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EXHIBIT 2.2
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ASSET PURCHASE AGREEMENT
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dated as of July 10, 2000
among
THOMSON NEWSPAPERS INC.,
THOMSON NEWSPAPERS LICENSING CORPORATION,
TN CUSTOMER HOLDING LLC
and
MEDIANEWS GROUP, INC.
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................................................1
SECTION 1.01. Certain Defined Terms................................................................1
ARTICLE II PURCHASE AND SALE..............................................................................9
SECTION 2.01. Purchase and Sale of Assets..........................................................9
SECTION 2.02. Assumption and Exclusion of Liabilities.............................................11
SECTION 2.03. Purchase Price; Allocation of Purchase Price........................................13
SECTION 2.04. Closing.............................................................................13
SECTION 2.05. Closing Deliveries by the Sellers...................................................13
SECTION 2.06. Closing Deliveries by the Purchaser.................................................14
SECTION 2.07. Working Capital Adjustment..........................................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS................................................16
SECTION 3.01. Organization and Authority of the Sellers...........................................16
SECTION 3.02. No Conflict.........................................................................16
SECTION 3.03. Consents and Approvals..............................................................16
SECTION 3.04. Financial Statements................................................................17
SECTION 3.05. Litigation..........................................................................17
SECTION 3.06. Permits and Licenses; Compliance with Laws..........................................17
SECTION 3.07. Conduct in the Ordinary Course; Absence of Changes or Events........................18
SECTION 3.08. Material Contracts..................................................................18
SECTION 3.09. Employee Matters....................................................................19
SECTION 3.10. Environmental Matters...............................................................20
SECTION 3.11. Intellectual Property...............................................................21
SECTION 3.12. Real Property.......................................................................21
SECTION 3.13. Transferred Assets..................................................................22
SECTION 3.14. Insurance...........................................................................22
SECTION 3.15. Labor Matters.......................................................................22
SECTION 3.16. Taxes...............................................................................22
SECTION 3.17. Brokers.............................................................................23
SECTION 3.18. Equipment and Tangible Property.....................................................23
SECTION 3.19. Circulation Matters.................................................................23
SECTION 3.20. Inventory...........................................................................23
SECTION 3.21. Nature of Transferred Assets........................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..............................................24
SECTION 4.01. Organization and Authority of the Purchaser.........................................24
SECTION 4.02. No Conflict.........................................................................24
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SECTION 4.03. Consents and Approvals..............................................................24
SECTION 4.04. Absence of Litigation...............................................................25
SECTION 4.05. Financing...........................................................................25
SECTION 4.06. Brokers.............................................................................25
SECTION 4.07. FCC Matters.........................................................................25
ARTICLE V ADDITIONAL AGREEMENTS........................................................................25
SECTION 5.01. Operation of the Newspapers Prior to the Closing....................................25
SECTION 5.02. Investigation; No Other Representations or Warranties...............................26
SECTION 5.03. Access to Information...............................................................26
SECTION 5.04. Confidentiality.....................................................................28
SECTION 5.05. Regulatory and Other Authorizations; Consents.......................................28
SECTION 5.06. Transition Services.................................................................29
SECTION 5.07. Bulk Transfer Laws..................................................................31
SECTION 5.08. Environmental Remediation Project...................................................31
SECTION 5.09. Non-Competition Covenant; No Interference...........................................32
SECTION 5.10. Corporate Service Agreements........................................................33
ARTICLE VI EMPLOYEE MATTERS.............................................................................34
SECTION 6.01. Employees...........................................................................34
SECTION 6.02 Health and Welfare Benefits.........................................................34
SECTION 6.03. Intentionally Omitted...............................................................35
SECTION 6.04. Pension Plan........................................................................35
SECTION 6.05. Defined Contribution Plan...........................................................35
SECTION 6.06. Intentionally Omitted...............................................................36
SECTION 6.07. WARN Act............................................................................36
ARTICLE VII TAX MATTERS..................................................................................36
SECTION 7.01. Cooperation and Exchange of Information.............................................36
SECTION 7.02. Conveyance Taxes....................................................................36
SECTION 7.03. Treatment of Indemnity Payments.....................................................37
ARTICLE VIII CONDITIONS TO THE CLOSING....................................................................37
SECTION 8.01. Conditions to Obligations of the Sellers............................................37
SECTION 8.02. Conditions to Obligations of the Purchaser..........................................38
ARTICLE IX INDEMNIFICATION..............................................................................39
SECTION 9.01. Survival............................................................................39
SECTION 9.02. Indemnification by the Purchaser....................................................39
SECTION 9.03. Indemnification by the Sellers......................................................40
SECTION 9.04. Notification of Claims..............................................................40
SECTION 9.05. Limitations.........................................................................42
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SECTION 9.06. Exclusive Remedy.....................................................................43
ARTICLE X TERMINATION, AMENDMENT AND WAIVER.............................................................43
SECTION 10.01. Termination..........................................................................43
SECTION 10.02. Effect of Termination................................................................44
SECTION 10.03. Exclusive Remedy.....................................................................44
ARTICLE XI GENERAL PROVISIONS............................................................................45
SECTION 11.01. Expenses............................................................................45
SECTION 11.02. Notices.............................................................................45
SECTION 11.03. Public Announcements................................................................46
SECTION 11.04. Headings............................................................................46
SECTION 11.05. Severability........................................................................46
SECTION 11.06. Disclosure Schedule.................................................................46
SECTION 11.07. Entire Agreement; Time of the Essence...............................................46
SECTION 11.08. Assignment; Like Kind Exchange......................................................47
SECTION 11.09. No Third-Party Beneficiaries........................................................47
SECTION 11.10. Further Action......................................................................47
SECTION 11.11. Amendment, Waiver...................................................................47
SECTION 11.12. Governing Law; Jurisdiction.........................................................48
SECTION 11.13. Counterparts........................................................................48
SECTION 11.14. Construction........................................................................48
SECTION 11.15. No Conflict of Interest.............................................................48
SECTION 11.16. Guarantee...........................................................................49
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EXHIBITS
1.01(a) Newspapers and Other Periodical Publications
1.01(c) Form of Assumption Agreement
1.01(d) Form of Bill of Sale and Assignment
1.01(e) Knowledge of Persons
1.01(f) Certain Excluded Intellectual Property
1.01(g) Market Area
2.03(b) Allocation of Purchase Price and Assumed Liabilities
2.07 Closing Working Capital Procedures
5.06 Transition Services
5.08 Environmental Remediation Projects
8.01(g) Form of Purchaser's counsel opinion
8.02(g) Form of Sellers' counsel opinion
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DISCLOSURE SCHEDULE
Section 1.01(1) Real Property
Section 1.01(2) Environmental Reports
Section 2.01(b) Excluded Assets
Section 2.02(b) Excluded Liabilities
Section 3.02 No Conflict
Section 3.03 Consents and Approvals
Section 3.04(a) Financial Statements
Section 3.04(b) Undisclosed Liabilities
Section 3.05 Litigation
Section 3.06(a) Permits and Licenses; Compliance with Laws
Section 3.06(b) Violation of Law
Section 3.07 Conduct in the Ordinary Course; Absence of Changes or
Events
Section 3.08 Certain Material Contract Matters
Section 3.09(a) Employee Matters
Section 3.09(c) Multiemployer Plans; Withdrawal Liability
Section 3.09(e) Newspaper Employees
Section 3.11 Intellectual Property
Section 3.12 Encumbrances on Real Property
Section 3.13 Encumbrances on Other Transferred Assets
Section 3.15 Labor Matters
Section 5.01 Operation of the Newspapers Prior to the Closing
Section 5.02 Non-compete Agreements
Section 5.02(c) Use of Transferred Assets
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ASSET PURCHASE AGREEMENT, dated as of July 10, 2000 among Thomson
Newspapers Inc. (Tax ID #22-2768755), a Delaware corporation ("TNI"), Thomson
Newspapers Licensing Corporation (Tax ID #51-0382215), a Delaware corporation
("TNLC"), and TN Customer Holding LLC (Tax ID #51-0400128), a Delaware limited
liability company ("TNCHL"), (collectively, the "Sellers"), and MediaNews Group,
Inc. (Tax ID # 76-042553), a Delaware corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, TNI owns and operates the newspapers and other periodical
publications listed on Exhibit 1.01(a) (collectively, the "Newspapers");
WHEREAS, TNLC owns or has the legal right to use certain of the
Intellectual Property constituting part of the Transferred Assets (other than
Customer IP);
WHEREAS, TNCHL owns or has the legal right to use certain paid
subscriber lists, commercial advertiser lists, distributor lists, carrier lists,
route representatives lists, single copy dealer lists, transient or private
party advertiser lists and commercial printing customer lists and similar
Intellectual Property (collectively, "Customer IP") constituting part of the
Transferred Assets;
WHEREAS, the Sellers desire to sell to the Purchaser, and the Purchaser
desires to purchase from the Sellers, all right, title and interest of the
Sellers in and to certain properties and assets of the Sellers used or held for
use solely in the Business, and in connection therewith, the Purchaser is
willing to purchase such properties and assets and to assume the liabilities of
the Sellers relating to the Business (with the exceptions specified below), all
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, the Sellers and the Purchaser
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Abitibi Contract" shall have the meaning set forth in Section
2.01(b)(ix) hereof.
"Affiliate" means, with respect to any specified Person, any other
Person that directly or indirectly Controls, is Controlled by, or is under
common Control with, such specified Person; provided, however, that, for
purposes of Section 5.09 only, the term Affiliate shall not include any direct
or indirect stockholder of TTC.
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"Agreement " means this Asset Purchase Agreement, among the Sellers and
the Purchaser (including the Exhibits hereto and the Disclosure Schedule) and
all amendments hereto made in accordance with the provisions of Section 11.11.
"Ancillary Agreements" means the Assumption Agreement, the Bill of Sale
and the Deeds.
