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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIBERTY GROUP PUBLISHING, INC.,
GREEN EQUITY INVESTORS II, L.P.
(FOR THE LIMITED PURPOSES DESCRIBED HEREIN),
LIBERTY GROUP OPERATING, INC.,
XXXXXXXXX INTERNATIONAL INC.,
APAC-90, INC.,
AMERICAN PUBLISHING (1991) INC. AND
APAC-95, INC.
DATED AS OF NOVEMBER 21, 1997
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TABLE OF CONTENTS
ARTICLE I
TRANSFER OF ASSETS AND CONSIDERATION
1.1 Transfer of Assets........................................2
1.2 Assumption of Liabilities.................................5
1.3 Consideration.............................................8
ARTICLE II
CLOSING
2.1 Closing..................................................11
2.2 Payments.................................................11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Organization; Capitalization; Ownership; Charter and
Bylaws, Etc............................................11
3.2 Corporate Authority and Approval.........................12
3.3 Consents.................................................12
3.4 No Conflicts.............................................12
3.5 Compliance with Laws.....................................13
3.6 Financial Statements.....................................14
3.7 Absence of Certain Changes or Events.....................14
3.8 Title to and Sufficiency of Assets.......................15
3.9 Patents, Trademarks, Subscriber Lists....................15
3.10 Commitments..............................................16
3.11 Litigation...............................................17
3.12 [Reserved]...............................................17
3.13 U.S. Employee Benefit Plans..............................17
3.14 Taxes....................................................17
3.15 Undisclosed Liabilities..................................18
3.16 Fees.....................................................18
3.17 Labor Matters............................................18
3.18 Real Property............................................18
3.19 Leases...................................................19
3.20 Environmental Matters....................................19
3.21 Pre-Closing Liabilities..................................20
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3.22 Agreements with Affiliates...............................20
3.23 Bulk Sales; Transfer Taxes...............................20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTOR
4.1 Organization and Good Standing...........................20
4.2 Corporate Authority and Approval.........................20
4.3 Consents.................................................20
4.4 No Conflicts.............................................21
4.5 Financing................................................21
4.6 Litigation...............................................21
ARTICLE V
COVENANTS OF THE COMPANY
5.1 Cooperation by the Company...............................21
5.2 Conduct of the Business..................................22
5.3 Access...................................................23
5.4 Permits..................................................24
5.5 Further Assurances.......................................24
5.6 Associated Agreements....................................24
5.7 No Default...............................................24
5.8 Compliance with Laws.....................................24
5.9 Supplemental Information.................................24
5.10 [Reserved]...............................................25
5.11 [Reserved]...............................................25
5.12 Transitional Services....................................25
5.13 [Reserved]...............................................25
5.14 Employees................................................25
5.15 Amended Disclosure Schedule..............................25
5.16 Insurance................................................26
5.17 Lenders' Consent.........................................26
5.18 Vehicular Titles.........................................26
5.19 UCC Termination Statements...............................26
5.20 Real Estate Conveyance Documents and Lease Assignments...26
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ARTICLE VI
COVENANTS OF INVESTOR
6.1 Cooperation by Investor..................................26
6.2 Preservation of Books and Records........................27
6.3 Employees................................................27
ARTICLE VII
CONDITIONS TO INVESTOR'S OBLIGATIONS
7.1 Representations, Warranties and Covenants of the Company
and the Associated Subsidiaries.........................28
7.2 Consents.................................................28
7.3 No Prohibitions..........................................28
7.4 Closing Documents........................................28
7.5 Opinion of Counsel.......................................29
7.6 Financing................................................29
7.7 [Reserved]...............................................30
7.8 Like Kind Exchange.......................................30
7.9 Lender...................................................30
ARTICLE VIII
CONDITIONS TO THE COMPANY'S OBLIGATIONS
8.1 Representations, Warranties and Covenants of Investor....31
8.2 Consents.................................................31
8.3 No Prohibitions..........................................31
8.4 Closing Documents........................................31
8.5 Opinion of Counsel.......................................32
8.6 Lenders' Consent.........................................32
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination..............................................32
9.2 Effect on Obligations....................................32
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ARTICLE X
EMPLOYEE MATTERS
10.1 Transferred Employees....................................33
10.2 Employee Benefits........................................33
10.3 Severance Claims.........................................34
10.4 WARN Act Liability.......................................34
10.5 Undue Hardship to the Investor...........................34
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
11.1 Survival.................................................35
11.2 Indemnification by the Company and the Associated
Subsidiaries...........................................35
11.3 Indemnification by CNCO and the Investor.................36
11.4 Matters Involving Third Parties..........................36
11.5 Environmental Remedies...................................38
ARTICLE XII
MISCELLANEOUS
12.1 Expenses.................................................38
12.2 Exclusive Agreement; No Third-Party Beneficiaries........39
12.3 Governing Law; Consent to Jurisdiction...................39
12.4 Successors and Assigns...................................39
12.5 Publicity................................................40
12.6 Severability.............................................40
12.7 Refunds..................................................40
12.8 Notices..................................................40
12.9 Counterparts.............................................41
12.10 Interpretation...........................................41
12.11 Amendment................................................42
12.12 Extension; Waiver........................................42
12.13 Captions.................................................42
12.14 Further Assurances.......................................42
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ARTICLE XIII
LIMITED GUARANTEE OF GREEN EQUITY INVESTORS II, L.P.
13.1 Limited Guarantee........................................43
EXHIBITS
Exhibit A List of Community Newspapers
Exhibit 1.1(b) Retained Assets
Exhibit 3.6 Financial Statements
Exhibit 4.5-1 Commitment and Highly Confident Letters
Exhibit 4.5-2 Alternative Commitment Letter
Exhibit 5.12 Transitional Services Agreement
Exhibit 5.14 Employees
Exhibit 7.4(a) Form of Xxxx of Sale, Assignment and Assumption
Exhibit 7.4(b) Form of Trademark and Trade Name Assignment
Exhibit 7.4(c) Non-Competition Agreement between the Company and CNCO
Exhibit 7.5-1 Form of Opinion of Cravath, Swaine & Xxxxx
Exhibit 7.5-2 Form of Opinion of General Counsel of Xxxxxxxxx
Exhibit 7.8 Like Kind Exchange Agreement
Exhibit 8.5 Form of Opinion of Xxxxx, Xxxxx & Xxxxx
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DISCLOSURE SCHEDULE
Schedule 3.1(a) Jurisdictional Qualification
Schedule 3.3 Consents
Schedule 3.4 Conflicts
Schedule 3.5 Noncompliance with Laws
Schedule 3.7 Certain Changes or Events
Schedule 3.8(a) Encumbrances on Title to Assets
Schedule 3.8(b) Exceptions to Sufficiency of Assets
Schedule 3.9 Patents and Trademark Rights
Schedule 3.10(a) Commitments Future Payments in Excess of $250,000
Schedule 3.10(b) Commitments for Restricting Business Practices
Schedule 3.10(c) Commitments for the Borrowing of Money
Schedule 3.10(d) Collective Bargaining Agreements
Schedule 3.10(e) Commitments for the Use of Patent and Trademark Rights
Schedule 3.10(f) Joint Ventures, Partnerships and Similar Agreements
Schedule 3.10(g) Commitments Relating to Employment or with Employees,
Officers, Directors or Shareholders
Schedule 3.10(h) Brokerage or Finder's Agreements
Schedule 3.10(i) Acquisition or Divestiture Agreements
Schedule 3.10(j) Other Material Commitments
Schedule 3.11 Litigation
Schedule 3.13 Benefit Plans
Schedule 3.15 Undisclosed Liabilities
Schedule 3.17 Labor Matters
Schedule 3.18 Real Property
Schedule 3.19 Real Property Leases
Schedule 3.20(a) Environmental Permits, Licenses or Authorizations
Schedule 3.20(b) Environmental Material Non-Compliance
Schedule 3.20(c) Environmental Actions
Schedule 3.20(d) Hazardous Materials
Schedule 3.22 Agreements with Affiliates Since September 30, 1997
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INDEX OF TERMS
1998 Cash Disbursements.....................................................8
1998 Cash Position Adjustment...............................................8
1998 Final Cash Position....................................................8
1998 Gross Cash ..........................................................8
1998 Net Cash Position......................................................8
1998 Period ..........................................................8
Accountant's Certificate....................................................9
Adjustment ..........................................................9
Agreement ..........................................................1
AP-91 ..........................................................1
APAC-90 ..........................................................1
APAC-95 ..........................................................1
APC-Illinois .........................................................30
Asset Purchase Agreement....................................................1
Assets ..........................................................2
Associated Agreements......................................................25
Associated Subsidiaries.....................................................1
Assumed Contracts ..........................................................3
Assumed Liabilities.........................................................5
Benefit Plans .........................................................17
Books and Records .........................................................27
Bulk Sales Laws .........................................................20
Business ..........................................................1
Claim Notice .........................................................37
Closing .........................................................11
Closing Date .........................................................11
CNCO ..........................................................1
CNCO Damages .........................................................35
CNCO Indemnitees .........................................................35
COBRA .........................................................33
Commitments .........................................................16
Company ..........................................................1
Company Damages .........................................................36
Company Indemnitees........................................................36
Consents .........................................................22
Current Asset Calculation...................................................9
Deductible .........................................................36
Direct Claim .........................................................37
Disclosure Schedule........................................................11
Effective Date ..........................................................8
Employees .........................................................33
Encumbrances ..........................................................4
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Environmental Law ..........................................................7
Environmental Tests........................................................38
ERISA .........................................................17
Estimated 1998 net Cash Position............................................8
Exchangor .........................................................30
Financial Statements.......................................................14
GAAP ..........................................................9
GEI II .........................................................43
Government Authority........................................................3
Greater than 120-Day Receivables............................................9
Guarantor ..........................................................1
Hazardous Materials........................................................19
HSR Act .........................................................12
Improvements ..........................................................2
Indemnifying Party.........................................................36
Investor ..........................................................1
Leased Real Property........................................................2
Lenders Consent .........................................................26
Like Kind Exchange.........................................................30
Like Kind Exchange Agreement...............................................30
Litigation .........................................................17
Marks ..........................................................1
Material .........................................................15
Material Adverse Effect....................................................12
Net Current Assets..........................................................9
Net Liabilities ..........................................................9
Owned Real Property.........................................................2
Patent and Trademark Rights................................................15
Permits .........................................................13
Permitted Encumbrances......................................................4
Receivables Notice..........................................................9
Retained Assets ..........................................................4
Retained Business ..........................................................4
Retained Liabilities........................................................6
Supplemental Commitment Letter.............................................30
Tax .........................................................17
Taxes .........................................................17
Third Party Claim .........................................................36
Trade Names ..........................................................1
Trademark and Trade Name Assignments.......................................28
Transfer Date .........................................................33
Transitional Service Agreement.............................................25
Transitional Services......................................................25
WARN Act .........................................................18
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
November 21, 1997, is by and among Liberty Group Publishing, Inc., a Delaware
corporation (the "Investor"), Liberty Group Operating, Inc., a Delaware
corporation and a wholly owned subsidiary of the Investor, ("CNCO"; the term
CNCO shall include subsidiaries of CNCO unless the context otherwise provides),
Xxxxxxxxx International Inc., a Delaware corporation (the "Company"), APAC- 90
INC., a Delaware corporation and an indirect wholly owned subsidiary of the
Company ("APAC- 90"; the term APAC-90 shall include subsidiaries of APAC-90
unless the context otherwise provides), American Publishing (1991) Inc., a
Delaware corporation and an indirect wholly owned subsidiary of the Company
("AP-91"; the term AP-91 shall include subsidiaries of AP-91 unless the context
otherwise provides), and APAC-95 INC., a Delaware corporation and an indirect
wholly owned subsidiary of the Company ("APAC-95"; the term APAC-95 shall
include subsidiaries of APAC-95 unless the context otherwise provides) (APAC-90
and each of its subsidiaries, AP-91 and each of its subsidiaries, and APAC-95
and each of its subsidiaries are collectively referred to herein as the
"Associated Subsidiaries", as such term is further explained in Section 3.1)
and, for the limited purposes described herein, Green Equity Investors II, L.P.,
a Delaware limited partnership (the "Guarantor").
W I T N E S S E T H:
WHEREAS, the Associated Subsidiaries are in the business of
publishing, marketing and distributing certain community newspapers as further
identified in Exhibit A hereto and operating printing plants associated
therewith (the "Business"; the term Business expressly excludes the assets which
the Investor or an Affiliate (as defined in Section 3.22) of the Investor will
receive pursuant to the Like Kind Exchange (as defined in Section 7.8);
WHEREAS, the Investor wishes to cause CNCO to purchase the
assets constituting the business.
