EXECUTION COPY
EXHIBIT 10.15
AGREEMENT OF PURCHASE AND SALE
AMONG
THE JOPLIN GLOBE, INC.,
▇▇▇▇▇▇▇ NEWSPAPERS, INC.,
THE MAIL TRIBUNE, INC.
AND
NEWPAPER HOLDINGS, INC.
Dated as of February 20, 2002
AGREEMENT OF PURCHASE AND SALE, dated as of February 20, 2002
(the "Agreement"), among The Joplin Globe, Inc., a Delaware corporation,
▇▇▇▇▇▇▇ Newspapers, Inc. ("Parent"), The Mail Tribune, Inc., a Delaware
corporation ("MTI") and Newspaper Holdings, Inc., a Delaware corporation
(the "Buyer").
WHEREAS, the Seller desires to sell to the Buyer, and the
Buyer desires to buy from the Seller, the Seller Assets (as defined below)
and the publishing business of Seller carried on by or with respect to
such Seller Assets (the "Business");
WHEREAS, MTI desires to sell to the Buyer, and the Buyer
desires to buy from MTI, the MTI Assets (as defined below);
In consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be
legally bound hereby, the parties hereto agree that, subject to the
conditions herein contained:
ARTICLE I
SALE OF ASSETS AND TERMS OF PAYMENT
1.1. The Sale.
(a)(i) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date (as defined below), the Seller shall sell,
convey, transfer, assign and deliver to the Buyer, and the Buyer shall
purchase and acquire from the Seller, all of the Seller's right, title and
interest in and to the Seller Assets (as defined below), as the same may
exist on the Closing Date. As used in this Agreement, the term "Seller
Assets" means all of the Seller's assets (other than Excluded Assets)
(defined below)), including:
(A) Each of the publications referred to in Schedule 1.1(a)(i)(A)
and all Seller's rights to prepare, publish, sell and distribute such
publications and any other publications, extensions or spinoffs derived
from such publications or related thereto in all languages (collectively,
the "Publications").
(B) All inventories (including, without limitation, inventories
of back and current issues of the Publications); editorial material, work
in process, finished goods, manuscripts, notes and drafts, graphic
artwork, cuts, photographs and negatives owned by the Seller; promotional
materials, inserts, and direct mail materials owned by the Seller;
stationery, supplies, purchase orders, forms, labels, shipping materials
and catalogs owned by the Seller, and all lists owned by the Seller of
contributors, authors, correspondents, reviewers, photographers,
illustrators and editors who contribute or have contributed to any of the
Publications.
(C) All circulation, delivery and mailing lists and carrier
routes maintained by or for the Seller relating to any of the
Publications, all data related to such lists, all circulation readership
studies, audience surveys and research owned by the Seller, and all other
mailing lists, together with all records, reports and tapes of computer
data owned by the Seller relating to any of the Publications.
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(D) All copyrights owned by the Seller in all material used in
any of the Publications, including all copyrights covering each issue of
each of the Publications, and the contents and components thereof, and all
copyright registrations pertaining thereto and all rights of the Seller to
obtain renewals and extensions of such copyrights (the "Copyrights").
(E) All lists of, files, books and records of the Seller relating
to the advertisers of, for or in any of the Publications, including, but
not limited to, rate cards, verification cards, advertising insertion
orders, specimen copies of all advertisements carried in any of the
Publications, and copies of current price lists, discount lists, catalogs,
public relations materials, sales correspondence, call reports, call books
and sales promotion lists.
(F) All of the advertising contracts, space reservations and
insertion orders relating to the placement of advertising in any of the
Publications with respect to all issues to be published after the Closing
Date.
(G) All subscriptions and orders for any of the Publications.
(H) All accounts and other amounts receivable and all Seller's
other rights to payment (including employee receivables), causes of
action, claims and rights of recovery, whether arising or accruing prior
to, on or after the Closing Date, whether in respect of advertising,
subscriptions, mailing lists or newsstand orders or otherwise, together
with the proceeds thereof.
(I) All fixed and tangible personal property as identified in
Schedule 1.1(a)(i)(I).
(J) All leaseholds, identified in Schedule 1.1(a)(i)(J).
(K) All licenses, permits, variances, franchises, certifications,
approvals, permits and authorizations issued by any administrative body or
licensing authority or governmental or regulatory agency to the Seller,
together with any renewals, extensions or modifications thereof and
additions thereto (the "Licenses"), to the extent transferable.
(L) All contracts, agreements and leases to which the Seller is a
party (hereinafter collectively, the "Contracts").
(M) All other books, financial and personnel records, invoices,
shipping records, supplier lists and other documents, records, data files
and service manuals owned by the Seller, but excluding the Seller's
corporate minute books and stockholder records.
(N) All computer software and programs and any rights thereto
owned by the Seller, but, if not owned by the Seller, then to the extent
that such software, programs or rights are assignable.
(O) All claims, causes of action, rights of recovery and rights
of set-off of any kind (including, without limitation, rights under and
pursuant to all warranties, representations and guarantees made by
suppliers of products, materials or equipment, or components thereof)
owned by the Seller.
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(P) The goodwill of or pertaining to the Business, the Seller
Assets, and the Publications.
(Q) The real property identified on Schedule 1.1(a)(i)(Q) (the
"Property").
(ii) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, MTI shall sell, convey, transfer, assign
and deliver to the Buyer, and the Buyer shall purchase and acquire from
MTI all of MTI's right, title and interest in and to the MTI Assets (as
defined below), as the same may exist on the Closing Date. As used in
this Agreement, the term "MTI Assets" means:
(A) All trademarks, service marks, logos, trademark
registrations, service ▇▇▇▇ registrations, trade names, domain names and
brand names used in connection with any of the Publications identified on
Schedule 3.11 (collectively, the "Intellectual Property") and the goodwill
related thereto.
(B) The names and addresses of all subscribers to any of the
Publications, all data related to such subscribers, and all rights to own,
manage, use and rent the names and addresses of all subscribers to any of
the Publications.
(C) All lists of, files, books and records of MTI relating to the
advertisers of, for or in any of the Publications, including, prospect
lists for advertising in any of the Publications.
(D) The goodwill of or pertaining to the MTI Assets.
(iii) Notwithstanding anything in this Agreement to the
contrary, specifically excluded from the Assets are the assets set forth
in Schedule 1.1(a)(iii) (collectively, the "Excluded Assets").
(iv) As used herein, the term Assets shall include the
Seller Assets and the MTI Assets.
(b)(i) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, the Buyer shall execute and deliver to the
Seller an Obligations Undertaking substantially in the form of Exhibit
1.1(c) (the "Obligations Undertaking") pursuant to which the Buyer shall
assume and become responsible for all debts, commitments, obligations and
liabilities (whether absolute, contingent, accrued, unaccrued, due or to
become due) of the Seller, or of MTI relating primarily to the Business
(collectively, excluding the Excluded Liabilities (defined below)) the
"Assumed Liabilities"), except for the liabilities expressly set forth in
the Obligations Undertaking (collectively, the "Excluded Liabilities").
(ii) The Buyer shall pay, perform and discharge when due
each Assumed Liability in accordance with the terms thereof.
(iii) The Buyer agrees that, effective upon the Closing,
the Buyer shall indemnify the Seller, MTI and the Parent and their
respective affiliates and hold each of them harmless against any claims,
losses, liabilities, damages, judgments, costs and expenses (including,
attorneys' fees and expenses) incurred or suffered by any of them arising
out of the Assumed Liabilities after the Closing Date.
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1.2. Purchase Price. (a) Upon the terms and subject to the
conditions contained in this Agreement, and in consideration of the
aforesaid sale, assignment, transfer and delivery of the Assets, on the
Closing Date the Buyer will pay or cause to be paid: (i) to the Seller in
cash the sum of (x) Sixty Six Million Nine Hundred Fourteen Thousand One
Hundred Sixty One Dollars ($66,914,161), plus (y) the amount, if any, by
which Estimated Closing Adjusted Net Working Capital (as defined below)
exceeds Zero Dollars ($0) or minus (z) the amount, if any, by which
Estimated Closing Adjusted Net Working Capital is less than Zero Dollars
($0) (the "Estimated Purchase Price") and (ii) to MTI in cash Zero Dollars
($0) (the "MTI Purchase Price"). As additional consideration for the
purchase of the Assets, the Buyer shall assume the Assumed Liabilities.
