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Exhibit 2.1
ASSET EXCHANGE AGREEMENT
THIS ASSET EXCHANGE AGREEMENT (this "Agreement"), is dated as of August
26, 1999, between LIBERTY GROUP PUBLISHING, INC., a Delaware corporation
("Liberty"), and XXX ENTERPRISES, INCORPORATED, a Delaware corporation ("Xxx").
BACKGROUND STATEMENT
Liberty (or an Affiliate thereof) is the owner and publisher of the
newspapers and related publications set forth on EXHIBIT A attached hereto and
made a part hereof (the "Liberty Newspapers"). Xxx is the owner and publisher of
the newspapers and related publications set forth on EXHIBIT B attached hereto
and made a part hereof (the "Xxx Newspapers"). Xxx desires to exchange all of
the Xxx Acquired Assets (as hereinafter defined) for the Liberty Acquired Assets
(as hereinafter defined), and Liberty desires to exchange all of the Liberty
Acquired Assets for the Xxx Acquired Assets, upon the terms and subject to the
conditions set forth in this Agreement.
The definitions of certain capitalized terms used herein are set forth
in EXHIBIT C hereto.
Accordingly, in consideration of the premises and of the respective
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF ACQUIRED ASSETS
1.1 Exchange of Assets. Subject to the terms and conditions set forth
herein, at the Closing, Xxx shall transfer, assign and convey to Liberty (or one
or more Affiliates of Liberty as designated by Liberty) and Liberty (or one or
more Affiliates of Liberty as designated by Liberty) shall acquire from Xxx all
of Xxx'x right, title and interest in and to the Xxx Acquired Assets, and in
exchange thereof, Liberty shall transfer, assign and convey to Xxx and Xxx shall
acquire from Liberty all of Liberty's right, title and interest in and to the
Liberty Acquired Assets, and Liberty shall pay to Xxx $8,400,000 payable in cash
("Cash Consideration") to Xxx or in Xxx'x discretion to an escrow agent
designated by Xxx and reasonably acceptable to Liberty ("Escrow Agent") to be
administered pursuant to a mutually agreeable Escrow Agreement between Xxx and
Escrow Agent. Any payments to be made pursuant to this Section 1.1 shall be made
by wire transfer of immediately available funds to an account designated by Xxx
on the date any such payment shall be delivered hereunder.
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1.2 Acquired Assets.
(a) As used herein, "Liberty Acquired Assets" shall mean all of the
assets, properties, rights, interests and claims (other than Liberty Excluded
Assets), that are used or held for use solely in connection with the Liberty
Business and the operation of the Liberty Newspapers. The Liberty Acquired
Assets referred to above include, without limitation, the following assets
(other than Liberty Excluded Assets):
(i) the Liberty Equipment and Liberty Motor Vehicles;
(ii) all inventory of the Liberty Business, including, ink,
newsprint, packaging materials and supplies;
(iii) the Liberty Intangible Property, including, the
trademarks, trade names, licenses and mastheads of the Liberty
Newspapers and all derivations thereof;
(iv) all un-expired contracts, leases, licenses and other
agreements (whether written or oral) to which Liberty is a party, and
relating solely to the Liberty Business (the "Liberty Contracts")
excluding therefrom Liberty Contracts which have already been completed
or will expire or be terminated prior to the Closing;
(v) all licenses, permits or other governmental
authorizations (the "Liberty Permits") relating solely to the Liberty
Business or the Liberty Acquired Assets;
(vi) the Liberty Records;
(vii) all prepaid expenses relating solely to the Liberty
Business;
(viii) all warranties and guarantees received from vendors,
suppliers or manufacturers (the "Liberty Warranties") relating solely
to the Liberty Acquired Assets;
(ix) all customer, sampling and marketing lists relating
solely to the Liberty Business;
(x) the Liberty Real Property;
(xi) all accounts receivable generated solely from the
Liberty Business;
(xii) all promotional material used solely in the Liberty
Business;
(xiii) all subscription, bulk sales, circulation, dealer and
sub-dealer lists relating solely to the Liberty Newspapers, together
with all records, and other lists relating to or concerning routes,
distribution, delivery, sale, returns and pre-paid subscriptions; and
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(xiv) all of Liberty's goodwill in, and going concerning
value relating solely to the Liberty Newspapers, except for any
goodwill relating to the Liberty Trademarks and Logos.
(b) As used herein, "Xxx Acquired Assets" shall mean all of the assets,
properties, rights, interests and claims (other than Xxx Excluded Assets), that
are used or held for use solely in connection with the Xxx Business and the
operation of the Xxx Newspapers. The Xxx Acquired Assets referred to above
include, without limitation, the following assets (other than Xxx Excluded
Assets):
(i) the Xxx Equipment and Xxx Motor Vehicles;
(ii) all inventory of the Xxx Business, including ink,
newsprint, packaging materials and supplies;
(iii) the Xxx Intangible Property, including the trademarks,
trade names, licenses and mastheads of the Xxx Newspapers and all
derivations thereof;
(iv) all un-expired contracts, leases, licenses and other
agreements (whether written or oral) to which Xxx is a party, and
relating solely to the Xxx Business (the "Xxx Contracts") but excluding
therefrom Xxx Contracts which have already been completed or will
expire or be terminated prior to the Closing;
(v) all licenses, permits or other governmental
authorizations (the "Xxx Permits") relating solely to the Xxx Business;
(vi) the Xxx Records;
(vii) all prepaid expenses relating solely to the Xxx
Business;
(viii) all warranties and guarantees received from vendors,
suppliers or manufacturers (the "Xxx Warranties") relating solely to
the Xxx Acquired Assets;
(ix) all customer, sampling and marketing lists relating
solely to the Xxx Business;
(x) the Xxx Real Property;
(xi) all accounts receivable generated solely from the Xxx
Business;
(xii) all promotional material used solely in the Xxx
Business;
(xiii) all subscriptions, bulk sales, circulation, dealer and
sub-dealer lists relating solely to the Xxx Newspapers, together with
all records, and other lists relating
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to or concerning routes, distribution, delivery, sale, returns and
pre-paid subscriptions to the Xxx Newspapers; and
(xiv) all of Xxx'x goodwill in, and going concern value
relating solely to the Xxx Newspapers, except for any goodwill relating
to the Xxx Trademarks and Logos.
1.3 Excluded Assets.
(a) The following assets ("Liberty Excluded Assets") are not included
in the Liberty Acquired Assets, and Liberty shall not transfer, assign or convey
to Xxx and Xxx shall not acquire from Liberty the following assets:
(i) corporate minute books, seals, stock records and other
corporate documentation of Liberty;
(ii) all tax returns, reports, forms and other tax records
pertaining to Liberty's operations prior to the Closing Date
(collectively, "Liberty Tax Records");
(iii) any intercompany debt owing to Liberty including all
interest thereon and all other intercompany agreements;
(iv) the name "Liberty" or "Liberty Group" any trade names,
trademarks, identifying logos or service marks employing the words
"Liberty Group Publishing" or any part or variation thereof or the
trade name, trademark, identifying logo or service xxxx of any Liberty
Affiliate or division not being exchanged hereby or any confusingly
similar trade name, trademark, logo or service xxxx (collectively, the
"Liberty Group Trademarks and Logos") and from and after Closing, Xxx
hereby agrees to completely and permanently remove all Liberty Group
Trademarks and Logos prior to using any item containing such marks and
logos, including promotional materials, packaging materials,
stationery, signs, business cards and use of the Liberty Group
Trademarks and Logos in the Liberty Newspapers. If all Liberty
Trademarks and Logos cannot be completely and permanently removed from
any such item, Xxx shall promptly destroy such item. Any destroyed
items shall be considered Liberty Excluded Assets;
(v) any rights or claims of Liberty or any of its
Affiliates related to or contingent on the satisfaction of Liberty
Retained Liabilities or Liberty Excluded Assets;
(vi) all insurance policies and binders owned or held by
Liberty or any of its Affiliates and claims with respect thereto;
(vii) all rights and claims which Liberty or any of its
Affiliates may have for refund or credit with respect to Income Taxes
(including estimated Income Taxes);
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(viii) any claim, right or obligation owing to Liberty from
any of its Affiliates, including, without limitation, on account of any
inter- or intra-company Indebtedness;
(ix) any corporate allocations to health and welfare, and
property and casualty insurance, including, without limitation, prepaid
insurance expenses, pension expenses and workers' compensation
expenses;
(x) any assets of a Liberty Benefit Plan, except as
expressly provided in Section 10.1;
(xi) the items referred to in the proviso to the definition
of Liberty Records;
(xii) all rights of Liberty under (i) this Agreement, (ii)
the Letter of Intent dated as of June 15, 1999 (the "LOI"), between
Liberty and Xxx, (iii) all documents and analyses prepared by Liberty
or any of its Affiliates for internal evaluation purposes in connection
with the sale of the Liberty Newspapers and the Liberty Business, and
(iv) any Ancillary Instrument;
(xiii) cash on hand and in bank accounts and other investment
accounts and cash equivalents, including, but not limited to,
investments securities as of the Closing; and
(xiv) the contracts, leases, licenses and other agreements
(whether written or oral listed in Section 1.3(a)(xiv) of the Liberty
Disclosure Letter (the "Liberty Excluded Contracts").
(b) The following assets ("Xxx Excluded Assets") are not included in
the Xxx Acquired Assets and Xxx shall not transfer, assign or convey to Liberty
and Liberty shall not acquire from Xxx the following assets:
(i) corporate minute books, seals, stock records and other
corporate documentation of Xxx;
(ii) all tax returns, reports, forms and other tax records
pertaining to Xxx or Xxx'x operations prior to the Closing Date
(collectively, "Xxx Tax Records");
(iii) any intercompany debt owing to Xxx including all
interest thereon and all other intercompany agreements;
(iv) the name "Xxx" or "Xxx Enterprises" or any trade names,
trademarks, identifying logos or service marks employing the words
"Xxx" or "Xxx Enterprises" or any part or variation thereof or the
trade name, trademark, identifying logo or service xxxx of any Xxx
Affiliate or division not being exchanged hereby or any confusingly
similar trade name, trademark, logo or service xxxx (collectively, the
"Xxx Trademarks and Logos") and the trademark, Forever Young, described
in Section
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4.16, Part B of the Xxx Disclosure Letter, which Xxx shall license to
Liberty under a perpetual, fully-paid and non-assignable, transferable
license under a License Agreement in a form to be agreed upon by mutual
agreement of the parties hereafter (the "License Agreement") and from
and after Closing, Liberty hereby agrees to completely and permanently
remove all Xxx Group Trademarks and Logos prior to using any item
containing such marks and logos, including promotional materials,
packaging materials, stationery, signs, business cards and use of the
Xxx Trademarks and Logos in the Xxx Newspapers. If all Xxx Trademarks
and Logos cannot be completely and permanently removed from any such
item, Liberty shall promptly destroy such item. Any destroyed items
shall be considered Xxx Excluded Assets;
(v) any rights or claims of Xxx or any of its Affiliates
related to or contingent on the satisfaction of Xxx Retained
Liabilities or Xxx Excluded Assets;
(vi) all insurance policies and binders owned or held by Xxx
or any of its Affiliates and claims with respect thereto;
(vii) all rights and claims which Xxx or any of its
Affiliates may have for refund or credit with respect to Income Taxes
(including estimated Income Taxes);
(viii) any claim, right or obligation owing to Xxx from any of
its Affiliates, including, without limitation, on account of any inter-
or intra-company Indebtedness;
(ix) any corporate allocations to health and welfare, and
property and casualty insurance, including, without limitation, prepaid
insurance expenses, pension expenses and workers' compensation
expenses;
(x) any assets of a Xxx Benefit Plan, except as expressly
provided in Section 10.2;
(xi) the items referred to in the proviso to the definition
of Xxx Records;
(xii) all rights of Xxx under (i) this Agreement, (ii) the
LOI, (iii) all documents and analyses prepared by Xxx or any of its
Affiliates for internal evaluation purposes in connection with the sale
of the Xxx Newspapers and the Xxx Business, and (iv) any Ancillary
Instrument;
(xiii) cash on hand and in bank accounts and other investment
accounts and cash equivalents, including, but not limited to,
investment securities as of the Closing;
(xiv) the contracts, leases, licenses and other agreements
(whether written or oral) listed in Section 1.3(b)(xiv) of the Xxx
Disclosure Letter (collectively, the "Xxx Excluded Contracts"); and
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(xv) the Xxx Employee Computer Purchase Agreements listed in
SCHEDULE 1.3(B)(XV) and related accounts receivable therefor.
1.4 Assumed Liabilities.
(a) Subject to the terms and conditions set forth herein, at the
Closing, Xxx shall assume and be liable and otherwise responsible for the
following liabilities and obligations of Liberty:
(i) the liabilities and obligations of Liberty under the
Liberty Contracts to the extent arising from and after the Closing
(other than liabilities and obligations relating to pre-closing
breaches);
(ii) all current liabilities of Liberty as of the Closing to
the extent such liabilities are reflected on the Liberty Balance Sheet
(as defined in Section 3.6(a)) or incurred after July 31, 1999 and
which in each case are included in the computation of Liberty Net
Working Capital;
(iii) the liabilities and obligations of Liberty relating to
the Liberty Transferred Employees expressly assumed by Xxx pursuant to
Article 10; and
(iv) the liabilities and obligations of Liberty under the
leases relating to the leased Liberty Real Property to the extent
arising from and after the Closing (other than liabilities and
obligations relating to pre-closing breaches) (all of the foregoing are
referred to herein collectively as the "Liberty Assumed Liabilities");
provided, however, that Liberty Assumed Liabilities shall not include, among
others, (u) except to the extent included in the Liberty Net Working Capital
pursuant to clause (ii) above, any liability or obligation under any Liberty
Contract required by the terms thereof to be discharged prior to the Closing,
(v) any liability or obligation incurred in violation of the provisions of this
Agreement, (w) any liability or obligation arising out of a breach or default by
Liberty prior to the Closing (including an event that with the passage of time
or the giving of notice, or both, would become such a breach or default) under
any Liberty Contract, (x) any liability for Taxes of Liberty except as expressly
provided herein, (y) any liability for deferred compensation or for
post-retirement welfare, medical or life insurance benefits, (z) any
Indebtedness of Liberty and any obligation or liability relating thereto, (uu)
except as provided in Section 10.3, any liability or obligation relating to
costs and expenses incurred by Liberty in connection with the sale of the
Liberty Acquired Assets or the Liberty Business, (vv) any liability or
obligation of Liberty under this Agreement, (ww) any liability or obligation of
Liberty owing to any of its Affiliates, including, but not limited to,
management fees, (xx) any liability or obligation of any current or former
Affiliates of Liberty for which Liberty is liable as a member of a consolidated
group, controlled group or affiliated group or otherwise, or (yy) except as
provided for in Article 10, any liability or obligation of Liberty relating to
the
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termination by Liberty at or prior to the Closing of any of its employees;
(zz) the Liberty Excluded Contracts.
(b) Subject to the terms and conditions set forth herein, at the
Closing, Liberty shall assume and be liable and otherwise responsible for the
following liabilities and obligations of the Xxx:
(i) the liabilities and obligations of the Xxx Newspapers,
under the Xxx Contracts to the extent arising from and after the
Closing (other than liabilities and obligations relating to pre-closing
breaches);
(ii) all current liabilities of the Xxx Newspapers as of the
Closing to the extent such liabilities are reflected on the Xxx Balance
Sheets (as defined in Section 4.6(a)) or incurred after July 31, 1999
and which in each case are included in the computation of Xxx Net
Working Capital;
(iii) the liabilities and obligations of Xxx relating to the
Xxx Transferred Employees expressly assumed by Liberty pursuant to
Article 10; and
(iv) the liabilities and obligations of Xxx under the leases
relating to the leased Xxx Real Property to the extent arising from and
after the Closing (other than liabilities and obligations relating to
pre-closing breaches) (all of the foregoing are referred to herein
collectively as the "Xxx Assumed Liabilities");
provided, however, that Xxx Assumed Liabilities shall not include, among others,
(u) except to the extent included in the Xxx Net Working Capital pursuant to
clause (ii) above, any liability or obligation under any Xxx Contract required
by the terms thereof to be discharged prior to the Closing, (v) any liability or
obligation incurred in violation of the provisions of this Agreement, (w) any
liability or obligation arising out of a breach or default by Xxx prior to the
Closing (including an event that with the passage of time or the giving of
notice, or both, would become such a breach or default) under any Xxx Contract,
(x) any liability for Taxes of Xxx, except as expressly provided herein, (y) any
liability for deferred compensation or for post-retirement welfare, medical or
life insurance benefits, (z) any Indebtedness of Xxx and any obligation or
liability relating thereto, (uu) except as provided in Section 10.3, any
liability or obligation relating to costs and expenses incurred by Xxx in
connection with the sale of the Xxx Acquired Assets or the Xxx Business, (vv)
any liability or obligation of Xxx under this Agreement, (ww) any liability or
obligation of Xxx owing to any of its Affiliates, including, but not limited to,
management fees, (xx) any liability or obligation of any current or former
Affiliates of Xxx for which Xxx is liable as a member of a consolidated group,
controlled group or affiliated group or otherwise, (yy) except as provided for
in Article 10, any liability or obligation of Xxx relating to the termination by
Xxx at or prior to the Closing of any of its employees, (zz) the Xxx Excluded
Contracts or (zzz) any liability or obligation arising out of or relating to any
release, discharge or leak from the sumps and the pipes leading to and from the
sumps at the Xxx Real Property located in Ottumwa, Iowa prior to the Closing
(the "Ottumwa Pre-Closing Sump Liability").
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1.5 Retained Liabilities.
(a) Liberty shall retain as of the Closing (and Xxx shall not
assume or be responsible for) all liabilities and obligations of Liberty,
whether arising before or after the Closing, disclosed or undisclosed, known or
unknown, absolute, contingent or otherwise and whether due or to become due
(including, but not limited to, the Liberty Excluded Contracts), except for the
Liberty Assumed Liabilities (the "Liberty Retained Liabilities").
(b) Xxx shall retain as of the Closing (and Liberty shall not
assume or be responsible for) all liabilities and obligations of Xxx, whether
arising before or after the Closing, disclosed or undisclosed, known or unknown,
absolute, contingent or otherwise and whether due or to become due (including,
but not limited to, the Xxx Excluded Contracts and the Ottumwa Pre-Closing Sump
Liability), except for the Xxx Assumed Liabilities (the "Xxx Retained
Liabilities").
ARTICLE 2
PURCHASE PRICE; CLOSING
2.1 Assumption of Liabilities. Subject to the terms and conditions
set forth herein, at the Closing (a) Liberty shall assign to Xxx, and Xxx shall
assume, the Liberty Assumed Liabilities pursuant to an instrument in a mutually
agreeable form (the "Xxx Assumption Agreement"), and (b) Xxx shall assign to
Liberty (or one or more Affiliates of Liberty designated by Liberty), and
Liberty (or one or more Affiliates of Liberty designated by Liberty) shall
assume, the Xxx Assumed Liabilities pursuant to an instrument or instruments in
mutually agreeable forms (the "Liberty Assumption Agreement").
2.2 Closing Date. Unless the parties hereto shall agree in writing
upon a different location, time or date, the closing of the exchange of the Xxx
Acquired Assets and the Liberty Acquired Assets (the "Closing") shall take place
at the offices of Xxx'x counsel, Lane & Xxxxxxxx, 000 Xxxxx Xxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxx 00000, at 10:00 A.M. on September 30, 1999. The term
"Closing" means the date and time at which the Closing occurs.
2.3 Deliveries. Subject to the terms and conditions set forth in
this Agreement, as of the date hereof or at the Closing, as the case may be:
(a) Liberty shall deliver to Xxx:
(i) at the Closing, a xxxx of sale and assignment for the
Liberty Acquired Assets in a mutually agreeable form, duly executed by
Liberty, together with one or more deeds (which shall be equivalent to
a Special Warranty Deed) executed and acknowledged by Liberty or its
Affiliates, as the case may be, conveying to Xxx all of
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such transferor's right, title and interest in and to the Liberty Real
Property owned by Liberty or such Affiliates;
(ii) at the Closing, the Liberty Assumption Agreement;
(iii) at the Closing, the Xxx Assumption Agreement;
(iv) at the Closing, an instrument of assignment in a
mutually agreeable form, duly executed by Liberty, of all registered
(and applications therefor) Liberty Intangible Property;
(v) at the Closing, title to the Liberty Motor Vehicles;
(vi) at the Closing, a Lease Assignment and Assumption in a
mutually agreeable form, duly executed by Liberty and the lessor under
any of the leases relating to the leased Liberty Real Property (the
"Liberty Lease Assignment");
(vii) at the Closing, a Lease Assignment and Assumption in a
mutually agreeable form, duly executed by Liberty (or its Affiliate)
under any of the leases relating to the leased Xxx Real Property (the
"Xxx Lease Assigment");
(viii) at the Closing, all certificates and other instruments
and documents which are expressly required or reasonably requested by
Xxx pursuant to this Agreement to be delivered by Liberty to Xxx at the
Closing in form and substance reasonably satisfactory to Xxx;
(ix) as of the date hereof, the Liberty Disclosure Letter,
dated as of the date hereof in the form of SCHEDULE 2.3(A)(IX) attached
hereto, and again at the Closing as provided in Section 3.21;
(x) at the Closing, the Cash Consideration as provided in
Section 1.1;
(xi) at the Closing, a list of the Xxx Transferred
Employees;
(xii) at the Closing, a list of the inventory of newsprint
used solely in the Liberty Business as of at least two days prior to
the Closing Date; and
(xiii) at the Closing, an assignment of the rights, remedies
and benefits of Liberty and its Affiliates involving existing
non-competition and non-solicitation agreements related to the Liberty
Business or similar undertaking for the benefit of Xxx reasonably
satisfactory to Xxx.