NOW, THEREFORE, in consideration of the promises and of the
respective representations, warranties, covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
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ARTICLE I
TRANSFER OF ASSETS AND CONSIDERATION
1.1 Transfer of Assets.
(a) Acquired Assets. Subject to the terms and conditions
hereof, the Company and the Associated Subsidiaries agree to sell to CNCO, and
the Investor agrees to cause CNCO to purchase from the Company and the
Associated Subsidiaries, at the Closing (as defined in Section 2.1) all of the
right, title and interest of the Company and the Associated Subsidiaries in and
to the Business and all properties, assets and rights of every nature, kind and
description of the Company and the Associated Subsidiaries used or held for use
primarily in connection with the Business wherever located (collectively, other
than the Retained Assets (as defined in Section 1.1(b) hereof), the "Assets"),
including the following:
(i) all of the rights of the Company or any Associated
Subsidiary to prepare, produce, publish, print, sell and/or distribute,
as the case may be, the community newspapers and other publications
which constitute the Business, together with the goodwill of or
relating to the Business;
(ii) all of the real property owned by the Company or any
Associated Subsidiary and primarily used in the operation of the
Business (the "Owned Real Property"), which Owned Real Property is
listed on Schedule 3.18 to the Disclosure Schedule (as defined in
Section 3.1(a)), and all of the buildings, fixtures and improvements
(the "Improvements") located in, on and under the Owned Real Property;
(iii) all of the rights of the Company or any Associated
Subsidiary in any real property leased or subleased by the Company or
the Associated Subsidiaries and used primarily in the operation of the
Business (the "Leased Real Property"), which Leased Real Property is
listed on Schedule 3.19 to the Disclosure Schedule, and all of the
Improvements located in, on and under the Leased Real Property to the
extent provided in the lease or sublease;
(iv) all of the materials, raw materials (including paper),
supplies, work in progress and other inventory owned by the Company or
any Associated Subsidiary and to the extent used or held for use in the
operation of the Business;
(v) all rights of the Company or any Associated Subsidiary to
fixed and other tangible personal property, whether owned or leased,
including furniture, equipment, computers and related items, fixtures,
machinery and tools owned by the Company or any Associated Subsidiary
and primarily used in the operation of the Business;
(vi) all rights, subscription rights, obligations and benefits
of contracts, licenses (whether the Company or any Associated
Subsidiary is a licensee or licensor) or
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arrangements of the Company or any Associated Subsidiary primarily
relating to the Business and the Assets (collectively, the "Assumed
Contracts"), including the items listed on Schedules 3.10(a) through
(j) of the Disclosure Schedule;
(vii) all files, books and records of the Company or any
Associated Subsidiary dating back at least five full fiscal years from
the date of the Closing primarily relating to the Business (but not
minute books and corporate governance records of the Company and the
Associated Subsidiaries) which are not physically located at the Owned
Real Property or the Leased Real Property and all files, books and
records of the Business which are physically located at the Owned Real
Property or the Leased Real Property, including financial statements
and records, advertising space reservations, advertising insertion
orders, promotional materials, all available records of current and
former advertisers in the newspapers and other publications which
comprise the Business or relating to the Business; provided that the
Company shall retain copies of all such files, books and records;
(viii) all credits, prepaid costs and expenses, deposits and
retentions held by third parties under leases, licenses, contracts and
other arrangements, in each case to the extent relating to the
Business;
(ix) all current assets (except for cash and cash
equivalents), but specifically including accounts receivable; provided
that following the Effective Date (as defined in Section 2.1) CNCO
shall have the right to assign certain accounts receivable to the
Company in accordance with the terms of Section 1.3(g) of this
Agreement;
(x) all subscription, distribution, circulation and mailing
lists relating primarily to the Business and all records and data
relating to such lists;
(xi) any available editorial and photographic morgues and any
available back issues of the newspapers and other publications which
comprise the Business;
(xii) all registered United States and foreign patents,
trademarks, service marks, trade names, mastheads, copyrights and
applications therefore set forth on Schedule 3.9 of the Disclosure
Schedule (including rights to xxx for and remedies against present and
future infringements thereof and rights of priority and protection of
interests) and the goodwill and going concern value related thereto;
(xiii) all licenses and permits of any government or state (or
any subdivision thereof), whether domestic or foreign, or any agency,
authority, bureau, commission, department or similar body or
instrumentality thereof, or any governmental court or tribunal,
federal, state and local ("Government Authority"), to the extent they
are transferable, relating primarily to the Business or the Assets;
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(xiv) all guaranties, warranties, indemnities and similar
rights in favor of the Company or any Associated Subsidiary to the
extent related to the Assets or the Business; and
(xv) all rights of the Company or any Associated Subsidiary
under any provision or covenant of any contract, agreement or
understanding in favor of the Company or any Associated Subsidiary or
their Affiliates to the extent relating to the Business limiting the
ability of any party to sell any products or services, engage in any
line of business or compete with or to obtain products or services from
any person and any causes of action, lawsuits, claims and demands
available to the Company or any Associated Subsidiary in respect of the
foregoing whether arising before or after the Closing.
The Assets shall be transferred free and clear of all liens,
easements, licenses, possessory rights, sales contracts, building and use
restrictions, reservations and limitations, encumbrances, security interests,
charges, pledges, mortgages, deeds of trust, deed to secure debt, liabilities,
debts, options or, to the best knowledge of the Company and the Associated
Subsidiaries, any other adverse claims, restrictions or third party rights of
any kind and nature whatsoever (the "Encumbrances"), except for the following
(the "Permitted Encumbrances"): (i) liens for current Taxes not yet due and
payable, (ii) the encumbrances disclosed on Schedule 3.8(a) of the Disclosure
Schedule, (iii) mechanics', carriers', workmen's, repairmen's or other like
liens arising or incurred in the ordinary course of business, liens arising
under original purchase price conditional sales contracts and equipment leases
with third parties entered into in the ordinary course of business, and which
are routinely and regularly extinguished by payment of the charges to which they
relate and which do not, individually or in the aggregate, materially impair the
continued use and operation of the assets to which they relate in the Business,
taken as a whole, as presently conducted or (iv) other imperfections of title or
encumbrances, if any, which do not, individually or in the aggregate, materially
impair the continued use and operation of the assets to which they relate in the
Business, taken as a whole, as presently conducted.
(b) Retained Assets. Except as set forth in Section 1.2(a),
the Associated Subsidiaries shall retain the real and personal property and
other assets of the Associated Subsidiaries or any of their Affiliates (as
defined in Section 3.22) that relate primarily to the businesses of the
Associated Subsidiaries or any of their Affiliates other than the Business (the
"Retained Business") and not primarily related to the Business or that relate
primarily to the Retained Liabilities (collectively, the "Retained Assets"),
including:
(i) all bank accounts and cash and cash equivalents of the
Associated Subsidiaries;
(ii) all rights, claims and credits of the Associated
Subsidiaries to the extent relating to any other Retained Asset or any
Retained Liability (as defined in Section 1.2(b)), including any such
items arising under insurance policies, and all guarantees, warranties,
indemnities and similar rights in favor of the Associated Subsidiaries
or any of their Affiliates in respect of any other Retained Asset or
any Retained Liability;
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(iii) [Reserved]
(iv) all rights of the Company and the Associated Subsidiaries
and their Affiliates under this Agreement, the Transitional Services
Agreement (as defined in Section 5.12 ), the Non-Competition Agreement
(as defined in Section 7.4) and the other agreements and instruments
executed and delivered in connection with this Agreement;
(v) all documents prepared in connection with the sale of the
Business and the Assets to CNCO, exclusive of documents prepared in the
ordinary course of business in connection with the operation of the
Business;
(vi) all financial and Tax records relating to the Business
that form part of the Company's or the Associated Subsidiaries' (or any
of their Affiliates') general ledger and all other files, books and
records not referred to in Section 1.1(a)(vii) which the Company or the
Associated Subsidiaries or any of their respective Affiliates have in
their possession; provided that upon reasonable request by CNCO, CNCO
shall be provided with copies of the portions of such records that
reasonably relate to the Business (other than copies of the Company's
consolidated, combined or unitary income Tax returns, provided that
copies of back up for such returns may reasonably be requested by
CNCO); and
(vii) the Retained Assets described in Exhibit 1.1(b).
1.2 Assumption of Liabilities.
(a) Liabilities Assumed. On the Closing Date, CNCO will assume and
agree to pay, perform and discharge as and when due the liabilities and
obligations, whether fixed, absolute or contingent, matured or unmatured, (the
"Assumed Liabilities") relating to the Business as the same exist on the Closing
Date which are specified below (provided, that in no event shall the Assumed
Liabilities include any Retained Liabilities, and CNCO shall assume no other
liabilities whatsoever of the Associated Subsidiaries or their Affiliates):
(i) all accounts payable and trade obligations to the extent
relating to the Business, including those which are owed to the
Associated Subsidiaries or their Affiliates which were incurred in the
ordinary course of business;
(ii) all prepaid subscription and advertising obligations to
the extent relating to the Business;
(iii) all liabilities and obligations arising from commitments
(in the form of issued purchase orders or otherwise) to purchase or
acquire inventory, supplies or services to the extent relating to the
Business and reflected on a balance sheet of the Business as of the
Closing Date as accounts payable or accrued expenses;
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(iv) all liabilities and obligations under existing licenses,
permits, authorizations, leases or contracts which are to be assigned
to CNCO hereunder other than liabilities or obligations for breaches or
defaults that occurred prior to the Closing;
(v) all liabilities or obligations for accrued but unpaid
vacation pay, sick pay and holiday pay for Employees (as defined in
Section 10.1) to the extent such pay is reflected in the Net
Liabilities (as defined in Section 1.3(f)) of the Business as of the
Effective Date; and
(vi) [Reserved]
(vii) all liabilities, other than Retained Liabilities
(including Tax (as defined in Section 3.14) liabilities), which are
reflected in the balance sheet included in the Financial Statements
dated as of September 30, 1997 provided pursuant to Section 3.6 (except
to the extent discharged prior to the Closing Date) or incurred by the
Business since the date of such balance sheet not in breach of any
representation or covenant in this Agreement and in the ordinary course
of business which are of the type that would be reflected in a balance
sheet prepared in conformity with GAAP and consistent with the
Financial Statements.
(b) No Other Liabilities Assumed. Notwithstanding anything to the
contrary contained herein, except as provided in Section 1.2(a), the parties
agree that CNCO has not agreed to pay, shall not assume and shall not have any
liability or obligation with respect to, the following liabilities and
obligations (collectively, the "Retained Liabilities"):
(i) any liability or obligation for any Tax of any kind
(including income, payroll, personnel, property, bulk transfer, sales,
use, ad valorem or franchise Taxes or assessments) owed prior to or at
Closing, or which may thereafter become due, to any foreign, federal,
state, local or other taxing authority which liability relates to any
transaction or period prior to or upon the Closing (including as a
result of Treasury Regulation Section 1.1502-6(a) or any similar
provision under state or local law);
(ii) any liability or obligation relating to, resulting from
or arising out of workers' compensation claims resulting from any
injury, disease or disability which injury, disease or disability
occurred prior to Closing (whether or not any such claim was filed
prior to the Closing);
(iii) any liability or obligation relating to, resulting from
or arising out of any violation of law (whether known or unknown) or
license, which violation occurred on or prior to the Closing Date;
(iv) any liability relating to the Owned Real Property or
Leased Real Property, or relating to discharges of hazardous substances
in violation of or giving rise to liability pursuant to any
Environmental Law (as defined below) by the Business, the basis for
which liability occurred or existed prior to the Closing, including any
investigation and remediation
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liabilities to the extent arising under standards established by any
and all foreign, federal, state or local laws, rules, orders,
regulations, consent decrees, settlement agreements, injunctions,
statutes or requirements imposed by any governmental authority relating
to or concerning protection of the environment and natural resource
damages, including surface water, soil, air and ground water
("Environmental Law") as enacted or enforced on or prior to the Closing
Date;
(v) any liability or obligation for severance, redundancy,
termination, payment in lieu of notice, indemnity or other payments
resulting from the transactions contemplated by this Agreement or
arising prior to the Transfer Date and any liability or obligation
arising prior to the Transfer Date to or with respect to any employee
or any employee matters, including any employee benefit plan, other
than those which are expressly assumed by CNCO, pursuant to Section
10.1;
(vi) any liability or obligation of or incurred by the Company
or its Affiliates to the extent related to the Retained Assets or not
arising from the Business;
(vii) any liability or obligation under licenses, permits,
authorizations, leases or contracts which are not assigned to CNCO
hereunder;
(viii) any liability or obligation for medical, dental and
disability benefits and any other welfare benefit, whether insured or
self-insured, incurred or existing at any time on or prior to the
Transfer Date, for current or past employees of the Business;
(ix) all liability of the Associated Subsidiaries and their
Affiliates or former Affiliates arising from indebtedness, including
guaranty and similar obligations, for borrowed money or long-term debt,
except as provided in Section 1.2(a);
(x) any liability or obligation relating to or resulting from
breach of contract or tort claims where the event giving rise to such
claim occurred prior to the Closing Date;
(xi) any other liability or obligation of the Company or the
Associated Subsidiaries whatsoever not expressly assumed by CNCO
hereunder;
(xii) liabilities for officers and directors of the Company
and the Associated Subsidiaries with respect to pre-Closing conduct;
(xiii) any liability or obligation for any intercompany notes
of the Company or any Associated Subsidiaries; and
(xiv) liability for travel vouchers or cash of $4,000 for each
publisher who exceeded budgeted gross operating profits for 1997 by
10%.
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1.3 Consideration. The consideration for the transfer of the Assets
described in Section 1.1(a) from the Associated Subsidiaries to CNCO shall be as
follows:
(a) Cash Purchase Price. The Investor will cause CNCO to pay a cash
purchase price of $233,765,884 for the Assets payable to the Associated
Subsidiaries.
(b) Assumption of Assumed Liabilities. CNCO shall assume and agree to
pay as they shall become due or discharge the Assumed Liabilities as described
in Section 1.2(a) hereof.
(c) [Reserved].
(d) Interest. At the Closing the Investor or CNCO will pay the Company
interest on $233,765,884 for the period from January 1, 1998 through the Closing
Date at a rate equal to (i) the 30-day Treasury xxxx rate in effect on December
31, 1997 multiplied by (ii) a fraction the numerator of which shall be the
number of days from January 1, 1998 through the Closing Date and the denominator
of which shall be 365.
(e) Determination of 1998 Net Cash Position; Payment of 1998 Estimated
Net Cash.
(i) During the period from December 31, 1997 (the "Effective
Date") through the Closing Date (the "1998 Period"), the Company shall
cause the Associated Subsidiaries to maintain financial records showing
all cash and cash equivalents received by or on behalf of the Business
during the 1998 Period (the "1998 Gross Cash") and all amounts of cash
or cash equivalents used to discharge accounts payable and other
obligations of the Business in the ordinary course consistent with past
practice, but excluding (w) interest on indebtedness for borrowed
money, (x) intercompany payments, but excluding management fees charged
at 1.6% of revenue for the 1998 Period, (y) fees and expense relating
to the transactions contemplated by this Agreement and the Associated
Agreements, and (z) income Taxes, but excluding income Taxes for the
1998 Period (the "1998 Cash Disbursements"). The excess, if any, of the
1998 Gross Cash over the 1998 Cash Disbursements shall be the "1998 Net
Cash Position."
(ii) At the Closing, the Company shall pay or cause to be paid
to CNCO, by wire transfer of immediately available funds (or by
intrabank transfer, if practicable), an amount equal to an estimate
determined in good faith by the Company of the 1998 Net Cash Position
(the "Estimated 1998 Net Cash Position").
(iii) Within 60 days following the Closing, the Accounting
Firm (as defined in Section 1.3(f)) shall (x) determine (1) the amount
of the 1998 Net Cash Position (as so determined, the "1998 Final Cash
Position") and (2) the 1998 Final Cash Position minus the 1998
Estimated Cash Position (the "1998 Cash Position Adjustment", which may
be positive or negative) and (y) deliver a letter (the "1998 Cash
Certification") (1) setting forth the calculation of the 1998 Cash
Position Adjustment and its components and (2) certifying that such
calculations were made in compliance with this Section 1.3(e). Such
determinations
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and calculations will be conclusive absent manifest error. If the 1998
Cash Position Adjustment is a positive number, the Company shall pay
such amount to CNCO within three (3) business days of delivery of the
1998 Cash Certification. If the 1998 Cash Position Adjustment is a
negative number, CNCO shall pay an amount equal to the absolute value
of such number to the Company within three (3) business days of
delivery of the 1998 Cash Certification. All payments pursuant to this
Section 1.3(e) shall be made by wire transfer of immediately available
funds (or by interbank transfer, if practicable).
