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EXHIBIT 2.1
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 27, 1998
AMONG
▇▇▇▇ ELSEVIER U.S. HOLDINGS INC.,
▇▇▇▇ ELSEVIER OVERSEAS BV,
CBM ACQUISITION PARENT CO.,
CBM MERGERSUB CORP.,
THE TIMES MIRROR COMPANY,
TMD, INC.
AND
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INCORPORATED
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TABLE OF CONTENTS
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ARTICLE 1 THE MERGER...........................................................................................3
SECTION 1.1. The Merger.....................................................................3
SECTION 1.2. Effective Time.................................................................3
SECTION 1.3. Closing of the Merger..........................................................4
SECTION 1.4. Effects of the Merger..........................................................4
SECTION 1.5. Certificate of Incorporation and Bylaws........................................4
SECTION 1.6. Directors......................................................................4
SECTION 1.7. Officers ......................................................................4
SECTION 1.8. Conversion of Shares...........................................................4
(a) Merger Consideration.............................................4
(b) Conversion of Stock of MergerSub.................................5
(c) Cancellation of Treasury Shares..................................5
SECTION 1.9. No Appraisal Rights............................................................5
SECTION 1.10. Exchange of Certificates......................................................5
(a) Delivery of Certificates Representing Merger Consideration.......5
(b) Delivery of Certificates Representing Shares.....................5
(c) Effect of Exchange...............................................5
ARTICLE 2 CONDITIONS TO CLOSING................................................................................6
SECTION 2.1. Conditions to All Parties' Obligations.........................................6
(a) HSR Act; Other Governmental Approvals............................6
(b) No Order.........................................................6
(c) Certain Agreements...............................................6
(d) Closing Under the Partnership Interest Purchase Agreement........6
SECTION 2.2. Conditions to the ▇▇▇▇ Parties' Obligations....................................7
(a) Representations, Warranties and Covenants........................7
(b) Certificates of Good Standing....................................7
(c) Resolutions......................................................7
(d) Third-Party Consents.............................................8
(e) Legal Opinion....................................................8
SECTION 2.3. Exception to the Conditions to the ▇▇▇▇ Parties' Obligations...................8
SECTION 2.4. Conditions to TM Parties' Obligations..........................................8
(a) Representations, Warranties and Covenants........................8
(b) Certificates of Good Standing....................................9
(c) Resolutions......................................................9
(d) Third-Party Consents.............................................9
(e) Lease Guaranty...................................................9
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(f) Legal Opinions..................................................9
SECTION 2.5. Substitution Transaction......................................................10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF MB................................................................10
SECTION 3.1. Organization and Good Standing of MB..........................................10
SECTION 3.2. Authority ....................................................................11
SECTION 3.3. No Breach ....................................................................11
SECTION 3.4. Consents and Approvals........................................................11
SECTION 3.5. Capital Stock of MB...........................................................11
SECTION 3.6. Equity Interests..............................................................12
(a) Equity Interests................................................12
(b) Organization and Good Standing of Subsidiaries..................12
(c) Capitalization of Subsidiaries..................................12
SECTION 3.7. Financial Statements..........................................................12
(a) Audited Financial Statements....................................12
(b) Unaudited March 31, 1998 Financial Statements...................13
SECTION 3.8. INTENTIONALLY OMITTED.........................................................13
SECTION 3.9. Assets Other Than Real Property...............................................13
SECTION 3.10. Real Property................................................................14
(a) Owned Property..................................................14
(b) Leased Property.................................................14
(c) Title to Real Property..........................................14
SECTION 3.11. Intellectual Property........................................................14
(a) Trademarks......................................................14
(b) Copyrights......................................................14
(c) Licenses........................................................15
(d) Claims..........................................................15
SECTION 3.12. Contracts ...................................................................15
(a) Employment, Independent Contractor and Consulting
Agreements...................................................15
(b) Collective Bargaining Agreements................................15
(c) Non-Competition Agreements......................................15
(d) Agreements with Officers, Directors or Employees................16
(e) Leases of Real Property.........................................16
(f) Personal Property Leases........................................16
(g) Supply and Service Agreements...................................16
(h) Indebtedness....................................................16
(i) Guarantees......................................................16
(j) Partnerships and Joint Ventures.................................16
(k) Author Contracts................................................16
(l) Other Agreements................................................17
SECTION 3.13. Litigation; Decrees..........................................................17
SECTION 3.14. Employee and Related Matters; ERISA..........................................17
(a) Plans...........................................................17
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(b) Compliance with ERISA and the Code..............................18
(c) Multiemployer Plan Liabilities..................................18
(d) Accumulated Funding Deficiencies; Liens.........................18
(e) Employee Welfare Benefit Plans..................................19
SECTION 3.15. Absence of Changes or Events.................................................19
SECTION 3.16. Compliance with Applicable Laws..............................................19
(a) General.........................................................19
(b) Hazardous Materials.............................................19
(c) Notices of Certain Environmental Matters........................19
(d) Definitions.....................................................19
SECTION 3.17. Taxes .......................................................................20
(a) Tax Returns and Taxes...........................................20
(b) Tax Claims......................................................20
(c) Definitions.....................................................20
SECTION 3.18. Employee and Labor Relations.................................................21
SECTION 3.19. Working Capital..............................................................21
SECTION 3.20. Transition Services Agreements...............................................21
(a) ▇▇▇▇▇ Transition Services Agreement.............................21
(b) TM Transition Services Agreement................................21
(c) MB Transition Services Agreement................................21
SECTION 3.21. Intercompany Liabilities.....................................................22
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF TIMES MIRROR AND TMD..............................................22
SECTION 4.1. Organization and Good Standing of Times Mirror and TMD........................22
(a) As to Times Mirror..............................................22
(b) As to TMD.......................................................22
SECTION 4.2. Authority ....................................................................22
(a) As to this Agreement............................................22
(b) As to the LLC Agreement........................................23
SECTION 4.3. No Breach ....................................................................23
SECTION 4.4. Consents and Approvals........................................................23
SECTION 4.5. Title to and Transfer of the Shares...........................................23
SECTION 4.6. INTENTIONALLY OMITTED.........................................................23
SECTION 4.7. Brokers ......................................................................23
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE ▇▇▇▇ PARTIES..................................................24
SECTION 5.1. Organization and Good Standing of the ▇▇▇▇ Parties............................24
(a) As to REUS and REBV.............................................24
(b) As to MB Parent.................................................24
(c) As to MergerSub.................................................24
SECTION 5.2. Authority ....................................................................24
(a) As to this Agreement............................................24
(b) As to the LLC Agreement.........................................25
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SECTION 5.3. No Breach ....................................................................25
(a) As to this Agreement............................................25
(b) As to the LLC Agreement.........................................25
SECTION 5.4. Consents and Approvals........................................................25
SECTION 5.5. Funding ......................................................................26
SECTION 5.6. Brokers ......................................................................26
SECTION 5.7. No Prior Activities...........................................................26
ARTICLE 6 COVENANTS OF THE TM PARTIES.........................................................................26
SECTION 6.1. Delivery of Interim Financial Statements......................................26
SECTION 6.2. Access .......................................................................26
SECTION 6.3. Ordinary Conduct..............................................................27
(a) Charter and Bylaws..............................................27
(b) Dividends.......................................................27
(c) Capital Stock...................................................27
(d) Employee Matters................................................27
(e) Compensation....................................................27
(f) Indebtedness....................................................28
(g) Encumbrances....................................................28
(h) Cancellation of Indebtedness....................................28
(i) Related-Party Transactions......................................28
(j) Accounting Policies.............................................28
(k) Reorganizations.................................................28
(l) Capital Expenditures............................................28
(m) Asset Dispositions..............................................28
(n) Certain Litigation..............................................29
(o) Agreements......................................................29
SECTION 6.4. Insurance ....................................................................29
SECTION 6.5. Year 2000 Software............................................................29
SECTION 6.6. Confidentiality Following Effective Time......................................29
SECTION 6.7. GLS ..........................................................................29
ARTICLE 7 COVENANTS OF THE ▇▇▇▇ PARTIES.......................................................................30
SECTION 7.1. INTENTIONALLY OMITTED.........................................................30
SECTION 7.2. Certain Pre-Effective Time Transactions.......................................30
(a) Issuance of MergerSub Common Stock and MergerSub
Preferred Stock..............................................30
(b) Issuance of MB Parent Preferred Stock...........................30
(c) Issuance of MB Parent Common Stock..............................31
(d) Contribution to LLC.............................................31
SECTION 7.3. Confidentiality...............................................................31
SECTION 7.4. No Additional Representations.................................................31
SECTION 7.5. Action Contrary to Tax-Free Treatment.........................................31
SECTION 7.6. Guaranty of Performance by REUS...............................................31
SECTION 7.7. Enforceability of LLC Agreement...............................................32
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SECTION 7.8. MergerSub Debt................................................................32
SECTION 7.9. Formation of LLC..............................................................32
ARTICLE 8 MUTUAL COVENANTS....................................................................................32
SECTION 8.1. Cooperation...................................................................32
SECTION 8.2. Publicity ....................................................................32
SECTION 8.3. Antitrust Notification........................................................32
SECTION 8.4. Records ......................................................................33
SECTION 8.5. Closing Balance Sheet; Closing Financial Reporting (FDC) Package..............34
(a) Closing Balance Sheet...........................................34
(b) Closing Financial Reporting (FDC) Package.......................34
SECTION 8.6. Further Assurances............................................................34
SECTION 8.7. Reasonable Best Efforts.......................................................34
ARTICLE 9 TERMINATION; AMENDMENT; WAIVER......................................................................35
SECTION 9.1. Termination...................................................................35
SECTION 9.2. INTENTIONALLY OMITTED.........................................................36
SECTION 9.3. Return of Confidential Information............................................36
SECTION 9.4. Effects of Termination........................................................36
ARTICLE 10 EMPLOYEE AND RELATED MATTERS.......................................................................36
SECTION 10.1. Continuation of Employment...................................................36
(a) Employment......................................................36
(b) No Termination..................................................37
(c) WARN Act and Other Matters......................................37
SECTION 10.2. Continuation of Plans........................................................37
SECTION 10.3. Acquiror's and Surviving Corporation Benefit Responsibilities................37
SECTION 10.4. Times Mirror 401(k) Plan Interests...........................................38
SECTION 10.5. Times Mirror ESOP............................................................38
SECTION 10.6. Times Mirror Defined Benefit Plan............................................38
SECTION 10.7. Coverage of Certain Welfare Benefits Through Effective Time..................39
SECTION 10.8. Indemnification for Certain Matters..........................................38
(a) Indemnification by Times Mirror.................................39
(b) Indemnification by Acquiror.....................................39
(c) Cooperation.....................................................40
(d) No Inference....................................................40
(e) Relationship to Section 2.3 and Article 11......................40
SECTION 10.9. Mutual Cooperation...........................................................40
SECTION 10.10. Certain Definitions.........................................................40
ARTICLE 11 INDEMNIFICATION....................................................................................41
SECTION 11.1. Tax Indemnification by Times Mirror..........................................41
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SECTION 11.2. Other Indemnification by Times Mirror........................................42
SECTION 11.3. Indemnification by Acquiror..................................................42
SECTION 11.4. Losses Net of Insurance......................................................42
SECTION 11.5. Termination of Indemnification...............................................42
SECTION 11.6. Procedures Relating to Indemnification (Except Under Section 11.1)...........43
SECTION 11.7. Procedures Relating to Indemnification of Tax Claims.........................44
(a) Notice of Tax Claim............................................44
(b) Control of Proceedings.........................................44
SECTION 11.8. Exclusive Remedy.............................................................44
ARTICLE 12 TAX MATTERS........................................................................................45
SECTION 12.1. Taxes .......................................................................45
(a) Returns and Payments............................................45
(b) Transfer Taxes..................................................45
SECTION 12.2. Cooperation..................................................................45
SECTION 12.3. Tax Sharing Agreements.......................................................45
SECTION 12.4. FIRPTA ......................................................................45
ARTICLE 13 MISCELLANEOUS......................................................................................46
SECTION 13.1. Expenses ....................................................................46
SECTION 13.2. Attorneys' Fees..............................................................46
SECTION 13.3. Assignment...................................................................46
SECTION 13.4. No Third-Party Beneficiaries.................................................46
SECTION 13.5. Notices .....................................................................46
SECTION 13.6. Counterparts.................................................................47
SECTION 13.7. Entire Agreement.............................................................48
SECTION 13.8. Severability.................................................................48
SECTION 13.9. Amendment ...................................................................48
SECTION 13.10. Extension; Waiver...........................................................48
SECTION 13.11. Dispute Resolution..........................................................48
(a) Accounting Disputes.............................................48
(b) Other Disputes..................................................48
SECTION 13.12. Interpretation of this Agreement............................................49
(a) Construction....................................................49
(b) Knowledge.......................................................49
(c) Governing Law...................................................50
(d) Headings, Exhibits and Schedules................................50
(e) Representation By Counsel; Interpretation.......................50
SECTION 13.13. Survival of Representations.................................................50
SECTION 13.14. Adjustments.................................................................50
SECTION 13.15. No Consequential or Punitive Damages........................................51
SECTION 13.16. Amendment and Restatement..................................................51
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TABLE OF EXHIBITS
Exhibit A........................................................Restated Certificate of Incorporation of MB Parent
Exhibit B........................................................Restated Certificate of Incorporation of MergerSub
Exhibit C...........................................................Certificate of Formation of Liberty ▇▇▇▇ I, LLC
Exhibit D................................................Limited Liability Company Agreement of Liberty ▇▇▇▇ I, LLC
Exhibit E..........................................................................MB Parent Stockholders Agreement
Exhibit F..............................................................Surviving Corporation Shareholders Agreement
Exhibit G...................................................................Partnership Interest Purchase Agreement
Exhibit H.............................Matters to be Covered by Opinion of Legal Counsel to Times Mirror, TMD and MB
Exhibit I............................................................................................Lease Guaranty
Exhibit J......................................................Matters to be Covered by Opinion of Legal Counsel to
Acquiror, MB Parent and MergerSub
Exhibit K.......................................................................▇▇▇▇▇ Transition Services Agreement
Exhibit L..........................................................................TM Transition Services Agreement
Exhibit M..........................................................................MB Transition Services Agreement
TABLE OF SCHEDULES
3.1 MB Foreign Jurisdictions 3.14(c) Multiemployer Plans
3.3 MB Conflicts 3.14(e) Employee Welfare Benefit Plans
3.6 MB Subsidiaries 3.15 Changes or Events
3.7(a) MB Audited Financial Statements 3.17(a) Tax Returns and Taxes
3.7(b) MB Unaudited Financial Statements 3.17(b) Tax Claims
3.9 Certain Liens 3.18 Employee and Labor Relations
3.10(a) Owned Property 6.3 Ordinary Conduct
3.10(b) Leased Property 6.4 MB Insurance Policies
3.11(a) Intellectual Property 10.3 Severance Benefits
3.11(b) Top 100 Publications
3.11(c) Licenses
3.11(d) Claims
3.12 Contract Defaults
3.12(a) Employment, etc. Agreements
3.12(b) Collective Bargaining Agreements
3.12(c) Non-Competition Agreements
3.12(d) Agreements with Officers, Directors or
Employees
3.12(e) Leases of Real Property
3.12(f) Personal Property Leases
3.12(g) Supply and Service Agreements
3.12(h) Indebtedness
3.12(I) Guarantees
3.12(j) Partnerships and Joint Ventures
3.12(k) Author Contracts
3.12(l) Other Agreements
3.13 Litigation; Decrees
3.14(a) Plans
3.14(b) Compliance with ERISA and Code
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TABLE OF DEFINED TERMS
Cross Reference
Term in Agreement Page
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Acquiror.....................................................................Preamble.............................1
Acquiror Entity..............................................................Section 10.8(a).....................35
Acquiror Material Adverse Effect.............................................Section 5.1(a)......................22
Acquiror Retirement Plan.....................................................Section 10.6........................35
Agreement....................................................................Preamble.............................1
Audited Financial Statements.................................................Section 3.7(a)......................11
Author.......................................................................Section 3.12(k).....................15
Closing......................................................................Section 1.3..........................3
Closing Balance Sheet........................................................Section 8.5.........................30
Closing Date.................................................................Section 1.3..........................3
Code.........................................................................Recitals.............................3
Confidentiality Agreement....................................................Section 6.2.........................24
Contracts....................................................................Section 3.13........................14
DOJ..........................................................................Section 8.3.........................29
Effective Time...............................................................Section 1.2..........................3
Enforceability Exceptions....................................................Section 3.2.........................10
Environmental Law............................................................Section 3.16(d)(ii).................18
ERISA........................................................................Section 3.14(b).....................16
ERISA Affiliate..............................................................Section 3.14(a).....................16
Existing Merger Agreement....................................................Recitals.............................1
FTC..........................................................................Section 8.3.........................29
GAAP.........................................................................Section 3.7.........................11
Hazardous Material...........................................................Section 3.16(d)(i)..................18
HSR Act......................................................................Section 2.1(a).......................5
Income Taxes.................................................................Section 11.1........................37
indemnified party............................................................Section 11.6........................38
Intellectual Property Right..................................................Section 3.11(d).....................13
IRS..........................................................................Section 12.1(a).....................40
Leased Properties............................................................Section 3.10(b).....................12
LLC..........................................................................Recitals.............................2
LLC Agreement................................................................Recitals.............................2
LLC Certificate of Formation.................................................Recitals.............................2
Losses.......................................................................Section 2.3..........................7
MB...........................................................................Preamble.............................1
MB Balance Sheet.............................................................Section 3.7.........................11
MB Employee..................................................................Section 10.10.......................36
MB Material Adverse Effect...................................................Section 3.1..........................9
MB Net Working Capital Deficit...............................................Section 3.19........................19
MB Parent Certificate of Incorporation.......................................Recitals.............................1
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Cross Reference
Term in Agreement Page
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MB Parent Common Stock.......................................................Recitals.............................2
MB Parent Preferred Stock....................................................Recitals.............................2
MB Parent Stockholders Agreement.............................................Section 2.1(c).......................6
MB Parent....................................................................Preamble.............................1
MB Personnel.................................................................Section 10.10.......................36
MB Plan......................................................................Section 3.14(a).....................16
MB Retirees..................................................................Section 10.10.......................36
MB Transition Services Agreement.............................................Section 3.20(a).....................19
Merger Certificate...........................................................Section 1.2..........................3
Merger Consideration.........................................................Section 1.8(a).......................4
Merger.......................................................................Section 1.1..........................3
MergerSub Certificate of Incorporation.......................................Recitals.............................1
MergerSub Common Stock.......................................................Recitals.............................1
MergerSub Debt...............................................................Recitals.............................2
MergerSub Participating Preferred Stock......................................Recitals.............................1
MergerSub Preferred Stock....................................................Recitals.............................1
MergerSub....................................................................Preamble.............................1
▇▇▇▇▇ Transition Services Agreement..........................................Section 3.20(a).....................19
NYBCL........................................................................Section 1.1..........................3
Other Taxes..................................................................Section 11.1........................37
Owned Properties.............................................................Section 3.10(a).....................12
Partnership Interest Purchase Agreement......................................Section 2.1(d).......................6
Permitted Liens..............................................................Section 3.9.........................12
Plans........................................................................Section 3.14(a).....................16
Real Properties..............................................................Section 3.10(b).....................12
REBV.........................................................................Preamble.............................1
Records......................................................................Section 8.4(a)......................30
▇▇▇▇ Parties.................................................................Preamble.............................1
Renegotiation Period.........................................................Section 2.5..........................9
Revision Date................................................................Section 2.5..........................9
Share or Shares..............................................................Section 1.8(a).......................4
Subsidiary...................................................................Section 3.6(b)......................11
Substitution Transaction.....................................................Section 2.5..........................9
Surviving Corporation........................................................Section 1.1..........................3
Surviving Corporation Shareholders Agreement.................................Section 2.1(c).......................6
Tax or Taxes.................................................................Section 3.17(c)(i)..................18
Tax Claim....................................................................Section 11.7........................39
Tax Return...................................................................Section 3.17(c)(ii).................19
Third-Party Claim............................................................Section 11.6........................39
Times Mirror.................................................................Preamble.............................1
Times Mirror 401(k) Plan.....................................................Section 10.4........................34
Times Mirror Entity..........................................................Section 10.8(a).....................35
Times Mirror ESOP............................................................Section 10.5........................35
Times Mirror Plan............................................................Section 3.14(a).....................16
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Cross Reference
Term in Agreement Page
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TM Transition Services Agreement.............................................Section 3.20(b).....................19
TMD..........................................................................Preamble.............................1
Top 100 Publications.........................................................Section 3.11(b).....................13
Trademarks...................................................................Section 3.11(a).....................13
Unaudited Financial Statements...............................................Section 3.7(b)......................12
Voting Power.................................................................Recitals.............................1
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this
"Agreement") dated as of April 27, 1998 is among THE TIMES MIRROR COMPANY, a
Delaware corporation, ("Times Mirror"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INCORPORATED,
a New York corporation and an indirect wholly owned subsidiary of Times Mirror
("MB"), TMD, INC., a Delaware corporation ("TMD" and together with Times Mirror
and MB, the "TM Parties"), ▇▇▇▇ ELSEVIER U.S. HOLDINGS INC., a Delaware
corporation ("REUS"), ▇▇▇▇ ELSEVIER OVERSEAS BV, a private limited liability
company incorporated under the laws of the Kingdom of the Netherlands ("REBV"
and together with REUS, "Acquiror"), CBM ACQUISITION PARENT CO., a Delaware
corporation and a subsidiary of Acquiror ("MB Parent"), and CBM MERGERSUB CORP.,
a New York corporation ("MergerSub" and, together with Acquiror and MB Parent,
the "▇▇▇▇ Parties").