"Assets" means all the properties and assets of every kind and
description and wherever located, whether tangible or intangible, real, personal
or mixed, owned by any Seller and, in any case, used or held for use solely in
the conduct of the Business, including without limitation, all of each Seller's
right, title and interest in and to the following:
(i) all Real Property;
(ii) all furniture, fixtures, equipment, machinery and other tangible
personal property used or held for use solely in the conduct of the
Business at the locations at which the Business is conducted and not
otherwise included in clause (i) above;
(iii) all automobiles, other vehicles and rolling stock used or held
for use solely in the conduct of the Business;
(iv) all inventories of merchandise, newsprint, ink and other raw
materials, work in process, finished goods, supplies (including without
limitation, photo supplies, composition supplies, camera supplies,
pressroom supplies, pressroom plates, mailroom supplies, plant supplies and
route and circulation supplies) and other personal property used or held
for use solely in the conduct of the Business at the locations at which the
Business is conducted;
(v) all Receivables;
(vi) all books of account, general, financial and personnel records,
invoices, shipping records, sales and promotional literature, supplier,
customer and circulation lists, correspondence and other documents,
records, data, files and service manuals solely pertaining to the Business
and located at the principal places of business of the Newspapers;
(vii) to the extent assignable, all computer software and programs used
or held for use solely in the conduct of the Business;
(viii) all goodwill solely relating to the Business;
(ix) all Intellectual Property used or held for use solely in the
conduct of the Business;
(x) to the extent assignable, all claims, causes of action, rights of
recovery, refunds, security deposits to the extent reflected on the Final
Closing Net Asset Statement, rights of set-off and other similar rights of
any kind (including without limitation, rights under and pursuant to all
warranties, representations and guarantees
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made by suppliers of products, materials or equipment, or components
thereof), to the extent pertaining to and arising solely out of the
Business;
(xi) to the extent assignable, all rights under all contracts, leases
(including without limitation, all automobile leases notwithstanding any
element of personal use thereof), licenses, purchase or customer orders,
commitments and other binding arrangements of the Business to the extent
solely pertaining to the Business ("Contracts");
(xii) to the extent assignable, all Federal, state and local permits,
licenses, waivers and authorizations used or held for use solely in the
conduct of the Business; and
(xiii) the library and morgue of each of the Newspapers, including
without limitation, all clippings, photographs (negatives and positives),
bound files of back issues and microfilm, microfiche and electronic
reproductions of back issues.
"Assumed Liabilities" has the meaning specified in Section 2.02(a).
"Assumption Agreement" means the Assumption Agreement to be executed by
the Purchaser and the Sellers on the Closing Date substantially in the form of
Exhibit 1.01(c).
"Beneficiary" means the Person designated by a Newspaper Employee or
former employee of the Business, by operation of law or otherwise, as the Person
entitled to compensation, benefits, damages, insurance coverage, payments,
indemnification or any other goods or services as a result of any liability or
claim under any applicable welfare or benefit plan or program.
"Bill of Sale" means the Bill of Sale and Assignment to be executed by
the Sellers on the Closing Date substantially in the form of Exhibit 1.01(d).
"Business" means the business of publishing, distributing and operating
the Newspapers (including any commercial printing operations directly relating
thereto and other publications associated with the Newspapers).
"Business Day" means a day of the year on which banks are not required
or authorized to be closed in the City of New York.
"Closing" has the meaning specified in Section 2.04.
"Closing Date" has the meaning specified in Section 2.04.
"Closing Date Working Capital" means Working Capital of the Business as
at the close of business on the Closing Date.
"Closing Statement of Net Assets" means the unaudited statement of net
assets of the Business as at the close of business on the Closing Date.
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"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Confidentiality Agreement" has the meaning specified in Section 5.04.
"Contracts" has the meaning specified in the definition of Assets
herein.
"Control" (including the terms "Controlled by" and "under common
Control with") means the possession, directly or indirectly, or as trustee or
executor, of the power to direct or cause the direction of the management
policies of a Person whether through the ownership of voting securities or
interests, as trustee or executor, by contract or credit agreement or otherwise.
"Corporate Employees" means the employees of TNI employed in the
Business and located at the Sellers' (and their Affiliates') corporate offices
in Stamford, Connecticut and Wexford, Pennsylvania; provided, however, that to
the extent that any such employee accepts an offer of employment by the
Purchaser to become an employee of the Purchaser as of the Closing Date, then
each such employee, if any, shall not be a Corporate Employee and shall be
deemed to be a Newspaper Employee for all purposes of this Agreement.
"Corporate Severance Agreements" means the severance agreements entered
into between certain Corporate Employees and TNI or its Affiliates in
contemplation of the transactions contemplated hereby.
"Customer IP" has the meaning specified in the recitals of this
Agreement.
"Damages" means any and all losses, damages, liabilities, obligations,
costs and expenses, including without limitation, reasonable fees and
disbursements of counsel, sustained or incurred by the applicable Person.
"Deeds" means the bargain and sale deeds with covenant against
grantor's acts (or the equivalent thereto in each jurisdiction in which Real
Property is located) to be executed by the appropriate Sellers on the Closing
Date in order to convey to the Purchaser each parcel of Real Property.
"Defined Contribution Plans" means the Thomson Newspapers Inc. 401(k)
Savings Plan Plus, the Thomson Newspapers Holdings Inc. 401(k) Savings Plan
Plus, the Thomson Newspapers Inc. 401(k) Plan for Union Employees and any other
defined contribution plan (within the meaning of Section 3(34) of ERISA)
maintained, sponsored or contributed to by TNI for Newspaper Employees.
"Disclosure Schedule" means the Disclosure Schedule delivered to the
Purchaser by the Sellers.
"Dispute Notice" has the meaning specified in Section 2.07(b)(i).
"Encumbrance" means a pledge, lien, security interest, mortgage,
charge, adverse claim of ownership or use, or other encumbrance of any kind.
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"Environmental Law" means all Federal, state, local and foreign laws,
rules and regulations relating to pollution or protection of the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata) or the protection of human health from environmental hazards, including
without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the Department of Treasury and the Department of Labor regulations
promulgated thereunder.
"Excluded Assets" has the meaning specified in Section 2.01(b).
"Excluded Liabilities" has the meaning specified in Section 2.02(b).
"Final Closing Statement of Net Assets" means the Closing Statement of
Net Assets that become final, binding and conclusive on the parties in the
manner set forth in Section 2.07.
"Final Working Capital Statement" means the determination of the
Closing Date Working Capital that becomes final, binding and conclusive on the
parties in the manner set forth in Section 2.07.
"GAAP" means generally accepted accounting principles and practices as
in effect from time to time.
"Governmental Authority" means any Federal, state or local
governmental, regulatory or administrative authority, agency, bureau or
commission or any court, tribunal, or judicial or arbitral body.
"Hazardous Substance" means petroleum, petroleum by-products,
polychlorinated biphenyls and any other chemicals, materials, substances or
wastes which are currently defined or regulated as "hazardous substances,"
"hazardous materials," "hazardous wastes," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants," "toxic
air pollutants," "hazardous air pollutants," "pollutants," or "contaminants"
under any Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Independent Accounting Firm" means (a) an independent certified public
accounting firm in the United States of national recognition (other than a firm
which then serves as the independent auditor for the Sellers or the Purchaser or
any of their respective Affiliates) mutually acceptable to the Sellers and the
Purchaser or (b) if the Sellers and the Purchaser are unable to agree upon such
a firm, then the Sellers, collectively, and the Purchaser shall each select a
representative from one such firm and those two individuals shall select a third
firm, in which event "Independent Accounting Firm" shall mean such third firm.
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"Initial Working Capital Statement" has the meaning specified in
Section 2.07(a).
"Intellectual Property" means all copyrights, patents, trademarks,
tradenames (including the Tradenames), services marks, licenses in respect of
computer software and other intellectual property, and other intellectual
property, in each case used or held for use solely in the conduct of the
Business and all applications for registration of any of the foregoing, all
goodwill associated therewith and all rights to pursue enforcement or
infringement of any such assets.
"IRS" means the Internal Revenue Service.
"Knowledge of the Sellers" or "Sellers' knowledge" or similar words
means the actual knowledge of any of the individuals listed in Exhibit 1.01(e),
in each case, without specific investigation or inquiry.
"Liabilities" means any and all debts, liabilities, obligations and
claims, whether accrued or fixed, absolute or contingent, known or unknown,
matured or unmatured or determined or determinable, including without
limitation, those arising under any law, action or governmental order and those
arising under any contract, agreement, arrangement, commitment, license, permit
or undertaking.
"Long Term Incentive Plan" means the Thomson Newspapers Long Term
Incentive Plan.
"Losses" means all losses, damages, liabilities, obligations and
claims, and costs and expenses of any kind related thereto, including without
limitation, reasonable fees and disbursements of counsel. Notwithstanding
anything to the contrary contained in the Agreement, neither Losses nor Damages
shall include (i) the loss of profits of any Person seeking indemnification
under the Agreement, (ii) punitive damages unless such Person had punitive
damages assessed or asserted against it or (iii) any consequential damages.
"Material Adverse Effect" means a material adverse effect on the
results of operations or financial condition of the Business, taken as a whole;
provided, however, that the term "Material Adverse Effect" shall not include any
effect attributable to the existence of or the public announcement of this
Agreement, general economic changes or general changes in the industry in which
the Business is engaged.
"Material Contract" has the meaning specified in Section 3.08.
"Market Area" means the areas identified on Exhibit 1.01(g) of this
Agreement.
"Materials of Environmental Concern" means chemicals, pollutants,
compounds, contaminants, wastes, toxic substances, hazardous materials,
hazardous substances, petroleum and petroleum products, in each case, which are
listed under any Environmental Law as "toxic" or "hazardous" or potentially
"toxic" or "hazardous" or with respect to which liability or standards of
conduct or clean-up are imposed pursuant to any Environmental Law.
"Multiemployer Plan" has the meaning specified in Section 3.09(c).
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"Newspaper Employees" means the employees of TNI employed in the
Business other than the Corporate Employees.
"Newspapers" has the meaning specified in the recitals of this
Agreement.
"Non-compete Agreements" has the meaning specified in Section 5.02(b)
hereof.
"Non-Corporate Severance Agreements" means the severance agreements
entered into between those Newspaper Employees identified by an asterisk on
Section 3.09(e) of the Disclosure Schedule and TNI in contemplation of the
transactions contemplated hereby (copies of which have been made available to
the Purchaser).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means the Thomson Holdings Inc. Group Pension Plan.
"Performance Plan" means the Thomson Newspapers Annual Management
Incentive Plan.
"Permitted Encumbrances" has the meaning specified in Section 3.12.
"Permitted Liens" has the meaning specified in Section 3.13.
"Person" means any individual, partnership, firm, corporation, limited
liability company, association, trust, joint venture, Governmental Authority,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended.
