EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
dated as of January 31, 2001
by and between
THE NEW YORK TIMES COMPANY MAGAZINE GROUP, INC.
and
ADVANCE MAGAZINE PUBLISHERS INC.
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.............................................1
1.1 Certain Definitions........................................1
1.2 Certain Additional Definitions.............................5
ARTICLE II. PURCHASE AND SALE OF ASSETS.............................7
2.1 Purchase and Sale of Purchased Assets......................7
2.2 Assumption of Liabilities.................................10
2.3 Consideration for Purchased Assets........................11
2.4 Further Assurances........................................14
2.5 Assignment of Business Contracts and Business Licenses...14
ARTICLE III. THE CLOSING............................................15
3.1 Time and Place............................................15
3.2 Closing Deliveries of the Seller..........................15
3.3 Closing Deliveries of the Purchaser.......................16
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER...........17
4.1 Organization..............................................17
4.2 Authority.................................................17
4.3 No Violation; Third Party Consents........................18
4.4 Government Consents.......................................18
4.5 Equipment and Tangible Property...........................19
4.6 Intellectual Property and Proprietary Rights..............19
4.7 Business Contracts........................................19
4.8 Business Licenses.........................................20
4.9 Business Employees........................................20
4.10 Employee Benefit Plans....................................20
4.11 Financial Statements......................................21
4.12 Real Property.............................................22
4.13 Litigation; Governmental Orders...........................22
4.14 Compliance with Laws......................................22
4.15 Environmental Matters.....................................22
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TABLE OF CONTENTS
(continued)
Page
4.16 Insurance.................................................23
4.17 Transactions with Affiliates..............................23
4.18 Taxes.....................................................24
4.19 Brokers...................................................24
4.20 Absence of Certain Changes................................24
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER........24
5.1 Organization..............................................24
5.2 Authority.................................................24
5.3 No Violation; Third Party Consents........................25
5.4 Governmental Consents.....................................26
5.5 Litigation................................................26
5.6 Brokers...................................................26
ARTICLE VI. COVENANTS AND AGREEMENTS...............................26
6.1 Conduct of Business.......................................26
6.2 Access and Information....................................27
6.3 Confidentiality...........................................27
6.4 Further Actions...........................................28
6.5 Fulfillment of Conditions by the Seller...................29
6.6 Fulfillment of Conditions by the Purchaser................29
6.7 Publicity.................................................29
6.8 Transaction Costs.........................................29
6.9 Employees and Employee Benefit Matters....................29
6.10 Retention of and Access to Records........................31
6.11 Notification of Certain Matters...........................31
6.12 Fulfillment of Current Subscriptions......................32
ARTICLE VII CLOSING CONDITIONS....................................32
7.1 Conditions to Obligations of the Purchaser................32
7.2 Conditions to Obligations of the Seller...................32
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VIII INDEMNIFICATION......................................33
8.1 Survival..................................................33
8.2 Indemnification by the Purchaser..........................33
8.3 Indemnification by the Seller.............................34
8.4 Notification of Claims....................................34
8.5 Limitations...............................................35
8.6 Treatment of Indemnity Benefits...........................36
8.7 Exclusive Remedy..........................................36
8.8 Remediation Projects......................................37
ARTICLE IX. TERMINATION............................................37
9.1 Termination...............................................37
9.2 Effect of Termination.....................................37
ARTICLE X. MISCELLANEOUS..........................................38
10.1 Notices...................................................38
10.2 Attorneys' Fees and Costs.................................38
10.3 Assignment................................................39
10.4 Amendments and Waiver; Exclusive Remedies.................39
10.5 Entire Agreement..........................................39
10.6 Representations and Warranties Exclusive..................39
10.7 No Third Party Beneficiary................................40
10.8 Governing Law.............................................40
10.9 Neutral Construction......................................40
10.10 Severability..............................................40
10.11 Bulk Sales Laws...........................................40
10.12 Heading; Interpretation; Schedules and Exhibits...........40
10.13 Waiver of Jury Trial......................................41
10.14 Counterparts..............................................41
10.15 Guaranty..................................................41
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TABLE OF CONTENTS
(continued)
List of Schedules and Exhibits
Schedule Description
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1.1(s) List of Persons - Knowledge of the Purchaser
1.1(t) List of Persons - Knowledge of the Seller
1.1(z) Permitted Encumbrances
2.1(c)(vi) Nontransferable Business Licenses
2.1(c)(ix) Excluded Trademarks
2.1(c)(xiii) Certain Excluded Assets
2.3(b) Working Capital Calculation
3.2 Required Consents
4.3 Third Party Consents - the Seller
4.4 Government Consents - the Seller
4.5 Equipment and Tangible Personal Property
4.6(a) Intellectual Property
4.7(a) Material Business Contracts
4.7(b) Material Business Contracts - Exceptions to Enforceability
4.8 Material Business Licenses
4.9 Business Employees
4.10(a) Benefit Plans
4.11(a) Financial Statements
4.12(a) Owned Real Property
4.12(b) Leased Real Property
4.11(b) Change in Business
4.13 Litigation; Governmental Orders - the Seller
4.14 Exceptions to Compliance with Laws
4.15 Environmental Matters
4.17 Transactions with Affiliates
5.3 Third Party Consents - the Purchaser
5.4 Government Consents - the Purchaser
5.5 Litigation - the Purchaser
6.1 Conduct of Business
6.9 Employees to be retained by Seller
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Exhibit A Grant Deed
Exhibit B Assignments of Leases
Exhibit C Bills of Sale
Exhibit D Assignments and Assumptions
Exhibit E Assignments of Proprietary Rights
Exhibit F Subscription Fulfillment Agreement
Exhibit G Guarantee of NYT
Exhibit H Officer's Certificate of the Seller
Exhibit I [Assistant] Secretary's Certificate of the Seller
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TABLE OF CONTENTS
(continued)
Exhibit J Opinion of Counsel to the Seller
Exhibit K Officer's Certificate of the Purchaser
Exhibit L [Assistant] Secretary's Certificate of the Purchaser
Exhibit M Opinion of Counsel to the Purchaser
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ASSET PURCHASE AGREEMENT (the "Agreement") dated as of January 31, 2001,
by and between The New York Times Company Magazine Group, Inc., a Delaware
corporation ("NYTMG"), and Advance Magazine Publishers Inc., a New York
corporation (the "Purchaser").
WHEREAS, the Seller (as defined below) has certain assets which it uses to
publish and distribute the magazines set forth on Schedule A hereto (the
"Magazines") and to operate the web site ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇ (collectively, the
"Business");
WHEREAS, the Purchaser desires to purchase from the Seller, and the Seller
desires to sell to the Purchaser, all assets owned, used or held for use to
conduct the operations of the Business, and in connection therewith, the
Purchaser has agreed to assume certain liabilities of the Seller relating to the
Business, all upon the terms and subject to the conditions set forth herein
(such transaction sometimes being referred to herein as the "Asset Purchase");
and
WHEREAS, the Seller and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Asset Purchase, all as more fully set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, promises and agreements hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. For all purposes of and under this Agreement, the
following terms shall have the respective meanings set forth below:
(a) "Action" means any claim, action, suit or proceeding, arbitral
action, governmental inquiry, criminal prosecution or other investigation.
(b) "Affiliate" means, as applied to any Person, (i) any other
Person directly or indirectly controlling, controlled by or under common control
with, that Person, (ii) any other Person that owns or controls 10% or more of
any class of equity securities (including any equity securities issuable upon
the exercise of any option or convertible security) of that Person or any of its
Affiliates, or (iii) any director, partner, member, officer, manager, agent,
employee or relative of such Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms "controlling,"
"controlled by," and "under common control with") as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
ownership of voting securities, by contract or otherwise.
(c) "Books and Records" means all files, documents, instruments and
papers relating to the Business, including, without limitation, financial
statements,
budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute
books, stock certificates and books, stocks transfer ledgers, Contracts,
Licenses, computer files and programs, retrieval programs, operating data and
plans and environmental studies and plans.
(d) "Business Day" means any weekday (Monday through Friday) on
which commercial banks in New York, New York are open for business.
"Confidentiality Agreement" means the letter agreement between NYT and The Conde
Nast Publications, dated as of January 19, 2001.
"Contract" means any currently enforceable contract, agreement, indenture, note,
bond, instrument, lease, conditional sales contract, mortgage, license,
franchise agreement, concession agreement, insurance policy, security
interest, guaranty, binding commitment or other agreement or arrangement,
whether written or oral.
"Encumbrance" means any security interest, pledge, mortgage, lien, charge,
adverse claim of ownership or use, restriction on transfer (such as a right
of first refusal or other similar right), defect of title, or other
encumbrance of any kind or character.
"Environmental Law" means any law, order, regulation, decree, permit, license,
ordinance, or other federal, state, county, provincial, local or foreign
governmental requirements in effect as of the Closing Date relating to
pollution, the protection of human health and the environment, or the
discharge or Release of any Hazardous Substance into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
any successor statute thereto, and the rules and regulations promulgated
thereunder.
"GAAP" means generally accepted accounting principles as in effect from time to
time in the United States.
"Governmental Authority" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal, or judicial body, in each case whether federal, state, county,
provincial, local or foreign.
"Governmental Order" means any statute, rule, regulation, order, judgment,
injunction, decree, stipulation or determination issued, promulgated or
entered by or with any Governmental Authority of competent jurisdiction.
"Hazardous Substance" means petroleum, petroleum by-products, polychlorinated
biphenyls and any other chemicals, materials, substances or wastes which are
currently defined or regulated as "hazardous substances," "hazardous
materials," "hazardous wastes," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "toxic air
pollutants," "hazardous air pollutants," "pollutants," or "contaminants," or
otherwise regulated under any Environmental Law.
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"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
"Income Tax" means any federal, state, county, provincial, local, foreign or
other income, alternative minimum, franchise, capital stock, net worth,
capital, business profits, gross receipts or other similar Tax, any
withholding or estimated Tax related thereto, any interest and penalties
(civil or criminal) thereon or additions thereto, and any expenses incurred
in connection with the determination, settlement or litigation of any
Liabilities related to any such Tax.
"Intellectual Property" means any (i) patents, patent applications, patent
disclosures and improvements thereto, (ii) trademarks, service marks, trade
dress, logos, trade names, corporate names and domain names, the goodwill
associated therewith, and the registrations and applications for registration
thereof, if any, and (iii) copyrights, and the registrations and applications
for registration thereof, if any.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, any
successor statute thereto, and the rules and regulations promulgated
thereunder.
"IRS" means the United States Internal Revenue Service, and any successor agency
thereto.
"Knowledge of the Purchaser," "known to the Purchaser" and phrases of similar
import mean, with respect to any matter in question relating to the
Purchaser, the actual knowledge of such matter by the Persons listed in
Schedule 1.1(s) hereto without obligation of inquiry.
"Knowledge of the Seller," "known to the Seller" and phrases of similar import
mean, with respect to any matter in question relating to the Seller, the
actual knowledge of such matter by the Persons listed in Schedule 1.1(t)
hereto without obligation of inquiry.
"Law" means any federal, state, county, provincial, local or foreign statute,
law, ordinance, regulation, rule, code or rule of common law.
"Liability" means any indebtedness, obligation and other liability with respect
to the Business or the Purchased Assets (whether absolute, accrued, matured,
contingent (or based upon any contingency), known or unknown, fixed or
otherwise, or whether due or to become due), including any fine, penalty,
judgment, award or settlement respecting any judicial administrative or
arbitration proceeding, damage, loss, claim or demand with respect to any
Law.
"License" means any franchise, approval, permit, order, authorization, consent,
license, registration or filing, certificate, variance and any other similar
right obtained from or filed with any Governmental Authority.
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"Material Adverse Effect" means any change or effect that is materially adverse
to the financial condition or results of operations of the Business, taken as
a whole, except for any such changes or effects resulting directly or
indirectly from (i) the transactions contemplated by this Agreement, (ii) the
announcement or other disclosure of the transactions contemplated by this
Agreement, (iii) regulatory changes and (iv) changes in conditions generally
applicable to the magazine publishing industry, or in general economic
conditions in the geographic regions in which the Business is conducted.
"Operative Agreements" means, collectively, (i) the Grant Deed, (ii) the
Assignments of Leases, (iii) the Bills of Sale, (iv) the Assignments and
Assumptions, (v) the Assignments of Proprietary Rights and (vi) the
Subscription Fulfillment Agreement.
