EXHIBIT 9
X.X. Xxxxx Investment Banking Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
May 8, 2001
VIA FEDERAL EXPRESS
[$10 Preferred Holder]
Re: Xxxxx Xxxxxxxxxxx Letter Agreement
Dear [Holder]:
As you are aware, the good news is that Xxxxx Xxxxxxxxxxx has agreed to
become the new President and Chief Executive Officer of News Communications,
Inc. pursuant to the terms of a certain letter agreement, a copy of which has
been provided to you. The letter agreement contemplates a potential transaction
where a new entity in which Xx. Xxxxxxxxxxx would have a 50.1% ownership
interest would acquire News Communications. The letter agreement contemplates
that you, the other holders of New Communications' $10 Convertible Preferred
Stock and certain other shareholders of News Communications, including X.X.
Xxxxx Investment Banking Corp., would acquire the balance of the shares in the
new entity. Since you received a copy of the letter agreement, it has been
slightly revised. Attached please find a black-lined version showing the
changes.
Based upon the current capitalization of News Communications, a copy of
which is attached (and assuming a conversion price of $1.54 for your shares of
$10 Preferred Stock), each share of News Communications' common stock held by
you would be converted into .1752 shares of common stock in the new entity
having a value of $.1752 per share and subordinated notes in the new entity
having a principal amount of $1.1248 per share, or an aggregate value of $1.30
per share.
The letter agreement also contemplates that you will vote in favor of
the transaction described above, that you will convert your shares of $10
Convertible Preferred Stock into common stock prior to such transaction and that
you will waive your right to designate one half of the members of the Board. We
believe that the proposed arrangement with Xx. Xxxxxxxxxxx represents the best
opportunity for a meaningful return on our equity investment in News
Communications. Xxxxxx Xxxx concurs and has agreed to vote in favor of the
transaction as long as he and the other holders of the $10 Preferred Stock
receive shares in the new entity having a value of $.20 per share.
Since the conversion ratio as currently contemplated would result in
you and the other holders of $10 Preferred Stock receiving stock in the new
entity having a value of less than $.20 per share, X.X. Xxxxx Investment Banking
Corp. has agreed to make up the difference. Accordingly, in consideration for
your agreement to consent to the foregoing, if, for any reason whatsoever, you
would receive shares of stock in the new entity having a value of less than $.20
per share, at your election, immediately after the consummation of the
transaction with the new entity, X.X. Xxxxx will cause to be transferred to you
a number of shares of the new entity's common stock so that you will hold .2
shares of the common stock of the new entity having a value of $.20. In
consideration for this transfer, you would transfer to X.X. Xxxxx Investment
Banking Corp. subordinated notes in Newco having a value equal to the shares
transferred to you. We would enter into a formal agreement to undertake the
exchange at the time the transaction is authorized.
Based upon the currently contemplated capitalization of the new entity,
and as an inducement to preferred holders, X.X. Xxxxx Investment Banking Corp.
would transfer to you and the other holders of $10 Preferred Stock an aggregate
of 19,246 shares of the new entity's common stock or 109,852 of its current
shares and you would transfer, if you choose to take the shares, subordinated
notes of the same value. It is possible that the capitalization of News
Communications at the time of the transaction will be slightly different than
that set forth on the attached capitalization summary. This will cause the
numbers outlined above to change. However, we do not believe that any such
change will be materially different.
If the above is acceptable to you, please sign the FOUR (4) signature
pages to the letter agreement and the FOUR (4) copies of the Waivers enclosed
herewith. Once executed, please return the signed documents to the following
address at your earliest convenience:
Xxx X. Xxx
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
If you have any questions with regard to the foregoing, please contact
either Xxxxxx Xxxx at (000) 000-0000 or Xxxxxx X. Xxxx at (000) 000-0000.
I urge you to sign this as expeditiously as possible and return it so
that the Company can promptly effectuate this vital transaction, in order to
bring on Xxxxx Xxxxxxxxxxx, an outstanding world-class publishing executive, so
that he can take the Company out of its dismal recent status and grow its
important platform of publishing holdings into a potentially outstanding growth
company that will benefit every one of us.
Thank you so much for your kind cooperation.
May you go from strength to strength!
With kindest personal regards and best wishes for everything great always, I am
Sincerely,
X.X. Xxxxx Investment Banking Corp.
By:_________________________________
X. Xxxxxx Xxxxx
Chairman