WHEREAS, the TM Parties, Acquiror, MB Parent and CBM Acquisition Corp.
have entered into an Agreement and Plan of Merger dated as of April 26, 1998
(the "Existing Merger Agreement");
WHEREAS, the TM Parties and the ▇▇▇▇ Parties desire to amend and
restate the Existing Merger Agreement on the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, in anticipation of the Merger (as defined in Section 1.1), MB
Parent will file a Restated Certificate of Incorporation of MB Parent,
substantially in the form attached hereto as Exhibit A (the "MB Parent
Certificate of Incorporation") with the Secretary of State of the State of
Delaware;
WHEREAS, in anticipation of the Merger, MergerSub will file a Restated
Certificate of Incorporation of MergerSub substantially in the form attached
hereto as Exhibit B (the "MergerSub Certificate of Incorporation") with the
Secretary of State of the State of New York;
WHEREAS, immediately prior to the Effective Time (as defined below), in
consideration of an amount in cash equal to $1,375,000,000 less the net proceeds
received by MergerSub from the MergerSub Debt (as defined below) from REUS and
REBV, MergerSub will issue to REUS (i) seven hundred and ninety-two (792) shares
of Common Stock, par value $.01 per share, of MergerSub ("MergerSub Common
Stock"), which MergerSub Common Stock will have 16% of the voting power of all
of the outstanding shares of capital stock entitled to vote in an election of
directors ("Voting Power") and such other designations, preferences, voting
powers, rights and qualifications as are set forth in the MergerSub Certificate
of Incorporation, (ii) 75% of the authorized shares of Nonvoting Participating
Preferred Stock, par value $.01 per share, of MergerSub ("MergerSub
Participating Preferred Stock"), and (iii) 75% of the authorized shares of
Voting Preferred Stock, par value $.01 per share, of MergerSub ("MergerSub
Preferred Stock"), which MergerSub Preferred Stock will have 60% of the Voting
Power and such other designations, preferences, voting powers, rights and
qualifications as are set forth in the MergerSub Certificate of Incorporation
and MergerSub will issue to REBV (i) one hundred and
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ninety-eight (198) shares of MergerSub Common Stock, which MergerSub Common
Stock will have 4% of the Voting Power and such other designations, preferences,
voting powers, rights and qualifications as are set forth in the MergerSub
Certificate of Incorporation, (ii) 25% of the authorized shares of MergerSub
Participating Preferred Stock, which MergerSub Participating Preferred Stock
will have no Voting Power and such other designations, preferences, voting
powers, rights and qualifications as are set forth in the MergerSub Certificate
of Incorporation and (iii) 25% of the authorized shares of MergerSub Preferred
Stock, which MergerSub Preferred Stock will have 20% of the Voting Power and
such other designations, preferences, voting powers, rights and qualifications
as are set forth in the MergerSub Certificate of Incorporation;
WHEREAS, immediately prior to the Effective Time (as defined in Section
1.3), MergerSub will borrow $600,000,000 on terms not inconsistent with the
terms set forth in Section 7.8 ("MergerSub Debt") from an affiliate of Acquiror;
WHEREAS, immediately prior to the Effective Time, in consideration for
75% of the authorized and outstanding shares of MergerSub Preferred Stock and
75% of the authorized and outstanding shares of MergerSub Participating
Preferred Stock held by REUS, MB Parent will issue to REUS 75% of the authorized
shares of Voting Preferred Stock, par value $.01 per share, of MB Parent ("MB
Parent Preferred Stock"), which MB Parent Preferred Stock will have 60% of the
Voting Power and such other designations, preferences, voting powers, rights and
qualifications as are set forth in the MB Parent Certificate of Incorporation;
WHEREAS, immediately prior to the Effective Time, in consideration for
25% of the authorized and outstanding shares of MergerSub Preferred Stock and
25% of the authorized and outstanding shares of MergerSub Participating
Preferred Stock held by REBV, MB Parent will issue to REBV 25% of the MB Parent
Preferred Stock, which MB Parent Preferred Stock will have 20% of the Voting
Power and such other designations, preferences, voting powers, rights and
qualifications as set forth in the MB Parent Certificate of Incorporation;
WHEREAS, immediately prior to the Effective Time, in consideration for
$1,375,000,000, MB Parent will issue to MergerSub 100% of the authorized shares
of Common Stock, par value $.01 per share, of MB Parent ("MB Parent Common
Stock"), which MB Parent Common Stock will have 20% of the Voting Power and such
other designations, preferences, voting powers, rights and qualifications as are
set forth in the MB Parent Certificate of Incorporation;
WHEREAS, in anticipation of the Merger, MB Parent will cause Liberty
▇▇▇▇ I, LLC, a single-member Delaware limited liability company ("LLC") to be
formed under the laws of the State of Delaware prior to the Effective Time by
filing with the Secretary of State of the State of Delaware the Certificate of
Formation of LLC which is attached hereto in the form filed as Exhibit C (the
"LLC Certificate of Formation");
WHEREAS, in anticipation of the Merger, MB Parent, an affiliate of MB
Parent and Times Mirror will enter into the Limited Liability Company Agreement
of LLC pursuant to which the affiliate of MB Parent shall be appointed the
initial manager of LLC and, immediately
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after the Effective Time, Times Mirror shall be appointed the manager of LLC, in
the form attached hereto as Exhibit D (the "LLC Agreement");
WHEREAS, immediately after the Effective Time, in accordance with the
terms of the LLC Agreement, MB Parent will make a contribution to LLC in the
amount of $1,375,000,000;
WHEREAS the Boards of Directors of Times Mirror, TMD, MB, Acquiror, MB
Parent and MergerSub have each (i) determined that the Merger is fair and in the
best interests of their respective stockholders and (ii) approved the Merger in
accordance with this Agreement; and
WHEREAS for federal income tax purposes it is intended that the Merger
qualify as a reorganization under the provisions of Section 368 of the Internal
Revenue Code of 1986 as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and
intending to be legally bound hereby, Times Mirror, TMD, MB, Acquiror, MB Parent
and MergerSub hereby agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1. The Merger. At the Effective Time (as defined in Section
1.3) and upon the terms and subject to the conditions of this Agreement and in
accordance with the New York Business Corporation Law (the "NYBCL"), MergerSub
shall be merged with and into MB (the "Merger"). Following the Merger, MB shall
continue as the surviving corporation (the "Surviving Corporation") and the
separate corporate existence of MergerSub shall cease. The Merger is intended to
qualify as a tax-free reorganization under Section 368 of the Code.
SECTION 1.2. Effective Time. Subject to the terms and conditions set
forth in this Agreement, a Certificate of Merger in form and substance complying
with all applicable provisions of the NYBCL (the "Merger Certificate") shall be
duly executed and acknowledged by MB and MergerSub and thereafter delivered to
the Secretary of State of the State of New York for filing pursuant to the NYBCL
on the Closing Date (as defined in Section 1.3). The Merger shall become
effective at such time as a properly executed and certified copy of the Merger
Certificate is duly filed with the Secretary of State of the State of New York
in accordance with the NYBCL or such later time as Times Mirror and Acquiror may
agree upon and cause to be set forth in the Merger Certificate (the time the
Merger becomes effective being referred to herein as the "Effective Time").
SECTION 1.3. Closing of the Merger. The closing of the Merger and the
other transactions contemplated by this Agreement (the "Closing") will take
place at a time which shall be at 9:00 AM (effective as of the preceding 12:00
midnight) and on a date (the "Closing Date") which shall be on the first
business day of the calendar month following the month during which satisfaction
or waiver of the conditions set forth in Section 2.1 at the offices of ▇▇▇▇▇▇,
▇▇▇▇ &
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▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless another time,
date or place is agreed to in writing by the parties hereto.
SECTION 1.4. Effects of the Merger. The Merger shall have the effects
set forth in the NYBCL. Without limiting the generality of the foregoing and
subject thereto, at the Effective Time, all the properties, rights, privileges,
powers and franchises of MB and MergerSub shall vest in the Surviving
Corporation and all debts, liabilities and duties of MB and MergerSub (including
any debts, liabilities and duties arising under this Agreement after the
Effective Time) shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.5. Certificate of Incorporation and Bylaws. The Certificate
of Incorporation of MergerSub in effect at the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation until amended in
accordance with applicable law. The Bylaws of MergerSub in effect at the
Effective Time shall be the Bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 1.6. Directors. The directors of MergerSub at the Effective
Time shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation until such director's successor is duly elected or
appointed and qualified.
SECTION 1.7. Officers. The officers of MergerSub at the Effective Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation until such officer's successor is duly elected or appointed and
qualified.
SECTION 1.8. Conversion of Shares.
(a) Merger Consideration. At the Effective Time, each share of
common stock, par value $100.00 per share, of MB (individually a "Share" and
collectively the "Shares") issued and outstanding immediately prior to the
Effective Time (other than Shares held in MB's treasury or by any of MB's
Subsidiaries), all of which are owned by TMD, shall, by virtue of the Merger and
without any action on the part of MergerSub, MB or the holder thereof, be
converted into and shall become the right to receive a number of the fully paid
and nonassessable shares of MB Parent Common Stock held by MergerSub immediately
prior to the Effective Time equal to a fraction, the numerator of which is the
number of shares of MB Parent Common Stock held by MergerSub immediately prior
to the Effective Time and the denominator of which is the number of Shares
outstanding immediately prior to the Effective Time (the "Merger
Consideration").
(b) Conversion of Stock of MergerSub. At the Effective Time
(i) each outstanding share of the MergerSub Common Stock shall be converted into
one share of common stock, par value $.01 per share, of the Surviving
Corporation, having designations, preferences, voting powers, rights and
qualifications identical to those of the MergerSub Common Stock, (ii) each
outstanding share of the MergerSub Participating Preferred Stock shall be
converted into one share of nonvoting participating preferred stock, par value
$.01 per share, of the Surviving Corporation, having designations, preferences,
voting powers, rights and
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qualifications identical to those of the MergerSub Participating Preferred Stock
and (iii) each outstanding share of MergerSub Preferred Stock shall be converted
into one share of preferred stock, par value $.01 per share, of the Surviving
Corporation, having designations, preferences, voting powers, rights and
qualifications identical to those of the MergerSub Preferred Stock.
(c) Cancellation of Treasury Shares. At the Effective Time,
each Share held in the treasury of MB or by any Subsidiary of MB immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of MergerSub, MB or the holder thereof, be canceled, retired
and cease to exist and no Merger Consideration shall be delivered with respect
thereto.
SECTION 1.9. No Appraisal Rights. The holders of Shares shall not be
entitled to appraisal rights.
SECTION 1.10. Exchange of Certificates.
(a) Delivery of Certificates Representing Merger
Consideration. At the Effective Time, MergerSub shall deliver to TMD for
exchange in accordance with this Article 1, certificates representing the number
of shares of MB Parent Common Stock issuable pursuant to Section 1.8 in exchange
for certificates representing outstanding Shares.
(b) Delivery of Certificates Representing Shares. At the
Effective Time, TMD shall deliver to MergerSub for cancellation in accordance
with this Article 1 certificates representing the Shares.
(c) Effect of Exchange. All shares of MB Parent Common Stock
issued upon the surrender of certificates representing Shares in accordance with
the terms hereof shall be deemed, to the fullest extent permitted by applicable
law, to have been issued in full satisfaction of all rights pertaining to such
Shares, and after the Effective Time there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the Shares
which were outstanding immediately prior to the Effective Time.
ARTICLE 2
CONDITIONS TO CLOSING
SECTION 2.1. Conditions to All Parties' Obligations. The respective
obligations of the parties hereto to consummate the Merger shall be subject to
the satisfaction (or waiver by each party) as of the Effective Time of the
following conditions:
(a) HSR Act; Other Governmental Approvals. Any waiting period
applicable to the consummation of the Merger contemplated under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act") shall have expired or have been
terminated, and any other notice or approvals to or of any federal, state or
foreign governmental authority with respect to the Merger shall have been either
filed or received.
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(b) No Order. No federal, state or foreign governmental
authority or other agency or commission or court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order (whether temporary, preliminary or
permanent) which remains in effect, and which has the effect of making the
transactions contemplated hereby illegal or otherwise prohibiting consummation
of the transactions contemplated by this Agreement.
(c) Certain Agreements. (i) Acquiror, MB Parent, TMD and Times
Mirror each will have executed and delivered a stockholders' agreement with
respect to MB Parent, substantially in the form attached hereto as Exhibit E
(the "MB Parent Stockholders Agreement"), (ii) MB Parent shall have adopted
bylaws in form and substance reasonably satisfactory to the parties hereto and
not inconsistent with the terms of this Agreement, (iii) Acquiror, MB Parent and
MergerSub each will have executed and delivered a shareholders' agreement with
respect to MergerSub, substantially in the form attached hereto as Exhibit F
(the "Surviving Corporation Shareholders Agreement") and (iv) MergerSub shall
have adopted bylaws in form and substance reasonably satisfactory to the parties
hereto and not inconsistent with the terms of this Agreement and (v) MB Parent
and Times Mirror shall have executed and delivered the LLC Agreement.