"Permitted Encumbrances" means the Encumbrances set forth on Schedule 1.1(x) and
(i) Encumbrances for mechanics' and materialmen's liens and workmen's,
repairmen's, warehousemen's and carriers' liens arising in the ordinary
course of the Business, (ii) Encumbrances for Taxes and other Liabilities not
yet due and payable or being contested in good faith, (iii) Encumbrances
arising out of, under or in connection with this Agreement, (iv) Encumbrances
reflected on the Latest Balance Sheet, (v) Encumbrances and imperfections of
title the existence of which would not reasonably be expected to materially
detract from the value of, materially interfere with, or otherwise materially
adversely affect the use and enjoyment of the property subject thereto or
affected thereby, consistent with past practice and (vi) solely with respect
to the Owned Real Property, (A) any lease in which the Seller is the lessor,
and (B) provided that the following are not violated by existing improvements
in any material respect and do not prohibit or materially restrict the
continued use and operation of such Owned Real Property for the same uses and
operations as currently conducted, or grant any third party any option or
right to acquire or lease a material portion thereof, (x) easements, rights
of way and other similar restrictions which would be shown by a current title
report, (y) conditions that may be shown by a current survey, title report or
physical inspection, and (z) zoning, building and other similar restrictions
imposed by applicable Law.
"Person" means any individual, general or limited partnership, firm,
corporation, limited liability company, association, trust, unincorporated
organization or other entity.
"Proprietary Rights" means (i) Intellectual Property, (ii) trade secrets and
confidential business information (including ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, research and development information, software,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information), (iii) URLs, domain names and Internet web sites, (iv) copies
and tangible embodiments of the foregoing (in whatever form or medium), and
(v) licenses granting any rights with respect to any of the foregoing.
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"Release" means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing of a
Hazardous Substance into the environment.
"Seller" means NYTMG and for the sole purpose (and no other purpose under the
Agreement) of conveying certain of the Purchased Assets to be conveyed to the
Purchaser and/or assigning certain Assumed Liabilities to be assumed by the
Purchaser, in each case relating to ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇ or Golf Digest's golf
schools, the term Seller shall also include certain Affiliates of NYTMG.
"Subsidiary" means (unless otherwise indicated), with respect to a Person, any
other Person in which such Person has a direct or indirect equity or other
ownership interest in excess of fifty percent (50%).
"Tax" means all Income Taxes and any federal, state, county, provincial, local,
foreign or other sales, use, ad valorem, employment, severance, stamp,
transfer, gains, license, excise, occupation, property, unclaimed property,
premium or other taxes, fees, levies, duties, assessments or charges of any
kind or nature whatsoever imposed by any Governmental Authority (whether
payable directly or by withholding), together with any interest, penalties
(civil or criminal), additions to, or additional amounts imposed by, any
Governmental Authority with respect thereto, and any expenses incurred in
connection with the determination, settlement or litigation of any Liability
therefor.
"Tax Return" means a report, return or other information required to be supplied
to a Governmental Authority with respect to any Tax.
1.2 Certain Additional Definitions. For all purposes of and under this
Agreement, the following terms shall have the respective meanings ascribed
thereto in the respective sections of this Agreement set forth opposite each
such term below:
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Term Section
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Agreement Preamble
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Asset Purchase Preamble
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Assignments and Assumptions 3.2(a)
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Assignments of Leases 3.2(a)
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Assignments of Proprietary Rights 3.2(a)
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Assumed Liabilities 2.2(b)
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Benefit Plan(s) 4.10(a)
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Bills of Sale 3.2(a)
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Business Preamble
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Business Contract(s) 2.1(b)
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Business Employee(s) 4.9
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Business Insurance Policies 4.16(a)
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Term Section
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Business License(s) 2.1(b)
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Cap 8.5
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Cash Payment 2.3(a)
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Closing 3.1
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Closing Balance Sheet 2.3(b)
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Closing Date 3.1
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Closing Working Capital 2.3(b)
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Connecticut Real Property Transfer Act 3.2(a)
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Consultants 8.8(b)
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Damages 8.2
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December 31, 2000 Working Capital 2.3(b)
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Deductible 8.5
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Deferred Subscription Liabilities 2.3(a)
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Estimated Closing Balance Sheet 2.3(b)
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Estimated Working Capital 2.3(b)
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Excluded Assets 2.1(c)
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Excluded Liabilities 2.2(c)
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Financial Statements 4.11(a)
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Grant Deed 3.2(a)
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Indemnified Party 8.4(a)
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Indemnifying Party 8.4(a)
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Indemnity Notice Period 8.4(b)
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Indemnity Response 8.4(c)
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Independent Accountant 2.3(b)
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Latest Balance Sheet 4.11(a)
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Latest Balance Sheet Date 4.11(a)
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Leased Real Property 2.1(b)
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Magazines Preamble
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Material Business Contract(s) 4.7(a)
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Material Business License(s) 4.8
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Notice of Claim 8.4(a)
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Notice of Disagreement 2.3(b)
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NYT 3.2(a)
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NYT Board Approval 4.2
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NYTMG Preamble
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Owned Real Property 2.1(b)
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Purchase Price 2.3(a)
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Purchased Assets 2.1(b)
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Purchaser Preamble
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6
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Term Section
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Purchaser Guarantor 10.15
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Purchaser Indemnified Party 8.3
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Real Property Leases 2.1(b)
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Remediation Project 8.8(a)
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Required Consents 3.2(a)
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Seller Indemnified Party 8.2
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Seller's Certificate of Incorporation 4.1
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Seller's Bylaws 4.1
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Short Term Agreement 4.7(a)
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Statement of Working Capital 2.3(b)
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Subscription Fulfillment Agreement 3.2(a)
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Subscription Liability Payment 2.3(a)
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Termination Date 9.1(b)
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Transferred Employees 6.9(a)
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WARN 6.9(a)
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Working Capital 2.3(b)
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ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1 Purchase and Sale of Purchased Assets.
(a) Purchase and Sale. Upon the terms and subject to the conditions
set forth herein, at the Closing the Purchaser shall purchase from the Seller,
and the Seller shall irrevocably sell, convey, transfer, assign and deliver to
the Purchaser, free and clear of all Encumbrances other than Permitted
Encumbrances, all right, title and interest of the Seller in and to the
Purchased Assets (as defined below).
(b) Purchased Assets. For all purposes of and under this Agreement,
the term "Purchased Assets" shall mean, refer to and include all of the Seller's
right, title and interest in and to all of the following items, in each case
used in connection with the Business (other than Excluded Assets) and as in
existence on the Closing Date:
(i) all parcel(s) of real property, as more fully described in
Schedule 4.12(a) hereto (the "Owned Real Property"), and all the rights arising
out of the ownership thereof or appurtenant thereto, including all rights,
privileges, grants and easements appurtenant to the Seller's interest in the
Owned Real Property, together with all buildings, structures, facilities,
fixtures and other improvements thereto;
(ii) all lease(s) of real property (the "Real Property
Leases"), as more fully described in Schedule 4.12(b), as to which the Seller is
the lessee (the "Leased Real Property"), together with any leasehold
improvements thereon, and in each
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case all other rights, subleases, licenses, permits, deposits and profits
appurtenant to or related to such lease;
(iii) all machinery, equipment, furniture, office equipment,
press equipment, computer equipment (including all hardware and software, but
subject, in the case of software, to any restrictions by the vendor or licensor
on the assignment thereof), facsimile machines, copying machines, communications
equipment, vehicles, storage tanks, spare and replacement parts, fuel and other
tangible property (and interests in any of the foregoing) of the Seller
(excluding the assets of Quebecor World and Que-Net located at the Owned Real
Property), including the equipment listed on Schedule 4.5 hereto;
(iv) all items of inventory pertaining to the operation of the
Business, including all materials and supplies, all work in process and all
finished products owned by the Seller as of the Closing Date;
(v) to the extent transferable by the Seller to the Purchaser,
all licenses, permits and authorizations issued by any Governmental Authority or
private organization possessed by the Seller and required for the operation of
the Business and/or use of the Purchased Assets (including the Material Business
Licenses), and all rights thereunder (each a "Business License" and,
collectively, the "Business Licenses");
(vi) to the extent transferable by the Seller to the
Purchaser, and with the exceptions set forth in Schedule 2.1(c)(xiii), all
contracts, agreements, personal property leases and commitments to which the
Seller is a party pertaining to the operation of the Business and/or use of the
Purchased Assets, including pricing agreements, printing agreements, pre-press
agreements, subscription agreements, advertising agreements, distribution
agreements, and purchase orders or purchase commitments (including the Material
Business Contracts), and all rights thereunder (together with the Real Property
Leases, each a "Business Contract" and, collectively, "Business Contracts");
(vii) all sales support and promotional materials, advertising
materials and production, sales and marketing files used exclusively for the
operation of the Business;
(viii) all current supplier lists, production records and
credit records, or similar records of all sales of the Business, and all other
Books and Records maintained for the operation of the Business;
(ix) Proprietary Rights (including the Intellectual Property
set forth in Schedule 4.6(a) hereto) to the extent of the Seller's rights
therein and subject to any restrictions on transfer or assignment, and goodwill
associated therewith, rights thereunder, remedies against infringements thereof,
and rights to protection of interests therein under the applicable Laws of all
jurisdictions, in each case used for the operation of the Business, but not, in
any event, any trademarks or trade names of the Seller or any of its Affiliates
not used exclusively in the Business, including, without limitation, "The
8
New York Times," "Times Company Digital," "Times Company" and any of the
trademarks identified on Schedule 2.1(c)(ix) hereto or any of the URLs or domain
names associated with the foregoing;
(x) accounts, accounts receivable and notes receivable
relating to the Business as of the Closing Date other than any such accounts or
receivables due from any Affiliate of the Seller;
(xi) all prepaid expenses, deposits, deferred charges and all
other similar assets paid by the Seller prior to the Closing Date in respect of
the Business and pertaining to periods after the Closing Date to the extent
reflected on the Closing Balance Sheet;
(xii) to the extent assignable, all of the Seller's rights,
claims, credits, causes of action or rights of setoff against third parties
relating to the Business or the Purchased Assets, including claims pursuant to
all warranties, representations and guarantees made by suppliers, manufacturers,
contractors and other third parties in connection with products or services
purchased by or furnished to the Seller for use in the Business or affecting any
of the Purchased Assets, but not, in any event, any such claims or rights that
may be used by the Seller to defend against any third party claims or any claims
under the Business Insurance Policies or any Contracts not included in the
Purchased Assets; provided, however, that if the actions of the Purchaser in
enforcing or pursuing any of the foregoing results in the assertion of a
counterclaim or right of setoff against the Business or the Seller, such
counterclaim or setoff shall be an Assumed Liability; and
(xiii) all goodwill associated with the Business or the
Purchased Assets.
(c) Excluded Assets. Notwithstanding anything to the contrary
herein, the Seller shall not contribute, convey, assign, or transfer to the
Purchaser, and the Purchaser shall not acquire or have any rights to acquire,
any assets (the "Excluded Assets") of the Seller other than those specifically
set forth in Section 2.1(b). Without limiting the generality of the foregoing,
unless specifically set forth in Section 2.1(b), the following shall constitute
Excluded Assets:
(i) all cash, cash equivalents and securities of the Seller;
(ii) all bank and other depository accounts of the Seller;
(iii) the capital stock of all subsidiaries of the Seller and
of any Affiliates of NYT and all corporate, organizational or tax records and
minute books of the Seller and such companies;
(iv) all refunds of Income Taxes and of other Taxes which
pertain to the period prior to the Closing and are not included in the Working
Capital;
9
(v) all assets, whether real or personal, tangible or
intangible, which are owned, used or held for use by the Seller primarily to
conduct any business operation or activity other than the Business;
(vi) nontransferable Business Licenses, including those listed
in Schedule 2.1(c)(vi) hereto;
(vii) all Business Insurance Policies or other insurance
policies relating to the Business, any refunds paid or payable in connection
with the cancellation or discontinuance of any insurance policies applicable to
the Business, and any claims made under any such insurance policies;
(viii) rights in or any assets associated with or allocated to
the Benefit Plans, including assets associated with or allocated to Transferred
Employees under The New York Times Companies Supplemental Retirement and
Investment Plan and The New York Times Companies Pension Plan;
(ix) the trademarks or trade names of any Affiliates of the
Seller not used exclusively in the Business, including, without limitation, "The
New York Times," "Times Company Digital," "Times Company" and any of the
trademarks identified on Schedule 2.1(c)(ix) or any of the URLs or domain names
associated with the foregoing;
(x) all intercompany debts and other obligations due to Seller
from any Affiliates of Seller;
(xi) any rights to receive corporate and other services
provided to the Business by NYT or any of its Affiliates;
(xii) all rights of the Seller under this Agreement, the
Purchase Price hereunder, any agreement, certificate, instrument or other
document executed and delivered by the Seller or the Purchaser in connection
with the transactions contemplated hereby, or any side agreement between the
Seller and the Purchaser entered into on or after the date of this Agreement;
(xiii) Seller's stock interest in ▇▇▇▇▇▇▇▇.▇▇▇ and those
Contracts with such entity listed in Schedule 2.1(c)(xiii); and
(xiv) any and all assets of the Seller or its Affiliates not
used in, or constituting part of, the Business.