(b) Xxx shall deliver to Liberty:
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(i) at the Closing, one or more bills of sale and
assignment for the Xxx Acquired Assets in a mutually agreeable form,
duly executed by Xxx, together with one or more deeds (which shall be
equivalent to a Special Warranty Deed) duly executed and acknowledged
by Xxx or its Affiliates, as the case may be, conveying to Liberty (or
one or more Affiliates of Liberty designated by Liberty) all of such
transferor's right, title and interest in and to the Xxx Real Property
owned by Xxx or its Affiliates;
(ii) at the Closing, the Xxx Assumption Agreement;
(iii) at the Closing, the Liberty Assumption Agreement;
(iv) at the Closing, an instrument of assignment in a
mutually agreeable form, duly executed by Xxx, of all registered (and
applications therefor) Xxx Intangible Property;
(v) at the Closing, title to the Xxx Motor Vehicles;
(vi) at the Closing, the Xxx Lease Assignment, duly executed
by Xxx and the lessor under any of the leases relating to the leased
Xxx Real Property;
(vii) at the Closing, the Liberty Lease Assignment, duly
executed by Xxx;
(viii) at the Closing, all certificates and other instruments
and documents which are expressly required or reasonably requested by
Liberty pursuant to this Agreement to be delivered by Xxx to Liberty at
the Closing in form and substance reasonably satisfactory to Liberty;
(ix) as of the date hereof, the Xxx Disclosure Letter, dated
as of the date hereof in the form of SCHEDULE 2.3(B)(IX) attached
hereto, and again at the Closing, as provided in Section 4.21;
(x) at the Closing, a list of the Liberty Transferred
Employees;
(xi) at the Closing, a list of the Xxx Employee Computer
Purchase Agreements;
(xii) at the Closing, a list of the inventory of newsprint
used solely in the Xxx Business as of at least two days prior to the
Closing Date;
(xiii) at the Closing, a list of the outstanding balances as
of the Closing of the Xxx Computer Purchase Agreements for each of the
Xxx Transferred Employees, which list shall be certified by the
Secretary or Assistant Secretary of Xxx to be true, accurate and
complete as of the Closing; and
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(xiv) at the Closing, an assignment of the rights, remedies
and benefits of Xxx and its Affiliates involving existing
non-competition and non-solicitation agreements related to the Xxx
Business or similar undertaking for the benefit of Liberty reasonably
satisfactory to Liberty.
2.4 Consent of Third Parties. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any of the Liberty Contracts, Liberty Permits, Liberty Warranties, Xxx
Contracts, Xxx Permits or Xxx Warranties or any claim, right or benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
the consent of a third Person thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of Xxx or
Liberty, as the case may be, thereunder. Liberty or Xxx, as applicable, will use
reasonable best efforts to obtain the consent of the other parties to any such
Liberty Contract, Liberty Permit, Liberty Warranty, Xxx Contract, Xxx Permit or
Xxx Warranty, as the case may be, for the assignment thereof to Xxx or Liberty,
as applicable. If such consent is not obtained prior to the Closing, or if an
attempted assignment thereof would be ineffective or would adversely affect the
rights of Xxx or Liberty, as the case may be, thereunder so that Xxx or Liberty,
as applicable, would not in fact receive all such rights, Liberty and Xxx will
cooperate to achieve a mutually agreeable arrangement under which (i) Xxx would
obtain the benefits and assume the obligations thereunder (but only to the
extent such obligations would have constituted Liberty Assumed Liabilities if
such assignment occurred on the Closing Date) from and after the Closing Date in
accordance with this Agreement, including subcontracting, sublicensing or
subleasing to Xxx, or under which Liberty would enforce for the benefit of Xxx,
with Xxx assuming Liberty's obligations to the same extent as if it would have
constituted a Liberty Assumed Liability, and any and all rights of Liberty
against a third Person thereto; and (ii) Liberty would obtain the benefits and
assume the obligations thereunder (but only to the extent such obligations would
have constituted Xxx Assumed Liabilities if such assignment occurred on the
Closing Date) from and after the Closing Date in accordance with this Agreement,
including subcontracting, sublicensing or subleasing to Liberty or under which
Xxx would enforce for the benefit of Liberty with Liberty assuming Xxx'x
obligations to the same extent as if it would have constituted a Xxx Assumed
Liability, and any and all rights of Xxx against a third Person thereto. Liberty
or Xxx as applicable, will pay promptly to the other applicable party when
received all monies received by Liberty or Xxx, as applicable, after the Closing
Date under any of the Liberty Contracts, Liberty Permits, Liberty Warranties,
Xxx Contracts, Xxx Permits or Xxx Warranties, as the case may be, or any claim,
right or benefit arising thereunder to the extent that Xxx or Liberty, as
applicable, would be entitled thereto pursuant hereto.
2.5 Adjustments to Working Capital.
(a) In accordance with this Section 2.5, Liberty shall pay to Xxx
the amount, if any, by which the Xxx Net Working Capital exceeds the Liberty Net
Working Capital or Xxx shall pay to Liberty the amount, if any, by which the
Liberty Net Working Capital exceeds the Xxx Net Working Capital. The payments to
be made pursuant to this Section 2.5 shall be made by
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wire transfer of immediately available funds to an account designated by the
party to receive such payment on the date any such payment shall be delivered
hereunder.
(b) At least five days prior to the Closing Date, (i) Liberty shall
deliver to Xxx its good faith written determination of the Liberty Net Working
Capital, which determination shall be made based upon the most recent balance
sheets of the Liberty Newspapers available prior to the Closing Date (with any
adjustment thereto agreed to by Liberty prior to the Closing Date, the "Liberty
Estimated Net Working Capital"), and (ii) Xxx shall deliver to Liberty its good
faith written determination of the Xxx Net Working Capital, which determination
shall be made based upon the most recent balance sheets of the Xxx Newspapers
available prior to the Closing Date (with any adjustments thereto agreed to by
Xxx prior to the Closing Date, the "Xxx Estimated Net Working Capital");
provided, however, if Xxx and Liberty do not agree upon the Xxx Estimated Net
Working Capital and the Liberty Estimated Net Working Capital prior to the
Closing, the Closing shall not be delayed and the Xxx Estimated Net Working
Capital and the Liberty Estimated Net Working Capital shall each be deemed to
equal zero unless Xxx and Liberty shall otherwise agree. Liberty shall make
available to Xxx and Xxx shall make available to Liberty, in each case during
normal business hours and on reasonable notice, all workpapers and other books
and records utilized in preparing the Liberty Estimated Net Working Capital or
Xxx Estimated Net Working Capital, as the case may be, and will make available
to each other, in each case during normal business hours and on reasonable
notice, the appropriate personnel involved in the preparation of such
determinations. At the Closing, Liberty shall pay to Xxx the amount, if any, by
which the Xxx Estimated Net Working Capital exceeds the Liberty Estimated Net
Working Capital or Xxx shall pay to Liberty the amount, if any, by which the
Liberty Estimated Net Working Capital exceeds the Xxx Estimated Net Working
Capital.
(c) On or prior to the ninetieth (90th) day following the Closing Date,
(i) Xxx shall notify Liberty in writing (the "Xxx Determination Notice") of its
determination of the final Liberty Net Working Capital, and (ii) Liberty shall
notify Xxx in writing (the "Liberty Determination Notice") of its determination
of the final Xxx Net Working Capital, each of which determinations shall set
forth in reasonable detail the basis for such determinations. Each of Xxx and
Liberty will provide the other party or parties and their respective
representatives with access during normal business hours to its personnel, books
and records to assist the other party in the preparation of its, and review of
the other party's, determination of the final Liberty Net Working Capital or Xxx
Net Working Capital, as the case may be. If Liberty or Xxx utilizes the services
of its respective firm of independent certified public accountants in connection
with the Liberty Determination Notice or the Xxx Determination Notice, as the
case may be, then Liberty or Xxx, as applicable, shall each cause such firm of
independent certified public accountants to (y) deliver to Xxx or Liberty, as
the case may be, all workpapers and other books and records utilized by such
firm of independent certified public accountants in preparing, or assisting
Liberty or Xxx, as the case may be, to prepare the Liberty Determination Notice
or Xxx Determination Notice, as the case may be, and (z) make available to Xxx
or Liberty, as the case may be, in each case during normal business hours and on
reasonable notice, the appropriate personnel involved in the preparation of such
determinations. Liberty shall notify Xxx in writing (the "Liberty Dispute
Notice") and Xxx
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shall notify Liberty in writing (the "Xxx Dispute Notice") within thirty (30)
days after receiving the Xxx Determination Notice or the Liberty Determination
Notice, as the case may be, if Liberty or Xxx disagrees with the other party's
calculation of Liberty Net Working Capital or Xxx Net Working Capital, as the
case may be, which notice shall set forth in reasonable detail the basis for
such dispute and the dollar amounts involved and such objecting party's good
faith estimate of the final Liberty Net Working Capital or Xxx Net Working
Capital, as the case may be. If no Liberty Dispute Notice or Xxx Dispute Notice
is received or given, by Xxx or Liberty, as the case may be, within such thirty
(30) day period, then Xxx'x or Liberty's determination of the final Liberty Net
Working Capital or Xxx Net Working Capital, as the case may be, set forth in the
applicable Determination Notice shall be final and binding upon the parties.
(d) Upon receipt of a Liberty Dispute Notice or a Xxx Dispute Notice,
Xxx and Liberty shall negotiate in good faith to resolve any disagreement with
respect to the final Liberty Net Working Capital and/or Xxx Net Working Capital,
as the case may be. To the extent Xxx and Liberty are unable to agree with
respect to the final Liberty Net Working Capital and/or Xxx Net Working Capital
within thirty (30) days after either party notifies the other of a disagreement
with respect thereto, Xxx and Liberty shall select a mutually acceptable
national accounting firm with no material relationship to Xxx or Liberty or
their Affiliates, and submit their dispute to such accounting firm for a binding
resolution. The cost of such accounting firm shall be paid one half by Liberty
and one half by Xxx.
(e) Upon the final determination of both the Liberty Net Working
Capital and Xxx Net Working Capital in accordance herewith, Liberty or Xxx, as
the case may be, will make the appropriate payment to the other Person within
two (2) business days of such final determination.
(f) Within two (2) business days of the final determination required in
(e) above, Liberty will pay Xxx by wire transfer the amount of the outstanding
balance of the Xxx Computer Purchase Agreements for any Xxx Transferred
Employee. Upon receipt of such payment, Xxx shall provide Liberty within two (2)
business days thereof an executed assignment of the Xxx Employee Computer
Purchase Agreements for Xxx Transferred Employees and related accounts
receivable in a mutually agreeable form.
(g) In making the adjustments pursuant to this Section 2.5, all prepaid
expenses, to the extent included in the Xxx Acquired Assets or the Liberty
Acquired Assets, and accrued expenses, including real property, personal
property and payroll Taxes, to the extent included in the Xxx Assumed
Liabilities, or the Liberty Assumed Liabilities, of the Xxx Newspapers or the
Liberty Newspapers which are properly included in the determination of Xxx Net
Working Capital or Liberty Net Working Capital shall, except as otherwise
expressly provided herein, be adjusted and allocated among Xxx and Liberty to
reflect the principle that all expenses arising from the operation of the Xxx
Newspapers before the opening of business on the Closing Date and the Liberty
Newspapers from and after the opening of business on the Closing Date shall be
for the account of Xxx, and all expenses arising from the operation of the
Liberty Newspapers before the opening of business on the Closing Date and the
Xxx
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Newspapers from and after the opening of business on the Closing Date shall be
for the account of Liberty.
(h) For purposes of determination of Net Working Capital for both Xxx
and Liberty, (i) only those accounts receivable actually collected on or prior
to the 90th day following the Closing Date shall be included and any accounts
receivable not so collected will be assigned to the original transferring party
on the 91st day following the Closing Date and (ii) notwithstanding anything
herein to the contrary, for purposes of application of the foregoing, unless
otherwise designated by the account debtor based upon a dispute, all payments
made by an account debtor with respect to accounts receivable outstanding as of
the Closing shall be applied in payment of the oldest outstanding account
receivable with respect to said account debtor as of the Closing. Neither Xxx
nor Liberty shall take any action to induce an account debtor to designate the
application of any accounts receivable payable by such account debtor.
2.6 Allocation of Purchase Price. Liberty and Xxx shall allocate the
consideration paid for the Liberty Acquired Assets and the Xxx Acquired Assets
in a manner agreed upon by the parties after the Closing. Neither party shall
take any position inconsistent with such allocations, and the parties shall file
all Tax returns and reports (including IRS Forms 8824 and 8594, if required)
with respect to the transaction contemplated hereby, including, but not limited
to, all Federal, state and local tax returns, on a basis consistent with such
allocations, and each party shall promptly give to the other written notice of
any disallowance of or challenge to such reporting by any taxing governmental
authority.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LIBERTY
Liberty represents and warrants to Xxx as follows.
3.1 Organization and Good Standing. Liberty is a corporation duly
incorporated and validly existing as a corporation in good standing under the
laws of the State of Delaware. Liberty (or an Affiliate thereof) has the
corporate power to carry on the Liberty Business, is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where qualification as a foreign corporation is required, except for such
failures to be qualified and in good standing that would not, in the aggregate,
have a Liberty Material Adverse Effect.
3.2 Authority. Liberty has the corporate power and corporate authority
to execute and deliver this Agreement and the other Ancillary Instruments to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions provided for hereby and thereby, and all corporate
action of Liberty necessary for the making and performance of this Agreement by
Liberty has been duly taken. Except as set forth in Section 3.2 of the Liberty
Disclosure Letter, the execution, delivery and performance by Liberty of this
Agreement and the other Ancillary Instruments to which it is a party do not and
will not
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(i)(A) contravene any provisions of the certificate of incorporation or
by-laws of Liberty, (B) with or without the giving of notice or the passage of
time or both, result in any breach by Liberty of, or default or permitted or
required acceleration of performance by Liberty under, or the creation of any
Lien upon the Liberty Acquired Assets which would remain on the Liberty Acquired
Assets after the Closing Date, or the creation in favor of any third party of
any right of termination of, any contract, lease, license or other agreement to
which Liberty is a party or by which Liberty or the Liberty Acquired Assets are
bound, or (C) assuming that the Governmental Actions/Filings referred to in
Section 3.2 of the Liberty Disclosure Letter are obtained or made, result in any
violation by Liberty of any law, rule or regulation applicable to either of
them, (ii) result in any violation by Liberty of any judgment, injunction or
decree of, or any license or permit issued by, any court or governmental
authority applicable to either of them, or (iii) assuming that the notices
referred to in Section 3.2 of the Liberty Disclosure Letter are made, require
any Governmental Action/Filing to be made or obtained by Liberty except (A) any
federal, state or local Tax filings and (B) any PBGC "Notice of Reportable
Event" required under Section 4043(c) of ERISA. This Agreement and each of the
Ancillary Instruments to which Liberty is a party has been duly executed and
delivered by Liberty. This Agreement and each of the Ancillary Instruments to
which Liberty is a party constitutes the valid and binding obligation of Liberty
enforceable against Liberty in accordance with its terms except that such
enforcement may be limited by any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws (whether statutory, regulatory or
decisional), now or hereafter in effect, relating to or affecting the rights of
creditors generally or by equitable principles (regardless of whether considered
in a proceeding at law or in equity).
3.3 Acquired Assets. Except (i) as set forth in Part A Section 3.3 of
the Liberty Disclosure Letter, (ii) for the Liberty Excluded Assets and (iii)
for such assets that are consumed or disposed of in the ordinary course of the
Liberty Business and consistent with prior practice after the date of this
Agreement, the Liberty Acquired Assets include all of the assets, properties and
rights of every type and description, real, personal and mixed, tangible and
intangible, that are owned, leased or licensed by Liberty and used solely in the
conduct of the Liberty Business in the manner in which the Liberty Business is
now conducted.
Except as set forth in Part B of Section 3.3 of the Liberty Disclosure
Letter, Liberty does not use any assets solely in the conduct of the Liberty
Business which in the aggregate are material to the Liberty Business and which
it does not own or lease. Except as set forth in Part C of Section 3.3 of the
Liberty Disclosure Letter, the tangible Liberty Acquired Assets are in good
operating condition, reasonable wear and tear excepted, and except for such
failures, to be in such good operating condition, individually or in the
aggregate, have not had and are not reasonably likely to have incurred a Liberty
Material Adverse Effect. The Liberty Acquired Assets constitute all of the
assets necessary to conduct the Liberty Business as currently conducted. Part A
of Section 3.3 of the Liberty Disclosure Letter also contains a true, accurate
and complete list of substantially all material tangible assets and properties,
real, personal and mixed, used primarily, but not solely, in the conduct of the
Liberty Business.
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3.4 Title to Acquired Assets; Liens. Except as set forth in Section 3.4
of the Liberty Disclosure Letter, Liberty (or an Affiliate thereof) owns good
title to or has valid leasehold interests in all of the Liberty Acquired Assets
and at the Closing good title to or valid leasehold interests in (and consents
to the assignment thereof) such Liberty Acquired Assets shall be transferred to
Xxx free and clear of any and all Liens except (i) for Liberty Permitted Liens,
and (ii) any restriction on assignment of Liberty Contracts which is contained
in such Liberty Contract or which arises by law.
3.5 Contracts and Agreements; Defaults.
(a) Part A of Section 3.5 of the Liberty Disclosure Letter contains a
list of (i) all outstanding mortgages, indentures, notes, guarantees,
installment obligations or other contracts or instruments evidencing or
providing any Indebtedness to which Liberty is a party and which relate solely
to the Liberty Business or by which Liberty or any of its assets are bound and
which relate solely to the Liberty Business, (ii) all outstanding contracts
containing non-competition covenants of Liberty and which relate solely to the
Liberty Business, (iii) all outstanding leases to which Liberty is a party and
which relate solely to the Liberty Business or by which Liberty is bound and
which relate solely to the Liberty Business, (iv) all outstanding contracts of
Liberty to sell assets, other than in the ordinary course of business, and which
relate solely to the Liberty Business, (v) all collective bargaining agreements
of Liberty with any labor union or other employee representative or a group of
employees and which relate solely to the Liberty Business, (vi) any joint
venture or partnership agreements to which Liberty is a party relating solely to
the Liberty Business, and (vii) all other outstanding contracts to which Liberty
is a party and which relate solely to the Liberty Business or by which Liberty
or any of its assets are bound and which relate solely to the Liberty Business,
which require or are likely to require the payment by Liberty of an amount, or
require Liberty to provide goods or services having a fair market value or
aggregate sales price, of more than $10,000 per annum, except (1) contracts
entered into in the ordinary course of business of Liberty that can be
terminated by Liberty on 60 or fewer days' notice without penalty, (2)
subscriptions to the Liberty Newspapers and contracts for advertising or
commercial printing which Liberty entered in the ordinary course of business
each involving aggregate amounts of less than $10,000 per annum, and (3) Liberty
Excluded Assets. Liberty has delivered to Xxx a correct and complete copy of
each written agreement listed on Part A of Section 3.5 of the Liberty Disclosure
Letter (the "Liberty Material Contracts").
(b) Except as set forth in Part B of Section 3.5 of the Liberty
Disclosure Letter, (i) neither Liberty, nor, to the Knowledge of Liberty, any
other party to any contract, lease, license or other agreement to which Liberty
is a party or by which Liberty or any of the Liberty Acquired Assets are bound
(other than contracts, licenses, leases or other agreements that constitute
Liberty Excluded Assets and do not relate solely to the Liberty Business) is in
material breach of or default under any such contract, lease, license or other
agreement and (ii) no event has occurred which (after notice or lapse of time or
both) would become a material breach or default by Liberty under any such
contract, lease, license or other agreement.
3.6 Financial Statements.
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(a) Attached as Part A of Section 3.6 of the Liberty Disclosure Letter
are true and complete copies of (i) the unaudited balance sheets of the Liberty
Newspapers as at December 31, 1998 and (ii) the unaudited balance sheets of the
Liberty Newspapers as at July 31, 1999 (the July 31, 1999 balance sheets are
referred to as the "Liberty Balance Sheet"), and the related unaudited
statements of income for the twelve month and seven month periods then ended
(collectively, the "Liberty Financial Statements"). Except as disclosed in Part
A of Section 3.6 of the Liberty Disclosure Letter, the Liberty Financial
Statements fairly present in all material respects the financial position of the
Liberty Newspapers as at December 31, 1998 and July 31, 1999 and the results of
operations for the twelve months ended December 31, 1998, and the seven months
ended July 31, 1999 in accordance with GAAP, except that the Liberty Financial
Statements are summary in nature and do not include the notes and related
disclosures required by GAAP.
(b) Except for Liberty Excluded Assets and except for cash distributed
to Liberty and its Affiliates, the Liberty Balance Sheet reflects all of the
Liberty Acquired Assets that will be acquired by Xxx at the Closing other than
such assets as are disposed of or consumed in the ordinary course of the Liberty
Business and consistent with past practice since July 31, 1999 or such
additional assets as are acquired by the Liberty Newspapers in the ordinary
course of business since July 31, 1999.
(c) Except as set forth in Part B of Section 3.6 of the Liberty
Disclosure Letter or as reflected, reserved against or otherwise disclosed in
the Liberty Balance Sheet and liabilities and obligations incurred in the
ordinary course of business since July 31, 1999, Liberty does not have any
material liabilities or obligations related solely to the Liberty Business that
would have been required to be reflected or otherwise disclosed by Liberty in
the Liberty Balance Sheet in accordance with GAAP.
