EXHIBIT 10.14
EXECUTION COPY
AGREEMENT OF PURCHASE AND SALE
AMONG
THE DAILY INDEPENDENT, INC.,
XXXXXXX NEWSPAPERS, INC.,
THE MAIL TRIBUNE, INC.
AND
NEWPAPER HOLDINGS, INC.
Dated as of February 20, 2002
AGREEMENT OF PURCHASE AND SALE, dated as of February 20, 2002
(the "Agreement"), among The Daily Independent, Inc., a Delaware
corporation, Xxxxxxx Newspapers, Inc. ("Parent"), The Mail Tribune,
Inc., a Delaware corporation ("MTI") and Newspaper Holdings, Inc., a
Delaware corporation (the "Buyer").
WHEREAS, the Seller desires to sell to the Buyer, and the
Buyer desires to buy from the Seller, the Seller Assets (as defined
below) and the publishing business of Seller carried on by or with
respect to such Seller Assets (the "Business");
WHEREAS, MTI desires to sell to the Buyer, and the Buyer
desires to buy from MTI, the MTI Assets (as defined below);
In consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be
legally bound hereby, the parties hereto agree that, subject to the
conditions herein contained:
ARTICLE I
SALE OF ASSETS AND TERMS OF PAYMENT
1.1. The Sale1.1. The Sale (tc "1.1. The Sale"_\1 2).
(a)(i) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date (as defined below), the Seller shall
sell, convey, transfer, assign and deliver to the Buyer, and the Buyer
shall purchase and acquire from the Seller, all of the Seller's right,
title and interest in and to the Seller Assets (as defined below), as
the same may exist on the Closing Date. As used in this Agreement, the
term "Seller Assets" means all of the Seller's assets (other than
Excluded Assets) (defined below)), including:
(A) Each of the publications referred to in Schedule 1.1(a)(i)(A)
and all Seller's rights to prepare, publish, sell and distribute such
publications and any other publications, extensions or spinoffs derived
from such publications or related thereto in all languages
(collectively, the "Publications").
(B) All inventories (including, without limitation, inventories
of back and current issues of the Publications); editorial material,
work in process, finished goods, manuscripts, notes and drafts, graphic
artwork, cuts, photographs and negatives owned by the Seller;
promotional materials, inserts, and direct mail materials owned by the
Seller; stationery, supplies, purchase orders, forms, labels, shipping
materials and catalogs owned by the Seller, and all lists owned by the
Seller of contributors, authors, correspondents, reviewers,
photographers, illustrators and editors who contribute or have
contributed to any of the Publications.
(C) All circulation, delivery and mailing lists and carrier
routes maintained by or for the Seller relating to any of the
Publications, all data related to such lists, all circulation readership
studies, audience surveys and research owned by the Seller, and all
other mailing lists, together with all records, reports and tapes of
computer data owned by the Seller relating to any of the Publications.
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(D) All copyrights owned by the Seller in all material used in
any of the Publications, including all copyrights covering each issue of
each of the Publications, and the contents and components thereof, and
all copyright registrations pertaining thereto and all rights of the
Seller to obtain renewals and extensions of such copyrights (the
"Copyrights").
(E) All lists of, files, books and records of the Seller relating
to the advertisers of, for or in any of the Publications, including, but
not limited to, rate cards, verification cards, advertising insertion
orders, specimen copies of all advertisements carried in any of the
Publications, and copies of current price lists, discount lists,
catalogs, public relations materials, sales correspondence, call
reports, call books and sales promotion lists.
(F) All of the advertising contracts, space reservations and
insertion orders relating to the placement of advertising in any of the
Publications with respect to all issues to be published after the
Closing Date.
(G) All subscriptions and orders for any of the Publications.
(H) All accounts and other amounts receivable and all Seller's
other rights to payment (including employee receivables), causes of
action, claims and rights of recovery, whether arising or accruing prior
to, on or after the Closing Date, whether in respect of advertising,
subscriptions, mailing lists or newsstand orders or otherwise, together
with the proceeds thereof.
(I) All fixed and tangible personal property as identified in
Schedule 1.1(a)(i)(I).
(J) All leaseholds, identified in Schedule 1.1(a)(i)(J).
(K) All licenses, permits, variances, franchises, certifications,
approvals, permits and authorizations issued by any administrative body
or licensing authority or governmental or regulatory agency to the
Seller, together with any renewals, extensions or modifications thereof
and additions thereto (the "Licenses"), to the extent transferable.
(L) All contracts, agreements and leases to which the Seller is a
party (hereinafter collectively, the "Contracts").
(M) All other books, financial and personnel records, invoices,
shipping records, supplier lists and other documents, records, data
files and service manuals owned by the Seller, but excluding the
Seller's corporate minute books and stockholder records.
(N) All computer software and programs and any rights thereto
owned by the Seller, but, if not owned by the Seller, then to the extent
that such software, programs or rights are assignable.
(O) All claims, causes of action, rights of recovery and rights
of set-off of any kind (including, without limitation, rights under and
pursuant to all warranties, representations and guarantees made by
suppliers of products, materials or equipment, or components thereof)
owned by the Seller.
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(P) The goodwill of or pertaining to the Business, the Seller
Assets, and the Publications.
(Q) The real property identified on Schedule 1.1(a)(i)(Q) (the
"Property").
(ii) Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, MTI shall sell, convey, transfer,
assign and deliver to the Buyer, and the Buyer shall purchase and
acquire from MTI all of MTI's right, title and interest in and to the
MTI Assets (as defined below), as the same may exist on the Closing
Date. As used in this Agreement, the term "MTI Assets" means:
(A) All trademarks, service marks, logos, trademark registrations,
service xxxx registrations, trade names, domain names and brand names
used in connection with any of the Publications identified on Schedule
3.11 (collectively, the "Intellectual Property") and the goodwill
related thereto.
(B) The names and addresses of all subscribers to any of the
Publications, all data related to such subscribers, and all rights to
own, manage, use and rent the names and addresses of all subscribers to
any of the Publications.
(C) All lists of, files, books and records of MTI relating to the
advertisers of, for or in any of the Publications, including, prospect
lists for advertising in any of the Publications.
(D) The goodwill of or pertaining to the MTI Assets.
(iii) Notwithstanding anything in this Agreement to the
contrary, specifically excluded from the Assets are the assets set forth
in Schedule 1.1(a)(iii) (collectively, the "Excluded Assets").
(iv) As used herein, the term Assets shall include the
Seller Assets and the MTI Assets.
(b)(i) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, the Buyer shall execute and deliver to
the Seller an Obligations Undertaking substantially in the form of
Exhibit 1.1(c) (the "Obligations Undertaking") pursuant to which the
Buyer shall assume and become responsible for all debts, commitments,
obligations and liabilities (whether absolute, contingent, accrued,
unaccrued, due or to become due) of the Seller, or of MTI relating
primarily to the Business (collectively, excluding the Excluded
Liabilities (defined below)) the "Assumed Liabilities"), except for the
liabilities expressly set forth in the Obligations Undertaking
(collectively, the "Excluded Liabilities").
(ii) The Buyer shall pay, perform and discharge when due
each Assumed Liability in accordance with the terms thereof.
(iii) The Buyer agrees that, effective upon the Closing,
the Buyer shall indemnify the Seller, MTI and the Parent and their
respective affiliates and hold each of them harmless against any claims,
losses, liabilities, damages, judgments, costs and expenses (including,
attorneys' fees and expenses) incurred or suffered by any of them
arising out of the Assumed Liabilities after the Closing Date.
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1.2. Purchase Price. (a) Upon the terms and subject to the
conditions contained in this Agreement, and in consideration of the
aforesaid sale, assignment, transfer and delivery of the Assets, on the
Closing Date the Buyer will pay or cause to be paid: (i) to the Seller
in cash the sum of (x) Thirty Eight Million Seven Hundred and Three
Thousand One Hundred Seventy Five Dollars ($38,703,175), plus (y) the
amount, if any, by which Estimated Closing Adjusted Net Working Capital
(as defined below) exceeds Zero Dollars ($0) or minus (z) the amount, if
any, by which Estimated Closing Adjusted Net Working Capital is less
than Zero Dollars ($0) (the "Estimated Purchase Price") and (ii) to MTI
in cash Zero Dollars ($0) (the "MTI Purchase Price"). As additional
consideration for the purchase of the Assets, the Buyer shall assume the
Assumed Liabilities. The Buyer shall deliver to the Seller the
Estimated Purchase Price, and to MTI the MTI Purchase Price, by wire
transfer of immediately available funds to accounts designated by the
Seller, and MTI, respectively, in writing at least two (2) business days
prior to the Closing Date.