The Buyer shall deliver to the Seller the Estimated Purchase Price, and to
MTI the MTI Purchase Price, by wire transfer of immediately available
funds to accounts designated by the Seller, and MTI, respectively, in
writing at least two (2) business days prior to the Closing Date.
(b) As used in this Agreement, the term "Closing Adjusted
Net Working Capital" means the amount of the difference between (i) the
aggregate value of the current assets of the Seller (excluding cash) as of
the Closing (the "Current Assets"), and (ii) the aggregate amount of the
current liabilities of the Seller (excluding liabilities for taxes and
other Excluded Liabilities) as of the Closing (the "Current Liabilities"),
in each case computed in a manner consistent with the Seller's accounting
practices. If Current Assets exceed Current Liabilities, the Closing
Adjusted Net Working Capital shall be deemed to be a positive amount. If
Current Liabilities exceed Current Assets, the Closing Adjusted Net
Working Capital shall be deemed to be a negative amount.
(c) Two (2) business days prior to the Closing, the Buyer
and the Seller shall jointly agree in writing upon an estimate of the
Closing Adjusted Net Working Capital as of the Closing Date (the
"Estimated Closing Adjusted Net Working Capital") and such Estimated
Closing Adjusted Net Working Capital shall be used to determine the amount
of the Estimated Purchase Price payable to the Seller at the Closing as
set forth in clause (a) of this Section 1.2.
(d) As soon as practicable after the Closing (but in any
event within sixty (60) business days thereof), the Buyer shall calculate
the actual Closing Adjusted Net Working Capital and deliver such
calculation, as well as the balance sheet used to derive such calculation
and all back-up materials necessary for Seller's understanding of such
calculation, to the Seller. The Seller must within thirty (30) business
days of receipt of same (the "Receipt Date") confirm whether or not it
agrees with the calculation of Closing Adjusted Net Working Capital and,
if it does not agree with such calculation, Seller will specify within
sixty (60) business days of the Receipt Date in reasonable detail the
points of disagreement. The Buyer and its accountants will provide the
Seller's accountants with reasonable access to the necessary books,
records and working papers. The parties shall then seek to resolve the
points of disagreement and agree upon the Closing Adjusted Net Working
Capital. If either the Seller agrees upon the Closing Adjusted Net
Working Capital or the Buyer and the Seller agree upon the same (with such
further adjustments as they may agree) within ninety (90) business days of
the Receipt Date,
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the amount so agreed upon shall be the Closing Adjusted Net Working
Capital. If the Buyer and the Seller do not agree upon the Closing
Adjusted Net Working Capital pursuant to the procedures set forth above,
the Buyer and the Seller shall mutually agree (and such agreement shall
not be unreasonably withheld) to the appointment of a firm of independent
public accountants from the "Big Five" accounting firms to act as an
arbitrator (the "Arbitrator") to determine the Closing Adjusted Net
Working Capital within one hundred twenty (120) business days of the
Receipt Date or as soon thereafter as is practicable. If the parties fail
to agree on the Arbitrator by the 100th business day after the Receipt
Date, the parties shall request that the American Arbitration Association
select one of the "Big Five" accounting firms with no material
relationship with Seller or Buyer to act as the Arbitrator. All
determinations made by the Arbitrator shall be final, conclusive and
binding with respect to the Closing Adjusted Net Working Capital. Fees
and expenses of the Arbitrator shall be shared equally by the Buyer, on
the one hand, and the Seller, on the other.
(e) To the extent that the actual amount of the Closing
Adjusted Net Working Capital (determined in accordance with the procedure
set forth in clause (d) of this Section 1.2), is greater than the
Estimated Closing Adjusted Net Working Capital, the Buyer shall pay to the
Seller within five business days of the date of such determination the
amount of such excess by wire transfer of immediately available funds to
an account designated in writing for such purpose by the Seller at least
one (1) business day prior to the date of payment (the "Additional
Purchase Price"). To the extent that the Estimated Closing Adjusted Net
Working Capital is greater than the Closing Adjusted Net Working Capital
(determined in accordance with the procedure set forth in clause (d) of
this Section 1.2), the Seller shall pay to the Buyer within five business
days of the date of such determination the amount of such excess by wire
transfer of immediately available funds to an account designated in
writing for such purpose by the Buyer at least one (1) business day prior
to the date of payment (the "Excess Purchase Price"). The MTI Purchase
Price and the Estimated Purchase Price plus the Additional Purchase Price
or less the Excess Purchase Price, as the case may be, is referred to
herein as the "Purchase Price".
1.3. Allocation. The Buyer, the Seller and MTI agree to
allocate the Purchase Price among the Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
on Schedule 1.3.
1.4 Procedures for Assets Not Transferable. If any of the
Contracts or any other property or rights included in the Seller Assets
are not assignable or transferable either by virtue of the provisions
thereof or under applicable law without the consent of some other party or
parties (a "Required Consent"), Seller shall use all commercially
reasonable efforts to obtain such consents prior to the Closing Date and
shall notify Buyer on or prior to the Closing Date of any consents not so
obtained; provided, that Seller shall not be required to make any payments
or to incur any obligations to third parties in connection with the
obtaining of any such consent. If any Required Consent cannot be obtained
prior to Closing, Seller shall use all commercially reasonable efforts to
obtain any consents not previously obtained as soon as possible after the
Closing Date or otherwise obtain for Buyer the practical benefit of such
property or rights.
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1.5 The Indemnification Agreement. In connection with the transactions
contemplated by this Agreement, the Buyer and the Parent are entering into
an indemnification agreement dated simultaneously with the date hereof
(the "Indemnification Agreement").
ARTICLE II
THE CLOSING
2.1. Time and Place of Closing. Upon the terms and subject to
the conditions contained in this Agreement, the closing of the
transactions contemplated by this Agreement (the "Closing") will take
place at the offices of Dow ▇▇▇▇▇ & Company, Inc. at 10:00 A.M. (local
time) on the later of (i) March 29, 2002 or (ii) as
soon as practicable, but in any event within three business days,
following
the date on which all of the conditions to each party's obligations
hereunder have been satisfied or waived; or at such other place or time or
both as the parties may agree. The date on which the Closing actually
occurs and the transactions contemplated hereby become effective is
hereinafter referred to as the "Closing Date."
2.2. Deliveries by the Seller and MTI. At the Closing (or as
soon thereafter as reasonably practicable with respect to Trademarks), the
Seller and MTI, as applicable, will deliver or cause to be delivered to
the Buyer duly executed instruments of transfer and assignment of the
Assets in form reasonably satisfactory to the Buyer, subject only to
Permitted Liens (as defined below), sufficient to vest in the Buyer the
interests in the Assets to be conveyed at the Closing in accordance with
the terms of this Agreement. In addition, at the Closing, the Seller, MTI
and the Parent shall deliver to Buyer:
(i) the originals (or if not in existence copies) of all
Contracts and the originals of all books, records and files included in
the Assets;
(ii) copies of corporate and stockholder resolutions of
each of the Seller, MTI and the Parent authorizing the execution and
delivery of this Agreement and, with respect to the Parent, the
Indemnification Agreement, and each Exhibit hereto to which each is a
party and the consummation of the transactions contemplated hereby and
thereby, certified by an executive officer of the Seller, MTI and the
Parent, as the case may be;
(iii) executed counterparts reasonably satisfactory in form
and substance to the Buyer of all consents necessary to the assignment to
the Buyer of the Contracts listed on Schedule 2.2 (the "Consents"); and
(iv) all other documents required by the terms of this
Agreement to be delivered by the Seller to the Buyer at the Closing.