(d) Closing Under the Partnership Interest Purchase Agreement.
All of the conditions to the consummation of the transactions contemplated by
the Partnership Interest Purchase Agreement of even date herewith by and among
Times Mirror, TM ShepCo, Inc., ▇▇▇▇▇▇▇'▇ Inc., ▇▇▇▇ Books Inc. and ▇▇▇▇ Elsevier
Inc., a copy of which is attached hereto as Exhibit G (the "Partnership Interest
Purchase Agreement"), shall have been satisfied or waived and the closing
thereunder shall have taken place concurrently with the closing hereunder.
SECTION 2.2. Conditions to the ▇▇▇▇ Parties' Obligations. The
obligations of the ▇▇▇▇ Parties to consummate the Merger are subject to the
satisfaction (or waiver by each of the ▇▇▇▇ Parties) as of the Effective Time of
the following conditions:
(a) Representations, Warranties and Covenants. Subject to
Section 2.3, the representations and warranties of each of the TM Parties made
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and, except as specifically contemplated by this
Agreement, on and as of the Closing Date, as though made on and as of the
Closing Date, and each of the TM Parties shall have performed or complied with,
or shall have caused to be performed or complied with, in all material respects
all obligations and covenants required by this Agreement to be performed or
complied with by the TM Parties or any affiliate of Times Mirror by the time of
the Closing; and the ▇▇▇▇ Parties shall have received from each of the TM
Parties a certificate dated the Closing Date and signed by an authorized officer
of each of the TM Parties confirming the foregoing.
(b) Certificates of Good Standing. The ▇▇▇▇ Parties shall have
received (i) from each of the TM Parties certificates as to the TM Parties
issued by the appropriate governmental authority of the state of incorporation
of each of the TM Parties, (ii) from MB certificates as to MB issued by the
appropriate governmental authority of each of the states set
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forth on Schedule 3.1, (iii) from MB certificates as to each of the corporations
and other entities set forth on Schedule 3.6 issued by the appropriate
governmental authority of each of the jurisdictions or states of incorporation
or organization of such corporations or other entities and (iv) from Times
Mirror a certificate as to LLC issued by the appropriate governmental authority
of the jurisdiction of formation of LLC, in each case evidencing such
corporation or other entity's good standing in such jurisdiction or state as of
a date not more than ten days prior to the Closing Date.
(c) Resolutions. The ▇▇▇▇ Parties shall have received (i) from
MB certified copies of resolutions duly adopted by the Board of Directors of MB
authorizing the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, (ii) from TMD certified
copies of resolutions duly adopted by the Board of Directors of TMD authorizing
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby and (iii) from Times Mirror certified
copies of resolutions duly adopted by the Board of Directors of Times Mirror
authorizing the execution, delivery and performance of this Agreement and of the
LLC Agreement and the consummation of the transactions contemplated hereby and
thereby, and all such resolutions shall not have been revoked and shall remain
in full force and effect.
(d) Third-Party Consents. The TM Parties shall have obtained
in writing any third-party consents required under any of the Contracts
indicated by an asterisk on Schedule 3.3.
(e) Legal Opinion. The ▇▇▇▇ Parties shall have received the
opinion of legal counsel to the TM Parties, in form and substance reasonably
satisfactory to each of them, substantially in the form attached hereto as
Exhibit H.
SECTION 2.3. Exception to the Conditions to the ▇▇▇▇ Parties'
Obligations. The language of Section 2.2 notwithstanding, the conditions to the
obligations of the ▇▇▇▇ Parties to consummate the Closing contained in Sections
2.2(a) and 2.2(d) shall be deemed satisfied if Times Mirror delivers to the ▇▇▇▇
Parties a certificate dated the Closing Date and signed by an authorized officer
of Times Mirror setting forth any failure of any condition contained in Section
2.2(a) or 2.2(d) and undertaking to indemnify the ▇▇▇▇ Parties with respect to
any and all damage, loss (including any diminution in the value of the assets of
MB), liability and expense (including reasonable expenses of investigation and
reasonable attorneys' fees and expenses in connection with any action, suit or
proceeding) ("Losses"); provided, however, that the exception set forth in this
Section 2.3 shall apply only in the case where (i) the Losses are readily
quantifiable, (ii) the failure of the applicable condition results in Losses
which are capable of being adequately recompensed by the payment of money, and
(iii) the amount of any such Losses, in the aggregate, does not exceed an amount
equal to 10% of the value of the Merger Consideration; provided, still further,
however, that any indemnification provided pursuant to this Section 2.3 shall be
subject to the provisions of Sections 11.4 and 11.6. In the absence of fraud or
willful misconduct on the part of any of the TM Parties, or any of their
respective officers, directors, employees or agents in connection with the
negotiation, execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby, the remedy contained in this Section 2.3 shall
constitute the sole and exclusive remedy of Acquiror with
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respect to any failure of the conditions to the obligations of Acquiror to
consummate the Closing contained in Sections 2.2(a) and 2.2(d) to be satisfied
as of the Closing and, without limitation, Acquiror shall have no right to
indemnification pursuant to Section 11.1 or 11.2 for any Losses incurred as a
result of any such failure.
SECTION 2.4. Conditions to TM Parties' Obligations. The obligations of
the TM Parties to consummate the Merger are subject to the satisfaction (or
waiver by each of the TM Parties) as of the Effective Time of the following
conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of each of the ▇▇▇▇ Parties made in this
Agreement shall be true and correct as of the date of this Agreement and on and
as of the Closing Date, as though made on and as of the Closing Date, and each
of the ▇▇▇▇ Parties shall have performed or complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by the ▇▇▇▇ Parties or any affiliate of the ▇▇▇▇ Parties by the
time of the Closing; and the TM Parties shall have received from each of the
▇▇▇▇ Parties a certificate dated the Closing Date and signed by an authorized
officer of each of the ▇▇▇▇ Parties confirming the foregoing.
(b) Certificates of Good Standing. The TM Parties shall have
received from the ▇▇▇▇ Parties (other than REBV) certificates as to the ▇▇▇▇
Parties issued by the appropriate governmental authority of the jurisdiction of
incorporation of each of the ▇▇▇▇ Parties (other than REBV) evidencing its good
standing in such jurisdiction or state as of a date not more than ten days prior
to the Closing Date.
(c) Resolutions. The TM Parties shall have received (i) from
MergerSub certified copies of resolutions duly adopted by the Board of Directors
of MergerSub authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, (ii)
from MB Parent certified copies of resolutions duly adopted by the Board of
Directors of MB Parent authorizing the execution, delivery and performance of
this Agreement and the LLC Agreement and the consummation of the transactions
contemplated hereby and thereby, (iii) from each of the ▇▇▇▇ Parties certified
copies of resolutions duly adopted by the respective Boards of Directors of each
of the ▇▇▇▇ Parties authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, and all
such resolutions shall not have been revoked and shall remain in full force and
effect.
(d) Third-Party Consents. The ▇▇▇▇ Parties shall have obtained
in writing any material third-party consents required under any of the contracts
to which any of the ▇▇▇▇ Parties is a party.
(e) Lease Guaranty. Acquiror shall have executed and delivered
to Times Mirror, for the benefit of itself and the owner of the real property
known as ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, a guaranty of the
obligations of MB under the lease between MB and the owner of such real property
with respect to such real property, substantially in the form attached hereto as
Exhibit I.
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(f) Legal Opinions.
(i) MB, TMD and Times Mirror shall have received the
opinion of legal counsel to the ▇▇▇▇ Parties, in form and substance
reasonably satisfactory to each of them, substantially in the form
attached hereto as Exhibit J.
(ii) Times Mirror shall have received a favorable
opinion of its legal counsel, in form and substance reasonably
satisfactory to it, as to the qualification of the Merger as a
reorganization under the provisions of Section 368 of the Code.
SECTION 2.5. Substitution Transaction. In the event that the
condition to the obligations of Times Mirror, TMD and MB to consummate the
Closing contained in Section 2.4(f)(ii) is not satisfied or waived by October
31, 1998 or such earlier date on which all other conditions in Sections 2.1, 2.2
and 2.4 have been satisfied or waived (the "Revision Date") then (i) the
condition to the obligations of the parties to consummate the transactions
contemplated by the Partnership Interest Purchase Agreement contained in Section
2.01(c) of such Agreement shall be waived effective as of the opening of
business on the Revision Date, (ii) this Merger Agreement shall not,
notwithstanding any provision of Article 9, terminate prior to January 31, 1999,
(iii) for a period of 45 days from the Revision Date (the "Renegotiation
Period"), Acquiror and Times Mirror shall enter into bona-fide negotiations with
a view to determining whether agreement can be reached as to the terms and
conditions upon which the transactions contemplated by this Agreement may be
restructured so as to replicate as much as practicable the relative economic
benefits that each party and their Affiliates would have derived from the
transactions contemplated by the Agreement (any such restructured transaction
hereafter referred to as the "Substitution Transaction"), (iv) unless the
parties agree to the terms and conditions of a Substitution Transaction during
the Renegotiation Period, as soon as practicable following the expiration of
such period, Times Mirror shall sell to REUS and REUS shall purchase from Times
Mirror, all the outstanding shares of MB for a cash purchase price of
$1,375,000,000 and (v) the terms and conditions of this Agreement shall apply
mutatis mutandis, to the sale and purchase referred to in (iv) above, except
that the reference in Article 9 to "October 31, 1998" shall be replaced with a
reference to "January 31, 1999" and Section 2.4(f)(ii) shall be deleted.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MB
MB hereby represents and warrants to each of the ▇▇▇▇ Parties as
follows:
SECTION 3.1. Organization and Good Standing of MB. MB is a corporation
duly organized and validly existing under the laws of the State of New York. MB
has all requisite corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to carry on its business as presently conducted other than such franchises,
licenses, permits, authorizations and approvals the lack of which would not have
a material adverse effect on the business, financial condition or results of
operations of MB and its subsidiaries, taken as a whole (a "MB Material Adverse
Effect"). MB is
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duly qualified and in good standing to do business in the jurisdictions set
forth on Schedule 3.1, which jurisdictions constitute each jurisdiction in which
the nature of its business or the ownership, leasing or holding of its
properties makes such qualification necessary, except such jurisdictions where
the failure be so qualified or in good standing would not have a MB Material
Adverse Effect. MB has made available to Acquiror, MB Parent and MergerSub true
and complete copies of (a) the Certificate of Incorporation, as amended to date,
and the Bylaws, as in effect on the date of this Agreement, of MB and (b) the
stock certificates and transfer records and the minute books of MB.
SECTION 3.2. Authority. MB has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. All necessary corporate action required to
have been taken by or on behalf of MB by applicable law or its charter documents
has been taken to authorize (a) the approval, execution and delivery on behalf
of MB of this Agreement and (b) the performance by MB of its obligations under
this Agreement and the consummation of the transactions contemplated hereby.
This Agreement constitutes a valid and binding agreement of MB, enforceable
against it in accordance with its terms, except (i) as the same may be limited
by applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights, including, without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers and (ii) for the limitations imposed by
general principles of equity (the foregoing exceptions set forth in clauses (i)
and (ii) being referred to as the "Enforceability Exceptions").
SECTION 3.3. No Breach. The execution and delivery of this Agreement by
MB do not, and the consummation of the transactions to which MB is a party
contemplated hereby will not, (a) violate or conflict with the Articles of
Incorporation or Bylaws of MB or (b) except as set forth on Schedule 3.3 hereto,
constitute a material breach or default or give rise to any lien, third-party
right of termination, cancellation, material modification or acceleration under
any of the Contracts, or violate or conflict with any law, rule or regulation to
which it or any material portion of its assets is subject.
SECTION 3.4. Consents and Approvals. Neither the execution and delivery
of this Agreement by MB nor the consummation of the transactions to which MB is
a party contemplated hereby will require any consent, approval, authorization or
permit of, or filing with or notification to, any federal, state or foreign
governmental or regulatory authority, except (a) for notification pursuant to,
and expiration or termination of the waiting period under, the HSR Act and (b)
where the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, (i) would not prevent MB from performing
its obligations under this Agreement and (ii) would not have a MB Material
Adverse Effect.
SECTION 3.5. Capital Stock of MB. The authorized capital stock of MB
consists of 7,500 shares of common stock, par value $100.00 per share, of which
5,400 shares, constituting the Shares, are duly authorized and validly issued
and outstanding, fully paid and nonassessable. Except for the Shares, there are
no shares of capital stock or other equity securities of MB outstanding. The
Shares have not been issued in violation of, and none of the Shares is subject
to, any preemptive or subscription rights. There are no outstanding warrants,
options, "phantom"
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stock rights, agreements, convertible or exchangeable securities or other
commitments (other than under this Agreement) pursuant to which MB is or may
become obligated to issue, sell, purchase, return or redeem any shares of
capital stock or other securities of MB, and no equity securities of MB are
reserved for issuance for any purpose. Other than this Agreement, the Shares are
not subject to any voting trust agreement or other contract, agreement,
arrangement, commitment or understanding, including any such agreement,
arrangement, commitment or understanding restricting or otherwise relating to
the voting, dividend rights or disposition of the Shares.
SECTION 3.6. Equity Interests.
(a) Equity Interests. Except as set forth on Schedule 3.6, MB
does not directly or indirectly own any capital stock of or other equity
interests in any corporation, partnership or other entity.
(b) Organization and Good Standing of Subsidiaries. Each
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, has all corporate
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to carry on its
business as presently conducted, other than such franchises, licenses, permits,
authorizations and approvals, the lack of which would not have a MB Material
Adverse Effect. Each Subsidiary is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or the
ownership, leasing or holding of its properties makes such qualification
necessary, except where the failure to be so qualified or in good standing would
not have a MB Material Adverse Effect. All Subsidiaries and their respective
jurisdictions of incorporation are identified on Schedule 3.6. "Subsidiary"
means any entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by MB.
(c) Capitalization of Subsidiaries. Except as disclosed in
Schedule 3.6, all of the outstanding capital stock or other voting securities of
each Subsidiary is owned by MB, directly or indirectly, free and clear of any
lien and free of any other limitation or restriction (including any restriction
on the right to vote, sell or otherwise dispose of such capital stock or other
voting securities). There are no outstanding (i) securities of MB or any
Subsidiary convertible into or exchangeable for shares of capital stock or
voting securities of any Subsidiary or (ii) options or other rights to acquire
from MB or any Subsidiary, or other obligation of MB or any Subsidiary to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of any Subsidiary (the items
in clauses 3.6(c)(i) and 3.6(c)(ii) being referred to collectively as the
"Subsidiary Securities"). There are no outstanding obligations of MB or any
Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities.
SECTION 3.7. Financial Statements.
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(a) Audited Financial Statements. The financial statements set
forth on Schedule 3.7(a), which consist of the audited consolidated balance
sheets of MB and the notes thereto as of December 31, 1996 and December 31, 1997
(the "MB Balance Sheet"), and the audited consolidated statements of operations,
shareholder's equity and cash flows and the notes thereto for the years ended
December 31, 1995, 1996 and 1997, audited by Ernst & Young LLP, whose report
thereon is included therewith (collectively, the "Audited Financial
Statements"), (i) were prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis, and (ii) present fairly, in
all material respects, MB's consolidated financial position and the consolidated
results of its operations and cash flows as of the dates thereof and for the
periods covered thereby.
(b) Unaudited March 31, 1998 Financial Statements. The
unaudited financial statements set forth on Schedule 3.7(b), which consist of
the unaudited condensed consolidated balance sheets of MB as of March 31, 1998
and the notes thereto and the unaudited condensed consolidated statements of
operations, shareholder's equity and cash flows of MB for the three-month period
ended March 31, 1998 (the "Unaudited Financial Statements"), were prepared in
accordance with GAAP, to the extent applicable to interim financial statements
(including APB Opinion No. 28), applied on a consistent basis with the Audited
Financial Statements except (i) as disclosed in the notes thereto, and (ii) such
financial statements have not been audited, and such Unaudited Financial
Statements present fairly, in all material respects, MB's consolidated financial
position and the consolidated results of its operations and cash flows as of the
date thereof and for the period covered thereby. The Unaudited Financial
Statements are based on amounts which are consistent, insofar as applicable,
with those used in compiling the unaudited financial statements of Times Mirror
which will be set forth in its Report on Form 10-Q to be filed with the
Securities and Exchange Commission in May 1998.
SECTION 3.8. INTENTIONALLY OMITTED.
SECTION 3.9. Assets Other Than Real Property. MB or one of its
Subsidiaries, as the case may be, has good title to all material assets, except
as otherwise specified below in this Section 3.9, reflected on the MB Balance
Sheet or thereafter acquired, except those sold or otherwise disposed of since
the date of the MB Balance Sheet in the ordinary course of business consistent
with past practice, free and clear of all mortgages, liens, security interests
or other encumbrances of any nature whatsoever, except (a) such as are disclosed
on Schedule 3.9 and (b) Permitted Liens. For purposes of this Agreement,
"Permitted Liens" shall mean (i) mechanics', carriers', workmen's,
warehousemen's, repairmen's or other like liens arising in the ordinary course
of business, (ii) liens arising under the original purchase price conditional
sale contracts and equipment leases with third parties entered into in the
ordinary course, (iii) liens for current Taxes and other governmental
obligations not yet due and payable and (iv) other imperfections of title,
restrictions or encumbrances, if any, which liens, imperfections of title,
restrictions or other encumbrances do not materially impair the continued use in
the business of the respective owner thereof, and operation of the specific
assets to which they relate.