(f) Working Capital Adjustment. Within 60 days following the Closing,
KPMG Peat Marwick LLP or such other firm of independent public accountants
mutually agreed by the Investor and the Company (the "Accounting Firm") shall
(i) on a basis consistent with U.S. generally accepted accounting principles as
applied in the Financial Statements (as defined in Section 3.6) ("GAAP") (x)
determine the Net Current Assets (as defined below) and the Net Liabilities (as
defined below) of the Business as of the Effective Date (the "Current Asset
Calculation") and (y) determine the amount of the Adjustment (as defined below),
if any, and (ii) deliver a letter (the "Accountant's Certificate") (x) setting
forth the calculation of the Adjustment and its components and (y) certifying
that each of such calculations was made in compliance with this Section 1.3(f)
Such determinations and calculations shall be conclusive absent manifest error.
If the Adjustment is a positive number in excess of $1,000,000, CNCO shall pay
such excess to the Company within three (3) business days following delivery of
the Accountant's Certificate. If the Adjustment is a negative number, the
absolute value of which is greater than $1,000,000, the Company shall pay such
excess to CNCO within three (3) business days following delivery of the
Accountant's Certificate. All payments pursuant to this Section 1.3(f) shall be
by wire transfer of immediately available funds (or by interbank transfer, if
applicable).
For purposes of this Section 1.3(f),
(1) "Net Current Assets" shall mean current assets
determined in a manner consistent with GAAP, but excluding (i)
cash and cash equivalents, (ii) current and deferred Taxes and
(iii) any other Retained Assets.
(2) "Net Liabilities" shall mean liabilities
determined in a manner consistent with GAAP, but excluding (i)
current and deferred Tax liabilities and (ii) any other
Retained Liabilities.
(3) The "Adjustment" means the amount (whether
positive or negative) equal to Net Current Assets minus Net
Liabilities.
(g) Uncollected Accounts Receivable. Within 135 days after the
Effective Date, CNCO shall have the right to (i) notify the Company in writing
(the "Receivables Notice") of the dollar amounts of the accounts receivable of
the Business existing on the Effective Date that have not been collected by CNCO
by the date of such notice and which are more than 120 days past due as of the
date of such notice (the "Greater than 120-Day Receivables") and (ii) at its
option, assign to the Company 100% of the then-outstanding Greater than 120-Day
Receivables. If so assigned, the
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Company shall purchase the Greater than 120-Day Receivables for a price equal to
(x) the face amount of the Greater than 120-Day Receivables less (y) the full
amount of the reserve for receivables reflected in the Net Current Assets, plus
(z) interest on (x) minus (y) accrued from the Effective Date at a rate equal to
the 30-day Treasury xxxx rate in effect on the Effective Date, payable by wire
transfer of immediately available funds to (or by interbank transfer, if
applicable) CNCO within 3 business days following receipt of the Receivables
Notice. In determining the amount collected with regard to any account
receivable, all amounts received from any obligor shall be allocated to the
receivable specified by such obligor, or if not specified, to the receivables of
such obligor in the order in which such receivables arose. From and after the
Closing, CNCO shall continue collecting accounts receivable in all material
respects in accordance with the past practice of the Business prior to the
Closing Date and shall provide the Company reasonable access to review all
information relating to the foregoing, including all write-offs. From and after
the date CNCO exercises its option to assign the Greater than 120-Day
Receivables to the Company, CNCO shall continue collecting such Greater than
120-Day Receivables on behalf of the Company for a reasonable fee to be agreed
upon by the parties in proportion to the services rendered.
(h) Pro Forma Calculation. Notwithstanding anything to the contrary
contained in this Agreement or the Transfer Agreement (as defined in Section
7.8), no payments shall be made under Sections 1.3(e), 1.3(f) or 1.3(g) of this
Agreement unless such payment would be required to be made if the determinations
and calculations required by such sections are made on a pro forma basis as if
the Business as defined in this Agreement and the Business as defined in the
Transfer Agreement were treated as a single business (subject to a single
$1,000,000 threshold for the purposes of calculating the Adjustment pursuant to
Section 1.3(f) of this Agreement and the comparable provision of the Transfer
Agreement), and in such event the portion of such payment to be made pursuant to
this Agreement shall be equal to 265/309ths of such payment, and the balance of
such payment shall be made pursuant to the Transfer Agreement.
(i) Purchase Price Allocation. The purchase price for the Assets
(including the Assumed Liabilities) shall be allocated among the Assets in
accordance with Schedule 1.3(i), to be prepared by the Investor and delivered to
the Company within 180 days after the Closing Date. Such allocation shall be
subject to the Company's consent, such consent not to be unreasonably withheld.
Following the Closing, the Investor and the Company, in connection with their
respective U.S. federal, state and local income Tax returns and other filings
(including, without limitation Internal Revenue Service Form 8594), shall not
take any position inconsistent with such allocation. Any adjustment to the
purchase price shall be allocated as provided by Temp. Treas. Reg. Section
1.1060-1T(f). For purposes of this Section 1.3(i), the withholding by the
Company of its consent to a proposed allocation of purchase price to an asset or
class of assets shall be deemed to be reasonable if, within 30 days after
receiving a copy of Schedule 1.3(i), the Company provides to the Investor a
written notice setting forth its proposed allocation of purchase price to such
asset or class of assets, and such proposed allocation differs by more than 25%
from the amount allocated on Schedule 1.3(i) to such asset or class of assets,
but compliance with this sentence shall not be necessary for such withholding of
consent by the Company to be deemed reasonable. The parties shall negotiate in
good faith to timely resolve any differences regarding such allocation.
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(j) Proration of Taxes. All real estate, personal property and ad
valorem Taxes relating to the Assets which shall have accrued and become payable
prior to the Closing Date shall be paid by the Company. All such Taxes which
shall be accrued but unpaid shall be prorated to the Closing Date. In connection
with such proration of Taxes, in the event that actual Tax figures are not
available at the Closing Date, proration of Taxes shall be based upon the actual
Taxes for the preceding year for which actual Tax figures are available, and
re-prorated when actual Tax figures become available. The amount due one party
as a result of such proration shall be paid to the other party at the Closing,
and the amount due one party as a result of a re-proration of Taxes for a taxing
jurisdiction shall be paid to such party within 30 days after actual Tax figures
become available for such taxing jurisdiction.
ARTICLE II
CLOSING
2.1 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall be held at the offices of Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 commencing at 9:00 a.m., Chicago time,
on January 30, 1998 or as soon as practicable thereafter after the satisfaction
or waiver of the conditions to closing set forth in Article VII and Article VIII
of this Agreement, or at such other place, time or date as the Investor and the
Company may agree (the "Closing Date").
2.2 Payments. All payments hereunder shall be in U.S. dollars, and
shall be made no later than 12:00 noon on the Closing Date by wire transfer of
immediately available funds (or interbank transfer, if applicable) to an account
or accounts of the Company, CNCO or the Investor, as applicable, at a bank or
banks specified by the Company, CNCO or the Investor, as applicable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company and the Associated Subsidiaries represent and warrant to
the Investor and CNCO as follows:
3.1 Organization; Capitalization; Ownership; Charter and Bylaws, Etc..
(a) Organization and Good Standing. Section 3.1(a) of the disclosure schedule
delivered by the Company to the Investor herewith (the "Disclosure Schedule")
sets forth a complete list of the subsidiaries of the Company through which the
Business is conducted, together with the subsidiaries owning the stock of such
subsidiaries. All such subsidiaries are included in the term "Associated
Subsidiaries" as defined in the preamble. Each of the Company and each
Associated Subsidiary is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation. Each of the Company and each
Associated
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Subsidiary has ll requisite corporate or limited liability company power and
authority to own, operate and lease the properties and assets it currently owns,
operates or leases and to carry on its business as it is currently conducted.
Each of the Company and each Associated Subsidiary is duly licensed or qualified
to do business as a foreign corporation or limited liability company and is in
good standing in all jurisdictions in which the character of the properties and
assets owned or leased by it or the nature of the business conducted by it
requires it to be so licensed or qualified and except where the failure so to
qualify would not, individually or in the aggregate, have or would not
reasonably be expected to have a Material Adverse Effect. Section 3.1(a) of the
Disclosure Schedule contains a complete list of all jurisdictions in which the
Company and each Associated Subsidiary are so qualified. The Company is the
direct or indirect beneficial and record holder of 100% of the capital stock of
the Associated Subsidiaries. "Material Adverse Effect" shall mean any event,
condition or circumstance which has or would reasonably be expected to have a
material adverse effect on the Business or on the properties, assets,
liabilities, results of operations or financial condition of the Business taken
as a whole.
3.2 Corporate Authority and Approval. Each of the Company and each
Associated Subsidiary has all requisite corporate power and authority to
execute, deliver and perform this Agreement and the Associated Agreements (as
defined in Section 5.12) and to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance of this Agreement and the
Associated Agreements by the Company and each Associated Subsidiary and the
consummation by the Company and each Associated Subsidiary of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate and action on the part of the Company and the Associated Subsidiaries.
Each of this Agreement and the Associated Agreements constitutes the valid and
binding obligation of each of the Company and each Associated Subsidiary, to the
extent they are parties thereto, enforceable against the Company and each
Associated Subsidiary, to the extent they are parties thereto, in accordance
with its terms, except to the extent such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws relating to creditors' rights generally and to general
principles of equity (regardless of whether enforcement is considered in the
proceeding in equity or at law).
3.3 Consents. Except as set forth in Section 3.3 of the Disclosure
Schedule, no consent, approval or authorization of, or exemption by or with
respect to the Company or any of the Associated Subsidiaries, or filing with,
notice to or permit from any court or any federal, state, local, foreign or
other governmental authority or other person, other than pursuant to the
Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the "HSR Act"), is required in
connection with the execution, delivery and performance by the Company or each
Associated Subsidiary of this Agreement and the Associated Agreements or the
taking by them of any other action contemplated hereby, excluding, however,
consents, approvals, authorizations, exemptions and filings, if any, which the
Investor is required to obtain or make.
3.4 No Conflicts. Except as set forth in Section 3.4 of the Disclosure
Schedule, the execution, delivery and performance by the Company and each
Associated Subsidiary of this
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Agreement and the Associated Agreements and all other instruments, agreements,
certificates and documents contemplated hereby and the consummation by the
Company and each Associated Subsidiary of the transactions contemplated hereby
and thereby will not, with or without the giving of notice or the lapse of time,
or both, subject to obtaining any required consents referred to in Section 3.3,
(i) violate or conflict with any provision of the charter, by-laws or other
governing documents of the Company or any of the Associated Subsidiaries, (ii)
violate or conflict with any law, statute, rule, regulation, order, judgment or
decree applicable to or binding on the Company or any of the Associated
Subsidiaries, or any of their respective properties or assets, or by which any
of them is bound or (iii) conflict with or result in the breach of, or
constitute a default under, or result in their termination, cancellation or
acceleration (whether after the giving of notice or the lapse of time or both)
of any right or obligation of the Company or any of the Associated Subsidiaries
under, any commitment or agreement reflecting obligations of the Company or any
of the Associated Subsidiaries, or loss of a material benefit under or result in
the creation of any Encumbrance upon any of the assets of the Company or any of
the Associated Subsidiaries, except (in the case of (ii) and (iii) only) for
violations, conflicts, breaches, defaults, terminations, cancellations,
accelerations or Encumbrances which, individually or in the aggregate, would not
have, and would not reasonably be expected to have, a Material Adverse Effect or
a material adverse effect on the reasonably expected benefits to the Investor of
the transactions contemplated hereunder.
3.5 Compliance with Laws. Except as set forth in Section 3.5 of the
Disclosure Schedule, the Business as it is presently conducted and as it will be
conducted at the Closing is and will be in compliance with all applicable
federal, state local and foreign laws, rules and regulations currently in
effect, including, without limitation, those relating to equal employment
opportunity practices and exports and imports from or to any jurisdiction, and
all orders, judgments and decrees but excluding those relating to environmental
matters (which are covered in Section 3.20 below) and except for failures to
comply which, individually or in the aggregate, do not have and would reasonably
not be expected to have a Material Adverse Effect. Except as disclosed in
Section 3.5 of the Disclosure Schedule, neither the Company nor any of the
Associated Subsidiaries has received notice from any governmental regulatory or
law enforcement authority of any allegation that its business or operations, as
currently conducted or as it will be conducted on the Closing Date, are not in
compliance with applicable law and regulations, or of any investigation or
administrative proceeding to determine such compliance, except for any such
notice, investigation or proceeding as to which there is no reasonable
likelihood of a Material Adverse Effect. Except for those relating to
environmental matters (which are covered in Section 3.20 below) and except as
disclosed in Section 3.5 of the Disclosure Schedule, each of the Company and the
Associated Subsidiaries has all governmental permits, licenses and
authorizations, approvals, exemptions, certificates or similar instruments or
documents ("Permits") necessary for the conduct of the Business as presently
conducted and for the lawful operation of the Business except where the failure
to have such Permits does not individually or in the aggregate have and would
reasonably not be expected to have, a Material Adverse Effect. Other than as
disclosed in Section 3.5 of the Disclosure Schedule, all such Permits will be in
full force and effect at the time of the Closing and will not be subject to
forfeiture, revocation, limitation or restriction as a result of the
transactions contemplated hereby except where
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the failure to have such Permits at the time of the Closing does not
individually or in the aggregate have and would reasonably not be expected to
have a Material Adverse Effect.
3.6 Financial Statements. True and complete copies of the (i) audited
financial statements of the Business as at December 31, 1995, December 31, 1996
and September 30, 1997 and (ii) unaudited financial statements of the Business
(including for this purpose the business relating to the Relinquished Property)
as at September 30, 1996, (collectively, the "Financial Statements") are
attached hereto as Exhibit 3.6. The Financial Statements present fairly the
financial position and results of operations and cash flow of the Business
(including for this purpose the business relating to the Relinquished Property)
as of the respective dates indicated and for the respective periods then ended
in conformity with GAAP and regulations of the Securities and Exchange
Commission, except that the interim financial statements do not contain all of
the footnote disclosure required by GAAP. "Relinquished Property" means the
assets acquired by the Investor pursuant to the Transfer Agreement.
3.7 Absence of Certain Changes or Events. Except as set forth in
Section 3.7 of the Disclosure Schedule and except as set forth in the Financial
Statements, since September 30, 1997 there have been no events, and the Business
has not suffered any changes, damage, destruction or casualty loss, which
individually or in the aggregate have had or could reasonably be expected to
have a Material Adverse Effect. Except as listed on Section 3.7 of the
Disclosure Schedule, since September 30, 1997, the Business has been conducted
in the ordinary course consistent with past practice. Since September 30, 1997,
except as disclosed in Section 3.7 of the Disclosure Schedule, the Business has
not:
(i) changed its accounting methods, systems, policies,
principles or practices, except as required by law, GAAP or generally
accepted accounting principles applicable to the Company or any of the
Associated Subsidiaries;
(ii) established or increased any bonus, insurance, severance,
deferred compensation, pension, profit sharing or other employee
benefit plan or otherwise increased the compensation payable or to
become payable to any officer, director, employee, agent or consultant
of the Company or any of the Associated Subsidiaries, except as
permitted by Section 5.14 herein;
(iii) made any borrowings, incurred any debt (other than trade
payables in the ordinary course of business and consistent with past
practice), or assumed, guaranteed, endorsed (except for the negotiation
or collection of negotiable instruments in the ordinary course of
business and consistent with past practice) or otherwise become liable
(whether directly, contingently or otherwise) for the obligations of
any other person, or made any payment or repayment in respect of any
indebtedness (other than trade payables and accrued expenses in the
ordinary course of business and consistent with past practice); or
(iv) failed to pursue the collection of receivables in the
ordinary course of business or failed to discharge its payables in the
ordinary course of business.