3.7 Business Since July 31, 1999. Except as disclosed in Part A of
Section 3.7 of the Liberty Disclosure Letter and except as required or otherwise
contemplated by this Agreement, since July 31, 1999 (i) the Liberty Business has
been conducted in all material respects in the ordinary course, consistent with
past practices, (ii) neither the Liberty Business nor its condition nor assets
has experienced a Liberty Material Adverse Effect and (iii) no event or events
has or have occurred that individually or in the aggregate has or have had or is
or are reasonably likely to have a Liberty Material Adverse Effect. Since July
31, 1999, except as described in Part B of Section 3.7 of the Liberty Disclosure
Letter, there has not been:
(a) any material damage, destruction, or loss to the Liberty Acquired
Assets outside the ordinary course of business;
(b) any making or authorization of any capital expenditure relating
solely to the Liberty Business by Liberty in excess of $10,000 individually or
the making or authorization of capital expenditures relating solely to the
Liberty Business by Liberty of more than $25,000 in the aggregate;
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(c) any sale, transfer, or other disposition of assets or properties,
real, personal, tangible or intangible, or mixed, relating solely to the Liberty
Business by Liberty, other than in the ordinary course of business;
(d) other than pursuant to existing collective bargaining agreements
or pursuant to regular salary reviews in the ordinary course of business
consistent with past practices, any increase in the compensation payable or to
become payable to any employees or agents of Liberty that are involved in the
Liberty Business, or any bonus arrangement made with any thereof; or
(e) no material increase in the operating costs of any of the Liberty
Newspapers, whether arising from or in connection with the sale of real property
or otherwise, has occurred.
3.8 Compliance with Law, Litigation, Injunctions. Liberty is not in
violation in any material respect of any law, rule, permit, regulation, order,
judgment or decree applicable to it, except as set forth in Part A of Section
3.8 of the Liberty Disclosure Letter, the violation of which could reasonably
have a Liberty Material Adverse Effect. Except for the matters set forth in Part
B of Section 3.8 of the Liberty Disclosure Letter and for claims fully covered
by liability insurance of Liberty, (i) there is no action, suit or other
proceeding pending or, to Liberty's Knowledge threatened, at law or in equity,
before any federal, state or municipal court, administrative agency or
arbitrator against Liberty and relating to the Liberty Newspapers which is
reasonably expected to have a Liberty Material Adverse Effect, and (ii) Liberty
is not a party to, or subject to or bound by, any order, injunction or decree of
any court or governmental authority relating to the Liberty Newspapers.
3.9 Licenses. With such exceptions as are set forth in Section 3.9 of
the Liberty Disclosure Letter (a) all licenses, permits, registrations or
authorizations of any governmental department or agency that are presently
required solely for the operation of the Liberty Business as presently conducted
have been duly obtained and are in full force and effect, the absence of which
would have a Liberty Material Adverse Effect and (b) no consent, authorization
or approval is required to transfer such licenses, permits, registrations or
authorizations to Xxx pursuant to this Agreement.
3.10 Taxes. Except as set forth in Section 3.10 of the Liberty
Disclosure Letter:
(a) Liberty and any consolidated, combined or unitary group of which
Liberty is or was a member have timely filed all Tax returns and reports with
respect to Taxes ("Tax Returns") which are required to be filed, and all Taxes
shown to be due on such Tax Returns have been timely paid. All such Tax Returns
were true and correct in all material respects. On July 31, 1999, Liberty had no
liability for Taxes (other than Income Taxes) that would have been required to
be reflected in the Liberty Balance Sheet in accordance with GAAP, except to the
extent that such Taxes are reflected, reserved against or otherwise disclosed in
the Liberty Balance Sheet or will be paid prior to the Closing Date. There is no
dispute or claim
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concerning any liability for Taxes of Liberty with respect to the Liberty
Business that is either (1) claimed or raised by any authority in writing or (2)
as to which any of the directors and officers (or employees responsible for Tax
matters) of Liberty has any knowledge based upon personal contact with any agent
of such authority. Liberty has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Section 6662 of the Code. Liberty has
withheld and paid over all Taxes required to have been withheld and paid over in
connection with amounts paid or owing to any employee, creditor, independent
contractor, or other third Person.
(b) No property of Liberty is subject to a tax benefit transfer lease
subject to the provisions of former Section 168(f)(8) of the Internal Revenue
Code of 1954.
(c) Liberty is not a foreign person subject to withholding under
Section 1445 of the Code and the regulations promulgated thereunder, and, at the
Closing Date, Liberty shall deliver to Xxx a certificate to that effect.
(d) Liberty is not bound by or obligated under any tax sharing or
similar agreement or arrangement, other than related to Liberty's consolidated
Tax return filing.
(e) For purposes of this Agreement, "Taxes" shall mean all federal,
state, local and foreign taxes, including, without limitation, all net income,
gross income, gross receipts, sales, use, value added, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
estimated, severance, stamp, occupation, property or other taxes and customs
duties of any kind whatsoever, together with any interest, penalties and
additions to tax or additional amounts relating thereto, imposed by any
governmental authority.
3.11 Affiliated Transactions. Section 3.11 of the Disclosure Letter
sets forth a complete and accurate list of all contracts in connection with the
Liberty Business to which Liberty on the one hand, and Liberty and any other
Affiliate of Liberty on the other hand, is a party.
3.12 Brokers. Neither Liberty nor any of its directors, officers,
employees or Affiliates has employed any broker or finder or has incurred or
will incur any broker's, finder's or similar fees, commissions or expenses, in
each case in connection with the transactions contemplated by this Agreement.
3.13 Labor.
(a) Except as set forth in Part A of Section 3.13 of the Liberty
Disclosure Letter, (i) Liberty does not have any contracts of employment with
any of its employees, or consulting agreements with any consultants, involved
solely in the Liberty Business, (ii) no union has been certified as representing
any of Liberty's employees involved in the Liberty Business and (iii) Liberty is
not a party to or currently negotiating any collective bargaining agreements
with respect to its employees involved in the Liberty Business, (iv) to
Liberty's Knowledge, there is no currently pending union representation
activity involving any employees of Liberty involved
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in the Liberty Business, (v) to Liberty's Knowledge, no demand has been
made for recognition by a labor organization by or with respect to any employees
of Liberty involved in the Liberty Business, and (vi) none of the employees of
Liberty involved in the Liberty Business is represented by any labor union or
organization. Except as set forth in, Part B of Section 3.13 of the Liberty
Disclosure Letter, there are no pending or, to Liberty's Knowledge, overtly
threatened (i) claims of employment discrimination, wage and hour claims, OSHA
claims, unemployment claims or worker's compensation claims or (ii) unfair labor
practice claims before the National Labor Relations Board.
(b) There is not presently pending and during the last five years there
has not been (i) any strike, picketing or work stoppage by any employees
involved solely in connection with the Liberty Business or (ii) any application
for certification of a collective bargaining agreement with respect to employees
of Liberty involved in the Liberty Business. There is no lockout of any employee
by Liberty involved solely in the Liberty Business and no such action is
contemplated by Liberty.
3.14 Employee Benefits.
(a) For purposes of this Agreement, an "Employee Benefit Plan" is (i)
each "employee benefit plan," within the meaning of Section 3(3) of ERISA and
(ii) each other retirement, deferred compensation, medical, dental, vision,
disability, educational assistance, dependent care, life insurance, flexible
spending account, cafeteria plan (within the meaning of Code Section 125),
workers compensation, stock option, stock purchase, other stock-based
compensation, severance, vacation pay, other fringe or welfare benefits, change
in control or incentive or bonus plan, fund, policy or arrangement. Section
3.14(a) of the Liberty Disclosure Letter lists each Employee Benefit Plan
maintained or contributed to by Liberty or any of its ERISA Affiliates for
current or former employees of Liberty involved solely in the Liberty Business
(collectively, "Liberty Benefit Plans"). Liberty has delivered or made available
to Xxx a copy of each Liberty Benefit Plan (and each trust maintained in
connection with any such Liberty Benefit Plan) or a written summary of any
material unwritten Liberty Benefit Plan and any summary plan description
relating to a Liberty Benefit Plan and, with respect to each Liberty Benefit
Plan under which liabilities are assumed by Xxx under Section 10.1 (an "Assumed
Liberty Benefit Plan") the most recent Internal Revenue Service ("IRS") Form
5500 and, where applicable, the most recent IRS determination letter.
(b) Except as set forth in Section 3.14(b) of the Liberty Disclosure
Letter with respect to each Assumed Liberty Benefit Plan (i) each such plan is
in material compliance with all applicable laws and regulations and has been
administered substantially in accordance with its terms; and (ii) each such plan
intended to be tax-qualified under Section 401(a) of the Code has received a
favorable determination letter from the IRS as to its tax-qualified status under
the Code and, to the Knowledge of Liberty, there are no existing circumstances
likely to result in the revocation of any such determination letter. There are
no actions, suits or claims pending or, to Liberty's Knowledge, threatened
(other than routine claims for benefits) with respect to any Liberty Benefit
Plan which are likely to result in the imposition of liability on Xxx.
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(c) Except as set forth in Section 3.14(c) of the Liberty Disclosure
Letter, no Liberty Benefit Plan is a "single-employer" plan within the meaning
of Section 4001(a)(15) of ERISA or a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA. Liberty has not incurred any liability under Title
IV of ERISA with respect to any Assumed Liberty Benefit Plan other than for PBGC
premiums not yet due.
(d) To the Knowledge of Liberty, no audit or investigation of any
Liberty Benefit Plan by the IRS, the Department of Labor or the PBGC is pending
or threatened.
(e) All contributions to the Assumed Liberty Benefit Plans that will
have been required to be made with respect to periods prior to the Closing Date
under such Assumed Liberty Benefit Plans will have been made or accrued as of
the Closing Date.
(f) Neither Liberty nor any of its ERISA Affiliates nor, to Liberty's
Knowledge, any other Person, has taken any action or failed to take any action
with respect to any Employee Benefit Plan maintained or contributed to or
previously maintained or contributed to by Liberty, or any of its ERISA
Affiliates for which Liberty or any of its ERISA Affiliates may have any
liability, contingent or otherwise, or permitted any circumstance to exist that
may subject Xxx or any Assumed Liberty Benefit Plan to any Tax, penalty, fine or
other liability under the Code or ERISA.
(g) Except as set forth in Section 3.14(g) of the Liberty Disclosure
Letter, there is no individual who is not, as of the date of this Agreement, an
active employee of Liberty or an ERISA Affiliate and who would at any future
date be entitled to any form of reemployment rights with Liberty or an ERISA
Affiliate with respect to the Liberty Business if (i) there were no exchange of
assets pursuant to this Agreement and (ii) Liberty continued to maintain the
Liberty Business.
3.15 Environmental Matters. Except as set forth on Section 3.15 of
the Liberty Disclosure Letter to Liberty's Knowledge:
(a) there has not been any past or continuing release or threat of
release of any Hazardous Substance in violation of Environmental Laws into the
environment at, on or from the Liberty Real Property or any other real property
currently or previously leased or owned by Liberty and used in the Liberty
Business and there are no Hazardous Substances at, on or under the Liberty Real
Property in violation of Environmental Laws;
(b) there have been no Hazardous Substances generated solely in
connection with the Liberty Business that have been disposed of or come to rest
at any site that has been included in any federal, state or local priority list
of hazardous or toxic waste sites published by any governmental body, agency or
authority;
(c) (i) there are no underground or above-ground storage tanks located
on the Liberty Real Property;
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(ii) there are no polychlorinated biphenyls ("PCBs") or
PCB-containing equipment used or stored on the Liberty Real Property;
(d) a copy of any environmental investigations, studies, audits,
tests, reviews or analyses relating to the Liberty Acquired Assets conducted by
Liberty, or any consultant engaged by Liberty within the last five years, if
any, have previously been provided to Xxx;
(e) Liberty has operated in compliance with all applicable
Environmental Laws, the violation of which could reasonably be expected to have
a Liberty Material Adverse Effect;
(f) Liberty has not received any directive, order or notice from
any government body alleging any violation of or failure to comply with
Environmental Laws at the Liberty Real Property by Liberty;
(g) Liberty has not received any directive, order or notice from
any government body or any other Person alleging that Liberty is actually or
potentially liable under Environmental Laws for the costs of environmental
investigation or remediation of the Liberty Real Property, or other real
property to which Hazardous Substances generated by Liberty in connection with a
Liberty Business were transferred for disposal; and
(h) The Liberty Real Property is not subject to any Lien, securing
the costs of environmental remediation, arising under Environmental Laws.
3.16 Intangible Property.
(a) Except for Liberty Excluded Assets, Liberty owns or possesses
adequate and enforceable licenses or other rights to use all Liberty Intangible
Property used solely in connection with the Liberty Business as currently
conducted. There are no existing, or to the Knowledge of Liberty, overtly
threatened claims of any third Person based on the use by Liberty, or
challenging the ownership, use, scope, enforceability or validity, of any of the
Liberty Intangible Property used in the Liberty Business. To the Knowledge of
Liberty, there is no infringing use by any Person of the Liberty Intangible
Property used in the Liberty Business and Liberty's use of the Liberty
Intangible Property does not infringe on the rights of any other Person.
(b) All Liberty Copyrights and Liberty Trademarks described in
Parts A and B, respectively, of Section 3.16(b) of the Liberty Disclosure Letter
are transferable to Xxx without the consent of any third party, and Section
3.16(b) constitutes a complete listing of all such Liberty Copyrights and
Liberty Trademarks material to the Liberty Business. The Liberty Business
possesses valid licenses for all material software used therein.
(c) Except as otherwise disclosed in Section 3.16(c) of the
Liberty Disclosure Letter, any reprogramming required to permit the proper
functioning (but only to the extent that such proper functioning would otherwise
be impaired by the occurrence of the year 2000)
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in and following the year 2000 of any software owned by or licensed to or used
by the Liberty Business, or the computer systems and other equipment containing
embedded microchips of the Liberty Business, in either case owned or operated by
or used or relied upon in the conduct of such business (including any such
systems and other equipment supplied by others or with which the computer
systems of the Liberty Business interface), and the testing of all such
software, systems and other equipment as so reprogrammed, has been completed and
paid for in full and such software, systems and other equipment shall function
properly, without material errors or omissions, upon the occurrence of the year
2000 (but only to the extent that such proper functioning would otherwise be
impaired by the occurrence of the year 2000).
3.17 Insurance. All policies of insurance to which Liberty is a party
or which provide insurance coverage to Liberty, taken together, provide adequate
insurance coverage for the material Liberty Acquired Assets and Liberty for all
risks to which the material Liberty Acquired Assets are normally exposed in the
ordinary course of the Liberty Business.
3.18 Advertisers, Subscribers, Circulation. To Liberty's Knowledge,
none of the advertisers that currently represent the Liberty Newspapers' ten
largest advertisers intends to materially reduce such purchases. Set forth on
Section 3.18 of the Liberty Disclosure Letter is (i) the total paid circulation
and the total unpaid circulation for each Liberty Newspaper as of December 31,
1998 and as of June 30, 1999, (ii) a list of the ten businesses or entities that
generated the greatest amount of advertising revenues for each Liberty Newspaper
during the periods from January 1, 1998 through December 31, 1998 and January 1,
1999 through June 30, 1999 and (iii) a schedule of all sales during the period
from January 1, 1999 through June 30, 1999 of, commitments during such period to
sell, or representations during such period that it will sell, advertising space
in any Liberty Newspaper to any party involving the receipt of non-cash
consideration in excess of $2,500. The Liberty Newspapers have no lifetime
subscription liabilities.
3.19 Real Property.
(a) The Liberty Real Property complies in all material respects with
all zoning, building, fire, use restriction, air, water or other pollution
control, environmental protection, waste disposal, safety or health codes,
ordinances, laws, rules or regulations. All of the buildings and other
improvements located upon the Liberty Real Property are in a good state of
repair, reasonable wear and tear excepted.
(b) No condemnation proceedings have been instituted or, to the
Knowledge of Liberty, threatened against Liberty or the Liberty Real Property.
(c) Except as otherwise described in Section 3.19 of the Liberty
Disclosure Letter, all buildings and structures located on the Liberty Real
Property are located completely within the boundary lines of the Liberty Real
Property, no buildings, structures or other improvements owned by others
encroach onto or under the Liberty Real Property, and the Liberty Real Property
has access to public roads. Liberty has all easements and rights
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necessary to conduct the Liberty Business on the Liberty Real Property in the
manner presently conducted.
3.20 Employment Matters. Except as otherwise described in Section
3.20 of the Liberty Disclosure Letter, since July 1, 1999, Liberty has not
transferred, or permitted or solicited the transfer of, any employee involved in
the Liberty Business to another newspaper or business owned or operated by
Liberty or any of its Affiliates.
3.21 Accuracy of Representations. No representation or warranty
made by Liberty in this Agreement or any document delivered, or to be delivered,
by or on behalf of Liberty pursuant hereto, including the Liberty Disclosure
Letter, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading; provided, however, that Liberty may submit, at any time up to the
end of the Business Day two Business Days prior to the Closing Date, a revised
version of the Liberty Disclosure Letter (and any attachment or schedule
thereto), which shall amend the Liberty Disclosure Letter only upon being
accepted by Xxx in writing. Xxx acknowledges that its sole remedy for any breach
of a representation or warranty caused by Xxx'x refusal to accept an amended
Liberty Disclosure Letter shall be termination of this Agreement in accordance
with Section 9.1(d).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXX
Xxx represents and warrants to Liberty as follows.
4.1 Organization and Good Standing. Xxx is a Delaware corporation
duly incorporated and validly existing as a corporation in good standing under
the laws of the State of Delaware, Xxx has the corporate power to carry on the
Xxx Business, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where qualification as a foreign
corporation is required, except for such failures to be qualified and in good
standing that would not, in the aggregate, have a Xxx Material Adverse Effect.
4.2 Authority. Xxx has the corporate power and corporate authority
to execute and deliver this Agreement and the other Ancillary Instruments to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions provided for hereby and thereby, and all corporate
action of Xxx necessary for the making and performance of this Agreement by Xxx
has been duly taken. Except as otherwise provided in Section 4.2 of the Xxx
Disclosure Letter, the execution, delivery and performance by Xxx of this
Agreement and the other Ancillary Instruments to which it is a party do not and
will not (i)(A) contravene any provisions of the certificate of incorporation or
by-laws of Xxx, (B) with or without the giving of notice or the passage of time
or both, result in any breach by Xxx of, or default or permitted or required
acceleration of performance by Xxx under, or the creation of any Lien upon the
Xxx Acquired Assets which would remain on the Xxx Acquired Assets after the
Closing Date,
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or the creation in favor of any third party of any right of termination of, any
contract, lease, license or other agreement to which Xxx is a party or by which
Xxx or the Xxx Acquired Assets are bound, or (C) assuming that the Governmental
Actions/Filings referred to in Section 4.2 of the Xxx Disclosure Letter are
obtained or made, result in any violation by Xxx of any law, rule or regulation
applicable to it, (ii) result in any violation by Xxx of any judgment,
injunction or decree of, or any license or permit issued by, any court or
governmental authority applicable to it, or (iii) assuming that the notices
referred to in Section 4.2 of the Xxx Disclosure Letter are made, require any
Governmental Action/Filing to be made or obtained by Xxx except (A) any federal,
state or local Tax filings, and (B) any PBGC "Notice of Reportable Event"
required under Section 4043(c) of ERISA. This Agreement and each of the
Ancillary Instruments to which it is a party has been duly executed and
delivered by Xxx. This Agreement and each of the Ancillary Instruments to which
it is a party constitutes the valid and binding obligation of Xxx, enforceable
against Xxx in accordance with its terms except that such enforcement may be
limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other laws (whether statutory, regulatory or decisional), now or
hereafter in effect, relating to or affecting the rights of creditors generally
or by equitable principles (regardless of whether considered in a proceeding at
law or in equity).
4.3 Acquired Assets. Except (i) as set forth in Part A of Section
4.3 of the Xxx Disclosure Letter, (ii) for the Xxx Excluded Assets and (iii) for
such assets that are consumed or disposed of in the ordinary course of the Xxx
Business and consistent with prior practice after the date of this Agreement,
the Xxx Acquired Assets include all of the assets, properties and rights of
every type and description, real, personal and mixed, tangible and intangible,
that are owned, leased or licensed by Xxx or any of its Affiliates and used
solely in the conduct of the Xxx Business in the manner in which the Xxx
Business is now conducted.
Except as set forth in Part B of Section 4.3 of the Xxx Disclosure
Letter, Xxx does not use any assets solely in the conduct of the Xxx Business
which in the aggregate are material to the Xxx Business and which it does not
own or lease. Except as set forth in Part C of Section 4.3 of the Xxx Disclosure
Letter, the tangible Xxx Acquired Assets are in good operating condition,
reasonable wear and tear excepted, and except for such failures, to be in such
good operating condition, individually or in the aggregate, have not had and are
not reasonably likely to have incurred a Xxx Material Adverse Effect. The Xxx
Acquired Assets constitute all of the assets necessary to conduct the Xxx
Business as currently conducted. Part A of Section 4.3 of the Xxx Disclosure
Letter also contains a true, accurate and complete list of all material tangible
assets and properties, real, personal and mixed, used primarily, but not solely,
in the conduct of the Xxx Business.
4.4 Title to Acquired Assets; Liens. Except as set forth in
Section 4.4 of the Xxx Disclosure Letter, Xxx owns good title to or has valid
leasehold interests in all of the Xxx Acquired Assets and at the Closing good
title to or valid leasehold interests in (and consents to the assignment
thereof) such Xxx Acquired Assets shall be transferred to Liberty, free and
clear of any and all Liens except (i) for Xxx Permitted Liens, and (ii) any
restriction on assignment of Xxx Contracts which is contained in such Xxx
Contract or which arises by law.
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4.5 Contracts and Agreements; Defaults.