(b) As used in this Agreement, the term "Closing Adjusted Net
Working Capital" means the amount of the difference between (i) the
aggregate value of the current assets of the Seller (excluding cash) as
of the Closing (the "Current Assets"), and (ii) the aggregate amount of
the current liabilities of the Seller (excluding liabilities for taxes
and other Excluded Liabilities) as of the Closing (the "Current
Liabilities"), in each case computed in a manner consistent with the
Seller's accounting practices. If Current Assets exceed Current
Liabilities, the Closing Adjusted Net Working Capital shall be deemed to
be a positive amount. If Current Liabilities exceed Current Assets, the
Closing Adjusted Net Working Capital shall be deemed to be a negative
amount.
(c) Two (2) business days prior to the Closing, the Buyer and
the Seller shall jointly agree in writing upon an estimate of the
Closing Adjusted Net Working Capital as of the Closing Date (the
"Estimated Closing Adjusted Net Working Capital") and such Estimated
Closing Adjusted Net Working Capital shall be used to determine the
amount of the Estimated Purchase Price payable to the Seller at the
Closing as set forth in clause (a) of this Section 1.2.
(d) As soon as practicable after the Closing (but in any
event within sixty (60) business days thereof), the Buyer shall
calculate the actual Closing Adjusted Net Working Capital and deliver
such calculation, as well as the balance sheet used to derive such
calculation and all back-up materials necessary for Seller's
understanding of such calculation, to the Seller. The Seller must
within thirty (30) business days of receipt of same (the "Receipt Date")
confirm whether or not it agrees with the calculation of Closing
Adjusted Net Working Capital and, if it does not agree with such
calculation, Seller will specify within sixty (60) business days of the
Receipt Date in reasonable detail the points of disagreement. The Buyer
and its accountants will provide the Seller's accountants with
reasonable access to the necessary books, records and working papers.
The parties shall then seek to resolve the points of disagreement and
agree upon the Closing Adjusted Net Working Capital. If either the
Seller agrees upon the Closing Adjusted Net Working Capital or the Buyer
and the Seller agree upon the same (with such further adjustments as
they may agree) within ninety (90) business days of the Receipt Date,
the amount so agreed upon shall be the Closing Adjusted Net Working
Capital. If the Buyer and the Seller do not agree upon the Closing
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Adjusted Net Working Capital pursuant to the procedures set forth above,
the Buyer and the Seller shall mutually agree (and such agreement shall
not be unreasonably withheld) to the appointment of a firm of
independent public accountants from the "Big Five" accounting firms to
act as an arbitrator (the "Arbitrator") to determine the Closing
Adjusted Net Working Capital within one hundred twenty (120) business
days of the Receipt Date or as soon thereafter as is practicable. If
the parties fail to agree on the Arbitrator by the 100th business day
after the Receipt Date, the parties shall request that the American
Arbitration Association select one of the "Big Five" accounting firms
with no material relationship with Seller or Buyer to act as the
Arbitrator. All determinations made by the Arbitrator shall be final,
conclusive and binding with respect to the Closing Adjusted Net Working
Capital. Fees and expenses of the Arbitrator shall be shared equally by
the Buyer, on the one hand, and the Seller, on the other.
(e) To the extent that the actual amount of the Closing
Adjusted Net Working Capital (determined in accordance with the
procedure set forth in clause (d) of this Section 1.2), is greater than
the Estimated Closing Adjusted Net Working Capital, the Buyer shall pay
to the Seller within five business days of the date of such
determination the amount of such excess by wire transfer of immediately
available funds to an account designated in writing for such purpose by
the Seller at least one (1) business day prior to the date of payment
(the "Additional Purchase Price"). To the extent that the Estimated
Closing Adjusted Net Working Capital is greater than the Closing
Adjusted Net Working Capital (determined in accordance with the
procedure set forth in clause (d) of this Section 1.2), the Seller shall
pay to the Buyer within five business days of the date of such
determination the amount of such excess by wire transfer of immediately
available funds to an account designated in writing for such purpose by
the Buyer at least one (1) business day prior to the date of payment
(the "Excess Purchase Price"). The MTI Purchase Price and the Estimated
Purchase Price plus the Additional Purchase Price or less the Excess
Purchase Price, as the case may be, is referred to herein as the
"Purchase Price".
1.3. Allocation. The Buyer, the Seller and MTI agree to
allocate the Purchase Price among the Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
on Schedule 1.3.
1.4 Procedures for Assets Not Transferable. If any of the
Contracts or any other property or rights included in the Seller Assets
are not assignable or transferable either by virtue of the provisions
thereof or under applicable law without the consent of some other party
or parties (a "Required Consent"), Seller shall use all commercially
reasonable efforts to obtain such consents prior to the Closing Date and
shall notify Buyer on or prior to the Closing Date of any consents not
so obtained; provided, that Seller shall not be required to make any
payments or to incur any obligations to third parties in connection with
the obtaining of any such consent. If any Required Consent cannot be
obtained prior to Closing, Seller shall use all commercially reasonable
efforts to obtain any consents not previously obtained as soon as
possible after the Closing Date or otherwise obtain for Buyer the
practical benefit of such property or rights.
1.5 The Indemnification Agreement. In connection with the
transactions contemplated by this Agreement, the Buyer and the Parent
are entering into an indemnification agreement dated simultaneously with
the date hereof (the "Indemnification Agreement").
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ARTICLE II
THE CLOSING
2.1. Time and Place of Closing. Upon the terms and subject
to the conditions contained in this Agreement, the closing of the
transactions contemplated by this Agreement (the "Closing") will take
place at the offices of Dow Xxxxx & Company, Inc. at 10:00 A.M. (local
time) on the later of (i) March 29, 2002 or (ii) as soon as practicable,
but in any event within three business days, following the date on
which all of the conditions to each party's obligations hereunder have
been satisfied or waived; or at such other place or time or both as the
parties may agree. The date on which the Closing actually occurs and
the transactions contemplated hereby become effective is hereinafter
referred to as the "Closing Date."
2.2. Deliveries by the Seller and MTI. At the Closing (or
as soon thereafter as reasonably practicable with respect to
Trademarks), the Seller and MTI, as applicable, will deliver or cause to
be delivered to the Buyer duly executed instruments of transfer and
assignment of the Assets in form reasonably satisfactory to the Buyer,
subject only to Permitted Liens (as defined below), sufficient to vest
in the Buyer the interests in the Assets to be conveyed at the Closing
in accordance with the terms of this Agreement. In addition, at the
Closing, the Seller, MTI and the Parent shall deliver to Buyer:
(i) the originals (or if not in existence copies) of
all Contracts and the originals of all books, records and files included
in the Assets;
(ii) copies of corporate and stockholder resolutions of
each of the Seller, MTI and the Parent authorizing the execution and
delivery of this Agreement and, with respect to the Parent, the
Indemnification Agreement, and each Exhibit hereto to which each is a
party and the consummation of the transactions contemplated hereby and
thereby, certified by an executive officer of the Seller, MTI and the
Parent, as the case may be;
(iii) executed counterparts reasonably satisfactory in
form and substance to the Buyer of all consents necessary to the
assignment to the Buyer of the Contracts listed on Schedule 2.2 (the
"Consents"); and
(iv) all other documents required by the terms of this
Agreement to be delivered by the Seller to the Buyer at the Closing.