2.2 Assumption of Liabilities.
(a) Assumption. Upon the terms and subject to the conditions set
forth herein, at the Closing the Purchaser shall assume from the Seller (and
thereafter pay, perform, discharge or otherwise satisfy in accordance with their
respective terms), and the Seller shall irrevocably convey, transfer and assign
to the Purchaser, only the Assumed Liabilities.
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(b) Assumed Liabilities. For all purposes of and under this
Agreement, the term "Assumed Liabilities" shall mean each of the following
Liabilities and no other Liabilities:
(i) all of the Seller's obligations, liabilities and
commitments under the Business Contracts included in the Purchased Assets
attributable to the period subsequent to the Closing;
(ii) all of the current liabilities of the Seller (other than
liabilities for severance payments to, and other obligations under contracts
with, Persons terminated prior to the Closing Date), only to the extent
reflected on the Closing Date Balance Sheet and on the Statement of Working
Capital for purposes of Section 2.3(b);
(iii) all liabilities and obligations associated with the
employment after the Closing of any of the Transferred Employees;
(iv) any liabilities described in the proviso to Section
2.1(b)(xii); and
(v) all other liabilities, obligations, costs, expenses and
commitments relating to the Purchaser's ownership of the Purchased Assets or the
conduct of the Business after the Closing.
(c) Excluded Liabilities. Except for the Assumed Liabilities, the
Purchaser shall not assume by virtue of this Agreement or the transactions
contemplated hereby, and shall have no liability for, any Liabilities of the
Seller or any Affiliate thereof (including those related to Business) of any
kind, character or description whatsoever (the "Excluded Liabilities"). The
Seller shall pay, perform, discharge or otherwise satisfy in accordance with
their respective terms all of the Excluded Liabilities.
2.3 Consideration for Purchased Assets.
(a) Consideration. Subject to Section 2.3(b) hereof, the purchase
price (the "Purchase Price") for the Purchased Assets shall be (i) $80,000,000
in cash, subject to adjustment as provided in Section 2.3(b) (the "Cash
Payment"), (ii) payment of an amount equal to the Deferred Subscription
Liabilities (as defined in the Subscription Fulfillment Agreement) of the
Magazines as of the Closing Date (the "Subscription Liability Payment"), and
(iii) the assumption by the Purchaser of the Assumed Liabilities pursuant to
Section 2.2 hereof.
(b) Working Capital Adjustment.
(i) For all purposes of and under this Agreement, the term
"Working Capital" shall mean (A) the aggregate value of the current assets of
the Business included within the Purchased Assets, minus (B) the aggregate value
of the current liabilities of the Business included within the Assumed
Liabilities (not including the Deferred Subscription Liabilities), each
calculated as of the Closing Date in accordance with GAAP applied in a manner
consistent with the preparation of the
11
Financial Statements and otherwise in a manner consistent with the calculation
of Working Capital as of December 31, 2000 as set forth in Schedule 2.3(b)
hereto (the "December 31, 2000 Working Capital"). Such aggregate value shall be
adjusted, if necessary, to reflect an appropriate proration of real and personal
property Taxes imposed upon any of the Purchased Assets.
(ii) Not more than five (5) Business Days, but in no event
less than two (2) Business Days, before the Closing, the Seller shall in good
faith prepare and deliver to the Purchaser an estimated unaudited combined
balance sheet of the Business (the "Estimated Closing Balance Sheet"), dated as
of the day immediately preceding the Closing, setting forth the Seller's
estimate of the Working Capital. The Seller will make available to the Purchaser
all records and work papers used in preparing the Seller's estimate of the
Working Capital and the Purchaser shall notify the Seller of any good faith
disagreement with such calculation. If the Purchaser and the Seller cannot agree
as to an estimate of the Working Capital prior to the Closing, the estimate of
the Working Capital will be deemed to be equal to the average of the Seller's
and the Purchaser's good faith determinations thereof. The Working Capital as
finally estimated pursuant to this Section 2.3(b)(ii) is referred to herein as
the "Estimated Working Capital." The Purchase Price payable at Closing will be
increased on a dollar for dollar basis by the amount by which the Estimated
Working Capital exceeds the December 31, 2000 Working Capital, or decreased on a
dollar for dollar basis by the amount by which the December 31, 2000 Working
Capital exceeds the Estimated Working Capital.
(iii) As promptly as practicable, but in any event within
sixty (60) calendar days following the Closing, the Seller shall cause to be
prepared and delivered to the Purchaser an unaudited combined balance sheet of
the Business as of the Closing Date (the "Closing Balance Sheet") and statement
relating to the Business (the "Statement of Working Capital") setting forth the
Working Capital as of the Closing (the "Closing Working Capital"). The Purchaser
shall afford the Seller and its agents and representatives reasonable access to
all books, records and work papers in order to prepare the Closing Balance Sheet
and the Statement of Working Capital.
(iv) If the Purchaser disagrees in good faith with the
Statement of Working Capital, then the Purchaser shall notify the Seller in
writing (the "Notice of Disagreement") of such disagreement within thirty (30)
calendar days following delivery of the Closing Balance Sheet and the Statement
of Working Capital. The Notice of Disagreement shall set forth in reasonable
detail the basis for the disagreement described therein. Thereafter, the Seller
and the Purchaser shall attempt in good faith to resolve and finally determine
the amount of the Closing Working Capital. If the Seller and the Purchaser are
unable to resolve the disagreement within thirty (30) calendar days following
delivery of the Notice of Disagreement, then the Seller and the Purchaser shall
select a mutually acceptable, nationally recognized independent accounting firm
that does not then have a relationship with the Seller or the Purchaser, or any
of their respective Affiliates (the "Independent Accountant"), to resolve the
disagreement and make a determination with respect thereto as promptly as
practicable; provided that if the Seller and the Purchaser cannot agree, the
Independent Accountant shall be selected by an accounting firm designated by the
Purchaser and an accounting firm designated by the
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Seller. Such determination will be made, and written notice thereof given to the
Seller and the Purchaser, within thirty (30) calendar days after such selection.
The determination by the Independent Accountant shall be final, binding and
conclusive upon the Seller and the Purchaser. The scope of the Independent
Accountant's engagement (which will not be an audit) shall be limited to the
resolution of the disputed items described in the Notice of Disagreement, and
the recalculation, if any, of the Closing Working Capital in light of such
resolution. If an Independent Accountant is engaged pursuant to this Section
2.3(b)(iv), the fees and expenses of the Independent Accountant shall be borne
equally by the Seller and the Purchaser. Within ten (10) calendar days after (x)
the expiration of the thirty (30) day period after delivery of the Statement of
Working Capital if no Notice of Disagreement shall have been delivered, (y) the
resolution by the Seller and the Purchaser of the items in any Notice of
Disagreement or (z) the delivery of a notice of determination by the Independent
Accountant as described above, as the case may be, any payment required by
Section 2.3(b)(v) hereof shall be made based on such determination.
(v) After the Closing Working Capital is finally determined
pursuant to Sections 2.3(b)(iii) and (iv):
(A) in the event that Estimated Working Capital is greater than
the Closing Working Capital, the Seller shall pay to the
Purchaser an amount in cash equal to Estimated Working Capital
minus the Closing Working Capital by wire transfer of
immediately available funds to an account designated by the
Purchaser; and
(B) in the event that the Closing Working Capital is greater than
the Estimated Working Capital, the Purchaser shall pay to the
Seller, an amount equal to the Closing Working Capital, minus
the Estimated Working Capital by wire transfer of immediately
available funds to an account designated by the Seller.
Any amount payable by the Purchaser or the Seller pursuant to this Section
2.3(b)(v) shall include simple interest thereon at the rate of 8% per annum,
calculated on the basis of a 365-day year, from the Closing Date to the date of
payment.
(c) Allocation of Purchase Price. The consideration for the
Purchased Assets provided herein shall be allocated among the various categories
of Purchased Assets in accordance with their respective fair market values.
Within one hundred twenty (120) days following the Closing, the Purchaser shall
provide to the Seller an allocation among the Purchased Assets in accordance
with Section 1060 of the Internal Revenue Code. Such allocation shall be deemed
final unless the Seller has notified the Purchaser of any disagreement with the
allocation within thirty (30) calendar days after submission by the Purchaser.
In the event of such disagreement, the parties hereto shall use their reasonable
efforts to reach agreement on a reasonable allocation of consideration to such
categories of Purchased Assets. If the allocation is deemed final or the
Purchaser and the Seller reach such agreement, the Purchaser and the Seller (i)
shall execute and file all Tax Returns in a manner consistent with the
allocation determined pursuant to this Section
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2.3(c) and (ii) shall not take any position before any Governmental Authority or
in any judicial proceeding that is inconsistent with such allocation. Such
agreement shall not be a condition to Closing or a requirement hereunder. The
Seller and the Purchaser shall each timely file a Form 8594 with the IRS in
accordance with the requirements of Section 1060 of the Internal Revenue Code.
In the event that the parties do not agree to a purchase price allocation then
each party hereto shall file its own Form 8594.
2.4 Further Assurances. At and after the Closing, and without further
consideration therefor, (i) the Seller shall execute, or arrange the execution
of, and deliver to the Purchaser such further instruments and certificates of
conveyance and transfer as the Purchaser may reasonably request in order to more
effectively convey and transfer the Purchased Assets from the Seller to the
Purchaser and to put the Purchaser in operational control of the Business, or
for aiding, assisting, collecting and reducing to possession any of the
Purchased Assets and exercising rights with respect thereto and (ii) the
Purchaser shall execute, or shall arrange the execution of, and deliver to the
Seller such further instruments and certificates of assumption, novation and
release as the Seller may reasonably request in order to effectively make the
Purchaser responsible for all Assumed Liabilities and release the Seller
therefrom to the fullest extent permitted under applicable Law.
2.5 Assignment of Business Contracts and Business Licenses. To the extent
that transfer or assignment hereunder by the Seller to the Purchaser of any
Business Contract or Business License is not permitted or is not permitted
without the consent or approval of another Person, this Agreement shall not be
deemed to constitute an undertaking to assign the same if such consent or
approval is not given or if such an undertaking otherwise would constitute a
breach thereof or cause a loss of benefits thereunder. The Seller (and the
Purchaser where required) shall use its commercially reasonable efforts to
obtain any and all such third party consents or approvals under all Material
Business Contracts and Material Business Licenses; provided, however, that
neither the Seller nor the Purchaser shall be required to pay or incur any cost
or expense to obtain any third party consent or approval that it is not
otherwise required to pay or incur in accordance with the terms of the
applicable Material Business Contract or Material Business License, except for
usual legal fees and expenses. If any such third party consent or approval for
the assignment or transfer of a Material Business Contract is not obtained
before the Closing, the Seller shall cooperate with the Purchaser in any
reasonable arrangement designed to provide for the Purchaser after the Closing
the benefits intended to be assigned to the Purchaser under the applicable
Business Contract, including enforcement at the cost and for the account of the
Purchaser of any and all rights of the Seller against the other party thereto
arising out of the breach or cancellation thereof by such other party or
otherwise; provided that the Purchaser shall (i) undertake to pay or satisfy the
corresponding Liabilities for the enjoyment of such benefit to the extent that
the Purchaser would have been responsible therefor hereunder if such consent,
waiver or approval had been obtained and (ii) indemnify and hold harmless the
Seller and its Affiliates for any costs, expenses or Liabilities (including
legal fees and expenses) incurred by them in connection with the enforcement of
any such Business Contract.
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ARTICLE III.
THE CLOSING
3.1 Time and Place. The consummation of the transactions contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
New York time, on the date (the "Closing Date") which is the third (3rd)
Business Day after satisfaction and fulfillment or, if permissible pursuant to
the terms hereof, waiver of the conditions set forth in Article VII hereof, at
the offices of The New York Times Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, unless another time, date or place is mutually agreed upon in
writing by the Seller and the Purchaser.
3.2 Closing Deliveries of the Seller. At the Closing, the Seller shall
deliver, or cause to be delivered, to the Purchaser the following instruments,
certificates and other documents, dated as of the Closing Date and executed or
acknowledged (as applicable) on behalf of the Seller by a duly authorized
officer thereof, in order to consummate the transactions contemplated hereby,
including the transfer of the Purchased Assets to the Purchaser pursuant to
Section 2.1 hereof:
(a) Instruments of Transfer and Assignment.
