretofore entered into a Pledge of
Stock and Security Agreement, dated January 10, 1996, with each of the
MacGregors (hereinafter the "Agreement") to secure payment to MacGregors under
the terms of certain Promissory Notes, dated January 10, 1996; delivered to
MacGregors by Northern and
WHEREAS, Northern now desires to transfer the pledged stock, together
with certain of the assets comprising the Collateral under the Agreement, to
United Magazine Company ("Unimag") pursuant to an Asset Transfer and Exchange
Agreement, dated August 30, 1996, between Northern and Unimag; and
WHEREAS, the terms of the Asset Transfer and Exchange Agreement
require that the stock and the assets transferred to Unimag be free of any
liens and encumbrances; and
WHEREAS, the MacGregors have agreed to such transfer.
NOW THEREFORE, for and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
A. MacGregors hereby consent to the transfer to, and assignment of,
the Promissory Notes and the Security Agreements (with respect to the assets of
Northern associated with its wholesale periodical distribution business), as
referenced above, and to the transfer of all of the assets of Northern
associated with its wholesale periodical distribution business to Unimag, and
further, MacGregors consent to the granting of additional security interests in
such assets by Unimag.
B. MacGregors hereby release the security interests held by them
pursuant to the above referenced security agreements with respect to any and
all of the assets of Northern which are not transferred to Unimag pursuant to
the Asset Transfer and Exchange Agreement.
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C. MacGregors hereby terminate the pledge of stock of MacGregor News
Agency, Inc., a Michigan corporation, and consent to the transfer to Unimag of
all of the issued and outstanding capital stock of that company.
The MacGregors agree to execute any termination statements or other
instruments which may be required to evidence the above releases and consents.
IN WITNESS WHEREOF, the parties have executed this document as of the
day and year first above written.
NORTHERN NEWS COMPANY
_______________________ ________________________
By: Xxxxx X. Xxxxxxxx Xxxxxxx X. XxxXxxxxx
Its: Treasurer
_______________________
_______________________ Xxxxx Xxxxx
Xxxxxx X. Xxxxxx, Xx.
_______________________
_______________________ Xxxxx X. Xxxxx
Xxxxx XxxXxxxxx
_______________________
Xxxxx XxxXxxxxx
United Magazine Company, in consideration of the above agreements
hereby agrees to assume the obligations and responsibilities of Northern under
the Agreement and the Promissory Notes from and after the date of final closing
of the Asset Transfer and Exchange Agreement.
UNITED MAGAZINE COMPANY
_______________________
By: Xxxxxx X. Xxxxxxx
Its: Chairman
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CONSENT TO ASSIGNMENT OF LEASE
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For and in consideration of the sum of ten dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Xxxxxxx X. XxxXxxxxx and Xxxx XxxXxxxxx, of 000 Xxxxxxxx
Xxxxx, Xx. Xxxxxxxx, Xxxxxxxx, Lessor under that certain Lease Agreement, dated
January 10, 1996, with MacGregor News Agency, Inc., a Michigan corporation, as
Lessee, for the property and warehouse located at 0000 Xxxxxxxxxx Xxxx Xxxxx,
Xx. Xxxxxxxx, Xxxxxxxx (the "Lease"), hereby consent to the transfer of the
capital stock of Lessee, together with the assignment of the Lease, pursuant to
the Asset Transfer and Exchange Agreement, dated July 29, 1996, between
Northern News Company, a Michigan corporation, and United Magazine Company, an
Ohio corporation.
_______________________
Xxxxxxx X. XxxXxxxxx
_______________________
Xxxx XxxXxxxxx