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3.8 Title to and Sufficiency of Assets. (a) The Associated Subsidiaries
have, and upon Closing will transfer to CNCO, good and marketable title to all
of the assets and properties (real and personal) constituting the Business, free
and clear of all Encumbrances, except (i) as set forth in Section 3.8(a) of the
Disclosure Schedule, (ii) for liens for Taxes not yet due or being contested in
good faith by appropriate proceedings and for which appropriate reserves are
being maintained in accordance with GAAP, (iii) mechanics', carriers',
workmen's, repairmen's or other like liens arising or incurred in the ordinary
course of business, liens arising under original purchase price conditional
sales contracts and equipment leases with third parties entered into in the
ordinary course of business, and which are routinely and regularly extinguished
by payment of the charges to which they relate and which do not, individually or
in the aggregate, materially impair the continued use and operation of the
assets to which they relate in the Business, taken as a whole, as presently
conducted and (iv) other imperfections of title or encumbrances, if any, which
do not, individually or in the aggregate, materially impair the continued use
and operation of the assets to which they relate in the Business, taken as a
whole, as presently conducted.
(b) Except as disclosed in Section 3.8(b) of the Disclosure Schedule,
the assets and properties of the Business used to operate the Business in the
manner in which it is currently conducted have been taken as a whole, reasonably
maintained and are in good operating condition and repair (with the exception of
normal wear and tear), and, to the best of the Company's knowledge, are, taken
as a whole, free from defects other than such minor defects as do not interfere
with the intended use thereof in the conduct of normal operations or adversely
affect the resale value thereof. The Associated Subsidiaries own or have a right
to use the assets, properties, rights, know-how, processes and ability which are
required for or currently used in connection with the operation of the Business
as it is presently conducted (the "Necessary Assets"), and, at the Closing the
Associate Subsidiaries shall transfer to CNCO the ownership or right to use the
Necessary Assets. Such assets, properties and rights, except for changes of
assets, properties and rights in the ordinary course of business, together with
the assets of the Company and the Associated Subsidiaries necessary for the
Transitional Services (as defined in Section 5.12), are sufficient to conduct
the Business substantially as it is currently being conducted.
3.9 Patents, Trademarks, Subscriber Lists. Section 3.9 of the
Disclosure Schedule sets forth a list, as of the date hereof, of all registered
United States and foreign patents, trademarks, service marks, trade names,
mastheads, copyrights and applications therefor which are used by the Company or
any of the Associated Subsidiaries in the conduct of the Business (the "Patent
and Trademark Rights") which are material as to the properties, assets,
liabilities, results of operations or financial condition of the Business as a
whole ("Material"). Except as set forth in Section 3.9 of the Disclosure
Schedule, (a) the Business owns or possesses adequate licenses or other valid
rights to use all Patent and Trademark Rights; (b) to the Company's knowledge,
the conduct of the Business as now being conducted does not conflict with any
valid patents, trademarks, trade names, mastheads or copyrights of others in any
way which, individually or in the aggregate, has or would reasonably be expected
to have a Material Adverse Effect; and (c) to the Company's knowledge, none of
the Patent and Trademark Rights is being infringed upon by others in any way
which, individually or in the aggregate, has or would reasonably be expected to
have a Material Adverse
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Effect. Except as set forth in Section 3.9 of the Disclosure Schedule, neither
the Company nor any of the Associated Subsidiaries has received any written
notice of infringement of any Patent or Trademark Right of any other person.
Except as set forth in Section 3.9 of the Disclosure Schedule, each of the
subscriber lists used in the Business is owned by the Company and the Associated
Subsidiaries and the Company and the Associated Subsidiaries have the exclusive
rights to use each of such subscriber lists.
3.10 Commitments. Section 3.10 of the Disclosure Schedule sets forth a
list of each contract, agreement (including, without limitation, non-compete
agreements) purchase or sale order, license, or other commitment or arrangement
(whether oral or in writing) with respect to the Business (other than solely
with respect to Retained Liabilities or Retained Assets) to which the Company or
any of the Associated Subsidiaries is a party or by which the Company or any of
the Associated Subsidiaries is bound (collectively, the "Commitments") (a) which
provides for future payments thereunder of more than $250,000 per year,
including, without limitation, all such Commitments which are (i) Commitments
for capital expenditures, (ii) distribution, dealer or sales agency Commitments,
(iii) Commitments for loans or advances or the incurrence of debt or guarantees
of third party obligations, and (iv) Commitments for the sale of any assets, but
excluding purchase orders or other Commitments for the purchase of raw
materials, components or supplies and sales orders or other Commitments for the
sale of finished goods entered into in the ordinary course of business; (b)
which restricts the kinds of businesses in which the Business may engage or the
geographical area in which the Business may be conducted; (c) which is an
indenture, mortgage, loan agreement or other Commitment for the borrowing of
money or a line of credit; (d) which is a collective bargaining agreement; (e)
which is a license (whether as licensor or licensee) or similar agreement
permitting the use of any Patent and Trademark Rights; (f) which is a joint
venture, partnership or similar agreement; (g) any Commitment which is an
employment agreement or severance agreement or bonus arrangement (either of an
ongoing or change of control nature) or Commitments of any kind with any
employee, officer or director of the Company or any Associated Subsidiary or any
of their respective Affiliates with respect to the Business, or any Commitment
of any kind with any shareholder of the Company or any Affiliate of any
shareholder of the Company; (h) which is a brokerage or finder's agreement; (i)
which is a stock purchase agreement, asset purchase agreement or other
acquisition or divestiture agreement other than the acquisition agreements
covering the acquisition of the Business by the Company so long as such
acquisition agreements do not provide for any current obligation or liability of
the Business that will be an Assumed Liability; or (j) which is not of the
foregoing type and is Material. Except as set forth in Section 3.10 of the
Disclosure Schedule, each of such Commitments, and each other Assumed Contract;
is a valid and binding obligation of the Company or the Associated Subsidiaries
and, to the knowledge of the Company, of the other parties to each of such
Commitments and each other Assumed Contract; each of such Commitments is
enforceable against the Company or an Associated Subsidiary, as applicable, in
accordance with its terms, except to the extent such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws relating to creditors' rights generally and to
general principles of equity (regardless of whether enforcement is considered in
the proceeding in equity or at law); and neither the Company nor the applicable
Associated Subsidiary nor, to the knowledge of the Company, any other party is
in violation or breach of or default under any Commitment except where such
violation, breach or
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default, individually or in the aggregate, do not have and would reasonably not
be expected to have a Material Adverse Effect.
3.11 Litigation. Except as set forth in Section 3.11 of the Disclosure
Schedule and except as pertains to environmental matters which are the subject
of Section 3.20 below, as of the date of this Agreement, there is no action,
claim, suit, investigation or other litigation or proceeding in any court or
before any governmental authority ("Litigation") pending or, to the Company's
knowledge, threatened against the Company or any of the Associated Subsidiaries,
or relating to the transactions contemplated by this Agreement. Except as set
forth in Section 3.11 of the Disclosure Schedule, neither the Company, any of
the Associated Subsidiaries nor the Business is subject to any outstanding
orders, rulings, judgments or decrees which if adversely determined to the
Company, any of the Associated Subsidiaries or the Business would have or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
3.12 [Reserved].
3.13 U.S. Employee Benefit Plans. Section 3.13 of the Disclosure
Schedule lists (a) (i) all employee benefit plans (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), (ii) all other retirement or deferred compensation plans, incentive
compensation plans, stock plans, unemployment compensation plans, vacation pay,
severance pay, bonus or benefit arrangements, insurance or hospitalization
programs and (iii) all other fringe benefit arrangements, in the case of each of
(ii) and (iii), for any current or former employee, director, consultant or
agent, whether pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an employee benefit plan and which
provides benefits to employees in the U.S. or which is subject to U.S. law and
(b) all employment (excluding offer letters to at-will employees) or consulting
agreements, which relate to or cover employees of the Business or with respect
to which the Business has any liability or contingent liability (the "Benefit
Plans"). The Investor has been supplied to the extent applicable true and
complete copies of all Benefit Plans and all contracts relating thereto, or to
the funding thereof, including, without limitation, all trust agreements,
insurance contracts, administration contracts, investment management agreements,
subscription and participation agreements, and recordkeeping agreements, each as
in effect on the date hereof. In the case of any Benefit Plan which is not in
written form, the Investor has been supplied with an accurate description of
such Benefit Plan as in effect on the date hereof.
3.14 Taxes. No material Tax liens have been filed on the Assets and no
material claims are being asserted that could reasonably result in a Tax lien on
the Assets. For purposes of this Agreement, (i) "Taxes" (including, with
correlative meaning, the term "Tax") shall mean all Taxes, charges, fees,
levies, penalties or other assessments imposed by any federal, state, local or
foreign taxing authority, including, but not limited to, income, gross receipts,
excise, property, sales, transfer, franchise, payroll, withholding, social
security and other Taxes, and shall include any interest, penalties or additions
attributable thereto.
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3.15 Undisclosed Liabilities. There are no liabilities of any nature,
whether accrued, absolute, contingent or otherwise, whether due or to become
due, with respect to the Business, other than (a) liabilities that are reflected
in the Financial Statements; (b) liabilities disclosed in Section 3.15 of the
Disclosure Schedule; (c) liabilities arising since September 30, 1997 in the
ordinary course of business; and (d) liabilities arising under this Agreement or
any of the Associated Agreements.
3.16 Fees. Except for the fees payable to Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, which are the sole responsibility of the Company,
neither the Company nor any Associated Subsidiary has paid or become obligated
to pay any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated hereby.
3.17 Labor Matters. Except as disclosed on Section 3.17 of the
Disclosure Schedule, neither the Company nor any of the Associated Subsidiaries
is party to any collective bargaining agreement with respect to the Business nor
does any labor union or collective bargaining agent represent any employees of
the Company or any of the Associated Subsidiaries who are employed with respect
to the Business. Except as set forth in Section 3.17 of the Disclosure Schedule,
there is no labor strike, slow-down or stoppage pending, or to the Company's
knowledge, threatened by the employees of the Company or any of the Associated
Subsidiaries, nor are there any pending grievances (or arbitrations thereon),
nor have any unfair labor practice charges with respect to the Company or any of
the Associated Subsidiaries been filed with the National Labor Relations Board,
nor have any written or oral grievances had the result of varying the terms or
the effect of the terms of any collective bargaining agreement to which the
Company or any Associated Subsidiary is a party which individually or in the
aggregate have or would reasonably be expected to have a Material Adverse
Effect. Except as set forth in Section 3.17 of the Disclosure Schedule, neither
the Company nor any Associated Subsidiary has taken any action within the ninety
(90) day period prior to the date hereof, and will not take such action prior to
Closing, which resulted in or which will result in an "employment loss" as such
term is defined in the Worker Adjustment and Retraining Notification Act, 29
U.S.C. Sections 2101-2109 (the "WARN Act"), with respect to any employee of the
Business. Except as set forth in Section 3.17 of the Disclosure Schedule, since
September 30, 1997, the Company and the Associated Subsidiaries have not
increased the compensation of employees of the Business, except for increases
for merit based promotions in the ordinary course of business.
3.18 Real Property. Set forth on Section 3.18 of the Disclosure
Schedule is a list of all Owned Real Property and the name of the record title
holder thereof. Except as set forth in Section 3.18 of the Disclosure Schedule,
none of the Owned Real Property violates any laws, rules, regulations, codes or
ordinances of any governmental authority or subdivision thereof in any material
respect. Except as set forth in Section 3.18 of the Disclosure Schedule, all of
the buildings, structures and appurtenances situated on the Owned Real Property
are in operating condition and in a state of maintenance and repair adequate for
the purposes for which such buildings, structures and appurtenances are
presently being used.
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3.19 Leases. Set forth on Section 3.19 of the Disclosure Schedule is a
list of all real property leases to which the Company or any Associated
Subsidiary is a party primarily used with respect to the Business and of which
any real property leased by the Company or any Associated Subsidiary is a party
primarily used with respect to the Business is the subject. Except as set forth
in Section 3.19 of the Disclosure Schedule, each such lease and all leases of
personal property are valid, binding and in full force and effect, and all rent
and other sums and charges currently payable under each such lease have been
paid, except where the failure to make such payments individually and in the
aggregate has not and would reasonably not be expected to have a Material
Adverse Effect. Except as set forth in Section 3.19 of the Disclosure Schedule,
since September 30, 1997, neither the Company nor any Associated Subsidiary has
received any notice of default under any such lease and no termination event or
condition which, with the giving of notice or the passage of time, or both,
could reasonably be expected to constitute a default thereunder on the part of
the Company or any of the Associated Subsidiaries or, to the Company's
knowledge, the lessor, exists under any such lease which individually or in the
aggregate have or would reasonably be expected to have a Material Adverse
Effect.
3.20 Environmental Matters. (a) Except as set forth on Section 3.20(a)
of the Disclosure Schedule, the Company or the Associated Subsidiaries have
obtained, and disclosed to the Investor, all applicable permits, licenses and
other authorizations which are required under any and all Environmental Laws
with respect to all real property owned, leased or operated with respect to the
Business.
(b) Except as set forth on Section 3.20(b) of the Disclosure Schedule,
the Business is in Material compliance with all terms and conditions of any such
required permits, licenses and authorizations, and all applicable requirements
of Environmental Laws with respect to all real property owned, leased or
operated with respect to the Business.
(c) Except as set forth on Section 3.20(c) of the Disclosure Schedule,
there is no judicial or administrative proceeding, investigation or remedial
action pending or to the Company's knowledge threatened against the Company or
any of the Associated Subsidiaries (A) alleging the violation of, noncompliance
with, or liability imposed under any Environmental Law or (B) alleging that they
are or may be responsible for any response, cleanup or corrective action under
any Environmental Law.
(d) Except as set forth on Section 3.20(d) of the Disclosure Schedule,
no generation, manufacture, storage, treatment, transportation, disposal or
release of Hazardous Materials (as defined below) is occurring or has occurred
so as to lead to liability under any Environmental Law, on or from any real
property owned, leased or operated by the Business or otherwise used in
connection with the Business; nor have any Hazardous Materials migrated from or
threatened to migrate from other properties upon or beneath any real property
owned, leased or operated by the Business or used with respect to the Business.
