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Exhibit 2(z)
DOCUMENT ESCROW AGREEMENT
Ohio Periodical Distributors, Inc.
This agreement is made and entered into __________________, 1997, among
United Magazine Company, an Ohio corporation ("UNIMAG"), Ohio Periodical
Distributors, Inc., an Ohio corporation ("OPD"), all of OPD's shareholders
(individually, an "OPD SHAREHOLDER" and collectively, the "OPD SHAREHOLDERS"),
and Xxxxx & Xxxxxxxxx LLP ("ESCROW AGENT").
BACKGROUND INFORMATION
A. Unimag, OPD and the OPD Shareholders are parties to an Amended and
Restated Stock Transfer and Exchange Agreement, as amended by that certain First
Amendment to Amended and Restated Stock Transfer and Exchange Agreement, both
dated effective as of August 1, 1996, and an Amendment to Acquisition Agreements
dated __________, 1997 (collectively, the "MERGER AGREEMENT"), and certain other
documents executed in connection with the transactions contemplated by the
Merger Agreement (the "ADDITIONAL DOCUMENTS").
B. Unimag, OPD, and the OPD Shareholders desire to consummate the Merger
(defined in the Merger Agreement) and the other transactions contemplated by the
Merger Agreement upon the satisfaction of certain conditions (as described in
Section 6.5 of the Merger Agreement and as also described more fully in this
agreement).
C. Unimag, OPD, and the OPD Shareholders 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:
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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 Merger Agreement.
Section 2. Unimag, OPD, and/or the OPD Shareholders 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. OPD 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. The OPD Shareholders have executed and/or delivered to Escrow
Agent and Escrow Agent hereby acknowledges receipt of the documents and
instruments described on Exhibit D.
Section 6. Unimag, OPD, and/or the OPD Shareholders, 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 7. Unless Unimag, OPD, and the OPD Shareholders all otherwise
agree and collectively 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 for Northern and Read-mor (as
defined below)), 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 on terms and conditions
substantially similar to the Escrow Closing under the Merger Agreement and
this agreement (hereinafter referred to as this "ESCROW CLOSING"). Unimag
and OPD hereby acknowledge that the escrow closings for Xxxxx, Michiana,
and Northern have been completed prior to this Escrow Closing and that
such escrow closings were upon terms and conditions substantially similar
to this Escrow Closing. Unimag, OPD, and the OPD Shareholders hereby
acknowledge that the consummation of the escrow closing for Read-mor Book
Stores, Inc. ("READ-MOR"), shall not be a condition to Escrow Agent's
delivery of the Closing Documents out of escrow. This condition shall be
satisfied by delivery to Escrow Agent of certificates executed by Unimag
and by each of The Xxxxxxx Companies and Wholesalers Leasing Corp., 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
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Exhibit E, certifying that the escrow closing for each of the respective
Xxxxxxx Companies Acquisitions, and each of the respective Xxxxx Companies
acquisitions has 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 OPD for the purpose of
evidencing OPD's acknowledgement and agreement to the certifications set
forth in that certificate.
(b) The Merger Agreement (with all of its schedules and exhibits)
and the Merger 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.
(c) The Merger, the Michiana Acquisition, the Xxxxx Acquisition, the
Xxxxxxx Companies Acquisitions (except for the acquisition of Read-mor),
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 F,
certifying that the Merger, the Xxxxx Acquisition, the Xxxxxxx Companies
Acquisitions (except for the acquisition of Read-mor), and each of the
respective 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 Closings for Northern, Michiana, and Xxxxx, 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 certificates executed by Unimag and each of Northern, Michiana, and
Xxxxx, in the form attached hereto as Exhibit G, certifying that such
Closings have been completed.
(f) The written consents of Xxxxxxx and Xxxxxx Xxxxxxxxx to the
granting of a mortgage on the Xxxxxx Road, Cincinnati property as security
for the Debentures shall have been received and delivered to Escrow Agent,
in form and content acceptable to Unimag. Notwithstanding anything in this
agreement to the contrary, this condition may not be waived or altered in
any manner by Unimag and/or OPD and Escrow Agent will
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disregard any instructions from Unimag and/or OPD which may attempt to
waive or alter this condition.
(g) The written consents of (i) Warner Publisher Services, Inc. and
(ii) Xxxxxx Circulation Co., in connection with the transfer of OPD's
personal property to Unimag pursuant to the Merger Agreement and the
subsequent grant by Unimag of a security interest in such personal
property as security for the Debentures shall have been received and
delivered to Escrow Agent, in form and content acceptable to Unimag.