(a) Part A of Section 4.5 of the Xxx Disclosure Letter contains a
list of: (i) all outstanding mortgages, indentures, notes, guarantees,
installment obligations or other contracts or instruments evidencing or
providing any Indebtedness to which Xxx is a party and which relate solely to
the Xxx Business or by which it or any of its assets are bound and which relate
solely to the Xxx Business; (ii) all outstanding contracts containing
noncompetition covenants of Xxx which relate solely to the Xxx Business; (iii)
all outstanding leases to which Xxx is a party and which relate solely to the
Xxx Business or by which it is bound and which relate solely to the Xxx
Business; (iv) all outstanding contracts of Xxx to sell assets, other than in
the ordinary course of business, and which relate solely to the Xxx Business;
(v) all collective bargaining agreements of Xxx with any labor union or other
employee representative or a group of employees and which relate to the Xxx
Business; (vi) any joint venture or partnership agreements to which Xxx is a
party relating solely to the Xxx Business; and (vii) all other outstanding
contracts to which Xxx is a party and which relate solely to the Xxx Business or
by which it or any of its assets are bound and which relate solely to the Xxx
Business, which require or are likely to require the payment by Xxx of an
amount, or require Xxx to provide goods or services having a fair market value
or aggregate sales price, of more than $10,000 per annum, except (1) contracts
entered into in the ordinary course of business of Xxx that can be terminated by
Xxx on 60 or fewer days' notice without penalty, (2) subscriptions to the Xxx
Newspapers and contracts for advertising or commercial printing which Xxx
entered in the ordinary course of business each involving aggregate amounts of
less than $10,000 per annum, and (3) Xxx Excluded Assets. Xxx has delivered to
Liberty a correct and complete copy of each written agreement listed on Part A
of Section 4.5 of the Xxx Disclosure Letter (the "Xxx Material Contracts").
(b) Except as set forth in Part B of Section 4.5 of the Xxx
Disclosure Letter, (i) neither Xxx, nor, to the Knowledge of Xxx, any other
party to any contract, lease, license or other agreement to which Xxx is a party
or by which Xxx or any of the Xxx Acquired Assets are bound (other than
contracts, licenses, leases or other agreements that constitute Xxx Excluded
Assets and do not relate solely to the Xxx Business) is in material breach of or
default under any such contract, lease, license or other agreement and (ii) no
event has occurred which (after notice or lapse of time or both) would become a
material breach or default by Xxx under any such contract, lease, license or
other agreement.
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4.6 Financial Statements; Undisclosed Liabilities.
(a) Attached as Part A of Section 4.6 of the Xxx Disclosure Letter
are true and complete copies of (i) the unaudited balance sheet of the Xxx
Newspapers as at September 30, 1998 and (ii) the unaudited balance sheet of the
Xxx Newspapers as at July 31, 1999 (July 31, 1999 balance sheet is referred to
as the "Xxx Balance Sheet"), and the related unaudited statements of income for
the twelve month and ten month periods then ended (collectively, the "Xxx
Financial Statements"). Except as disclosed in Part A of Section 4.6 of the Xxx
Disclosure Letter, the Xxx Financial Statements fairly present in all material
respects the financial position of Xxx Newspapers as at September 30, 1998 and
July 31, 1999 and the results of operations for the twelve months ended
September 30, 1998, and the ten months ended July 31, 1999 in accordance with
GAAP, except that the Xxx Financial Statements are summary in nature and do not
include the notes and related disclosures required by GAAP.
(b) Except for Xxx Excluded Assets and except for cash distributed
to Xxx and its Affiliates, the Xxx Balance Sheet reflects all of the Xxx
Acquired Assets that will be acquired by Liberty at the Closing other than such
assets as are disposed of or consumed in the ordinary course of the Xxx Business
and consistent with past practice since July 31, 1999 or such additional assets
as are acquired by the Xxx Newspapers in the ordinary course of business since
July 31, 1999.
(c) Except as set forth in Part B of Section 4.6 of the Xxx
Disclosure Letter or as reflected, reserved against or otherwise disclosed in
the Xxx Balance Sheet and liabilities and obligations incurred in the ordinary
course of business since July 31, 1999, Xxx does not have any material
liabilities or obligations related solely to the Xxx Business that would have
been required to be reflected or otherwise disclosed by Xxx in the Xxx Balance
Sheet in accordance with GAAP.
4.7 Business Since July 31, 1999. Except as disclosed in Part A of
Section 4.7 of the Xxx Disclosure Letter and except as required or otherwise
contemplated by this Agreement, since July 31, 1999 (i) the Xxx Business has
been conducted in all material respects in the ordinary course, consistent with
past practices, (ii) neither the Xxx Business nor its condition nor assets has
experienced a Xxx Material Adverse Effect and (iii) no event or events has or
have occurred that individually or in the aggregate has or have had or is or are
reasonably likely to have a Xxx Material Adverse Effect. Since July 31, 1999,
except as described in Part B of Section 4.7 of the Xxx Disclosure Letter, there
has not been:
(a) any material damage, destruction, or loss to the Xxx
Acquired Assets outside the ordinary course of business;
(b) any making or authorization of any capital expenditure
relating solely to the Xxx Business by Xxx in excess of $10,000 individually or
the making or authorization of capital expenditures relating solely to the Xxx
Business by Xxx of more than $25,000 in the aggregate;
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(c) any sale, transfer, or other disposition of assets or
properties, real, personal, tangible or intangible, or mixed, relating solely to
the Xxx Business, by Xxx, other than in the ordinary course of business;
(d) other than pursuant to existing collective bargaining
agreements or pursuant to regular salary reviews in the ordinary course of
business consistent with past practices, any increase in the compensation
payable or to become payable to any employees or agents of Xxx that are involved
in the Xxx Business, or any bonus arrangement made with any thereof; or
(e) no material increase in the operating costs of any of the Xxx
Newspapers, whether arising from or in connection with the sale of real property
or otherwise, has occurred.
4.8 Compliance with Law; Litigation; Injunctions. Xxx is not in
violation in any material respect of any law, rule, permit, regulation, order,
judgment or decree applicable to it, except as set forth in Part A of Section
4.8 of the Xxx Disclosure Letter, the violation of which could reasonably have a
Xxx Material Adverse Effect. Except for the matters set forth in Part B of
Section 4.8 of the Xxx Disclosure Letter and for claims fully covered by
liability insurance of Xxx, (i) there is no action, suit or other proceeding
pending or, to Xxx'x Knowledge, threatened, at law or in equity, before any
federal, state or municipal court, administrative agency or arbitrator against
Xxx and relating to the Xxx Newspapers which is reasonably expected to have a
Xxx Material Adverse Effect and (ii) Xxx is not a party to, or subject to or
bound by, any order, injunction or decree of any court or governmental authority
relating to the Xxx Newspapers.
4.9 Licenses. With such exceptions as are set forth in Section 4.9
of the Xxx Disclosure Letter (a) all licenses, permits, registrations or
authorizations of any governmental department or agency that are presently
required solely for the operation of the Xxx Business as presently conducted
have been duly obtained and are in full force and effect, the absence of which
would have a Xxx Material Adverse Effect and (b) no consent, authorization or
approval is required to transfer such licenses, permits, registrations or
authorizations to Liberty (or one or more Affiliates of Liberty as designated by
Liberty) pursuant to this Agreement.
4.10 Taxes. Except as set forth in Section 4.10 of the Xxx
Disclosure Letter:
(a) Xxx and any consolidated, combined or unitary group of which
Xxx is or was a member have timely filed all Tax Returns which are required to
be filed, and all Taxes shown to be due on such Tax Returns have been timely
paid. All such Tax Returns were true and correct in all material respects. On
July 31, 1999, Xxx had no liability for Taxes (other than Income Taxes) that
would have been required to be reflected in the Xxx Balance Sheet in accordance
with GAAP, except to the extent that such Taxes are reflected, reserved against
or otherwise disclosed in the Xxx Balance Sheet or will be paid prior to the
Closing Date. There is no dispute or claim concerning any liability for Taxes of
Xxx with respect to the Xxx Business that is either (1) claimed or raised by any
authority in writing or (2) as to which any of the directors and officers (or
employees responsible for Tax matters) of Xxx has any knowledge
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based upon personal contact with any agent of such authority. Xxx has disclosed
on its federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the meaning of
Section 6662 of the Code. Xxx has withheld and paid over all Taxes required to
have been withheld and paid over in connection with amounts paid or owing to any
employee, creditor, independent contractor, or other third Person.
(b) No property of Xxx is subject to a tax benefit transfer lease
subject to the provisions of former Section 168(f)(8) of the Internal Revenue
Code of 1954.
(c) Xxx is not a foreign person subject to withholding under
Section 1445 of the Code and the regulations promulgated thereunder, and, at the
Closing Date, Xxx shall deliver to Liberty a certificate to that effect.
(d) Xxx is not bound by or obligated under any tax sharing or
similar agreement or arrangement, other than related to Xxx'x consolidated Tax
return filing.
4.11 Affiliated Transactions. Section 4.11 of the Xxx Disclosure
Letter sets forth a complete and accurate list of all contracts in connection
with the Xxx Business to which Xxx on the one hand, and any of its Affiliates on
the other hand, is a party.
4.12 Brokers. Neither Xxx nor any of its directors, officers,
employees or Affiliates has employed any broker or finder or has incurred or
will incur any broker's, finder's or similar fees, commissions or expenses, in
each case in connection with the transactions contemplated by this Agreement.
4.13 Labor.
(a) Except as set forth in Part A of Section 4.13 of the Xxx
Disclosure Letter, (i) Xxx does not have any contracts of employment with any of
its employees, or consulting agreements with any consultants, involved solely in
the Xxx Business, (ii) no union has been certified as representing any of Xxx'x
employees involved in the Xxx Business, (iii) Xxx is not a party to or currently
negotiating any collective bargaining agreements with respect to its employees
involved in the Xxx Business, (iv) to Xxx'x Knowledge, there is no currently
pending union representation activity involving any employees of Xxx involved in
the Xxx Business, (v) to Xxx'x Knowledge, no demand has been made for
recognition by a labor organization by or with respect to any employees of Xxx
involved in the Xxx Business, and (vi) none of the employees of Xxx involved in
the Xxx Business is represented by any labor union or organization. Except as
set forth in, Part B of Section 4.13 of the Xxx Disclosure Letter, there are no
pending or, to Xxx'x Knowledge, overtly threatened (i) claims of employment
discrimination, wage and hour claims, OSHA claims, unemployment claims or
worker's compensation claims or (ii) unfair labor practice claims before the
National Labor Relations Board.
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(b) There is not presently pending and during the last five years
there has not been (i) any strike, picketing or work stoppage by any employees
involved solely in connection with the Xxx Business or (ii) any application for
certification of a collective bargaining agreement. There is no lockout of any
employee by Xxx involved solely in the Xxx Business, and no such action is
contemplated by Xxx.
4.14 Employee Benefits.
(a) For purposes of this Agreement, an "Employee Benefit Plan" is
(i) each "employee benefit plan," within the meaning of Section 3(3) of ERISA
and (ii) each other retirement, deferred compensation, medical, dental, vision,
disability, educational assistance, dependent care, life insurance, flexible
spending account, cafeteria plan (within the meaning of Code Section 125),
workers compensation, stock option, stock purchase, other stock-based
compensation, severance, vacation pay, other fringe or welfare benefits, change
in control or incentive or bonus plan, fund, policy or arrangement. Section
4.14(a) of the Xxx Disclosure Letter lists each Employee Benefit Plan maintained
or contributed to by Xxx or any of its ERISA Affiliates for current or former
employees of Xxx involved solely in the Xxx Business (collectively, "Xxx Benefit
Plans"). Xxx has delivered or made available to Liberty a copy of each Xxx
Benefit Plan (and each trust maintained in connection with any such Xxx Benefit
Plan) or a written summary of any material unwritten Xxx Benefit Plan and any
summary plan description relating to a Xxx Benefit Plan and, with respect to
each Xxx Benefit Plan under which liabilities are assumed by Liberty under
Section 10.1 (an "Assumed Xxx Benefit Plan") the most recent Internal Revenue
Service ("IRS") Form 5500 and, where applicable, the most recent IRS
determination letter.
(b) Except as set forth in Section 4.14(b) of the Xxx Disclosure
with respect to each Assumed Xxx Benefit Plan, (i) each such plan is in material
compliance with all applicable laws and regulations and has been administered
substantially in accordance with its terms; and (ii) each such plan intended to
be tax-qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS as to its tax-qualified status under the Code
and, to the Knowledge of Xxx, there are no existing circumstances likely to
result in the revocation of any such determination letter. There are no actions,
suits or claims pending or, to Xxx'x Knowledge, threatened (other than routine
claims for benefits) with respect to any Xxx Benefit Plan which are likely to
result in the imposition of liability on Liberty.
(c) Except as set forth in Section 4.14(c) of the Xxx Disclosure
Letter, no Xxx Benefit Plan is a "single-employer" plan within the meaning of
Section 4001(a)(15) of ERISA or a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA. Xxx has not incurred any liability under Title IV
of ERISA with respect to any Assumed Xxx Benefit Plan other than for PBGC
premiums not yet due.
(d) To the Knowledge of Xxx, no audit or investigation of any Xxx
Benefit Plan by the IRS, the Department of Labor or the PBGC is pending or
threatened.
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(e) All contributions to the Assumed Xxx Benefit Plans that will
have been required to be made with respect to periods prior to the Closing Date
under such Assumed Xxx Benefit Plans will have been made or accrued as of the
Closing Date.
(f) Neither Xxx nor any of its ERISA Affiliates nor, to Xxx'x
Knowledge, any other Person, has taken any action or failed to take any action
with respect to any Employee Benefit Plan maintained or contributed to or
previously maintained or contributed to by Xxx or any of its ERISA Affiliates
for which Xxx or any of its ERISA Affiliates may have any liability, contingent
or otherwise, or permitted any circumstance to exist that may subject Liberty or
any Assumed Xxx Benefit Plan to any Tax, penalty, fine or other liability under
the Code or ERISA.
(g) Except as set forth in Section 4.14(g) of the Xxx Disclosure
Letter, there is no individual who is not, as of the date of this Agreement, an
active employee of Xxx or an ERISA Affiliate and who would at any future date be
entitled to any form of reemployment rights with Xxx or an ERISA Affiliate with
respect to the Xxx Business if (i) there were no exchange of assets pursuant to
this Agreement and (ii) Xxx continued to maintain the Xxx Business.
4.15 Environmental Matters. Except as set forth on Section 4.15 of
the Xxx Disclosure Letter to Xxx'x Knowledge:
(a) there has not been any past or continuing release or threat of
release of any Hazardous Substance in violation of Environmental Laws into the
environment at, on or from the Xxx Real Property or any other real property
currently or previously leased or owned by Xxx and used in the Xxx Business and
there are no Hazardous Substances at, on or under the Xxx Real Property in
violation of Environmental Laws;
(b) there have been no Hazardous Substances generated solely in
connection with the Xxx Business that have been disposed of or come to rest at
any site that has been included in any federal, state or local priority list of
hazardous or toxic waste sites published by any governmental body, agency or
authority;
(c) (i) there are no underground or above-ground storage tanks
located on the Xxx Real Property;
(ii) there are no PCBs or PCB-containing equipment used or
stored on the Xxx Real Property;
(d) a copy of any environmental investigations, studies, audits,
tests, reviews or analyses relating to the Xxx Acquired Assets conducted by Xxx
or any consultant engaged by Xxx within the last five years, if any, have
previously been provided to Liberty;
(e) Xxx has operated in compliance with all applicable
Environmental Laws, the violation of which could reasonably be expected to have
a Xxx Material Adverse Effect;
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(f) Xxx has not received any directive, order or notice from any
government body alleging any violation of or failure to comply with
Environmental Laws at the Xxx Real Property by Xxx;
(g) Xxx has not received any directive, order or notice from any
government body or any other Person alleging that Xxx is actually or potentially
liable under Environmental Laws for the costs of environmental investigation or
remediation of the Xxx Real Property, or other real property to which Hazardous
Substances generated by Xxx in connection with a Xxx Business were transferred
for disposal; and
(h) The Xxx Real Property is not subject to any Lien, securing the
costs of environmental remediation, arising under Environmental Laws.
4.16 Intangible Property.
(a) Except for Xxx Excluded Assets, Xxx owns or possesses valid,
adequate and enforceable licenses or other rights to use all Xxx Intangible
Property used solely in connection with the Xxx Business as currently conducted.
There are no existing, or to the Knowledge of Xxx, overtly threatened claims of
any third Person based on the use by Xxx, or challenging the ownership, use,
scope, enforceability or validity, of any of the Xxx Intangible Property used in
the Xxx Business. To the Knowledge of Xxx, there is no infringing use by any
Person of the Xxx Intangible Property used in the Xxx Business. Xxx'x use of the
Xxx Intangible Property does not infringe on the rights of any other Person.
(b) All Xxx Copyrights and Xxx Trademarks described in Parts A and
B, respectively, of Section 4.16(b) of the Xxx Disclosure Letter are
transferable to Liberty without the consent of any third party, and Section
4.16(b) constitutes a complete listing of all such Xxx Copyrights and Xxx
Trademarks material to the Xxx Business. The Xxx Business possesses valid
licenses for all material software used therein.
(c) Except as otherwise disclosed in Section 4.16(c) of the Xxx
Disclosure Letter, any reprogramming required to permit the proper functioning
(but only to the extent that such proper functioning would otherwise be impaired
by the occurrence of the year 2000) in and following the year 2000 of any
software owned by or licensed to or used by the Xxx Business, or the computer
systems and other equipment containing embedded microchips of the Xxx Business,
in either case owned or operated by or used or relied upon in the conduct of
such business (including any such systems and other equipment supplied by others
or with which the computer systems of the Xxx Business interface), and the
testing of all such software, systems and other equipment as so reprogrammed,
has been completed and paid for in full and such software, systems and other
equipment shall function properly, without material errors or omissions, upon
the occurrence of the year 2000 (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of the year 2000).
4.17 Insurance. All policies of insurance to which Xxx is a party
or which provide insurance coverage to Xxx, taken together, provide adequate
insurance coverage for the
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material Xxx Acquired Assets and Xxx for all risks to which the material Xxx
Acquired Assets and Xxx are normally exposed in the ordinary course of the Xxx
Business.
4.18 Advertisers, Subscribers, Circulation. Except as disclosed in
Section 4.18 of the Xxx Disclosure Letter, to Xxx'x Knowledge, none of the
advertisers that currently represent the Xxx Newspapers' ten largest advertisers
intends to materially reduce such purchases. Set forth on Section 4.18 of the
Xxx Disclosure Letter is (i) the total paid circulation and the total unpaid
circulation for each Xxx Newspaper as of December 31, 1998 and as of July 31,
1999, (ii) a list of the ten businesses or entities that generated the greatest
amount of advertising revenues for each Xxx Newspaper during the periods from
October 1, 1997 through September 30, 1998 and October 1, 1998 through June 30,
1999 and (iii) a schedule of all sales during the period from October 1, 1998
through June 30, 1999 of, commitments during such period to sell, or
representations during such period that it will sell, advertising space in any
Xxx Newspaper to any party involving the receipt of non-cash consideration in
excess of $2,500. The Xxx Newspapers have no lifetime subscription liabilities.
4.19 Real Property.
(a) The Xxx Real Property complies in all material respects with
all zoning, building, fire, use restriction, air, water or other pollution
control, environmental protection, waste disposal, safety or health codes,
ordinances, laws, rules or regulations. All of the buildings and other
improvements located upon the Xxx Real Property are in a good state of repair,
reasonable wear and tear excepted.
(b) No condemnation proceedings have been instituted or, to the
Knowledge of Xxx, threatened against Xxx or the Xxx Real Property.
(c) Except as otherwise described in Section 4.19 of the Xxx
Disclosure Letter, all buildings and structures located on the Xxx Real Property
are located completely within the boundary lines of the Xxx Real Property, no
buildings, structure or other improvements owned by others encroach onto or
under the Xxx Real Property, and the Xxx Real Property has access to public
roads. Xxx has all easements and rights necessary to conduct the Xxx Business on
the Xxx Real Property in the manner presently conducted.
4.20 Employment Matters. Except as otherwise disclosed in Section
4.20 of the Xxx Disclosure Letter, since July 1, 1999, Xxx has not transferred,
or permitted or solicited the transfer of, any employee involved in the Xxx
Business to another newspaper or business owned or operated by Xxx or any of its
Affiliates.
4.21 Accuracy of Representations. No representation or warranty
made by Xxx in this Agreement or any document delivered, or to be delivered, by
or on behalf of Xxx pursuant hereto, including the Xxx Disclosure Letter,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading; provided, however, that Xxx may submit, at any time up to the end of
the Business Day two Business Days prior to the Closing Date, a revised version
of the Xxx Disclosure
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Letter (and any attachment or schedule thereto), which shall amend the Xxx
Disclosure Letter only upon being accepted by Liberty in writing. Liberty
acknowledges that its sole remedy for any breach of a representation or warranty
caused by Liberty's refusal to accept an amended Xxx Disclosure Letter shall be
termination of this Agreement in accordance with Section 9.1(c).
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF LIBERTY
6.1 Liberty's Closing Conditions. The obligations of Liberty under
this Agreement to effect the Closing are, at its option, subject to the
fulfillment of the following conditions prior to or at the Closing, each of
which may be waived (as conditions to its obligations) by Liberty in its
absolute discretion:
(a) Representations, Warranties, Covenants.
(i) The representations and warranties of Xxx contained in
Article 4 of this Agreement shall be true and correct in all material
respects as though such representations and warranties were made, as
written herein, immediately prior to the Closing (except to the extent
changes are permitted, required or otherwise contemplated pursuant to
this Agreement) provided, however, if any such representation or
warranty is already qualified by materiality in any manner (including,
but not limited to, any materiality qualification contained in a
definition of a capitalized term used in such representation or
warranty), for purposes of determining whether this condition has been
satisfied, such representation or warranty as so qualified must be true
and correct in all respects;
(ii) Xxx shall have performed and complied in all material
respects with each and every covenant and agreement required by this
Agreement to be performed or complied with by it at or prior to the
Closing; and
(iii) Xxx shall have furnished Liberty with a certificate,
dated the Closing Date and duly executed on behalf of Xxx by an officer
of Xxx, to the effect that the conditions set forth in clauses (i) and
(ii) of this Section 6.1(a) have been satisfied.