This Section 3.9 does not relate to real property or interests in real
property, which are the subject of Section 3.10, or to intellectual property,
which is the subject of Section 3.11.
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SECTION 3.10. Real Property.
(a) Owned Property. Schedule 3.10(a) sets forth a complete
list of all real property and interests in real property owned in fee by MB or
any of its Subsidiaries ("Owned Properties").
(b) Leased Property. Schedule 3.10(b) sets forth a complete
list of all real property and interests in real property leased by MB or any of
its Subsidiaries ("Leased Properties," and together with the Owned Properties,
"Real Properties") and identifies any leases relating to the Leased Properties.
(c) Title to Real Property. MB or one of its Subsidiaries, as
the case may be, has (i) good and marketable fee title to all Owned Property and
(ii) good and marketable title to the leasehold estates in all Leased Property,
in each case free and clear of all mortgages, liens, security interests,
easements, covenants, rights-of-way and other similar restrictions of any nature
whatsoever, except (A) Permitted Liens, (B) easements, covenants, rights-of-way
and other similar restrictions of record and (C) (x) zoning, building and other
similar restrictions, (y) mortgages, liens, security interests or encumbrances
that have been placed by any developer, landlord or other third party on
property over which MB has easement rights or on any Leased Property and
subordination or similar agreements relating thereto and (z) unrecorded
easements, covenants, rights-of-way or other similar restrictions, none of which
items set forth in clauses (x), (y) and (z) above materially impairs the
continued use in the business of MB or such Subsidiary, as the case may be, and
operation of the property to which they relate.
SECTION 3.11. Intellectual Property.
(a) Trademarks. Schedule 3.11(a) sets forth a true and
complete list of all United States and foreign registered trademarks, material
common law trademarks, internet domain names, trade names, service marks and
applications therefor (collectively, "Trademarks ") that are registered or filed
in the name of or owned by MB or any of its Subsidiaries. With respect to
registered Trademarks, Schedule 3.11(a) contains a list of all United States and
foreign jurisdictions in which such trademarks are registered or applied for and
all registration and application numbers.
(b) Copyrights. Schedule 3.11(b) sets forth a true and
complete list of the United States copyright registrations with respect to the
top 100 publications (based on revenue) of MB (the "Top 100 Publications"). To
the Knowledge of MB, MB or one of its Subsidiaries owns the copyrights to or
otherwise has all rights sufficient to reproduce, publish and distribute all of
the publications of MB as currently being reproduced, published or distributed
by MB or any of its subsidiaries, except where any failure to own such copyright
or to otherwise have such rights would not have a MB Material Adverse Effect.
(c) Licenses. Except as disclosed on Schedule 3.11(c), neither
MB nor any of its Subsidiaries has licensed to any third party the right to
distribute or the right, on an exclusive basis, to use or exploit any of the Top
100 Publications in any jurisdiction.
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(d) Claims. Except as set forth on Schedule 3.11(d) or on
Schedule 3.13, no claims are pending or, to the Knowledge of MB, threatened in
writing against MB or any of its Subsidiaries by any person with respect to the
ownership, validity, enforceability or use of any Intellectual Property Rights
owned by MB or its Subsidiaries or otherwise challenging or questioning the
validity or effectiveness of any such Intellectual Property Rights except for
any such claims that would not have a MB Material Adverse Effect. Except as set
forth on Schedule 3.11(d), no claims are pending or, to the Knowledge of MB,
threatened in writing against MB or any of its subsidiaries as of the date of
this Agreement by any person in which such person alleges that any activities or
conduct of business of MB or any of its subsidiaries infringes upon the
intellectual property rights of any third party except for any such claims that
would not have a MB Material Adverse Effect. "Intellectual Property Right" means
any trademark, service ▇▇▇▇, trade dress, trade name, mask work, invention,
patent, trade secret, copyright or know-how (including any registrations or
applications for registration of any of the foregoing).
SECTION 3.12. Contracts. Schedules 3.12(a) through 3.12(l) set forth a
true and complete list of each of the following types of contracts to which MB
or any of its Subsidiaries is a party (together with leases related to the
Leased Properties, "Contracts"):
(a) Employment, Independent Contractor and Consulting
Agreements. (i) Any employment agreement, employment contract or any agreement
or contract providing for the payment of any severance compensation or deferred
or contingent compensation to any MB Employee (as defined in Section 10.10) or
for the provision, vesting and/or acceleration of any employee benefits
following a change of ownership or control of MB and (ii) any independent
contractor or consulting agreement (except those described in Section 3.12(k))
that has an aggregate liability after June 30, 1998 in excess of $250,000 and is
not terminable by notice of less than 60 calendar days for a cost of less than
$250,000;
(b) Collective Bargaining Agreements. Any employee collective
bargaining agreement or other contract with any labor union;
(c) Non-Competition Agreements. Any covenant or agreement that
restricts the ability of MB or any of its subsidiaries to engage in any line of
business in any place in the world or that would so limit MB or any Subsidiary
after June 30, 1998;
(d) Agreements with Officers, Directors or Employees. Any
agreement or contract with any officer, director or employee of MB or any of its
Subsidiaries (other than employment agreements covered by paragraph (a) above);
(e) Leases of Real Property. Any lease or similar agreement
under which MB or any of its Subsidiaries is a lessor or sublessor of, or makes
available for use by any third party, any Real Property;
(f) Personal Property Leases. Any lease or similar agreement
under which (i) MB is lessee of, or holds or uses, any machinery, equipment,
vehicle or other tangible personal property owned by a third party or (ii) MB is
a lessor or sublessor of, or makes available
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for use by any third party, any tangible personal property owned or leased by MB
or any of its Subsidiaries, in any such case which has an aggregate liability
after June 30, 1998 in excess of $250,000 and is not terminable by notice of
less than 60 calendar days for a cost of less than $250,000;
(g) Supply and Service Agreements. (i) Any continuing
agreement or contract for the future purchase by MB or any of its Subsidiaries
of materials, supplies or equipment (other than purchase contracts and orders
for inventory in the ordinary course of business consistent with past practice)
or (ii) any advertising agreement or arrangement (including any advertising
agreements or arrangements to which any of the TM Parties or any Subsidiary of
MB is a party and that is applicable to MB or any of its Subsidiaries), in any
such case which has an aggregate liability after June 30, 1998 in excess of
$250,000 and is not terminable by notice of less than 60 calendar days for a
cost of less than $250,000;
(h) Indebtedness. Any agreement or contract under which MB or
any of its Subsidiaries has borrowed or loaned any money or issued any note,
bond, indenture or other evidence of indebtedness or directly or indirectly
guaranteed indebtedness, liabilities or obligations of others (other than
endorsements for the purpose of collection in the ordinary course of business),
or any other note, bond, indenture or other evidence of indebtedness;
(i) Guarantees. Any agreement or contract under which any
other person has directly or indirectly guaranteed indebtedness, liabilities or
obligations of MB or any of its Subsidiaries (other than endorsements for the
purpose of collection in the ordinary course of business);
(j) Partnerships and Joint Ventures. Any partnership agreement
or other joint venture agreement to which MB or any of its Subsidiaries is a
party;
(k) Author Contracts. Any agreement or contract under which MB
or any of its Subsidiaries is obligated to pay compensation to any Author in
connection with the reproduction, publication, sale, sublicense or distribution
of any of the Top 100 Publications. "Author" as used herein means any author,
editor, photographer, illustrator or successor or assignee thereof; and
(l) Other Agreements. Any other agreement, contract, lease,
license, commitment or instrument to which MB or any of its Subsidiaries is a
party or by or to which the assets or business of MB or any of its subsidiaries
is bound or subject which in any case has an aggregate liability after June 30,
1998 in excess of $250,000 and is not terminable by notice of less than 60
calendar days for a cost of less than $250,000 (other than purchase contracts
and orders for inventory in the ordinary course of business consistent with past
practice).
Except as disclosed on Schedule 3.12 or the other schedules hereto, MB or one of
its Subsidiaries, as applicable, has performed all material obligations required
to be performed by it to date under the Contracts to which it is a party and it
is not in breach or default in any material respect thereunder and, to the
Knowledge of MB, no other party to any of the Contracts is in breach or default
in any material respect thereunder.
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SECTION 3.13. Litigation; Decrees. Schedule 3.13 sets forth a list, as
of the date of this Agreement, of all pending and, to the Knowledge of MB,
threatened lawsuits or claims with respect to which MB or any of its
Subsidiaries has contacted in writing the defendant or has been contacted in
writing by the claimant or by counsel for the claimant by or against MB or any
of its Subsidiaries or any of the properties, assets, operations or businesses
or MB or any of its Subsidiaries and which (a) involve a claim by or against MB
or any of its Subsidiaries of more than $250,000, (b) seek any injunctive relief
or (c) relate to the transactions contemplated by this Agreement. To the
Knowledge of MB, except as disclosed on Schedule 3.13, neither MB nor any of its
Subsidiaries is in default under any judgment, order or decree of any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, applicable to MB or any of its
Subsidiaries or any of the properties, assets, operations or businesses of MB or
any of its Subsidiaries, except where such default would not have a MB Material
Adverse Effect.
SECTION 3.14. Employee and Related Matters; ERISA.
(a) Plans. Schedule 3.14(a) sets forth each employee pension,
retirement, profit sharing, stock bonus, stock option, stock purchase,
incentive, deferred compensation, hospitalization, medical, dental, vision, life
insurance, accidental death and dismemberment insurance, business travel
insurance, cafeteria and flexible spending, sick pay, disability, severance,
golden parachute or other plan, fund, program, policy, contract or arrangement
(including any contracts or agreements with certain employees of MB or any of
its Subsidiaries that relate to the transactions contemplated by this Agreement)
providing employee benefits that is maintained or contributed to by the TM
Parties or any of their respective subsidiaries in which any MB Personnel have
participated or under which any MB Personnel have accrued and remain entitled to
any benefits (the "Plans"). Each Plan covering only MB Personnel (a "MB Plan")
is identified as such on Schedule 3.14(a). Each Plan not so identified shall,
for purposes of this Agreement, be referred to as a "Times Mirror Plan." MB has
delivered to Acquiror true, complete and correct copies of (i) each Plan (or, in
the case of any unwritten Plans, descriptions thereof), (ii) the most recent
annual report on Form 5500 filed with the IRS with respect to each Plan (if any
such report was required), (iii) the most recent summary plan description for
each Plan for which such a summary plan description is required and (iv) each
trust agreement and group annuity contract relating to any Plan. Neither MB nor
any corporation or trade or business (whether or not incorporated) which would
be treated as a member of the controlled group including MB under Section
4001(a)(14) of ERISA (as defined in Section 3.14(b)) (an "ERISA Affiliate")
would be liable for any amount pursuant to Section 4062, 4063 or 4064 of ERISA,
if any Plan which is subject to Title IV of ERISA were to terminate. Except as
disclosed on Schedule 3.14(a), no MB Employee is entitled to any benefit under
any Plan by reason of the transactions contemplated hereby, and no Plan includes
any common stock or other security issued by Times Mirror or any ERISA Affiliate
among its assets.
(b) Compliance with ERISA and the Code. None of the TM Parties
or any of the Plans or any trust created thereunder, or any trustee or
administrator thereof, has engaged in a transaction in connection with which MB
or any of its subsidiaries would be subject to either a material liability or
civil penalty assessed pursuant to Sections 409, 502(i) or 502(1) of ERISA or
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a material Tax imposed pursuant to Section 4971, 4972, 4974, 4975, 4976 or 4980B
of the Code. Except as described on Schedule 3.14(b), each of the Plans has been
operated and administered in all material respects in accordance with applicable
laws, including the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Code. Each Plan intended to be a qualified plan under Code
Section 401 has received a favorable determination letter to that effect (a copy
of which has been delivered to Acquiror) and nothing has occurred since the
issuance of such letter that would adversely affect the Tax qualification of any
such Plan. There are no pending or, to the Knowledge of MB, threatened claims by
or on behalf of any of the Plans, by any employee or beneficiary covered under
any such Plan, or otherwise involving any such Plan (other than ordinary course
claims for benefits).
(c) Multiemployer Plan Liabilities. Except as disclosed on
Schedule 3.14(c), none of the TM Parties or any ERISA Affiliate is, or has been
within the last six years, obligated to contribute, on behalf of any current or
former employee of MB, to a multiemployer plan (as defined in Section 3(37) of
ERISA) and no such ERISA Affiliate is liable or reasonably expected to be liable
for any withdrawal liability under Section 4201 of ERISA.
(d) Accumulated Funding Deficiencies; Liens. None of the Plans
or any trust established thereunder has incurred any accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of each
of the Plans. No contribution failure has occurred with respect to any Plan
sufficient to give rise to a lien under Section 302(f) of ERISA.
(e) Employee Welfare Benefit Plans. With respect to any Plan
that is an employee welfare benefit plan, except as disclosed on Schedule
3.14(e), (i) no such Plan is unfunded or funded through a welfare benefits fund,
as such term is defined in Section 419(e) of the Code and (ii) to the Knowledge
of MB, each such Plan that is a group health plan, as such term is defined in
Section 5000(b)(1) of the Code, complies with the applicable requirements of
Section 4980B(f) of the Code.
SECTION 3.15. Absence of Changes or Events. Except as set forth on
Schedule 3.15, since the date of the MB Balance Sheet, there has not been a
material adverse change in the business, financial condition or results of
operations of MB and its Subsidiaries, taken as a whole, other than changes
relating to the economy in general or the legal publishing industry in general
and not specifically relating to MB. Except as disclosed on Schedule 3.15 or as
contemplated by this Agreement, since the date of the MB Balance Sheet, the
business of MB and its Subsidiaries has been conducted in the ordinary course
consistent with past practice.
SECTION 3.16. Compliance with Applicable Laws. Except as previously
disclosed by MB to Acquiror in writing, or as set forth on any Schedule to this
Agreement:
(a) General. MB and each of its Subsidiaries is in compliance
with all applicable statutes, laws, ordinances, rules, orders and regulations of
any governmental authority or instrumentality, domestic or foreign, except for
any such incidents of noncompliance that would not have a MB Material Adverse
Effect. This Section 3.16 does not relate to matters with
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respect to Taxes. This Section 3.16(a) does not relate to environmental matters,
which are the subjects of Sections 3.16(b), 3.16(c) and 3.16(d).
(b) Hazardous Materials. There has been no release of any
Hazardous Material to soil or water at, on, or from any of the Real Properties
during the period that MB or any of its divisions or subsidiaries has owned or
leased such Real Property, except for any such releases that would not have a MB
Material Adverse Effect.
(c) Notices of Certain Environmental Matters. MB has not
received written notice of any alleged violation of Environmental Law or
liability for any release of any Hazardous Material in connection with the
present or past business or properties of MB or any of its subsidiaries, and
there exists no writ, injunction, decree, order or judgment outstanding, nor any
lawsuit, proceeding, citation, summons or government agency investigation
relating thereto, except for any such matters that would not have a MB Material
Adverse Effect.
(d) Definitions. For purposes of Sections 3.16(b) and 3.16(c):
(i) "Hazardous Material" means any substance the
presence of which requires investigation or remediation under any
federal, state or local statute, regulation, ordinance, order, or
common law; or which is defined as a "hazardous waste" or "hazardous
substance" under any federal, state or local statute, regulation or
ordinance, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601 et seq.) or the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.); or which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or
otherwise hazardous and is regulated as such by any governmental
authority, agency, department, commission, board, agency or
instrumentality of the United States or state or any political
subdivision thereof.
(ii) "Environmental Law" means any applicable
statute, regulation, rule, ordinance, code, license or order, of any
governmental agency, department, commission, board, bureau or
instrumentality of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory
decrees, judgments and orders relating to the protection of human
health or the environment with respect to Hazardous Materials.
SECTION 3.17. Taxes.
(a) Tax Returns and Taxes. Except as set forth on Schedule
3.17(a), MB and its Subsidiaries have filed or caused to be filed in a timely
manner (within any applicable extension periods) with the appropriate Tax
authorities all Tax Returns they are required to have filed and have paid all
Taxes they are required to have paid, except where the failure to have filed
such a Tax Return would not have a MB Material Adverse Effect. There are no
material Tax liens or assessments against MB or any of its Subsidiaries or any
property or assets of the MB or any of its Subsidiaries, other than liens for
Taxes that are not due and payable.
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(b) Tax Claims. Except as set forth on Schedule 3.17(b), no
material claim for assessment or collection of Taxes is presently being asserted
against MB or any of its Subsidiaries and neither MB nor any of its Subsidiaries
is a party to any pending action, proceeding, or investigation by any
governmental taxing authority nor does MB have knowledge of any such threatened
action, proceeding or investigation.
(c) Definitions. For purposes of this Agreement:
(i) "Tax" (including "Taxes") means all federal,
state, local, foreign and other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, withholding, payroll, employment, excise, stamp,
premium, property or other taxes of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts
with respect thereto; and
(ii) "Tax Return" means any return, report, statement
or information statement required to be filed with respect to Taxes.