(i) a bargain and sale deed to be delivered by the Seller
substantially in the form attached hereto as Exhibit A (the "Grant Deed");
(ii) an Assignment of Lease or Leases to be delivered by the
Seller substantially in the form attached hereto as Exhibit B (the "Assignments
of Leases");
(iii) Bills of Sale to be delivered by the Seller (including
certain Affiliates of NYTMG who hold certain Purchased Assets) substantially in
the form attached hereto as Exhibit C (the "Bills of Sale");
(iv) Instruments of Assignment and Assumption to be delivered
by the Seller (including certain Affiliates of NYTMG who hold certain Purchased
Assets or are obligated with respect to certain Assumed Liabilities)
substantially in the form attached hereto as Exhibit D (the "Assignments and
Assumptions");
(v) Assignments of Proprietary Rights to be delivered by the
Seller (including certain Affiliates of NYTMG who hold certain Purchased Assets)
substantially in the form attached hereto as Exhibit E (the "Assignments of
Proprietary Rights");
(vi) a Subscription Fulfillment Agreement substantially in the
form attached hereto as Exhibit F (the "Subscription Fulfillment Agreement") and
the Seller shall make the payment required thereby;
(vii) a guarantee of The New York Times Company, a New York
corporation and the corporate parent of the Seller ("NYT"), substantially in the
form attached hereto as Exhibit G; and
15
(viii) copies of the waivers, consents and/or approvals listed
in Schedule 3.2 hereto (the "Required Consents");
(ix) copies of any documents and filings required in
connection with the payment of transfer Taxes; and
(x) documentation reasonably satisfactory to the Purchaser
that the Asset Purchase does not trigger Connecticut's Real Property Transfer
Act, as amended (the "Connecticut Real Property Transfer Act"), with respect to
the Owned Real Property or any Leased Real Property, or, if it is determined
that the Asset Purchase does trigger the Connecticut Real Property Transfer Act
with respect to certain of the Owned or Leased Real Property for each such
parcel of Owned or Leased Real Property (a) either (i) a properly completed and
executed Form I (as that term is defined in the Connecticut Real Property
Transfer Act) or (ii) a properly completed and executed Form II (as that term is
defined in the Connecticut Real Property Transfer Act) and (b) documentation
reasonably satisfactory to the Purchaser that the Form Is and/or Form IIs have
been submitted to the Commissioner of Environmental Protection, as required
under the Connecticut Real Property Transfer Act, and that those respective Form
Is and/or Form IIs were the appropriate forms for filing under the Connecticut
Real Property Transfer Act.
(b) Closing Certificates.
(i) an officer's certificate to be delivered by the Seller
substantially in the form attached hereto as Exhibit H, which shall certify as
to the satisfaction of the conditions set forth in Sections 7.1(a) and 7.1(b)
hereof;
(ii) a secretary's or assistant secretary's certificate to be
delivered by the Seller substantially in the form attached hereto as Exhibit I;
and
(iii) a certificate of the Seller certifying as to its
non-foreign status which complies with the requirements of Section 1445 of the
Internal Revenue Code.
(c) Legal Opinion. A legal opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, Senior
Vice President, General Counsel and Secretary of NYT, substantially in the form
attached hereto as Exhibit J.
3.3 Closing Deliveries of the Purchaser. At the Closing, the Purchaser
shall make the payment and deliver, or cause to be delivered, to the Seller the
following instruments, certificates and other documents, dated as of the Closing
Date and executed or acknowledged (as applicable) on behalf of the Purchaser by
a duly authorized officer thereof, in order to pay for the Purchased Assets and
effect the assumption of all Assumed Liabilities from the Seller pursuant to
Section 2.2 hereof:
(a) Cash Payment. An amount in cash equal to the Cash Payment,
payable by wire transfer of immediately available funds to an account designated
in writing by the Seller at least two (2) Business Days prior to the Closing
Date.
16
(b) Instruments of Assumption.
(i) the Assignments and Assumptions;
(ii) the Subscription Fulfillment Agreement;
(iii) copies of any documents and filings required in
connection with the payment of transfer Taxes; and
(iv) all other instruments and certificates of assumption,
novation and release as the Seller may reasonably request in order to
effectively make the Purchaser responsible for all Assumed Liabilities and
release the Seller therefrom to the fullest extent permitted under applicable
Law.
(c) Closing Certificates.
(i) an officer's certificate substantially in the form
attached hereto as Exhibit K, which shall certify as to the satisfaction of the
conditions set forth in Sections 7.2(a) and 7.2(b) hereof; and
(ii) a secretary's or assistant secretary's certificate
substantially in the form attached hereto as Exhibit L.
(d) Legal Opinion. A legal opinion of ▇▇▇▇▇, Bermant & ▇▇▇▇▇ LLP,
counsel for the Purchaser, substantially in the form attached hereto as Exhibit
M.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
4.1 Organization. The Seller is a corporation, duly organized, validly
existing and in good standing under the Laws of the State of Delaware, with all
requisite corporate power and authority to own, operate or lease the Purchased
Assets as now owned, operated or leased by it, and to conduct the Business
substantially as presently conducted by it. The Seller has made available to the
Purchaser true and complete copies of its Certificate of Incorporation (the
"Seller's Certificate of Incorporation") and Bylaws (the "Seller's Bylaws"),
each as amended and in effect as of the date of this Agreement.
4.2 Authority. Subject to obtaining the approval of the Board of Directors
of NYT (the "NYT Board Approval"), the Seller has all requisite corporate power
and authority to enter into and deliver this Agreement and the Operative
Agreements, to perform its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. Subject to the NYT
Board Approval, the execution and delivery by the Seller of this Agreement and
the Operative Agreements, the performance by the Seller of its obligations
hereunder and thereunder, and the consummation by the Seller of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action on its part. This Agreement has
17
been duly executed and delivered by the Seller. Assuming the due authorization,
execution and delivery of this Agreement and the Operative Agreements by the
Purchaser, subject to the NYT Board Approval, this Agreement constitutes, and
each of the Operative Agreements (when so executed and delivered) will
constitute, a legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by principles of public policy, and subject to (i) the effect of any
applicable Laws of general application relating to bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or similar Laws affecting
creditors' rights and relief of debtors generally, and (ii) the effect of rules
of Law and general principles of equity, including rules of Law and general
principles of equity governing specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
4.3 No Violation; Third Party Consents. Assuming that all consents,
waivers, approvals, orders and authorizations set forth in Schedule 4.4 hereto
have been obtained and all registrations, qualifications, designations,
declarations or filings with any Governmental Authorities set forth in Schedule
4.4 hereto have been made, and, subject to the NYT Board Approval, except as set
forth in Schedule 4.3 hereto, the execution and delivery by the Seller of this
Agreement and the Operative Agreements, the performance by the Seller of its
obligations hereunder and thereunder, and the consummation by the Seller of the
transactions contemplated hereby and thereby, will not conflict with or violate,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, give rise to any right of termination,
amendment, modification, acceleration or cancellation of any obligation or loss
of any benefit under, result in the creation of any Encumbrance other than a
Permitted Encumbrance on any of the Purchased Assets pursuant to, or require it
to obtain any consent, waiver, approval or action of, make any filing with
(other than filings required by applicable securities Laws or the rules of the
New York Stock Exchange), or give any notice to any Person as a result or under,
the terms and provisions of (i) Seller's Certificate of Incorporation or the
Seller's Bylaws, (ii) any Material Business Contract to which the Seller is a
party or by which any of the Purchased Assets being sold by it are bound, or
(iii) any Law applicable to the Seller or any of the Purchased Assets being sold
by it, or any Governmental Order issued by a Governmental Authority by which the
Seller or any of the Purchased Assets being sold by it is in any way bound or
obligated.
4.4 Government Consents. No consent, waiver, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required on the part of the Seller in
connection with the execution and delivery by the Seller of this Agreement and
the Operative Agreements, the performance by the Seller of its obligations
hereunder and thereunder, and the consummation by the Seller of the transactions
contemplated hereby and thereby, including the sale and transfer of the
Purchased Assets being sold by the Seller to the Purchaser, except any filing or
approval that may be required under the HSR Act, applicable securities Laws or
the rules of the New York Stock Exchange and as set forth in Schedule 4.4
hereto.
4.5 Equipment and Tangible Property.
18
(a) Schedule 4.5(a) hereto contains a list of all equipment and
tangible personal property (except for non-capitalized leased equipment) of the
Seller included in the Purchased Assets and used regularly in and material to
the conduct of the Business that, individually, has a book value in excess of
$25,000. As of the date hereof, the Seller is the sole and exclusive legal and
equitable owner of all equipment and tangible property included by it in the
Purchased Assets, free and clear of all Encumbrances, except Permitted
Encumbrances.
(b) Except for the Excluded Assets, the Purchased Assets constitute
all of the assets in all material respects necessary to conduct the Business
substantially as currently conducted. The tangible Purchased Assets, taken as a
whole, are in good condition (ordinary wear and tear excepted) for property of
comparable type, age and usage.
4.6 Intellectual Property and Proprietary Rights.
(a) Schedule 4.6(a) hereto contains a list of all material
Intellectual Property of the Seller included in the Purchased Assets.
(b) The Seller owns or has a valid right to use all Proprietary
Rights required by the Seller to conduct the operations of the Business
substantially as currently conducted by it, without infringing upon the rights
of any other Person in any material way. To the Knowledge of the Seller, no
other Person is infringing upon its rights in or to any of its Intellectual
Property set forth in Schedule 4.6(a) hereto in any material way.
4.7 Business Contracts.
(a) Schedule 4.7(a) hereto contains a list of the following Business
Contracts of the Seller included by it in the Purchased Assets and material to
the Business as currently conducted by it (each, a "Material Business Contract"
and collectively, the "Material Business Contracts"): (i) Real Property Leases;
(ii) printing, pre-press and distribution agreements; (iii) capital or operating
leases or conditional sales agreements relating to any Purchased Assets (other
than Short Term Agreements), in each case involving annual payments in excess of
$25,000; (iv) noncompetition or other agreements restricting the ability of the
Seller to engage in the Business in any location; (v) employment, consulting,
separation, collective bargaining or other labor agreements; (vi) agreements
under which the Seller is obligated to indemnify, or entitled to indemnification
from, any other Person, other than any agreement that requires indemnification
solely in connection with or as a result of a breach of such agreement; and
(vii) each other Contract or agreement relating exclusively to the Business
and/or any Purchased Assets and involving payments made to or by the Seller that
exceeded in 2000, or are expected to exceed in 2001, $500,000. For all purposes
of and under this Agreement, the term "Short Term Agreement" shall mean an
agreement entered into by the Seller in the ordinary course of business that is
terminable by the Seller upon ninety (90) days or less notice without penalty.
19
(b) Except as set forth in Schedule 4.7(b) hereto, as of the date
hereof, (i) each Material Business Contract represents a valid, binding and
enforceable obligation of the Seller in accordance with the respective terms
thereof and, to its Knowledge, represents a valid, binding and enforceable
obligation of each of the other parties thereto; and (ii) there exists no
material breach or material default (or event that with notice or the lapse of
time, or both, would constitute a material breach or material default) on the
part of the Seller or, to its Knowledge, on the part of any other party under
any Material Business Contract.
4.8 Business Licenses. The Seller owns or possesses all right, title and
interest in and to all material Licenses which are necessary for it to conduct
the Business substantially as currently conducted by it (each, a "Material
Business License" and collectively, the "Material Business Licenses"). Schedule
4.8 hereto contains a list of all Material Business Licenses of the Seller
included in the Purchased Assets. No loss or expiration of any such Material
Business License is pending or, to the Knowledge of the Seller, threatened,
other than the expiration of any such Material Business License in accordance
with the terms thereof which may be renewed in the ordinary course of business.
4.9 Business Employees. Schedule 4.9 hereto lists all employees of the
Seller who, as of the date of this Agreement, have employment duties primarily
related to the Business, including (and designating as such) any such employee
who is an inactive employee on paid or unpaid leave of absence, short-term
disability or long-term disability (but not including retirees), and indicating
the date of employment, current title and compensation. Each employee set forth
in Schedule 4.9 hereto who remains employed by the Seller immediately prior to
the Closing (whether actively or inactively), and each additional employee who
is hired to work primarily in the Business following the date hereof and prior
to the Closing who remains employed by the Seller immediately prior to the
Closing (whether actively or inactively), is referred to herein individually as
a "Business Employee" and collectively, as "Business Employees."