"Hazardous Materials" means any substance, waste, pollutant or contaminant
denominated or regulated as hazardous or toxic under any Environmental Law.
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3.21 Pre-Closing Liabilities. Upon Closing, CNCO will not have
liabilities of any nature whether accrued, absolute, contingent or otherwise,
whether due or to become due, relating to the Business which arise from any act,
matter, circumstance or omission relating to the period prior to the Closing
Date except for the Assumed Liabilities and liabilities of CNCO arising pursuant
to this Agreement and the Associated Agreements which are expressly intended to
be liabilities of CNCO from and after the Closing.
3.22 Agreements with Affiliates. Section 3.22 of the Disclosure
Schedule identifies all agreements, contracts and commitments entered into since
September 30, 1997 primarily related to the Business between any Associated
Subsidiary, on the one hand, and any Affiliate of the Company or any shareholder
of the Company, on the other hand, other than the Transitional Services
Agreement (as defined in Section 5.12). (As used herein the term "Affiliate"
shall have the meaning set forth in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended.)
3.23 Bulk Sales; Transfer Taxes. The Company and all Associated
Subsidiaries have complied with all applicable bulk sale statutes, other than
provisions of state or local Tax laws requiring notification of taxing
authorities regarding sales of assets ("Bulk Sales Laws") to, and has paid all
transfer Taxes with respect to the sale of the Business to, CNCO.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor and CNCO hereby represent and warrant to the Company as
follows:
4.1 Organization and Good Standing. Each of the Investor and CNCO is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.
4.2 Corporate Authority and Approval. Each of the Investor and CNCO has
all requisite corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Investor and CNCO and the
consummation by the Investor and CNCO of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the part of each
of the Investor and CNCO. This Agreement constitutes the valid and binding
obligation of the Investor enforceable against the Investor and CNCO in
accordance with its terms, except to the extent such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws relating to creditors' rights generally.
4.3 Consents. Except as set forth in Exhibit 4.3, no consent, approval
or authorization of, or exemption by, or filing with, notice to or permit from
any court or any federal, state, local, foreign or other governmental authority
or other person, other than pursuant to the HSR Act, is required in connection
with the execution, delivery and performance by the Investor and CNCO of
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this Agreement or the taking by it of any other action contemplated hereby,
excluding, however, consents, approvals, authorizations, exemptions and filings,
if any, which the Company is required to obtain or make.
4.4 No Conflicts. The execution, delivery and performance by the
Investor and CNCO of this Agreement and all other instruments, agreements,
certificates and documents contemplated hereby and the consummation by the
Investor and CNCO of the transactions contemplated hereby will not, with or
without the giving of notice or the lapse of time, or both, subject to obtaining
any required consents referred to in Section 4.3, (i) violate or conflict with
any provision of its charter or bylaws, (ii) violate or conflict with any law,
statute, rule, regulation, order, judgment or decree applicable to or binding on
the Investor or CNCO, or (iii) conflict with or result in the breach of any
agreement reflecting obligations of the Investor or CNCO for borrowed money, in
each case except for violations, conflicts or breaches which would not
individually or in the aggregate materially hinder or impair the consummation of
the transactions contemplated hereby.
4.5 Financing. The Investor has obtained commitment letters for bank
financing and a "highly confident" letter for Rule 144A financing in amounts
sufficient to complete the transactions. Copies of such letters are attached
hereto as Exhibit 4.5-1. However, if the financing as provided in Exhibit 4.5-1
is not available, the Investor has obtained commitment letters for alternative
financing in amounts sufficient to complete the transactions as set forth in
Exhibit 4.5-2. As of the date hereof, the Investor has no reason to believe that
any of the conditions to the financing will not be satisfied or that the
financing will not be available on a timely basis to complete the transactions
contemplated hereby.
4.6 Litigation. As of the date of this Agreement, there is no
Litigation pending or, to the Investor's or CNCO's knowledge, threatened against
the Investor or CNCO (a) with respect to which there is a reasonable likelihood
of a determination which, individually or in the aggregate, would materially
hinder or impair the consummation of the transactions contemplated hereby or (b)
which seeks to enjoin or obtain damages in respect of the consummation of the
transactions contemplated hereby.
ARTICLE V
COVENANTS OF THE COMPANY
The Company and the Associated Subsidiaries hereby covenant and agree
with the Investor as follows:
5.1 Cooperation by the Company.
(a) Consents and Authorizations. The Company shall, and shall cause its
Associated Subsidiaries to, use all commercially reasonable efforts and
cooperate with the Investor to secure all necessary consents, approvals,
authorizations, beneficial assignments, exemptions and waivers
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from third parties (collectively "Consents") as shall be required in order to
enable the Investor to effect the transactions contemplated hereby and to
prevent a breach of, a default under, or a termination, change in the terms or
conditions or modification of, any instrument, contract, lease, license or other
agreement to which the Company or any of the Associated Subsidiaries is a party
or by which any of them is bound, and shall otherwise use all commercially
reasonable efforts to cause the consummation of such transactions in accordance
with the terms and conditions hereof. Without limiting the provisions set forth
in this Section 5.1, the Company shall file, or cause to be filed, with the
Department of Justice and the Federal Trade Commission a Pre-Merger Notification
and Report Form pursuant to the HSR Act in respect of the transactions
contemplated hereby within ten business days of the date of this Agreement and
the Company shall use, and shall cause each of its Associated Subsidiaries and
Affiliates to use, all reasonable efforts to take or cause to be taken all
actions necessary, including to promptly and fully comply with any requests for
information from regulatory authorities, to obtain any consent, waiver, approval
or authorization relating to the HSR Act that is necessary to enable the parties
to consummate the transactions contemplated by this Agreement. Notwithstanding
the foregoing, no provision of this Agreement shall be construed as requiring
the Company or any of the Associated Subsidiaries to make payments of any kind
in order to obtain Consents.
(b) Nonassignable Contracts. Anything contained herein to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
Assumed Contract or other commitment or asset if an assignment or attempted
assignment of the same without the consent of the other party or parties thereto
would constitute a breach thereof or in any way impair the rights of the Company
or the Associated Subsidiaries thereunder. If any consent necessary to convey
any Asset is not obtained or if an attempted assignment would be ineffective or
would impair any party's rights under any such Assumed Contract or other Asset
so that CNCO would not receive all such rights, then (x) the Company shall use
commercially reasonable efforts (it being understood that such efforts shall not
include any requirement of the Company or the Associated Subsidiaries or CNCO or
the Investor to expend money or offer or grant any financial accommodation) to
provide or cause to be provided to CNCO, to the extent permitted by law, the
benefits of any such Assumed Contract or other Asset, and the Company shall
promptly pay or cause to be paid to CNCO, when received, all moneys received by
the Company or the Associated Subsidiaries with respect to any such Assumed
Contract or other Asset and (y) in consideration thereof CNCO shall pay, perform
and discharge on behalf of the Company and the Associated Subsidiaries debts,
liabilities, obligations and commitments thereunder in a timely manner and in
accordance with the terms thereof. In addition, the Company shall take such
other actions (at the expense of CNCO, as designated by the Investor) as may
reasonably be requested by the Investor in order to place CNCO, insofar as
reasonably possible, in the same position as if such Assumed Contract or other
Asset had been transferred as contemplated hereby and so all the benefits and
burdens relating thereto, including possession, use, risk of loss, potential for
gain and dominion, control and command are to inure to CNCO. If and when such
consents and approvals are obtained, the transfer of the applicable asset shall
be effected in accordance with the terms of this Agreement.
5.2 Conduct of the Business. (a) During the period from the date of
this Agreement to the Closing, except as otherwise contemplated by this
Agreement or as the Investor shall otherwise
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agree in writing in advance with respect to the Business, the Company covenants
and agrees to, and shall cause the Associated Subsidiaries to, (i) conduct the
Business in the ordinary and usual course in a manner consistent with past
practice, (ii) use their best efforts to preserve intact its present business
organization, (iii) make available to the Investor the services of the officers
and employees of the Business, (iv) preserve the good will and relationships
with customers, suppliers and others having business dealings with the Business
and (v) not take any action which would cause any of the representations and
warranties of the Company in Article III to be untrue or incorrect in any
material respect as of the Closing. From December 31, 1997 through the Closing
Date the Company will not, and will cause the Associated Subsidiaries not to (i)
declare, set aside or pay any dividends with respect to their respective capital
stock, or redeem or otherwise acquire any of their respective capital stock or
other securities (except for payments of cash dividends and redemptions for
cash) or (ii) pay any indebtedness or accounts payable except for indebtedness
or accounts payable of the Business to third parties in the ordinary course of
business (it being expressly understood that no payments will be made on any
intercompany notes).
(b) During the period from the date of this Agreement to the Closing,
except as otherwise provided for in this Agreement or Section 5.2 of the
Disclosure Schedule or as the Investor shall otherwise consent, the Company
covenants and agrees that, with respect to the Business, it shall not, and it
shall not permit its Associated Subsidiaries to:
(i) other than (a) sales of products in the ordinary course of
business, or (b) sales of obsolete plants and equipment in the ordinary
course of business, sell, transfer, convey, assign or otherwise dispose
of, or agree to sell, transfer, convey, assign or otherwise dispose of,
any of its assets or properties, or suffer or permit the creation of
any Encumbrance; other than in the ordinary course of business;
(ii) other than (a) Commitments to distributors in the
ordinary course of business consistent with past practice or (b) in the
ordinary course of business consistent with past practice (x) take any
action, or enter into or authorize any Commitment or transaction or (y)
terminate, modify, amend or otherwise alter any material terms or
provisions of any of its Commitments, except as expressly contemplated
by this Agreement;
(iii) abandon, sell, pledge, alter, amend or enter into any
licensing or contractual arrangements with respect to any Intellectual
Property Rights;
(iv) fail to pursue the collection of receivables in the
ordinary course of business, fail to discharge its payables in the
ordinary course of business or otherwise make any material change in
the course of dealing with customers or suppliers as a whole; or
(v) agree or commit to any of the foregoing.
5.3 Access. From the date hereof and prior to the Closing, the Company
shall provide the Investor with such information as the Investor may from time
to time reasonably request with respect to the Company and the Associated
Subsidiaries and the transactions contemplated by this
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Agreement, provide the Investor and its representatives reasonable access during
regular business hours and upon reasonable notice to the properties, books and
records of the Company, and the Associated Subsidiaries as the Investor may from
time to time reasonably request, provided that the Company shall not be
obligated to provide the Investor with any information which would violate (i)
any law, rule or regulation or term of any Commitment, or (ii) any
confidentiality provision of any contract, or if the provision thereof would
adversely affect the ability of the Company or the Associated Subsidiaries to
assert attorney client, attorney work product or other similar privilege.
Notwithstanding the foregoing, the Investor shall have the absolute right to
review any Commitment or other Assumed Contract.
5.4 Permits. The Company agrees to use commercially reasonable efforts
to assist the Investor in obtaining for CNCO all Permits required for the
Business to the extent they cannot be transferred to CNCO pursuant to this
Agreement. Notwithstanding the foregoing, the Investor shall have the right to
direct the Company to forego one or more applications for Permits. The Company
shall pay the costs of such Permits.
5.5 Further Assurances. At any time after the Closing Date, the Company
shall promptly execute, acknowledge and deliver any other assurances or
documents reasonably requested by the Investor and necessary for the Investor to
satisfy its obligations hereunder or obtain the benefits contemplated hereby.
5.6 Associated Agreements. The Company and the Associated Subsidiaries
covenant and agree that (i) they shall each enter into each of the Associated
Agreements (as defined in Section 5.12) in a timely matter, (ii) they shall each
perform their respective obligations pursuant to, and fully comply with the
terms of, the Associated Agreements; and (iii) that the Investor is a third
party beneficiary of the Associated Agreements; and (iv) that the Investor must
approve any and all changes to the forms of Associated Agreements that are
exhibits to this Agreement.
5.7 No Default. Neither the Company nor the Associated Subsidiaries
shall do any act or omit to do any act, or permit any act or omission to act,
which will cause a breach of any Commitment to which the Company or the
Associated Subsidiaries are a party or by which any of them or their assets are
bound or the Business are subject, the breach of which would have a Material
Adverse Effect.
5.8 Compliance with Laws. Through the close of business on the Closing
Date, the Company shall, and shall cause the Associated Subsidiaries to, comply
with all laws, statutes, regulations, rules and orders applicable to the
Business or the operation of the Company or the Associated Subsidiaries, except
where the failure to comply therewith, individually or in the aggregate, does
not have a Material Adverse Effect.
5.9 Supplemental Information. From time to time prior to the Closing,
the Company will promptly disclose in writing to the Investor any matter
hereafter arising which, if existing, occurring or known at the date of this
Agreement would have been required to be disclosed to the Investor or which
would render inaccurate any of the representations, warranties or statements set
forth in
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Article III hereof. No information provided to a party pursuant to this Section
shall be deemed to cure any breach of any representation, warranty or covenant
made in this Agreement.
5.10 [Reserved].
5.11 [Reserved].
5.12 Transitional Services. The Company agrees to provide transition
management and administrative services ("Transitional Services") to CNCO for a
period of up to 3 years pursuant to the Transitional Services Agreement
substantially in the form of Exhibit 5.12 (the "Transitional Service Agreement";
the Transitional Services Agreement, together with the Like Kind Exchange
Agreement (as defined in Section 7.8) and the Non-Competition Agreement (as
defined in Section 7.4), are collectively referred to as the "Associated
Agreements"). The Investor must approve any and all changes to the form of
Transitional Services Agreement that is an exhibit to this Agreement.
5.13 [Reserved]
5.14 Employees. The Company agrees to cooperate with the Investor with
respect to the Investor's making of employment offers to the employees of the
Business on behalf of CNCO pursuant to Section 10.1. Exhibit 5.14 sets forth a
list of employees of the Business. The Company will provide the Investor by
November 25, 1997 with a substituted Exhibit 5.14, setting forth a list of the
employees of the Business as of the date hereof. At the request of the Investor,
the Company will forward employment offers on behalf of the Investor to the
employees of the Business. The Company will permit the Investor to discuss
employment offers with employees of the Business during business hours and to
make presentations to the employees of the Business during business hours. The
Company agrees that beginning on the date of this Agreement until the second
anniversary of the Transfer Date (as defined in Section 10.1) neither it nor any
of its Affiliates or subsidiaries will directly or indirectly solicit any
employees of CNCO with respect to employment, without the prior written consent
of the Investor. However, nothing herein prevents the Company or its Affiliates
from placing any general advertisements for employees or from hiring any
employees of CNCO at any time who initiate employment discussions with the
Company or its Affiliates or who respond to any general advertisement for
employees placed by the Company or its Affiliates. During the period commencing
on the date hereof through the Closing Date, the Company and the Associated
Subsidiaries will not increase the compensation of employees of the Business,
except that any employee receiving a merit based promotion in the ordinary
course of business and resulting in increased responsibilities may receive a
raise appropriate to reflect such employee's new position. Bonuses paid to
employees of the Business for 1997 in amounts determined by the Company in the
ordinary course of business shall be reflected in Net Liabilities of the
Business for purposes of Section 1.3(f), and, unless CNCO consents otherwise,
CNCO will pay such bonuses after the Closing Date. CNCO consents to the payment
of such bonuses by the Company if the Closing Date is later than January 30,
1998.