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2.3. Deliveries by the Buyer. At the Closing, the Buyer will
deliver to the Seller the Obligations Undertaking. In addition, at the
Closing, the Buyer shall deliver:
(i) the Estimated Purchase Price and the MTI Purchase
Price;
(ii) copies of corporate and stockholder resolutions of
the Buyer authorizing the execution and delivery of this Agreement and the
Indemnification Agreement and each Exhibit hereto to which the Buyer is a
party and the consummation of the transactions contemplated hereby and
thereby, certified by an executive officer of the Buyer; and
(iii) all other documents required by the terms of this
Agreement to be delivered by the Buyer to the Seller at the Closing.
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE SELLER, MTI AND THE PARENT
Except as set forth in the schedules being delivered by
the Seller to the Buyer (the "Seller Schedules," and each, a "Seller
Schedule"), the Seller, with respect to itself, the Business, and the
Seller Assets; MTI, with respect to itself and the MTI Assets, and only as
set forth in Sections 3.1, 3.2, 3.3, 3.6, 3.8, 3.11 and 3.16; and the
Parent, with respect to itself and only as set forth in Sections 3.1, 3.2,
3.3, 3.8 and 3.16, represent and warrant to the Buyer as follows:
3.1 Organization. Each of the Seller, MTI and the Parent is
a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, except where the
failure to be so existing and in good standing would not have a Business
Material Adverse Effect. A "Business Material Adverse Effect" means a
material adverse effect on the operations or financial condition of the
Business (other than any effect arising from or related to general
economic, securities markets, or industry conditions) or on the ability of
the Seller, MTI and the Parent to consummate the transactions contemplated
hereby without material delay. The Seller has all requisite corporate
power and authority to own, lease and operate the Seller Assets and to
carry on the Business as now being conducted, except where the failure to
have such power and authority would not have a Business Material Adverse
Effect. MTI has all requisite corporate power and authority to own, lease
and operate the MTI Assets, except where the failure to have such power
and authority would not have a Business Material Adverse Effect.
3.2. Authority Relative to this Agreement and the
Indemnification Agreement. Each of the Seller, MTI and the Parent has
full corporate power and authority to execute and deliver this Agreement
(and, with respect to the Parent, the Indemnification Agreement) and to
consummate the transactions contemplated hereby (and, with respect to the
Parent, by the Indemnification Agreement). The execution and delivery of
this Agreement by the Seller, MTI and the Parent (and, with respect to the
Parent, of the Indemnification Agreement) and the consummation of the
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transactions contemplated hereby by the Seller, MTI and the Parent (and,
with respect to the Parent, by the Indemnification Agreement) have been
duly and validly authorized by all necessary corporate action on the part
of the Seller, MTI and the Parent and no other corporate proceedings on
the part of the Seller, MTI or the Parent are necessary to authorize this
Agreement (or, with respect to the Parent, the Indemnification Agreement)
or to consummate the transactions contemplated hereby (or, with respect to
the Parent, by the Indemnification Agreement). This Agreement (and, with
respect to the Parent, the Indemnification Agreement) has been duly and
validly executed and delivered by the Seller, MTI and the Parent and,
assuming the due authorization, execution and delivery by the other
parties hereto, constitute a legal, valid and binding obligation of the
Seller, MTI and the Parent, enforceable against each such party in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general equitable principles
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
3.3. Consents and Approvals; No Violation. Except for the
applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended and the rules and regulations thereunder (the "HSR
Act"), to the knowledge of each of the Seller, the Parent and MTI,
respectively, there is no requirement applicable to the Seller, the Parent
or MTI to make any filing with, or to obtain any permit, authorization,
consent or approval of, any governmental or regulatory authority as a
condition to (i) the lawful consummation by the Seller, the Parent or MTI
of the transactions contemplated by this Agreement or (ii) the lawful
consummation by the Parent of the transactions contemplated by the
Indemnification Agreement. Except as set forth in Schedule 3.3, neither
the execution and delivery of this Agreement by the Seller, the Parent and
MTI (and of the Indemnification Agreement by the Parent) nor the
consummation by the Seller, the Parent and MTI of the transactions
contemplated hereby (and by the Parent of the transactions contemplated by
the Indemnification Agreement) nor compliance by the Seller, the Parent
and MTI with any of the provisions hereof (and by the Parent with any of
the provisions of the Indemnification Agreement) will (i) conflict with or
result in any breach of the Certificate of Incorporation or By-laws of the
Seller or MTI, as the case may be, (ii) to the knowledge of the Seller,
the Parent or MTI result in a breach of or default, or give rise to any
right of termination, cancellation or acceleration under, any material
note, bond, mortgage, indenture, license, agreement, lease or other
similar instrument or obligation to which the Seller the Parent or MTI is
a party or by which any of its properties or assets may be bound, except
for such breaches or defaults (or, rights of termination cancellation or
acceleration) as to which requisite waivers or consents have been
obtained, or (iii) assuming compliance with the HSR Act, to the knowledge
of the Seller and MTI, violate any material order, judgment, writ,
injunction, decree, statute, rule or regulation applicable to the Seller,
the Parent MTI, the Business or any of the Assets, excluding from the
foregoing clauses (ii) and (iii) such breaches, defaults, rights of
termination, cancellation or acceleration and violations which would not
have a Business Material Adverse Effect.
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3.4. Financial Statements. Attached as Schedule 3.4 are (i)
the statements of income of the Seller for the years ending December 31,
2000 and 2001, (ii) the statement of income of the Seller for the one-
month period ended January 31, 2002 (the "January Income Statement"),
(iii) the balance sheets of the Seller as of December 31, 2000 and 2001
and (iv) the balance sheet of the Seller as of January 31], 2002 (the
"January Balance Sheet" and, together with the January Income Statement,
the "January Financial Statements" and all above referenced financial
information collectively, the "Financial Statements"). The Financial
Statements (including the notes thereto) fairly present in all material
respects the financial position of the Business and the results of
operations of the Business as at and for the periods covered thereby and
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, except as otherwise noted
therein, and except for footnotes and for year-end adjustments the effect
of which in the aggregate is not expected to be material.
3.5. Absence of Certain Changes or Events. Except as set
forth in Schedule 3.5 and except as otherwise contemplated by this
Agreement, since January 31, 2002, the Business has not (a) suffered any
damage, destruction or casualty loss to its physical properties which has
had a Business Material Adverse Effect; (b) incurred or discharged any
obligation or liability or entered into any other transaction except in
the ordinary course of business and except that have not had a Business
Material Adverse Effect; (c) suffered any change in its relationship with
its suppliers, customers, distributors, lessors, licensors, or licensees
other than changes which have not had a Business Material Adverse Effect;
(d) other than with respect to agreements for which the Buyer will have no
liability after Closing, increased the rate or terms of compensation or
benefits payable to or to become payable by it to its directors, officers,
or key employees or increased the rate or terms of any bonus, pension or
other employee benefit plan covering any of its directors, officers or key
employees, except in each case increases occurring in the ordinary course
of business in accordance with its customary practice (including normal
periodic performance reviews and related compensation and benefits
increases) or as required by any pre-existing commitment; (e) incurred any
indebtedness for borrowed money; (f) forgiven or canceled any indebtedness
owing to it or waived any claims or rights of material value, in each case
except in the ordinary course of business; (g) sold, leased, licensed or
otherwise disposed of any of its material assets other than sales of
inventory and sales of obsolete assets in the ordinary course of business;
or (h) committed pursuant to a legally binding agreement to do any of the
things set forth in clause (b) and clauses (d) through (g) above.
3.6. Title to Assets. Each of the Seller and MTI has good
title to all of the Assets which it purports to own (except for Assets
sold, consumed or otherwise disposed of in the ordinary course of business
since the date of the January Balance Sheet), free and clear of all liens,
pledges, charges, mortgages, security interests, restrictions, easements,
liabilities, claims, encumbrances or rights of others of every kind and
description (collectively, "Liens"), except Permitted Liens. Except as
specified in Schedule 3.6, the Assets include all material assets and
properties used in the operation and conduct of the Business as currently
conducted by the Seller, and are in good working order, reasonable wear
and tear excepted.