2.3. Deliveries by the Buyer. At the Closing, the Buyer
will deliver to the Seller the Obligations Undertaking. In addition, at
the Closing, the Buyer shall deliver:
(i) the Estimated Purchase Price and the MTI Purchase
Price;
(ii) copies of corporate and stockholder resolutions of
the Buyer authorizing the execution and delivery of this Agreement and
the Indemnification Agreement and each Exhibit hereto to which the Buyer
is a party and the consummation of the transactions contemplated hereby
and thereby, certified by an executive officer of the Buyer; and
(iii) all other documents required by the terms of this
Agreement to be delivered by the Buyer to the Seller at the Closing.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE SELLER, MTI AND THE PARENT
Except as set forth in the schedules being delivered by the
Seller to the Buyer (the "Seller Schedules," and each, a "Seller
Schedule"), the Seller, with respect to itself, the Business, and the
Seller Assets; MTI, with respect to itself and the MTI Assets, and only
as set forth in Sections 3.1, 3.2, 3.3, 3.6, 3.8, 3.11 and 3.16; and the
Parent, with respect to itself and only as set forth in Sections 3.1,
3.2, 3.3, 3.8 and 3.16, represent and warrant to the Buyer as follows:
3.1 Organization. Each of the Seller, MTI and the Parent is
a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, except where
the failure to be so existing and in good standing would not have a
Business Material Adverse Effect. A "Business Material Adverse Effect"
means a material adverse effect on the operations or financial condition
of the Business (other than any effect arising from or related to
general economic, securities markets, or industry conditions) or on the
ability of the Seller, MTI and the Parent to consummate the transactions
contemplated hereby without material delay. The Seller has all
requisite corporate power and authority to own, lease and operate the
Seller Assets and to carry on the Business as now being conducted,
except where the failure to have such power and authority would not have
a Business Material Adverse Effect. MTI has all requisite corporate
power and authority to own, lease and operate the MTI Assets, except
where the failure to have such power and authority would not have a
Business Material Adverse Effect.
3.2. Authority Relative to this Agreement and the
Indemnification Agreement. Each of the Seller, MTI and the Parent has
full corporate power and authority to execute and deliver this Agreement
(and, with respect to the Parent, the Indemnification Agreement) and to
consummate the transactions contemplated hereby (and, with respect to
the Parent, by the Indemnification Agreement). The execution and
delivery of this Agreement by the Seller, MTI and the Parent (and, with
respect to the Parent, of the Indemnification Agreement) and the
consummation of the transactions contemplated hereby by the Seller, MTI
and the Parent (and, with respect to the Parent, by the Indemnification
Agreement) have been duly and validly authorized by all necessary
corporate action on the part of the Seller, MTI and the Parent and no
other corporate proceedings on the part of the Seller, MTI or the Parent
are necessary to authorize this Agreement (or, with respect to the
Parent, the Indemnification Agreement) or to consummate the transactions
contemplated hereby (or, with respect to the Parent, by the
Indemnification Agreement). This Agreement (and, with respect to the
Parent, the Indemnification Agreement) has been duly and validly
executed and delivered by the Seller, MTI and the Parent and, assuming
the due authorization, execution and delivery by the other parties
hereto, constitute a legal, valid and binding obligation of the Seller,
MTI and the Parent, enforceable against each such party in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general equitable
principles (regardless of whether enforceability is considered in a
proceeding in equity or at law).
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3.3. Consents and Approvals; No Violation. Except for the
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended and the rules and regulations thereunder (the
"HSR Act"), to the knowledge of each of the Seller, the Parent and MTI,
respectively, there is no requirement applicable to the Seller, the
Parent or MTI to make any filing with, or to obtain any permit,
authorization, consent or approval of, any governmental or regulatory
authority as a condition to (i) the lawful consummation by the Seller,
the Parent or MTI of the transactions contemplated by this Agreement or
(ii) the lawful consummation by the Parent of the transactions
contemplated by the Indemnification Agreement. Except as set forth in
Schedule 3.3, neither the execution and delivery of this Agreement by
the Seller, the Parent and MTI (and of the Indemnification Agreement by
the Parent) nor the consummation by the Seller, the Parent and MTI of
the transactions contemplated hereby (and by the Parent of the
transactions contemplated by the Indemnification Agreement) nor
compliance by the Seller, the Parent and MTI with any of the provisions
hereof (and by the Parent with any of the provisions of the
Indemnification Agreement) will (i) conflict with or result in any
breach of the Certificate of Incorporation or By-laws of the Seller or
MTI, as the case may be, (ii) to the knowledge of the Seller, the Parent
or MTI result in a breach of or default, or give rise to any right of
termination, cancellation or acceleration under, any material note,
bond, mortgage, indenture, license, agreement, lease or other similar
instrument or obligation to which the Seller the Parent or MTI is a
party or by which any of its properties or assets may be bound, except
for such breaches or defaults (or, rights of termination cancellation or
acceleration) as to which requisite waivers or consents have been
obtained, or (iii) assuming compliance with the HSR Act, to the
knowledge of the Seller and MTI, violate any material order, judgment,
writ, injunction, decree, statute, rule or regulation applicable to the
Seller, the Parent MTI, the Business or any of the Assets, excluding
from the foregoing clauses (ii) and (iii) such breaches, defaults,
rights of termination, cancellation or acceleration and violations which
would not have a Business Material Adverse Effect.
3.4. Financial Statements. Attached as Schedule 3.4 are (i)
the statements of income of the Seller for the years ending December 31,
2000 and 2001, (ii) the statement of income of the Seller for the one-
month period ended January 31, 2002 (the "January Income Statement"),
(iii) the balance sheets of the Seller as of December 31, 2000 and 2001
and (iv) the balance sheet of the Seller as of January 31], 2002 (the
"January Balance Sheet" and, together with the January Income Statement,
the "January Financial Statements" and all above referenced financial
information collectively, the "Financial Statements"). The Financial
Statements (including the notes thereto) fairly present in all material
respects the financial position of the Business and the results of
operations of the Business as at and for the periods covered thereby and
have been prepared in conformity with generally accepted
accountingprinciples applied on a consistent basis, except as otherwise
noted therein, and except for footnotes and for year-end adjustments the
effect of which in the aggregate is not expected to be material.
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3.5. Absence of Certain Changes or Events. Except as set
forth in Schedule 3.5 and except as otherwise contemplated by this
Agreement, since January 31, 2002, the Business has not (a) suffered any
damage, destruction or casualty loss to its physical properties which
has had a Business Material Adverse Effect; (b) incurred or discharged
any obligation or liability or entered into any other transaction except
in the ordinary course of business and except that have not had a
Business Material Adverse Effect; (c) suffered any change in its
relationship with its suppliers, customers, distributors, lessors,
licensors, or licensees other than changes which have not had a Business
Material Adverse Effect; (d) other than with respect to agreements for
which the Buyer will have no liability after Closing, increased the rate
or terms of compensation or benefits payable to or to become payable by
it to its directors, officers, or key employees or increased the rate or
terms of any bonus, pension or other employee benefit plan covering any
of its directors, officers or key employees, except in each case
increases occurring in the ordinary course of business in accordance
with its customary practice (including normal periodic performance
reviews and related compensation and benefits increases) or as required
by any pre-existing commitment; (e) incurred any indebtedness for
borrowed money; (f) forgiven or canceled any indebtedness owing to it or
waived any claims or rights of material value, in each case except in
the ordinary course of business; (g) sold, leased, licensed or otherwise
disposed of any of its material assets other than sales of inventory and
sales of obsolete assets in the ordinary course of business; or (h)
committed pursuant to a legally binding agreement to do any of the
things set forth in clause (b) and clauses (d) through (g) above.
3.6. Title to Assets. Each of the Seller and MTI has good
title to all of the Assets which it purports to own (except for Assets
sold, consumed or otherwise disposed of in the ordinary course of
business since the date of the January Balance Sheet), free and clear of
all liens, pledges, charges, mortgages, security interests,
restrictions, easements, liabilities, claims, encumbrances or rights of
others of every kind and description (collectively, "Liens"), except
Permitted Liens. Except as specified in Schedule 3.6, the Assets
include all material assets and properties used in the operation and
conduct of the Business as currently conducted by the Seller, and are in
good working order, reasonable wear and tear excepted.