SECTION 3.18. Employee and Labor Relations. Except as set forth on
Schedule 3.18, (a) there is no labor strike, dispute, or work stoppage or
lockout pending or, to the Knowledge of MB, threatened against or affecting MB
or any of its Subsidiaries; (b) to the Knowledge of MB, no union organizing
campaign is in progress or threatened with respect to the MB Employees; (c)
there is no unfair labor practice charge or complaint against MB or any of its
Subsidiaries pending or, to the Knowledge of MB, threatened before the National
Labor Relations Board, (d) there is no pending or, to the Knowledge of MB,
threatened grievance that would have a MB Material Adverse Effect and (e) no
charges with respect to or relating to MB or any of its Subsidiaries are pending
before the Equal Employment Opportunity Commission or any state agency
responsible for the prevention of unlawful employment practices as to which
there is a reasonable likelihood of adverse determination, other than those
which, if so determined, would not have a MB Material Adverse Effect.
SECTION 3.19. Working Capital. As of the Effective Time, the amount by
which the total current liabilities of MB exceed the total current assets of MB
(net of allowances for doubtful accounts and returns and excluding any current
portion of deferred income taxes), in each case as reflected on the Closing
Balance Sheet and determined in accordance with GAAP applied on a basis
consistent with the Audited Financial Statements (the "MB Net Working Capital
Deficit") shall not be greater than $5,288,000.
SECTION 3.20. Transition Services Agreements.
(a) ▇▇▇▇▇ Transition Services Agreement. MB and ▇▇▇▇▇, Inc.
have entered into a transition services agreement, copy of which is attached
hereto as Exhibit K (the "▇▇▇▇▇ Transition Services Agreement"), pursuant to
which MB will provide certain specified transition services to ▇▇▇▇▇, Inc. for a
specified period of time after the Effective Time.
(b) TM Transition Services Agreement. MB, Times Mirror and an
affiliate of Times Mirror have entered into a transition services agreement, a
copy of which is attached
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hereto as Exhibit L (the "TM Transition Services Agreement"), pursuant to which
MB will provide certain specified transition services to Times Mirror and its
affiliate for a specified period of time after the Effective Time.
(c) MB Transition Services Agreement. MB and Times Mirror have
entered into a transition services agreement, a copy of which is attached hereto
as Exhibit M (the "MB Transition Services Agreement"), pursuant to which Times
Mirror will provide certain specified transition services to MB for a specified
period of time after the Effective Time.
SECTION 3.21. Intercompany Liabilities. As of the Closing Date, there
will be no intercompany liabilities outstanding between MB or any of its
Subsidiaries, on the one hand, and Times Mirror or any of its affiliates (other
than MB or any of its Subsidiaries) on the other hand.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
TIMES MIRROR AND TMD
Times Mirror and TMD, severally and not jointly, hereby represent and
warrant to each of the ▇▇▇▇ Parties as follows:
SECTION 4.1. Organization and Good Standing of Times Mirror and TMD.
(a) As to Times Mirror. Times Mirror is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Times Mirror has all requisite corporate power and authority and, to
the Knowledge of Times Mirror, possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to carry on its
business as presently conducted other than such franchises, licenses, permits,
authorizations and approvals the lack of which would not prevent Times Mirror
from performing its obligations under this Agreement.
(a) As to TMD. TMD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. TMD has
all requisite corporate power and authority and, to the Knowledge of TMD,
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to carry on its business as presently conducted
other than such franchises, licenses, permits, authorizations and approvals the
lack of which would not prevent TMD from performing its obligations under this
Agreement.
SECTION 4.2. Authority.
(a) As to this Agreement. Each of Times Mirror and TMD has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions to which Times Mirror or TMD is a party
contemplated hereby. All necessary corporate action required to have been taken
by or on behalf of each of Times Mirror and TMD by applicable law or its
respective charter documents has been taken to authorize (i) the approval,
execution and delivery on behalf of Times Mirror or TMD of this Agreement and
(ii) the
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performance by Times Mirror and TMD of their respective obligations under this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes a valid and binding agreement of each of Times Mirror and
TMD, enforceable against each of them in accordance with its terms, except as
the same may be limited by the Enforceability Exceptions.,
(b) As to the LLC Agreement. Times Mirror has all requisite
corporate power and authority to execute and deliver the LLC Agreement and to
consummate the transactions to which Times Mirror is a party contemplated
thereby. All necessary corporate action required to have been taken by or on
behalf of Times Mirror by applicable law or its charter documents has been taken
to authorize (i) the approval, execution and delivery on behalf of Times Mirror
of the LLC Agreement and (ii) the performance by Times Mirror of its obligations
under the LLC Agreement and the consummation of the transactions contemplated
thereby. When executed and delivered, the LLC Agreement will constitute a valid
and binding agreement of Times Mirror, enforceable against it in accordance with
its terms, except as the same may be limited by the Enforceability Exceptions.
SECTION 4.3. No Breach. The execution and delivery of this Agreement by
each of Times Mirror and TMD do not, and the consummation of the transactions to
which Times Mirror and TMD is a party contemplated hereby will not, (a) violate
or conflict with the organizational documents of Times Mirror or TMD or (b)
constitute a material breach or default or give rise to any lien, third-party
right of termination, cancellation, material modification or acceleration under
any material agreement, understanding or undertaking to which Times Mirror or
TMD is a party or by which it is bound, or violate or conflict with any law,
rule or regulation to which it or any material portion of its assets is subject.
SECTION 4.4. Consents and Approvals. Neither the execution and delivery
of this Agreement by either of Times Mirror or TMD nor the consummation of the
transactions to which Times Mirror or TMD is a party contemplated hereby will
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, except (a) for
notification pursuant to, and expiration or termination of the waiting period
under, the HSR Act and (b) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent Times Mirror or TMD from performing its obligations under this
Agreement.
SECTION 4.5. Title to and Transfer of the Shares. TMD is the record
owner of the Shares and has good and marketable title thereto, free and clear of
any liens, claims, encumbrances, security interests, options, charges and
restrictions of any kind.
SECTION 4.6. INTENTIONALLY OMITTED.
SECTION 4.7. Brokers. No broker, finder or investment banker other than
▇▇▇▇▇▇▇, Sachs & Co. is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of any of the TM Parties.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF THE ▇▇▇▇ PARTIES
The ▇▇▇▇ Parties hereby represent and warrant to each of the TM Parties
as follows:
SECTION 5.1. Organization and Good Standing of the ▇▇▇▇ Parties.
(a) As to REUS and REBV. REUS is a corporation duly organized,
validly existing and in good standing under the laws of Delaware. REBV is a
private limited liability company duly organized and validly existing under the
laws of the Kingdom of the Netherlands. REUS and REBV have all requisite
corporate power and authority and, to the Knowledge of Acquiror, possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to carry on its business as presently conducted other
than such franchises, licenses, permits, authorizations and approvals the lack
of which would not have a material adverse effect on their ability to perform
their obligations under this Agreement (an "Acquiror Material Adverse Effect")
(b) As to MB Parent. MB Parent is a corporation duly organized
and validly existing under the laws of the State of Delaware. MB Parent has all
requisite corporate power and authority and, to the Knowledge of Acquiror,
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to carry on its business as presently
contemplated to be conducted other than such franchises, licenses, permits,
authorizations and approvals the lack of which will not have a material adverse
effect on the business, financial condition or results of operations of MB
Parent.
(c) As to MergerSub. MergerSub is a corporation duly organized
and validly existing under the laws of the State of New York. MergerSub has all
requisite corporate power and authority and, to the Knowledge of Acquiror,
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to carry on its business as presently
contemplated to be conducted other than such franchises, licenses, permits,
authorizations and approvals the lack of which will not have a material adverse
effect on the business, financial condition or results of operations of
MergerSub.
SECTION 5.2. Authority.
(a) As to this Agreement. Each of the ▇▇▇▇ Parties has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions to which any of the ▇▇▇▇ Parties is a party
contemplated hereby. All necessary corporate action required to have been taken
by or on behalf of each of the ▇▇▇▇ Parties by applicable law or its respective
charter documents has been taken to authorize (a) the approval, execution and
delivery on behalf of each of the ▇▇▇▇ Parties of this Agreement and (b) the
performance by each of the ▇▇▇▇ Parties of its respective obligations under this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes a valid and binding agreement of
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each of the ▇▇▇▇ Parties, enforceable against each of them in accordance with
its terms, except as the same may be limited by the Enforceability Exceptions.
(b) As to the LLC Agreement. MB Parent has all requisite
corporate power and authority to execute and deliver the LLC Agreement and to
consummate the transactions to which MB Parent is a party contemplated thereby.
All necessary corporate action required to have been taken by or on behalf of MB
Parent by applicable law or its charter documents has been taken to authorize
(a) the approval, execution and delivery on behalf of MB Parent of the LLC
Agreement and (b) the performance by MB Parent of its obligations under the LLC
Agreement and the consummation of the transactions contemplated thereby.
SECTION 5.3. No Breach.
(a) As to this Agreement. The execution and delivery of this
Agreement by each of the ▇▇▇▇ Parties do not, and the consummation of the
transactions to which the ▇▇▇▇ Parties is a party contemplated hereby will not,
(i) violate or conflict with the organizational documents of the ▇▇▇▇ Parties or
(ii) constitute a material breach or default or give rise to any lien,
third-party right of termination, cancellation, material modification or
acceleration under any material agreement, understanding or undertaking to which
any of the ▇▇▇▇ Parties is a party or by which it is bound, or violate or
conflict with any law, rule or regulation to which it or any material portion of
its assets is subject.
(b) As to the LLC Agreement. The execution and delivery of the
LLC Agreement will not, and the consummation of the transactions to which MB
Parent is a party contemplated thereby will not, (i) violate or conflict with
the organizational documents of MB Parent or (ii) constitute a material breach
or default or give rise to any lien, third-party right of termination,
cancellation, material modification or acceleration under any material
agreement, understanding or undertaking to which MB Parent will be a party or by
which it will be bound, or violate or conflict with any law, rule or regulation
to which it or any material portion of its assets is subject.
SECTION 5.4. Consents and Approvals. Neither the execution and delivery
of this Agreement by any of the ▇▇▇▇ Parties nor the consummation of the
transactions to which any of the ▇▇▇▇ Parties is a party contemplated hereby
will require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, except (a) for
notification pursuant to, and expiration or termination of the waiting period
under, the HSR Act, (b) any consent, approval, authorization, permit, filing or
notice required under the federal or state securities or state blue sky laws in
connection with the transactions contemplated by Sections 7.1 and 7.2 of this
Agreement and (c) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, (i) would not
prevent Acquiror from performing its obligations under this Agreement and (ii)
would not have an Acquiror Material Adverse Effect.
SECTION 5.5. Funding. Acquiror has and will have as of immediately
prior to the Effective Time on hand or committed cash and cash equivalent assets
of not less than the sum of $1,375,000,000 plus the aggregate amount of expenses
and fees payable by the ▇▇▇▇ Parties, MB
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Parent or MergerSub in connection with this Agreement and the LLC Agreement and
the transactions contemplated hereby and thereby.
SECTION 5.6. Brokers. No broker, finder or investment banker other than
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated is entitled to any brokerage finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of any of the ▇▇▇▇
Parties.
SECTION 5.7. No Prior Activities. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement and the transactions contemplated hereby
(including aggregate indebtedness of MergerSub to an affiliate of Acquiror in an
amount equal to $600,000,000), neither MB Parent nor MergerSub has incurred any
obligation or liability or engaged in any business or activity of any type or
kind whatsoever or entered into any agreement or arrangement with any person.
ARTICLE 6
COVENANTS OF THE TM PARTIES
SECTION 6.1. Delivery of Interim Financial Statements. As soon as
practicable and in any event not later than 45 days after the end of any fiscal
quarter of MB ending after the date hereof and prior to the Effective Time, MB
shall, and Times Mirror shall cause MB to, deliver to Acquiror the unaudited
condensed consolidated balance sheet of MB as of the end of such fiscal quarter
and the unaudited condensed consolidated statements of operations, shareholder's
equity and cash flows for the fiscal quarter then ended, which shall be prepared
in accordance with GAAP, applied in a manner consistent with the preparation of
the Audited Financial Statements, except that the financial statements delivered
pursuant to this Section 6.1 will be interim financial statements and will not
include all of the information and footnotes required by GAAP for complete
financial statements, and, in the opinion of the management of MB, will include
all adjustments (consisting of normal recurring adjustments) necessary for a
fair presentation of MB's consolidated financial position and the consolidated
results of its operations and cash flows as of the date thereof and for the
period covered thereby. The financial statements delivered pursuant to this
Section 6.1 shall be accompanied by a certificate of the Chief Financial Officer
of MB confirming that such financial statements have been prepared as described
above.
SECTION 6.2. Access. Prior to the Closing, the TM Parties and their
respective officers, directors, employees, advisors, representatives and
authorized agents will provide Acquiror, MergerSub and their respective
representatives, employees, counsel and accountants, during scheduled
appointments approved by MB occurring during normal business hours and in a
manner not unreasonably disruptive to the conduct of the business of MB or any
of MB's officers, directors, employees, advisors, representatives or authorized
agents, access to the personnel, properties, books and records of MB and its
Subsidiaries, including access to MB Employees for the purpose of pre-enrolling
such MB Employees in any employee benefit or welfare plans of Acquiror;
provided, however, that all information and documentation made available
pursuant to the terms of this Section 6.2 shall be subject to the terms of the
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Confidentiality Agreement between an affiliate of the ▇▇▇▇ Parties and Times
Mirror dated as of December 26, 1997 (the "Confidentiality Agreement").
SECTION 6.3. Ordinary Conduct. Except as contemplated by this Agreement
or as set forth on Schedule 6.3, from the date of this Agreement to the Closing
Date, MB will, and will cause its Subsidiaries to, conduct its business in the
ordinary course, consistent with past practices, and will make all reasonable
efforts consistent with past practices to preserve its relationships with
customers, suppliers and others with whom MB deals. Except as contemplated by
this Agreement, MB will not, and will cause its Subsidiaries not to, do any of
the following, without the prior written consent of Acquiror:
(a) Charter and Bylaws. Amend its charter or bylaws;
(b) Dividends. Declare or pay any dividend or make any other
distributions to TMD or Times Mirror whether or not upon or in respect of any
shares of its capital stock, except such dividend or dividends as may be
required to provide funds in order to cancel intercompany indebtedness in order
to comply with Section 3.21; provided, however, that MB may declare and make a
non-cash distribution to Times Mirror of any intercompany receivable owing from
Times Mirror to MB as of the Effective Time. For purposes of this Agreement,
including Section 3.21, cash sweeps shall be treated as adjustments to the
intercompany accounts between MB or the applicable Subsidiaries and Times Mirror
or its applicable affiliate, as the case may be;
(c) Capital Stock. Redeem or otherwise acquire any shares of
its capital stock or issue any capital stock or any option, warrant or right
relating thereto or any securities convertible into or exchangeable for any
shares of capital stock;
(d) Employee Matters. Adopt or amend in any material respect
any employment agreement, Plan or collective bargaining agreement, except as
required by law;
(e) Compensation. (i) Grant to any executive officer or
employee any increase in compensation or benefits or any rights to receive
severance payments or other benefits upon a termination of employment or a
change of ownership or control of the employer, except (A) as may be required
under existing agreements or outstanding offers listed on Schedule 10.3, (B) in
the ordinary course of business consistent with past practice, (C) agreements
substantially similar to those described on Schedule 3.12(a) with any employees
of MB hired after the date of this Agreement (to the extent consistent with
those of such agreements entered into prior to the date of this Agreement with
respect to the level of benefits provided and the seniority level of the
employees covered thereby) or (D) any increases, payments or benefits for which
Times Mirror shall be solely obligated, including any such increases, payments
or benefits payable as a result of the consummation of the Merger or (ii)
terminate any executive officer or employee other than in the ordinary course of
business consistent with past practice;
(f) Indebtedness. Incur or assume any liabilities, obligations
or indebtedness for borrowed money or guarantee any such liabilities,
obligations or indebtedness, other than any indebtedness owing to Times Mirror
or any indebtedness incurred in the ordinary course
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of business consistent with past practice; provided that in no event shall MB or
any of its Subsidiaries incur, assume or guarantee any long-term indebtedness
for borrowed money;
(g) Encumbrances. Permit, allow or suffer any of its assets to
be subjected to any mortgage, pledge, lien, encumbrance, restriction or charge
of any kind, other than those excepted from the representations set forth in
Sections 3.9 and 3.10;
(h) Cancellation of Indebtedness. Cancel any indebtedness
owing to MB or any of its Subsidiaries, or waive any claims or rights, other
than cancellations or waivers that cover any indebtedness, claims or rights
that, individually, have a value of less than $50,000 and that, in the
aggregate, have a value of less than $250,000; provided, further, however, that
MB may cancel any intercompany receivable owing from Times Mirror to MB as of
the Closing Date;
(i) Related Party Transactions. Except for (i) dividends or
distributions not prohibited under clause (b) above, (ii) indebtedness not
prohibited by clause (f) above and (iii) intercompany transactions permitted
under clause (h) above or in the ordinary course of business and consistent with
past practice, pay, loan or advance any amount to, or sell, transfer or lease
any of its assets to, or enter into any agreement or arrangement with Times
Mirror or any affiliate of Times Mirror;
(j) Accounting Policies. Make any change in any method of
accounting or accounting practice or policy other than those required by GAAP;
(k) Reorganizations. Acquire or agree to acquire by merging or
consolidating with, or by purchasing the stock of, or a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets (other than inventory);
(l) Capital Expenditures. Make or incur any capital
expenditures other than those made or incurred in accordance with Times Mirror's
fiscal year 1998 capital expenditure budget with respect to MB heretofore
disclosed to Acquiror;
(m) Asset Dispositions. Sell, lease, license or otherwise
dispose of, or agree to sell, lease, license or otherwise dispose of, any of its
assets, except in the ordinary course of business and except for sales, leases,
licenses or dispositions of assets that, individually, have a value of less than
$250,000 and, in the aggregate, have a value of less than $500,000;
(n) Certain Litigation. Settle any of the actions, claims,
lawsuits or proceedings disclosed in items 3 and 4 of Schedule 3.13;
(o) Agreements. Agree, whether in writing or otherwise, to do
any of the foregoing.