(b) Proceedings. No action or proceeding shall have been instituted or
threatened prior to or on the Closing Date before any court or governmental body
or authority pertaining to the transactions contemplated by this Agreement or
the Ancillary Instruments, the result of
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which could prevent, or in any way limit or make illegal, the consummation of
such transactions or operation of the Xxx Newspapers after the Closing. No
United States or state governmental authority or other agency or commission or
United States or state court of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
injunction or other order (whether temporary, preliminary, or permanent) that is
in effect and has the effect of limiting or prohibiting consummation of the
transactions contemplated by this Agreement.
(c) Consents Under Contracts. Xxx shall have obtained and
delivered to Liberty all consents, waivers and approvals required under any Xxx
Material Contract (without any materially adverse provision or condition) to (i)
permit the valid execution, delivery and performance by Xxx of this Agreement
and the Ancillary Instruments or (ii) prevent any Xxx Material Contract from
terminating or being amended prior to its scheduled termination as a result of
the consummation of the transactions contemplated hereby and thereby.
(d) Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is necessary under any applicable law, rule, order or
regulation for the consummation of the transactions contemplated by this
Agreement and the Ancillary Instruments shall have consented to, authorized,
permitted or approved such transactions, and the waiting period (and any
extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder (the "HSR
Act"), applicable to the transactions contemplated by this Agreement and the
Ancillary Instruments shall have expired or been terminated without any
condition attached to such expiration or termination.
(e) Noncompetition/Nonsolicitation Agreement. Xxx and Liberty
shall have entered into a Noncompetition/Nonsolicitation Agreement, dated the
Closing Date, in a mutually agreeable form.
(f) Real Estate Documents. Liberty shall have obtained, at Xxx'x
expense, each of the following, in form and substance reasonably satisfactory to
Liberty, covering the Xxx Real Property.
(i) An ALTA 1990 owner's title policy (including extended
coverage over the standard printed exceptions, access, location,
environmental lien, survey and comprehensive endorsements) insuring
title in Liberty (or one or more Affiliates of Liberty designated by
Liberty) of each parcel of owned Xxx Real Property and all recorded
easements appurtenant thereto upon Closing, subject only to the Xxx
Permitted Liens, in the amount set forth with respect to each such
parcel on SCHEDULE 6.1(F)(I) attached hereto, together in each case
with any title insurance affidavit signed by Xxx or its Affiliates
required by the title insurance company issuing such policy and copies
of all documents referenced in the policy as exceptions.
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(ii) An as-built survey relating to each parcel of owned Xxx
Real Property which survey shall: (i) indicate the location, legal
description and area and square feet of each parcel of owned Xxx Real
Property, (ii) locate all easements, utilities (including connections
to public streets), parking facilities, covenants and restrictions and
rights of way, (iii) indicate adjoining streets, building lines,
surface improvements, encroachments, vehicular access and parking
requirements, (iv) identify which portions of owned Xxx Real Property
are located in a 100 year flood plain area as identified under the
National Flood Insurance Program and (v) satisfy the Minimum Standard
Detail Requirements for ALTA/ACSM (1992) Land Title Surveys, including
Table A requirements 3, 4, 6, 7, 8, 9, 10, 11 and 13.
Xxx shall have delivered to Liberty such other documents as may be reasonably
necessary to consummate the acquisition of the owned Xxx Real Property effected
through a "New York style" escrow closing, including, but not limited to, escrow
instructions, any releases and settlement agreements from existing creditors of
Xxx or its Affiliates which may be necessary to assure delivery of title to the
owned Xxx Real Property (including, but not limited to, the Xxx Real Property
owned by Affiliates of Xxx), subject only to Xxx Permitted Liens.
(g) Environmental Reports. Liberty shall have obtained, at Xxx'x
expense, (i) an environmental assessment evaluation "Phase I" report with
respect to each parcel of the owned Xxx Real Property designated by Liberty (the
"Xxx Environmental Reports") from an environmental consultant selected, and
directed as to the scope thereof, by Xxx and (ii) a repair plan to reseal the
Ottumwa sumps and to evaluate the integrity of, and, if necessary, repair or
replace any broken or leaking pumps leading to or from such sumps with respect
to the Ottumwa Pre-Closing Sump Liability, which plan shall be acceptable to
Liberty, in its sole discretion (the "Sump Resealing Plan"). Liberty may
undertake such further inspections and testing at its expense after the date
hereof and prior to the Closing with respect to the owned Xxx Real Property.
Liberty shall be satisfied, in Liberty's sole discretion, that all such
environmental reports, inspections and testing do not disclose conditions or the
possibility of conditions which (a) might be expected to impose a material
liability on Liberty (or one or more Affiliates of Liberty) under applicable
laws for clean-up or other costs or (b) may make it difficult to obtain
financing secured by the owned Xxx Real Property. Xxx shall have completed, at
Xxx'x expenses, the repair activities set forth in the Sump Resealing Plan and
the disposal of the containers containing waste relating thereto, given such
repair activities and disposal are in accordance with all applicable
Environmental Laws, and Liberty shall, in its sole discretion, be satisfied
therewith.
(h) Closing Documents. Xxx shall have delivered to Liberty the
documents specified in Section 2.3(b) hereof.
(i) Leases. Liberty shall have received from each landlord under a
lease of the leased Xxx Real Property an estoppel certificate in form and
substance reasonably satisfactory to Liberty and covering such other matters as
Liberty reasonably may require.
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(j) Foreign Person. Liberty shall have received from Xxx an
affidavit (1) confirming its representation in Section 4.10(c), (2) setting
forth Xxx'x taxpayer identification number, and (3) granting Liberty permission
to furnish a copy of such affidavit to the Internal Revenue Service.
(k) Transition Services. Liberty shall have received from Xxx a
Transition Services Agreement, referred to in Section 11.20, duly executed by
Xxx and acceptable to Liberty, and such agreement shall be in full force and
effect.
(l) Additional Financial Statements. Xxx shall have provided to
Liberty the Xxx financial statements, in such form and prepared in accordance
with Section 4.6(a), for any month-end occurring after July 31, 1999 within 15
days of such month-end. If the Closing will occur prior to 15 days after a
month-end, Xxx shall not be obligated to provide such financial statements for
such month-end, but Liberty shall be permitted to make inquiry of Xxx management
of trends and other information with respect to such Xxx financial statements
not yet available for any month then ended, and there shall be no Xxx Material
Adverse Effect shown or expressed therein in the Xxx Business.
(m) License Agreement. Liberty shall have received from Xxx the
License Agreement, duly executed by Xxx.
(n) Aledo Purchase Agreement. At the Closing, Liberty and Xxx
shall have consummated the transactions contemplated by the Aledo Purchase
Agreement.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF XXX
7.1 Xxx'x Closing Conditions. The obligations of Xxx under this
Agreement to effect the Closing are, at its option, subject to the fulfillment
of the following conditions prior to or at the Closing Date, each of which may
be waived (as conditions to its obligations) by Xxx in its absolute discretion:
(a) Representations, Warranties, Covenants.
(i) The representations and warranties of Liberty contained
in Article 3 of this Agreement shall be true and correct in all
material respects as though such representations and warranties were
made, as written herein, immediately prior to the Closing (except to
the extent changes are permitted, required or otherwise contemplated
pursuant to this Agreement) provided, however, if any such
representation or warranty is already qualified by materiality in any
manner (including, but not limited to, any materiality qualification
contained in a definition of a capitalized term used in such
representation or warranty), for purposes of determining whether this
condition has
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been satisfied, such representation or warranty as so qualified must be
true and correct in all respects;
(ii) Liberty shall have performed and complied in all
material respects with each and every covenant and agreement required
by this Agreement to be performed or complied with by them at or prior
to the Closing Date; and
(iii) Liberty shall have furnished Xxx with a certificate,
dated the Closing Date and duly executed on behalf of Liberty by an
officer of Liberty, to the effect that the conditions set forth in
clauses (i) and (ii) of this Section 7.1(a) have been satisfied.
(b) Proceedings. No action or proceeding shall have been
instituted or threatened prior to or on the Closing Date before any court or
governmental body or authority pertaining to the transactions contemplated by
this Agreement or the Ancillary Instruments, the result of which could prevent,
or in any way limit or make illegal, the consummation of such transactions. No
United States or state governmental authority or other agency or commission or
United States or state court of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
injunction or other order (whether temporary, preliminary, or permanent) that is
in effect and has the effect of limiting or prohibiting consummation of the
transactions contemplated by this Agreement.
(c) Consents Under Contracts. Liberty shall have obtained and
delivered to Xxx all consents, waivers and approvals required under any Liberty
Material Contract (without any materially adverse provision or condition) to (i)
permit the valid execution, delivery and performance by Liberty of this
Agreement and the Ancillary Instruments or (ii) prevent any Liberty Material
Contract from terminating or being amended prior to its scheduled termination as
a result of the consummation of the transactions contemplated hereby and
thereby.
(d) Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is necessary under any applicable law, rule, order or
regulation for the consummation of the transactions contemplated by this
Agreement and the Ancillary Instruments shall have consented to, authorized,
permitted or approved such transactions, and the waiting period (and any
extensions thereof) under the HSR Act applicable to the transactions
contemplated by this Agreement and the Ancillary Instruments shall have expired
or been terminated without any condition attached to such expiration or
termination.
(e) Noncompetition/Nonsolicitation Agreement. Xxx and Liberty
shall have entered into a Noncompetition/Nonsolicitation Agreement, dated the
Closing Date, in a mutually agreeable form.
(f) Real Estate Documents. Xxx shall have obtained, at Liberty's
expense, each of the following, in form and substance reasonably satisfactory to
Xxx, covering the Liberty Real Property:
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(i) An ALTA 1990 owner's or leasehold title policy
(including extended coverage over the standard printed exceptions,
access, location, environmental lien, survey and comprehensive
endorsements) insuring title in Xxx of each parcel of owned Liberty
Real Property and all recorded easements appurtenant thereto upon the
Closing Date, subject only to the Liberty Permitted Liens, in the
amount set forth with respect to each such parcel on SCHEDULE
7.1(F)(I), together in each case with any title insurance affidavit
signed by Liberty or its Affiliates required by the title insurance
company issuing such policy and copies of all documents referenced in
the policy as exceptions.
(ii) An as-built survey relating to each parcel of owned
Liberty Real Property which survey shall: (i) indicate the location,
legal description and area and square feet of each parcel of owned
Liberty Real Property, (ii) locate all easements, utilities (including
connections to public streets), parking facilities, covenants and
restrictions and rights of way, (iii) indicate adjoining streets,
building lines, surface improvements, encroachments, vehicular access
and parking requirements, (iv) identify which portions of the owned
Liberty Real Property are located in a 100 year flood plain area as
identified under the National Flood Insurance Program and (v) satisfy
the Minimum Standard Detail Requirements for ALTA/ACSM (1992) Land
Title Surveys, including Table A requirements 3, 4, 6, 7, 8, 9, 10, 11
and 13.
Liberty shall have delivered to Xxx such other documents as may be reasonably
necessary to consummate the acquisition of the owned Liberty Real Property
effected through a "New York style" escrow closing, including, but not limited
to, escrow instructions, any releases and settlement agreements from existing
creditors of Liberty or its Affiliates which may be necessary to assure delivery
of title to the owned Liberty Real Property (including, but not limited to, the
Liberty Real Property owned by Affiliates of Liberty), subject only to Liberty
Permitted Liens.
(g) Environmental Reports. Xxx shall have obtained, at Liberty's
expense, an environmental assessment evaluation "Phase I" report with respect to
each parcel of the owned Liberty Real Property designated by Xxx from an
environmental consultant selected, and directed as to the scope thereof, by
Liberty. Xxx may undertake such further inspections and testing at its expense
after the date hereof and prior to the Closing with respect to the owned Liberty
Real Property. Xxx shall be satisfied, in Xxx'x sole discretion, that all such
environmental reports, inspections and testing do not disclose conditions or the
possibility of conditions which (a) might be expected to impose a material
liability on Xxx under applicable laws for clean-up or other costs or (b) may
make it difficult to obtain financing secured by the Liberty Real Property.
(h) Closing Documents. Liberty shall have delivered to Xxx the
documents specified in Section 2.3(a) hereof.
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(i) Leases. Xxx shall have received from each landlord under a
lease of the leased Liberty Real Property an estoppel certificate in form and
substance reasonably satisfactory to Xxx and covering such other matters as Xxx
reasonably may require.
(j) Foreign Person. Xxx shall have received from Liberty an
affidavit (1) confirming its representation in Section 3.10(c), (2) setting
forth Liberty's taxpayer identification number, and (3) granting Xxx permission
to furnish a copy of such affidavit to the Internal Revenue Service.
(k) Transition Services. Xxx shall have received from Liberty a
Transition Services Agreement, referred to in Section 11.20, duly executed by
Liberty and acceptable to Xxx, and such agreement shall be in full force and
effect
(l) Additional Financial Statements. Liberty shall have provided
to Xxx the Liberty financial statements, in such form and prepared in accordance
with Section 3.6(a), for any month-end occurring after July 31, 1999 within 15
days of such month-end. If the Closing will occur prior to 15 days after a
month-end, Liberty shall not be obligated to provide such financial statements
for such month-end, but Xxx shall be permitted to make inquiry of Liberty
management of trends and other information with respect to such Liberty
financial statements not yet available for any month then ended, and there shall
be no Liberty Material Adverse Effect shown or expressed therein in the Liberty
Business.
(m) License Agreement. Xxx shall have received from Liberty the
License Agreement, duly executed by Liberty.
(n) Aledo Purchase Agreement. At the Closing, Liberty and Xxx
shall have consummated the transactions contemplated by the Aledo Purchase
Agreement.
ARTICLE 8
SURVIVAL; INDEMNIFICATION
8.1 Survival. All representations, warranties, covenants and
agreements contained in this Agreement, the Liberty Disclosure Letter, the Xxx
Disclosure Letter or in any exhibit, certificate, agreement, document or
statement delivered pursuant hereto, (an "Ancillary Instrument"), shall survive
(and not be affected in any respect by) the Closing Date and any investigation
conducted by any party hereto. Notwithstanding the foregoing, the
representations and warranties contained in or made pursuant to this Agreement
or any Ancillary Instrument, respectively, shall terminate on, and no claim or
action with respect thereto may be brought after, the date that is twelve months
after the Closing Date, except that (1) the representations and warranties
contained in Sections 3.10, 3.14, 3.15, 4.10, 4.14 and 4.15 hereof shall
terminate on, and no claim or action with respect thereto may be brought after,
the expiration date of the applicable statute of limitations (giving effect to
any waiver, stay or extension thereof), and (2) the representations and
warranties contained in Sections 3.4
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and 4.4 hereof shall survive in perpetuity. The representations and warranties
which terminate on the date that is twelve months after the Closing Date, and
upon the expiration date of the applicable statute of limitations (giving effect
to any waiver, stay or extension thereof), and the liability of any party hereto
with respect thereto pursuant to this Article 8, shall not terminate with
respect to any claim, whether or not fixed as to liability or liquidated as to
amount, with respect to which the Indemnifying Party (as defined in Section
8.2(c)) has been given written notice setting forth the material facts upon
which the claim for indemnification is based and, if feasible, a reasonable
estimate of the amount of the claims prior to the date that is twelve months
after the Closing Date or that is the date of expiration of the applicable
statute of limitations, as the case may be.
8.2 Indemnification. The parties hereto shall indemnify each
other as set forth below:
(a) Subject to Section 8.1 and to the other provisions of
this Section 8.2, Liberty hereby agrees to indemnify and hold Xxx harmless from,
and to reimburse Xxx for any Losses (including, without limitation, any
reasonable Legal Expenses) which result from or arise out of:
(i) the breach of any representation or warranty of Liberty
contained in this Agreement or any Ancillary Instrument;
(ii) the breach by Liberty of, or failure by Liberty, to
perform any of its respective covenants or agreements contained in this
Agreement or any Ancillary Instrument;
(iii) the Liberty Retained Liabilities;
(iv) the Xxx Assumed Liabilities;
(v) the operation of the Xxx Business or the ownership of
the Xxx Acquired Assets following the Closing Date; or
(vi) non-compliance with any applicable bulk sales law
insofar as it relates to the Liberty Acquired Assets;
provided, however, that with respect to the Liberty Newspapers (A) Liberty shall
not be responsible for any Losses with respect to the matters referred to in
clause (i) of this Section 8.2(a) until the cumulative aggregate amount of such
Losses exceeds $140,000 (the "Liberty Basket Amount"), in which case Liberty
shall then be liable only for such Losses in excess of the Liberty Basket Amount
and (B) the cumulative aggregate indemnity obligation of Liberty under Section
8.2(a)(i) shall in no event exceed $1,400,000.
As used herein, "Legal Expenses" shall mean the fees, costs and
expenses of any kind incurred by any Person indemnified herein and its counsel
in investigating, preparing for,
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defending against or providing evidence, producing documents or taking other
action with respect to any threatened or asserted claim.
(b) Subject to Section 8.1 and to the other provisions of this
Section 8.2, Xxx hereby agrees to indemnify and hold Liberty harmless from, and
to reimburse Liberty for any Losses (including, without limitation, any
reasonable Legal Expenses) which result from or arise out of:
(i) the breach of any representation or warranty of Xxx
contained in this Agreement or any Ancillary Instrument;
(ii) the breach by Xxx of or failure by Xxx to perform any
of its respective covenants or agreements contained in this Agreement
or any Ancillary Instrument;
(iii) the Xxx Retained Liabilities (including, but not
limited to, the Ottumwa Pre-Closing Sump Liability);
(iv) the Liberty Assumed Liabilities;
(v) the operation of the Liberty Business or the ownership
of the Liberty Acquired Assets following the Closing Date; or
(vi) non-compliance with any applicable bulk sales law
insofar as it relates to the Xxx Acquired Assets;
provided, however, that (A) Xxx shall not be responsible for any Losses with
respect to the matters referred to in clause (i) of this Section 8.2(b), until
the cumulative aggregate amount of such Losses exceeds $140,000 (the "Xxx Basket
Amount"), in which case Xxx shall then be liable only for such Losses in excess
of the Xxx Basket Amount and (B) the cumulative aggregate indemnity obligation
of Xxx under Section 8.2(b)(i) shall in no event exceed $1,400,000;
provided further, however, that Xxx'x obligation to indemnify Liberty under
Section 8.2(b)(iii) with respect to the Ottumwa Pre-Closing Sump Liability shall
only arise in the event that Liberty incurs any Losses in connection with or in
relation to the Ottumwa Pre-Closing Liability as a result of or in connection
with (a) an action, claim, charge, proceeding, investigation, order, judgment or
decree relating to the Ottumwa Pre-Closing Sump Liability and brought by or
initiated by a federal, state, local or municipal court, administrative agency
or other governmental authority (including, but not limited to, the U.S.
Environmental Protection Agency or Iowa Department of Natural Resources)
(collectively "Governmental Agency or Agencies"), an unaffiliated third party
purchaser of the owned Xxx Real Property located in Ottumwa, Iowa or another
unaffiliated third party or (b) any remediation, clean-up or indemnity of or
with respect to the Ottumwa Pre-Closing Sump Liability which is required, as an
express condition of purchase by an unaffiliated third party prospective
purchaser of the owned Xxx Real Property located in Ottumwa, Iowa.
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(c) As promptly as practicable, and in any event within 30 days,
after Xxx or any of its Affiliates, on the one hand, or Liberty or any of its
Affiliates, on the other hand, shall receive any notice of, or otherwise become
aware of, the commencement of any action, suit or proceeding, the assertion of
any claim, or the incurrence of any Loss, for which indemnification is provided
for (assuming, only for the purposes of this Section 8.2(c) and of the terms
defined in this Section 8.2(c), that the Liberty Basket Amount or the Xxx Basket
amount, as the case may be, was zero) by Section 8.2(a) or 8.2 (b) (an
"Indemnification Event"), the party entitled to such indemnification (an
"Indemnified Party") shall give written notice (an "Indemnification Claim") to
the party from which such indemnification is (or, under such assumption, could
be) sought (an "Indemnifying Party") describing in reasonable detail the
Indemnification Event and the basis on which indemnification is (or, under such
assumption, could be) sought. If the Indemnifying Party is not so notified by
the Indemnified Party within 30 days after the date of the receipt by the
Indemnified Party or any of its Affiliates of notice of, or of the Indemnified
Party or any of its Affiliates otherwise becoming aware of, any particular
Indemnification Event, the Indemnifying Party shall be relieved of all liability
hereunder in respect of such Indemnification Event (or the facts or
circumstances giving rise thereto) to the extent that such Indemnifying Party is
prejudiced or harmed as a consequence of such failure (and, to such extent, the
Losses resulting from such Indemnification Event shall be disregarded for
purposes of determining whether the Liberty Basket Amount or the Xxx Basket
Amount, as the case may be, has been exceeded).