Notwithstanding anything in this agreement to the contrary, this condition
may not be waived or altered in any manner by Unimag and/or OPD and Escrow
Agent will disregard any instructions from Unimag and/or OPD which may
attempt to waive or alter this condition.
Section 8. Upon the satisfaction of the conditions set forth in Section 7
by Escrow Agent's receipt of all of the certificates and consents described in
Section 7, the Parties will attend the Closing (as contemplated by the Merger
Agreement) and Escrow Agent will distribute (a) the Debenture Agreement
counterpart signature pages listed on Exhibit A and the Shareholder Voting
Agreement counterpart signature pages listed as item 1 on Exhibit D to the
trustee under the Debenture Agreement 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 as items 11 and 12 of Exhibit B to the
trustee under the Debenture Agreement to be recorded by the trustee; (c) the
remaining documents listed in Exhibit B to Xxxxxx X. Xxxxxxx (who shall
represent the OPD Shareholders for purposes of the receipt of such documents);
(d) the document listed as item 2 in Exhibit A and the remaining documents
listed in Exhibit C to an officer of Unimag; and (e) the documents listed as
items 2 and 3 in Exhibit D 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, OPD, and the OPD Shareholders hereby
acknowledge that the closings for the Xxxxxxx Companies Acquisitions (except
Northern and Read-mor), and the Xxxxx Companies acquisitions will be held
shortly after the Closing.
Section 9. If all of the conditions set forth in Section 7 have not been
satisfied by ______________, 1997, or such later date as Unimag and OPD may
agree to and so instruct Escrow Agent in writing, then Escrow Agent shall (a)
destroy the Closing Documents described in Exhibit A, (b) return the Closing
Documents described in Exhibit B to Unimag, (c) return the Closing Documents
described in Exhibit C to OPD, and (d) return the Closing Document described as
item 2 in Exhibit D to the OPD Shareholders, and destroy those Closing Documents
listed as
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items 1 and 3 of Exhibit D; and all of the Closing Documents shall be deemed
void and of no further force and effect. Notwithstanding the foregoing, the
Merger Agreement shall be deemed terminated and each of Unimag, OPD and the OPD
Shareholders shall remain responsible for its or their costs and expenses
associated with the transactions contemplated by the Merger Agreement in
accordance with the provisions of Section 9.10 of the Merger Agreement.
Section 10. 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 the OPD Shareholders. 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 11. 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, OPD, and the OPD
Shareholders 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 12. Instructions to Escrow Agent shall be addressed to:
Xxxxx & Xxxxxxxxx LLP
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 13. The Parties hereby: (a) designate the Court of Common Pleas of
Franklin County, Ohio, as a court of proper jurisdiction and venue for any
actions or proceedings relating to this agreement; (b) irrevocably consent to
such designation, jurisdiction and venue; and (c)
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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 14. 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 15. 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 7, and such notice is received prior to the distributions from escrow
set forth in Section 8, 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 LLP
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 LLP in that regard.
UNITED MAGAZINE COMPANY
By__________________________________
Xxxxxx X. Xxxxxxx, Chairman
OHIO PERIODICAL DISTRIBUTORS, INC.
By__________________________________
Xxxxx X. Xxxxxxxx, Treasurer
[Signatures continued on the following page.]
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THE OPD SHAREHOLDERS:
-------------------------------
Bank One Trust Company, NA,
Trustee under the Xxxxx X. Xxxxxxx
Agreement of Trust FBO Xxxxxx X. Xxxxxxx
dated June 14, 1979
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Bank One Trust Company, NA,
Trustee under the Xxxxx X. Xxxxxxx
Agreement of Trust FBO Xxxxx Xxxxxx
Xxxxxxx dated June 14, 1979
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XXX XXXX
XXXXX & XXXXXXXXX LLP
By__________________________________
Xxxx Xxxxxxxx, Partner
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EXHIBIT A
DOCUMENTS DELIVERED BY UNIMAG, OPD,
AND/OR THE OPD SHAREHOLDERS
1. Debenture Agreement dated as of October 9, 1996, among Unimag, the OPD
Shareholders, and certain other parties. (Includes counterpart signature
pages for only the OPD Shareholders. The remaining counterpart signature
pages will be provided in connection with the other Escrow Closings.)
2. Certificate of Merger pursuant to the Merger Agreement executed by Unimag
and the OPD Shareholders to be filed with the Ohio Secretary of State.
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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 Merger.
8. Letter or copy of federal register notice from Federal Trade Commission
terminating HSR Act waiting period.
9. Letter of Xxxxxx Xxxxxxxx LLP with respect to tax effect on Unimag of the
Section 351 exchange.