3.7. Certain Contracts. Schedule 3.7 lists all contracts or
agreements to which the Seller is a party, as of the date hereof, other
than (i) contracts for the purchase or sale of goods or services entered
into in the ordinary course of business, (ii) contracts that terminate
or are terminable without penalty within one (1) year after the date
hereof, and (iii) contracts that involve an annual obligation of less
than $10,000 on the part of the Business (collectively, the "Material
Contracts"). Except as set forth in Schedule 3.7, to the knowledge of
the Seller, there is not, under any of the Material Contracts, any
existing default or event of default which, with or without due notice
or lapse of time or both, would constitute a default or event of default
on the part of the Seller, except such defaults, events of default and
other events which would not have a Business Material Adverse Effect.
Except as set forth in Schedule 3.7, each Material Contract is a
validand binding obligation of the Seller to the knowledge of the
Seller, the other party thereto, is enforceable against the Seller in
accordance with its terms, in all cases except as such enforceability
may be limited by the effect of bankruptcy, insolvency or similar laws
affecting creditors' rights generally or by general principles of
equity, and is in full force and effect as of the date hereof.
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3.8. Legal Proceedings, etc. Except as set forth on Schedule
3.8, as of the date hereof, there are no legal, administrative,
arbitration or other proceedings or governmental investigations pending
or, to the knowledge of the Seller, threatened in writing against the
Seller, or against MTI or the Parent relating to the Business, other
than those which would not have a Business Material Adverse Effect.
3.9. Employee Benefit Plans. The Seller has made available
to the Buyer each written plan, policy, commitment and agreement that
provides material compensation or employee benefits to the Transferred
Employees (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), maintained by the Seller or any of its
affiliates.
3.10. Taxes. All material returns of income Taxes (as
defined in the following sentence) and all returns of other Taxes
required to be filed with respect to the Business have been filed
(taking into account any extension of time to file), and all material
Taxes required to be paid in connection therewith have been paid, except
where failure to file such Tax returns or to pay such Taxes would not
have a Material Adverse Effect. For purposes of this Section 3.10,
"Taxes" shall mean all taxes, charges, fees, levies, or other
assessments, including, without limitation, income, excise, property,
sales and franchise taxes, imposed by the United States or any state,
county, local or foreign government or subdivision or agency thereof,
and including any interest, penalties or additions attributable thereto.
3.11. Intellectual Property. Schedule 3.11 sets forth a list
of all of the Intellectual Property. Except as set forth on Schedule
3.11, the Seller and MTI own or, to the knowledge of the Seller and MTI,
have a valid right to use the Intellectual Property included in the
Seller Assets and the MTI Assets, respectively, and the Seller owns the
Copyrights, in each case free and clear of all Liens (other than
Permitted Liens), except for such Liens or absence of rights as would
not have a Business Material Adverse Effect. Each of the Seller and MTI
has the power and authority to transfer or license to the Buyer all of
such rights owned by such party to be transferred or licensed to the
Buyer under this Agreement with respect to the Intellectual Property and
the Copyrights. Except as set forth in Schedule 3.11, as of the date
hereof, there is no claim or litigation pending or, to the knowledge of
the Seller or MTI, threatened in writing against the Seller or MTI
contesting the right of the Seller or MTI to sell or the right of the
Seller or MTI to use any of the Intellectual Property or the Copyrights.
3.12. Compliance with Law; Licenses. Except as set forth in
Schedule 3.12 hereto, to the knowledge of the Seller, the Business is in
compliance in all material respects with all applicable laws, rules and
regulations, except where the failure to so comply would not have a
Business Material Adverse Effect. Except as would not have a Business
Material Adverse Effect, to the knowledge of the Seller, the Business
has all of the Licenses required for the operation of the Business as
conducted as of the date of this Agreement. (This Section 3.12 does not
relate to environmental matters, which matters are covered instead
exclusively in Section 3.18.)
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3.13. Employees. (a) Schedule 3.13 is a true and complete
list of the name of each individual who is employed or who is retained
as an independent contractor or consultant (either directly or
indirectly) by the Seller on the date hereof along with his or her
current job title, compensation, and any additional employee benefits
enjoyed by such individual which are not generally available to
employees of the Seller.
(b) The Seller has complied in all material respects
with all applicable laws, rules and regulations relating to the
employment of labor, including those relating to wages, hours,
unemployment insurance, collective bargaining and the payment and
withholding of taxes for all employees of the Seller. There is not
pending or, to the knowledge of the Seller, threatened, any material
labor dispute, strike, work stoppage or union organizing effort
involving the Business.
3.14. Undisclosed Liabilities. The Business did not have as
of the date of the January Balance Sheet any material liability or
obligation of any kind or nature (fixed or contingent) that is required
to be reflected on a balance sheet in accordance with generally accepted
accounting principles, which is not reflected, reserved against or
disclosed in the January Financial Statements or disclosed elsewhere in
the Schedules or in the documents listed in the Schedules, other than
(i) such as would not have a Business Material Adverse Effect, (ii)
Excluded Liabilities, (iii) liabilities incurred in the ordinary course
of business since the date of the January Balance Sheet, and (iv)
liabilities under contracts not required to be disclosed on Seller's
Schedules.
3.15. Schedules and Exhibits. Disclosure of any fact or item
in any Schedule or Exhibit hereto referenced by a particular paragraph
or section in this Agreement shall, should the existence of the fact or
item or its contents be relevant to any other paragraph or section, be
deemed to be disclosed with respect to that other paragraph or section
whether or not an explicit cross-reference appears.
3.16. No Implied Representation. Notwithstanding anything
contained in this Article III or any other provision of this Agreement,
it is the explicit intent of each party hereto that none of the Seller,
MTI or the Parent is making any representation or warranty whatsoever,
express or implied, beyond those expressly given in this Agreement,
including any implied warranty or representation as to condition,
merchantability or suitability as to any of the Assets or the Business,
and it is understood that subject to the representations and warranties
contained in this Agreement the Buyer takes the Assets and the Business
as is and where is and in their then present condition, and Buyer shall
rely upon its own examination thereof.
3.17. Construction of Certain Provisions. It is understood
and agreed that the specification of any dollar amount in any provision
of this Agreement or the Indemnification Agreement or the inclusion of
any specific item in the Schedules or Exhibits is not intended to imply
that such amounts or higher or lower amounts, or the items so included
or other items, are or are not material and neither party shall use the
fact of the setting of such amounts or the fact of the inclusion of any
such item in the Schedules in any dispute or controversy between the
parties as to whether any obligation, item or matter not described
herein or included in a Schedule or Exhibit is or is not material for
purposes of this Agreement or the Indemnification Agreement.
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3.18. Environmental Matters.
(a) Except as set forth in Schedule 3.18(a), to the
knowledge of the Seller, (i) the Business is in compliance in all
material respects with all applicable Environmental Laws, except for
such noncompliance as would not have a Business Material Adverse Effect;
(ii) the Seller has obtained and is in material compliance with all
terms and conditions of all Environmental Permits, except for such
noncompliance as would not have a Business Material Adverse Effect; and
(iii) neither the Seller, nor the Parent has received any written notice
that the Business is in violation of any Environmental Laws or
Environmental Permits.
(b) Except as set forth in Schedule 3.18(b) or except
as otherwise permitted by applicable Environmental Laws, the Seller has
no knowledge of the release or discharge of any Hazardous Materials by
the Seller into the environment at, on or from the premises of the
Seller, that would be reasonably likely to form the basis of any claim
or action under any Environmental Laws and that would have a Business
Material Adverse Effect.
(c) For purposes of this Agreement: (i) "Environmental
Laws" means all federal, state, local and foreign statutes, laws, rules,
regulations and ordinances relating to Environmental Matters, as enacted
and in effect on or prior to the date hereof; (ii) "Environmental
Matters" means any matter arising out of or relating to health and
safety, or pollution or protection of the environment or workplace, any
of the foregoing relating to the presence, use, production, generation,
handling, transport, treatment, storage, disposal, distribution,
discharge, release, control or cleanup of any Hazardous Materials; (iii)
"Environmental Permits" means all licenses, permits and other
governmental authorizations required pursuant to applicable
Environmental Laws for the operation of the Business as conducted as of
the date of this Agreement; and (iv) "Hazardous Materials" means,
collectively, any material defined as, or considered to be, a "hazardous
waste," "hazardous substance," pollutant or contaminant under any
Environmental Law including, the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. Section 9601 et. seq.) and/or the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et. seq.).