"Phantom and Stock Plans" means all phantom stock and stock option
plans of TTC.
"Plans" has the meaning specified in Section 3.09(a).
"Purchase Price" has the meaning specified in Section 2.03(a).
"Purchaser" has the meaning specified in the preamble to this
Agreement.
"Purchaser Indemnified Parties" has the meaning specified in Section
9.03.
"Purchaser Material Adverse Effect" has the meaning specified in
Section 8.01(a).
"Real Property" means the real property identified on Section 1.01(1)
of the Disclosure Schedule, together with all buildings and other structures,
facilities or improvements located thereon, all fixtures attached or appurtenant
thereto, and all easements, rights and appurtenances relating to the foregoing.
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"Receivables" means any and all accounts receivable, notes receivable
and other amounts receivable (net of any allowances or discounts) from third
parties which are not Affiliates of any Seller arising solely from the conduct
of the Business.
"Reference Statement of Net Assets" means the unaudited statement of
net assets of the Business as at May 31, 2000, including the notes thereto, a
copy of which is set forth as Section 3.04(a) of the Disclosure Schedule.
"Reference Earnings Statements" means the unaudited statements of
earnings before interest, taxes, depreciation and amortization of the Business
for the year ended December 31, 1999 and the three-month period ended May 31,
2000, including the notes thereto, copies of which are set forth as Section
3.04(a) of the Disclosure Schedule.
"Reference Working Capital" means $5,000,000.
"Reports" means the environmental reports listed on Section 1.01(2) of
the Disclosure Schedule.
"Required Permits" has the meaning specified in Section 3.06(a).
"Retention Agreements" means the stay bonus and retention agreements
entered into between certain Newspaper Employees and certain Corporate
Employees, on the one hand, and TNI or its Affiliates, on the other hand, in
contemplation of the transactions contemplated hereby (for greater certainty,
Retention Agreements do not include the Corporate Severance Agreements or any
other severance agreements or arrangements).
"Retiree" means a former employee of any of the Sellers who was
employed in the Business and who retired prior to the Closing Date.
"Returns" has the meaning specified in Section 7.01.
"Review Period" has the meaning specified in Section 2.07(b)(i).
"Seller Indemnified Parties" has the meaning specified in Section 9.02.
"Sellers" has the meaning specified in the preamble of this Agreement.
"Sellers' Health and Welfare Plan" has the meaning specified in Section
6.02(a).
"SERP Plans" means all supplemental pension and deferred compensation
plans maintained by TNI or its Affiliates covering Newspaper Employees, among
others.
"Tax" or "Taxes" means all taxes or similar assessments, charges or
levies of any kind whatsoever (whether payable directly or by withholding),
together with any interest, penalties and additions to tax imposed by any taxing
authority.
"Termination Date" has the meaning provided in Section 10.01(a).
"Thomson Names" has the meaning specified in Section 2.01(b)(vi).
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"TIMN" means Flywheel Media (formerly known as Thomson Interactive
Media Network), a division of TNI.
"Tradenames" means the tradenames of each Newspaper.
"Transferred Assets" has the meaning specified in Section 2.01(a).
"Transition Services" has the meaning specified in Section 5.06(b).
"Transition Services Provider" has the meaning specified in Section
5.06(b).
"TTC" means The Thomson Corporation, an Ontario corporation.
"Working Capital" means the excess, if any, of current Transferred
Assets (excluding trade and barter receivables) over current Assumed Liabilities
(excluding trade and barter liabilities), determined in accordance with Section
2.07.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of Assets.
(a) On the terms and subject to the conditions of this Agreement, on
the Closing Date, the Sellers shall sell, assign, transfer and convey to the
Purchaser, and the Purchaser shall purchase from the Sellers, all of the
Sellers' respective right, title and interest in and to all of the Assets on the
Closing Date, other than the Excluded Assets (the "Transferred Assets").
(b) The Transferred Assets shall not include the following Assets (the
"Excluded Assets"):
(i) all of the Sellers' cash (including without limitation, all checks
and drafts), cash equivalents (other than security deposits to the extent
reflected on the Final Closing Statement Net Assets) and marketable
securities on hand or deposited in bank accounts, deposit accounts, lockbox
accounts or any other accounts with banks or other depositories on or prior
to the Closing Date, and all bank, depository and other accounts related
thereto (other than lockbox accounts);
(ii) all refunds and claims for refunds of income Taxes paid by any
Seller or any of its Affiliates arising prior to or on the Closing Date;
(iii) all rights and interests of any Seller or any of its Affiliates
in, to or under any insurance policy, including any prepaid expense in
respect thereof and any cash surrender value thereof;
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(iv) all debts and other obligations due to any Seller from any other
Seller or from any Affiliate of any Seller (other than any debts reflected
or reserved against in the Final Closing Statement of Net Assets and due to
the Business from TIMN);
(v) income Tax records and Returns;
(vi) all right, title and interest in and to the names, trademarks,
tradenames and service marks "THOMSON NEWSPAPERS INC.," "THOMSON
NEWSPAPERS," "THE THOMSON CORPORATION," "THOMSON INTERACTIVE MEDIA
NETWORK," "FLYWHEEL MEDIA" and "THOMSON" and the other names, trademarks,
tradenames and service marks listed on Exhibit 1.01(f) and any variations
thereof (collectively, the "Thomson Names"), and all rights to use the
Thomson Names, and all Intellectual Property owned by an of the Sellers for
the benefit of TIMN, and all items marked with the Thomson Names, including
without limitation, promotional materials, packaging materials, stationery,
signs, business cards, business manuals and training videos;
(vii) other than as provided pursuant to Section 5.06, any rights to
receive corporate overhead and other services provided to the Business by
the corporate office of the Sellers or otherwise shared among the
businesses conducted by the Sellers, including without limitation,
treasury, legal, tax, human resources, risk management and finance and
group purchasing plans;
(viii) all property and assets of the Pension Plan and the Defined
Contribution Plans and all rights in all assets associated with any of the
Plans or Sellers' Health and Welfare Plan;
(ix) all rights and interests under (a) the Agreement effective as of
January 1, 2000 by and among Abitibi Consolidated Sales Corporation, TNI,
Abitibi-Consolidated Inc. and Thomson Newspapers Canada (the "Abitibi
Contract"), (b) the Corporate Advertising Agreement effective as of March
1, 2000 between Thomson Newspapers and JC Penney Co., Inc. (including
Eckerd Corporation), (c) the 2000 Preprint Agreement effective as of
January 1, 2000 between Thomson Newspapers and Sears, Roebuck and Company,
(d) the 1999-2001 K-Mart Preprint Agreement effective as of June 1, 1999
between Thomson Newspapers Holdings, Inc. and K-Mart Corporation, and (e)
the Publishers Agreement effective as of January 2, 1998, between USA
Weekend, Inc. and TNI;
(x) property and assets which are listed on Section 2.01(b) of the
Disclosure Schedule;
(xi) all property and assets of any Seller located at the Sellers' (and
their Affiliates') corporate offices in Stamford, Connecticut and Wexford,
Pennsylvania or at the Sellers' central data processing center in New York,
New York; and
(xii) all claims, causes of action, rights of recovery, rights of
set-off and other similar rights of any kind, to the extent relating to any
other Excluded Asset or any Excluded Liability.
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SECTION 2.02. Assumption and Exclusion of Liabilities.
(a) On the terms and subject to the conditions of this Agreement, the
Purchaser shall, on the Closing Date, assume, and shall pay, perform and
discharge when due, all Liabilities expressly agreed to by the Purchaser or
expressly stated to be assumed by Purchaser, in any case, pursuant to one or
more other provisions of this Agreement, and the following (and only the
following) Liabilities of each Seller arising out of or relating to the
Business, the Transferred Assets or the Newspapers, whether accrued or arising
before or after the Closing, in all cases, except for the Excluded Liabilities
(the "Assumed Liabilities"):
(i) all Liabilities of each Seller as of the Closing Date with respect
to all accounts payable incurred with respect to the Business;
(ii) all Liabilities of each Seller as of the Closing Date with respect
to delivery of the Newspapers for the remaining term of any and all prepaid
subscriptions;
(iii) all Liabilities of each Seller under all Contracts to the extent
those Liabilities become due or arise subsequent to the Closing;
(iv) all Liabilities of each Seller with respect to all real estate,
personal property, sales, use and similar Taxes arising out of the
operation of the Business prior to the Closing and accrued as of the
Closing Date;
(v) all Liabilities of each Seller with respect to all sick leave and
vacation benefits for Newspaper Employees of each Seller on the Closing
Date with respect to work performed prior to the Closing Date; and
(vi) all Liabilities of each Seller reflected or reserved against on
the Final Closing Statement of Net Assets.