SECTION 6.4. Insurance. The TM Parties shall keep, or cause to be kept,
all insurance policies presently maintained relating to MB and its properties,
or suitable replacements therefor,
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in full force and effect through the close of business on the Closing Date.
Schedule 6.4 sets forth all the insurance policies presently owned and
maintained by MB. Any and all insurance policies not listed on Schedule 6.4
presently maintained relating to MB are maintained by Times Mirror. Neither MB
nor Acquiror will have any rights under any such insurance policies not listed
on Schedule 6.4 from and after the Closing Date with the exception of such
policies that do not name Times Mirror or any of its other subsidiaries as named
insureds.
SECTION 6.5. Year 2000 Software. Times Mirror, MB and its Subsidiaries
shall begin to implement as soon as practicable after the date hereof and
thereafter shall continue to implement with reasonable diligence the plan
previously disclosed to the ▇▇▇▇ Parties for the conversion of software systems
of MB and its Subsidiaries to include calendar year 2000 conversion and
compatibilities.
SECTION 6.6. Confidentiality Following Effective Time. After the
Effective Time, Times Mirror shall, and shall cause its affiliates and its and
their respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents to, hold in confidence all confidential
documents and information concerning MB and its Subsidiaries. The terms of the
Confidentiality Agreement shall apply, mutatis mutandis, to the obligations set
forth in the preceding sentence.
SECTION 6.7. GLS. Effective as of the Effective Time, Times Mirror
shall assign all of its rights to and interest in the license from GLS, Inc. and
the related sublicense to MB to ▇▇▇▇ Elsevier Properties Inc., a Delaware
corporation.
ARTICLE 7
COVENANTS OF THE ▇▇▇▇ PARTIES
SECTION 7.1. INTENTIONALLY OMITTED.
SECTION 7.2. Certain Pre-Effective Time Transactions. Each of the ▇▇▇▇
Parties and each of the TM Parties will consummate, immediately prior to the
Effective Time, each of the transactions described below to which it is a party:
(a) Issuance of MergerSub Common Stock and MergerSub Preferred
Stock. In consideration for an amount in cash equal to $1,375,000,000 less the
net proceeds received by MergerSub from the MergerSub Debt from REUS and REBV,
MergerSub will issue to REUS (i) seven hundred and ninety-two (792) shares of
MergerSub Common Stock, which MergerSub Common Stock will have 16% of the Voting
Power and such other designations, preferences, voting powers, rights and
qualifications as are set forth in the MergerSub Certificate of Incorporation,
(ii) 75% of the authorized shares of MergerSub Participating Preferred Stock,
which MergerSub Participating Preferred Stock will have no Voting Power and such
other designations, preferences, voting powers, rights and qualifications as are
set forth in the MergerSub Certificate of Incorporation and (iii) 75% of the
authorized shares of MergerSub Preferred Stock, which MergerSub Preferred Stock
will have 60% of the Voting Power and such other designations, preferences,
voting powers, rights and qualifications as are set forth in the
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MergerSub Certificate of Incorporation and MergerSub will issue to REBV (i) one
hundred ninety-eight (198) shares of MergerSub Common Stock, which MergerSub
Common Stock will have 4% of the Voting Power and such other designations,
preferences, voting powers, rights and qualifications as are set forth in the
MergerSub Certificate of Incorporation, (ii) 25% of the authorized shares of
MergerSub Participating Preferred Stock, which MergerSub Participating Preferred
Stock will have no Voting Power and such other designations, preferences, voting
powers, rights and qualifications as are set forth in the MergerSub Certificate
of Incorporation and (iii) 25% of the authorized shares of MergerSub Preferred
Stock, which MergerSub Preferred Stock will have 20% of the Voting Power and
such other designations, preferences, voting powers, rights and qualifications
as are set forth in the MergerSub Certificate of Incorporation.
(b) Issuance of MB Parent Preferred Stock. In consideration
for 100% of the authorized and outstanding shares of MergerSub Preferred Stock
and 100% of the authorized and outstanding shares of MergerSub Participating
Preferred Stock held by Acquiror, MB Parent will issue to Acquiror 100% of the
authorized shares of MB Parent Preferred Stock, which MB Parent Preferred Stock
will have 80% of the Voting Power and such other designations, preferences,
voting powers, rights and qualifications as are set forth in the MB Parent
Certificate of Incorporation.
(c) Issuance of MB Parent Common Stock. In consideration for
$1,375,000,000, MB Parent will issue to MergerSub 100% of the authorized shares
of MB Parent Common Stock, which MB Parent Common Stock will have 20% of the
Voting Power and such other designations, preferences, voting powers, rights and
qualifications as are set forth in the MB Parent Certificate of Incorporation.
(d) Contribution to LLC. Immediately after the Effective Time,
MB Parent will, and Acquiror will cause MB Parent to, in accordance with the
terms of the LLC Agreement, make a contribution to LLC in the amount of
$1,375,000,000.
SECTION 7.3. Confidentiality. Each of the ▇▇▇▇ Parties acknowledges
that the information being provided to it by or on behalf of each of the TM
Parties is subject to the terms of the Confidentiality Agreement, the terms of
which are incorporated herein by reference. Effective upon, and only upon, the
Closing, the Confidentiality Agreement will terminate only with respect to
information relating solely to MB and its Subsidiaries, and each of the ▇▇▇▇
Parties acknowledges that any and all other information provided to it by Times
Mirror or Times Mirror's representatives concerning any other subsidiary of
Times Mirror or any other operations of Times Mirror shall remain subject to the
terms and conditions of the Confidentiality Agreement after the Effective Time.
SECTION 7.4. No Additional Representations. Each of the ▇▇▇▇ Parties
acknowledges that none of the TM Parties or any other person has made any
representation or warranty, expressed or implied, as to the accuracy or
completeness of any information regarding MB except as expressly set forth in
this Agreement or the schedules hereto, and none of the TM Parties or any other
person will have or be subject to any liability or indemnification obligation to
any of the ▇▇▇▇ Parties or any other person resulting from the distribution to
any of the ▇▇▇▇ Parties or the use by any of the ▇▇▇▇
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Parties of any such information, including the Confidential Offering Memorandum
dated March 1998 prepared by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. related to MB and any
information, document, or material made available to any of the ▇▇▇▇ Parties in
certain "data rooms," management presentations or in any other form in
expectation of the transactions contemplated by this Agreement.
SECTION 7.5. Action Contrary to Tax-Free Treatment. Neither Acquiror
nor MB Parent has any plan or intention to, and for a period of two years after
the Effective Time shall not, (a) liquidate MB, (b) merge MB into another
corporation, (c) sell or otherwise dispose of the stock of MB or (d) without the
prior written consent of Times Mirror (which shall not be unreasonably withheld
or delayed), cause or permit MB to sell or otherwise dispose of any of its
assets outside of the ordinary course of business.
SECTION 7.6. Guaranty of Performance by REUS. REUS, as an obligor and
not as a surety, guarantees the performance by the ▇▇▇▇ Parties of its
obligations under this Agreement.
SECTION 7.7. Enforceability of LLC Agreement. The ▇▇▇▇ Parties will not
commence, maintain or join any action (at law or otherwise) that asserts that
the LLC Agreement is unenforceable.
SECTION 7.8. MergerSub Debt. The MergerSub Debt shall include the
following terms and conditions: (i) the principal amount of such debt shall be
equal to $600,000,000; (ii) interest shall be payable at least annually at an
annual rate not less than 5% nor greater than 7-1/2%; (iii) the maturity date
shall be 7 years from the date of initial issuance (but may be repaid and
reborrowed within such term); and (iv) the debt shall be unsecured and not
subordinated to any other indebtedness of MergerSub or the Surviving
Corporation. For a period of five years from the date of issuance, the Surviving
Corporation's aggregate indebtedness for money borrowed shall not exceed
$700,000,000.
SECTION 7.9. Formation of LLC. Prior to the Effective Time, MB Parent
shall form LLC by filing with the Secretary of State of Delaware the LLC
Certificate of Formation.
ARTICLE 8
MUTUAL COVENANTS
SECTION 8.1. Cooperation. The ▇▇▇▇ Parties and the TM Parties shall
cooperate with each other and shall cause their respective officers, employees,
affiliates, agents, auditors and representatives to cooperate with each other
after the Effective Time to ensure the orderly transfer of MB to Acquiror and to
minimize any disruption to the respective businesses of MB or Acquiror that
might result from the transactions contemplated hereby.
SECTION 8.2. Publicity. The ▇▇▇▇ Parties and the TM Parties agree that,
from the date of this Agreement through the Effective Time, no public release or
announcement concerning the transactions contemplated hereby shall be issued by
any party without the prior consent of each
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other party (which consent shall not be unreasonably withheld), except as such
release or announcement may be required by law or the rules or regulations of
any United States or foreign securities exchange, in which case the party
required to make the release or announcement shall allow each other party
reasonable time within any constraints imposed by such law, rule or regulation
to comment on such release or announcement in advance of such issuance.
SECTION 8.3. Antitrust Notification. Each of Times Mirror and Acquiror
will as promptly as practicable, but in no event later than ten Business Days
following the execution and delivery of this Agreement, file with the United
States Federal Trade Commission (the "FTC") and the United States Department of
Justice (the "DOJ") the notification and report form, if any, required for the
transactions contemplated hereby and any supplemental information requested in
connection therewith pursuant to the HSR Act. Any such notification and report
form and supplemental information will be in substantial compliance with the
requirements of the HSR Act. Each of Times Mirror and Acquiror shall furnish to
the other such necessary information and reasonable assistance as the other may
request in connection with its preparation of any filing or submission which is
necessary under the HSR Act. Times Mirror and Acquiror shall keep each other
apprised of the status of any communications with, and inquiries or requests for
additional information from, the FTC and the DOJ and shall comply promptly with
any such inquiry or request. Each of Times Mirror and Acquiror will use
reasonable best efforts to obtain any clearance required under the HSR Act for
the consummation of the transactions contemplated hereby.
SECTION 8.4. Records.
(a) At the Effective Time, Times Mirror shall deliver or cause
to be delivered to Surviving Corporation all original agreements, documents,
books, records and files (collectively, "Records"), in the possession of Times
Mirror related to the business and operations of MB and its Subsidiaries to the
extent not then in the possession of MB, subject to the following exceptions:
(i) Times Mirror may retain all Records related to or
prepared in connection with the services to be provided by Times Mirror
to MB pursuant to the MB Transition Services Agreement until the
expiration of the term thereof;
(ii) Each of the ▇▇▇▇ Parties recognizes that certain
Records may contain incidental information relating to MB or may relate
primarily to subsidiaries or divisions of Times Mirror other than MB or
businesses of MB previously sold, and that Times Mirror may retain such
Records and shall provide copies of the relevant portions thereof to
the ▇▇▇▇ Parties;
(iii) Times Mirror may retain all Records prepared in
connection with the Merger, including bids received from other parties
and analyses relating to MB; and
(iv) Times Mirror may retain any Tax Returns or Tax
records, and the ▇▇▇▇ Parties shall be provided with copies of such Tax
Returns or Tax records, only to
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the extent that they relate to MB's Tax Returns for taxable periods
ending after the Effective Time.
(b) After the Effective Time, upon reasonable written notice,
Times Mirror, Acquiror, MB Parent and Surviving Corporation agree to furnish or
cause to be furnished to each other and their representatives, employees,
counsel and accountants access, during normal business hours and at the expense
of the requesting party, to such information (including Records pertinent to MB
and its Subsidiaries) and assistance relating to MB as is reasonably necessary
for financial reporting and accounting matters, the preparation and filing of
any Tax Returns or the defense of any Tax Claim or assessment; provided,
however, that such access does not unreasonably disrupt the normal operations of
Times Mirror, Acquiror, MB Parent or Surviving Corporation.
SECTION 8.5. Closing Balance Sheet; Closing Financial Reporting (FDC)
Package.
(a) Closing Balance Sheet. As soon as practicable and in any
event not later than 45 days after the Effective Time, Times Mirror will deliver
to Acquiror an unaudited consolidated balance sheet of MB as of the Effective
Time (the "Closing Balance Sheet") and a calculation of the MB Net Working
Capital Deficit as of the Effective Time. The Closing Balance Sheet shall be
prepared in accordance with GAAP and on a basis consistent with the Audited
Financial Statements. The Closing Balance Sheet shall be accompanied by a
certificate of the Chief Financial Officer of Times Mirror confirming that the
Closing Balance Sheet has been prepared as described above. Each of Acquiror and
Surviving Corporation agrees to cooperate with Times Mirror, including providing
to Times Mirror access to any Records of MB necessary to the preparation of the
Closing Balance Sheet, in the preparation of the Closing Balance Sheet.
(b) Closing Financial Reporting (FDC) Package. Each of
Acquiror and MergerSub agrees to cooperate with Times Mirror, including
providing a closing Financial Reporting (FDC) Package of MB, in support of Times
Mirror's compliance with any financial reporting requirements of Times Mirror
under the rules and regulations promulgated by the Securities and Exchange
Commission for any period ending at or prior to the Effective Time.
SECTION 8.6. Further Assurances. From time to time, as and when
requested by any party hereto, the other parties shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other actions as such requesting
party may reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement.
SECTION 8.7. Reasonable Best Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use
reasonable best efforts to take, or cause to be taken, all actions, to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement.
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ARTICLE 9
TERMINATION; AMENDMENT; WAIVER
SECTION 9.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual written consent of Times Mirror, TMD, MB,
Acquiror, MB Parent and MergerSub;
(b) by any of the ▇▇▇▇ Parties or the TM Parties if (i) any
federal, state or foreign governmental authority or other agency or commission
or court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any order, decree or ruling which remains in effect, and
which has the effect of making the transactions contemplated hereby illegal or
otherwise prohibiting consummation of the transactions contemplated by this
Agreement and such order, decree, ruling or other action is or shall have become
nonappealable or (ii) the Merger has not been consummated by October 31, 1998;
provided that no party may terminate this Agreement pursuant to this clause (ii)
if such party's failure to fulfill any of its obligations under this Agreement
shall have been the reason that the Effective Time shall not have occurred on or
before said date;
(c) by any of the TM Parties if (i) there shall have been a
breach of any representation or warranty on the part of any of the ▇▇▇▇ Parties
set forth in this Agreement or if any representation or warranty of any of the
▇▇▇▇ Parties shall have become untrue, and such breach shall not have been cured
or such representation or warranty shall not have been made true within twenty
business days after notice by any of the TM Parties thereof, provided that none
of the TM Parties has breached any of its obligations hereunder; (ii) there
shall have been a breach by any of the ▇▇▇▇ Parties of any of its covenants or
agreements hereunder having an Acquiror Material Adverse Effect or materially
adversely affecting (or materially delaying) the consummation of the Merger, and
Acquiror, MB Parent or MergerSub, as the case may be, has not cured such breach
within twenty business days after notice by any of the TM Parties thereof,
provided that neither Times Mirror, TMD nor MB has breached any of obligations
hereunder; or
(d) by any of the ▇▇▇▇ Parties, subject to Section 2.3, if (i)
there shall have been a breach of any representation or warranty on the part of
any of the TM Parties set forth in this Agreement or if any representation or
warranty of any of the TM Parties shall have become untrue, and such breach
shall not have been cured or such representation or warranty shall not have been
made true within twenty business days after notice by Acquiror or MergerSub
thereof, provided that none of the ▇▇▇▇ Parties has breached any of their
respective obligations hereunder; (ii) there shall have been a breach by any of
the TM Parties of any of their respective covenants or agreements hereunder
having a MB Material Adverse Effect or materially adversely affecting (or
materially delaying) the consummation of the Merger, and MB, TMD or Times
Mirror, as the case may be, has not cured such breach within twenty business
days after notice by any of the ▇▇▇▇ Parties thereof, provided that none of the
▇▇▇▇ Parties has breached any of their respective obligations hereunder.
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SECTION 9.2. INTENTIONALLY OMITTED.
SECTION 9.3 Return of Confidential Information. In the event of
termination by any party pursuant to Section 9.1, written notice thereof shall
forthwith be given to the other parties and the transactions contemplated by
this Agreement shall be terminated, without further action by any party. If the
transactions contemplated by this Agreement are terminated as provided herein:
(a) The ▇▇▇▇ Parties shall return and cause to be returned all
documents and copies and other material received from or on behalf of any of the
TM Parties relating to the business of Times Mirror, MB or any other subsidiary
of Times Mirror or to the transactions contemplated hereby, whether obtained
before or after the execution hereof, to Times Mirror; and
(b) All confidential information received by the ▇▇▇▇ Parties
with respect to the businesses of Times Mirror, MB or any other subsidiary of
Times Mirror shall be treated in accordance with the Confidentiality Agreement,
which shall remain in full force and effect notwithstanding the termination of
this Agreement.