10. Irrevocable instruction letter to Unimag's transfer agent for the issuance
of Unimag Shares to the OPD Shareholders as required by the Merger.
11. Affidavit in Aid of Title to be filed in the office of the Xxxxxxxx
County, Ohio Recorder regarding the transfer of title to the Xxxxxx Road,
Cincinnati real property to Unimag, as the surviving entity of the Merger.
12. Two Mortgages executed by Unimag as mortgagor. (Counterpart signature page
of Trustee to be delivered to Escrow Agent in connection with the other
Escrow Closings.)
13. Three Senior Debentures to be issued to the OPD Shareholders (or their
designee) under the Debenture Agreement.
14. Three Subordinated Debentures to be issued to the OPD Shareholders (or
their designee) under the Debenture Agreement.
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EXHIBIT C
DOCUMENTS DELIVERED BY OPD
1. Certified articles of incorporation of OPD.
2. Good standing certificate of OPD.
3. Certified Code of Regulations of OPD.
4. Incumbency certificate of OPD.
5. Certificate of president or other officers of OPD.
6. Written actions of board of directors and shareholders of OPD.
7. Opinion letter of OPD's legal counsel.
8. OPD's minute books and other corporate records.
9. All of the certificates for the 5,000,000 shares of Unimag common stock
endorsed in blank for cancellation.
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EXHIBIT D
DOCUMENTS DELIVERED BY THE OPD SHAREHOLDERS
1. Shareholder Voting Agreement dated October 9, 1996, among the OPD
Shareholders and certain other parties (includes counterpart signature
pages for only the OPD Shareholders).
2. All of the certificates for the OPD Shares endorsed for transfer to
Unimag.
3. Lease from ______________________ to Unimag for the Xxxxxxx Avenue,
Columbus building.
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EXHIBIT E
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 LLP, which is the escrow agent under a certain document escrow
agreement dated ____________, 199__ (the "OPD DOCUMENT ESCROW AGREEMENT"), among
Unimag, Ohio Periodical Distributors, Inc. ("OPD") all of OPD's shareholders,
and Xxxxx & Xxxxxxxxx LLP, as follows:
1. The escrow closing (the "_________ Escrow Closing") contemplated by
[insert description of appropriate acquisition agreement] was
completed on [insert date];
2. The _________ Escrow Closing was completed upon terms and conditions
substantially similar to the escrow closing provided for in the OPD
Document Escrow Agreement.
[INSERT NAME OF
COMPANY]
Date: ____________, 199__ By_______________________________
Print Name_______________________
Its______________________________
UNITED MAGAZINE COMPANY
Date: ____________, 199__ By_______________________________
Print Name_______________________
Its______________________________
[Acknowledgement on the following page.]
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ACKNOWLEDGEMENT
The undersigned hereby acknowledges and agrees, on behalf of OPD and the
OPD Shareholders, that the certifications set forth in this certificate satisfy
the requirements of Section 8(a) of the OPD Document Escrow Agreement.
OHIO PERIODICAL DISTRIBUTORS, INC.
Date: _________________, 199__ By__________________________________
Print Name________________________
Its__________________________________
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EXHIBIT F
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
______________, 199__, hereby certifies to Xxxxx & Xxxxxxxxx LLP 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 Merger Agreement among Unimag, Ohio Periodical Distributors,
Inc. ("OPD"), and all of its shareholders;
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 Stock Transfer and Exchange Agreement among Unimag, Michiana
News Service, Inc. ("MICHIANA"), and all of its shareholders and the
acquisition of the stock of Michiana 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: _____________, 199__ _________________________________________
_________________, Inspector of Elections
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EXHIBIT G
CERTIFICATE OF CLOSING
The undersigned hereby certify, on behalf of [Northern News Company,
Michiana News Service, Inc., or The Xxxxx Companies] and United Magazine
Company, an Ohio corporation ("UNIMAG"), respectively, to Xxxxx & Xxxxxxxxx LLP,
which is escrow agent under a certain Document Escrow Agreement dated
_______________, 199__, among Unimag, Ohio Periodical Distributors, Inc.
("OPD"), and all of the shareholders of OPD, that the closing contemplated by
the [insert description of appropriate acquisition agreement] was completed on
[insert date].
[NORTHERN NEWS COMPANY,
MICHIANA NEWS SERVICE, INC., or
THE XXXXX COMPANIES]
Date___________________ By_______________________________
Print Name_______________________
Its______________________________
UNITED MAGAZINE COMPANY
Date___________________ By_______________________________
Print Name_______________________
Its______________________________