5.15 Amended Disclosure Schedule. The Company may provide an amended
Disclosure Schedule, adding solely matters that have arisen since the date of
this Agreement, to the Investor
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48 hours prior to Closing; provided, however, that such amended Disclosure
Schedule shall not affect any representation or warranty of the Company or any
Associated Subsidiary or the obligation of the Company to satisfy the conditions
to Closing set forth in Section 7.1. The purpose of the additions to the
Disclosure Schedule shall solely be to provide the Investor with information for
purposes of Section 7.1 below about the extent, if any, to which the Company's
representations and warranties will not be true and correct as of the Closing,
and any failure of the Company's representations and warranties to be true and
correct as of the Closing disclosed by such additions shall not give rise to
liability after the Closing if the Closing occurs.
5.16 Insurance. The Company agrees to, and to cause the Associated
Subsidiaries to, maintain existing insurance on the Business for the benefit of
CNCO with respect to events happening on or prior to the Closing Date.
5.17 Lenders' Consent. The Company agrees to obtain by three weeks from
the date of execution hereof the consent of its lenders (the "Lenders' Consent")
to the extent necessary to effect the transactions contemplated by this
Agreement and the Associated Agreements.
5.18 Vehicular Titles. The Associated Subsidiaries agree to provide the
certificates transferring title to CNCO for all Assets which are motor vehicles
(the "Vehicular Titles") on the Closing Date.
5.19 UCC Termination Statements. The Associated Subsidiaries agree to
deliver to CNCO on the Closing Date UCC termination statements, releases of
mortgages and/or deeds of trust and any other documents as are necessary for the
discharge of all Encumbrances (other than Permitted Encumbrances) affecting the
Business or any other of the assets.
5.20 Real Estate Conveyance Documents and Lease Assignments. The
Associated Subsidiaries agree to deliver to CNCO on the Closing Date real estate
conveyance documents and lease assignments, as applicable, with respect to all
of the real property set forth on Sections 3.18 and 3.19, as applicable, of the
Disclosure Schedule, as amended as of the Closing Date.
ARTICLE VI
COVENANTS OF INVESTOR
The Investor hereby covenants and agrees with the Company:
6.1 Cooperation by Investor. From the date hereof and prior to the
Closing, the Investor shall use all reasonable efforts, and shall cooperate with
the Company, to secure all necessary consents, approvals, authorizations,
exemptions and waivers from third parties as shall be required in order to
enable the Company to effect the transactions contemplated hereby, and shall
otherwise use all reasonable efforts to cause the consummation of such
transactions in accordance with the terms and conditions hereof. Without
limiting the provisions set forth in this Section 6.1, the
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Investor shall file with the Department of Justice and the Federal Trade
Commission a Pre-Merger Notification and Report Form pursuant to the HSR Act in
respect of the transactions contemplated hereby within ten business days of the
date of this Agreement, and the Investor shall use, and shall cause each of its
Affiliates to use, all reasonable efforts to take or cause to be taken all
actions necessary, including to promptly and fully comply with any requests for
information from regulatory authorities, to obtain any consent, waiver, approval
or authorization relating to the HSR Act that is necessary to enable the parties
to consummate the transactions contemplated by this Agreement.
6.2 Preservation of Books and Records. For a period of (i) five years
from the Closing Date with respect to Books and Records (as defined below)
relating to litigation, Tax or environmental matters and (ii) three years from
the Closing Date with respect to Books and Records relating to all other
matters:
(i) The Investor shall not dispose of or destroy any of the
books and records of CNCO relating to periods prior to the Closing
("Books and Records") without first offering to turn over possession
thereof to the Company by written notice to the Company at least 90
days prior to the proposed date of such disposition or destruction.
(ii) The Investor shall allow the Company and its agents
access to all Books and Records on reasonable notice and at reasonable
times at the Investor's principal place of business or at any location
where any Books and Records are stored, and the Company shall have the
right, at their own expense, to make copies of any Books and Records;
provided, however, that any such access or copying shall be had or done
in such a manner so as not to unduly interfere with the normal conduct
of the Investor's business and provided that the Company shall maintain
the confidentiality of such Books and Records.
6.3 Employees. The Investor agrees that for the period beginning as of
the date hereof and ending on the second anniversary of the Transfer Date,
without the prior written consent of the Company, neither it nor CNCO shall
directly or indirectly solicit any employees of the Company with respect to
employment other than persons employed by the Business at the Transfer Date.
However, nothing herein prevents the Investor or CNCO from placing any general
advertisement for employees or from hiring any employees of the Company at any
time who initiate employment discussions with the Investor or CNCO or who
respond to any general advertisement for employees placed by CNCO or the
Investor.
ARTICLE VII
CONDITIONS TO INVESTOR'S OBLIGATIONS
The obligations of the Investor to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver,
where permissible) at or prior to the Closing of all of the following
conditions:
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7.1 Representations, Warranties and Covenants of the Company and the
Associated Subsidiaries. The Company and the Associated Subsidiaries shall have
complied in all material respects with each of its agreements and covenants
contained herein to be complied with on or prior to the Closing Date. All the
representations and warranties of the Company and the Associated Subsidiaries
set forth in this Agreement that are qualified as to materiality shall be true
and correct, and the representations and warranties of the Company and the
Associated Subsidiaries set forth in this Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of the date
of this Agreement, and as of the Closing Date (after giving effect to the
closings pursuant to each of the Associated Agreements) as though made on and as
of the Closing Date, with future tense references in Section 3.1 being deemed to
be present tense references as of the Closing Date, except that the accuracy of
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be determined as of such date; provided that
this condition shall not be unsatisfied unless it would be unsatisfied if the
representations and warranties of the Company and the Associated Subsidiaries in
this Agreement were deemed to refer to the Business as defined in this Agreement
and the "Business" as defined in the Transfer Agreement constituting a part of
the Like Kind Exchange Agreement, taken as a whole, and the Disclosure Schedule
is read to apply to such combination of both such Businesses. The Investor shall
have received a certificate executed by or on behalf of the Company and the
Associated Subsidiaries, dated as of the Closing Date, certifying as to the
fulfillment of the conditions set forth in this Section 7.1.
7.2 Consents. The applicable waiting period under the HSR Act shall
have expired or been terminated and all other consents, approvals,
authorizations, exemptions and waivers by, or filing with, notice to or permit
from governmental agencies or other persons that shall be required in order to
enable the Investor to consummate the transactions contemplated hereby shall
have been obtained (except for such consents, approvals, authorizations,
exemptions and waivers, filings, notices or permits, the absence of which would
not prohibit consummation of such transactions or render such consummation
illegal).
7.3 No Prohibitions. No statute, rule or regulation or order or decree
of any court or governmental body shall be in effect which prohibits the
Investor from consummating the transactions contemplated by this Agreement.
7.4 Closing Documents. In addition to the other documents expressly
referenced in this Article VII, the Company or its Affiliates shall have
delivered or caused to be delivered the following closing documents or payments
in form and substance satisfactory to the Investor:
(a) the Associated Subsidiaries shall have executed and delivered (i)
Xxxx of Sale, Assignment and Assumption substantially in the form of Exhibit
7.4(a) hereto and (ii) Trademark and Trade Name Assignments substantially in the
form of Exhibit 7.4(b) hereto (the "Trademark and Trade Name Assignments").
(b) American Publishing Management Services Inc. shall have executed
and delivered the Transitional Services Agreement;
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(c) the Company shall have executed and delivered a non-competition
agreement with CNCO substantially in the form of Exhibit 7.4(c) hereto (the
"Non-Competition Agreement);
(d) [Reserved];
(e) simultaneously with the Closing, the Company shall have paid to
CNCO an amount equal to the Estimated Net Cash Position;
(f) [Reserved];
(g) a copy of the resolution or resolutions duly adopted by the board
of directors of the Company and each Associated Subsidiary authorizing the
execution, delivery and performance of this Agreement and the Associated
Agreements and the transactions contemplated hereby and thereby, certified by
the Secretary or an Assistant Secretary of such entity;
(h) a certificate of the Secretary or an Assistant Secretary of the
Company and each Associated Subsidiary as to the incumbency and signatures of
the officers of each such entity executing this Agreement and the Associated
Agreements;
(i) certificates issued by the Secretary of State of the State of
Delaware, as of a recent date, as to the good standing of each of the Company
and each Associated Subsidiary;
(j) certificates issued by the Secretary of State of each jurisdiction
in which the Company and each Associated Subsidiary is licensed or qualified to
do business as a foreign corporation, as of a recent date, as to the good
standing of each such entity;
(k) copies of all governmental consents, approvals and filings which
have been obtained by the Company pursuant hereto; and
(l) such other documents relating to the transactions contemplated
hereby and under the Associated Agreements as the Investor or its counsel may
reasonably request.
7.5 Opinion of Counsel. The Investor shall have received an opinion of
Cravath, Swaine & Xxxxx, counsel for the Company, substantially in the form of
Exhibit 7.5-1 and the opinion of internal counsel of the Company in the form of
Exhibit 7.5-2.
7.6 Financing. The Investor shall have obtained (or the Company shall
have obtained for the benefit of the Investor) either (i) financing of $350
million to complete the transactions contemplated hereby and provide for working
capital for CNCO on substantially the terms set forth in the letters attached as
Exhibit 4.5-1 or terms which are more favorable to the Investor or (ii)
financing of $205 million to complete the transactions contemplated hereby and
provide for working capital for CNCO on substantially the terms set forth in the
letters attached as Exhibit 4.5-2 or terms which are more favorable to the
Investor (it being understood that (x) in the case of either (i) or (ii)
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the Investor may choose to finance a higher portion of the amounts needed to
complete the transactions contemplated hereby and provide for working capital
for CNCO than the amounts specified in (i) or (ii), as the case may be, but that
the inability to finance such higher amounts shall not cause a failure of the
condition to closing set forth in this Section 7.6 and (y) in any event, the
condition specified in this Section 7.6 will be satisfied if the financing
referred to in clause (ii) is available to the Investor). In connection with the
financing referred to in Exhibit 4.5-2, the Investor agrees (x) to cause the
notice required by paragraph 1 of the Supplemental Commitment Letter contained
in Exhibit 4.5-2 (the "Supplemental Commitment Letter") for that financing to be
given on a timely basis and (y) to cause the conditions specified in paragraph
3.b(2) of the Supplemental Commitment Letter to be satisfied, and further agrees
that the nonsatisfaction of the conditions specified in the foregoing clauses
(x) and (y) shall not be deemed to cause a failure of the condition specified in
this Section 7.6 to be satisfied. The Investor further agrees that, for purposes
of determining whether the condition in this Section 7.6 is satisfied, the
determination of whether paragraph 3b(1) of the Supplemental Commitment Letter
is satisfied shall take into account only (x) with respect to paragraph 3b(1)(i)
of the Supplemental Commitment Letter, the amounts required to be paid by the
Investor, CNCO or any Affiliate (at the Closing or at a later time in the
ordinary course) pursuant to the transactions contemplated by this Agreement and
the Associated Agreements, (y) with respect to paragraph 3b(1)(ii) of the
Supplemental Commitment Letter, indebtedness that is an Assumed Liability, and
(z) with respect to paragraph 3b(1)(iii) of the Supplemental Commitment Letter,
not more than $20 million of the fees, costs, expenses and other amounts payable
by the Investor, CNCO or any Affiliate in respect of the transactions
contemplated by this Agreement and the Associated Agreements or the financing
thereof or any services related thereto.
7.7 [Reserved].
7.8 Like Kind Exchange. Simultaneously with the Closing, the Investor
and a subsidiary of the Company will close a like kind exchange (the "Like Kind
Exchange") pursuant to a transfer agreement between American Publishing Company
of Illinois ("APC-Illinois") and the Investor (the "Transfer Agreement"), the
Exchange Agreement between APC-Illinois and Chicago Deferred Exchange
Corporation (the "Exchangor") and the Qualified Exchange Trust Agreement among
the Chicago Trust Company, the Exchangor and APC-Illinois substantially in the
form set forth in Exhibit 7.8 (collectively, the "Like Kind Exchange
Agreement"). The Investor must approve any and all changes to the form of any of
the components of the Like Kind Exchange Agreement that is an exhibit to this
Agreement.
7.9 Lenders' Consent. The Lenders' Consent shall have been received.
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ARTICLE VIII
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver,
where permissible) at or prior to the Closing of all of the following
conditions:
8.1 Representations, Warranties and Covenants of Investor. The Investor
shall have complied in all material respects with each of its agreements and
covenants contained herein to be complied with on or prior to the Closing Date.
All the representations and warranties of the Investor set forth in this
Agreement that are qualified as to materiality shall be true and correct, and
the representations and warranties of the Investor set forth in this Agreement
that are not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement, and as of the Closing Date as though
made on and as of the Closing Date, except that the accuracy of representations
and warranties that by their terms speak as of the date of this Agreement or
some other date shall be determined as of such date. The Company shall have
received a certificate executed by or on behalf of the Investor, dated as of the
Closing Date, certifying as to the fulfillment of the conditions set forth in
this Section 8.1.
8.2 Consents. The applicable waiting period under the HSR Act shall
have expired or been terminated and all other consents, approvals,
authorizations, exemptions by, or filing with, notice to or permit from
governmental agencies or other persons that shall be required in order to enable
the Company to consummate the transactions contemplated hereby shall have been
obtained (except for such consents, approvals, authorizations, exemptions,
filings, notices or permits, the absence of which would not prohibit
consummation of such transactions or render such consummation illegal).
8.3 No Prohibitions. No statute, rule or regulation or order or decree
of any court or governmental body shall be in effect which prohibits the Company
from consummating the transactions contemplated by this Agreement.
8.4 Closing Documents. In addition to the other documents expressly
referenced in this Article VIII, the Investor or CNCO shall have delivered the
following payments or closing documents in form and substance satisfactory to
the Company:
(a) simultaneously with the Closing, the Investor or CNCO shall have
made the cash payments required under Sections 1.3(a) and (d) and shall have
assumed the Assumed Liabilities;
(b) a copy of the resolution or resolutions duly adopted by the board
of directors of the Investor authorizing the execution, delivery and performance
of this Agreement and the Associated Agreements and the transactions
contemplated hereby and thereby;
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(c) CNCO shall have executed and delivered the Transitional Services
Agreement and the Non-Competition Agreement;
(d) a certificate of the Secretary, or an Assistant Secretary of the
Investor as to the incumbency and signatures of the officers executing the
Agreement;
(e) certificates issued by the Secretary of State of Delaware as to the
good standing of the Investor; and
(f) such other documents relating to the transactions contemplated
hereby or under the Associated Agreements as the Company or its counsel may
reasonably request.