(d) If any Indemnification Event involves the claim of any third
party (a "Third-Party Claim"), the Indemnifying Party shall (whether or not the
Indemnified Party is entitled to claim indemnification under Section 8.2(a) or
8.2 (b),as the case may be) be entitled to, and the Indemnified Party shall
provide the Indemnifying Party with the right to, participate in, and assume
sole control over, the defense and settlement of such Third-Party Claim (with
counsel reasonably satisfactory to the Indemnified Party); provided, however,
that (i) the Indemnified Party shall be entitled to participate in the defense
of such Third-Party Claim and to employ counsel at its own expense to assist in
the handling of such Third-Party Claim, and (ii) the Indemnifying Party shall
obtain the prior written approval of the Indemnified Party before entering into
any settlement of such Third-Party Claim or ceasing to defend against such
Third-Party Claim, such approval not to be unreasonably withheld or delayed, if
(x) as a result of such settlement or ceasing to defend, injunctive or other
equitable relief would be imposed against the Indemnified Party or (y) in the
case of a settlement, the Indemnified Party would not thereby receive from the
claimant an unconditional release from all further liability in respect of such
Third-Party Claim. After written notice by the Indemnifying Party to the
Indemnified Party of its election to assume control of the defense of any such
Third-Party Claim, the Indemnifying Party shall not be liable hereunder to
indemnify any Person for any Legal Expenses subsequently incurred in connection
therewith except as provided below. If the Indemnifying Party does not assume
sole control over the defense or settlement of such Third-Party Claim as
provided in this Section 8.2(d) within a reasonable period of time, or, after
assuming such control, fails to defend against such Third-Party Claim (it being
agreed that settlement of such Third-Party Claim does not constitute such a
failure to defend), the Indemnified Party shall have the right (as to itself) to
defend and, upon obtaining the written
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consent of the Indemnifying Party, which shall not be unreasonably withheld or
delayed, settle the claim in such manner as it may deem appropriate, and the
Indemnifying Party shall promptly reimburse the Indemnified Party therefor in
accordance with (and to the extent provided for (subject to, and not
disregarding, the provisos to Section 8.2(a) or 8.2(b) in Section 8.2(a) or
8.2(b)), as appropriate. Notwithstanding the foregoing provisions of this
Section 8.2(d), the Indemnified Party shall have the right at all times to take
over and assume the control (as to itself) of the defense or settlement of any
Third-Party Claim; provided, however, that in such event (x) the Indemnifying
Party shall cease to have any obligation under Section 8.2(a) or 8.2(b), as the
case may be, in respect of such Third-Party Claim and (y) all Losses resulting
from such Third-Party Claim will not be considered for purposes of determining
whether the Liberty Basket Amount or the Xxx Basket Amount, as the case may be,
has been exceeded. The Indemnifying Party shall not be liable under this Section
8.2 for any settlement or compromise effected without its consent.
(e) The Indemnified Party and the Indemnifying Party shall each
cooperate (and shall each cause its Affiliates to cooperate) with the other in
the defense of any Third-Party Claim pursuant to Section 8.2(d). Without
limiting the generality of the foregoing, each such Person shall furnish the
other such Person with such documentary or other evidence as is then in its or
any of its Affiliate's possession as may reasonably be requested by the other
Person for the purpose of defending against any such Third-Party Claim.
(f) Upon payment of any amount pursuant to any Indemnification
Claim, the Indemnifying Party shall be subrogated, to the extent of such
payment, to all of the Indemnified Party's rights of recovery against any third
party with respect to the matters to which such Indemnification Claim relates.
(g) Liberty and Xxx each agree that: (i) if the Closing occurs,
the rights to indemnification set forth in Section 8.2 (a) or 8.2(b) shall,
except as otherwise required by law, be the sole and exclusive remedy that any
Indemnified Party has against the other party with respect to breaches of
representations or warranties under this Agreement; (ii) prior to the Closing
Date, the sole and exclusive remedies of Liberty and Xxx for breaches of
representations or warranties hereunder shall be either of the following: (A) to
enforce its rights set forth in Section 11.18 or (B) to terminate this Agreement
as provided in Section 9.1; and (iii) at the Closing each party will confirm to
the other in writing whether it has actual knowledge of an Indemnification Event
existing at the Closing Date and a description of any such claim. Neither party
shall have an obligation to the other under Section 8.2(a) or 8.2 (b) with
respect to any Indemnification Event actually known to the other party and not
so disclosed at the Closing. All claims for indemnification must be asserted, if
at all, in good faith and in accordance with the provisions of Section 8.2(c)
hereof and, to the extent applicable to such claims, within the relevant time
period set forth in the last sentence of Section 8.1 hereof.
(h) If at any time subsequent to the receipt by an Indemnified
Party of an indemnity payment hereunder, such Indemnified Party (or any
Affiliate thereof) receives any recovery, settlement or other similar payment
with respect to the Loss for which it received such
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indemnity payment (the "Recovery"), such Indemnified Party shall promptly pay to
the Indemnifying Party an amount equal to the amount of such Recovery, less any
expense, including reasonable attorneys' fees, incurred by such Indemnified
Party (or its Affiliates) in connection with such Recovery, but in no event
shall any such payment exceed the amount of such indemnity payment.
ARTICLE 9
TERMINATION
9.1 Termination of Agreement. This Agreement may be terminated at
any time on or prior to the Closing Date:
(a) by the mutual written consent of Liberty and Xxx;
(b) by either Liberty or Xxx, if the Closing Date has not taken place
by September 30, 1999 and the terminating party is not in material breach of its
obligations hereunder;
(c) by Liberty as provided in Section 4.21;
(d) by Xxx as provided in Section 3.21; or
(e) by either Liberty or Xxx, if any court or governmental body of
competent jurisdiction in the United States shall have issued an order, stay,
judgment or decree, or taken any other action, permanently prohibiting the
transactions contemplated by this Agreement, and such order, stay, judgment,
decree, or other action, shall have become final and non-appealable; or
(f) by either Liberty or Xxx in the event the Aledo Purchase
Agreement is terminated by either Xxx or Liberty in accordance with its terms.
If Liberty or Xxx shall terminate this Agreement pursuant to the
foregoing provisions of this Section 9.1, such termination shall be effected by
written notice to the other party specifying the provision pursuant to which
such termination is made.
9.2 Liabilities Upon Termination. Except for the terms of Section
11.2 hereof (and, to the extent relevant thereto, the terms of Sections 8.2,
11.4, 11.5, 11.6, 11.7, 11.14, 11.16, 11.17 and 11.19 hereof), which shall
survive any termination of this Agreement, upon the termination of this
Agreement pursuant to Section 9.1 hereof, this Agreement shall forthwith become
null and void, and no party hereto or any of its officers, directors, employees,
agents, consultants, stockholders or principals shall have any rights,
liabilities or obligations hereunder or with respect hereto; provided, however,
that nothing contained in Section 9.1 or this Section 9.2 shall (i) relieve any
party from liability for any willful failure to comply with any covenant or
agreement contained herein (and the terms of Sections 8.2, 11.4, 11.5, 11.6,
11.7, 11.14,
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11.16, 11.17 and 11.19 hereof shall apply to any such failure) or (ii) affect
the Confidentiality Agreement, which shall survive any termination of this
Agreement in accordance with the Confidentiality Agreement's terms and
conditions.
ARTICLE 10
EMPLOYEE AND CERTAIN TAX MATTERS
10.1 Liberty Employee Matters.
(a) (i) Liberty shall, after notifying Xxx of its intent thereto and
after first allowing Xxx to be present at and to participate during or
in connection with such notification (if Xxx desires), provide all
current Liberty employees involved solely in the Liberty Business with
all appropriate notification of the sale of the Liberty Business and
the termination of each such employee's employment with Liberty as a
result thereof.
(ii) Xxx shall have no obligation to hire any of Liberty's
current or former employees involved in the Liberty Business. Promptly
after the date hereof, Xxx shall have the right to review all
employment records and files of the Liberty employees involved solely
in the Liberty Business, after Liberty obtains a written release of
each such employee's personnel file from such employee, and to
interview current Liberty employees involved solely in the Liberty
Business for employment after the Closing Date. Xxx may make an offer
of employment to any Liberty Business employee involved solely in the
Liberty Business, which offer shall be subject to, and effective,
immediately following the Closing Date. Any employee of Liberty
involved in the Liberty Business who commences employment with Xxx as
of the Closing Date is referred to herein as a "Liberty Transferred
Employee."
(b) Except to the extent prohibited by the Code, ERISA, or other
applicable law, each Employee Benefit Plan established or maintained by Xxx or
its ERISA Affiliates for Liberty Transferred Employees ("Xxx Plan") shall grant
credit to each Liberty Transferred Employee for all service on or prior to the
Closing Date with Liberty or any predecessor or ERISA Affiliate of Liberty, for
purposes of eligibility, vesting and seniority; provided, however, that such
credit shall only be provided to the extent that such service is documented by
Liberty substantially contemporaneously with the Closing Date and in a manner
reasonably satisfactory to Xxx; provided further, no such credit shall be
provided with respect to any group health plan (other than a health flexible
spending arrangement) maintained by Xxx or an ERISA Affiliate; provided further,
that credit for such service shall not be required for any purpose under any
post-retirement medical or life insurance plan or for purposes of benefit
accrual under any plan; and provided further, that any Xxx Plan may be designed
to offset, or otherwise avoid duplication of, any benefits to which a Liberty
Transferred Employee is entitled under any comparable Liberty Benefit Plan on or
prior to the Closing Date.
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(c) During the period that begins on the Closing Date and ends on the
last day of the calendar month in which the Closing Date occurs, Liberty shall
continue group health plan coverage for Liberty Transferred Employees and their
family members in the same manner and under the same terms as if such Liberty
Transferred Employees had remained employees of Liberty. As of the first day
after the period described in the preceding sentence, Xxx shall establish or
maintain a group health plan which shall cover all Liberty Transferred Employees
and their family members (as defined in the plan established or maintained by
Xxx) who immediately prior to the Closing Date were covered under any group
health plan (other than a health flexible spending arrangement) maintained by
Liberty. As of the same date any such group health plan (other than a health
flexible spending arrangement) established or maintained by Xxx shall, with
respect to Liberty Transferred Employees and their family members (as defined in
the plan established or maintained by Xxx), (i) waive any waiting period, (ii)
waive any exclusion or limitation for preexisting conditions which were covered
(generally and/or specifically as to any individual) under any group health plan
maintained by Liberty prior to the Closing Date and (iii) grant credit (for
purposes of annual deductibles, co-payments and out-of-pocket limits) for any
covered claims incurred or payments made prior to the Closing Date during the
plan year in which the Closing Date occurs.
(d) A 401(k) Plan maintained by Xxx shall accept direct rollovers of
distributions from Liberty's 401(k) Plan for electing Liberty Transferred
Employees, but only to the extent that:
(i) the plan administrator of Xxx'x 401(k) Plan receives such
statements, certifications, and documentation as are considered by such
plan administrator to be necessary or appropriate for such plan
administrator to reasonably conclude that such rollovers are valid
rollover contributions;
(ii) the plan administrator of Xxx'x 401(k) Plan does not
subsequently determine that one or more of such rollovers was an
invalid rollover contribution;
(iii) the electing Liberty Transferred Employee is an employee
of Xxx or an ERISA Affiliate as of the date of the rollover
contribution; and
(iv) the rollover contribution consists exclusively of cash.
(e) Xxx will assume and satisfy Liberty's liability with respect to
all earned and unpaid vacation pay to which Liberty Transferred Employees are
entitled, if any, as of the Closing Date, either by providing such employees
with their eligible paid vacation time or a payment in lieu thereof consistent
with Xxx'x past practices. Xxx will give the Liberty Transferred Employees
credit for past service with Liberty and its Affiliates in determining the
amount of paid vacation to which they may become entitled after the Closing Date
in accordance with Xxx'x vacation policies in effect from time to time;
provided, however, that such credit shall only be provided to the extent that
such service is documented by Liberty substantially contemporaneously with the
Closing Date and in a manner reasonably satisfactory to Xxx.
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(f) Liberty shall remain liable for and shall pay all short-term
disability benefits payable to any Liberty Transferred Employee with respect to
any illness or injury which occurred or existed on or prior to the Closing Date.
Xxx shall be liable for and shall pay all short-term disability benefits payable
to any Liberty Transferred Employee with respect to any illness or injury which
occurred or existed on or after the Closing Date in accordance with the terms of
any applicable Xxx employee benefit plan.
(g) Liberty shall be responsible for providing long-term disability
benefits to any current or former employees of Liberty who are receiving
long-term disability benefits as of the Closing Date in accordance with the
terms of Liberty's long-term disability plan and to any employees on short-term
disability leave as of the Closing Date who subsequently qualify for long-term
disability benefits.
(h) Liberty shall be responsible for any covered claims incurred by
any Liberty Transferred Employee under Liberty's medical or dental plans prior
to the Closing Date in accordance with the terms of such plans. Xxx shall be
responsible for any claims incurred by any Liberty Transferred Employee
participating in Xxx'x medical or dental plans after the Closing Date, to the
extent such claims are covered by, and in accordance with the terms of, Xxx'x
plans.
(i) Liberty shall be responsible for providing continuation of group
health coverage required by Section 4980B of the Code or Sections 601 through
608 of ERISA ("COBRA") to any current or former employee of Liberty or any
"qualified beneficiary" (within the meaning of Section 4980B of the Code) of any
such current or former employee who has incurred a "qualifying event" (within
the meaning of Section 4980B of the Code) under any Liberty Benefit Plan on or
prior to the Closing Date. Xxx shall not require, recommend or encourage any
Liberty Transferred Employee to elect continuation of coverage under a Liberty
group health plan pursuant to COBRA. Xxx shall be responsible for providing
COBRA coverage to any Liberty Transferred Employee or any "qualified
beneficiary" of a Liberty Transferred Employee who incurs a "qualifying event"
under any Xxx Benefit Plan after the Closing Date.
(j) Liberty shall be responsible for providing any post-employment
benefits, including medical and life insurance benefits, to any employees or
former employees of Liberty (and their family members) in accordance with the
terms of Liberty's Plans, if applicable.
(k) Liberty shall be responsible for any workers compensation claims
which are reported or incurred by any Liberty Transferred Employee prior to the
Closing Date. Xxx shall be responsible for any workers compensation claims which
are incurred by any Liberty Transferred Employee on or after the Closing Date.
(l) Except as otherwise specifically provided herein, Xxx, its
Affiliates, and its ERISA Affiliates shall have no responsibility for, and
Liberty shall be solely responsible for, all benefits, compensation, or other
liabilities attributable to (i) services rendered to Liberty on
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or prior to the Closing Date by a Liberty Transferred Employee or by any other
individual as an employee of Liberty or otherwise, or (ii) any act or omission
of Liberty with respect to any individual described in clause (i), including any
agreement, plan, fund, policy, or arrangement maintained at any time by Liberty.
No other provision of this Section 10.1 describing Liberty's liability or
responsibility shall be interpreted to limit the liability or responsibility
that Liberty has under this paragraph (l) except to the extent that such other
provision specifically makes Xxx liable or responsible. For purposes of this
paragraph (l), references to Liberty shall include Liberty, its Affiliates, its
ERISA Affiliates, and all predecessors of any of such entities.
(m) The parties agree that, to the extent permissible under
applicable law (i) Xxx shall be a successor employer with respect to the Liberty
Transferred Employees for purposes of the Federal Insurance Contributions Act,
as codified at 26 U.S.C. ss 3101-3128 and the Federal Unemployment Tax Act,
as codified at 26 U.S.C. ss 3301-3311, and (ii) to the extent that Xxx
elects, it shall be treated as a successor employer under any applicable state
unemployment compensation laws. Liberty and Xxx agree to provide each other with
such wage, tax and other information as may reasonably be required for those
purposes.
(n) Liberty shall, upon the request of Xxx, deliver such documents,
personnel or benefit information and other information in its possession, as may
be necessary or desirable from time to time for the administration, analysis and
operation of the Xxx Plans. Such documents and information may be provided at
such times and in such form (including any electronic media) as may reasonably
be requested by either party.
10.2 Xxx Employee Matters.
(a) (i) Xxx shall, after notifying Liberty of its intent thereto and
after first allowing Liberty to be present at and to participate during
or in connection with such notification (if Liberty desires), provide
all current Xxx employees involved solely in the Xxx Business with all
appropriate notification of the sale of the Xxx Business and the
termination of each such employee's employment with Xxx as a result
thereof.
(ii) Liberty shall have no obligation to hire any of Xxx
current or former employees involved in the Xxx Business. Promptly
after the date hereof, Liberty shall have the right to review all
employment records and files of Xxx employees involved solely in the
Xxx Business, after Xxx obtains a written release of each such
employee's personnel file from such employee, and to interview current
Xxx employees involved solely in the Xxx Business for employment after
the Closing Date. Liberty may make an offer of employment to any Xxx
Business employee involved solely in the Xxx Business, which offer
shall be subject to, and effective, immediately following the Closing
Date. Any employee of Xxx involved in the Xxx Business who commences
employment with Liberty as of the Closing Date (or one or more
Affiliates of Liberty designated by Liberty) is referred to herein as a
"Xxx Transferred Employee."
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(b) Except to the extent prohibited by the Code, ERISA, or other
applicable law, each Employee Benefit Plan established or maintained by Liberty
or its ERISA Affiliates for Xxx Transferred Employees ("Liberty Plan") shall
grant credit to each Xxx Transferred Employee for all service on or prior to the
Closing Date with Xxx or any predecessor or ERISA Affiliate of the foregoing,
for purposes of eligibility, vesting and seniority; provided, however, that such
credit shall only be provided to the extent that such service is documented by
Xxx substantially contemporaneously with the Closing Date and in a manner
reasonably satisfactory to Liberty; provided further, no such credit shall be
provided with respect to any group health plan (other than a health flexible
spending arrangement) maintained by Liberty or an ERISA Affiliate; provided
further, that credit for such service shall not be required for any purpose
under any post-retirement medical or life insurance plan or for purposes of
benefit accrual under any plan; and provided further, that any Liberty Plan may
be designed to offset, or otherwise avoid duplication of, any benefits to which
a Xxx Transferred Employee is entitled under any comparable Xxx Benefit Plan on
or prior to the Closing Date.
(c) During the period that begins on the Closing Date and ends on the
last day of the calendar month in which the Closing Date occurs, Xxx shall
continue group health plan coverage for Xxx Transferred Employees and their
family members in the same manner and under the same terms as if such Xxx
Transferred Employees had remained employees of Xxx. As of the first day after
the period described in the preceding sentence, Liberty shall establish or
maintain a group health plan which shall cover all Xxx Transferred Employees and
their family members ( as defined in the plan established or maintained by
Liberty) who immediately prior to the Closing Date were covered under any group
health plan (other that a health flexible spending arrangement) maintained by
Xxx. As of the same date, any such group health plan (other than a health
flexible spending arrangement) established or maintained by Liberty shall, with
respect to Xxx Transferred Employees and their family members (as defined in the
plan established or maintained by Liberty), (i) waive any waiting period, (ii)
waive any exclusion or limitation for preexisting conditions which were covered
(generally and/or specifically as to any individual) under any group health plan
maintained by Xxx prior to the Closing Date and (iii) grant credit (for purposes
of annual deductibles, co-payments and out-of-pocket limits) for any covered
claims incurred or payments made prior to the Closing Date during the plan year
in which the Closing Date occurs.
(d) A 401(k) Plan maintained by Liberty shall accept direct
rollovers of distributions from Xxx'x 401(k) Plan for electing Xxx Transferred
Employees, but only to the extent that:
(i) the plan administrator of Liberty's 401(k) Plan
receives such statements, certifications, and documentation as
are considered by such plan administrator to be necessary or
appropriate for such plan administrator to reasonably conclude
that such rollovers are valid rollover contributions;
(ii) the plan administrator of Liberty's 401(k) Plan does
not subsequently determine that one or more of such rollovers was
an invalid rollover contribution;
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(iii) the electing Xxx Transferred Employee is an employee of
Liberty or an ERISA Affiliate as of the date of the rollover
contribution; and
(iv) the rollover contribution consists exclusively of cash.
(e) Liberty will assume and satisfy Xxx'x liability with respect to
all earned and unpaid vacation pay to which Xxx Transferred Employees are
entitled, if any, as of the Closing Date, either by providing such employees
with their eligible paid vacation time or a payment in lieu thereof consistent
with Liberty's past practices. Liberty will give the Xxx Transferred Employees
credit for past service with Xxx and its Affiliates in determining the amount of
paid vacation to which they may become entitled after the Closing Date, in
accordance with Liberty's vacation policies in effect from time to time;
provided, however, that such credit shall only be provided to the extent that
such service is documented by Xxx substantially contemporaneously with the
Closing Date and in a manner reasonably satisfactory to Liberty.
(f) Xxx shall remain liable for and shall pay all short-term
disability benefits payable to any Xxx Transferred Employee with respect to any
illness or injury which occurred or existed on or prior to the Closing Date.
Liberty shall be liable for and shall pay all short-term disability benefits
payable to any Xxx Transferred Employee with respect to any illness or injury
which occurred or existed on or after the Closing Date in accordance with the
terms of any applicable Liberty employee benefit plan.
(g) Xxx shall be responsible for providing long-term disability
benefits to any current or former employees of Xxx who are receiving long-term
disability benefits as of the Closing Date in accordance with the terms of Xxx'x
long-term disability plan and to any employees on short-term disability leave as
of the Closing Date who subsequently qualify for long-term disability benefits.
(h) Xxx shall be responsible for any covered claims incurred by any
Xxx Transferred Employee under Xxx'x medical, dental or vision plans prior to
the Closing Date in accordance with the terms of such plans. Liberty shall be
responsible for any claims incurred by any Xxx Transferred Employee
participating in Liberty's medical, dental or vision plans after the Closing
Date, to the extent such claims are covered by, and in accordance with the terms
of, Liberty's plans.
(i) Xxx shall be responsible for providing COBRA coverage to any
current or former employee of Xxx or any "qualified beneficiary" (within the
meaning of Section 4980B of the Code) of any such current or former employee who
has incurred a "qualifying event" (within the meaning of Section 4980B of the
Code) under any Xxx Benefit Plan on or prior to the Closing Date. Liberty shall
not require, recommend or encourage any Xxx Transferred Employee to elect
continuation of coverage under a Xxx group health plan pursuant to COBRA.
Liberty shall be responsible for providing COBRA coverage to any Xxx Transferred
Employee or any "qualified beneficiary" of a Xxx Transferred Employee who incurs
a "qualifying event" under any Liberty Benefit Plan after the Closing Date.
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(j) Xxx shall be responsible for providing any post-employment
benefits, including medical and life insurance benefits, to any employees or
former employees of Xxx (and their family members) in accordance with the terms
of Xxx'x Plans, if applicable.