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3.7. Certain Contracts. Schedule 3.7 lists all contracts or
agreements to which the Seller is a party, as of the date hereof, other
than (i) contracts for the purchase or sale of goods or services entered
into in the ordinary course of business, (ii) contracts that terminate or
are terminable without penalty within one (1) year after the date hereof,
and (iii) contracts that involve an annual obligation of less than $10,000
on the part of the Business (collectively, the "Material Contracts").
Except as set forth in Schedule 3.7, to the knowledge of the Seller, there
is not, under any of the Material Contracts, any existing default or event
of default which, with or without due notice or lapse of time or both,
would constitute a default or event of default on the part of the Seller,
except such defaults, events of default and other events which would not
have a Business Material Adverse Effect. Except as set forth in Schedule
3.7, each Material Contract is a valid and binding obligation of the
Seller to the knowledge of the Seller, the other party thereto, is
enforceable against the Seller in accordance with its terms, in all cases
except as such enforceability may be limited by the effect of bankruptcy,
insolvency or similar laws affecting creditors' rights generally or by
general principles of equity, and is in full force and effect as of the
date hereof.
3.8. Legal Proceedings, etc. Except as set forth on
Schedule 3.8, as of the date hereof, there are no legal, administrative,
arbitration or other proceedings or governmental investigations pending
or, to the knowledge of the Seller, threatened in writing against the
Seller, or against MTI or the Parent relating to the Business, other than
those which would not have a Business Material Adverse Effect.
3.9. Employee Benefit Plans. The Seller has made available
to the Buyer each written plan, policy, commitment and agreement that
provides material compensation or employee benefits to the Transferred
Employees (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), maintained by the Seller or any of its
affiliates.
3.10. Taxes. All material returns of income Taxes (as
defined in the following sentence) and all returns of other Taxes required
to be filed with respect to the Business have been filed (taking into
account any extension of time to file), and all material Taxes required to
be paid in connection therewith have been paid, except where failure to
file such Tax returns or to pay such Taxes would not have a Material
Adverse Effect. For purposes of this Section 3.10, "Taxes" shall mean all
taxes, charges, fees, levies, or other assessments, including, without
limitation, income, excise, property, sales and franchise taxes, imposed
by the United States or any state, county, local or foreign government or
subdivision or agency thereof, and including any interest, penalties or
additions attributable thereto.
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3.11. Intellectual Property. Schedule 3.11 sets forth a
list of all of the Intellectual Property. Except as set forth on Schedule
3.11, the Seller and MTI own or, to the knowledge of the Seller and MTI,
have a valid right to use the Intellectual Property included in the Seller
Assets and the MTI Assets, respectively, and the Seller owns the
Copyrights, in each case free and clear of all Liens (other than Permitted
Liens), except for such Liens or absence of rights as would not have a
Business Material Adverse Effect. Each of the Seller and MTI has the
power and authority to transfer or license to the Buyer all of such rights
owned by such party to be transferred or licensed to the Buyer under this
Agreement with respect to the Intellectual Property and the Copyrights.
Except as set forth in Schedule 3.11, as of the date hereof, there is no
claim or litigation pending or, to the knowledge of the Seller or MTI,
threatened in writing against the Seller or MTI contesting the right of
the Seller or MTI to sell or the right of the Seller or MTI to use any of
the Intellectual Property or the Copyrights.
3.12. Compliance with Law; Licenses. Except as set forth in
Schedule 3.12 hereto, to the knowledge of the Seller, the Business is in
compliance in all material respects with all applicable laws, rules and
regulations, except where the failure to so comply would not have a
Business Material Adverse Effect. Except as would not have a Business
Material Adverse Effect, to the knowledge of the Seller, the Business has
all of the Licenses required for the operation of the Business as
conducted as of the date of this Agreement. (This Section 3.12 does not
relate to environmental matters, which matters are covered instead
exclusively in Section 3.18.)
3.13. Employees. (a) Schedule 3.13 is a true and complete
list of the name of each individual who is employed or who is retained as
an independent contractor or consultant (either directly or indirectly) by
the Seller on the date hereof along with his or her current job title,
compensation, and any additional employee benefits enjoyed by such
individual which are not generally available to employees of the Seller.
(b) The Seller has complied in all material respects
with all applicable laws, rules and regulations relating to the employment
of labor, including those relating to wages, hours, unemployment
insurance, collective bargaining and the payment and withholding of taxes
for all employees of the Seller. There is not pending or, to the
knowledge of the Seller, threatened, any material labor dispute, strike,
work stoppage or union organizing effort involving the Business.
3.14. Undisclosed Liabilities. The Business did not have as
of the date of the January Balance Sheet any material liability or
obligation of any kind or nature (fixed or contingent) that is required to
be reflected on a balance sheet in accordance with generally accepted
accounting principles, which is not reflected, reserved against or
disclosed in the January Financial Statements or disclosed elsewhere in
the Schedules or in the documents listed in the Schedules, other than (i)
such as would not have a Business Material Adverse Effect, (ii) Excluded
Liabilities, (iii) liabilities incurred in the ordinary course of business
since the date of the January Balance Sheet, and (iv) liabilities under
contracts not required to be disclosed on Seller's Schedules.
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3.15. Schedules and Exhibits. Disclosure of any fact or item
in any Schedule or Exhibit hereto referenced by a particular paragraph or
section in this Agreement shall, should the existence of the fact or item
or its contents be relevant to any other paragraph or section, be deemed
to be disclosed with respect to that other paragraph or section whether or
not an explicit cross-reference appears.
3.16. No Implied Representation. Notwithstanding anything
contained in this Article III or any other provision of this Agreement, it
is the explicit intent of each party hereto that none of the Seller, MTI
or the Parent is making any representation or warranty whatsoever, express
or implied, beyond those expressly given in this Agreement, including any
implied warranty or representation as to condition, merchantability or
suitability as to any of the Assets or the Business, and it is understood
that subject to the representations and warranties contained in this
Agreement the Buyer takes the Assets and the Business as is and where is
and in their then present condition, and Buyer shall rely upon its own
examination thereof.
3.17. Construction of Certain Provisions. It is understood
and agreed that the specification of any dollar amount in any provision of
this Agreement or the Indemnification Agreement or the inclusion of any
specific item in the Schedules or Exhibits is not intended to imply that
such amounts or higher or lower amounts, or the items so included or other
items, are or are not material and neither party shall use the fact of the
setting of such amounts or the fact of the inclusion of any such item in
the Schedules in any dispute or controversy between the parties as to
whether any obligation, item or matter not described herein or included in
a Schedule or Exhibit is or is not material for purposes of this Agreement
or the Indemnification Agreement.
3.18. Environmental Matters.
(a) Except as set forth in Schedule 3.18(a), to the
knowledge of the Seller, (i) the Business is in compliance in all material
respects with all applicable Environmental Laws, except for such
noncompliance as would not have a Business Material Adverse Effect; (ii)
the Seller has obtained and is in material compliance with all terms and
conditions of all Environmental Permits, except for such noncompliance as
would not have a Business Material Adverse Effect; and (iii) neither the
Seller, nor the Parent has received any written notice that the Business
is in violation of any Environmental Laws or Environmental Permits.
(b) Except as set forth in Schedule 3.18(b) or except
as otherwise permitted by applicable Environmental Laws, the Seller has no
knowledge of the release or discharge of any Hazardous Materials by the
Seller into the environment at, on or from the premises of the Seller,
that would be reasonably likely to form the basis of any claim or action
under any Environmental Laws and that would have a Business Material
Adverse Effect.
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(c) For purposes of this Agreement: (i) "Environmental
Laws" means all federal, state, local and foreign statutes, laws, rules,
regulations and ordinances relating to Environmental Matters, as enacted
and in effect on or prior to the date hereof; (ii) "Environmental Matters"
means any matter arising out of or relating to health and safety, or
pollution or protection of the environment or workplace, any of the
foregoing relating to the presence, use, production, generation, handling,
transport, treatment, storage, disposal, distribution, discharge, release,
control or cleanup of any Hazardous Materials; (iii) "Environmental
Permits" means all licenses, permits and other governmental authorizations
required pursuant to applicable Environmental Laws for the operation of
the Business as conducted as of the date of this Agreement; and (iv)
"Hazardous Materials" means, collectively, any material defined as, or
considered to be, a "hazardous waste," "hazardous substance," pollutant or
contaminant under any Environmental Law including, the Comprehensive
Environmental Response Compensation and Liability Act (42 U.S.C. Section 9601
et. seq.) and/or the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et. seq.).