(b) Except for the Assumed Liabilities, Purchaser does not assume or
agree to pay any liability or obligation of any Seller, direct or indirect,
known or unknown, absolute or contingent, contractual or otherwise. Without
limiting the generality of the foregoing, the Sellers shall retain, and shall
pay, perform and discharge when due, and the Purchaser shall not assume or have
any responsibility for, all of the following Liabilities of the Sellers (the
"Excluded Liabilities"):
(i) all income Taxes (including any state or local franchise Taxes
based in whole or part on income) now or hereafter owed by the Sellers or
any Affiliate of the Sellers that are attributable to the operations or
activities of the Business, relating to any period, or any portion of any
period, ending on or prior to the Closing Date;
(ii) all Liabilities to the extent arising out of or relating to the
Excluded Assets (other than Liabilities reflected or reserved against on
the Closing Statement of Net Assets, all of which shall be Assumed
Liabilities notwithstanding anything in this Agreement to the contrary);
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(iii) all Liabilities relating exclusively to or arising exclusively
out of the obligations of the Sellers under Sections 5.08, 6.02(a),
6.02(c), 6.02(e)(ii) and 6.04;
(iv) all Liabilities arising out of the Long Term Incentive Plan, the
Phantom and Stock Plans, the Performance Plan, any SERP Plans, the
Retention Agreements, the Corporate Severance Agreements or any other
employee benefit or welfare plan relating in whole or in part to the
Newspaper Employees whether, on behalf of any present or former employees
of the Business and/or their dependents;
(v) all debts and other obligations due from any Seller to another
Seller or to any Affiliate of any Seller (other than any debts reflected or
reserved against in the Final Closing Statement of Net Assets and due to
TIMN);
(vi) all debts and other obligations of the Sellers for borrowed money,
including, but not limited to, capital lease obligations;
(vii) all Liabilities of the Sellers to the extent not arising out of
or relating to the Business, the Transferred Assets and/or the Newspapers;
(viii) all Liabilities of the Sellers solely to the extent such
Liabilities constitute (a) libel claims with respect to materials published
by the Newspapers prior to the Closing Date, (b) workers' compensation
claims of Newspaper Employees with respect to occurrences prior to the
Closing Date or (c) or other claims on Section 3.05 of the Disclosure
Schedule (other than the matters listed as items 1 and 2 thereon which
shall be governed by clause (ix) of this Section 2.02(b));
(ix) all Liabilities of the Sellers or any of their Affiliates to pay
attorneys fees and expenses of counsel to Sellers or any of their
Affiliates and other fees and expenses of consultants, expert witnesses or
other third parties retained by Sellers or their Affiliates in connection
with the defense of the litigations listed as items 1 and 2 in Section 3.05
of the Disclosure Schedule and to pay monetary Damages, if any, pursuant to
a final and nonappealable order or judgment of the court having
jurisdiction with respect to such litigations, in any case, solely to the
extent such monetary obligations arise as a result of occurrences prior to
the Closing Date (provided that, for greater certainty, Excluded
Liabilities shall not include, and Assumed Liabilities shall include, any
injunctive or other equitable remedies resulting from or relating to such
litigations that affects the Business or the Purchaser or its Affiliates or
any Liabilities or Damages resulting from or relating to the operation of
the Business or any other action by the Purchaser or its Affiliates from
and after the Closing Date);
(x) all Liabilities of the Sellers arising out of any breach by the
Sellers or any of their Affiliates prior to the Closing Date of any of the
Non-compete Agreements (other than any breach arising out of the
consummation of the transactions contemplated hereby);
(xi) all Liabilities under any insurance policy relating to the
Business;
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(xii) all Liabilities of the Sellers relating to terminations of
employment of Newspaper Employees prior to the Closing Date; and
(xiii) all Liabilities which are listed on Section 2.02(b) of the
Disclosure Schedule.
SECTION 2.03. Purchase Price; Allocation of Purchase Price.
(a) Subject to the adjustments set forth in Section 2.07, the aggregate
purchase price for the Transferred Assets (the "Purchase Price") shall be
$205,000,000.
(b) The Purchase Price and Assumed Liabilities shall be allocated in
(i) between the Transferred Assets owned by TNLC and TNCHL (the "IP Assets"), on
the one hand, and all other Transferred Assets, on the other hand, as of the
Closing Date in accordance with Exhibit 2.03(b) and (ii) among the Transferred
Assets (other than the IP Assets) as of the Closing Date in accordance with the
agreement of the parties hereto reached in good faith on or before the date
which is the earlier to occur of (x) the date which is six months after the
Closing Date and (y) the first date on which such allocation must be reflected
on the Tax Returns of any of the parties hereto. Any subsequent adjustments to
the Purchase Price shall be reflected in the allocation hereunder in a manner
consistent with Treasury Regulation Section 1.1060-1T(f) and as agreed to by the
Purchaser and the Sellers (including pursuant to Section 7.03 hereof). The
Purchaser and the Sellers shall report the Federal, state and local income and
other Tax consequences of the transactions contemplated by this Agreement in a
manner consistent with such allocation. Except as otherwise required by law,
neither the Purchaser nor the Sellers shall take an inconsistent position with
such allocations on any Tax Return or otherwise.
SECTION 2.04. Closing. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Transferred Assets and the assumption of
the Assumed Liabilities contemplated hereby shall take place at a closing (the
"Closing") at the offices of counsel to the Sellers at 10:00 a.m., local time,
on October 1, 2000, if as of such date all applicable waiting periods under the
HSR Act have expired or been terminated and all other conditions to the
obligations of the parties set forth in Article VIII have been satisfied or
waived, and if not, on the fifth Business Day following the later to occur of
(i) the expiration or termination of all applicable waiting periods under the
HSR Act and (ii) the satisfaction or waiver of all other conditions to the
obligations of the parties set forth in Article VIII, or at such other time or
on such other date or at such other place as the Sellers and the Purchaser may
mutually agree in writing (the day on which the Closing takes place being the
"Closing Date").
SECTION 2.05. Closing Deliveries by the Sellers. At the Closing, the
Sellers shall deliver or cause to be delivered to the Purchaser:
(a) the Bill of Sale, the Deeds and such other instruments as may be
reasonably requested by the Purchaser to transfer the Transferred Assets to
the Purchaser or to evidence such transfer on the public records;
(b) the Assumption Agreement;
(c) a receipt for the Purchase Price; and
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(d) the certificates and other documents required to be delivered
pursuant to Section 8.02.
SECTION 2.06. Closing Deliveries by the Purchaser. At the Closing, the
Purchaser shall deliver to the Sellers:
(a) the Purchase Price by wire transfer in immediately available funds
to an account which shall be designated by the Sellers to the Purchaser;
(b) the Assumption Agreement; and
(c) the certificates and other documents required to be delivered
pursuant to Section 8.01.
SECTION 2.07. Working Capital Adjustment. The Purchase Price shall be
subject to adjustment after the Closing as specified in this Section 2.07:
(a) Closing Statement of Net Assets and Working Capital. As promptly as
practicable, but in any event within 90 days following the Closing Date, the
Purchaser shall deliver to the Sellers the Closing Statement of Net Assets and a
statement setting forth the Closing Date Working Capital as computed from such
Closing Statement of Net Assets (the "Initial Working Capital Statement"), in
each case prepared on a basis consistent with the procedures and principles set
forth in Exhibit 2.07 hereto and in accordance with GAAP, to the extent not
inconsistent with such procedures. At all reasonable times during the 90-day
period referred to above and 30 Business Days immediately following the Sellers'
receipt of the Closing Statement of Net Assets and Initial Working Capital
Statement, the Sellers and their representatives shall be permitted to review
the Purchaser's work papers and the other books and records relating to the
Closing Statement of Net Assets and the Initial Working Capital Statement and
the Purchaser shall make reasonably available the individuals responsible for
the preparation of the Closing Statement of Net Assets and the Initial Working
Capital Statement in order to respond to the inquiries of the Sellers and their
representatives related thereto.
(b) Disputes. (i) The Sellers may dispute the Closing Statement of Net
Assets and the determination of Closing Date Working Capital (including any
amounts set forth in the Closing Statement of Net Assets); provided, however,
that the Sellers shall have notified the Purchaser in writing of each disputed
item within 30 Business Days of the Sellers' receipt of the Closing Statement of
Net Assets and the Initial Working Capital Statement (the "Review Period"),
specifying the amount thereof in dispute and setting forth, in reasonable
detail, the basis for such dispute, the dollar amounts involved and the Sellers'
good faith estimate of the Closing Date Working Capital and any changes in the
Closing Statement of Net Assets (a "Dispute Notice"). At all reasonable times
following the Purchasers' receipt of a Dispute Notice, the Purchaser and its
representatives shall be permitted to review the Sellers' work papers relating
to the Dispute Notice and the Sellers shall make reasonably available the
individuals responsible for the preparation of the Dispute Notice in order to
respond to the inquiries of the Purchaser and its representatives related
thereto. In the event of such a dispute, the Purchaser and the Sellers shall
attempt to resolve their differences in good faith within 20 Business Days after
receipt by the Purchaser of the Dispute Notice. In the event that the Purchaser
and Sellers
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resolve all disputed items within 20 Business Days after receipt by the
Purchaser of the Dispute Notice, then the Sellers and Purchaser shall set forth
the agreed upon Final Closing Statement of Net Assets and the determination of
Closing Date Working Capital in writing and such Final Closing Statement of Net
Assets and such determination of Closing Date Working Capital shall be final,
binding and conclusive on the parties and shall be deemed to be the Final
Working Capital Statement and the Final Closing Statement of Net Assets, as the
case may be. If the Sellers and the Purchaser are unable to reach a resolution
with respect to all disputed items within 20 Business Days after receipt by the
Purchaser of the Dispute Notice, the Sellers and the Purchaser shall submit any
items remaining in dispute for resolution to an Independent Accounting Firm, and
shall use their respective reasonable best efforts to cause the Independent
Accounting Firm, within 30 Business Days after such submission, to determine in
a written report to the Sellers and the Purchaser its resolution of such
remaining disputed items, and such determination of such remaining disputed
items (together with those items not in dispute and those items resolved between
the Sellers and the Purchaser, and, accordingly, not submitted to the
Independent Accounting Firm) shall be final, binding and conclusive on the
Sellers and the Purchaser and shall be deemed to be the Final Working Capital
Statement and the Final Closing Statement of Net Assets, as the case may be. The
fees and disbursements of the Independent Accounting Firm shall be borne equally
by the Sellers and the Purchaser. During the 30 Business Day review by the
Independent Accounting Firm, the Purchaser and the Sellers will each make
available to the Independent Accounting Firm such individuals and such
information, books and records as may be reasonably required by the Independent
Accounting Firm to make its final determination.
(ii) If the Sellers do not deliver the Dispute Notice to the Purchaser
within the Review Period, the Initial Working Capital Statement and the Closing
Statement of Net Assets delivered by the Purchaser to the Sellers shall be
deemed to be accepted by the Sellers, shall be final, binding and conclusive on
the parties hereto, and shall be deemed to be the Final Closing Statement of Net
Assets and the Final Working Capital Statement.
(c) Purchase Price Adjustment. Within three Business Days following the
Final Working Capital Statement being deemed final pursuant to Section
2.07(b)(i) or (ii), as the case may be, a Purchase Price adjustment shall be
made as follows:
(i) in the event that the Reference Working Capital exceeds the Closing
Date Working Capital (as set forth on the Final Working Capital Statement),
the Purchase Price shall be adjusted downward by the amount of such excess,
and the Sellers shall pay the amount of such excess, together with interest
as provided for in Section 2.07(d) below, to the Purchaser by wire transfer
in immediately available funds to an account designated by Purchaser; and
(ii) in the event that the Closing Date Working Capital (as set forth
on the Final Working Capital Statement) exceeds the Reference Working
Capital, the Purchase Price shall be adjusted upward by the amount of such
excess, together with interest as provided for in Section 2.07(d) below,
and the Purchaser shall pay the amount of such excess to the Sellers by
wire transfer in immediately available funds to an account designated by
the Sellers.