3.19 Real Property.
(a) Schedule 1.1(a)(i)(Q) lists all real property owned by
Seller included in the Seller Assets. Seller does not own or lease any
real property in connection with the businesses of the Publications
other than the Property and the Leasehold Property (as defined below).
At the Closing, Seller will transfer to Buyer good and marketable fee
simple title to all Property free and clear of all Liens (other than
Permitted Liens).
(b) Schedule 1.1(a)(i)(J) lists all real property leases
where Seller is lessee ("Facility Leases") included in the Seller
Assets. Other than the Facility Leases set forth on Schedule
1.1(a)(i)(J) or other leases set forth on Schedule 1.1(a)(i)(L), there
are no leases, subleases, licenses or other agreements or arrangements
granting to any person the right to purchase, use or occupy any facility
or any real property owned or leased by Seller.
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(c) With respect to each Facility Lease, Seller has and
will transfer to Buyer at the Closing, subject to any required consent
and to Section 1.4 hereof, an unencumbered interest in the leasehold
estate. Seller enjoys peaceful and undisturbed possession of the
property subject to each Facility Lease, subject to the rights of the
fee owners.
(d) No zoning or similar land use restrictions are
presently in effect or, to Seller's knowledge, proposed, by any
governmental authority that would impair the use, occupancy, or
enjoyment of the Property for the purposes for which such Property is
currently being used, and Seller's use of the Property is in compliance
with all applicable building, zoning, land use, health or other codes,
ordinances, laws or regulations relating to the use thereof except as
would not have a Business Material Adverse Effect. No condemnation or
taking by eminent domain of the Property has occurred, is pending or, to
the knowledge of Seller, is threatened.
(e) The Property is served by or has access to public
streets and rights of way, rights of ingress and egress, public sewage
(both storm and sanitary), gas, electric and telephone utility services
that are adequate for the operation of the Publications as currently
conducted.
3.20 Circulation. Schedule 3.20 sets forth the paid
circulation of each of the Publications as of the most recent date
reported by the Audit Bureau of Circulation and as of the most recent
date reported in the Publisher's Unaudited Statement to the Audit Bureau
of Circulation. There has been no material decline in paid circulation
for the Publications since the most recent date reported in the
Publisher's Unaudited Statement to the Audit Bureau of Circulation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Except as set forth in the schedules being delivered by the
Buyer to the Seller (the "Buyer Schedules" and, each, a "Buyer
Schedule"), the Buyer represents and warrants to the Seller, MTI and the
Parent as follows:
4.1. Organization. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so
existing and in good standing or to have such power and authority would
not have a Buyer Material Adverse Effect. A "Buyer Material Adverse
Effect" mans a material adverse effect on the operations or financial
condition of the Buyer (other than any effect arising from or related to
general economic, securities markets, or industry conditions) or on the
ability of the Buyer to consummate the transactions contemplated hereby
without material delay.
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4.2. Authority Relative to this Agreement. The Buyer has
full corporate power and authority to execute and deliver this
Agreement, the Indemnification Agreement and the Obligations Undertaking
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement, the Indemnification Agreement
and the Obligations Undertaking by the Buyer and the consummation of the
transactions contemplated hereby and thereby by the Buyer have been duly
and validly authorized by all necessary corporate action on the part of
the Buyer and no other proceedings on the part of the Buyer are
necessary to authorize this Agreement, the Indemnification Agreement or
the Obligations Undertaking or to consummate the transactions
contemplated hereby or thereby. This Agreement, the Indemnification
Agreement and the Obligations Undertaking have been duly and validly
executed and delivered by the Buyer and, assuming the due authorization,
execution and delivery by the other parties hereto, constitute a legal,
valid and binding obligation of the Buyer, enforceable against the Buyer
in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally and by general
equitable principles (regardless of whether enforceability is considered
in a proceeding in equity or at law).
4.3. Consents and Approvals; No Violation. To the knowledge
of the Buyer, there is no requirement applicable to the Buyer to make
any filing with, or to obtain any permit, authorization, consent or
approval of, any governmental or regulatory authority as a condition to
the lawful consummation by the Buyer of the transactions contemplated by
this Agreement or by the Indemnification Agreement. Except as set forth
in Schedule 4.3, neither the execution and delivery of this Agreement
and the Indemnification Agreement by the Buyer nor the consummation by
the Buyer of the transactions contemplated hereby or thereby nor
compliance by the Buyer with any of the provisions hereof or thereof
will (i) conflict with or result in a breach of the Certificate of
Incorporation of the Buyer, (ii) to the knowledge of the Buyer, result
in a breach of or default, or give rise to any right of termination,
cancellation or acceleration under, any material note, bond, mortgage,
indenture, license, agreement, lease or other similar instrument or
obligation to which the Buyer is a party or by which any of the Buyer's
properties or assets may be bound, except for such breaches or defaults
(or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained, or (iii) assuming
compliance with the HSR Act, to the knowledge of the Buyer, violate any
material order, judgment, writ, injunction, decree, statute, rule or
regulation applicable to the Buyer or any of the Buyer's properties or
assets, excluding from the foregoing clauses (ii) and (iii) such
breaches, defaults and violations which, in the aggregate, would not
have a Buyer Material Adverse Effect.
4.4. Financial Capability. The Buyer has immediately
available cash sufficient to pay the Purchase Price or, if some or all
of the Purchase Price will be obtained from external financing sources,
the Buyer has delivered to the Seller executed commitments from
responsible financial institutions in form and substance satisfactory to
Seller for such funds, and the Buyer will have available as of the
Closing Date (either from its immediately available cash or from such
commitments, or a combination thereof) funds sufficient to pay the
Estimated Purchase Price and the MTI Purchase Price.
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4.5. Litigation. As of the date hereof, there are no legal,
administrative, arbitration or other proceedings or government
investigations pending or, to the knowledge of the Buyer, threatened in
writing which seek to question, delay or prevent the consummation of or
would materially impair the ability of the parties hereto to consummate
the transactions contemplated hereby.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the
Closing Date, without the prior consent of the Buyer (which consent will
not be unreasonably withheld or delayed) the Seller will conduct the
Business according to its ordinary course of business consistent with
past practice. Without limiting the generality of the foregoing, and,
except as otherwise contemplated by this Agreement or disclosed on
Schedule 5.1 hereto, prior to the Closing Date, without the prior
consent of the Buyer (which consent will not be unreasonably withheld or
delayed), the Seller will not:
(a) except to the extent required by law or contractual
obligations or other understandings or arrangements existing on the date
hereof (i) increase in any material manner the compensation of any of
the directors, officers or other employees of the Business, except such
increases as are granted in the ordinary course of business in
accordance with its customary practices; (ii) pay or agree to pay any
pension, retirement allowance or other employee benefit not required or
permitted by any existing plan, agreement or arrangement to any such
director, officer or employee, whether past or present; or (iii) commit
itself to any additional pension, profit-sharing, bonus, incentive,
deferred compensation, stock purchase, stock option, stock appreciation
right, group insurance, severance pay, retirement or other employee
benefit plan, agreement or arrangement, or to any employment agreement
or consulting agreement (arising out of prior employment) with or for
the benefit of any person, or, to amend any of such plans or any of such
agreements in existence on the date hereof;
(b) except in the ordinary course of business, sell,
transfer, mortgage, or otherwise dispose of, or agree to sell, transfer,
or otherwise dispose of, any material properties or assets of the
Business, real, personal or mixed; or
(c) enter into other material agreements, commitments or
contracts with respect to the Business, except agreements, commitments
or contracts made in the ordinary course of business.
5.2. Access to Information.
(a) Between the date of this Agreement and the Closing
Date, the Seller will (i) give the Buyer and its authorized
representatives reasonable access to all books, records, offices and
other facilities and properties of the Business, (ii) permit the Buyer
to make such inspections thereof, during regular business hours upon at
least five business days notice, as the Buyer may reasonably request and
(iii) cause its officers to furnish the Buyer with such financial and
operating data and other information with respect to the Business as the
Buyer may from time to time reasonably request; provided, however, that
any such investigation shall be conducted in such a manner as not to
interfere unreasonably with the operation of the Business.
