EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
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This Agreement is made as of this 11th day of April, 1997, by and between
Liberty Fund, Inc., an Indiana nonprofit corporation ("Liberty Fund"), and
Central Newspapers, Inc., an Indiana corporation (the "Company").
Recitals
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A. The Liberty Fund is the record owner of 1,127,900 shares of the Class
A common stock of the Company and 190,000 Shares of Class B common stock which
Liberty Fund intends to convert to 19,000 shares of Class A common stock of the
Company (the "Shares").
B. The Estate of Xxxx Xxxxxxxx (the "Estate") is expected to distribute
1,242,600 Shares to the Liberty Fund on or before May 30, 1997.
C. The Company desires to purchase from the Liberty Fund and the Liberty
Fund desires to sell to the Company 763,167 Shares (the "Redeemed Shares").
D. The Liberty Fund desires for the Company to assist the Liberty Fund
and the Company desires to assist the Liberty Fund, in the sale and distribution
of substantially all of the Liberty Fund's remaining Shares (the "Secondary
Offering Shares") in an underwritten public offering (the "Secondary Offering"),
all as hereinafter more specifically provided herein.
Agreement
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NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and subject to and upon the terms and conditions hereinafter
set forth, it is hereby agreed as follows:
Article I
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Purchase of Redeemed Shares
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1.1. On or before May 30, 1997 (the "Closing Date"), the Liberty Fund will
deliver to the Company, at the Company's offices in Indianapolis, Indiana, the
certificate or certificates representing the Redeemed Shares, a stock power duly
executed in blank and such other instruments as the Company shall deem necessary
to transfer ownership of the Redeemed Shares to the Company. The Company will
deliver to the Liberty Fund a certified or cashiers check or wire funds transfer
in an amount equal to $37,776,766.50 (or $49.50 per Redeemed Share) plus
interest at the per annum rate of 5.25% from the date hereof to, but not
including, the Closing Date (the "Purchase Price").
1.2. The Company represents and warrants as follows:
(a) This Agreement is the valid and binding obligation of the
Company, enforceable in accordance with its terms, and the
execution and performance of this Agreement by the Company will
not result in any violation of or be in conflict with or
constitute a default under any contract, agreement, instrument,
judgment, decree or other indenture to which the Company is a
party or by which the Company otherwise is bound; and
(b) No person, corporation or other entity has, nor as a result of
the transactions contemplated hereby will have, any right,
interest, or valid claim against the Liberty Fund, the Company or
any other person, for any commission, fee or other compensation
as a finder or broker or in any similar capacity arising out of
any action taken by the Company, except for the underwriters
selected for the Secondary Offering, which commissions and
discounts (not to exceed 5%) are to be paid by the Liberty Fund
with respect to the Shares sold by it; and
(c) The Company's purchase of the Redeemed Shares pursuant to this
Agreement is a permissible distribution within the limits of IC
23-1-28-3 and does not violate any provisions of the Company's
articles of incorporation as amended.
Article II
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Secondary Offering
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2.1. The Company will use its best efforts to facilitate a Secondary
Offering in which the Liberty Fund may sell the Secondary Offering Shares. The
Secondary Offering will be managed by underwriters selected by the Company. The
Liberty Fund will be responsible for its own legal and/or accounting fees
incurred in connection with the Secondary Offering and for the underwriter's
discounts and commissions incurred with respect to its Secondary Offering
Shares. In addition, the Liberty Fund shall pay a pro rata share (based on the
total number of shares sold in the Secondary Offering) of the NASD filing fees,
printing costs, Securities and Exchange Commission filing fees, blue sky filing
fees, blue sky legal fees, and all other fees and expenses associated with the
Secondary Offering not specifically allocated to the Company herein
("Registration Expenses").
2.2. The Company will be responsible solely for roadshow expenses, the
Company's accounting and legal fees and any transfer agent and custodian fees
(the "Company Expenses"). Except as set forth in Section 3.4 hereof, in the
event that the Liberty Fund withdraws its Secondary Offering Shares from the
Secondary Offering, or otherwise fails or refuses to consummate the Secondary
Offering and the registration and sale of its Secondary Offering Shares, the
Liberty Fund shall be required to pay its pro rata share of the Registration
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Expenses and to reimburse the Company for the Liberty Fund's pro rata share of
the Company Expenses.