3.19 Real Property.
(a) Schedule 1.1(a)(i)(Q) lists all real property owned
by Seller included in the Seller Assets. Seller does not own or lease any
real property in connection with the businesses of the Publications other
than the Property and the Leasehold Property (as defined below). At the
Closing, Seller will transfer to Buyer good and marketable fee simple
title to all Property free and clear of all Liens (other than Permitted
Liens).
(b) Schedule 1.1(a)(i)(J) lists all real property leases
where Seller is lessee ("Facility Leases") included in the Seller Assets.
Other than the Facility Leases set forth on Schedule 1.1(a)(i)(J) or other
leases set forth on Schedule 1.1(a)(i)(L), there are no leases, subleases,
licenses or other agreements or arrangements granting to any person the
right to purchase, use or occupy any facility or any real property owned
or leased by Seller.
(c) With respect to each Facility Lease, Seller has and
will transfer to Buyer at the Closing, subject to any required consent and
to Section 1.4 hereof, an unencumbered interest in the leasehold estate.
Seller enjoys peaceful and undisturbed possession of the property subject
to each Facility Lease, subject to the rights of the fee owners.
(d) No zoning or similar land use restrictions are
presently in effect or, to Seller's knowledge, proposed, by any
governmental authority that would impair the use, occupancy, or enjoyment
of the Property for the purposes for which such Property is currently
being used, and Seller's use of the Property is in compliance with all
applicable building, zoning, land use, health or other codes, ordinances,
laws or regulations relating to the use thereof except as would not have a
Business Material Adverse Effect. No condemnation or taking by eminent
domain of the Property has occurred, is pending or, to the knowledge of
Seller, is threatened.
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(e) The Property is served by or has access to public
streets and rights of way, rights of ingress and egress, public sewage
(both storm and sanitary), gas, electric and telephone utility services
that are adequate for the operation of the Publications as currently
conducted.
3.20 Circulation. Schedule 3.20 sets forth the paid
circulation of each of the Publications as of the most recent date
reported by the Audit Bureau of Circulation and as of the most recent
date reported in the Publisher's Unaudited Statement to the Audit Bureau
of Circulation. There has been no material decline in paid circulation
for the Publications since the most recent date reported in the
Publisher's Unaudited Statement to the Audit Bureau of Circulation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Except as set forth in the schedules being delivered by
the Buyer to the Seller (the "Buyer Schedules" and, each, a "Buyer
Schedule"), the Buyer represents and warrants to the Seller, MTI and the
Parent as follows:
4.1. Organization. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so
existing and in good standing or to have such power and authority would
not have a Buyer Material Adverse Effect. A "Buyer Material Adverse
Effect" mans a material adverse effect on the operations or financial
condition of the Buyer (other than any effect arising from or related to
general economic, securities markets, or industry conditions) or on the
ability of the Buyer to consummate the transactions contemplated hereby
without material delay.
4.2. Authority Relative to this Agreement. The Buyer has
full corporate power and authority to execute and deliver this Agreement,
the Indemnification Agreement and the Obligations Undertaking and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement, the Indemnification Agreement
and the Obligations Undertaking by the Buyer and the consummation of the
transactions contemplated hereby and thereby by the Buyer have been duly
and validly authorized by all necessary corporate action on the part of
the Buyer and no other proceedings on the part of the Buyer are necessary
to authorize this Agreement, the Indemnification Agreement or the
Obligations Undertaking or to consummate the transactions contemplated
hereby or thereby. This Agreement, the Indemnification Agreement and the
Obligations Undertaking have been duly and validly executed and delivered
by the Buyer and, assuming the due authorization, execution and delivery
by the other parties hereto, constitute a legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with
their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general equitable principles
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
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4.3. Consents and Approvals; No Violation. To the knowledge
of the Buyer, there is no requirement applicable to the Buyer to make any
filing with, or to obtain any permit, authorization, consent or approval
of, any governmental or regulatory authority as a condition to the lawful
consummation by the Buyer of the transactions contemplated by this
Agreement or by the Indemnification Agreement. Except as set forth in
Schedule 4.3, neither the execution and delivery of this Agreement and the
Indemnification Agreement by the Buyer nor the consummation by the Buyer
of the transactions contemplated hereby or thereby nor compliance by the
Buyer with any of the provisions hereof or thereof will (i) conflict with
or result in a breach of the Certificate of Incorporation of the Buyer,
(ii) to the knowledge of the Buyer, result in a breach of or default, or
give rise to any right of termination, cancellation or acceleration under,
any material note, bond, mortgage, indenture, license, agreement, lease or
other similar instrument or obligation to which the Buyer is a party or by
which any of the Buyer's properties or assets may be bound, except for
such breaches or defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been
obtained, or (iii) assuming compliance with the HSR Act, to the knowledge
of the Buyer, violate any material order, judgment, writ, injunction,
decree, statute, rule or regulation applicable to the Buyer or any of the
Buyer's properties or assets, excluding from the foregoing clauses (ii)
and (iii) such breaches, defaults and violations which, in the aggregate,
would not have a Buyer Material Adverse Effect.
4.4. Financial Capability. The Buyer has immediately
available cash sufficient to pay the Purchase Price or, if some or all of
the Purchase Price will be obtained from external financing sources, the
Buyer has delivered to the Seller executed commitments from responsible
financial institutions in form and substance satisfactory to Seller for
such funds, and the Buyer will have available as of the Closing Date
(either from its immediately available cash or from such commitments, or a
combination thereof) funds sufficient to pay the Estimated Purchase Price
and the MTI Purchase Price.
4.5. Litigation. As of the date hereof, there are no legal,
administrative, arbitration or other proceedings or government
investigations pending or, to the knowledge of the Buyer, threatened in
writing which seek to question, delay or prevent the consummation of or
would materially impair the ability of the parties hereto to consummate
the transactions contemplated hereby.
ARTICLE V
COVENANTS OF THE PARTIES
5.1. Conduct of Business. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the
Closing Date, without the prior consent of the Buyer (which consent will
not be unreasonably withheld or delayed) the Seller will conduct the
Business according to its ordinary course of business consistent with past
practice. Without limiting the generality of the foregoing, and, except
as otherwise contemplated by this Agreement or disclosed on Schedule 5.1
hereto, prior to the Closing Date, without the prior consent of the Buyer
(which consent will not be unreasonably withheld or delayed), the Seller
will not:
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(a) except to the extent required by law or contractual
obligations or other understandings or arrangements existing on the date
hereof (i) increase in any material manner the compensation of any of the
directors, officers or other employees of the Business, except such
increases as are granted in the ordinary course of business in accordance
with its customary practices; (ii) pay or agree to pay any pension,
retirement allowance or other employee benefit not required or permitted
by any existing plan, agreement or arrangement to any such director,
officer or employee, whether past or present; or (iii) commit itself to
any additional pension, profit-sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right,
group insurance, severance pay, retirement or other employee benefit plan,
agreement or arrangement, or to any employment agreement or consulting
agreement (arising out of prior employment) with or for the benefit of any
person, or, to amend any of such plans or any of such agreements in
existence on the date hereof;
(b) except in the ordinary course of business, sell,
transfer, mortgage, or otherwise dispose of, or agree to sell, transfer,
or otherwise dispose of, any material properties or assets of the
Business, real, personal or mixed; or
(c) enter into other material agreements, commitments or
contracts with respect to the Business, except agreements, commitments or
contracts made in the ordinary course of business.
5.2. Access to Information.
(a) Between the date of this Agreement and the Closing
Date, the Seller will (i) give the Buyer and its authorized
representatives reasonable access to all books, records, offices and other
facilities and properties of the Business, (ii) permit the Buyer to make
such inspections thereof, during regular business hours upon at least five
business days notice, as the Buyer may reasonably request and (iii) cause
its officers to furnish the Buyer with such financial and operating data
and other information with respect to the Business as the Buyer may from
time to time reasonably request; provided, however, that any such
investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the Business.