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(b) Seller will furnish to Buyer (1) as soon as
available, and in any event within ten (10) days after it is prepared, a
copy of any report prepared from the date hereof through the Closing
Date by Seller for submission to its board of directors or to management
of the Publications relating to any material adverse effect on the
Business or on the transactions contemplated hereby arising from or
related to a change in general economic conditions; and (2) as soon as
available, and in any event within ten (10) days after it is prepared,
monthly unaudited balance sheets and income statements for the
Publications. Each of the financial statements delivered pursuant to
this Section 5.2(b) will be prepared consistent with Seller's accounting
practices.
(c) Between the date of this Agreement and the Closing
Date, the Buyer will hold and will cause its officers, directors,
employees, representatives, consultants and advisors to hold in strict
confidence in accordance with the terms of the Nondisclosure Agreement
between the Seller and the Buyer (the "Nondisclosure Agreement"), all
documents and information furnished to the Buyer by the Seller, MTI, the
Parent or any of their representatives, consultants or advisors in
connection with the transactions contemplated by this Agreement.
(d) The Buyer agrees to hold all of the books and
records of the Business existing on the Closing Date and not to destroy
or dispose of any thereof for a period of seven (7) years from the
Closing Date or such longer time as may be required by law and at any
time thereafter prior to destroying or disposing of any such records to
notify the Seller and the Parent and afford them the opportunity to take
or to make copies of any such books and records, and following the
Closing Date to afford to the Seller, MTI, the Parent, their accountants
and counsel, during normal business hours upon reasonable request, at
any time, full access to the books, records and other data of the
Business and to the employees of the Business to the extent that such
access may be requested for any legitimate purpose at no cost to the
Seller, MTI or the Parent (other than for reasonable out-of-pocket
expenses of the Buyer); provided, however, that any such investigation
shall be conducted in such a manner as not to unreasonably interfere
with the operation of the Business by the Buyer.
5.3. Expenses. Except as otherwise specifically provided in
this Agreement, whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred by the Buyer in connection
with this Agreement and the transactions contemplated hereby will be
paid by the Buyer and all costs and expenses incurred by the Seller, MTI
and the Parent in connection with this Agreement and the transactions
contemplated hereby will be paid by the Seller, MTI and the Parent, as
the case may be.
5.4. Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use its commercially
reasonable efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
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5.5. Public Announcements. None of the Seller, MTI, the
Parent or the Buyer shall issue any press release or otherwise make any
public statement with respect to this Agreement and the transactions
contemplated hereby without the prior approval of the other parties
hereto, except as may be required by applicable law.
5.6. Filings. The Seller, MTI and the Buyer will use
commercially reasonable their best efforts to make or cause to be made
all such filings and submissions as may be required under applicable
laws and regulations, if any, for the consummation of the transactions
contemplated by this Agreement, including, all filings under the HSR Act
and all filings required to transfer Intellectual Property as provided
hereunder. The Buyer, MTI, Parent and the Seller will coordinate and
cooperate with one another in exchanging such information and providing
such reasonable assistance as another may request in connection with all
of the foregoing.
5.7. Further Assurances. From time to time, without further
consideration, the Seller will, at the expense of Buyer, execute and
deliver such documents to the Buyer as the Buyer may reasonably request
in order more effectively to consummate the transactions contemplated
hereby. From time to time, without further consideration, the Buyer
will, at the expense of Seller, execute and deliver such documents as
the Seller may reasonably request in order more effectively to
consummate the transactions contemplated hereby. In case at any time
after the Closing Date any further action is necessary or desirable to
carry out the purposes of this Agreement or the Indemnification
Agreement, each party to hereto and thereto will take or cause its
proper officers and directors to take all such necessary action.
5.8. Brokers. The Seller represents and warrants to the
Buyer that, except for Xxxxx, Van Essen & Xxxxxx whose fees shall be the
sole responsibility of the Seller, no broker, finder or other person is
entitled to any brokerage fees, commissions or finder's fees from the
Seller in connection with the transactions contemplated hereby. The
Seller will pay or discharge, and will indemnify and hold the Buyer
harmless from and against, any and all claims or liabilities for all
brokerage fees, commissions and finder's fees incurred by reason of any
action taken by the Seller. The Buyer represents and warrants to the
Seller that, except for Belmoro Corporate Advisors, LLC, whose fees
shall be the sole responsibility of the Buyer, no broker, finder or
other person is entitled to any brokerage fees, commissions or finder's
fees from the Buyer in connection with the transactions contemplated
hereby. The Buyer will pay or discharge, and will indemnify and hold
the Seller harmless from and against, any and all claims or liabilities
for all brokerage fees, commissions and finder's fees incurred by reason
of any action taken by the Buyer.
5.9. Sales and Transfer Taxes and Fees. The parties agree
that all sales, transfer, documentary, stamp, excise, recording or other
taxes and fees incurred in connection with this Agreement and the
transactions contemplated hereby (other than income taxes payable by the
Seller, MTI or the Parent) will be borne by the Buyer, and the Buyer
will, at its expense, file all necessary tax returns and other
documentation with respect to all such sales and transfer taxes and
fees.
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5.10. Employee Matters.
(a) Effective as of the Closing, each employee listed on
Schedule 5.10, who is working for the Seller as of the Closing Date and
not on long-term disability shall become an employee of the Buyer on an
at-will basis commencing on the Closing Date. All such employees are
referred to herein as "Transferred Employees." The Buyer shall provide
each Transferred Employee with (i) the same base salary or wages as set
forth on Schedule 3.13 and (ii) the benefit package currently provided
by Buyer to its employees as described on Schedule 5.10(a).
(b) Upon the Closing, the Buyer shall assume as of the
Closing Date the obligation to provide coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, under the Buyer's
plans to each Transferred Employee who as of the Closing Date is a
"qualified beneficiary" under any plan to which Section 607 of ERISA,
and Section 4980B of the Code apply; provided that nothing in this
Section 5.10(b) shall be construed, from and after the Closing Date, to
restrict or in any manner otherwise limit or prohibit the Buyer's
exercise of its rights to amend, modify and terminate any plan or any
benefit provided thereunder or otherwise or the participation of any
individual in any such plan or benefit thereunder.
(c) To the extent that service is relevant for purposes
of eligibility or vesting under any employee benefit plan, program or
arrangement established or maintained by the Buyer for the benefit of
the Transferred Employees heretofore or in the future, the Buyer shall
cause such plan, program or arrangement to credit such Transferred
Employees for their aggregate service on and prior to the Closing Date
with the Seller and the Business. Service on and prior to the Closing
Date with the Seller and the Business shall also be credited for
purposes of determining the amount of severance pay and vacation day
accruals to which a Transferred Employee is entitled following the
Closing Date. The Buyer shall cause any plan, program or arrangement of
Seller that provides medical, health or other similar benefits to waive
any preexisting condition or waiting period limitations and shall honor
any deductible and out-of-pocket expenses incurred by the Transferred
Employees and their beneficiaries under plans, programs or arrangements
of the Business prior to the Closing Date.
(d) The Buyer agrees to provide severance pay which may
be owing to any Transferred Employee whose employment is terminated by
the Buyer, other than for cause, within six months after the Closing
Date, in an amount equal to two weeks salary (at the salary level in
effect as of the date of this Agreement) for each year of such
Transferred Employee's service with the Seller and the Business (with a
minimum of two weeks of salary) or, if more favorable to the Transferred
Employee, the amount of severance pay and benefit entitlements
determined in accordance with the severance policy of the Buyer in
effect after the Closing; provided, however, that severance for any
single employee shall not exceed six month's salary.
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(e) Effective as of the Closing, the Buyer shall assume
the collective bargaining agreements covering the Transferred Employees,
each of which is set forth on Schedule 5.10(e), and all liabilities and
obligations thereunder. To the extent that the liabilities and
obligations of the Buyer under such collective bargaining agreements are
inconsistent with the liabilities and obligations of the Buyer pursuant
to this Article V, the terms of the collective bargaining agreements
shall control.