Article III
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Representations and Covenants of Liberty Fund
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3.1. The Liberty Fund hereby represents and warrants as follows:
(a) As of the Closing Date, the Liberty Fund will be the sole owner
of the Redeemed Shares, and that each of the Redeemed Shares will
be free and clear of liens, encumbrances, claims of others and
transfer restrictions of any kind; and
(b) The Liberty Fund has full power and authority to sell the
Redeemed Shares to the Company in accordance with the provisions
hereof; and
(c) This Agreement is the valid and binding obligation of the Liberty
Fund, enforceable in accordance with its terms, and the execution
and performance of this Agreement by the Liberty Fund will not
result in any violation of or be in conflict with or constitute a
default under any contract, agreement, instrument, judgment,
decree or other indenture to which the Liberty Fund is a party or
by which the Liberty Fund otherwise is bound; and
(d) No person, corporation or other entity has, nor as a result of
the transactions contemplated hereby will have, any right,
interest, or valid claim against the Liberty Fund, the Company or
any other person, for any commission, fee or other compensation
as a finder or broker or in any similar capacity arising out of
any action taken by the Liberty Fund, except for the underwriters
selected for the Secondary Offering, which commissions and
discounts (not to exceed 5%) are to be paid by the Liberty Fund
with respect to any Shares sold by it; and
(e) The Liberty Fund has had access to all public information it
desires concerning the Company and its subsidiaries and
operations and to certain non-public information concerning the
financial position and results of operation of the Company for
the first quarter of 1997, and has had the opportunity to ask
such questions of officers of the Company as the Liberty Fund has
deemed necessary or appropriate in order to enable the Liberty
Fund to determine whether to authorize the sale of the Redeemed
Shares and Secondary Offering Shares on the terms herein
specified. Further, the Liberty Fund has received certain non-
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public information concerning the Company pursuant to that
certain Confidentiality Letter Agreement dated March 31, 1997,
between the Company and the Liberty Fund (the "Confidentiality
Agreement"). The Liberty Fund acknowledges that pursuant to the
Confidentiality Agreement, any material non-public information
received by the Liberty Fund for this transaction must be kept in
confidence in compliance with applicable federal securities law,
and the Liberty Fund must refrain from trading the Company's
stock while in possession of such non-public information. The
Liberty Fund has reviewed all information it deems material to
making its decision to sell the Redeemed Shares and Secondary
Offering Shares hereunder.
3.2. In order to induce the Company to purchase the Redeemed Shares, the
Liberty Fund hereby covenants and agrees not to trade, sell, transfer, encumber
or otherwise dispose of any of its Shares, except for a sale pursuant to the
Secondary Offering, for a period commencing on the date hereof and continuing
for six (6) months following the date on which the Estate delivers Shares to the
Liberty Fund; provided however, if the Shares are not legally distributable from
the Estate to the Liberty Fund on or before June 30, 1997, the restrictions
contained in this Section 3.2 shall nevertheless expire on December 31, 1997.
3.3. The Company hereby undertakes to use its best efforts to facilitate
the Secondary Offering, but the Liberty Fund understands and agrees that there
is no assurance that the Secondary Offering can be successfully completed or at
what price the Shares can be sold in the Secondary Offering. The Company shall
have no liability to the Liberty Fund in such events.
3.4. The Liberty Fund will cooperate with the Company to facilitate the
Secondary Offering and shall execute an underwriting agreement and other
documents with terms which are usual and customary for such agreements and
reasonably necessary to facilitate the Secondary Offering. In the event that
(a) any of the Shares are not legally distributable from the Estate on or before
June 30, 1997, or (b) the market price of the Shares on the date of commencement
of the roadshow is less than $48 per share, the Liberty Fund may withdraw from
the Secondary Offering without reimbursing its pro rata share of the Company
Expenses to the Company.
Article IV
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General
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4.1. This Agreement constitutes the entire Agreement between the parties
with respect to the subject matter hereof and supersedes and merges all prior
understandings and agreements concerning the subject matter hereof. This
Agreement may only be modified or amended in writing.
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4.2. This Agreement shall be governed and construed in all respects under
the laws of the State of Indiana.
4.3. This Agreement may be executed in counterparts, each one of which
shall constitute one and the same Agreement and each one of which shall be
deemed an original.
[Rest of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CENTRAL NEWSPAPERS, INC.
/s/ Xxxxxx X. MacGillivsay
By: ______________________________________
Xxxxxx X. MacGillivsay
Printed: _________________________________
Chief Financial Officer
Title: ___________________________________
LIBERTY FUND, INC.
/s/ T. Xxxx Xxxxxxx
By: ______________________________________
T. Xxxx Xxxxxxx
Printed: _________________________________
Chairman
Title: ___________________________________
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