(b) Seller will furnish to Buyer (1) as soon as
available, and in any event within ten (10) days after it is prepared, a
copy of any report prepared from the date hereof through the Closing Date
by Seller for submission to its board of directors or to management of the
Publications relating to any material adverse effect on the Business or on
the transactions contemplated hereby arising from or related to a change
in general economic conditions; and (2) as soon as available, and in any
event within ten (10) days after it is prepared, monthly unaudited balance
sheets and income statements for the Publications. Each of the financial
statements delivered pursuant to this Section 5.2(b) will be prepared
consistent with Seller's accounting practices.
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(c) Between the date of this Agreement and the Closing
Date, the Buyer will hold and will cause its officers, directors,
employees, representatives, consultants and advisors to hold in strict
confidence in accordance with the terms of the Nondisclosure Agreement
between the Seller and the Buyer (the "Nondisclosure Agreement"), all
documents and information furnished to the Buyer by the Seller, MTI, the
Parent or any of their representatives, consultants or advisors in
connection with the transactions contemplated by this Agreement.
(d) The Buyer agrees to hold all of the books and
records of the Business existing on the Closing Date and not to destroy or
dispose of any thereof for a period of seven (7) years from the Closing
Date or such longer time as may be required by law and at any time
thereafter prior to destroying or disposing of any such records to notify
the Seller and the Parent and afford them the opportunity to take or to
make copies of any such books and records, and following the Closing Date
to afford to the Seller, MTI, the Parent, their accountants and counsel,
during normal business hours upon reasonable request, at any time, full
access to the books, records and other data of the Business and to the
employees of the Business to the extent that such access may be requested
for any legitimate purpose at no cost to the Seller, MTI or the Parent
(other than for reasonable out-of-pocket expenses of the Buyer); provided,
however, that any such investigation shall be conducted in such a manner
as not to unreasonably interfere with the operation of the Business by the
Buyer.
5.3. Expenses. Except as otherwise specifically provided in
this Agreement, whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred by the Buyer in connection
with this Agreement and the transactions contemplated hereby will be paid
by the Buyer and all costs and expenses incurred by the Seller, MTI and
the Parent in connection with this Agreement and the transactions
contemplated hereby will be paid by the Seller, MTI and the Parent, as the
case may be.
5.4. Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each of the parties hereto will use its commercially
reasonable efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
5.5. Public Announcements. None of the Seller, MTI, the
Parent or the Buyer shall issue any press release or otherwise make any
public statement with respect to this Agreement and the transactions
contemplated hereby without the prior approval of the other parties
hereto, except as may be required by applicable law.
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5.6. Filings. The Seller, MTI and the Buyer will use
commercially reasonable their best efforts to make or cause to be made all
such filings and submissions as may be required under applicable laws and
regulations, if any, for the consummation of the transactions contemplated
by this Agreement, including, all filings under the HSR Act and all
filings required to transfer Intellectual Property as provided hereunder.
The Buyer, MTI, Parent and the Seller will coordinate and cooperate with
one another in exchanging such information and providing such reasonable
assistance as another may request in connection with all of the foregoing.
5.7. Further Assurances. From time to time, without further
consideration, the Seller will, at the expense of Buyer, execute and
deliver such documents to the Buyer as the Buyer may reasonably request in
order more effectively to consummate the transactions contemplated hereby.
From time to time, without further consideration, the Buyer will, at the
expense of Seller, execute and deliver such documents as the Seller may
reasonably request in order more effectively to consummate the
transactions contemplated hereby. In case at any time after the Closing
Date any further action is necessary or desirable to carry out the
purposes of this Agreement or the Indemnification Agreement, each party to
hereto and thereto will take or cause its proper officers and directors to
take all such necessary action.
5.8. Brokers. The Seller represents and warrants to the
Buyer that, except for ▇▇▇▇▇, Van Essen & ▇▇▇▇▇▇ whose fees shall be the
sole responsibility of the Seller, no broker, finder or other person is
entitled to any brokerage fees, commissions or finder's fees from the
Seller in connection with the transactions contemplated hereby. The Seller
will pay or discharge, and will indemnify and hold the Buyer harmless from
and against, any and all claims or liabilities for all brokerage fees,
commissions and finder's fees incurred by reason of any action taken by
the Seller. The Buyer represents and warrants to the Seller that, except
for Belmoro Corporate Advisors, LLC, whose fees shall be the sole
responsibility of the Buyer, no broker, finder or other person is entitled
to any brokerage fees, commissions or finder's fees from the Buyer in
connection with the transactions contemplated hereby. The Buyer will pay
or discharge, and will indemnify and hold the Seller harmless from and
against, any and all claims or liabilities for all brokerage fees,
commissions and finder's fees incurred by reason of any action taken by
the Buyer.
5.9. Sales and Transfer Taxes and Fees. The parties agree
that all sales, transfer, documentary, stamp, excise, recording or other
taxes and fees incurred in connection with this Agreement and the
transactions contemplated hereby (other than income taxes payable by the
Seller, MTI or the Parent) will be borne by the Buyer, and the Buyer will,
at its expense, file all necessary tax returns and other documentation
with respect to all such sales and transfer taxes and fees.
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5.10. Employee Matters.
(a) Effective as of the Closing, each employee listed on
Schedule 5.10, who is working for the Seller as of the Closing Date and
not on long-term disability shall become an employee of the Buyer on an
at-will basis commencing on the Closing Date. All such employees are
referred to herein as "Transferred Employees." The Buyer shall provide
each Transferred Employee with (i) the same base salary or wages as set
forth on Schedule 3.13 and (ii) the benefit package currently provided by
Buyer to its employees as described on Schedule 5.10(a).
(b) Upon the Closing, the Buyer shall assume as of the
Closing Date the obligation to provide coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, under the Buyer's
plans to each Transferred Employee who as of the Closing Date is a
"qualified beneficiary" under any plan to which Section 607 of ERISA, and
Section 4980B of the Code apply; provided that nothing in this Section
5.10(b) shall be construed, from and after the Closing Date, to restrict
or in any manner otherwise limit or prohibit the Buyer's exercise of its
rights to amend, modify and terminate any plan or any benefit provided
thereunder or otherwise or the participation of any individual in any such
plan or benefit thereunder.
(c) To the extent that service is relevant for purposes
of eligibility or vesting under any employee benefit plan, program or
arrangement established or maintained by the Buyer for the benefit of the
Transferred Employees heretofore or in the future, the Buyer shall cause
such plan, program or arrangement to credit such Transferred Employees for
their aggregate service on and prior to the Closing Date with the Seller
and the Business. Service on and prior to the Closing Date with the
Seller and the Business shall also be credited for purposes of determining
the amount of severance pay and vacation day accruals to which a
Transferred Employee is entitled following the Closing Date. The Buyer
shall cause any plan, program or arrangement of Seller that provides
medical, health or other similar benefits to waive any preexisting
condition or waiting period limitations and shall honor any deductible and
out-of-pocket expenses incurred by the Transferred Employees and their
beneficiaries under plans, programs or arrangements of the Business prior
to the Closing Date.
(d) The Buyer agrees to provide severance pay which may
be owing to any Transferred Employee whose employment is terminated by the
Buyer, other than for cause, within six months after the Closing Date, in
an amount equal to two weeks salary (at the salary level in effect as of
the date of this Agreement) for each year of such Transferred Employee's
service with the Seller and the Business (with a minimum of two weeks of
salary) or, if more favorable to the Transferred Employee, the amount of
severance pay and benefit entitlements determined in accordance with the
severance policy of the Buyer in effect after the Closing; provided,
however, that severance for any single employee shall not exceed six
month's salary.
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(e) Effective as of the Closing, the Buyer shall assume
the collective bargaining agreements covering the Transferred Employees,
each of which is set forth on Schedule 5.10(e), and all liabilities and
obligations thereunder. To the extent that the liabilities and
obligations of the Buyer under such collective bargaining agreements are
inconsistent with the liabilities and obligations of the Buyer pursuant to
this Article V, the terms of the collective bargaining agreements shall
control.