4.10 Employee Benefit Plans.
(a) Schedule 4.10(a) hereto lists each employment, bonus, incentive
compensation, deferred compensation, pension, profit sharing, retirement, stock
purchase, stock option, stock ownership, equity (or equity-based), leave of
absence, vacation, day or dependent care, cafeteria, life, health, medical,
accident, disability, workmen's compensation or other insurance, severance,
change of control or other benefit plan, agreement (including any collective
bargaining agreement), practice, policy or arrangement, whether written or oral,
and whether or not subject to ERISA (including any "employee benefit plan"
within the meaning of Section 3(3) of ERISA), which the Seller or any of its
Affiliates sponsors, maintains, has any obligation to contribute to, has
Liability under or is otherwise a party to as of the date hereof, and which
covers or otherwise provides benefits to the Seller's Business Employees (or
their dependents and beneficiaries) (with respect to their relationship with the
Business) (each, a "Benefit Plan" and, collectively, the "Benefit Plans").
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(b) Each Benefit Plan presently complies, and has been operated, in
all material respects with its terms and all applicable Laws.
(c) Each Benefit Plan that is intended to be tax-qualified under
Section 401(a) of the Internal Revenue Code, has been determined by the IRS to
be so qualified and, to the Knowledge of the Seller, no circumstances have
occurred that would adversely affect the tax-qualified status of any such plan.
(d) No Business Employee participates in a "multiemployer plan" (as
defined in Section 4001(1) of ERISA) as of the date hereof.
4.11 Financial Statements.
(a) Attached as Schedule 4.11(a)-1 hereto are true, correct and
complete copies of the following financial statements (collectively, the
"Financial Statements"): (i) the unaudited statement of assets and liabilities
of the Business (the "Latest Balance Sheet") as of December 31, 2000 (the
"Latest Balance Sheet Date"), (ii) the unaudited statement of assets and
liabilities of the Business as of December 26, 1999 and (iii) the related
unaudited statements of revenues and expenses of the Business for the years
ended December 31, 2000, December 26, 1999, December 27, 1998, December 28, 1997
and December 29, 1996. The Financial Statements were derived from the books and
records of the Business (which are accurate and complete in all material
respects), were prepared (other than for the absence of notes and as set forth
in Schedule 4.1(a)-2 hereto) in accordance with GAAP consistently applied, and,
except as set forth in Schedule 4.1(a)-2 hereto, fairly present, in all material
respects, the financial condition and results of operations of the Business as
of the dates or for the periods, as the case may be, to which they relate.
(b) Seller represents that the amounts set forth in Schedule
4.11(a)-1 were included (without adjustments) in the audited financial
statements of NYT for the fiscal years ended December 26, 1999, December 28,
1998, December 28, 1997 and December 29, 1996, as applicable, which were audited
by Deloitte Touche LLP. As of the date hereof, the Seller is not aware of, and
does not expect, any audit adjustments that will be required to be made to the
amounts set forth in Schedule 4.11(a)-1 for the fiscal year ended December 31,
2000 in connection with their inclusion in the audited financial statements of
NYT for that period; provided, however, that the Purchaser is aware that the
audit of NYT's financial statements for such period has not been completed as of
the date hereof.
(c) Except as set forth in Schedule 4.11 (c), there has been no
change in the Business since the Latest Balance Sheet Date that has resulted in,
or could reasonably be expected to result in, a Material Adverse Effect.
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4.12 Real Property.
(a) Schedule 4.12(a) describes the Owned Real Property, which is all
the real property owned by the Seller and used in the Business. The Seller has
good title to the Owned Real Property held by it, free and clear of all
Encumbrances, except for Permitted Encumbrances.
(b) Schedule 4.12(b) describes the Leased Real Property, which is
all the real property leased to the Seller and used in the Business. The Seller
has not leased any real property as a lessor. To the Knowledge of the Seller,
each Real Property Lease is in full force and effect, and the Seller has not
received any outstanding notice of default from the landlord under such lease.
(c) There are no condemnation or appropriation proceedings or
special assessments pending, or to the Knowledge of the Seller threatened,
against any of the Owned Real Property or, to the Knowledge of the Seller, the
Leased Real Property.
(d) The Seller has adequate rights of ingress and egress with
respect to the Owned Real Property and the Leased Real Property. The Seller's
use of the Owned Real Property and the Leased Real Property does not contravene
or violate any building, zoning, administrative, occupational safety and health
or other applicable Law in any material respect.
4.13 Litigation; Governmental Orders.
(a) Except as set forth in Schedule 4.13 hereto, there are no
pending or, to the Knowledge of the Seller, threatened material Actions by any
Person or Governmental Authority against or relating to the Seller with respect
to the Business or to which any of the Purchased Assets being sold by it are
subject.
(b) The Seller is not subject to or bound by any Governmental Order
other than those which would not reasonably be expected to have a Material
Adverse Effect.
4.14 Compliance with Laws. Except as set forth in Schedule 4.14 hereto, as
of the date hereof the Seller is in compliance with in all material respects,
and the Seller has not received any claim or notice within the last five (5)
years that it is not in compliance with in all material respects, each material
Law or Governmental Order applicable to the Business.
4.15 Environmental Matters. Except as disclosed in Schedule 4.15:
(a) The Seller, and the owners of the Leased Real Property, are in
compliance in all material respects with all Environmental Laws applicable to
the Business as presently conducted.
(b) The Seller holds and is in compliance in all material respects
with all Licenses required under Environmental Laws applicable to the conduct of
the Business as presently conducted by it.
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(c) The Seller has not received any written notice of any Action by
any Person or Governmental Authority alleging a material violation of, material
non-compliance with or material Liability under any Environmental Law relating
to the Business or the Purchased Assets.
(d) There has been no Release of any Hazardous Substance at the
Owned Real Property or Leased Real Property that is in material violation of or
is reasonably likely to lead to any material Liability arising under any
Environmental Law.
(e) The Seller has not transported or arranged for the treatment,
storage, or disposal of any Hazardous Substances to any off-site location in
connection with the Business that has resulted in, or is reasonably likely to
result in, a material Liability to the Seller under applicable Environmental
Laws.
(f) To the Knowledge of the Seller, there are no underground storage
tanks, asbestos, polychlorinated biphenyls, or other Hazardous Substances in,
on, over, under, or at the Purchased Assets.
(g) The Asset Purchase Agreement does not trigger or, will be
effected in compliance with, any Laws requiring environmental investigations,
environmental remediations, or notifications to environmental regulatory
authorities, including, but not limited to, the Connecticut Real Property
Transfer Act.
4.16 Insurance.
(a) The Seller or an Affiliate of the Seller maintains insurance in
respect of the Purchased Assets and the Business covering such risks, in such
amounts, with such terms and with such insurers as the Seller or such Affiliate
has determined is appropriate in light of the Business and consistent with
industry practice (such insurance, the "Business Insurance Policies").
(b) All of the Business Insurance Policies are in full force and
effect. The Seller is not in default with respect to any material provision
contained in any such Business Insurance Policy held by or on behalf of it. The
Seller has not received any notice of cancellation or non-renewal of any such
Business Insurance Policy.
(c) The Seller or an Affiliate thereof maintains, and will maintain
through the Closing Date, "publishers' tort" insurance and such insurance policy
is written on an "occurrence," not a "claims made," basis.
4.17 Transactions with Affiliates. Except as set forth in Schedule 4.17
hereto, no shareholder, officer, director or employee of the Seller or any of
its Affiliates, or any immediate family member of any of the foregoing, has (a)
borrowed money from (other than for reasonable travel expenses arising in
connection with the Business), or loaned money to, the Business which remains
outstanding or (b) any interest in any of the Purchased Assets.
4.18 Taxes.
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(a) With respect to Taxes, other than Income Taxes, relating
primarily to the Business, the Seller has filed or will have filed on a timely
basis all material Tax Returns in connection with any such federal, state or
local Tax required to be filed by it, and the Seller has or will have timely
paid all such Taxes shown thereon to be due except as contested upon audit. None
of the Purchased Assets is subject to any Encumbrance in favor of the United
States pursuant to Section 6321 of the Internal Revenue Code for nonpayment of
federal Taxes, or any lien in favor of any state or locality pursuant to any
comparable provision of state or local Law, under which transferee liability
might be imposed upon the Purchaser as a buyer of such Purchased Assets pursuant
to Section 6323 of the Internal Revenue Code or any comparable provision of
state or local Law.
(b) The Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, partner or other third party.
4.19 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Seller (or an
Affiliate of the Seller) directly with the Purchaser without the intervention of
any Person on behalf of the Seller in such manner as to give rise to any valid
claim by any Person against the Purchaser for a finder's fee, brokerage
commission or similar payment, other than Persons whose fees and expenses shall
be borne by the Seller.
4.20 Absence of Certain Changes. Except as disclosed in Schedule 4.20
hereto, or as contemplated by this Agreement, since the date of the Latest
Balance Sheet, the Business has been conducted only in the ordinary course
substantially consistent with past practice, and there have not been any events,
changes or developments which, individually or in the aggregate, would have a
Material Adverse Effect or prevent the consummation of the transactions
contemplated hereby, other than events relating to the economy in general or
resulting from industry-wide developments affecting companies in similar
businesses or from the disclosure of the transactions contemplated by this
Agreement.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller as follows:
5.1 Organization. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
5.2 Authority. The Purchaser has all requisite corporate power and
authority to enter into and deliver this Agreement and the Operative Agreements
to which it is a party, to perform its obligations hereunder and thereunder, to
consummate the transactions contemplated hereby and thereby, and to assume and
perform the Assumed Liabilities. The execution and delivery by the Purchaser of
this Agreement and the Operative Agreements to which it is a party, the
performance by the Purchaser of its obligations hereunder and thereunder, the
consummation by the Purchaser of the
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transactions contemplated hereby and thereby, and the assumption and performance
of the Assumed Liabilities, have been duly authorized by all necessary corporate
action on the part of the Purchaser. This Agreement has been, and the Operative
Agreements to which the Purchaser is a party shall be, duly executed and
delivered by the Purchaser. Assuming the due authorization, execution and
delivery of this Agreement and the Operative Agreements by the Seller, this
Agreement constitutes, and each of the Operative Agreements to which the
Purchaser is a party (when so executed and delivered) will constitute, a legal,
valid and binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, except as such enforceability may be limited by
principles of public policy, and subject to (i) the effect of any applicable
Laws of general application relating to bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or similar Laws affecting creditors' rights
and relief of debtors generally, and (ii) the effect of rules of Law and general
principles of equity, including rules of Law and general principles of equity
governing specific performance, injunctive relief and other equitable remedies
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
5.3 No Violation; Third Party Consents. Assuming that all consents,
waivers, approvals, orders and authorizations set forth in Schedule 5.4 hereto
have been obtained and all registrations, qualifications, designations,
declarations or filings with any Governmental Authorities set forth in Schedule
5.4 hereto have been made, and except as set forth in Schedule 5.3 hereto, the
execution and delivery by the Purchaser of this Agreement and the Operative
Agreements to which it is a party, the performance by the Purchaser of its
obligations hereunder and thereunder, the consummation by the Purchaser of the
transactions contemplated hereby and thereby, and the assumption and performance
of the Assumed Liabilities, will not conflict with or violate, constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, give rise to any right of termination, amendment,
modification, acceleration or cancellation of any obligation or loss of any
benefit under, result in the creation of any Encumbrance other than a Permitted
Encumbrance on any of the assets or properties of the Purchaser pursuant to, or
require the Purchaser to obtain any consent, waiver, approval or action of, make
any filing with, or give any notice to any Person as a result or under, the
terms or provisions of (i) the certificate of incorporation and by-laws of the
Purchaser, (ii) any Contract to which the Purchaser is a party or is bound, or
(iii) any Law applicable to the Purchaser, or any Governmental Order issued by a
Governmental Authority by which the Purchaser is in any way bound or obligated,
except, in the case of clauses (ii) and (iii) of this Section 5.3, as would not
have a material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement and the Operative Agreements to which it is a
party, to assume and perform the Assumed Liabilities or to consummate on a
timely basis the transactions contemplated hereby or thereby.
5.4 Governmental Consents. No consent, waiver, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required on the part of the Purchaser
in connection with the execution and delivery by the Purchaser of this Agreement
and the Operative Agreements to which it is a party, the performance by the
Purchaser of its obligations hereunder and
25
thereunder, the consummation by the Purchaser of the transactions contemplated
hereby and thereby, the assumption and performance of the Assumed Liabilities,
except (i) any filing or approval that may be required under the HSR Act and as
set forth in Schedule 5.4 hereto, and (ii) where the failure to obtain such
consent, waiver, approval, order or authorization, or to make such registration,
qualification, designation, declaration or filing, would not have a material
adverse effect on the ability of the Purchaser to perform its obligations under
this Agreement, the Operative Agreements to which it is a party, to assume and
perform the Assumed Liabilities or to consummate on a timely basis the
transactions contemplated hereby or thereby.
