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Exhibit 2(bb)
DOCUMENT ESCROW AGREEMENT
The Xxxxxxx Companies
This agreement is made and entered into December ___, 1996, among United
Magazine Company, an Ohio corporation ("UNIMAG"), The Xxxxxxx Companies, a
Delaware corporation ("XXXXXXX"), all of the Xxxxxxx shareholders (individually,
a "XXXXXXX SHAREHOLDER" and collectively, the "XXXXXXX SHAREHOLDERS"), and Xxxxx
& Xxxxxxxxx ("ESCROW AGENT").
BACKGROUND INFORMATION
A. Unimag, Xxxxxxx, and the Xxxxxxx Shareholders are parties to a Stock
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, Xxxxxxx, and the Xxxxxxx Shareholders 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 6.5 of the Exchange Agreement and as also
described more fully in this agreement).
C. Unimag, Xxxxxxx, and the Xxxxxxx 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:
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, Xxxxxxx, and/or the Xxxxxxx 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. Xxxxxxx 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 Xxxxxxx 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, Xxxxxxx, and/or the Xxxxxxx 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, Xxxxxxx, and the Xxxxxxx Shareholders 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 for 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, Xxxxxxx, and
the Xxxxxxx Shareholders 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 Wholesalers Leasing Corp. 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 E,
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 Xxxxxxx and the
Xxxxxxx Shareholders for the purpose of evidencing Xxxxxxx'x and the
Xxxxxxx Shareholders' acknowledgement and agreement to the certifications
set forth in that certificate.
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(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.
(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 F, 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 G, certifying
that such Closing has been completed.
Section 8. Upon the satisfaction of the conditions set forth in Section 7
by Escrow Agent's receipt of all of the certificates described in Section 7, 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 D 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
Xxxxxx X. Xxxxxxx (who shall represent Xxxxxxx and the Xxxxxxx Shareholders for
purposes of receipt of such documents), and (c) the documents listed in Exhibit
C and the remaining documents listed in Exhibit D to an officer of Unimag. If
instructed to do so by a Party entitled to receive documents, the Escrow Agent
may
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deliver such documents to another person or entity. Unimag, Xxxxxxx, and the
Xxxxxxx Shareholders hereby acknowledge that the closings for the Xxxxxxx
Companies Acquisitions (except for Northern and OPD) and the Xxxxx Companies
acquisitions will be held simultaneous with or shortly after the Closing.
Section 9. If all of the conditions set forth in Section 7 have not been
satisfied by December 31, 1996, or such later date as Unimag, Xxxxxxx, and the
Xxxxxxx Shareholders may agree to and so instruct Escrow Agent 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
14, which the Escrow Agent shall destroy, (c) return the Closing Documents
described in Exhibit C to Xxxxxxx, except for items 7 and 10, which Escrow Agent
shall destroy, and (d) return the Closing Documents described in Exhibit D to
the Xxxxxxx Shareholders (via Xxxxxx X. Xxxxxxx as their attorney-in-fact),
except for the Voting Agreement, which the 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 each of Unimag, Xxxxxxx, and the Xxxxxxx Shareholders shall
remain responsible for their costs and expenses associated with the transactions
contemplated by the Exchange Agreement in accordance with the provisions of
Section 9.10 of the Exchange 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 Xxxxxxx 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 and the Xxxxxxx
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.
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Section 12. 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 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) 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 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
[Signatures continued on following page.]
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THE XXXXXXX COMPANY
By
----------------------------------
Xxxxx X. Xxxxxxxx, Chairman
THE XXXXXXX SHAREHOLDERS:
------------------------------------
XXXXXX X. XXXXXXX
------------------------------------
XXXXX X. XXXXXXX
------------------------------------
XXX XXXX
XXXXX & XXXXXXXXX
By
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Xxxxxx X. Xxxx, Partner
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EXHIBIT A
DOCUMENTS DELIVERED BY UNIMAG, XXXXXXX, AND/OR
THE XXXXXXX SHAREHOLDERS
1. Debenture Agreement dated as of October 9, 1996, among Unimag, the Xxxxxxx
Shareholders, and certain other parties. (Includes counterpart signature
pages for only the Xxxxxxx Shareholders 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. Employment Agreement of Xxxxxxx X. Xxxxxxx.
8. Employment Agreement of Xxxxxx X. Xxxxxxx, Xx.
9. Employment Agreement of Xxxxxx X. Xxxxxx, Xx.
10. Employment Agreement of Xxxxx Xxxxxxx.
11. Letters from shareholders of Unimag entitled to vote more than 50% of
Unimag common shares indicating they will vote in favor of the Exchange.
12. Letter or copy of federal register notice from Federal Trade Commission
terminating HSR Act waiting period for the acquisition of OPD.
13. Letter of Xxxxxx Xxxxxxxx LLP with respect to tax effect on Unimag of the
Section 351 exchange.
14. Opinion letter of Xxxxx & Xxxxxxxxx.
15. Irrevocable instruction letter to Unimag's transfer agent for the issuance
of Unimag Shares to the Xxxxxxx Shareholders as required by the Exchange.
16. Three Senior Debentures to be issued to the Xxxxxxx Shareholders under the
Debenture Agreement.
17. Three Subordinated Debentures to be issued to the Xxxxxxx Shareholders
under the Debenture Agreement.
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EXHIBIT C
DOCUMENTS DELIVERED BY XXXXXXX
1. Certified certificate of incorporation of Xxxxxxx.
2. Good standing certificate of Xxxxxxx.
3. Certified By-laws of Xxxxxxx.
4. Incumbency certificate of Xxxxxxx.
5. Certificate of the president or other officer of Xxxxxxx.
6. Certified resolutions of the board of directors of Xxxxxxx.
7. Opinion letter of Xxxxxxx'x Legal Counsel.
8. Xxxxxxx'x minute books and other corporate records.
9. Amendment to lease for the Post Road corporate headquarters.
10. Consent of NRS Equities, Inc. to the assignment of the lease for the Post
Road corporate headquarters.
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EXHIBIT D
DOCUMENTS DELIVERED BY THE XXXXXXX SHAREHOLDERS
1. Shareholder Voting Agreement dated as of October 9, 1996, among the
Xxxxxxx Shareholders and certain other parties. (Counterpart signature
pages for the Xxxxxxx Shareholders have been deposited into escrow in
connection with the escrow closing for Xxxxx.)
2. Certificate of the Xxxxxxx Shareholders.
3. All of the certificates for the Xxxxxxx Shares endorsed for transfer to
Unimag.
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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, which is the escrow agent under a certain document escrow agreement
dated December ___, 1996 (the "XXXXXXX DOCUMENT ESCROW AGREEMENT"), among
Unimag, The Xxxxxxx Companies ("XXXXXXX"), the Xxxxxxx Shareholders, 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 the
Xxxxxxx 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 Xxxxxxx and
all of its shareholders, that the certifications set forth in this certificate
satisfy the requirements of Section 7(a) of the Xxxxxxx Document Escrow
Agreement.
THE XXXXXXX COMPANIES
Date: December ___, 1996 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
______________, 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 Xxxxxxx 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 G
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, the Xxxxxxx Companies ("XXXXXXX"), all of the Xxxxxxx Shareholders, 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_________________________________