5.11. Buyer's Knowledge. The Buyer agrees (without
prejudice to any rights which the Buyer may have under this Agreement to
decline to consummate the transactions contemplated hereby and to
terminate this Agreement) that, if the Closing occurs, then to the extent
any representation, warranty, covenant or agreement of the Seller
contained in this Agreement has, to the knowledge of the Buyer acquired
prior to the Closing, been breached, the Buyer shall be deemed to have
consented to and waived, and shall have no rights hereunder by reason of,
such breach.
ARTICLE VI
CLOSING CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each
party to effect the transactions contemplated hereby shall be subject to
the fulfillment at or prior to the Closing Date of the following
conditions:
(a) There shall be no effective injunction, writ, or
preliminary restraining order of a court of competent jurisdiction
directing that the transactions provided for herein shall not be
consummated.
(b) No action, suit, proceeding or investigation by or
before any court, administrative agency or other governmental authority
shall have been instituted (i) to restrain, prohibit or invalidate the
transactions contemplated by this Agreement or the Indemnification
Agreement or (ii) which seeks material or substantial damages by reason
of completion of such transaction.
(c) The applicable waiting periods under the HSR Act
shall have expired or been terminated.
6.2. Conditions to the Obligations of the Seller, MTI and the
Parent to Effect the Transactions Contemplated Hereby. The obligations of
the Seller, MTI and the Parent to effect the transactions contemplated
hereby shall be further subject to the fulfillment at or prior to the
Closing Date of the following conditions, any of which may be waived by
the Seller, MTI and the Parent:
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(a) (i) The Buyer shall have performed and complied in
all material respects with the agreements contained in this Agreement
required to be performed and complied with by it at or prior to the
Closing Date; and (ii) the representations and warranties of the Buyer set
forth in this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made at and as of the
Closing Date (except as otherwise contemplated by this Agreement), except
to the extent that all failures of the representations and warranties of
the Buyer set forth in this Agreement to be true and correct, taken
together, would not have a Buyer Material Adverse Effect.
(b) The Seller shall have received a certificate to the
effect of Section 6.2(a) signed by an authorized officer of the Buyer.
6.3. Conditions to the Obligations of the Buyer to Effect
the Transactions Contemplated Hereby. The obligations of the Buyer to
effect the transactions contemplated hereby shall be further subject to
the fulfillment at or prior to the Closing Date of the following
conditions (provided that, with respect to (d) below, Buyer has negotiated
in good faith), any of which may be waived by the Buyer:
(a) (i) The Seller and MTI shall have performed and
complied in all material respects with the agreements contained in this
Agreement required to be performed and complied with by them at or prior
to the Closing Date; and (ii) the representations and warranties of the
Seller, the Parent and MTI set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as
though made at and as of the Closing Date (except as otherwise
contemplated by this Agreement), except to the extent that all failures of
the representations and warranties of the Seller, the Parent and MTI set
forth in this Agreement to be true and correct would not have a Business
Material Adverse Effect.
(b) Since the date of the execution of this Agreement,
no event has occurred that will cause a Business Material Adverse Effect.
(c) The Buyer shall have received a certificate to the
effect of clauses 6.3(a) and 6.3(b) signed by an authorized officer of
each of the Seller and MTI.
(d) Parent, or Parent's nominee, shall have agreed to
enter into an interim, short-term, services agreement ("Services
Agreement") with Buyer pursuant to which Parent or Parent's nominee shall
perform certain administrative services for Buyer on reasonable terms and
conditions.
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ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual consent of the Seller and the Buyer;
(b) by the Seller or the Buyer at any time after June
30, 2002; provided, however, that no party hereto shall have the right to
terminate this Agreement under this Section 7.1(b) if such party's failure
to fulfill any obligation under this Agreement shall have been the cause
of, or shall have resulted in, the failure of the Closing to occur prior
to such date;
(c) by the Buyer, if there has been a material breach by
the Seller, the Parent or MTI of its covenants, representations or
warranties contained in this Agreement as a result of which it has become
impossible for one or more of the conditions to the obligations of the
Buyer to consummate the transactions contemplated hereby to be satisfied,
and such breach has not been (i) cured, or adequate assurance of a cure
has not been given, within 20 business days following notice of the breach
from the Buyer to the Seller, or (ii) waived by the Buyer; or
(d) by the Seller, if there has been a material breach
by the Buyer of its covenants, representations or warranties contained in
this Agreement as a result of which it has become impossible for one or
more of the conditions to the obligations of the Seller to consummate the
transactions contemplated hereby to be satisfied, and such breach has not
been (i) cured, or adequate assurance of a cure have not been given,
within 20 business days following notice of the breach from the Seller to
the Buyer, or (ii) waived by the Seller.
7.2. Procedure and Effect of Termination. In the event of
termination of this Agreement as provided in Section 7.1, this Agreement
shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) upon request therefor, each party will redeliver all
documents, work papers and other material of any other party relating to
the transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same;
(b) none of the information received by or on behalf of
the Buyer with respect to the Business, the Seller, MTI and the Parent
shall at any time be used for the advantage of the Buyer to the detriment
of the Business, the Seller, MTI or the Parent; and the Buyer will use its
best efforts to prevent the disclosure thereof to third persons except as
may be required by law;
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(c) no party hereto shall have any liability or further
obligation to any other party to this Agreement pursuant to this Agreement
except as stated in this Section 7.2 and in Sections 5.3, 5.5, and 5.8;
provided, however, that nothing in this Section 7.2 shall be deemed to
release any party from any liability for breach by such party of any of
its covenants set forth in this Agreement which occurs on or before the
date of the termination of this Agreement; and this Agreement will be of
no further force and effect except that this Section 7.2 and Sections 5.3,
5.5, 5.8, and Article VIII and the terms of the Indemnification Agreement
shall remain in effect; and
(d) all filings, applications, and other submissions
made pursuant to Section 5.6 shall, to the extent practicable, be
withdrawn from the agency or other person to which made.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1. Amendment and Modification. Subject to applicable law,
this Agreement and the Indemnification Agreement may be amended, modified
or supplemented only by written agreement of the parties hereto at any
time prior to the Closing Date with respect to any of the terms contained
herein.
8.2. Waiver of Compliance. Except as otherwise provided in
this Agreement and the Indemnification Agreement, any failure of any of
the parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the party or parties entitled to the
benefits thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance
with such obligation, covenant, agreement or condition shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other
failure..
8.3 Survival of Representations and Warranties. The
representations and warranties set forth in this Agreement shall survive
the Closing and will expire 180 days from the Closing Date, except for
those representations and warranties contained in Sections 3.6, 3.10 and
3.18, which shall remain in force until the expiration of the applicable
statute of limitations. No party shall be entitled to assert any claims
against the other for misrepresentations or breaches of representations
and warranties under or pursuant to this Agreement (or for indemnification
under the Indemnification Agreement for such misrepresentations or
breaches of representations and warranties), unless the party asserting
such claim shall notify the other of such claim with reasonable
specificity and outlining the basis of alleged liability within the
survival period of the applicable representation and warranty.
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8.4. Notices. All notices hereunder and under the
Indemnification Agreement shall be in writing and shall be deemed given if
delivered personally or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following
addresses (or at such other address for a party as shall be specified by
like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
(a) if to the Seller, MTI or the Parent:
c/▇ ▇▇▇▇▇▇▇ Newspapers, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇▇ Newspapers, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
with a copy to:
Dow ▇▇▇▇▇ & Company, Inc.
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
Attention: Legal Department
(b) if to the Buyer, to
Newspaper Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
with a copy to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
8.5. Assignment. This Agreement, the Indemnification
Agreement and all of the provisions hereof and thereof shall be binding
upon and inure to the benefit of the parties hereto and thereto and their
respective successors and permitted assigns, but neither this Agreement,
the Indemnification Agreement nor any of the rights, interests or
obligations hereunder or thereunder shall be assigned by any of the
parties hereto or thereto without the prior written consent of the other
parties.