8.5 Opinion of Counsel. The Company shall have received an opinion of
Xxxxx, Xxxxx & Xxxxx, counsel for the Investor, substantially in the form of
Exhibit 8.5.
8.6 Lenders' Consent. The Lenders' Consent shall have been received.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated by either party, by a
written notice to the other parties, prior to Closing:
(a) by the mutual written consent of the Company and the Investor;
(b) by either the Investor or the Company if the Closing shall not have
occurred on or before February 28, 1998; provided that this right to terminate
shall not be available to any party whose breach of this Agreement has been the
cause of, or resulted in, the Closing not occurring;
(c) by the Investor if the Lenders' Consent has not been received by
three weeks from the date of execution hereof.
9.2 Effect on Obligations. (a) Termination of this Agreement pursuant
to this Article IX shall terminate all rights and obligations of the parties
hereunder and none of the parties shall have any liability to the other party
hereunder, except that Article XII shall remain in effect, and provided that
neither anything herein nor the termination of this Agreement shall relieve any
party from liability for any breach of this Agreement prior to such termination.
(b) In the event of a termination by the Company or the Investor
pursuant to Section 9.1, written notice thereof shall forthwith be given to the
other party. In addition, the Investor shall return all documents and other
material received from the Company or the Associated Subsidiaries relating to
the transactions contemplated hereby, whether obtained before or after the
execution
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hereof, to the Company and shall destroy all analyses, notes, reports, and other
documents prepared in connection with the transactions contemplated by this
Agreement and shall deliver to the Company a certificate signed by an officer of
the Investor certifying as to such destruction.
ARTICLE X
EMPLOYEE MATTERS
10.1 Transferred Employees. Prior to the date on which employees of the
Business are transferred to CNCO (the "Transfer Date", which date shall be the
Closing Date or such later date as the parties shall mutually agree in
accordance with Section 10.3), CNCO shall offer employment to each employee of
the Business set forth on Exhibit 5.14 (other than any such employees whose
employment has been terminated prior to the Transfer Date) and each other person
so employed on the Transfer Date whose employment primarily relates to the
Business (the "Employees") on such terms and conditions (including salary and
benefit level) that are not materially less favorable (exclusive of any equity
incentive compensation provided by the Company), when taken in the aggregate to
the terms and conditions of the employee's employment with the Company or the
Associated Subsidiaries, as the case may be, immediately prior to the Transfer
Date. CNCO will give Employees credit for accrued but unpaid vacation pay, sick
pay and holiday pay to the extent such pay is reflected in the Net Liabilities
of the Business as of the Effective Date.
10.2 Employee Benefits. CNCO shall recognize each Employee's prior
service with the Company, the Associated Subsidiaries and all members of the
Company's controlled group within the meaning of Section 414(b), (c), (m), and
(o) of the Internal Revenue Code of 1986, as amended (the "Code") for all
purposes (other than benefit accrual under a defined benefit plan) under each
employee benefit plan, policy or arrangement of CNCO. The Company and the
Associated Subsidiaries shall retain, and be solely responsible for, all
benefits and compensation payable to or with respect to Employees, or other
employees of the Associated Subsidiaries, with respect to services performed,
and claims incurred, in each case, prior to the Closing Date under any welfare
plan, pension plan, deferred compensation plan, stock based plans, employee
benefit pension plans (as defined in ERISA) or any other plans, agreements,
policies or arrangements related to compensation, severance or other employee
benefits and all liabilities with respect to such plans, agreements, policies or
arrangements prior to the Closing Date. For purposes of this Section, disability
claims are incurred on the date on which the disability was incurred or, in the
case of a disability which is not incurred on a single, identifiable date, the
date on which the disability was diagnosed; medical and dental services are
incurred when an individual is provided with medical or dental care; death
benefit claims are incurred at the time of death of the insured notwithstanding
any other provision of any welfare benefit plan to the contrary. The Company and
the Associated Subsidiaries shall be responsible for all qualifying events under
Part 6 of Title I of ERISA and Section 4980B of the Code ("COBRA") and COBRA
claims incurred under the welfare plans of the Company and the Subsidiaries on
or before the Transfer Date.
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10.3 Severance Claims. The Company and the Associated Subsidiaries
shall be responsible for any claim of severance by a person who refuses CNCO's
offer of employment made in accordance with Section 10.1 hereof pursuant hereto.
CNCO shall be responsible for any claim of severance made by any person who
accepts such offer of employment, who becomes an employee of CNCO and whose
employment is thereafter terminated. CNCO shall reimburse the Company and the
Associated Subsidiaries for any payments made in respect of severance to any
person who does not accept CNCO's offer of employment pursuant hereto but who is
employed by CNCO or a subsidiary or Affiliate within one year after the Transfer
Date.
10.4 WARN Act Liability. The Company and the Associated Subsidiaries
shall be responsible for any claims or liabilities relating to the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101-2109 (the
"WARN Act") which arise in connection with the Business or the Employees prior
to the Closing Date (whether or not filed prior to the Closing Date) or arise as
a result of the transactions contemplated by this Agreement (exclusive of any
action taken by or on behalf of CNCO after the Closing).
10.5 Undue Hardship to the Investor. Notwithstanding anything to the
contrary herein, if taking the actions required pursuant to Section 10.1 prior
to the Closing Date, in the judgment of the Investor and the Company as mutually
and reasonably agreed, would be impracticable or would cause undue hardship to
CNCO, the Investor or any of their Affiliates or subsidiaries then (i)
compliance with Section 10.1 shall not be required on the Closing Date and (ii)
the Employees shall remain employees of the Company and its subsidiaries, as
applicable, until such date as it becomes practicable for CNCO to comply with
Section 10.1; provided that the Transfer Date may be no later than 90 days
following the Closing Date. Without duplication of any other provision of this
Agreement, if the Transfer Date is not the Closing Date, CNCO shall indemnify,
defend and hold harmless the Company and its subsidiaries, and their officers,
directors, employees, advisors, agents and representatives (except to the extent
any such person is an Employee, in which case this indemnification shall not
apply to such person) from and against any and all demands, claims, complaints,
actions or causes of action, suits, proceedings, investigations, arbitrations,
assessments, losses, settlements, Taxes, damages, liabilities, costs and
expenses, including interest, penalties and reasonable attorneys' and accounting
fees and disbursements (including, but not limited to, all administrative costs
and expenses incurred as a result of the Employees remaining employees of the
Company or its subsidiaries after the Closing Date) (including those relating to
the enforcement of this indemnity) related to Employees which arise between the
Closing Date and the Transfer Date as a result of the fact that the Transfer
Date was not the Closing Date; provided that CNCO shall not be required to make
any indemnification in connection with liabilities and obligations relating to
severance which arise prior to the Transfer Date or with respect to any Employee
to the extent he or she is not an employee of the Business between the Closing
Date and the Transfer Date. No deductible shall apply to CNCO's indemnification
obligation under this Section 10.5. Without limiting the foregoing, if the
Transfer Date is not the Closing Date, the Company shall deliver to CNCO as
promptly as practicable after the Transfer Date a statement itemizing all costs,
expenses and obligations of any kind whatsoever with respect to Employees,
including all compensation and benefits costs and Taxes related thereto but
specifically excluding severance costs and liabilities, incurred by the Company
and the Associated Subsidiaries between the Closing Date and the
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Transfer Date. CNCO shall pay the amount set forth in such statement, unless it
is disputed, to the Company in immediately available funds within three (3)
business days after receiving such statement. Disputes as to such amount shall
be resolved by the Accounting Firm.
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
11.1 Survival. All of the representations and warranties contained in
this Agreement or in any certificates delivered pursuant to this Agreement will
survive the Closing (except for Section 3.14, which shall not survive the
Closing) and continue in full force and effect (i) in the case of the
representations and warranties contained in Sections 3.1, 3.2, 3.8(a), 3.21, 4.1
and 4.2, indefinitely, (ii) in the case of representations and warranties
contained in Section 3.20 until the third anniversary of the Closing Date, and
(iii) in the case of any other representation or warranty contained in this
Agreement or in any certificate delivered pursuant to this Agreement, until
eighteen months following the Closing Date; provided, however, that if a written
claim for a breach of any representation or warranty is made before the
expiration thereof, such representation or warranty shall be deemed to survive
indefinitely for purposes of that claim. The covenants and agreements contained
in this Agreement or in any certificates delivered pursuant to this Agreement
shall survive the Closing and continue in full force and effect indefinitely
except for the covenants contained in Sections 5.2, 5.7 and 5.8, which shall
survive the Closing and remain in full force and effect until eighteen months
following the Closing Date.
11.2 Indemnification by the Company and the Associated Subsidiaries.
Subject to the limitations of this Section 11.2 and the conditions and
provisions of Section 11.4, the Company and the Associated Subsidiaries agree to
indemnify, defend and hold harmless the Investor, CNCO and their respective
officers, directors, employees, agents, advisors, representatives and Affiliates
(collectively, "CNCO Indemnitees") from and against any and all demands,
complaints, actions or causes of action, suits, proceedings, investigations,
arbitrations, assessments, losses, settlements, Taxes, claims, judgments,
damages, liabilities, costs and expenses, including interest, penalties,
reasonable attorneys' and accounting fees and disbursements and costs of
investigation (including those relating to the enforcement of this indemnity)
("CNCO Damages"), asserted against, imposed upon or incurred by any CNCO
Indemnitee, directly or indirectly, by reason of, relating to or resulting from
(i) any Retained Assets or Retained Liabilities, (ii) any nonfulfillment of any
agreement on the part of the Company or the Associated Subsidiaries contained
herein, or (iii) any breach of representation or warranty on the part of the
Company or the Associated Subsidiaries contained herein. Breaches are to be
determined for these purposes without regard to any materiality, Material or
Material Adverse Effect standard or qualifier set forth in any representation or
warranty, covenant or certificate; provided that such materiality, Material and
Material Adverse Effect qualifiers shall apply to (i) any obligation to list
matters on the Disclosure Schedule where the representation or warranty
specifies that only Material matters are to be so listed and (ii) Sections 3.7,
5.7 and 5.8. Notwithstanding the foregoing, the Company will not have any
obligation to indemnify the Investor from and against any CNCO Damages with
respect to breaches of representations and warranties or of the covenant set
forth in Section 5.2 except to the extent that
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CNCO Damages arising from any breaches of representations and warranties of this
Agreement and the Like Kind Exchange Agreement or of the covenants set forth in
Section 5.2 of this Agreement or the corresponding section of the Like Kind
Exchange Agreement, taken together, are equal to or are greater than $1,000,000
(the "Deductible"), whereupon the Company shall pay the Investor for all such
CNCO Damages in excess of the Deductible. The Deductible shall not apply except
as specifically provided in the preceding sentence, and the circumstances under
which the Deductible shall not apply include (w) breaches of Section 3.8(a), (x)
breaches of covenants or obligations hereunder other than Section 5.2, (y)
Retained Assets or Retained Liabilities or (z) adjustments pursuant to Section
1.3. Recovery pursuant to indemnification for Retained Liabilities shall be for
any and all CNCO Damages even if (i) the facts giving rise to such
indemnification may also give rise for a claim of breach of the representation
and warranties of this Agreement or the Like Kind Exchange Agreement or (ii)
facts relating to such Retained Liability appear on the Disclosure Schedule. In
addition to any indemnification of any CNCO Indemnitee pursuant to this Section
11.2, such CNCO Indemnitee shall be entitled to its rights and remedies pursuant
to this Agreement, and otherwise at law or in equity.
11.3 Indemnification by CNCO and the Investor. Subject to the
limitations of this Section 11.3 and the conditions and provisions of Section
11.4, CNCO and the Investor agree to indemnify, defend and hold harmless the
Company and the Associated Subsidiaries, and their officers, directors,
employees, agents, advisors, representatives and Affiliates (collectively,
"Company Indemnitees") from and against any and all demands, complaints, actions
or causes of action, suits, proceedings, investigations, arbitrations,
assessments, losses, settlements, Taxes, claims, judgments, damages,
liabilities, costs and expenses, including, but not limited to, interest,
penalties and reasonable attorneys' and accounting fees and disbursements and
costs of investigation (including those relating to the enforcement of this
indemnity) ("Company Damages"), asserted against, imposed upon or incurred by
any Company Indemnitee, directly or indirectly, by reason of, relating to or
resulting from (i) all liabilities and obligations of CNCO relating to or
arising out of the conduct of the Business or the use of the Assets following
the Closing or the Assumed Liabilities following the Closing or (ii)
nonfulfillment of any agreement on the part of the Investor or CNCO contained
herein. In addition to any indemnification of any Company Indemnitee pursuant to
this Section 11.3, such Company Indemnitee shall be entitled to its rights and
remedies pursuant to this Agreement, and otherwise at law or in equity.
11.4 Matters Involving Third Parties. The party or parties making a
claim for indemnification under this Article XI shall be for the purposes of
this Agreement referred to as the "Indemnified Party" and the party or parties
against whom such claims are asserted under this Article XI shall be, for the
purposes of this Agreement, referred to as the "Indemnifying Party". All claims
by any Indemnified Party under this Article XI shall be asserted and resolved as
follows:
(i) In the event that (x) any claim, demand or action is
asserted or instituted by any person other than the parties to this
Agreement or their Affiliates which could give rise to CNCO Damages or
Company Damages, as applicable, for which an Indemnifying Party could
be liable to an Indemnified Party under this Agreement (such claim or
demand or action, a "Third Party Claim" or (y) any Indemnified Party
under this Agreement shall have
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a claim to be indemnified by any Indemnifying Party under this
Agreement which does not involve a Third Party Claim (such claim, a
"Direct Claim"), the Indemnified Party shall with reasonable promptness
send to the Indemnifying Party a written notice specifying the nature
of such claim, demand or action and the amount or estimated amount
thereof, provided that a delay in notifying the Indemnifying Party
shall not relieve the Indemnifying Party of its obligations under this
Agreement except to the extent that (and only to the extent that) such
failure shall have caused the CNCO Damages or Company Damages, as
applicable, for which the Indemnifying Party is obligated to be greater
than such CNCO Damages or Company Damages, as applicable, would have
been had the Indemnified Party given the Indemnifying Party prompt
notice (which amount or estimated amount shall not be conclusive of the
final amount, if any, of such claim, demand or action) (a "Claim
Notice").