(k) Xxx shall be responsible for any workers compensation claims
which are reported or incurred by any Xxx Transferred Employee prior to the
Closing Date. Liberty shall be responsible for any workers compensation claims
which are incurred by any Xxx Transferred Employee on or after the Closing Date.
(l) Except as otherwise specifically provided herein, Liberty, its
Affiliates, and its ERISA Affiliates shall have no responsibility for, and Xxx
shall be solely responsible for, all benefits, compensation, or other
liabilities attributable to (i) services rendered to Xxx on or prior to the
Closing Date by a Xxx Transferred Employee or by any other individual as an
employee of Xxx or otherwise, or (ii) any act or omission of Xxx with respect to
any individual described in clause (i), including any agreement, plan, fund,
policy, or arrangement maintained at any time by Xxx. No other provision of this
Section 10.2 describing Xxx'x liability or responsibility shall be interpreted
to limit the liability or responsibility that Xxx has under this paragraph (l)
except to the extent that such other provision specifically makes Liberty liable
or responsible. For purposes of this paragraph (l), references to Xxx shall
include Xxx, its Affiliates, its ERISA Affiliates, and all predecessors of any
of such entities.
(m) The parties agree that, to the extent permissible under
applicable law (i) Liberty shall be a successor employer with respect to the Xxx
Transferred Employees for purposes of the Federal Insurance Contributions Act,
as codified at 26 U.S.C. xx.xx. 3101-3128 and the Federal Unemployment Tax Act,
as codified at 26 U.S.C. xx.xx. 3301-3311, and (ii) to the extent that Liberty
elects, it shall be treated as a successor employer under any applicable state
unemployment compensation laws. Xxx and Liberty agree to provide each other with
such wage, tax and other information as may reasonably be required for those
purposes.
(n) Xxx shall, upon the request of Liberty deliver such documents,
personnel or benefit information and other information in its possession, as may
be necessary or desirable from time to time for the administration, analysis and
operation of the Liberty Plans. Such documents and information may be provided
at such times and in such form (including any electronic media) as may
reasonably be requested by either party.
10.3 Certain Tax Matters. All federal, state, local and other
transfer, sales and use Taxes imposed upon the transfer to Liberty (or one or
more Affiliates of Liberty as designated by Liberty) of the Xxx Acquired Assets
or to Xxx of the Liberty Acquired Assets as contemplated by this Agreement will
be shared equally by Liberty on the one hand and Xxx on the other.
ARTICLE 11
MISCELLANEOUS
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11.1 Exclusivity of Representations, Reliance on Representations.
(a) THE REPRESENTATIONS AND WARRANTIES MADE BY LIBERTY AND XXX,
RESPECTIVELY, IN THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER
IMPLIED WARRANTIES, OF LIBERTY AND XXX RESPECTIVELY. LIBERTY AND XXX EACH HEREBY
DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR WARRANTIES,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE BY LIBERTY OR ANY OTHER PERSON TO XXX
OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR REPRESENTATIVES, OR BY
XXX OR ANY OTHER PERSON TO LIBERTY, ANY OF ITS RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR REPRESENTATIVES, OF ANY DOCUMENTATION OR OTHER INFORMATION
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(b) Xxx represents and warrants to Liberty that in making its
decision to enter into this Agreement it is not relying on any information
provided or statements made by Liberty or any of its respective agents,
representatives, employees or affiliates other than the specific representations
and warranties made by Liberty in this Agreement.
(c) Liberty represents and warrants to Xxx that in making its
decision to enter into this Agreement it is not relying on any information
provided or statements made by Xxx or any of its respective agents,
representatives, employees or affiliates other than the specific representations
and warranties made by Xxx in this Agreement.
11.2 Expenses. Except as expressly set forth in this Section 11.2 and
Section 10.3 and Section 11.13, regardless of whether the Closing Date occurs,
each party hereto shall bear all of its expenses incurred in connection with the
transactions contemplated by this Agreement, including, without limitation,
accounting and legal fees incurred in connection herewith. Notwithstanding the
foregoing, the fees of all filings required under the HSR Act in connection with
the transactions contemplated by this Agreement and the Ancillary Instruments
will be shared equally by the parties.
11.3 Further Assurances, Bulk Transfer. Subject to Section 9.1 hereof,
from time to time prior to, at and after the Closing Date, without the payment
of any additional consideration except as otherwise set forth in this Agreement,
each party hereto will execute all such instruments and take all such actions as
the other party shall reasonably request in connection with carrying out and
effectuating the intent and purpose hereof and all transactions and things
contemplated by this Agreement. The parties hereby waive compliance with the
provisions of any applicable bulk sales law of any jurisdiction in connection
with the transactions contemplated hereby and no representation, warranty or
covenant contained in this Agreement shall be deemed to have been breached as a
result of such non-compliance.
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11.4 Notices. Notices and other communications provided for herein
shall be in writing (which shall include notice by facsimile transmission) and
shall be delivered or mailed (or if by facsimile communications equipment of the
sending party hereto, delivered by such equipment), addressed as follows:
If to Liberty: Liberty Group Publishing, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
with a copy to: Xxxxxx Xxxxxx & Zavis
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
If to Xxx: Xxx Enterprises, Incorporated
000 Xxxxx Xxxx Xxxxxx, Xxx. 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
with a copy to: Lane & Xxxxxxxx
000 X. Xxxx Xxxxxx, Xxx. 000
Xxxxxxxxx, XX 00000
Attn: C. Xxxx Xxxxxxxx III
or to such other address as a party may from time to time designate in writing
in accordance with this section. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.
11.5 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that neither
this Agreement nor any of the rights, interests, or obligations hereunder may be
assigned by any of the parties hereto without the prior written consent of the
other parties, except that Liberty and Xxx may assign any or all of their
respective rights and obligations hereunder to any of their Affiliates without
the consent of the other parties; provided, that any such assignment shall not
relieve Liberty or Xxx, as the case may be, from any liability hereunder.
11.6 Construction.
(a) Unless otherwise expressly specified herein, (i) defined terms in
the singular shall also include the plural and vice versa, (ii) the words
"hereof", "herein", "hereunder"
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and other similar words refer to this Agreement as a whole, (iii) Article,
Section and Schedule references in this Agreement are to Articles of, Sections
of, Schedule to and Exhibits to this Agreement and (iv) words of any gender
(masculine, feminine, neuter) mean and include correlative words of the other
genders.
(b) The captions in this Agreement are for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
(c) All references to "days" shall be to calendar days unless
business days are specified.
(d) Unless the context otherwise requires, (i) "or" is not exclusive
and (ii) "including" means "including but not limited to" and "including without
limitation".
(e) As used herein, the phrases "date of this Agreement" and "date
hereof' and any other phrases of similar import shall mean August 26, 1999
(regardless, with respect to representations and warranties, of the date or time
as of which such representations and warranties are made or deemed to have been
made or as of which the accuracy or inaccuracy thereof is measured or
determined).
11.7 Law Governing. THIS AGREEMENT IS INTENDED AS A CONTRACT UNDER AND
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LOCAL LAW OF THE STATE OF ILLINOIS,
INCLUDING WITHOUT LIMITATION AS TO ALL MATTERS OF CONSTRUCTION, VALIDITY,
ENFORCEABILITY AND PERFORMANCE.
11.8 Waiver of Provisions. The provisions, terms, covenants,
representations, warranties and conditions of this Agreement may be waived only
by a written instrument executed by the party hereto waiving compliance. The
failure of any party hereto at any time or times to require performance of any
provision of this Agreement shall in no manner affect the right of such party at
a later date to enforce the same. No waiver by any party hereto of any condition
or the breach of any provision, term, covenant, representation or warranty
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances shall be deemed to be or construed as a further or continuing waiver
of any such condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
11.9 Counterparts. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one agreement,
binding on the parties hereto, notwithstanding that such parties are not
signatory to the same counterpart.
11.10 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any and all prior agreements
between them relating to the subject matter hereof, excluding the
Confidentiality Agreement (which shall remain in full
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force and effect in accordance with its terms and conditions), and may not be
amended or modified except by a written agreement signed by Xxx and Liberty.
11.11 Access to Books and Records.
(a) After the Closing Date, Xxx shall, upon Liberty's request from
time to time, and upon reasonable notice, in connection with the preparation by
Liberty or its Affiliates of Tax returns, audited financial statements
incorporating the Xxx Newspapers and the Xxx Business and all requisite
securities law filings (including, but not limited to, a Form 8K filing, if
required, with respect to the transactions contemplated by this Agreement) and
the initiation or defense of litigation with third parties involving Xxx Assumed
Liabilities, (i)(A) provide to the officers and other authorized representatives
of Liberty, and its Affiliates reasonable access, during normal business hours,
to any and all premises, properties, files, books, records, documents and other
information (including, but not limited to, workpapers in the possession of
current and former accountants of the Xxx Newspapers) relating to the Liberty
Business and Xxx Business with respect to the period prior to the Closing Date
(including, but not limited to, with respect to liabilities for Taxes included
in the computation of Xxx Net Working Capital, Xxx Tax Records), (B) cause its
officers to furnish to Liberty and its authorized representatives any and all
financial, technical and operating data and other information (including, but
not limited to, workpapers in the possession of current and former accountants
of the Xxx Newspapers) pertaining to the Liberty Business and Xxx Business with
respect to the period prior to the Closing Date, and (C) make available to
Liberty, and its authorized representatives personnel of Xxx to consult with
such personnel and (ii) make available for inspection and copying by Liberty at
Liberty's expense true and complete copies of any documents relating to the
foregoing. In exercising its rights under the foregoing provisions of this
Section 11.11(a), Liberty, and its representatives shall not interfere with the
normal operations of the Liberty Business. Xxx shall retain the files, books,
records and documents relating to the Liberty Business for at least six years
after the Closing Date. In addition, after the Closing Date, upon Liberty's
request from time to time, Xxx shall cause each of the Persons from whom Xxx
acquired the Xxx Newspapers and their Affiliates and predecessors to (i) provide
to the officers and other authorized representatives (including, but not limited
to, accountants) of Liberty and its Affiliates reasonable access, during normal
business hours, to any and all files, books, records, documents, financial and
operating data and other information (including, but not limited to, workpapers
in the possession of current and former accountants of the Xxx Newspapers)
relating to the Xxx Newspapers and the Xxx Business (collectively, the
"Historical Books and Records"), (ii) cause its officers to furnish to, or make
available for inspection and copying, at Liberty's expense, by, Liberty and its
Affiliates and their authorized representatives (including, but not limited to,
accountants) true and complete copies of all such Historical Books and Records,
and (iii) make available to Liberty and its Affiliates and their authorized
representatives its personnel to consult with such representatives, in each case
in connection with, and as necessary in relation to, the preparation by Liberty
and its Affiliates of audited financial statements incorporating the Xxx
Newspapers and the Xxx Business and all requisite securities law filings
(including, but not limited to, a Form 8-K filing, if required, with respect to
the transactions contemplated by this Agreement).
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(b) After the Closing Date, Liberty shall, upon Xxx'x request from
time to time, and upon reasonable notice, in connection with the preparation by
Xxx or its Affiliates of Tax returns and the initiation or defense of litigation
with third parties involving Liberty Assumed Liabilities, (i)(A) provide to the
officers and other authorized representatives of Xxx and its Affiliates
reasonable access, during normal business hours, to any and all premises,
properties, files, books, records, documents and other information relating to
the Xxx Business and Liberty Business with respect to the period prior to the
Closing Date (including, with respect to liabilities for Taxes included in the
computation of Liberty Net Working Capital, Liberty Tax Records), (B) cause its
officers to furnish to Xxx and its authorized representatives any and all
financial, technical and operating data and other information pertaining to the
Xxx Business and Liberty Business with respect to the period prior to the
Closing Date, and (C) make available to Xxx and its authorized representatives
personnel of Liberty to consult with such personnel and (ii) make available for
inspection and copying by Xxx at Xxx'x expense true and complete copies of any
documents relating to the foregoing. In exercising its rights under the
foregoing provisions of this Section 11.11(b), Xxx and its representatives shall
not interfere with the normal operations of the Xxx Business. Liberty shall
retain the files, books, records and documents relating to the Xxx Business for
at least six years after the Closing Date.
11.12 Disclosure Letters. Any information disclosed in any section of
the Liberty Disclosure Letter delivered on the date hereof or the Xxx Disclosure
Letter if reasonably related to any other section or sections of the Liberty
Disclosure Letter or the Xxx Disclosure Letter, as the case may be, and
described in reasonable detail to allow a reasonable person to make the
applicable connection to such section, shall be deemed fully disclosed for the
purposes of all such applicable sections of the Liberty Disclosure Letter or the
Xxx Disclosure Letter, as the case may be. Neither the specification (directly
or indirectly by reference to a defined term hereof) of any dollar amount in the
representations and warranties set forth in Article 3 or Article 4 or the
indemnification provisions of Article 8 nor the inclusion of any items in the
Liberty Disclosure Letter or the Xxx Disclosure Letter shall be deemed to
constitute an admission by Liberty or Xxx, or otherwise imply, that any such
amount or such items so included are material for the purposes of this
Agreement. The inclusion of, or reference to, any item within any particular
section of the Liberty Disclosure Letter or the Xxx Disclosure Letter does not
constitute an admission by either Liberty or Xxx that such item meets any or all
of the criteria set forth in this Agreement for inclusion in such section of the
Liberty Disclosure Letter or the Xxx Disclosure Letter, as the case may be.
11.13 Cooperation.
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(a) From and after the Closing Date, Xxx will cooperate with Liberty
in the investigation, defense or prosecution of any action, suit, proceeding or
other litigation, at law or in equity, which is pending or threatened against
Liberty or any of its Affiliates and which relates to the Liberty Business or
the Liberty Newspapers. Without limiting the generality of the foregoing, Xxx
will make available its employees engaged in the Liberty Business to give
depositions or testimony and will furnish all documentary or other evidence in
each case as Liberty may reasonably request. Liberty shall reimburse Xxx for all
reasonable and necessary out-of-pocket expenses incurred in connection with the
performance of its obligations under this Section 11.13(a).
(b) From and after the Closing Date, Liberty will cooperate with Xxx
in the investigation, defense or prosecution of any action, suit, proceeding or
other litigation, at law or in equity, which is pending or threatened against
Xxx or any of its Affiliates and which relates to the Xxx Business or the Xxx
Newspapers. Without limiting the generality of the foregoing, Liberty will make
available its employees engaged in the Xxx Business to give depositions or
testimony and will furnish all documentary or other evidence in each case as Xxx
may reasonably request. Xxx shall reimburse Liberty for all reasonable and
necessary out-of-pocket expenses incurred in connection with the performance of
its obligations under this Section 11.13(b).
11.14 No Third Party Beneficiary. This Agreement is for the sole
benefit of the parties hereto 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.
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11.15 Insurance.
(a) Xxx acknowledges that all insurance policies maintained by
Liberty and its Affiliates with respect to the Liberty Business and Liberty
Acquired Assets will be terminated effective on the Closing Date.
(b) Liberty acknowledges that all insurance policies maintained by
Xxx and its Affiliates with respect to the Xxx Business and Xxx Acquired Assets
will be terminated effective on the Closing Date.
11.16 No Presumption. With regard to each and every term and condition
of this Agreement and any and all agreements and instruments subject to the
terms hereof or referred to herein, the parties hereto understand and agree that
the same have or has been mutually negotiated, prepared and drafted, and if at
any time the parties hereto desire or are required to interpret or construe any
such term or condition or any agreement or instrument subject hereto, no
consideration shall be given to the issue of which party hereto actually
prepared, drafted or requested any term or condition of this Agreement or any
agreement or instrument subject hereto.
11.17 Severability. To the fullest extent that they may effectively do
so under applicable law, the parties hereto hereby waive any provision of law
which renders any provision of this Agreement invalid, illegal or unenforceable
in any respect. Such parties further agree that any provision of this Agreement
which, notwithstanding the preceding sentence, is rendered or held invalid,
illegal or unenforceable in any respect in any jurisdiction shall be
ineffective, but such ineffectiveness shall be limited as follows: (i) if such
provision is rendered or held invalid, illegal or unenforceable in such
jurisdiction only as to a particular Person or Persons or under any particular
circumstance or circumstances, such provision shall be ineffective, but only in
such jurisdiction and only with respect to such particular Person or Persons or
under such particular circumstance or circumstances, as the case may be; (ii)
without limitation of clause (i), such provision shall in any event be
ineffective only as to such jurisdiction and only to the extent of such
invalidity, illegality or unenforceability, and such invalidity, illegality or
unenforceability in such jurisdiction shall not render invalid, illegal or
unenforceable such provision in any other jurisdiction; and (iii) without
limitation of clause (i) or (ii), such ineffectiveness shall not render invalid,
illegal or unenforceable this Agreement or any of the remaining provisions
hereof. Without limitation of the preceding sentence, (A) it is the intent of
the parties hereto that, in the event that in any court proceeding, such court
determines that any provision of this Agreement is illegal, invalid or
unenforceable in any jurisdiction to any extent, such court shall have the power
to, and shall, (1) modify such provision (including by limiting the Persons
against whom, or the circumstances under which, such provision shall be
effective in such jurisdiction) for purposes of such proceeding to the minimum
extent necessary so that such provision, as so modified, may then be enforced in
such proceeding and (2) enforce such provision, as so modified pursuant to
clause (1), in such proceeding and (B) upon any determination that any provision
of this Agreement is invalid, illegal or unenforceable, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of such parties as closely as possible in a mutually
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acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
11.18 Specific Performance. Each of Liberty and Xxx acknowledges that
the rights of each party to consummate the transactions contemplated hereby are
unique and recognizes and affirms that in the event of a breach of this
Agreement by any party, money damages may be inadequate and the non-breaching
party may have no adequate remedy at law. Accordingly, the parties agree that
such non-breaching party shall have the right, in addition to any other rights
and remedies existing in their favor at law or in equity, to enforce their
rights and the other party's obligations hereunder not only by an action or
actions for damages but also by an action or actions for specific performance,
injunctive and/or other equitable relief (without posting of bond or other
security).
11.19 Announcements. None of the parties hereto will (and each such
party will cause its Affiliates not to) issue any press release or otherwise
make any public statement with respect to the transactions contemplated hereby
without the prior written consent of the other parties, except as and to the
extent that such party or any of its Affiliates determines in good faith that it
is so obligated by law or stock exchange rules, in which case such party shall
use reasonable efforts to give notice to the other parties in advance of such
party's or its Affiliate's intent to make such announcement or issue such press
release and the parties hereto shall use reasonable efforts to cause a mutually
agreeable release or announcement to be issued.
11.20 Transition Services Agreement.
(a) In order to allow Xxx and Liberty to make suitable alternative
arrangements, for a period of 3 months following the Closing, Xxx shall use its
reasonable efforts to provide or cause to be provided to Liberty or its
designated Affiliates the transition services (the "Xxx Transition Services")
listed and described in the Transition Services Agreement consistent with the
provisions hereof which Xxx or the Xxx Newspapers are currently receiving from
Xxx, an outside third party vendor or from another newspaper owned by Xxx (the
"Xxx Transition Services Provider"), and Liberty shall use its reasonable
efforts to provide or cause to be provided to Xxx the transition services (the
"Liberty Transition Services" and, together with the Xxx Transition Services,
the "Transition Services") listed and described in the Transition Services
Agreement consistent with the provisions hereof which Liberty or the Liberty
Newspapers are currently receiving from Liberty, an outside third party vendor
or from another newspaper owned by Liberty or its Affiliates (the "Liberty
Transition Services Provider"). The Transition Services shall be provided in a
manner consistent with the manner in which they were provided to the Xxx
Newspapers or the Liberty Newspapers, as the case may be, by the applicable
Transition Services Provider prior to the Closing. Without limiting the
generality of the previous sentence, Xxx will make payment (including, without
limitation, the payment for the service) to the Xxx Transition Services Provider
and Liberty will submit such payment to Xxx within 30 days of receiving Xxx'x
invoice therefor, and Liberty will make payment (including, without limitation,
the payment for the service) to the Liberty Transition Services Provider and Xxx
will submit such payment to Liberty within 30 days of receiving Liberty's
invoice therefor. If any such payments were previously made by inter-company
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journal entries, after the Closing, such payments will be made by check at the
same time as the payment would have been made by inter-company journal entry.
(b) The obligation of Xxx or Liberty, as the case may be, to
provide, or cause to be provided, Transition Services under this section (the
"Providing Party") shall be suspended with respect to any specified Transition
Services to the extent that any Transition Services Provider is prevented or
hindered from providing such services by any law or governmental order, rule,
regulation or direction, whether domestic or foreign or by any cause beyond the
control of such Transition Services Provider, including acts of God, strikes,
lockouts and other labor and industrial disputes and disturbances, civil
disturbances, accidents, acts of war or conditions arising out of or
attributable to war (whether declared or undeclared), shortage of necessary
equipment, failures of equipment or information systems, materials of labor or
restrictions thereon or limitations upon the use thereof and delays in
transportation or the refusal of the Transition Services Provider to allow the
Transition Services to be provided to the Xxx Newspapers or the Liberty
Newspapers, as the case may be, following the Closing. In such event, the
applicable Providing Party shall give written notice as soon as reasonably
practicable to the other party (the "Recipient Party") stating the date and
extent of such suspension and the cause thereof, and the Providing Party shall
resume the performance of other obligations under this section as soon as
reasonably practicable after the removal of the cause.
(c) Neither Xxx nor Liberty shall have any duties or
responsibilities pursuant to this section other than those specifically set
forth herein and no implied obligations shall be read into this section. Neither
Xxx or Liberty nor any of their respective officers, directors, employees,
agents, attorneys in fact or Affiliates shall be liable for any act taken or
omitted to be taken by it under or in connection with this section except that
Xxx or Liberty, as the Providing Party, shall only be liable for losses incurred
by the applicable Recipient Party arising out of its gross negligence or willful
misconduct in the performance of the Transition Services.
