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