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(d) Interest. All amounts paid pursuant to Section 2.07(c) shall bear
interest from and after the Closing Date, until paid, at the per-annum rate
equal to the prime rate of Citibank, N.A. (or its successors), as in effect from
time to time, on the basis of a 365-day year and the actual number of days
elapsed.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
TNI represents and warrants to the Purchaser as of the date hereof all
of the following representations and warranties, and TNLC and TNCHL each
represent and warrant, severally and not jointly, to the Purchaser only the
representations and warranties set forth in Sections 3.01, 3.02, 3.03, 3.11 and
3.13 and solely to the extent such representations and warranties relate to such
Seller or the Transferred Assets owned by it:
SECTION 3.01. Organization and Authority of the Sellers. Each of TNI
and TNLC is a corporation and TNCHL is a limited liability company, in each
case, duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization and has all necessary corporate and limited
liability company, as applicable, power and authority to enter into this
Agreement and the Ancillary Agreements, to carry out its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. This Agreement has been, and the Ancillary Agreements will be, duly
executed and delivered by each Seller, and (assuming due authorization,
execution and delivery by the Purchaser) this Agreement constitutes, and, upon
their execution, the Ancillary Agreements will constitute, legal, valid and
binding obligations of each Seller enforceable against each Seller in accordance
with their respective terms.
SECTION 3.02. No Conflict. Assuming that all consents, approvals,
authorizations, other actions, filings and notifications described in Section
3.03 have been obtained and made, the execution, delivery and performance of
this Agreement and the Ancillary Agreements by the Sellers do not (a) violate or
conflict with the Certificate of Incorporation or By-laws of the Sellers, (b)
except as would not, individually or in the aggregate, reasonably be likely to
have a Material Adverse Effect, conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to any of the Sellers (with respect to the Business), the Transferred
Assets or the Newspapers or (c) except as would not, individually or in the
aggregate, reasonably be likely to have a Material Adverse Effect or as
described in Section 3.02 of the Disclosure Schedule, result in any breach of,
or constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, or give to others any rights of
termination, acceleration or cancellation of, or result in the creation of any
Encumbrance on any of the Transferred Assets pursuant to any Material Contract.
SECTION 3.03. Consents and Approvals. The execution and delivery of
this Agreement and the Ancillary Agreements by the Sellers do not, and the
performance of this Agreement and the Ancillary Agreements by the Sellers will
not, require any consent, approval, authorization or other action by, or filing
with or notification to, any Governmental Authority, except (a) as described in
Section 3.03 of the Disclosure Schedule, (b) the notification and
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waiting period requirements of the HSR Act, (c) where failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not, individually or in the aggregate, reasonably be likely
to have a Material Adverse Effect or (d) as may be necessary as a result of any
facts or circumstances relating solely to the Purchaser.
SECTION 3.04. Financial Statements.
(a) Attached as Section 3.04(a) of the Disclosure Schedule is the
Reference Statement of Net Assets and the Reference Earnings Statements. The
Reference Statement of Net Assets and the Reference Earnings Statements (i) were
prepared in accordance with the books of account and other financial records of
the Sellers relating to the Business, and (ii) except as provided in the notes
thereto and except that the foregoing statements do not reflect barter and trade
assets or liabilities, present fairly in all material respects the net assets of
the Business as of the date thereof and the earnings before interest, taxes,
depreciation and amortization of the Business for the applicable periods then
ended, respectively.
(b) The Sellers do not have any Liabilities with respect to the
Business, the Transferred Assets or the Newspapers that would be required by
GAAP to be reflected or reserved against in a balance sheet, except (i) such
Liabilities as are reflected or reserved against in the Reference Statement of
Net Assets or in Section 3.04(b) of the Disclosure Schedule, (ii) such
Liabilities as are incurred after the date of the Reference Statement of Net
Assets in the ordinary course of business, (iii) the Excluded Liabilities, (iv)
trade and barter liabilities or (v) Liabilities which would not individually or
in the aggregate, reasonably be likely to have a Material Adverse Effect;
provided, however in no event shall the representation and warranty contained in
this Section 3.04(b) cover or be deemed to cover any matter, subject, category
or event which is covered by or addressed in any other representation or
warranty of any of the Sellers contained in this Agreement.
SECTION 3.05. Litigation. Except as disclosed in Section 3.05 of the
Disclosure Schedule, there are no actions, proceedings or investigations
pending, or to the Sellers' knowledge threatened, against any of the Sellers
relating to the Business or the Transferred Assets, before any Governmental
Authority that would, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect. Except as disclosed in Section 3.05 of the
Disclosure Schedule, none of the Sellers with respect to the Business or the
Transferred Assets is subject to any order, writ, judgment, injunction, decree,
determination or award which, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect.
SECTION 3.06. Permits and Licenses; Compliance with Laws.
(a) Except as disclosed in Section 3.03 or 3.06(a) of the Disclosure
Schedule and except as would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect, (i) the Sellers have or
have effected all permits, licenses, approvals, authorizations, registrations,
qualifications and filings with and under all Federal, state, local and foreign
laws and Governmental Authorities, that are required for the Sellers to operate
the Business in the manner in which it is currently being operated
(collectively, the "Required Permits") and (ii) all such Required Permits are in
full force and effect and no cancellation of the Required Permits is pending, or
to the knowledge of the Sellers, threatened.
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(b) The Sellers are not in violation of any law, rule, regulation,
order, judgment or decree applicable to the Sellers (with respect to the
Business) or by which any of the Transferred Assets is bound or affected, except
(i) as set forth in Section 3.06(b) of the Disclosure Schedule and (ii) for
violations the existence of which would not, individually or in the aggregate,
be reasonably likely to have a Material Adverse Effect.
SECTION 3.07. Conduct in the Ordinary Course; Absence of Changes or
Events. Since December 31, 1999, except for matters arising out of the
transactions contemplated by this Agreement and except as disclosed in Section
3.07 of the Disclosure Schedule, the Business has been conducted in the ordinary
course, consistent with past practice. Without limiting the generality of the
foregoing, except (a) as disclosed in Section 3.07 of the Disclosure Schedule,
(b) for matters arising out of the transactions contemplated by this Agreement
or (c) as would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect, since December 31, 1999, no Seller has (with
respect to the Business):
(i) sold, transferred, leased, subleased, licensed or otherwise
disposed of any asset (other than Excluded Assets), other than in the
ordinary course of business, consistent with past practice;
(ii) purchased, leased or otherwise acquired any asset (other than
Excluded Assets), other than in the ordinary course of business, consistent
with past practice;
(iii) suffered any damage, destruction or other casualty loss (not
covered by insurance) to the Transferred Assets;
(iv) revalued any of the Transferred Assets, including without
limitation, by writing down or writing up the value of any Receivables, or
made any changes in its accounting methods, principles and practices, other
than in the ordinary course of business, consistent with past practice;
(v) terminated or amended any Material Contract or entered into any
contract or agreement which would otherwise be a Material Contract, other
than in the ordinary course of business, consistent with past practice;
(vi) created or granted any Encumbrance (other than Permitted Liens) on
any Transferred Asset; or
(vii) established any new bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing or other employee benefit
plan for Newspaper Employees, or, other than in the ordinary course of
business, consistent with past practice, increased the benefits payable
under any Plan or the compensation payable or to become payable to any
officers or key employees of any of the Sellers who are Newspaper
Employees, other than pursuant to the Retention Agreements or severance
agreements with certain Newspaper Employees entered into in contemplation
of the transactions contemplated hereby.
SECTION 3.08. Material Contracts. Except to the extent they relate to
Excluded Assets or Excluded Liabilities, the Sellers have previously made
available to the Purchaser true
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copies of all of the following contracts and agreements of the Sellers with
respect to the Business (the "Material Contracts"):
(a) each agreement for the purchase of personal property with any
supplier to the Business or for the furnishing of services to the Business
under the terms of which any of the Sellers: (1) is required to pay more
than $100,000 in the aggregate during the calendar year ending December 31,
2000 or (2) is required to pay more than $100,000 in the aggregate over the
remaining term of such agreement, in any case, except for purchase or sales
orders entered into in the ordinary course of business, consistent with
past practice;
(b) each agreement for the sale of personal property by the Business or
for the furnishing of services by the Business under the terms of which any
of the Sellers: (1) is to receive more than $100,000 in the aggregate
during the calendar year ending December 31, 2000 or (2) is to receive more
than $100,000 in the aggregate over the remaining term of such agreement,
in any case, except for purchase or sales orders entered into in the
ordinary course of business, consistent with past practice, or sales of
equipment which were no longer used in the operation of the Business;
(c) all employment and management agreements and agreements with
independent contractors or consultants under the terms of which any of the
Sellers: (1) is required to pay more than $100,000 in the aggregate during
the calendar year ending December 31, 2000 or (2) is required to pay more
than $100,000 in the aggregate over the remaining term of the agreement;
(d) each lease of real property under the terms of which any of the
Sellers: (1) is required to pay more than $100,000 in the aggregate during
the calendar year ending December 31, 2000 or (2) is required to pay more
than $100,000 in the aggregate over the remaining term of the lease; and
(e) all collective bargaining agreements.
Except as disclosed in Section 3.08 of the Disclosure Schedule, each
Material Contract and each of the other Contracts is valid and binding against
the applicable Seller, and to the Sellers' knowledge, valid and binding against
the other parties thereto and in full force and effect. None of the Sellers, or
to the Sellers' knowledge, no other party to any Material Contract, is in breach
of, or in default under, any Material Contract, except where such breach or
default would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect.
SECTION 3.09. Employee Matters.