5.5 Litigation. Except as set forth in Schedule 5.5 hereto, there are no
pending or, to the knowledge of the Purchaser, threatened Actions by any Person
or Governmental Authority against or relating to the Purchaser (or any Affiliate
of the Purchaser) or by which the Purchaser or its assets or properties are or
may be bound which, if adversely determined, would have a material adverse
effect on the ability of the Purchaser to perform its obligations under this
Agreement and the Operative Agreements to which it is a party, to assume and
perform the Assumed Liabilities or to consummate on a timely basis the
transactions contemplated hereby or thereby.
5.6 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Purchaser (or an
Affiliate of the Purchaser) directly with the Seller without the intervention of
any Person on behalf of the Purchaser in such manner as to give rise to any
valid claim by any Person against the Seller for a finder's fee, brokerage
commission or similar payment.
ARTICLE VI.
COVENANTS AND AGREEMENTS
6.1 Conduct of Business. At all times during the period commencing upon
the execution and delivery hereof by each of the parties hereto and terminating
upon the Closing or the termination of this Agreement pursuant to and in
accordance with the terms of Section 9.1 hereof, unless the Purchaser shall
otherwise consent in writing (which consent shall not be unreasonably withheld
or delayed), and except as otherwise set forth in Schedule 6.1 hereto, the
Seller shall (a) conduct the operations of the Business in the ordinary course
of business and substantially consistent with its past practices, (b) use
commercially reasonable efforts to preserve intact the goodwill of the Business
and the current relationships of the Seller with its officers, employees,
customers, suppliers and others with significant and recurring business dealings
with the Business, (c) use commercially reasonable efforts to maintain in effect
all Business Insurance Policies, all Business Contracts and all Business
Licenses held by or on behalf of the Seller that are necessary to carry on the
Business substantially in the manner conducted by it as of the date hereof, (d)
maintain the books of account and records of the Business as conducted by it in
the usual, regular and ordinary manner and substantially consistent with its
past practices, and (e) not knowingly, with intent to breach, take any action
that would result in a breach of or inaccuracy in (in each case as of the
Closing) any of the representations and warranties of the Seller contained in
Article IV hereof.
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6.2 Access and Information. Subject to the terms of the Confidentiality
Agreement, at all times during the period commencing upon the execution and
delivery hereof by each of the parties hereto and terminating upon the Closing
or the termination of this Agreement pursuant to and in accordance with the
terms of Section 9.1 hereof, the Seller shall permit the Purchaser and its
authorized agents and representatives to have reasonable access, upon reasonable
notice and during normal business hours, to the Purchased Assets and all of the
relevant books, records and documents of or relating to the Business and the
Purchased Assets, and shall furnish to the Purchaser such information and data,
financial records and other documents in its possession relating to the Business
and the Purchased Assets as the Purchaser may reasonably request. The Seller
shall permit the Purchaser and its agents and representatives reasonable access
to its accountants for reasonable consultation or verification of any
information obtained by the Purchaser during the course of any investigation
conducted pursuant to this Section 6.2.
6.3 Confidentiality. The terms of the Confidentiality Agreement are hereby
incorporated herein by reference and shall continue in full force and effect
from the date hereof until the Closing in accordance with the terms thereof,
such that the information obtained by the Purchaser, or its officers, employees,
agents or representatives, during any investigation conducted pursuant to
Section 6.2 hereof, in connection with the negotiation, execution and
performance of this Agreement, the consummation of the transactions contemplated
hereby, or otherwise, shall be governed by the terms set forth in the
Confidentiality Agreement; provided, however, that in the event of the
termination of this Agreement, the terms of the Confidentiality Agreement
incorporated herein by reference shall survive indefinitely.
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6.4 Further Actions.
(a) Upon the terms and subject to the conditions set forth in this
Agreement (including the terms of Section 6.4(b) hereof), the Seller and the
Purchaser shall each use their respective commercially reasonable efforts to
take, or cause to be taken, all appropriate action, and to do, or cause to be
done, and to assist and cooperate with the other parties hereto in doing, all
things necessary, proper or advisable under applicable Laws to consummate the
transactions contemplated hereby, including, without limitation: (i) obtaining
all necessary Licenses, actions or nonactions, waivers, consents or approvals,
authorizations, qualifications and other orders of any Governmental Authorities
with competent jurisdiction over the transactions contemplated hereby, (ii)
obtaining all necessary consents, approvals or waivers from third parties
(subject to the first proviso in Section 2.5), (iii) defending any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby, including
seeking to have vacated or reversed any stay or temporary restraining order
entered by any Governmental Authority prohibiting or otherwise restraining the
consummation of the transactions contemplated hereby, and (iv) executing and
delivering any additional instruments, certificates and other documents
necessary or advisable to consummate the transactions contemplated hereby and to
fully carry out the purposes of this Agreement.
(b) Without limiting the generality of the foregoing, the Seller and
the Purchaser hereby agree to provide promptly to Governmental Authorities with
regulatory jurisdiction over enforcement of any applicable antitrust laws all
information and documents requested by any such Governmental Authorities or
necessary, proper or advisable to permit consummation of the transactions
contemplated hereby, and to file any Notification and Report Form and related
material required under the HSR Act as soon as practicable after the date
hereof. The Seller and the Purchaser shall each thereafter take all necessary
steps to complete as soon as practicable its compliance with any requests for
additional information or documentary material that may be made under the HSR
Act. The Purchaser and the Seller hereby further agree to take all necessary
steps to (i) obtain any governmental clearances required for consummation of the
transactions contemplated hereby, (ii) respond to any government request for
information, (iii) contest and resist any action, including any legislative,
administrative or judicial action, and have vacated, lifted, reversed or
overturned, any Governmental Order (whether temporary, preliminary or permanent)
that restricts, prevents or prohibits the consummation of the transactions
contemplated hereby, including by using all legal efforts to vigorously pursue
all available avenues of administrative and judicial appeal and all available
legislative action, and (iv) in the event that any permanent or preliminary
injunction or other order is entered or becomes reasonably foreseeable to be
entered in any proceeding that would make consummation of the transactions
contemplated hereby in accordance with the terms of this Agreement unlawful or
that would prohibit, prevent, delay or otherwise restrain the consummation of
the transactions contemplated hereby, contest the same in order to have the
relevant Governmental Authorities vacate, modify or suspend such injunction or
order so as to permit the consummation of the transactions contemplated hereby
prior to the Termination Date.
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6.5 Fulfillment of Conditions by the Seller. The Seller shall not
knowingly take or cause to be taken, or knowingly fail to take or cause to be
taken, any action that would cause the conditions to the obligations of the
Seller or the Purchaser to consummate the transactions contemplated hereby to
not be satisfied or fulfilled at or prior to the Closing.
6.6 Fulfillment of Conditions by the Purchaser. The Purchaser shall not
knowingly take or cause to be taken, or knowingly fail to take or cause to be
taken, any action that would cause the conditions to the obligations of the
Seller or the Purchaser to consummate the transactions contemplated hereby to
fail to be satisfied or fulfilled at or prior to Closing.
6.7 Publicity. The Seller and the Purchaser shall cooperate with each
other in the development and distribution of all news releases and other public
disclosures relating to the transactions contemplated by this Agreement. Prior
to the Closing, neither the Seller nor the Purchaser shall issue or make, or
allow to have issued or made, any press release or public announcement
concerning the transactions contemplated by this Agreement without the consent
of the other party hereto, except as otherwise required by applicable Law or the
rules of any applicable stock exchange, but in any event only after giving the
other parties hereto a reasonable opportunity to comment on such release or
announcement in advance, consistent with such applicable legal requirements.
6.8 Transaction Costs. The Purchaser shall pay all transaction costs and
expenses (including any HSR filing fee, legal, accounting and other professional
fees and expenses) that it incurs in connection with the negotiation, execution
and performance of this Agreement and the consummation of the transactions
contemplated hereby. The Seller shall pay all transaction costs and expenses
(including legal, accounting and other professional fees and expenses) that it
incurs in connection with the negotiation, execution and performance of this
Agreement and the consummation of the transactions contemplated hereby. The
Purchaser and the Seller shall each pay one-half of any and all transfer Taxes
(including sales, use and real property transfer Taxes) and the fees and costs
of recording or filing all applicable conveyancing instruments associated with
the transfer of the Purchased Assets from the Seller to the Purchaser pursuant
to this Agreement. The Seller and the Purchaser shall cooperate in the
preparation, execution and filing of all Tax Returns regarding any transfer
Taxes which become payable as a result of the transfer of the Purchased Assets
from the Seller to the Purchaser pursuant to this Agreement and/or shall
cooperate to seek an available exemption from such Taxes.
6.9 Employees and Employee Benefit Matters.
(a) The Purchaser shall offer employment as of the Closing Date to
all Business Employees except as set forth on Schedule 6.9. As of the Closing
Date, the Purchaser shall employ each such Business Employee who accepts the
Purchaser's offer of employment ("Transferred Employees") at a compensation
level (including salary, bonuses and commissions) that is generally comparable
in the aggregate, and on terms and conditions (and with employee benefits
(including benefits of the type described in Section 3(1) of ERISA)) that are
generally comparable in the aggregate, as those
29
provided by the Seller (or any Affiliate thereof) until at least the first
anniversary of the Closing Date. The Purchaser shall provide each Transferred
Employee credit for years of service with the Seller (or its Affiliates) prior
to the Closing for the purpose of eligibility, vesting and coverage (but not for
purposes of benefit accrual under defined benefit plans) under the Purchaser's
health (including post-retirement welfare benefit coverage), vacation,
severance, sick leave and other employee benefit plans and policies. In the
event that as a result of the Purchaser's termination of the employment of
Transferred Employees after the Closing Date, or for any other reason, the
requirements under the Worker Adjustment and Retraining Notification Act, as
amended ("WARN"), are triggered, the Purchaser shall be responsible for all
financial obligations arising as a result thereof. In addition, the Purchaser
acknowledges and agrees that any decisions respecting the termination of the
employment of Transferred Employees after the Closing Date shall be solely the
responsibility of the Purchaser and the Purchaser shall not consult with or rely
upon the Seller, its Affiliates or their respective agents in making any such
determination.
(b) Without limiting the scope of Section 6.9(a), the Purchaser
shall cause each Transferred Employee (and his or her eligible dependents) to be
covered immediately following the Closing, until the first anniversary of the
Closing Date, by group health plans that provide health benefits (within the
meaning of Section 5000(b)(1) of the Internal Revenue Code) on terms and
conditions that are substantially similar to those provided under the group
health plans in which the Transferred Employee participated immediately prior to
the Closing, provided that such group health plans (i) do not limit or exclude
coverage on the basis of any pre-existing condition of such Transferred Employee
or his or her dependents and (ii) provide such Transferred Employee full credit
for the year during which the Closing occurs for any deductible already incurred
by the Transferred Employee and his or her dependents under such group health
plans and with any other out-of-pocket expenses that count against any maximum
out-of-pocket expense provision of such group health plans.
(c) If any Transferred Employee is eligible to take any accrued but
unused vacation time pursuant to the vacation policy applicable to such
Transferred Employee immediately prior to Closing and such Liability is
reflected on the Closing Balance Sheet, the Purchaser shall allow such
Transferred Employee to use such accrued vacation, or to receive payment
thereafter upon termination of employment to the extent such payment would have
been made under the Seller's vacation policy.
(d) From the Closing Date until the first anniversary of the Closing
Date, if the Purchaser (or an Affiliate thereof) terminates the employment of a
Transferred Employee with the Purchaser (or an Affiliate thereof) for any reason
that would have given rise to the payment of a severance payment under The New
York Times Company Severance Pay Plan, as set forth on Schedule 4.10(a), the
Purchaser shall provide a severance package to such Transferred Employee
containing severance benefits at least equal to those that would have been paid
under The New York Times Company Severance Pay Plan. For purposes of the
preceding sentence, such Transferred Employee will receive credit for service
performed for the Seller (or its Affiliates) prior to the
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Closing Date, and service performed for the Purchaser after the Closing Date, in
connection with the determination of such severance benefit.
(e) The Seller agrees to cooperate with the Purchaser in filing any
applications and forms related to employment Taxes, including annual Form W-2s
and applications for transfer of unemployment experience history.