SECTION 9.4 Effects of Termination. If this Agreement is terminated and
the transactions contemplated hereby are abandoned pursuant to Section 9.1, this
Agreement shall become void and of no further force and effect, except for the
provisions of (a) Section 7.4 relating to the obligation of each of the ▇▇▇▇
Parties to keep confidential certain information and data obtained by it, (b)
Section 7.5 relating to the acknowledgment by each of the ▇▇▇▇ Parties that no
additional representations were made by or on behalf of Times Mirror or MB other
than those set forth in this Agreement, (c) Section 8.2 relating to publicity,
(d) Section 13.1 relating to expenses generally, (e) Section 13.2 relating to
attorneys' fees and expenses, (f) Section 13.5 relating to notices, (g) Section
13.11 relating to arbitration and consent to jurisdiction, (h) Section 13.15
relating to the limitation on consequential and punitive damages and (i) this
Article 9. Nothing in this Article 9 shall be deemed to release any party from
any liability for any breach by such party of the terms and provisions of this
Agreement or to impair the right of any party to compel specific performance by
any other party of its obligations under this Agreement.
ARTICLE 10
EMPLOYEE AND RELATED MATTERS
SECTION 10.1. Continuation of Employment.
(a) Employment. Surviving Corporation shall assume
responsibility for all MB Employees subject to the provisions of this Article
10. Any MB Employee who is described in clause (ii) of the definition thereof
(set forth in Section 10.10 hereof) at the Effective Time shall be offered
active employment with Surviving Corporation following the expiration of such
leave of absence only to the extent that MB would have been obligated to offer
employment to any such employee had the transactions contemplated hereby not
occurred. Times Mirror shall retain the obligation to provide worker's
compensation, short-term disability, long-term
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disability and other benefits to any employee described in the previous sentence
to the extent that such benefit is insured under a Times Mirror Plan and the
event giving rise to such benefit occurred prior to the Effective Time; but only
until such time as such MB Employee is offered employment by Surviving
Corporation.
(b) No Termination. The consummation of the transactions
contemplated hereby shall not be considered a termination of employment of any
MB Employee; provided, that nothing in this Agreement shall be construed to
limit Acquiror's or Surviving Corporation's ability to terminate the employment
of any employee, including an MB Employee, at any time at or after the Effective
Time.
(c) WARN Act and Other Matters. Surviving Corporation shall be
fully responsible for any liability arising under the Worker Adjustment and
Retraining Notification (WARN) Act arising in connection with the transactions
contemplated by this Agreement. Except as expressly otherwise provided herein,
all liabilities related to the termination of the employment of any of MB
Employees on or after the Effective Time shall be the responsibility of
Acquiror.
SECTION 10.2. Continuation of Plans. As of the Effective Time, MB
Employees shall cease to participate in or be covered by all Times Mirror Plans,
and neither Acquiror, Surviving Corporation nor any other affiliate of Surviving
Corporation shall have any responsibility for benefits or other liability under
such Plans. Without limiting the foregoing, Times Mirror shall retain all
liability with respect to (i) benefits for MB Retirees and their beneficiaries
and (ii) "performance bonuses" and similar bonuses payable as a result of the
consummation of the Merger. As of the Effective Time, Acquiror or Surviving
Corporation shall become or continue as the sponsor of each MB Plan, and neither
Times Mirror nor any other affiliate of Times Mirror shall have any
responsibility for benefits under any such Plan. Without limiting the foregoing,
Acquiror or Surviving Corporation shall be solely responsible for providing and
continuing benefits under COBRA to MB Employees and qualified beneficiaries with
respect to "qualifying events", as such term is used in Section 4980B of the
Code, occurring at or after the Effective Time.
SECTION 10.3. Acquiror's and Surviving Corporation Benefit
Responsibilities. For a period starting at the Effective Time and ending on
December 31, 1999, Acquiror or Surviving Corporation shall provide benefits to
MB Employees which are substantially comparable in the aggregate to those
provided to MB Employees immediately before the Effective Time, taking into
account retirement plan benefits, defined contribution plan benefits (including
a cash or deferred arrangement under Code Section 401(k)), comprehensive group
health insurance (providing medical, hospitalization, prescription drug, mental
health, substance abuse, employee assistance, dental and vision care benefits),
life insurance and similar welfare benefits, including health insurance and life
insurance for MB Retirees, and vacation, personal and sick leave benefits and
severance benefits, but excluding options or other stock or equity-based awards.
Acquiror or Surviving Corporation shall recognize service performed by MB
Employees under the Plans prior to the Effective
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Time: (i) for purposes of eligibility and vesting only, under all employee
benefit plans maintained by Acquiror or Surviving Corporation at or after the
Effective Time in which MB Employees participate; and (ii) (in addition to
recognizing vacation accrual of each MB Employee prior to the Effective Time, in
accordance with the terms of the relevant Plan) for purposes of benefit accrual,
under vacation and severance plans maintained by Acquiror or Surviving
Corporation at or after the Effective Time in which MB Employees participate.
Acquiror or Surviving Corporation shall waive all preexisting condition
exclusions under any health insurance plans maintained by Acquiror or Surviving
Corporation after the Effective Time with respect to MB Employees to the extent
such MB Employees had satisfied, prior to the Effective Time, the conditions for
waiving corresponding exclusions under the Plans. In addition, Acquiror or
Surviving Corporation shall assume sole responsibility for all individual
agreements or plans or other arrangements to provide severance benefits to
certain MB Employees, as set forth on Schedule 10.3 as amended through the
Effective Time. For purposes of this Article 10, "comparable" shall mean
benefits that are substantially similar in nature, scope, eligibility
requirements and employee cost sharing.
SECTION 10.4. Times Mirror 401(k) Plan Interests. Acquiror or Surviving
Corporation shall, as soon as practicable after the Effective Time, establish,
to the extent it does not already maintain, a defined contribution plan that is
intended to meet the qualification requirements of Code Section 401(a) that
includes a cash or deferred arrangement under Code Section 401(k), and that
covers MB Employees, subject to minimum eligibility service requirements
permitted under the Code (taking into account, however, prior service required
to be taken into account under Section 10.3). Acquiror or Surviving Corporation,
as the case may be, agrees that its defined contribution plan shall provide, or
shall be amended to provide features substantially similar to those provided
under the Times Mirror Savings Plus Plan ("Times Mirror 401(k) Plan"). As of the
Effective Time, all MB Employees shall be made fully vested in their account
balances under the Times Mirror 401(k) Plan (subject to valuation and
revaluation in accordance with the terms of the Times Mirror Plan).
Distributions under the Times Mirror 401(k) Plan shall be available to MB
Employees in accordance with the provisions of the Times Mirror 401(k) Plan and
applicable law.
SECTION 10.5. Times Mirror ESOP. Distributions under the Times Mirror
Employee Stock Ownership Plan (the "Times Mirror ESOP") shall be available to MB
Employees in accordance with the provisions of the Times Mirror ESOP and
applicable law, taking into account amendments to the Times Mirror ESOP,
effective January 1, 1995, pursuant to which all participants became fully
vested in their accounts therein.
SECTION 10.6. Times Mirror Defined Benefit Plan. Without limiting
Section 10.2, as of the Effective Time, MB Employees shall cease actively to
participate in the Times Mirror Pension Plan, and neither Acquiror, Surviving
Corporation nor any affiliate of Acquiror or Surviving Corporation shall have
any responsibility for benefits or other liability under the Times Mirror
Pension Plan. No assets or liabilities shall be transferred in respect of MB
Employees from the Times Mirror Pension Plan to any plan or trust maintained by
Acquiror or Surviving Corporation. Distributions under the Times Mirror Pension
Plan shall be available to MB Employees in accordance with the provisions of the
Times Mirror Pension Plan and applicable law. Without limiting Section 10.3, as
of the Effective Time MB Employees shall be eligible to participate in the ▇▇▇▇
Elsevier U.S. Retirement Plan (the "Acquiror Retirement Plan") in
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accordance with the terms of the Acquiror Retirement Plan, treating Surviving
Corporation as a participating employer.
SECTION 10.7. Coverage of Certain Welfare Benefits Through Effective
Time. Times Mirror agrees to continue coverage of MB Personnel under the Times
Mirror Group Benefit Plan up to the Effective Time and to provide benefits to or
reimburse covered MB Employees for eligible health care and other eligible
welfare expenses and services incurred up to the Effective Time in accordance
with the terms of such Plan. For purposes of the foregoing, an expense or
service is deemed to be incurred when the health care services are performed,
or, with respect to welfare benefits other than medical or dental benefits, when
the event giving rise to such expense or service occurs.
SECTION 10.8. Indemnification for Certain Matters.
(a) Indemnification by Times Mirror. Times Mirror shall
indemnify each Acquiror Entity (as defined below) and each of their respective
officers, directors, employees and agents and hold them harmless from any Losses
(other than a Loss arising from an indemnification obligation under clause (b)
below) suffered or incurred by any such indemnified party as a result of a
Third-Party Claim (as defined in Section 11.6) which would not have been
suffered or incurred by such indemnified party but for the treatment of any
Times Mirror Entity and any Acquiror Entity as members, as a result of the
transaction contemplated by this Agreement, of the same "controlled group" under
Section 414 of the Code or Title IV of ERISA. For purposes of this Section 10.8,
"Acquiror Entity" means Acquiror and any of its affiliates thereof (including MB
Parent and Surviving Corporation) that is treated as a member at any time of a
controlled group that includes Acquiror under Section 414 of the Code or Title
IV of ERISA and "Times Mirror Entity" means Times Mirror and any entity, other
than an Acquiror Entity, that is treated as a member at any time of a controlled
group that includes Times Mirror under Section 414 of the Code or Title IV of
ERISA.
(b) Indemnification by Acquiror. Acquiror shall indemnify each
Times Mirror Entity and each of their respective officers, directors, employees
and agents and hold them harmless from any Losses (other than a Loss arising
from an indemnification obligation under clause (a) above) suffered or incurred
by any such indemnified party as a result of a Third-Party Claim which would not
have been suffered or incurred by such indemnified party but for the treatment
of any Times Mirror Entity and Acquiror Entity as members, as a result of the
transaction contemplated by this Agreement, of the same "controlled group" under
Section 414 of the Code or Title IV of ERISA.
(c) Cooperation. After the Effective Time, Times Mirror and
Acquiror shall, to the extent reasonably requested by either such party, share
information concerning the funded status of retirement plans maintained by the
Times Mirror Entities and the Acquiror Entities, respectively, including copies
of actuarial valuations and similar reports.
(d) No Inference. No provision of this Section 10.8 shall be
interpreted as giving rise to any inference that any Times Mirror Entity and any
Acquiror Entity are or should
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be treated as members of the same "controlled group" for purposes of Section 414
of the Code, Title IV of ERISA, or any other purpose.
(e) Relationship to Section 2.3 and Article 11. Any
indemnification under this Section 10.8 shall be subject to the procedures set
forth in Section 11.6. Any indemnification under this Section 10.8 shall be
subject to the provisions of Section 11.4 in the same manner as if this Section
10.8 were a part of Article 11. The indemnification provided under this Section
10.8 shall be exclusive of any indemnification provided pursuant to Section 2.3
or pursuant to Article 11. The obligations of Times Mirror and Acquiror set
forth in this Section 10.8 shall not terminate.
SECTION 10.9. Mutual Cooperation. Each of Times Mirror, Acquiror and
Surviving Corporation agrees to cooperate, and agrees to use its best efforts to
cause its affiliates to cooperate and in a complete, diligent and timely manner
to provide each other such party with such compensation, service, payroll and
other pertinent census data as may be required by such party for purposes of
calculating or effecting distribution of benefits to which any MB Personnel may
be entitled under any benefit plan established, maintained or contributed to by
Times Mirror, Acquiror or Surviving Corporation.
SECTION 10.10. Certain Definitions. For purposes of this Agreement:
(a) "MB Employee" means (i) all persons actively employed at
the Effective Time by MB or any of its subsidiaries and (ii) all persons not so
actively employed but who are, as of the Effective Time, with respect to MB or
any of its subsidiaries, on any authorized leave of absence, on either short or
long-term disability leave, on worker's compensation leave or on vacation or
otherwise are absent with rights of recall or reinstatement.
(b) "MB Retirees" means all persons formerly employed by MB or
any of its subsidiaries who are eligible to receive benefits under any Plans of
Times Mirror or MB.
(c) "MB Personnel" means all MB Employees and MB Retirees.
ARTICLE 11
INDEMNIFICATION
SECTION 11.1. Tax Indemnification by Times Mirror.
(a) Times Mirror shall indemnify Acquiror and its affiliates (including
MB Parent and Surviving Corporation) and each of their respective officers,
directors, employees and agents and hold them harmless from (i) all liability
for (x) federal and state income, franchise or similar Taxes (including any
liability for Tax of MB and its Subsidiaries under Treasury Regulation Section
1.1502-6 or any similar provision of state, local or foreign law) ("Income
Taxes") and (y) all Taxes other than Income Taxes to the extent in excess of the
amount taken into account in the calculation of the MB Net Working Capital
Deficit delivered to Acquiror pursuant to Section 8.5(a) ("Other Taxes") of MB
and its Subsidiaries, for all periods ending on or before the
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Closing Date, provided that Times Mirror shall be required to indemnify any such
indemnified party in respect of Other Taxes only to the extent that such Other
Taxes exceed $500,000 in the aggregate, and (ii) all liabilities, costs,
expenses (including reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements or judgments arising out of
or incident to the imposition, assessment or assertion of any Tax described in
clause (i) above. The Tax indemnity provided under this Section 11.1(a) shall
not cover Tax liabilities resulting from any transactions of MB not in the
ordinary course of business that occur on the Closing Date but after the
Effective Time (which transactions, solely for purposes of the avoidance of
doubt, shall not include the Merger). The parties agree that the Tax
consequences of any such transaction shall be reflected on the Post-Closing Date
Tax Return of MB as provided under Treasury Regulation Section
1.1502-76(b)(ii)(B) and any similar state, local or foreign Tax provisions. The
▇▇▇▇ Parties and Times Mirror acknowledge that Times Mirror has no obligation to
indemnify Acquiror or its affiliates for any Taxes other than specifically
provided in this Section 11.1. The indemnification provided under this Section
11.1 shall be exclusive of any indemnification provided by Times Mirror pursuant
to Section 2.3.
(b) For purposes of this Section 11.1, in the case of any Taxes that
are imposed on a periodic basis and are payable for a Tax period that includes
(but does not end on) the Closing Date, the portion of such Tax related to the
portion of such Tax period ending on and including the Closing Date shall (i) in
the case of any Taxes other than gross receipts, sale or use taxes and Taxes
based upon or related to income, be deemed to be the amount of such Tax for the
entire Tax period multiplied by a fraction, the numerator of which is the number
of days in the Tax period ending on and including the Closing Date and the
denominator of which is the number of days in entire Tax period, and (ii) in the
case of any Tax based upon or related to income and gross receipts, sales or use
taxes, be deemed equal to the amount which would be payable if the relevant Tax
period ended on and included the Closing Date. The portion of any credits
relating to a Tax period that begins before and ends after the Closing Date
shall be determined as though the relevant Tax period ended on and included the
Closing Date. All determinations necessary to give effect to the foregoing
allocations shall be made in a manner consistent with the past practice of MB
and its Subsidiaries.
SECTION 11.2. Other Indemnification by Times Mirror. Times Mirror shall
indemnify Acquiror and its affiliates (including MB Parent and Surviving
Corporation) and each of their respective officers, directors, employees and
agents and hold them harmless from any Losses suffered or incurred by any such
indemnified party to the extent arising from (a) any failure of any
representation or warranty of any of the TM Parties, other than the
representations and warranties contained in Section 3.17, to be true and correct
as of the Effective Time or (b) any breach by Times Mirror or TMD of any
covenant contained in this Agreement or by MB of any covenant contained in this
Agreement to be performed prior to the Effective Time; provided, however, that
Times Mirror shall not have any liability under clause (a) of this Section 11.2
unless the aggregate of all Losses relating thereto for which Times Mirror
would, but for this provision, be liable exceeds on a cumulative basis an amount
equal to $5,000,000 in which case Times Mirror shall be responsible for all such
Losses; and provided further, however, that Times Mirror's aggregate liability
under clause (a) of this Section 11.2 shall in no event exceed an amount equal
to 25% of the value of the Merger Consideration. The indemnification provided
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under this Section 11.2 shall be exclusive of any indemnification provided by
Times Mirror pursuant to Section 2.3 and shall be provided only with respect to
matters discovered by Acquiror after the Effective Time.
SECTION 11.3. Indemnification by Acquiror. Acquiror shall indemnify
Times Mirror, TMD and their respective officers, directors, employees and agents
against and hold them harmless from any Losses suffered or incurred by any such
indemnified party to the extent arising from (a) any failure of any
representation or warranty of the ▇▇▇▇ Parties to be true and correct as of the
Effective Time or (b) any breach by the ▇▇▇▇ Parties of any covenant contained
in this Agreement; provided, however, that Acquiror shall not have any liability
under clause (a) of this Section 11.3 unless the aggregate of all Losses
relating thereto for which Acquiror would, but for this provision, be liable
exceeds on a cumulative basis an amount equal to $5,000,000, in which case
Acquiror shall be responsible for all such Losses; and provided further,
however, that Acquiror's aggregate liability under clause (a) of this Section
11.3 shall in no event exceed an amount equal to 25% of the value of the Merger
Consideration.