(a) Except as disclosed in Section 3.09(a) of the Disclosure Schedule,
the Sellers have previously made available to the Purchaser true and complete
copies (or where written plans do not exist, summary descriptions thereof) of
(i) all employee benefit plans as defined in Section 3(3) of ERISA and (ii)
except for the agreements or plans referred to in Section 2.02(b)(iv), all
bonus, stock option, stock purchase, restricted stock, incentive and retirement
plans, programs or arrangements, as each of the foregoing were entered into,
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maintained, or contributed to, by the Sellers, or any of their Affiliates for,
or with respect to, the Newspaper Employees (collectively, the "Plans"). Except
as disclosed in Section 3.09(a) of the Disclosure Schedule, the Sellers have
made available to the Purchaser true copies of the most recently received IRS
determination letter for each such Plan, where applicable, and of the most
recent annual reports relating thereto on IRS Form 5500 and/or Form 990, where
applicable. Other than claims for benefits in the ordinary course, there is no
claim pending or, to the knowledge of Sellers, threatened, involving any Plan by
any person or entity against such Plan or the Sellers or any ERISA Affiliate
(b) Each Plan has been operated by the Sellers in compliance with its
terms and the requirements of ERISA, the Code and other applicable law, except
where a failure to do so, individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect. No legal action, suit or claim is
pending or, to the knowledge of the Sellers, threatened, with respect to any
Plan (other than claims for benefits in the ordinary course), except where such
action, suit or claim, individually or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect.
(c) Except as disclosed in Section 3.09(c) of the Disclosure Schedule,
none of the Plans is a multiemployer plan, within the meaning of Section 3(37)
or 4001(a)(3) of ERISA ("Multiemployer Plan"). Except as disclosed in Schedule
3.09(c) of the Disclosure Schedule, no Seller has incurred any withdrawal
liability (within the meaning of Section 4201 of ERISA) prior to the Closing
Date with respect to any Multiemployer Plan.
(d) (i) No Seller has incurred any liability to the Pension Benefit
Guaranty Corporation (except for required premium payments), (ii) no "prohibited
transaction" (within the meaning of Section 406 of ERISA or Section 4975(c) of
the Code) has occurred with respect to any Plan, (iii) all reports, returns and
similar documents with respect to the Plans required to be filed by the Sellers
with any Governmental Authority have been so filed and (iv) the Sellers have
complied with the notice and continuation requirements of Section 4980B of the
Code and Section 601 of ERISA and the regulations thereunder; except in any
case, where such would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect.
(e) Section 3.09(e) of the Disclosure Schedule contains a true and
complete list of all of the Newspaper Employees as of the date therein set
forth, and such list correctly reflects their salaries, hours, wages, other
compensation (other than benefits under the Plans), including all bonuses
accrued as of such date, dates of employment, positions and all severance pay
entitlements (other than Excluded Liabilities).
SECTION 3.10. Environmental Matters. Except as set forth in the
Reports, neither the Business nor any of the Sellers with respect to the
Business has received from any Governmental Authority any written request for
information, notice of claim, demand or other notification that it is
potentially responsible with respect to any investigation or clean-up of any
Material of Environmental Concern. Except as disclosed in the Reports: (i) the
Real Property and the current use thereof complies in all material respects with
applicable Environmental Law; (ii) there are no Materials of Environmental
Concern located in or on the Real Property, except for solvents and other
chemicals customarily used in the businesses of operating and publishing
newspapers and carrying out commercial printing; (iii) none of the Real Property
has been used
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as a waste disposal site, nor are there any underground storage tanks in or
under any such property, nor any asbestos situate thereon; (iv) Sellers hold and
are in compliance with all licenses required under all Environmental Laws
applicable to the operations of the Business as currently conducted by Sellers;
(v) the Real Property is not subject to any Lien imposed pursuant to any
Environmental Law; (vi) there has been no release of any Hazardous Substance at
any Real Property by the Sellers or any other person under Sellers' direction or
control that is in violation of or is reasonably likely to lead to any Liability
arising under any Environmental Law, except for any such violations or
Liability, as would individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect; (vii) the Sellers have not transported or
arranged for the treatment, storage, or disposal of any Hazardous Substances to
any off-site location in connection with the operation of the Business that has
resulted in a Liability to the Sellers under applicable Environmental Laws,
except for any such Liability, as would individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect; and (viii) none of the Real
Property is listed on the National Priorities List or on the Comprehensive
Environmental Response, Compensation and Liability Information System list, both
promulgated under CERCLA, or on any state or local list of sites requiring
removal, remedial response or corrective action pursuant to any Environmental
Law. The Sellers have made available to the Purchaser true copies of the
Reports.
Notwithstanding any other provision of this Agreement, the parties to
this Agreement acknowledge and agree that the representations and warranties
contained in this Section 3.10 are the only representations and warranties given
by the Sellers with respect to environmental matters or compliance with
Environmental Laws and no other provision of this Agreement shall be interpreted
as containing any representation or warranty with respect thereto.
SECTION 3.11. Intellectual Property. Except as disclosed in Section
3.11 of the Disclosure Schedule and except as would not, individually or in the
aggregate be reasonably likely to have a Material Adverse Effect, (i) the rights
of the Sellers to the Intellectual Property that is part of the Transferred
Assets do not conflict with or infringe on the rights of any other Person, and
the Sellers have not received any written claim or notice from any Person to
such effect, (ii) to the Sellers' knowledge, no Person is infringing on the
rights of the Sellers to the Intellectual Property that is part of the
Transferred Assets, and (iii) the Sellers own, are licensed or otherwise have
the legal right to use all the Intellectual Property that is part of the
Transferred Assets.
SECTION 3.12. Real Property. Each parcel of Real Property is owned by
TNI free and clear of all Encumbrances, except: (a) as disclosed in Section 3.12
of the Disclosure Schedule; (b) liens for Taxes and assessments not yet payable;
(c) liens for Taxes, assessments and charges and other claims, the validity of
which are being contested in good faith; (d) imperfections of title, easements,
liens, security interests, claims and other charges and Encumbrances the
existence of which would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect; (e) mechanic's and materialmen's liens
for construction or alterations in progress; (f) statutory liens of landlords
and workmen's, repairmen's, warehousemen's and carrier's liens arising in the
ordinary course of business; and (g) requirements incurred or other Encumbrances
relating to deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance or other
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similar statutory requirements (collectively, the "Permitted Encumbrances"). The
Sellers have not received written notice of non-compliance of the Real Property
with any law, regulation or ordinance which has not been remedied in all
material respects. The heating, ventilation and air conditioning, plumbing and
electrical systems in the building included in the Real Property are, as a
whole, in good working order and condition for their age and length of service,
ordinary wear and tear excepted, and there is no current necessity to replace or
make significant repairs to any of the foregoing systems, other than such
replacements and repairs as are customary in light of the age and length of
service of such systems. There are no challenges or appeals brought by a Seller
pending regarding the amount of the Taxes on, or the assessed valuation of, the
Real Property, and no special written arrangements or agreements exist between a
Seller and any Governmental Authority with respect thereto. There is no Tax
assessment (in addition to the normal, annual general real estate and similar
Taxes assessment) pending or, to the Sellers' knowledge, threatened with respect
to any portion of the Real Property. There are no condemnation proceedings
pending or, to the Sellers' knowledge, threatened with respect to any portion of
the Real Property.
SECTION 3.13. Transferred Assets. The Sellers own, lease or have the
legal right to use all the Transferred Assets (other than the Real Property),
and the Sellers have good title to, or, in the case of leased or subleased
Transferred Assets, valid and subsisting leasehold interests in, all such
Transferred Assets, free and clear of Encumbrances, except (i) as disclosed in
Section 3.13 of the Disclosure Schedule, (ii) Permitted Encumbrances and (iii)
where failure to hold such good title or valid and subsisting interest would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect (collectively, "Permitted Liens").
SECTION 3.14. Insurance. All material assets and risks of the Sellers
in the conduct of the Business are covered by valid and currently effective
insurance policies or binders of insurance or programs of self-insurance.
SECTION 3.15. Labor Matters. Except as set forth in Section 3.15 of the
Disclosure Schedule, (i) there are no actions pending or, to the knowledge of
the Sellers, threatened, between any Seller and any Newspaper Employees, which
actions, individually or in the aggregate, would be reasonably likely to have a
Material Adverse Effect; (ii) no Seller is a party to any collective bargaining
agreement or other labor union contract applicable to Newspaper Employees; (iii)
there are no grievances outstanding against any of the Sellers under any such
agreement or contract which, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect; (iv) there are no unfair
labor practice complaints pending, or, to the knowledge of the Sellers,
threatened, against any of the Sellers with respect to the Business before the
National Labor Relations Board which, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect; and (v) there are no
general strikes, work stoppages, lockouts, or, to the Sellers' knowledge,
threats thereof, by or with respect to Newspaper Employees which, individually
or in the aggregate, would be reasonably likely to have a Material Adverse
Effect.
SECTION 3.16. Taxes. The Sellers have timely filed or been included in
all material Returns required to be filed with respect to Taxes pertaining to
the Transferred Assets and such Returns are accurate and complete in all
material respects. All Taxes shown thereon have been paid when due. There are no
Encumbrances for Taxes, other than Permitted Liens, on
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the Transferred Assets. No deficiencies for Taxes pertaining to the Transferred
Assets have been claimed or assessed in writing or, to the knowledge of the
Sellers, proposed in writing by any taxing authority, the Sellers have not
received written notice of any pending audits, investigations or claims for or
relating to any liability in respect of Taxes pertaining to the Transferred
Assets, no issues have been raised in any pending audit of any of the Sellers
which could reasonably be expected materially to increase liability for Taxes
pertaining to the Transferred Assets of the Sellers for a taxable year which has
either not been audited or as to which no federal, state, local or foreign tax
assessment audit is pending, and no extension of a statute of limitations or
power of attorney relating to Taxes pertaining to the Transferred Assets is in
effect with respect to the Sellers, and, other than in the ordinary course of
business, the Sellers have not requested any extension of time within which to
file Returns (including without limitation, information returns and reports) in
respect of any Taxes pertaining to the Transferred Assets. The Sellers have
withheld and paid all Taxes pertaining to the Transferred Assets required to
have been withheld and paid in connection with amounts paid or owing any
employee, independent contractor, creditor, stockholder, partner or other third
party as of the date hereof.
SECTION 3.17. Brokers. Other than Goldman Sachs & Co. and Dirks, Van
Essen & Murray, no broker, finder or investment banker 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 the Sellers or any of their Affiliates.
SECTION 3.18. Equipment and Tangible Property. All equipment and
tangible property included in the Transferred Assets are, as a whole, in good
working order and condition for their age and length of service, ordinary wear
and tear excepted, and, to the Sellers' knowledge, there is no current necessity
to replace or make significant repairs to any portion thereof, other than such
replacement and repairs as are customary in light of the age and length of
service of such equipment and tangible property.