(ii) Except as provided below, in the event of a Third Party
Claim, the Indemnifying Party shall be entitled to control the defense
of such Third Party Claim and to appoint counsel of the Indemnifying
Party's choice at the expense of the Indemnifying Party to represent
the Indemnified Party and any others the Indemnifying Party may
reasonably designate in connection with such claim, demand or action
(in which case the Indemnifying Party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained
by any Indemnified Party except as set forth below); provided that such
counsel is reasonably acceptable to the Indemnified Party.
Notwithstanding an Indemnifying Party's election to appoint counsel to
represent an Indemnified Party in connection with a Third Party Claim,
an Indemnified Party shall have the right to participate in the defense
of such claim and to employ counsel of its choice for such purpose;
provided that the fees and expenses of such separate counsel shall be
borne by the Indemnified Party (except as provided below and except for
any fees and expenses of such separate counsel that are incurred prior
to the date the Indemnifying Party effectively assumes control of such
defense which, notwithstanding the foregoing, shall be borne by the
Indemnifying Party). If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and
its counsel in contesting any claim, demand or action which the
Indemnifying Party defends, or, if appropriate and related to the
claim, demand or action in question, in making any counterclaim against
the person asserting the Third Party Claim, or any cross-complaint
against any person. The Indemnifying Party shall not be entitled to
assume control of the defense of a Third Party Claim and shall pay the
reasonable fees and expenses of counsel retained by the Indemnified
Party (provided that such counsel is reasonably acceptable to the
Indemnifying Party) if (i) the claim for indemnification relates to or
arises in connection with any criminal proceeding, action, indictment,
allegation or investigation, (ii) an adverse determination with respect
to the action, lawsuit, investigation, proceeding or other claim giving
rise to such claim for indemnification would reasonably be likely to be
materially detrimental to the Indemnified Party's reputation or
business, (iii) the claim seeks an injunction or equitable relief
against the Indemnified Party or (iv) the claim involves liabilities
under environmental laws that require remedial action at facilities
that were transferred pursuant to this Agreement, in which case the
Indemnified Party shall have control and management authority over the
resolution of such claims, including hiring environmental consultants
and conducting environmental investigations and cleanups;
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provided that the Indemnified Party shall keep the Indemnifying Party
apprised of any major developments relating to any such environmental
claim and provided further that, in the case of any of (i) through (iv)
above, (x) the Indemnified Party shall not agree to any stipulation to
or the entry of a court order that adversely affects the Indemnifying
Party without the Indemnifying Party's consent and (y) the Indemnifying
Party shall have the right to retain counsel of its choice at its own
expense and participate in the defense of the Third Party Claim, in
which case the third sentence of this Section 11.4(ii) shall be fully
applicable. No Third Party Claim (regardless of whether the
Indemnifying Party has assumed control of such Third Party Claim or
such Third Party Claim falls into any of the categories set forth in
(i) through (iv) above) may be settled or compromised (i) by the
Indemnified Party without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed or
(ii) by the Indemnifying Party without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld or
delayed. In the event any Indemnified Party settles or compromises or
consents to the entry of any judgment with respect to any Third Party
Claim without the prior written consent of the Indemnifying Party, each
Indemnified Party shall be deemed to have waived all rights against the
Indemnifying Party for indemnification under this Article XI.
11.5 Environmental Remedies. The Investor shall not be entitled to
indemnification for a breach of Section 3.20 if the condition, event or
circumstance that gave rise to such breach was discovered as a result of a Phase
II or other intrusive environmental sampling, testing or investigation
(collectively, "Environmental Tests") at any of the facilities of the Business
that are transferred to CNCO except for Environmental Tests undertaken (i) to
respond to, investigate, or otherwise remediate environmental conditions that
could reasonably be expected to create an imminent and substantial endangerment
to the health, safety and welfare of the employees of CNCO, the public or the
environment; (ii) in response to an inquiry, request, claim or demand by a
governmental entity or (iii) in connection with a possible sale of all or part
of CNCO or its assets. For purposes of this Section 11.5, the Business shall
include the Relinquished Property.
ARTICLE XII
MISCELLANEOUS
12.1 Expenses. The Company, on the one hand, and the Investor, on the
other hand, shall pay all costs and expenses incurred by such party or on its
behalf in connection with this Agreement and the transactions contemplated
hereby, including without limiting the generality of the foregoing, fees and
expenses of its financial consultants, accountants and counsel. All excise,
sales, use, transfer (including real property transfer or gains), stamp,
documentary, filing recordation or other Taxes, if any, incident to the transfer
of the Assets to CNCO or which may be imposed or assessed as a result of the
transactions contemplated hereby and all of the expenses relating to obtaining
any governmental permits, licenses and authorizations, approvals, exemptions,
certificates or similar instruments or documents which are necessary for the
conduct of the Business immediately after the Closing Date shall be paid by the
Company; provided that the Investor shall pay all of the expenses
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relating to the qualification of CNCO to do business in such foreign
jurisdictions as are necessary or desirable for the conduct of the Business
immediately after the Closing Date.
12.2 Exclusive Agreement; No Third-Party Beneficiaries. This Agreement
(including the Disclosure Schedule and all Exhibits hereto) constitute the sole
understanding of the parties with respect to the subject matter hereof. Any
disclosure in the Disclosure Schedule shall expressly not be deemed to
constitute an admission by the Company or to otherwise imply that any such
matter is Material for the purposes of this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement, express
or implied, is intended to confer on any person other than the parties hereto or
their respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
12.3 Governing Law; Consent to Jurisdiction. This Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware
applicable to agreements made and to be performed wholly within such
jurisdiction. All disputes, litigation, proceedings or other legal actions by
any party to this Agreement in connection with or relating to this Agreement or
any matters described or contemplated in this Agreement shall be instituted in
the courts of the State of Delaware or of the United States sitting in the State
of Delaware. Each party to this Agreement irrevocably submits to the exclusive
jurisdiction of the courts of the State of Delaware and of the United States
sitting in the State of Delaware in connection with any such dispute,
litigation, action or proceeding arising out of or relating to this Agreement.
Each party to this Agreement will maintain at all times a duly appointed agent
in the State of Delaware for the service of any process or summons in connection
with any such dispute, litigation, action or proceeding brought in any such
court and, if its fails to maintain such an agent during any period, any such
process or summons may be served on it by mailing a copy of such process or
summons to it at its address set forth, and in the manner provided, in Section
12.8, with such service deemed effective on the fifteenth day after the date of
such mailing.
Each party to this Agreement irrevocably waives the right to a trial by
jury in connection with any matter arising out of this Agreement and, to the
fullest extent permitted by applicable law, any defense or objection it may now
or hereafter have to the laying of venue of any proceeding under this Agreement
brought in the courts of the State of Delaware or of the United States sitting
in the State of Delaware and any claim that any proceeding under this Agreement
brought in any such court has been brought in an inconvenient forum.
12.4 Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto; provided, however, that this Agreement may not be
assigned by the Company and may not be assigned by the Investor without the
prior written consent of the Company and any such assignment in violation of
this provision shall be null and void, except that the Investor may, at its
election, assign this Agreement to an Affiliate so long as (a) the
representations and warranties of the Investor made herein are equally true of
such assignee and (b) such assignment does not have any adverse consequences to
the Company or any of its Affiliates (including, without limitation, any adverse
Tax
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consequences or any adverse effect on the ability of the Company to timely
consummate the transactions contemplated hereby), but no such assignment of this
Agreement or any of the rights or obligations hereunder shall relieve the
Investor of any of its obligations under this Agreement. Such assignee shall
execute a counterpart of this Agreement agreeing to be bound by the provisions
hereof as "Investor," and agreeing to be jointly and severally liable with the
Investor and any other assignee for all of the obligations of the assignor
hereunder.
12.5 Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior
consent of the other party (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 United States or foreign securities exchange, in which case
the party required to make the release or announcement shall give the other
party notice in advance of such issuance.
12.6 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any adverse manner to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner so that the transactions
contemplated hereby are fulfilled to the greatest extent possible.
12.7 Refunds. The Company shall be entitled to any refunds or credits
of Taxes for any Taxable period (or portion thereof) ending on or prior to the
Closing Date. CNCO shall be entitled to any refunds or credits of Taxes for any
Taxable period (or portion thereof) beginning after the Closing Date.
12.8 Notices. Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party shall be in writing and
shall be given (and will be deemed to have been duly given upon receipt) by
delivery in person, by facsimile transmission, or by overnight courier or by
registered or certified mail, postage prepaid:
(a) If to the Company, to: Xxxxxxxxx International Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Vice President and General Counsel
Telecopy: (000) 000-0000
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with a copy to: Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Xx.
Telecopy: (000) 000-0000
and with a copy to: Xxxxxxxxx Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attention: Vice President and General Counsel
Telecopy: (000) 000-0000
(b) If to the Investor, to: Liberty Group Publishing, Inc.
c/o Xxxxxxx Xxxxx & Partners, L.P.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to: Xxxxxxx Xxxxx & Partners, L.P.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
and with a copy to: Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
or at such other address for a party as shall be specified by like
notice.
12.9 Counterparts. This Agreement 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 and the same agreement. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section, provided receipt of copies of such counterparts is confirmed.
12.10 Interpretation. For the purposes hereof: (i) words in the
singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender
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as the context requires; (ii) the terms "hereof," "herein," and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole (including all of the Schedules and Exhibits hereto)
and not to any particular provision of this Agreement, and Section, paragraph,
Exhibit and Schedule references are to the Sections, paragraphs, Exhibits and
Schedules to this Agreement unless otherwise specified; (iii) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless the context otherwise requires or unless
otherwise specified; (iv) the word "or" shall not be exclusive; and (v) this
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted.
12.11 Amendment. This Agreement may not be modified or amended except
by an instrument or instruments in writing signed by all parties hereto. Any
party hereto may, only by an instrument in writing, waive compliance by the
other party hereto with any term or provision hereof on the part of such other
party hereto to be performed or complied with. The waiver by any party hereto of
a breach of any term or provision hereof shall not be construed as a waiver of
any subsequent breach.
12.12 Extension; Waiver. At any time the parties may extend the time
for the performance of any of the obligations or other acts of the other party,
waive any inaccuracies in the representations and warranties contained in this
Agreement and waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument signed on
behalf of such party. The waiver by any party hereto of a breach of any
provision hereunder shall not operate to be construed as a waiver of any prior
or subsequent breach of the same or any other provision hereunder.
12.13 Captions. The Section and other headings contained in this
Agreement are inserted for convenience of reference only and will not affect the
meaning or interpretation of this Agreement. All references to Sections
contained herein mean Sections of this Agreement unless otherwise stated. All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms
12.14 Further Assurances. Following the Closing, CNCO, the Company and
each Associated Subsidiary shall each from time to time at the other's
reasonable request and without further consideration execute and deliver to the
other such additional instruments of transfer and conveyance and take such
action as may be reasonably requested in order better to assure, convey and
confirm to CNCO all of the Associated Subsidiaries' right, title, interest in
and all benefits of and to the Assets to be assigned, conveyed and transferred
hereunder.
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ARTICLE XIII
LIMITED GUARANTEE OF GREEN EQUITY INVESTORS II, L.P.
13.1 Limited Guarantee. Green Equity Investors II, L.P. ("GEI II"),
which shall be a party to this Agreement solely for purposes of this Section
13.1 and Section 12.3, guarantees, subject to the limitations provided below,
the obligations of the Investor under this Agreement and the Associated
Agreements to the extent that such obligations are to be performed on the
Closing Date; provided that GEI II's obligations hereunder shall be limited to
the payment of money not to exceed $150 million and shall terminate at the
Closing and provided further that GEI II's obligations hereunder shall be
further reduced to the extent GEI II makes payments under Section 21 of the
Transfer Agreement (it being understood that GEI II shall in no event be
responsible for more than $150 million in the aggregate under this Article XIII
and Section 21 of the Transfer Agreement). GEI II agrees to be bound by the
provisions of Section 12.3 of this Agreement with respect solely to its promises
in this Section 13.1.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
INVESTOR:
LIBERTY GROUP PUBLISHING, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Its:__________________________________
CNCO:
LIBERTY GROUP OPERATING, INC.
By: /s/ Xxxxxxx X. Annick
-----------------------------------
Its:__________________________________
COMPANY:
XXXXXXXXX INTERNATIONAL INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Its:__________________________________
APAC-90, INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Its:__________________________________
AMERICAN PUBLISHING (1991) INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Its:__________________________________
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APAC-95, INC.
By: /s/ X. X. Xxxxxxxx
----------------------------------
Its:_________________________________
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date hereof solely for the purposes evidencing its obligations pursuant to
Section 12.3 and Article XIII hereof.
GUARANTOR:
GREEN EQUITY INVESTORS II, L.P.
By: Grand Avenue Capital Partners, L.P.
its sole general partner
By: Grand Avenue Capital Corporation
its sole general partner
By: /s/ Xxxxxxx X. Annick
------------------------------------
Name: Xxxxxxx X. Annick
----------------------------------
Title: Vice President
---------------------------------
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EXHIBIT A
ALL OF XXXXXXXXX'X PUBLICATIONS AND PRINTING PRESSES
IN THE FOLLOWING LOCATIONS (OTHER THAN THOSE OWNED
BY AMERICAN PUBLISHING COMPANY OF ILLINOIS
AND THE ASSETS SET FORTH IN EXHIBIT 1.1(B))
CALIFORNIA MISSOURI ILLINOIS
Yreka Camdentown Xxxxxx
Mt. Xxxxxx Xxxxx Xxxxxxx
Xxxx St. Xxxxx Xxxxxxxxxxx
Waynesville Herrin
ARIZONA Xxxxxxxxxx Xxxxxx
Globe Neosho Murphysboro
Boonville West Frankfort
NEW YORK Brookfield Fairbury
Hornell Chillicothe Xxxxxxxxxx
Bath Kirksville Xxxxxx City
Dansville Macon Pontiac
Penn Xxx Xxxxxxxxx Gallatia
Tonawanda Mexico Ridgway
Canisteo Monroe City Shawneetown
Herkimer Osage Beach
Little Falls Carthage MICHIGAN
Catskill Malden Cheybogan
Saugerties Ionia
Wellsville MINNESOTA Sault Ste. Xxxxx
Canajoharie Crookston
ARKANSAS
PENNSYLVANIA KANSAS Heber Springs
Honesdale Leavenworth Xxxxxx
Xxxxx Xxxxxxxx Stuttgart
Xxxx Xxxxxxx Newport
Punxsutawney Derby
Ridgway El Dorado
St. Mary's XxXxxxxxx
Xxxxx
Xxxxxx IOWA
Titusville Xxxxxxx City
Xxxxxx
Waynesboro
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EXHIBIT 1.1(B)
RETAINED ASSETS
1. 4 Xxxx Community Press units stored at Little Falls, New York.
2. Upper former for Xxxx folder located at Tonawanda, New York.
3. The right to refunds of all Taxes described in Section 1.2(b)(i).
4. The names "Xxxxxxxxx" and "American Publishing Company" and all
derivatives thereof.