5.11. Buyer's Knowledge. The Buyer agrees (without prejudice
to any rights which the Buyer may have under this Agreement to decline
to consummate the transactions contemplated hereby and to terminate this
Agreement) that, if the Closing occurs, then to the extent any
representation, warranty, covenant or agreement of the Seller contained
in this Agreement has, to the knowledge of the Buyer acquired prior to
the Closing, been breached, the Buyer shall be deemed to have consented
to and waived, and shall have no rights hereunder by reason of, such
breach.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each
party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Closing Date of the following
conditions:
(a) There shall be no effective injunction, writ, or
preliminary restraining order of a court of competent jurisdiction
directing that the transactions provided for herein shall not be
consummated.
(b) No action, suit, proceeding or investigation by or
before any court, administrative agency or other governmental authority
shall have been instituted (i) to restrain, prohibit or invalidate the
transactions contemplated by this Agreement or the Indemnification
Agreement or (ii) which seeks material or substantial damages by reason
of completion of such transaction.
(c) The applicable waiting periods under the HSR Act
shall have expired or been terminated.
6.2. Conditions to the Obligations of the Seller, MTI and the
Parent to Effect the Transactions Contemplated Hereby. The obligations
of the Seller, MTI and the Parent to effect the transactions
contemplated hereby shall be further subject to the fulfillment at or
prior to the Closing Date of the following conditions, any of which may
be waived by the Seller, MTI and the Parent:
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(a) (i) The Buyer shall have performed and complied in
all material respects with the agreements contained in this Agreement
required to be performed and complied with by it at or prior to the
Closing Date; and (ii) the representations and warranties of the Buyer
set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing Date as though made at and as of
the Closing Date (except as otherwise contemplated by this Agreement),
except to the extent that all failures of the representations and
warranties of the Buyer set forth in this Agreement to be true and
correct, taken together, would not have a Buyer Material Adverse Effect.
(b) The Seller shall have received a certificate to the
effect of Section 6.2(a) signed by an authorized officer of the Buyer.
6.3. Conditions to the Obligations of the Buyer to Effect the
Transactions Contemplated Hereby. The obligations of the Buyer to
effect the transactions contemplated hereby shall be further subject to
the fulfillment at or prior to the Closing Date of the following
conditions (provided that, with respect to (d) below, Buyer has
negotiated in good faith), any of which may be waived by the Buyer:
(a) (i) The Seller and MTI shall have performed and
complied in all material respects with the agreements contained in this
Agreement required to be performed and complied with by them at or prior
to the Closing Date; and (ii) the representations and warranties of the
Seller, the Parent and MTI set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date (except as otherwise
contemplated by this Agreement), except to the extent that all failures
of the representations and warranties of the Seller, the Parent and MTI
set forth in this Agreement to be true and correct would not have a
Business Material Adverse Effect.
(b) Since the date of the execution of this Agreement,
no event has occurred that will cause a Business Material Adverse
Effect.
(c) The Buyer shall have received a certificate to the
effect of clauses 6.3(a) and 6.3(b) signed by an authorized officer of
each of the Seller and MTI.
(d) Parent, or Parent's nominee, shall have agreed to
enter into an interim, short-term, services agreement ("Services
Agreement") with Buyer pursuant to which Parent or Parent's nominee
shall perform certain administrative services for Buyer on reasonable
terms and conditions.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual consent of the Seller and the Buyer;
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(b) by the Seller or the Buyer at any time after June
30, 2002; provided, however, that no party hereto shall have the right
to terminate this Agreement under this Section 7.1(b) if such party's
failure to fulfill any obligation under this Agreement shall have been
the cause of, or shall have resulted in, the failure of the Closing to
occur prior to such date;
(c) by the Buyer, if there has been a material breach by
the Seller, the Parent or MTI of its covenants, representations or
warranties contained in this Agreement as a result of which it has
become impossible for one or more of the conditions to the obligations
of the Buyer to consummate the transactions contemplated hereby to be
satisfied, and such breach has not been (i) cured, or adequate assurance
of a cure has not been given, within 20 business days following notice
of the breach from the Buyer to the Seller, or (ii) waived by the Buyer;
or
(d) by the Seller, if there has been a material breach
by the Buyer of its covenants, representations or warranties contained
in this Agreement as a result of which it has become impossible for one
or more of the conditions to the obligations of the Seller to consummate
the transactions contemplated hereby to be satisfied, and such breach
has not been (i) cured, or adequate assurance of a cure have not been
given, within 20 business days following notice of the breach from the
Seller to the Buyer, or (ii) waived by the Seller.
7.2. Procedure and Effect of Termination. In the event of
termination of this Agreement as provided in Section 7.1, this Agreement
shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) upon request therefor, each party will redeliver all
documents, work papers and other material of any other party relating to
the transactions contemplated hereby, whether obtained before or after
the execution hereof, to the party furnishing the same;
(b) none of the information received by or on behalf of
the Buyer with respect to the Business, the Seller, MTI and the Parent
shall at any time be used for the advantage of the Buyer to the
detriment of the Business, the Seller, MTI or the Parent; and the Buyer
will use its best efforts to prevent the disclosure thereof to third
persons except as may be required by law;
(c) no party hereto shall have any liability or further
obligation to any other party to this Agreement pursuant to this
Agreement except as stated in this Section 7.2 and in Sections 5.3, 5.5,
and 5.8; provided, however, that nothing in this Section 7.2 shall be
deemed to release any party from any liability for breach by such party
of any of its covenants set forth in this Agreement which occurs on or
before the date of the termination of this Agreement; and this Agreement
will be of no further force and effect except that this Section 7.2 and
Sections 5.3, 5.5, 5.8, and Article VIII and the terms of the
Indemnification Agreement shall remain in effect; and
(d) all filings, applications, and other submissions
made pursuant to Section 5.6 shall, to the extent practicable, be
withdrawn from the agency or other person to which made.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1. Amendment and Modification. Subject to applicable law,
this Agreement and the Indemnification Agreement may be amended,
modified or supplemented only by written agreement of the parties hereto
at any time prior to the Closing Date with respect to any of the terms
contained herein.
8.2. Waiver of Compliance. Except as otherwise provided in
this Agreement and the Indemnification Agreement, any failure of any of
the parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the party or parties entitled to the
benefits thereof only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent
or other failure..
8.3 Survival of Representations and Warranties. The
representations and warranties set forth in this Agreement shall survive
the Closing and will expire 180 days from the Closing Date, except for
those representations and warranties contained in Sections 3.6, 3.10 and
3.18, which shall remain in force until the expiration of the applicable
statute of limitations. No party shall be entitled to assert any claims
against the other for misrepresentations or breaches of representations
and warranties under or pursuant to this Agreement (or for
indemnification under the Indemnification Agreement for such
misrepresentations or breaches of representations and warranties),
unless the party asserting such claim shall notify the other of such
claim with reasonable specificity and outlining the basis of alleged
liability within the survival period of the applicable representation
and warranty.
8.4. Notices. All notices hereunder and under the
Indemnification Agreement shall be in writing and shall be deemed given
if delivered personally or mailed by registered or certified mail
(return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address
shall be effective only upon receipt thereof):
(a) if to the Seller, MTI or the Parent:
c/x Xxxxxxx Newspapers, Inc.
00 Xxxxx 000
XX Xxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Xx.
with a copy to:
Xxxxxxx Newspapers, Inc.
00 Xxxxx 000
XX Xxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
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with a copy to:
Dow Xxxxx & Company, Inc.
XX Xxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
and
Attention: Legal Department
(b) if to the Buyer, to
Newspaper Holdings, Inc.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
with a copy to
Xxxxxx X. Xxxxxx, Esq.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
8.5. Assignment. This Agreement, the Indemnification
Agreement and all of the provisions hereof and thereof shall be binding
upon and inure to the benefit of the parties hereto and thereto and
their respective successors and permitted assigns, but neither this
Agreement, the Indemnification Agreement nor any of the rights,
interests or obligations hereunder or thereunder shall be assigned by
any of the parties hereto or thereto without the prior written consent
of the other parties.
8.6. Governing Law. This Agreement and the Indemnification
Agreement shall be governed by the laws of the State of Delaware
(regardless of the laws that might otherwise govern under applicable New
York principles of conflicts of law) as to all matters, including but
not limited to matters of validity, construction, effect, performance
and remedies. All actions and proceedings arising out of or relating to
this Agreement and the Indemnification Agreement shall be heard and
determined in a Delaware state or federal court, and the parties hereto
hereby irrevocably submit to the exclusive jurisdiction of such courts
in any such action or proceeding and irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action or proceeding.