SECTION 11.4. Losses Net of Insurance. The amount of any Losses for
which indemnification is provided under this Article 11 shall be net of any
amounts recovered or recoverable by the indemnified party under insurance
policies with respect to such Losses.
SECTION 11.5. Termination of Indemnification. The obligations to
indemnify and hold harmless a party hereto, (a) pursuant to Section 11.1, shall
terminate at the time the applicable statutes of limitations with respect to the
Tax liabilities in question expire (giving effect to any extension thereof by
waiver or otherwise), (b) pursuant to clause (a) of Sections 11.2 and 11.3,
shall terminate when the applicable representation or warranty terminates
pursuant to Section 13.13, and (c) pursuant to clause (b) of Sections 11.2 and
11.3, shall not terminate; provided, however, that as to clauses (a) and (b)
above, such obligations to indemnify and hold harmless shall not terminate with
respect to any item as to which the person to be indemnified or the related
party hereto shall have, before the expiration of the applicable period,
previously made a claim by delivering a notice (setting forth the detailed basis
of such claim) to the indemnifying party.
SECTION 11.6. Procedures Relating to Indemnification (Except Under
Section 11.1). In order for a party (the "indemnified party") to be entitled to
any indemnification provided for under this Agreement (other than under Section
11.1) in respect of, arising out of or involving a claim or demand made by any
person, firm, governmental authority or corporation against the indemnified
party (a "Third-Party Claim"), such indemnified party must notify the
indemnifying party in writing, and in reasonable detail, of the Third-Party
Claim within 10 Business Days after receipt by such indemnified party of written
notice of the Third-Party Claim; provided, however, that failure to give such
notification shall not affect the indemnification provided hereunder except to
the extent the indemnifying party shall have been actually prejudiced as a
result of such failure (except that the indemnifying party shall not be liable
for any expenses incurred during the period in which the indemnified party
failed to give such notice). Thereafter, the indemnified party shall deliver to
the indemnifying party, within 5 Business Days after the indemnified
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party's receipt thereof, copies of all notices and documents (including court
papers) received by the indemnified party relating to the Third-Party Claim.
If a Third-Party Claim is made against an indemnified party, the
indemnifying party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified party. Should
the indemnifying party so elect to assume the defense of a Third-Party Claim,
the indemnifying party will not be liable to the indemnified party for legal
fees and expenses subsequently incurred by the indemnified party in connection
with the defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying party shall
control such defense. The indemnifying party shall be liable for the fees and
expenses of counsel employed by the indemnified party for any period during
which the indemnifying party has not assumed the defense thereof (other than
during any period in which the indemnified party shall have failed to give
notice of the Third-Party Claim as provided above). If the indemnifying party
chooses to defend or prosecute any Third-Party Claim, all the parties hereto
shall cooperate in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the indemnifying party's request) the provision
to the indemnifying party of records and information which are reasonably
relevant to such Third-Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Whether or not the indemnifying party shall have
assumed the defense of a Third-Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third-Party Claim without the indemnifying party's prior written consent (which
consent shall not be unreasonably withheld). The indemnifying party shall obtain
the prior written consent of the indemnified party (which shall not be
unreasonably withheld) before entering into any settlement of such Third-Party
Claim, if the settlement does not expressly unconditionally release the
indemnified party from all liabilities and obligations with respect to such
Third-Party Claim or the settlement imposes injunctive or other equitable relief
against the indemnified party. All Tax Claims shall be governed by Section 11.7.
SECTION 11.7. Procedures Relating to Indemnification of Tax Claims.
(a) Notice of Tax Claim. If a claim shall be made against
Acquiror or any of its affiliates by any taxing authority, which, if successful,
would result in an indemnity payment to Acquiror or one of its affiliates
pursuant to Section 11.1 (a "Tax Claim"), Acquiror shall promptly notify Times
Mirror in writing of such Tax Claim stating the nature and basis of such Tax
Claim and the amount thereof, to the extent known by Acquiror. If notice of a
Tax Claim is not given to Times Mirror within a sufficient period of time to
allow Times Mirror to effectively contest such Tax Claim, or in reasonable
detail to apprise Times Mirror of the nature of the Tax Claim, in each case
taking into account the facts and circumstances with respect to such Tax Claim,
Times Mirror shall not be liable to Acquiror or any of its affiliates to the
extent that Times Mirror's ability to effectively contest such Tax Claim is
actually prejudiced as a result thereof.
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(b) Control of Proceedings. With respect to any Tax Claim that
relates to a Tax period ending on or before the Closing Date, Times Mirror shall
control all proceedings taken in connection with such Tax Claim (including
selection of counsel) and, without limiting the foregoing, may in its sole
discretion pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with any taxing authority with respect thereto and may,
in its sole discretion, either pay the Tax claimed and ▇▇▇ for a refund where
applicable law permits such refund suits or contest the Tax Claim in any
permissible manner; provided, however, that Times Mirror shall not take or
advocate (unless otherwise required by applicable law) any position that could
reasonably be expected to have a material adverse effect on Acquiror or any of
its affiliates (including MB Parent and Surviving Corporation).
(c) With respect to any Tax Claim that relates to a Tax period
that begins before and ends after the Closing Date, Acquiror shall control all
proceedings taken in connection with such Tax Claim; provided that Acquiror
shall not settle any such proceeding, to the extent that such settlement would
result in an indemnity payment to Acquiror or one of its affiliates pursuant to
Section 11.1, without the consent of Times Mirror (which consent shall not be
unreasonably withheld).
SECTION 11.8. Exclusive Remedy. In the absence of fraud or willful
misconduct on the part of the indemnifying party, or any of its officers,
directors, employees or agents in connection with the negotiation, execution or
delivery of this Agreement or the consummation of the transactions contemplated
hereby, the remedy contained in Sections 10.8, 11.1, 11.2 and 11.3 shall
constitute the sole and exclusive remedy of the indemnified party (and its
affiliates and each of their respective officers, directors, employees and
agents) against the indemnifying party for Losses suffered or incurred in
connection with this Agreement and the transactions contemplated hereby.
ARTICLE 12
TAX MATTERS
SECTION 12.1. Taxes.
(a) Returns and Payments. Times Mirror shall timely prepare
and file with the Internal Revenue Service (the "IRS") all federal income and
with the appropriate state agencies all consolidated, combined or unitary state
income and franchise Tax Returns required to be filed by Times Mirror and its
affiliates with respect to MB and its Subsidiaries for all taxable years ending
at or before the Effective Time, and shall pay all Taxes due with respect to
such Tax Returns. MB shall timely prepare and file, or cause to be prepared and
filed, with the appropriate Tax authorities all other Tax Returns required to be
filed by MB and its subsidiaries, and, subject to Section 11.1, shall pay all
Taxes due with respect to such Tax Returns.
(b) Transfer Taxes. Acquiror shall pay all transfer Taxes
resulting from the transactions contemplated by this Agreement.
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SECTION 12.2. Cooperation. Times Mirror, Acquiror, MB Parent and
Surviving Corporation shall reasonably cooperate, and shall cause their
respective affiliates, officers, employees, agents, auditors and representatives
reasonably to cooperate, in preparing and filing all returns, reports and forms
relating to Taxes, including maintaining and making available to each other all
records necessary in connection with Taxes and in resolving all disputes and
audits with respect to all Taxable periods relating to Taxes. Each party hereto
shall retain or cause to be retained all books and records related to Tax
matters related to MB and its Subsidiaries for periods ending on or before the
Closing Date until the expiration of the applicable statute of limitations
(giving effect to any extension or waiver thereof).
SECTION 12.3. Tax Sharing Agreements. Any and all existing tax sharing
agreements or arrangements binding MB or any of its Subsidiaries shall be
terminated as of the Closing Date and, after the Closing Date, neither MB nor
any of its Subsidiaries shall have any further rights, obligations or
liabilities thereunder.
SECTION 12.4. FIRPTA. On or before the Closing Date, Times Mirror shall
deliver to Acquiror a properly executed statement pursuant to Treasury
Regulation Section 1.1445-2(b)(2) that TMD is not a "foreign person" for
purposes of such Regulation.
ARTICLE 13
MISCELLANEOUS
SECTION 13.1. Expenses. Whether or not the transactions contemplated
hereby are consummated, and except as otherwise provided in this Agreement, all
fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs or expenses. The fees, costs and expenses incurred by MB in connection
with this Agreement and the transactions contemplated hereby shall be paid by
Times Mirror.
SECTION 13.2. Attorneys' Fees. Should any arbitration or litigation be
commenced concerning this Agreement or the rights and duties of any party with
respect to it, the party prevailing shall be entitled, in addition to such other
relief as may be granted, to a reasonable sum for such party's attorneys' fees
and expenses determined by the court in such arbitration or litigation or in a
separate action brought for that purpose.
SECTION 13.3. Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by Times Mirror, TMD, MB,
Acquiror, MB Parent or MergerSub (including by operation of law in connection
with a merger, or sale of substantially all the assets, of Times Mirror, TMD,
MB, Acquiror, MB Parent or MergerSub) without the prior written consent of the
other parties hereto (except that nothing herein shall be construed (a) as
obligating (i) Times Mirror to obtain the consent of MB or TMD, (ii) TMD to
obtain the consent of Parent or MB or (iii) MB to obtain the consent of Times
Mirror or TMD to any of the transactions described above or (b) as obligating
(i) Acquiror to obtain the consent of MB Parent or MergerSub, (ii) MB Parent to
obtain the consent of Acquiror or MergerSub or (iii) MergerSub
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to obtain the consent of MB Parent or Acquiror to any of the transactions
described above); provided, however, that no assignment shall limit or affect
the assignor's obligations hereunder.
SECTION 13.4. No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person or
entity, other than the parties hereto and such assigns, any legal or equitable
rights hereunder. Without limiting the foregoing, nothing herein shall be
construed to give any MB Employee or any other person any right to employment or
continued employment, or to participate in or receive benefits under any
employee benefit plan.
SECTION 13.5. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent prepaid telecopy, or sent, postage prepaid, by registered,
certified or express mail, or reputable overnight courier service and shall be
deemed given when so delivered by hand or telecopied, or if mailed, three days
after mailing (one Business Day in the case of express mail or overnight courier
service), as follows:
(i) if to any ▇▇▇▇ Party or, after the Effective Time, MB,
c/▇ ▇▇▇▇ Elsevier Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
(ii) if to Times Mirror,
Times ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
(v) if to MB, prior to the Effective Time,
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Incorporated
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 13.6. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other party.
SECTION 13.7. Entire Agreement. This Agreement contains the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter.
SECTION 13.8. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.
SECTION 13.9. Amendment. This Agreement may be amended by action taken
by Times Mirror, TMD, MB and the ▇▇▇▇ Parties at any time only by an instrument
in writing signed on behalf of each of the parties hereto.
SECTION 13.10. Extension; Waiver. At any time prior to the Effective
Time, any party hereto may (a) extend the time for the performance of any of the
obligations or other acts of any other party, (b) waive any inaccuracies in the
representations and warranties of any other party contained herein or in any
document, certificate or writing delivered pursuant hereto or (c) waive
compliance by any other party with any of the agreements or conditions contained
herein. Any agreement on the part of any party hereto to any such extension or
waiver shall be valid only if
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set forth in an instrument, in writing, signed on behalf of such party. The
failure of any party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.
SECTION 13.11. Dispute Resolution.
(a) Accounting Disputes. Notwithstanding anything to the
contrary contained in this Section 13.11, any controversy, dispute or claim
arising under this Agreement related to or arising out of accounting matters
relating to this Agreement shall be resolved by means of discussions between the
regularly retained independent certified public accountants of Acquiror and
Times Mirror. In the event that the independent certified public accountants of
each of Acquiror and Times Mirror are unable to resolve the dispute within 60
days after the dispute is first submitted to them, then a third independent
certified public accountant of recognized national standing shall be selected by
the independent certified public accountants of each of Acquiror and Times
Mirror and the determination of such third independent certified public
accountant, with respect to the matter in dispute, shall be rendered within 45
days after the dispute has been submitted to it and such determination shall be
final and binding on all of the parties hereto.
(b) Other Disputes. Notwithstanding anything to the contrary
contained in this Section 13.11, any controversy, dispute or claim by any party
arising under this Agreement, including any claim for injunctive or other
equitable relief, including specific performance (including specific performance
of the agreement to resolve disputes related to or arising out of accounting
matters contained in Section 13.11(a)), may be brought in the Supreme Court of
the State of New York, New York County, or in the United States District Court
for the Southern District of New York. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of (i) the Supreme Court of the State of
New York, New York County and (ii) the United States District Court for the
Southern District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the parties hereto agrees to commence any action, suit or proceeding
relating hereto either in the United States District Court for the Southern
District of New York or, if, for jurisdictional reasons, such suit, action or
other proceeding may not be brought in such court, in the Supreme Court of the
State of New York, New York County. Each of the parties hereto further agrees
that service of any process, summons, notice or document by U.S. registered mail
to such party's respective address set forth in Section 13.5 above shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction as set forth
above in the immediately preceding sentence. Each of the parties hereto
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (x) the Supreme Court of the State of New York, New York
County or (y) the United States District Court for the Southern District of New
York, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
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SECTION 13.12. Interpretation of this Agreement.
(a) Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, "including" is not limiting
and "or" has the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder" and "this Agreement" and similar terms
in this Agreement refer to this Agreement as a whole (including the Preamble,
the Recitals, the Schedules and the Exhibits) and not to any particular
provision of this Agreement. Article, section, exhibit, schedule, recital and
preamble references in this Agreement are to those portions of this Agreement
unless otherwise specified.
(b) Knowledge. Whenever any representation or warranty of any
party contained in this Agreement or in any certificate or other document
delivered in connection with this Agreement is qualified to the "Knowledge" of
such party, such qualification shall mean the actual knowledge, after due
inquiry, of (i) in the case of Times Mirror or TMD, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇; (ii) in the case of MB, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇; and (iii) in the case of the ▇▇▇▇ Parties, I.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
(d) Headings, Exhibits and Schedules. The headings contained
in this Agreement, in any Exhibit or Schedule hereto and in the Table of
Contents to this Agreement, are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Any capitalized
terms used in any Exhibit or Schedule but not otherwise defined therein shall
have the meaning as defined in this Agreement. Any matter disclosed in one
Schedule hereto shall be deemed incorporated by reference into each other
Schedule hereto and disclosed in each such Schedule to the extent that the
relevancy of such matter to each such other Schedule is apparent from the
disclosure included on the Schedule.
(e) Representation By Counsel; Interpretation. The parties
hereto each acknowledges that each party to this Agreement has been represented
by counsel in connection with this Agreement and the transactions contemplated
by this Agreement. Accordingly, any rule of law, including Section 1654 of the
California Civil Code or any comparable provision of New York law, or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the party that drafted it has no application and is expressly
waived. The provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of the parties hereto.
SECTION 13.13 Survival of Representations. The representations and
warranties in this Agreement (other than representations and warranties relating
to Taxes and environmental matters) and in any other document identified as
being delivered in connection with this Agreement shall survive the Closing
solely for purposes of Section 11.2 and 11.3 and shall terminate at the close of
business on the first anniversary after the Effective Time. The
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representations and warranties relating to environmental matters shall survive
the Closing solely for the purposes of Sections 11.2 and 11.3 and shall
terminate when the applicable statutes of limitations with respect to the
environmental liabilities in question expire (giving effect to any extension
thereof by waiver or otherwise). The representations and warranties relating to
Taxes shall terminate on the Effective Time; however, Times Mirror's obligations
under Section 11.1 with respect to any Tax shall survive until the expiration of
the applicable statute of limitations with respect to such Tax.
SECTION 13.14. Adjustments. The per share and aggregate stated value of
the MergerSub Preferred Stock set forth in this Agreement are based on the
assumption that the MergerSub Debt is $600,000,000 immediately prior to the
Effective Time. If the MergerSub Debt is less than $600,000,000 immediately
prior to the Effective Time, the per share and aggregate stated value of the
MergerSub Preferred Stock shall be adjusted by mutual agreement of the parties
hereto.
SECTION 13.15. No Consequential or Punitive Damages. Notwithstanding
anything to the contrary elsewhere in this Agreement, no party (or its
affiliates) shall, in any event, be liable to any other party (or its
affiliates) for any consequential damages, including, but not limited to, loss
of revenue or income, or loss of business reputation or opportunity, or any
punitive damages relating to the breach or alleged breach of this Agreement.
SECTION 13.16. Amendment and Restatement. As of the date first written
above, this Agreement shall amend, restate and supersede the Existing Merger
Agreement in its entirety.
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IN WITNESS WHEREOF, the parties have caused this Amended and
Restated Agreement and Plan of Merger to be duly executed as of the date first
written above.
THE TIMES MIRROR COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
TMD, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INCORPORATED,
a New York corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇ ELSEVIER U.S. HOLDINGS INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇ ELSEVIER OVERSEAS BV,
a private limited liability company
incorporated under the laws of the
Kingdom of the Netherlands
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
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CBM ACQUISITION PARENT CO.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
CBM MERGERSUB CORP.,
a New York corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
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