6.10 Retention of and Access to Records. From and after the Closing, for a
period of six (6) years the Purchaser shall preserve all Books and Records
transferred by the Seller to the Purchaser pursuant to this Agreement. Upon the
expiration of such six (6) year period, the Purchaser shall provide the Seller a
reasonable opportunity to obtain copies, at the Seller's expense, of any of such
Books and Records. As soon as practicable following the Closing, the Purchaser
shall deliver to the Seller such financial information relating to the Business
in sufficient detail to enable the Seller to prepare its financial statements,
the Statement of Working Capital and all Tax Returns of the Seller relating to
periods ending on or prior to the Closing Date. In addition to the foregoing,
from and after the Closing, the Purchaser shall afford to the Seller, and its
counsel, accountants and other authorized agents and representatives, during
normal business hours, reasonable access to the employees, Books and Records and
other data relating to the Purchased Assets, the Assumed Liabilities, the
Transferred Employees and the Excluded Liabilities in its possession with
respect to periods prior to the Closing, and the right to make copies and
extracts therefrom, to the extent that such access may be reasonably required by
the requesting party (a) to facilitate the investigation, litigation and final
disposition of any claims which may have been or may be made against any such
party or Person, or its Affiliates, (b) for the preparation of Tax Returns and
audits, and (c) for any other reasonable business purpose.
6.11 Notification of Certain Matters. In the event that the Seller
notifies the Purchaser or the Purchaser otherwise has Knowledge (in which case
it agrees to promptly notify the Seller) on or prior to the Closing Date of any
breach of any representation or warranty of the Seller that but for this Section
6.11 would entitle the Purchaser to not consummate the Closing (whether due to
facts or events occurring subsequent to the execution of this Agreement or facts
or events that existed on the date hereof), unless the Seller determines to cure
such breach and such breach is cured by the Seller on or prior to the Closing
Date, (x) to the extent the aggregate cost of remedying such breach is less than
or equal to $25,000,000, the Purchaser shall consummate the Closing with a
reduction of the Cash Payment by such cost; or (y) if the cost of remedying such
breach exceeds $25,000,000, the Purchaser may terminate this Agreement in
accordance with Section 9.1 hereof; or (z) if such breach is not reasonably
subject to meaningful quantification but constitutes a Material Adverse Effect,
the Purchaser may terminate this Agreement in accordance with Section 9.1(d). In
any case, notwithstanding anything in this Agreement to the contrary, whether
the Purchaser terminates this Agreement or proceeds to consummate the Closing,
the Purchaser shall be deemed to have waived any and all rights, remedies or
other recourse against the Seller to which the Purchaser might otherwise be
entitled in respect of such breach.
31
6.12 Fulfillment of Current Subscriptions. The Purchaser agrees, as a
representative of the Seller, to discharge all of the Seller's obligations and
liabilities for the fulfillment of current subscriptions to the Magazines, to
the extent such obligations and liabilities remain unperformed or unfulfilled
on, or by their terms continue in effect after the Closing Date, substantially
consistent with the Seller's past practices, and in accordance with the terms
and conditions set forth in the Subscription Fulfillment Agreement.
ARTICLE VII.
CLOSING CONDITIONS
7.1 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or fulfillment at or prior to the Closing of the
following conditions, any of which may be waived in whole or in part by the
Purchaser in writing:
(a) All representations and warranties of the Seller contained in
this Agreement shall be true and correct at and as of the Closing with the same
effect as though such representations and warranties were made at and as of the
Closing (other than any representation or warranty that is expressly made as of
a specified date, which shall be true and correct as of such specified date
only) except where the failure to be so true and correct, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect.
(b) The Seller shall have performed and complied in all material
respects with all the covenants and agreements required by this Agreement to be
performed or complied by it at or prior to the Closing.
(c) All applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated.
(d) There shall be in effect no Law or injunction issued by a court
of competent jurisdiction making illegal or otherwise prohibiting or restraining
the consummation of the transactions contemplated by this Agreement.
(e) The Seller shall have delivered to the Purchaser all of the
certificates, instruments and other documents required to be delivered by it at
or prior to the Closing pursuant to Section 3.2 hereof, including the Required
Consents, and shall have made the payment required by the Subscription
Fulfillment Agreement.
(f) The NYT Board Approval shall have been obtained.
7.2 Conditions to Obligations of the Seller. The obligations of the Seller
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction or fulfillment at or prior to the Closing of the following
conditions, any of which may be waived in whole or in part by the Seller in
writing:
32
(a) All representations and warranties of the Purchaser contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing with the same effect as though such representations and warranties
were made at and as of the Closing (other than any representation or warranty
that is expressly made as of a specified date, which shall be true and correct
in all material respects as of such specified date only).
(b) The Purchaser shall have performed and complied in all material
respects with the covenants and agreements required by this Agreement to be
performed or complied with at or prior to the Closing.
(c) All applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated.
(d) There shall be in effect no Law or injunction issued by a court
of competent jurisdiction making illegal or otherwise prohibiting or restraining
the consummation of the transactions contemplated by this Agreement.
(e) The Purchaser shall have delivered to the Seller the Cash
Payment (as it may be adjusted based on the Estimated Working Capital pursuant
to Section 2.3(b)(ii)), the Subscription Liability Payment and all of the
certificates, instruments and other documents required to be delivered by the
Purchaser at or prior to the Closing pursuant to Section 3.3 hereof.
(f) The NYT Board Approval shall have been obtained.
ARTICLE VIII.
INDEMNIFICATION
8.1 Survival. The representations and warranties made by any party and
contained in or made pursuant to this Agreement shall expire on the date which
is one (1) year after the Closing Date; provided however, that if written notice
is properly given under this Article VIII with respect to any alleged breach of
a representation and warranty to which such party is entitled to be indemnified
hereunder prior to the applicable expiration date, such representation and
warranty shall continue to survive (with respect to the subject matter of such
written notice only) until the applicable claim is finally resolved.
8.2 Indemnification by the Purchaser. (a) After the Closing, the Purchaser
agrees to indemnify the Seller, its Affiliates and their respective officers,
directors, employees and representatives (each, a "Seller Indemnified Party")
against and hold them harmless from and reimburse them for all losses, damages,
liabilities and expenses, including reasonable attorneys' fees (collectively,
"Damages") which such Seller Indemnified Party may at any time sustain or incur
as a result of or arising out of:
33
(i) the breach of any representation or warranty of the
Purchaser herein or the breach of any covenant of the Purchaser herein which is
to be performed on or before the Closing Date;
(ii) the breach of any covenant or agreement of the Purchaser
contained herein which is to be performed after the Closing Date; and
(iii) the Assumed Liabilities.
8.3 Indemnification by the Seller. (a) After the Closing, the Seller
agrees to indemnify the Purchaser, its Affiliates and their respective officers,
directors, employees and representatives (each, a "Purchaser Indemnified Party")
against and hold them harmless from and reimburse them for all Damages which
such Purchaser Indemnified Party may at any time sustain or incur as a result of
or arising out of:
(i) the breach of any representation or warranty of the Seller
herein or breach of any covenant of the Seller herein which is to be performed
on or before the Closing Date;
(ii) the breach of any covenant or agreement of the Seller
contained herein which is to be performed after the Closing Date; and
(iii) the Excluded Liabilities (including any Damages arising
under Environmental Laws, arising from acts, omissions or conditions occurring
or in existence at the Owned Real Property or the Leased Real Property or in
connection with the Business on or prior to the Closing Date, but subject to
Section 8.8).
8.4 Notification of Claims.
(a) A party entitled to be indemnified pursuant to Section 8.2 or
8.3 (the "Indemnified Party") shall promptly notify the party or parties liable
for such indemnification (the "Indemnifying Party") in writing of any claim or
demand which the Indemnified Party has determined has given or could give rise
to a right of indemnification under this Agreement (a "Notice of Claim");
provided, however, that a delay or failure to provide such notice shall not
relieve any Indemnifying Party of its obligations except to the extent that it
has been prejudiced by such delay or failure. Any Notice of Claim (i) shall
state (with reasonable specificity) the basis on which indemnification is being
asserted, (ii) shall set forth the amount of Damages for which indemnification
is being asserted, and (iii) in the case of third party claims, shall be
accompanied by copies of all relevant pleadings, demands and other papers served
on the Indemnified Party.
(b) If the Indemnified Party shall notify the Indemnifying Party of
any claim or demand pursuant to Section 8.2 or 8.3 asserted by a third party,
the Indemnifying Party shall have the right (i) to employ counsel of its choice
to defend any such claim or demand asserted against the Indemnified Party, (ii)
to control and conduct any proceedings or negotiations in connection therewith
and necessary or appropriate to defend the Indemnified Party and (iii) to take
all other steps or proceedings to settle or
34
defend any such claims, provided that in the case of any settlement that
provides for any relief other than the payment of monetary damages as to which
the Indemnified Party will be indemnified in full, such settlement may only be
made with the prior written consent of the Indemnified Party, which consent will
not be unreasonably withheld or delayed. The Indemnifying Party shall notify the
Indemnified Party in writing, as promptly as possible after receipt of the
Notice of Claim (but in any case within 30 days of receipt by the Indemnifying
Party of a Notice of Claim or such earlier time necessary to reasonably allow a
timely response to the claim (the "Indemnity Notice Period")) of its election to
defend any such third party claim or demand. In the event that the Indemnifying
Party does assume the defense as provided above, the Indemnified Party shall
have the right to participate in such defense (including without limitation,
with counsel of its choice), at its own expense, and the Indemnifying Party
shall reasonably cooperate with the Indemnified Party in connection with such
participation. If the Indemnifying Party does not deliver to the Indemnified
Party written notice within the Indemnity Notice Period that the Indemnifying
Party will assume the defense of any such claim or litigation resulting
therefrom, the Indemnified Party may defend against any such claim or litigation
in such manner as it may deem appropriate, at the cost of the Indemnified Party,
provided that the Indemnified Party shall not settle any such claim or
litigation without the prior written consent of the Indemnifying Party, which
consent will not be unreasonably withheld or delayed. In the event that the
Indemnifying Party does not assume the defense as provided above, the
Indemnifying Party shall have the right to participate in such defense
(including without limitation, with counsel of its choice), at its own expense,
and the Indemnified Party shall reasonably cooperate with the Indemnifying Party
in connection with such participation, and in all cases the Indemnified Party
shall keep the Indemnifying Party reasonably informed as to all matters
concerning such third party claim and shall promptly notify the Indemnifying
Party in writing of any and all significant developments relating thereto.
(c) In the event that a Notice of Claim hereunder does not involve a
third party claim, the Indemnifying Party shall, within 30 days after the date
of receipt of a Notice of Claim, respond in writing to the Indemnified Party
(the "Indemnity Response") and set forth with reasonable specificity those
items, if any, in the Notice of Claim to which the Indemnifying Party does not
agree as well as the basis upon which such disagreement is founded. Within 30
days following the receipt of the Indemnity Response by the Indemnified Party,
representatives of the Indemnifying Party and the Indemnified Party shall meet
to attempt to resolve through good faith negotiations the applicable disputed
matters. The parties shall negotiate in good faith for up to 30 days in an
attempt to reach a settlement of any disputed matter. In the event that such
good faith negotiations are unsuccessful or in the event of any other dispute
under this Article VIII, the parties may proceed in court to adjudicate the
dispute pursuant to the provisions of this Agreement.
8.5 Limitations.
(a) Notwithstanding anything herein to the contrary, no Indemnifying
Party shall have any obligation to indemnify any Indemnified Parties pursuant to
Sections 8.2(a)(i) or 8.3(a)(i), and no Indemnified Party shall make a claim
pursuant to Sections
35
8.2(a)(i) or 8.3(a)(i), unless the aggregate amount of Damages sustained or
incurred with respect to all claims pursuant to Section 8.2(a)(i) or Section
8.3(a)(i), as the case may be, exceeds $4,000,000 (the "Deductible") and then
only to the extent of such excess up to (but not in excess of) a maximum
aggregate indemnity for such Damages payable by the Purchaser pursuant to
Section 8.2(a)(i) or the Seller pursuant to Section 8.3(a)(i), as the case may
be, of an amount equal to $50,000,000 (the "Cap").
(b) Notwithstanding anything herein to the contrary, payments by the
Indemnifying Party pursuant to Section 8.2 or 8.3 shall be limited to the amount
of Damages, if any, that remains after deducting therefrom (i) any insurance
proceeds and any indemnity, contribution or other similar payment actually
recovered by the Indemnified Parties from any third party with respect thereto,
(ii) any provision or reserve provided for the item in question in the Statement
of Working Capital and (iii) any adjustments to the Purchase Price paid pursuant
to Section 2.3(b) in respect of the item in question, provided that any amount
deducted pursuant to any one of the foregoing subsections (i) through (iii)
shall not be also deducted pursuant to any of the other subsections of this
Section 8.5(b).