SECTION 3.19. Circulation Matters. The Sellers have made available to
the Purchaser true and complete copies of (a) the most currently completed audit
report by the Audit Bureau of Circulation ("ABC") relative to the Newspapers and
(b) the publisher's statements most recently submitted to the ABC, relative to
such of the Newspapers as are audited by the ABC (the "ABC Audited Newspapers").
As of the date hereof, since the date of such publisher's statements, the paid
circulation of the ABC Audited Newspapers has not fallen more than 3% below the
level reflected in such publisher's statements, the Sellers have not made any
material change in their policies for the pricing of circulation with respect to
such newspapers and the Sellers have not circulated such Newspapers at discounts
greater than those reported in such publisher's statements. All representations
by the Sellers contained in such publisher's statements and other materials
submitted by the Seller to the ABC for the period covered by such publisher's
statements and the aforementioned audit report are, to Sellers' knowledge, true
and complete in all material respects.
SECTION 3.20. Inventory. All of the inventory included in the
Transferred Assets is in the physical possession and control of the Sellers at
their or their suppliers' facilities or in transit from suppliers. Such
inventory is of a quality readily usable and/or saleable in the normal course of
the Business as conducted by the Sellers.
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SECTION 3.21. Nature of Transferred Assets. Except for the Excluded
Assets, the Transferred Assets, as a whole, constitute, in all material
respects, (i) all of the assets and property used, or held for use by Seller in
the operation of the Business and (ii) all of the assets necessary to own and
conduct the Business as it is presently conducted, and there are no properties
or assets of the type described in the definition of Transferred Assets (except
Excluded Assets) owned, used, or held for use by Sellers in the operation of the
Business that are not included in the Transferred Assets. All the Transferred
Assets that constitute tangible real or personal property are located in the
State of Connecticut (other than inventory and supplies in transit).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as of the date
hereof as follows:
SECTION 4.01. Organization and Authority of the Purchaser. The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has all necessary
corporate power and authority to enter into this Agreement and the Ancillary
Agreements, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. This Agreement has
been, and the Ancillary Agreements will be, duly executed and delivered by the
Purchaser, and (assuming due authorization, execution and delivery by the
Sellers) this Agreement constitutes, and, upon their execution, the Ancillary
Agreements will constitute, legal, valid and binding obligations of the
Purchaser enforceable against the Purchaser in accordance with their respective
terms.
SECTION 4.02. No Conflict. Assuming that all consents, approvals,
authorizations, other actions, filings and notifications described in Section
4.03 have been obtained and made, the execution, delivery and performance of
this Agreement and the Ancillary Agreements by the Purchaser do not (a) violate
or conflict with the Certificate of Incorporation or By-laws (or equivalent
organizational documents) of the Purchaser, (b) conflict with or violate any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award applicable to the Purchaser, or (c) result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, acceleration or cancellation of, or result in the creation of any
Encumbrance on any of the assets or properties of the Purchaser pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument relating to any assets or properties to which the
Purchaser or any of its subsidiaries is a party or by which any of such assets
or properties is bound or affected, in any case, which would prevent, delay or
limit in any manner the Purchaser from consummating the transactions
contemplated by this Agreement and the Ancillary Agreements.
SECTION 4.03. Consents and Approvals. The execution and delivery of
this Agreement and the Ancillary Agreements by the Purchaser do not, and the
performance of this Agreement and the Ancillary Agreements by the Purchaser will
not, require any consent,
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approval, authorization or other action by, or filing with or notification to,
any Governmental Authority or any other Person, except (a) the notification and
waiting period requirements of the HSR Act, (b) where failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not prevent, delay or limit the Purchaser from performing
any of its material obligations under this Agreement or the Ancillary
Agreements, as the case may be, and (c) as may be necessary as a result of any
facts or circumstances relating solely to the Sellers.
SECTION 4.04. Absence of Litigation. There are no actions, proceedings
or investigations pending, or to the Purchaser's knowledge threatened, against
the Purchaser which seek to prevent, delay or limit the consummation of the
transactions contemplated hereby or by the Ancillary Agreements.
SECTION 4.05. Financing. The Purchaser has all funds necessary to
timely consummate the transactions contemplated by this Agreement and has
provided the Sellers with sufficient evidence of such financing.
SECTION 4.06. Brokers. No broker, finder or investment banker 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 the Purchaser or any of its Affiliates.
SECTION 4.07. FCC Matters. There are no facts relating to the Purchaser
(or an Affiliate thereof) under the Communications Act of 1934, as amended (and
all rules regulations and written policies thereunder), that would disqualify it
(or any Affiliate or assignee thereof) from obtaining control of the Newspapers
or that would prevent, delay or limit it (or any Affiliate or assignee) from
consummating the transactions contemplated by this Agreement. Without limiting
the foregoing, it is not necessary for the Purchaser or any Affiliate thereof to
seek or obtain any waiver from the Federal Communications Commission, dispose of
any interest in any media or communications property or interest, terminate any
venture or arrangement, or effectuate any change or restructuring of its
ownership (including without limitation, the removal or withdrawal of officers
or directors or the conversion or repurchase of equity securities in the
Purchaser or any Affiliate thereof) to avoid any delay or other limitation in
consummating the transactions contemplated hereby.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Operation of the Newspapers Prior to the Closing.
(a) Except for matters arising out of the transactions contemplated by
this Agreement or as disclosed in Section 5.01 of the Disclosure Schedule, the
Sellers covenant and agree that, between the date hereof and the Closing Date,
they will (i) operate the Business in the ordinary course, consistent with past
practice, (ii) use their reasonable best efforts to preserve the present
business relationships with Persons having material business dealings with the
Sellers in connection with the Business, except where failure to do so,
individually or in the aggregate,
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would not be reasonably likely to have a Material Adverse Effect and (iii) not
take any action that would result in a breach of the last sentence of Section
3.07.
SECTION 5.02. Investigation; No Other Representations or Warranties.
(a) The Purchaser acknowledges and agrees that it (i) has made its own
inquiry and investigation into, and, based thereon, has formed an independent
judgment concerning, the Transferred Assets, the Assumed Liabilities, the
Newspapers and the Business and (ii) has been furnished with or has been given
adequate access to such information about the Transferred Assets, the Assumed
Liabilities, the Newspapers and the Business as it has requested. In connection
with the Purchaser's investigation of the Transferred Assets, the Assumed
Liabilities, the Newspapers and the Business, the Purchaser may have received
and may hereafter receive from the Sellers or its representatives estimates,
projections and other forecasts relating to the Transferred Assets, the Assumed
Liabilities, the Newspapers and the Business, and plan and budget information
with respect thereto (collectively, "Projections"). The Purchaser acknowledges
that there are uncertainties inherent in attempting to make Projections, that
the Purchaser is familiar with such uncertainties, and that the Purchaser is
taking full responsibility for making its own evaluation of the adequacy and
accuracy of any Projections.
(b) The Purchaser acknowledges and agrees that, except for the
representations and warranties (including the Disclosure Schedule with respect
thereto) made by the Sellers and expressly set forth in Article III of this
Agreement, none of the Sellers or any Affiliate or representative of the Sellers
has made and shall not be construed as having made to the Purchaser or to any
representative or Affiliate thereof, and neither the Purchaser nor any Affiliate
nor any representative thereof has relied upon, any representation or warranty
of any kind. Without limiting the generality of the foregoing, and
notwithstanding any express representation and warranty made by the Sellers in
Article III hereof, the Purchaser agrees that none of the Sellers or any
Affiliate or any representative of the Sellers makes or has made any
representation or warranty to the Purchaser or to any representative or
Affiliate thereof with respect to any Projections or with respect to any of the
agreements listed on Section 5.02 of the Disclosure Schedule (the "Non-compete
Agreements") or, except to the extent and as expressly covered by a
representation and warranty of the Sellers contained in Article III hereof, with
respect to any statements, documents or other information heretofore or
hereafter delivered to or made available to the Purchaser or to any
representative or Affiliate thereof (including without limitation, the
Confidential Information Memorandum dated March 2, 2000), and that the Purchaser
will not assert any claim against the Sellers or any of their Affiliates or any
of their directors, officers, employees, agents, stockholders, or
representatives, or hold the Sellers or any such Persons liable with respect
thereto.
(c) The parties hereto agree to the matters set forth on Section
5.02(c) of the Disclosure Schedule.
SECTION 5.03. Access to Information.
(a) From the date hereof until the Closing, upon reasonable notice, the
Sellers shall, and shall cause each of their officers, directors, employees,
agents and representatives to (i)
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afford the officers, employees and authorized
agents and representatives of the Purchaser reasonable access, during normal
business hours, to the offices, properties, books and records of the Sellers and
their Affiliates relating to the Business, the Transferred Assets, the Assumed
Liabilities and the Newspapers and (ii) furnish to the officers, employees and
authorized agents and representatives of the Purchaser such additional available
financial and operating data and other information regarding the Business,
Transferred Assets, the Assumed Liabilities and the Newspapers as the Purchaser,
its officers, employees, authorized agents or representatives, may from time to
time reasonably request; provided, however, that such access shall be provided
in a manner which will not unreasonably interfere with the Business or the other
businesses of the Sellers or any of their Affiliates; and provided further,
however, that there shall be no obligation to disclose any privileged
information.
(b) (i) In order to facilitate the evaluation, preparation,
investigation, defense and resolution of any claim, litigation, proceeding or
investigation (including Tax audits) made by or against any of the Sellers or
any of their Affiliates,
(ii) in connection with any Excluded Liability or Excluded Asset, and,
(iii) in connection with the preparation of the Closing Statement of
Net Assets or any financial statement, Tax Return (or any amendment
thereto) or other report or document to be furnished to any Governmental
Authority, in any case, after the Closing Date,
upon reasonable notice, the Purchaser shall, at no cost to the Sellers, (1)
afford the officers, employees and authorized agents and representatives of the
Sellers reasonable access, during normal business hours, to the offices,
properties, books and records of the Purchaser relating to the Business, the
Transferred Assets, the Assumed Liabilities and the Newspapers, (2) furnish to
the officers, employees and authorized agents and representatives of the Sellers
such available additional financial and operating data and other information
regarding the Business, the Transferred Assets, the Assumed Liabilities and the
Newspapers as the Sellers may from time to time reasonably request, (3) make
available to the Sellers the employees (including the Newspaper Employees) of
the Purchaser and its Affiliates whose assistance, testimony or presence is
reasonably necessary to assist the Sellers, including in evaluating, preparing,
investigating, defending and resolving any such claims, litigations,
proceedings, or investigations, including the presence of such persons as
witnesses in depositions, hearings or trials for such purposes and (4)
reasonably cooperate with the Sellers, and cause its and its Affiliates'
officers, employees, agents and representatives so to cooperate with the
Sellers, in connection therewith; provided, however, that such access shall be
provided in a manner which will not unreasonably interfere with the Business or
other businesses of the Purchaser or any of its Affiliates.