8.7. Counterparts. This Agreement and the Indemnification
Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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8.8. Interpretation. The article and section headings
contained in this Agreement and the Indemnification Agreement are solely
for the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or interpretation of
this Agreement or the Indemnification Agreement. The parties have
participated jointly in the negotiation and drafting of this Agreement
and the Indemnification Agreement. If any ambiguity or question of
intent or interpretation arises, this Agreement and the Indemnification
Agreement shall be construed as if drafted jointly by the parties and no
presumptions or burden of proof shall arise favoring or disfavoring any
party by virtue of authorship of any of the provisions of this Agreement
or the Indemnification Agreement. As used in this Agreement, the term
"person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof. As used in this
Agreement, the term "Permitted Liens" shall mean and include (i) those
exceptions to title to the properties and assets of the Seller listed in
the Schedule referred to in the applicable Section of this Agreement;
(ii) Liens incurred in connection with the purchase of properties and
assets by the Seller securing all or a portion of the purchase price
therefor; (iii) statutory liens for current taxes or assessments not yet
due or delinquent or the validity of which is being contested in good
faith by appropriate proceedings; (iv) mechanics', carriers', workers',
repairers' and other similar Liens arising or incurred in the ordinary
course of business relating to obligations as to which there is no
default on the part of the Seller which would have a Business Material
Adverse Effect; and (v) such other Liens, imperfections in title,
charges, easements, restrictions, and encumbrances which do not
materially detract from the value of or interfere with the present use
of the properties subject thereto or affected thereby. As used in this
Agreement, the "knowledge" of a party means the knowledge of any
executive officer of such party. As used in this Agreement, "including"
means including without limitation.
8.9. Entire Agreement. The Nondisclosure Agreement, the
Indemnification Agreement and this Agreement, including the Exhibits and
Schedules hereto (which are incorporated herein by reference and made a
part hereof) and the documents, schedules, certificates and instruments
referred to herein, embody the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this
Agreement and the Indemnification Agreement. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other
than those expressly set forth or referred to herein and therein. The
Nondisclosure Agreement, the Indemnification Agreement and this
Agreement supersede all prior agreements and understandings between the
parties with respect to such transactions.
8.10. Severability. If any term or other provision of this
Agreement or the Indemnification Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement and the
Indemnification Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions
contemplated hereby and thereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement or the
Indemnification Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order
that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
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8.11. Bulk Transfer Laws. The Buyer acknowledges that the
Seller will not comply with the provisions of any bulk transfer laws of
any jurisdiction in connection with the transactions contemplated by
this Agreement.
8.12 No Third Party Beneficiary. Each of this Agreement and
the Indemnification Agreement is for the sole benefit of the parties
hereto and thereto and their respective successors and permitted assigns
and nothing herein, express or implied, is intended to or shall confer
upon any other person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement or the
Indemnification Agreement.
8.13 Exclusivity of Remedies. The remedies of any party
hereto for breaches by another party of any representation, warranty,
covenant or agreement hereunder, or otherwise arising out of any matter
pertaining hereto, shall be limited to the right of indemnification
provided in the Indemnification Agreement, and such right of
indemnification shall be exclusive of any and all other rights or
remedies which might be available to a party upon the occurrence of any
such breach or with respect to such other matter whether such other
right or remedy would otherwise be available at law or in equity.
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IN WITNESS WHEREOF, each of the parties hereto has signed this Agreement
or has caused this Agreement to be signed by its duly authorized
officers as of the date first above written.
THE DAILY INDEPENDENT, INC.,
By:/s/Xxxxxx Xxxxxxx
------------------------------
Name:Xxxxxx Xxxxxxx
Title:Vice President
XXXXXXX NEWSPAPERS, INC
By:/s/Xxxxxx Xxxxxxx
------------------------------
Name:Xxxxxx Xxxxxxx
Title:President
THE MAIL TRIBUNE, INC.
By:/s/Xxxxxx Xxxxxxx
------------------------------
Name:Xxxxxx Xxxxxxx
Title:Vice President
NEWSPAPER HOLDINGS, INC.
By:/s/Xxxxxxx Xxxx
------------------------------
Name:Xxxxxxx Xxxx
Title:President
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EXHIBIT 1.1(C)
OBLIGATIONS UNDERTAKING
OBLIGATIONS UNDERTAKING dated, as of , 2002, by Newspaper
Holdings, Inc., a Delaware corporation (the "(XE "Buyer")Buyer") in
favor of The Daily Independent, Inc., a Delaware corporation (the "(XE
"Sellers")Seller") and The Mail Tribune, Inc., a Delaware corporation
("MTI").
WHEREAS, pursuant to an Agreement of Purchase and Sale,
dated as of February 20, 2002 (the "Agreement"), among the Seller, MTI,
Xxxxxxx Newspapers, Inc. ("Parent") and the Buyer, the Seller and MTI
have concurrently herewith sold, assigned, transferred, conveyed and
delivered the Seller Assets (as defined in the Agreement) and the MTI
Assets (as defined in the Agreement), respectively, to Buyer;
WHEREAS, in partial consideration therefor, the Agreement
requires Buyer to execute and deliver to the Seller and MTI this
Obligations Undertaking;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt of which by Buyer is hereby
acknowledged, Buyer hereby agrees as follows (capitalized terms used but
not defined herein having the meanings ascribed thereto in the
Agreement):
1. Subject to the limitation contained herein, Buyer
hereby assumes and agrees to perform and discharge all debts,
commitments, obligations and liabilities (whether absolute, contingent,
accrued, unaccrued, due or to become due) of Seller, or of MTI, relating
primarily to the Business, including, without limitation:
(a) those liabilities reflected in the balance sheet
delivered pursuant to Section 1.2(d) of the Agreement;
(b) the obligation of the Business to fulfill
outstanding subscriptions for the Publications incurred in the normal
and customary course of business with respect to the period commencing
on the Closing Date;
(c) the unperformed and unfulfilled obligations of
the Seller and/or MTI accruing from and after the Closing Date (with
respect to periods commencing on and after the Closing Date) under the
Contracts.
2. Notwithstanding anything to the contrary contained
herein, the Assumed Liabilities shall not include any of the following
debts, commitments, obligations or liabilities of the Seller and MTI
(herein collectively referred to as the "Excluded Liabilities"):
i. any obligation or liability of the Seller or MTI based
upon acts or omissions of the Seller or MTI occurring after the Closing
Date;
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ii. any brokerage or finder's fee payable by the Seller and
MTI or any other costs and expenses incurred in connection with the
negotiation, execution and/or consummation of the Agreement and/or
transactions contemplated thereby;
iii. any indebtedness of, or other amounts owed by, Seller
or MTI to any of their affiliates;
iv. any liability for Taxes relating to the operation of
the Business assessed, accrued for or attributable to any period up to
and including the Closing Date.
v. any and all liabilities and obligations with respect to
legal, administrative, arbitration or other proceedings or governmental
investigations pending, or arising out of events occurring, on or prior
to the Closing Date;
vi. any and all liabilities and obligations based on or
arising from the presence, use, disposal or treatment on or prior to the
Closing Date of any asbestos or any Hazardous Materials on or about any
of the Property or any discharge or release of a Hazardous Material on
or prior to the Closing Date or failure to obtain any license or permit
required in connection with any Hazardous Material or arising out of any
non-compliance with any Environmental Law on or prior to the Closing
Date;
vii. any and all debts, liability or obligation of the
Seller and MTI with respect to any of the Excluded Assets; or
viii. any and all liabilities or obligations to or as a
guarantor, co-obligor or surety of any affiliate of the Seller or MTI.
5. No person, firm or corporation other than the Seller
and MTI shall have any rights under or by reason of this Obligations
Undertaking or the provisions contained herein.
IN WITNESS WHEREOF, the undersigned has caused
this Agreement to be signed by its duly authorized officer as of the
date first above written.
NEWSPAPER HOLDINGS, INC.
By:/s/Xxxxxxx Xxxx
-----------------------------
Name:Xxxxxxx Xxxx
Title:President
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