(c) The Seller shall have no liability under any provision of this
Agreement for any Damages to the extent, but only to the extent, that such
Damages relate to actions taken or omitted to be taken by the Purchaser or any
of its Affiliates after the Closing Date to the extent the Purchaser had
Knowledge that its actions taken or omitted to be taken could reasonably be
expected to give rise to Damages, and in no event shall the Seller be liable for
punitive or consequential damages.
(d) Notwithstanding any other provision of this Agreement, the
Purchaser acknowledges that the obligation of the Seller to provide
indemnification for Damages arising out of Section 8.3 extends only to the
Purchaser Indemnified Parties, and that the Seller shall not be obligated to
provide such indemnification to any other Persons.
8.6 Treatment of Indemnity Benefits. All payments made by the Seller or
the Purchaser, as the case may be, to or for the benefit of the other pursuant
to any indemnification obligations under this Agreement shall be treated as
adjustments to the Purchase Price for Tax purposes and such agreed treatment
shall govern for purposes of this Agreement.
8.7 Exclusive Remedy. The parties hereto hereby acknowledge and agree that
the sole and exclusive remedy of the Purchaser Indemnified Parties and the
Seller Indemnified Parties, as the case may be, from and after the Closing with
respect to Damages and any and all claims for any breach or liability under this
Agreement or any of the Operative Agreements or otherwise relating to the
subject matter of this Agreement and the Operative Agreements and the
transactions contemplated hereby and thereby shall be solely in accordance with,
and limited by, the indemnification provisions set forth in this Article VIII.
In furtherance of the foregoing, the Purchaser and the Seller hereby waive on
their own behalf and on behalf of each other applicable Indemnified Party, to
the fullest extent permitted under applicable Law, any and all rights, claims
and causes of action it or they may have against the Seller or the Purchaser, as
the case may
36
be, arising under or based upon any Federal, state or local Law, rule or
regulation (including without limitation, (i) any such rights, claims or causes
of action arising under or based upon common law or otherwise and (ii) any and
all claims for Damages or contribution arising under any Environmental Law or
securities Laws).
8.8 Remediation Projects. Each remediation project under Environmental
Laws for which the Purchaser shall seek indemnification under Section
8.3(a)(iii) (each, a "Remediation Project") shall be planned, conducted, and
supervised by environmental consultants of recognized standing selected by the
Purchaser and reasonably acceptable to the Seller (the "Consultants"). The
Purchaser agrees to consult with the Seller in connection with all Remediation
Projects and that any Remediation Project shall be limited to measures that are
reasonably determined by the Consultants to be applicable to property used for
commercial and/or industrial purposes.
ARTICLE IX.
TERMINATION
9.1 Termination. This Agreement and the transactions contemplated hereby
may be terminated and abandoned:
(a) by the mutual consent of the Seller and the Purchaser;
(b) unless the Closing has not occurred as a result of a breach of
this Agreement by the party seeking such termination, by either the Seller or
the Purchaser if the Closing has not occurred on or prior to 5:00 p.m. (New York
time) on the date which is 180 days following the date of this Agreement (the
"Termination Date");
(c) by either the Seller or the Purchaser if any Governmental
Authority with jurisdiction over such matters shall have issued a final and
nonappealable Governmental Order permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement;
provided, however, that neither the Seller nor the Purchaser may terminate this
Agreement pursuant to this Section 9.1(c) unless the party seeking to so
terminate this Agreement has complied with Section 6.4(b); or
(d) by the Purchaser in accordance with the provisions of Section
6.11 hereof.
9.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1 hereof, this Agreement shall become null and void and none of the
parties hereto shall have any further liability hereunder except that (i) the
provisions of Sections 6.3, 6.7 and 6.8 and Article IX and X generally shall
remain in full force and effect, and (ii) each party hereto shall remain liable
to the each other party hereto for any willful breach of its obligations under
this Agreement prior to such termination.
37
ARTICLE X.
MISCELLANEOUS
10.1 Notices. All notices, requests, demands, claims and other
communications that are required or may be given pursuant to this Agreement must
be in writing and delivered personally against written receipt, by a recognized
overnight delivery service, by telecopy or by registered or certified mail,
return receipt requested, postage prepaid, to the parties at the following
addresses (or to the attention of such other Person or such other address as any
party may provide to the other parties by notice in accordance with this Section
10.1):
if to the Purchaser, to: with copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Advance Magazine Publishers Inc. ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
Four Times Square ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
if to the Seller, to:
c/o The New York Times Company
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Any such notice or other communication will be deemed to have been given (i) if
personally delivered, when so delivered, against written receipt, (ii) if sent
by a nationally recognized overnight delivery service which guarantees next day
delivery, one (1) Business Day after being so sent, (iii) if given by
telecopier, once such notice or other communication is transmitted to the
facsimile number specified above and the appropriate answer back or telephonic
confirmation is received, provided that such notice or other communication is
promptly thereafter delivered in accordance with the provisions of clauses (i),
(ii) or (iv) hereof, or (iv) if mailed by registered or certified mail, return
receipt requested, postage prepaid and addressed to the intended recipient as
set forth above, five (5) Business Days after being so mailed. Any notice,
request, demand, claim or other communication given hereunder using any other
means (including ordinary mail or electronic mail) shall not be deemed to have
been duly given unless and until such notice, request, demand, claim or other
communication actually is received by the individual for whom it is intended.
10.2 Attorneys' Fees and Costs. If attorneys' fees or other costs are
incurred to secure performance of any obligations hereunder, or to establish
damages for the breach thereof or to obtain any other appropriate relief,
whether by way of prosecution or defense, the prevailing party will be entitled
to recover reasonable attorneys' fees and costs incurred in connection
therewith.
38
10.3 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned or delegated by the Seller or the
Purchaser without the prior written consent of the other parties and any
purported assignment or delegation in violation hereof shall be null and void
except for assignments and transfers by operation of Law; provided that the
Purchaser may assign its rights, interest and obligations under this Agreement,
in whole or in part, to any Person that is a wholly-owned direct or indirect
Subsidiary of the Purchaser Guarantor (provided that the Purchaser shall not be
released from its obligations hereunder).
10.4 Amendments and Waiver; Exclusive Remedies. This Agreement may not be
modified or amended except in writing signed by the party or parties against
whom enforcement is sought. The terms of this Agreement may be waived only by a
written instrument signed by the party or parties waiving compliance. No waiver
of any provision of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise provided. No delay on the part
of any party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
Whenever this Agreement requires or permits consent by or on behalf of a party,
such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this Section 10.4. The
rights and remedies herein provided shall be the exclusive rights and remedies
available to the parties hereto at law or in equity.
10.5 Entire Agreement. This Agreement and the related documents contained
as Exhibits and Schedules hereto or expressly contemplated hereby (including the
Operative Agreements) contain the entire understanding of the parties relating
to the subject matter hereof and supersede all prior written or oral and all
contemporaneous oral agreements and understandings relating to the subject
matter hereof. The Exhibits and Schedules to this Agreement are hereby
incorporated by reference into and made a part of this Agreement for all
purposes. Disclosures included in any Schedule shall be considered disclosures
for all Schedules.
10.6 Representations and Warranties Exclusive. The representations,
warranties, covenants and agreements set forth in this Agreement and the
Operative Agreements constitute all the representations, warranties, covenants
and agreements of the parties hereto and their respective shareholders,
directors, officers, employees, affiliates, advisors (including financial, legal
and accounting), agents and representatives and upon which the parties have
relied. In particular, and without in any way limiting the generality of the
foregoing, the Purchaser acknowledges and agrees that, in making its decision to
purchase the Purchased Assets, it is not relying on (a) any information or
materials, oral or written, distributed or made available to the Purchaser by an
Person prior to the date hereof other than matters set forth in this Agreement,
including the Schedules and/or the Operative Agreements or (b) any financial
projection, forecast or business plan relating to the Business. With respect to
any projection, forecast or business plan delivered by or on behalf of the
Seller to the Purchaser, the Purchaser
39
acknowledges that (i) there are uncertainties inherent in attempting to make
such projections, forecasts and plans, (ii) it is familiar with such
uncertainties, (iii) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections, forecasts and
plans so furnished to it, and (iv) it shall have no claim of any kind whatsoever
against any Person with respect thereto.
10.7 No Third Party Beneficiary. This Agreement is made for the sole
benefit of the parties hereto, and their respective successors, executors and
permitted assigns, and nothing contained herein, express or implied, is intended
to or shall confer upon any other Person any third party beneficiary right or
any other legal or equitable rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement (except to the extent that
certain third parties are expressly covered by the indemnity herein).
10.8 Governing Law. This Agreement will be governed by and construed and
interpreted in accordance with the substantive Laws of the State of New York,
without giving effect to any conflicts of Law, rule or principle that might
require the application of the Laws of another jurisdiction.
10.9 Neutral Construction. The parties to this Agreement agree that this
Agreement was negotiated fairly between them at arms' length and that the final
terms of this Agreement are the product of the parties' negotiations. Each party
represents and warrants that it has sought and received legal counsel of its own
choosing with regard to the contents of this Agreement and the rights and
obligations affected hereby. The parties agree that this Agreement shall be
deemed to have been jointly and equally drafted by them, and that the provisions
of this Agreement therefore should not be construed against a party or parties
on the grounds that the party or parties drafted or was more responsible for
drafting the provision(s).
10.10 Severability. In the event that any one or more of the provisions or
parts of a provision contained in this Agreement shall for any reason be held to
be invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement or any other jurisdiction, but this
Agreement shall be reformed and construed in any such jurisdiction as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained herein and such provision or part shall be reformed so that it
would be valid, legal and enforceable to the maximum extent permitted in such
jurisdiction, provided that any such reform or construction does not affect the
economic or legal substance of the transactions contemplated hereby in a manner
adverse to any party.
10.11 Bulk Sales Laws. The parties hereby waive compliance with the Bulk
Sales Laws of any State in which the Purchased Assets are located or in which
operations relating to the Business are conducted.
10.12 Heading; Interpretation; Schedules and Exhibits. The descriptive
headings of the several Articles and Sections of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement. References to
Sections or Articles, unless
40
otherwise indicated, are references to Sections and Articles of this Agreement.
The word "including" means including without limitation. Words (including
defined terms) in the singular shall be held to include the plural and vice
versa and words of one gender shall be held to include the other gender as the
context requires. The terms "hereof," "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole (including all of the Schedules and Exhibits hereto) and
not to any particular provision of this Agreement unless otherwise specified. It
is understood and agreed that neither the specifications of any dollar amount in
this Agreement nor the inclusion of any specific item in the Schedules or
Exhibits is intended to imply that such amounts or higher or lower amounts, or
the items so included or other items, are or are not material, and no party
shall use the fact of setting of such amounts or the fact of the inclusion of
such item in the Schedules or Exhibits in any dispute or controversy between the
parties as to whether any obligation, item or matter is or is not material for
purposes hereof.
10.13 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (II) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER
VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.13.
10.14 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, each of which shall be
deemed an original and all of which together will constitute one and the same
instrument.
10.15 Guaranty. Advance Publications, Inc., the corporate parent of the
Purchaser (the "Purchaser Guarantor"), hereby guarantees to the Seller, as a
primary obligor, payment and performance by the Purchaser of its obligations
under this Agreement and under each of the Operative Agreements to which it is a
party (including without limitation, all amendments hereof and thereof), in each
case subject to the terms, conditions and limitations hereof and thereof. The
Purchaser Guarantor hereby waives suretyship defenses, demand, payment, protest
and notice of dishonor or nonperformance of any such obligations, and no consent
of the Purchaser Guarantor shall be required with respect to any amendment or
waiver of this Agreement (other than this Section 10.15) or any Operative
Agreements that is effected in accordance with this Agreement or the
41
Operative Agreements, as the case may be. The liability of the Purchaser
Guarantor under this Agreement and the Operative Agreements by reason of this
Section 10.15 is primary, and the Seller shall not be required to make any
demand on the Purchaser for performance of any of its obligations under this
Agreement or the Operative Agreements, nor to exhaust any legal, contractual or
equitable remedies against the Purchaser, prior to proceeding against the
Purchaser Guarantor.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the date first above written.
THE NEW YORK TIMES COMPANY
MAGAZINE GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
ADVANCE MAGAZINE PUBLISHERS INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇, Jr.
-------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇, Jr.
Title: President
ADVANCE PUBLICATIONS, INC.
(Solely for purposes of Section 10.15)
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇, Jr.
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Name: ▇. ▇. ▇▇▇▇▇▇▇▇, Jr.
Title: Chairman
SCHEDULE A
Golf Digest
Golf Digest Woman
Golf World
Golf World Business