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8.6. Governing Law. This Agreement and the Indemnification
Agreement shall be governed by the laws of the State of Delaware
(regardless of the laws that might otherwise govern under applicable New
York principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and
remedies. All actions and proceedings arising out of or relating to this
Agreement and the Indemnification Agreement shall be heard and determined
in a Delaware state or federal court, and the parties hereto hereby
irrevocably submit to the exclusive jurisdiction of such courts in any
such action or proceeding and irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action or proceeding.
8.7. Counterparts. This Agreement and the Indemnification
Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument.
8.8. Interpretation. The article and section headings
contained in this Agreement and the Indemnification Agreement are solely
for the purpose of reference, are not part of the agreement of the parties
and shall not in any way affect the meaning or interpretation of this
Agreement or the Indemnification Agreement. The parties have participated
jointly in the negotiation and drafting of this Agreement and the
Indemnification Agreement. If any ambiguity or question of intent or
interpretation arises, this Agreement and the Indemnification Agreement
shall be construed as if drafted jointly by the parties and no
presumptions or burden of proof shall arise favoring or disfavoring any
party by virtue of authorship of any of the provisions of this Agreement
or the Indemnification Agreement. As used in this Agreement, the term
"person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof. As used in this
Agreement, the term "Permitted Liens" shall mean and include (i) those
exceptions to title to the properties and assets of the Seller listed in
the Schedule referred to in the applicable Section of this Agreement; (ii)
Liens incurred in connection with the purchase of properties and assets by
the Seller securing all or a portion of the purchase price therefor; (iii)
statutory liens for current taxes or assessments not yet due or delinquent
or the validity of which is being contested in good faith by appropriate
proceedings; (iv) mechanics', carriers', workers', repairers' and other
similar Liens arising or incurred in the ordinary course of business
relating to obligations as to which there is no default on the part of the
Seller which would have a Business Material Adverse Effect; and (v) such
other Liens, imperfections in title, charges, easements, restrictions, and
encumbrances which do not materially detract from the value of or
interfere with the present use of the properties subject thereto or
affected thereby. As used in this Agreement, the "knowledge" of a party
means the knowledge of any executive officer of such party. As used in
this Agreement, "including" means including without limitation.
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8.9. Entire Agreement. The Nondisclosure Agreement, the
Indemnification Agreement and this Agreement, including the Exhibits and
Schedules hereto (which are incorporated herein by reference and made a
part hereof) and the documents, schedules, certificates and instruments
referred to herein, embody the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this
Agreement and the Indemnification Agreement. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other
than those expressly set forth or referred to herein and therein. The
Nondisclosure Agreement, the Indemnification Agreement and this Agreement
supersede all prior agreements and understandings between the parties with
respect to such transactions.
8.10. Severability. If any term or other provision of this
Agreement or the Indemnification Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement and the Indemnification
Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby
and thereby is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement or the Indemnification Agreement so as to
effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the greatest extent
possible.
8.11. Bulk Transfer Laws. The Buyer acknowledges that the
Seller will not comply with the provisions of any bulk transfer laws of
any jurisdiction in connection with the transactions contemplated by this
Agreement.
8.12 No Third Party Beneficiary. Each of this Agreement and
the Indemnification Agreement is for the sole benefit of the parties
hereto and thereto and their respective successors and permitted assigns
and nothing herein, express or implied, is intended to or shall confer
upon any other person any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement or the
Indemnification Agreement.
8.13 Exclusivity of Remedies. The remedies of any party
hereto for breaches by another party of any representation, warranty,
covenant or agreement hereunder, or otherwise arising out of any matter
pertaining hereto, shall be limited to the right of indemnification
provided in the Indemnification Agreement, and such right of
indemnification shall be exclusive of any and all other rights or remedies
which might be available to a party upon the occurrence of any such breach
or with respect to such other matter whether such other right or remedy
would otherwise be available at law or in equity.
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IN WITNESS WHEREOF, each of the parties hereto has
signed this Agreement or has caused this Agreement to be signed by its
duly authorized officers as of the date first above written.
THE JOPLIN GLOBE, INC.,
By:/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ NEWSPAPERS, INC.
By:/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name:▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
THE MAIL TRIBUNE, INC.
By:/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name:▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:Vice President
NEWSPAPER HOLDINGS, INC.
By:/s/▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
Name:▇▇▇▇▇▇▇ ▇▇▇▇
Title:President
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EXHIBIT 1.1(C)
OBLIGATIONS UNDERTAKING
OBLIGATIONS UNDERTAKING dated, as of , 2002, by
Newspaper Holdings, Inc., a Delaware corporation (the "Buyer") in favor of
The Joplin Globe, a Delaware corporation (the "Seller") and The Mail
Tribune, Inc., a Delaware corporation ("MTI").
WHEREAS, pursuant to an Agreement of Purchase and Sale,
dated as of February 20, 2002 (the "Agreement"), among the Seller, MTI,
▇▇▇▇▇▇▇ Newspapers, Inc. ("Parent") and the Buyer, the Seller and MTI have
concurrently herewith sold, assigned, transferred, conveyed and delivered
the Seller Assets (as defined in the Agreement) and the MTI Assets (as
defined in the Agreement), respectively, to Buyer;
WHEREAS, in partial consideration therefor, the Agreement
requires Buyer to execute and deliver to the Seller and MTI this
Obligations Undertaking;
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt of which by Buyer is
hereby acknowledged, Buyer hereby agrees as follows (capitalized terms
used but not defined herein having the meanings ascribed thereto in the
Agreement):
1. Subject to the limitation contained herein, Buyer hereby
assumes and agrees to perform and discharge all debts, commitments,
obligations and liabilities (whether absolute, contingent, accrued,
unaccrued, due or to become due) of Seller, or of MTI, relating primarily
to the Business, including, without limitation:
(a) those liabilities reflected in the balance sheet
delivered pursuant to Section 1.2(d) of the Agreement;
(b) the obligation of the Business to fulfill
outstanding subscriptions for the Publications incurred in the normal and
customary course of business with respect to the period commencing on the
Closing Date;
(c) the unperformed and unfulfilled obligations of the
Seller and/or MTI accruing from and after the Closing Date (with respect
to periods commencing on and after the Closing Date) under the Contracts.
2. Notwithstanding anything to the contrary contained herein,
the Assumed Liabilities shall not include any of the following debts,
commitments, obligations or liabilities of the Seller and MTI (herein
collectively referred to as the "Excluded Liabilities"):
i. any obligation or liability of the Seller or MTI based
upon acts or omissions of the Seller or MTI occurring after the Closing
Date;
ii. any brokerage or finder's fee payable by the Seller and
MTI or any other costs and expenses incurred in connection with the
negotiation, execution and/or consummation of the Agreement and/or
transactions contemplated thereby;
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iii. any indebtedness of, or other amounts owed by, Seller
or MTI to any of their affiliates;
iv. any liability for Taxes relating to the operation of the Business
assessed, accrued for or attributable to any period up to and including
the Closing Date.
v. any and all liabilities and obligations with respect to
legal, administrative, arbitration or other proceedings or governmental
investigations pending, or arising out of events occurring, on or prior to
the Closing Date;
vi. any and all liabilities and obligations based on or
arising from the presence, use, disposal or treatment on or prior to the
Closing Date of any asbestos or any Hazardous Materials on or about any of
the Property or any discharge or release of a Hazardous Material on or
prior to the Closing Date or failure to obtain any license or permit
required in connection with any Hazardous Material or arising out of any
non-compliance with any Environmental Law on or prior to the Closing Date;
vii. any and all debts, liability or obligation of the
Seller and MTI with respect to any of the Excluded Assets; or
viii. any and all liabilities or obligations to or as a guarantor, co-
obligor or surety of any affiliate of the Seller or MTI.
5. No person, firm or corporation other than the Seller and
MTI shall have any rights under or by reason of this Obligations
Undertaking or the provisions contained herein.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
signed by its duly authorized officer as of the date first above written.
NEWSPAPER HOLDINGS, INC.
By:/s/▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
Name:▇▇▇▇▇▇▇ ▇▇▇▇
Title:President
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