(d) Xxx or Liberty, as the case may be, may, as the Recipient Party,
terminate or partially limit any Transition Services being provided to it at any
time, in its sole discretion, upon 10 days' prior written notice to the
applicable Providing Party.
(e) The Transition Services shall be billed at the Providing Party's
commercial customer charges and rates, or at commercially reasonable hourly
rates, as the case may be, with reimbursement for the Providing Party's long
distance line charges. The Transition Services Agreement shall provide such
reasonable provisions necessary to insure the Providing Party's license
agreements, confidential information and proprietary systems are not breached.
11.21 Transfer of Liberty Acquired Assets and Xxx Acquired Assets. To
the extent that any of the Liberty Acquired Assets or the Xxx Acquired Assets
are held by Affiliates of Liberty or Xxx, Liberty or Xxx shall take all actions
necessary to cause its Affiliates to convey the Liberty Acquired Assets or the
Xxx Acquired Assets, as the case may be, to Xxx or Liberty, respectively.
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11.22 Environmental Testing. With respect to the owned Xxx Real
Property located in Ottumwa, Iowa, Liberty agrees that, after the Closing,
Liberty (a) shall not conduct a Phase I or Phase II environmental assessment
with respect to such owned Xxx Real Property unless (i) mandated by a
Governmental Agency having jurisdiction with respect thereto, (ii) requested by
an unaffiliated third party purchaser or prospective purchaser of such owned Xxx
Real Property as an express condition of purchase or (iii) required by Liberty's
lenders and other financing sources and (b) shall not disclose the Ottumwa
Pre-Closing Sump Liability or any Phase I or Phase II environmental assessments,
testing, investigations, proposals, or invoices with respect thereto
(collectively, "Environmental Assessment") to any unaffiliated third party,
including Governmental Agencies, except (i) as required by law or stock exchange
rules, (ii) to Liberty's lenders and other financing sources and (iii) to an
unaffiliated third party purchaser or prospective purchaser of such owned Xxx
Real Property. The disclosure of any Environmental Assessment shall not be made
pursuant to (b)(iii) above until Liberty has received a confidentiality
agreement reasonably acceptable to Liberty and Xxx from such party referred to
in (b)(iii) above pursuant to which such party shall agree not to disclose the
Ottumwa Pre-Closing Sump Liability and Environmental Assessment except (i) as
required by law or stock exchange rules, (ii) to Liberty's lenders and other
financing sources and (iii) to an unaffiliated third party purchaser or
prospective purchaser of such owned Xxx Real Property.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
LIBERTY GROUP PUBLISHING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Its: Authorized Representative
XXX ENTERPRISES, INCORPORATED
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Its: Authorized Representative
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EXHIBIT A
Beatrice, NE, Daily Sun
Beatrice, NE, Xxxxx Press 5
Beatrice, NE, Plug Nickel
Beatrice, NE, Sunday & Wednesday Weekender
Beatrice, NE, Sunland
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00
XXXXXXX X
Xxxxxxx, XX, Star Courier
Kewanee, IL, Star Extra
Kewanee, IL, Xxxxxxxx-Annawan News
Geneseo, IL, Xxxxx County Advertizer
Ottumwa, IA, Ottumwa Courier
Ottumwa, IA, Wapello County Shopper
Ottumwa, IA, Forever Young
Ottumwa, IA, Area Visitors Guide
Ottumwa, IA, Neighbors
Ottumwa, IA, Homes
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EXHIBIT C
For purposes of the Agreement to which this EXHIBIT C is attached (the
"Agreement"), the following terms shall have the following meanings:
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with, such Person. For the purposes of this definition,
"control" means the possession, directly or indirectly of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Aledo Purchase Agreement" means that certain Asset Purchase Agreement
dated as of the date hereof between Liberty and Xxx.
"Ancillary Instrument" shall have the meaning ascribed to such term in
Section 8.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" means the Confidentiality and Negotiation
Agreement between Xxx and Liberty dated June 1, 1999.
"ERISA Affiliate(s)" shall mean, with respect to any specified Person,
any other Person which is treated as a single employer with such specified
Person under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of
ERISA.
"Environmental Laws" means all federal, state and local laws,
regulations, ordinances and rules of common law relating to environmental
matters, including those relating to fines, orders, injunctions, penalties,
damages, contribution, cost recovery compensation, losses, or injuries resulting
from the release or threatened release of Hazardous Substances and the
generation, use, storage, transportation, or disposal of Hazardous Substances in
any manner applicable to the Xxx Business or Liberty Business or as to Xxx the
Liberty Acquired Assets, and as to Liberty the Xxx Acquired Assets, including,
but not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. xx.xx. 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. xx.xx. 1801 et seq.), the Resource Conservation
and Recovery Act of 1976 (42 U.S.C. xx.xx. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. xx.xx. 1251 et seq.), the Clean Air Act (42
U.S.C. xx.xx. 7401 et seq.), the Toxic Substances Control Act of 1976 (15 U.S.C.
xx.xx. 2601 et seq.,) the Safe Drinking Water Act (42 U.S.C. xx.xx. 000x-xx.xx.
300j-11 et seq.), and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. xx.xx. 1101 et seq.), each as heretofore amended and supplemented, or any
analogous present federal, state or local statutes, rules, and regulations
promulgated thereunder or pursuant thereto, and any other present law,
ordinance, rule, regulation, permit, order, or directive addressing
environmental, safety or health issues, of or
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by the federal government, any state or political subdivision thereof, or any
agency, court, or body of the federal government or any state or political
subdivision thereof.
"GAAP" means generally accepted United States accounting principles,
applied on a consistent basis.
"Hazardous Substances" means (a) any chemical, material or substance
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous waste," "restricted
hazardous waste," "medical waste, "toxic pollutants," "contaminants,"
"pollutants," "toxic substances," or words of similar import under any
applicable Environmental Law, (b) any oil, petroleum, petroleum product or
petroleum derived substance, any flammable substances or explosives, any
radioactive materials, (c) asbestos and asbestos containing materials in any
form which is or could become friable, and (d) radon gas, urea formaldehyde,
lead-based paint, dielectric fluid, and polychlorinated biphenyls.
"Income Taxes" means Taxes in the nature of any federal, state, local
or foreign income or franchise taxes, including interest, penalties and
additions to tax with respect thereto.
"Indebtedness" means, with respect to Xxx or Liberty, as the case may
be, (a) all indebtedness of such party for borrowed money, whether current or
funded, secured or unsecured, (b) all indebtedness of such party for the
deferred purchase price of any assets or services, (c) all indebtedness of such
party created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such party (even though the
rights and remedies of such party or lender under such agreement in the event of
a default may be limited to repossession or sale of such property), (d) all
indebtedness of such party secured by a purchase money mortgage or other lien to
secure all or part of the purchase price of property subject to such mortgage or
lien, (e) all obligations of such party under leases which shall have been or
must be, in accordance with generally accepted accounting principles, recorded
as capital leases in respect of which such party is liable as lessee, (f) any
liability of such party in respect of banker's acceptances or letters of credit,
(g) any indebtedness, whether or not assumed by such party, secured by liens on
property acquired by such party at the time of acquisition thereof and (h) all
guaranties by such party of the obligations, indebtedness or liabilities of any
other Person or which such party has agreed (contingently or otherwise) to
purchase or otherwise acquire or in respect of which it has otherwise assured a
creditor against loss.
"Knowledge of Xxx" or "Xxx'x Knowledge" (or words of similar import)
means the actual knowledge of any of the officers or directors of Xxx or the
employee at each respective Xxx Newspaper who is the highest ranking manager at
such Xxx Newspaper.
"Knowledge of Liberty" or "Liberty's Knowledge" (or words of similar
import) means the actual knowledge of any of the officers or directors of
Liberty or the employee at each respective Liberty Newspaper who is the highest
ranking manager at such Liberty Newspaper.
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"Xxx Business" shall mean the business and the operation of the Xxx
Newspapers, including without limitation the publication of such newspapers.
"Xxx Copyrights" means all copyrights, including copyrights for printed
matter, databases, software, CD/ROM discs, software and CD/ROM disc source
codes, copyright registrations and all pending applications for copyright
registration owned by Xxx and used solely in connection with the Xxx Business,
including those items described in Part A of Section 4.16(b) of the Xxx
Disclosure Letter.
"Xxx Disclosure Letter" means the disclosure letter, dated the date of
the Agreement (or if accepted by Liberty, the Closing Date), delivered to
Liberty.
"Xxx Employee Computer Purchase Agreements" means the agreements
between Xxx and the Xxx employees listed in Schedule 1.3(b)(xv) involving a Xxx
employee's installment purchase of a personal computer for personal use outside
of the workplace.
"Xxx Equipment" means all machinery, presses, equipment, furniture,
computer equipment (including software), fixtures, furnishings, toolings, parts
and other items of tangible personal property owned or leased by Xxx and used
solely in connection with the Xxx Business.
"Xxx Intangible Property" means solely in connection with the Xxx
Business: (i) the Xxx Copyrights; (ii) the Xxx Trademarks; (iii) the Xxx Trade
Secrets; and (iv) all goodwill, if any, associated therewith.
"Xxx Material Adverse Effect" means any material adverse changes in, or
material adverse effect on, (i) the operations, results of operations or
condition (financial or otherwise) of Xxx or the Xxx Business or (ii) the Xxx
Acquired Assets taken as a whole; provided, however, no change or effect shall
be considered a "Xxx Material Adverse Effect" if (a) such change or effect is
caused primarily by, and is of similar magnitude to, changes in the newspaper
industry generally; (b) such change or effect is substantially the result of
circumstances that are not likely to recur and have been substantially remedied
and any material reduction in the revenues of the Xxx Business attributable to
such change or effect has been restored ; or (c) such change or effect is
related to the announcement of the transactions contemplated by this Agreement.
"Xxx Motor Vehicles" means all motor vehicles owned by Xxx and used
solely in the operation of the Xxx Business, including those listed in Section
1.2(b)(i) of the Xxx Disclosure Letter.
"Xxx Net Working Capital" means an amount equal to current assets
included within the Xxx Acquired Assets, minus current liabilities included
within the Xxx Assumed Liabilities, in each case calculated in accordance with
GAAP and past practice and applied on a basis consistent with the Xxx Balance
Sheet, including the exceptions to GAAP listed in Part A of
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Section 4.6 of the Xxx Disclosure Letter, except for purposes of determining Xxx
Net Working Capital:
(a) newsprint inventory shall be valued at $600 per metric ton without
the inclusion of any additional costs or fees;
(b) prepaid insurance and other prepaid expenses, to the extent Liberty
will not receive a dollar for dollar monetary benefit after the Closing Date,
will not be included;
(c) accounts receivable that are not collected on or prior to the 90th
day after the Closing Date will not be included;
(d) current liabilities shall include an accrual for the vacation pay
liability assumed by Liberty pursuant to Section 10.2; and
(e) current liabilities shall include deferred subscription revenue.
"Xxx Permitted Liens" means (i) Liens for Taxes not yet due and
payable, that are payable without penalty or that are being contested in good
faith and for which adequate reserves have been taken, (ii) Liens arising or
resulting from any action taken by Liberty or any of its Affiliates, (iii) Liens
created by, arising out of or specifically contemplated by the Agreement, (iv)
Liens identified as Xxx Permitted Liens in the Xxx Disclosure Letter, (v)
materialmen's, mechanics', workmen's, repairmen's, employees' or other similar
Liens arising in the course of construction or in the ordinary course of
operations or maintenance in each such case securing obligations which are not
delinquent or are being contested in good faith and for which adequate reserves
have been taken or securing obligations which are bonded in a reasonable manner,
(vi) zoning restrictions, easements, licenses or other restrictions on the use
of real property or other minor irregularities in title thereto, so long as the
same do not, individually or in the aggregate, materially interfere with or
impair the use of such real property in the manner normally used, and (vii)
Liens arising out of judgments or awards with respect to which at the time an
appeal or proceeding for review is being prosecuted in good faith if adequate
reserves with respect thereto have been established and are being maintained and
with respect to which there shall have been secured a stay of execution pending
such appeal or proceeding for review.
"Xxx Real Property" means Xxx'x fee simple, leasehold or other interest
in the real property listed in Section 1.2(b)(x) of the Xxx Disclosure Letter
and all buildings, improvements and fixtures thereon, together with all strips
and gores, rights of way, easements, privileges and appurtenances pertaining
thereto, including any right, title and interest of Xxx in and to any street
adjoining any portion of the Xxx Real Property.
"Xxx Records" means files and records, including schematics, technical
information and engineering data, programming information, correspondence, books
of account, employment records, customer files, purchase and sales records and
correspondence, advertising records, files and literature, and other written
materials of Xxx relating solely to the
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Xxx Acquired Assets, or the Xxx Business, other than duplicates of such files
and records retained by Xxx; provided, however, that Xxx Records shall not mean
or include the corporate minute books and stock records of Xxx and any shares of
capital stock of Xxx nor shall they include any communications that do not
relate solely to the Xxx Acquired Assets or the Xxx Business that are currently
protected from disclosure by Xxx by virtue of the attorney-client privilege.
"Xxx Trade Secrets" means all formulae, processes, procedures, designs,
ideas, research records, inventions, records of inventions, test information,
technical information, marketing know-how, proprietary information, know-how,
and trade secrets (and all related manuals, books, files, journals, models,
instructions, patterns, drawings, blueprints, plans, designs specifications,
equipment lists, parts lists, descriptions, data, art work, software, computer
programs and source code data related thereto including all current and
historical data bases) owned, used or held for use by Xxx solely in connection
with the Xxx Newspapers or the Xxx Business.
"Xxx Trademarks" means all of those trade names, trademarks, service
marks, slogans, logos, trademark and service xxxx registrations and trademark
and service xxxx applications owned, used, held for use, licensed by or leased
by Xxx solely in connection with the Xxx Newspapers or the Xxx Business, but
including those items described in Part B of Section 4.16(b) of the Xxx
Disclosure Letter.
"Letter of Intent" or "LOI" shall have the meaning ascribed to such
term in Section 1.3(a).
"Legal Expenses" shall have the meaning ascribed to such term in
Section 8.2(a).
"Legal Requirements" means all governmental statutes, ordinances, codes
and regulations.
"Liberty Business" means the business and operations of the Liberty
Newspapers, including without limitation the publication of the Liberty
Newspapers.
"Liberty Copyrights" means all copyrights, including copyrights for
printed matter, databases, software, CD/ROM discs, software and CD/ROM disc
source codes, copyright registrations and all pending applications for copyright
registration owned by Liberty and used solely in connection with the Liberty
Business, including those items described in Part A of Section 3.16(b) of the
Liberty Disclosure Letter.
"Liberty Disclosure Letter" means the disclosure letter, dated the date
of the Agreement (or if accepted by Xxx, the Closing Date), delivered to Xxx.
"Liberty Equipment" means all machinery, presses, equipment, furniture,
computer equipment (including software), fixtures, furnishings, toolings, parts
and other items of
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tangible personal property owned or leased by Liberty, as the case may be, and
used solely in the operation of the Liberty Business.
"Liberty Intangible Property" means, solely in connection with the
Liberty Business: (i) the Liberty Copyrights; (ii) the Liberty Trademarks; (iii)
the Liberty Trade Secrets and (iv) all goodwill, if any, associated therewith.
"Liberty Material Adverse Effect" means any material adverse changes,
in, or material adverse effect on (i) the operations, results of operation or
conditions (financial or otherwise) of Liberty or the Liberty Business or (ii)
the Liberty Acquired Assets taken as a whole; provided, however, no change or
effect shall be considered a "Liberty Material Adverse Effect" if (a) such
change or effect is caused primarily by, and is of similar magnitude to, changes
in the newspaper industry generally; (b) such change or effect is substantially
the result of circumstances that are not likely to recur and have been
substantially remedied and any material reduction in the revenues of the Liberty
Business attributable to such change or effect has been restored; or (c) such
change or effect is related to the announcement of the transactions contemplated
by this Agreement.
"Liberty Motor Vehicles" means all motor vehicles owned by Liberty and
used solely in the operation of the Liberty Business, including those listed in
Section 1.2(a)(i) of the Liberty Disclosure Letter.
"Liberty Net Working Capital" means an amount equal to current assets
included within the Liberty Acquired Assets, minus current liabilities included
within the Liberty Assumed Liabilities, in each case calculated in accordance
with GAAP and past practice and applied on a basis consistent with the Liberty
Balance Sheet, including the exceptions to GAAP listed in Part A of Section 3.6
of the Liberty Disclosure Letter, except for purposes of determining Liberty Net
Working Capital:
(a) newsprint inventory shall be valued at $600 per metric ton without
the inclusion of any additional costs or fees;
(b) prepaid insurance and other prepaid expenses, to the extent Xxx
will not receive a dollar for dollar monetary benefit after the Closing, will
not be included;
(c) accounts receivable that are not collected on or prior to the 90th
day after the Closing Date will not be included;
(d) current liabilities shall include an accrual for the vacation pay
liability assumed by Xxx pursuant to Section 10.1; and
(e) current liabilities shall include deferred subscription revenue.
"Liberty Permitted Liens" means (i) Liens for Taxes not yet due and
payable, that are payable without penalty or that are being contested in good
faith and for which adequate
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reserves have been taken, (ii) Liens arising or resulting from any action taken
by Xxx, or any of its Affiliates, (iii) Liens created by, arising out of or
specifically contemplated by the Agreement, (iv) Liens identified as Liberty
Permitted Liens in the Liberty Disclosure Letter, (v) materialmen's, mechanics',
workmen's, repairmen's, employees' or other similar Liens arising in the course
of construction or in the ordinary course of operations or maintenance in each
such case securing obligations which are not delinquent or are being contested
in good faith and for which adequate reserves have been taken or securing
obligations which are bonded in a reasonable manner, (vi) zoning restrictions,
easements, licenses or other restrictions on the use of real property or other
minor irregularities in title thereto or Liens thereon, so long as the same do
not, individually or in the aggregate, materially interfere with or impair the
use of such real property in the manner normally used, and (vii) Liens arising
out of judgments or awards with respect to which at the time an appeal or
proceeding for review is being prosecuted in good faith if adequate reserves
with respect thereto have been established and are being maintained and with
respect to which there shall have been secured a stay of execution pending such
appeal or proceeding for review.
"Liberty Real Property" means Liberty's fee simple, leasehold or other
interest in the real property listed in Section 1.2(a)(x) of the Liberty
Disclosure Letter and all buildings, improvements and fixtures thereon, together
with all strips and gores, rights of way, easements, privileges and
appurtenances pertaining thereto, including any right, title and interest, in
and to any street adjoining any portion of the Liberty Real Property.
"Liberty Records" means files and records, including schematics,
technical information and engineering data, programming information,
correspondence, books of account, employment records, customer files, purchase
and sales records and correspondence, advertising records, files and literature,
and other written materials of Liberty relating solely to the Liberty Acquired
Assets or the Liberty Business other than duplicates of such files and records
retained by Liberty; provided, however, that Liberty Records shall not mean or
include the corporate minute books and stock records of Liberty, and any shares
of capital stock of Liberty nor shall they include any communications that do
not relate solely to the Liberty Acquired Assets or the Liberty Business that
are currently protected from disclosure by Liberty by virtue of the
attorney-client privilege.
"Liberty Trade Secrets" means all formulae, processes, procedures,
designs, ideas, research records, inventions, records of inventions, test
information, technical information, marketing know-how, proprietary information,
know-how, and trade secrets (and all related manuals, books, files, journals,
models, instructions, patterns, drawings, blueprints, plans, designs
specifications, equipment lists, parts lists, descriptions, data, art work,
software, computer programs and source code data related thereto including all
current and historical data bases) owned, used or held for use by Liberty solely
in connection with the Liberty Newspapers.
"Liberty Trademarks" means all of those trade names, trademarks,
service marks, slogans, logos, trademark and service xxxx registrations and
trademark and service xxxx applications owned, used, held for use, licensed by
or leased by Liberty solely in connection
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with the Liberty Newspapers, excluding the Liberty Trademarks and Logos, but
including those items described in Part B of Section 3.16(b) of the Liberty
Disclosure Letter.
"Lien" means any lien (including any Tax lien), mortgage, security
interest, claim, charge, defect in title or other encumbrance.
"Loss(es)" means all losses, damages, liabilities and claims, and fees,
costs and expenses of any kind related thereto.
"Person" includes any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or association,
government or any agency or political subdivision thereof.
"Subsidiary" means, with respect to any Person, any other corporation,
partnership, joint venture, association or other entity in respect of which such
Person directly, or indirectly through one or more other Subsidiaries, both (i)
owns not less than a majority of the overall economic equity and (ii) has the
power to elect a majority of the board of directors (or individuals serving a
function similar to that of a board of directors of a corporation).
"Taxes" shall have the meaning ascribed to such term in Section
3.10(e).
"Third Party Claim" shall have the meaning ascribed to such term in
Section 8.2(d).
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SCHEDULE 1.3(b)(xv)
Xxx Employee Computer Purchase Agreements
EMPLOYEE LOAN BALANCE
Geneseo
May $ 813.55
Xxxxxx $ 361.94
Ottumwa
Xxxx $1,014.75
Box $ 243.57
Davidson $1,100.97
Xxxxx $ 178.97
Xxxxxxx $1,311.75
Xxxxxx $ 240.00
Xxxxxxx $1,348.47
Xxxxxxxx $1,194.39
Xxxxxx $1,198.11
Xxxxxx $1,318.47
Kewanee
Xxxxx $ 338.04
Hunter $1,102.99
Xxxx $ 531.28
Part $1,120.53
Vandewoestyn $ 736.03
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SCHEDULE 6.1(f)(i)
OWNER'S TITLE INSURANCE POLICY AMOUNTS
Kewanee $361,200
Ottumwa $303,600
(based upon assesed valuation plus 20%)
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SCHEDULE 7.1(f)(i)
OWNER'S TITLE INSURANCE POLICY AMOUNTS
Xxxxxxxx $275,000
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