(c) The Purchaser agrees that it shall preserve and keep all books and
records relating to the Transferred Assets, Assumed Liabilities and the Business
in the Purchaser's or an Affiliate's possession for a period of at least six
years from the Closing Date and the Sellers shall have the right, at their
expense, to obtain copies of all or part of such books and records. The Sellers
shall be given an opportunity, at their cost and expense, to remove and retain
all or
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any part of such books and records as the Sellers may select at the expiration
of such period to the extent that the Purchaser desires to dispose of any of the
foregoing.
SECTION 5.04. Confidentiality. The terms of the letter agreement dated
February 2000 (the "Confidentiality Agreement") between TTC and the Purchaser
are hereby incorporated by reference. References to the "Company" in the
Confidentiality Agreement shall be deemed to include, without limitation,
references to the Sellers. The Confidentiality Agreement shall continue in full
force and effect until the Closing, at which time the Confidentiality Agreement
and the obligations thereunder shall terminate; provided, however, that,
notwithstanding the foregoing, the Confidentiality Agreement shall terminate
only in respect of that portion of the Information (as defined in the
Confidentiality Agreement) exclusively relating to the Business, the Transferred
Assets, Assumed Liabilities, the Newspapers and transactions contemplated by
this Agreement and all other provisions of the Confidentiality Agreement shall
continue in full force and effect in all respects. If this Agreement is, for any
reason, terminated prior to the Closing, the Confidentiality Agreement shall
continue in full force and effect in all respects.
SECTION 5.05. Regulatory and Other Authorizations; Consents.
(a) Each party hereto will use its reasonable best efforts to obtain
all authorizations, consents, orders and approvals of all Governmental
Authorities and other Persons that may be or become necessary for the execution
and delivery of, and the performance of its obligations pursuant to, this
Agreement and will reasonably cooperate with the other parties in promptly
seeking to obtain all such authorizations, consents, orders and approvals. Each
party hereto agrees to make an appropriate filing of a Notification and Report
Form pursuant to the HSR Act with respect to the transactions contemplated
hereby within five Business Days of the date hereof (or as soon thereafter as
practicable) and to supply promptly any additional information and documentary
material that may be requested pursuant to the HSR Act. The Sellers and the
Purchaser shall cooperate with each other in connection with the making of all
such filings or responses, including providing copies of all such documents to
the other party and its advisors prior to filing or responding and, if
requested, consider in good faith all reasonable additions, deletions or changes
suggested in connection therewith. Each party shall promptly notify the other
party of any communication to that party from any Governmental Agency and permit
the other party to review in advance any proposed communication to any
Governmental Agency. Each party shall not agree to participate in any meeting
with any Governmental Agency in respect of any filings, investigation or other
inquiry unless it consults with the other party in advance and, to the extent
permitted by such Governmental Agency, gives the other party the opportunity to
attend and participate thereat. The parties hereto will not take any action that
will have the effect of delaying, impairing or impeding the receipt of any
required authorizations, consents, orders and approvals.
(b) Without limiting the generality of the Purchaser's agreements
pursuant to Section 5.05(a), the Purchaser shall:
(i) take promptly and diligently pursue any or all of the following
actions to the extent necessary to eliminate any concerns on the part of,
or to satisfy any conditions imposed by, any Governmental Authority with
jurisdiction over the enforcement of any
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applicable laws, rules and regulations, including without limitation, any
antitrust laws, regarding the legality of the Purchaser's acquisition of
the Business, the Transferred Assets, the Assumed Liabilities and the
Newspapers: entering into negotiations, providing information, making
proposals, entering into and performing agreements or submitting to
judicial or administrative orders, or, pursuant to any such agreement or
order or otherwise, selling or otherwise disposing of, or holding separate
(through the establishment of a trust or otherwise), particular assets or
categories of assets (including, after the Closing, any of the Transferred
Assets), or businesses (including, after the Closing, any portion of the
Business), of the Purchaser or any of its Affiliates;
(ii) use its best efforts to prevent the entry in a judicial or
administrative proceeding brought under any antitrust or other law by any
Government Authority or any other Person of any permanent, temporary or
preliminary injunction or other order that would make consummation of the
acquisition of the Business, the Transferred Assets, the Assumed
Liabilities and the Newspapers in accordance with the terms of this
Agreement unlawful or that would prevent or delay such consummation,
including without limitation, taking the steps contemplated by Section
5.05(b)(i);
(iii) take promptly and diligently pursue, in the event that an
injunction or order has been issued as referred to in Section 5.05(b)(ii),
any and all steps, including without limitation, the appeal thereof, the
posting of a bond and/or the steps contemplated by Section 5.05(b)(i)
above, necessary to vacate, modify or suspend such injunction or order so
as to permit such consummation on a schedule as close as possible to that
contemplated by this Agreement; and
(iv) take promptly and diligently pursue all other actions and do all
other things necessary and proper to avoid or eliminate each and every
impediment under any antitrust or other law, rule or regulation that may be
asserted by any Government Authority or any other Person to the
consummation of the acquisition of the Business, the Transferred Assets,
the Assumed Liabilities and the Newspapers by the Purchaser in accordance
with the terms of this Agreement.
SECTION 5.06. Transition Services.
(a) The Purchaser acknowledges and agrees that the Business currently
receives from the Sellers, their Affiliates and third parties certain
administrative and corporate services and benefits, including without
limitation: computer and information processing services; finance, accounting
and payroll services; facilities management services; treasury services
(including banking, insurance, administration, taxation and internal audit);
general administrative services; executive and management services; legal
services; and human resources services. The Purchaser further acknowledges and
agrees that, except as otherwise expressly provided in this Section 5.06, all
such services and benefits shall cease, and any agreement in respect thereof
shall terminate with respect to the Business as of the Closing Date.
(b) In order to allow the Purchaser to make suitable alternative
arrangements, for a period of up to 90 days following the Closing, at the
Purchaser's option and expense, the Sellers shall use their reasonable best
efforts to provide, or cause to be provided by the Sellers or
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Affiliates of the Sellers or other third parties (each, a "Transition Services
Provider") the services listed on Exhibit 5.06 (the "Transition Services") to
the Business to the extent it is currently receiving such Transition Services.
(c) The obligations of the Sellers under this Section 5.06 shall (x)
not require them to pay any amounts in excess of those currently paid by the
Sellers for the Transition Services to be provided pursuant to this Section
5.06(a) and (y) not render the Sellers or any Transition Service Provider liable
for any failure of any Seller Transition Services to be delivered to the
Purchaser other than to the extent such failure resulted from the gross
negligence or willful breach of the Sellers.
(d) The Transition Services shall be generally provided, to the extent
practicable, in a manner consistent with the manner in which they were provided
to the Business by the Transition Services Providers prior to the Closing.
Without limiting the generality of the previous sentence, the Purchaser will
make payments to the Transition Services Providers as set forth on Exhibit 5.06
within 30 days of receipt of an invoice with respect thereto.
(e) The obligations of the Sellers and the Transition Services to be
provided under this Section 5.06 shall be suspended with respect to any
specified Transition Services during the period and to the extent that any
Transition Services Provider is prevented or hindered from providing such
Transition Services by any law or governmental order, rule, regulation or
direction, whether domestic or foreign, or by any cause beyond the control of
such Transition Services Provider, including acts of God, strikes, lockouts and
other labor and industrial disputes and disturbances, civil disturbances,
accidents, acts of war or conditions arising out of or attributable to war
(whether declared or undeclared), shortage of necessary equipment, materials or
labor, or restrictions thereon or limitations upon the use thereof, and delays
in transportation or the refusal of any third party supplying Transition
Services to allow the Transition Services to be provided to the Business
following the Closing. In such event, the Sellers shall give notice of
suspension as soon as reasonably practicable to the Purchaser stating the date
and extent of such suspension and the cause thereof, and the Sellers shall
resume the performance of their obligations under this Section 5.06 as soon as
reasonably practicable after the removal of the cause and the Sellers shall so
notify the Purchaser. For greater certainty, such a suspension shall not have
the effect of extending the period of time for which the Transition Services
shall be provided by the Transition Services Providers.
(f) The Sellers and the Transition Services Providers shall not have
any duties or responsibilities pursuant to this Section 5.06 other than those
specifically set forth in this Section 5.06 and no implied obligations shall be
read into this Section 5.06. Neither the Sellers, the Transition Services
Providers nor any of their respective officers, directors, employees, agents,
representatives, attorneys-in-fact or Affiliates shall be liable for any action
taken or omitted to be taken by it or such Person under or in connection with
this Section 5.06 other than to the extent such action or omission constituted
gross negligence or willful breach by the Sellers.
(g) The Purchaser may terminate or partially limit any Transition
Services being provided to the Business at any time, in its sole discretion,
upon 30 days prior written notice to the Sellers and the applicable Transition
Services Providers.
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(h) The Sellers hereby agree with the Purchaser to reasonably cooperate
with the Purchaser in good faith with respect to the provision to the Purchaser
for a period of up to 90 days following the Closing of payroll and other
services heretofore provided to the Business by the Sellers, in addition to the
Transition Services, determined by the Purchaser to be reasonably necessary to
the conduct of the Business by the Purchaser. The parties agree to negotiate in
good faith with each other the terms and conditions, including price (based upon
actual costs), for such additional services.
SECTION 5.07. Bulk Transfer Laws. The Purchaser hereby waives
compliance by the Sellers with any applicable bulk sale or bulk transfer laws of
any jurisdiction in connection with the sale of the Transferred Assets to the
Purchaser. The Sellers shall indemnify and hold harmless the Purchaser against
any and all Damages that are asserted by third parties against the Purchaser as
a result of noncompliance by the Sellers with any such bulk transfer law (except
in respect of those obligations of the Purchaser undertaken hereunder and those
Liabilities assumed by the Purchaser hereunder or in the Assumption Agreement).
SECTION 5.08. Environmental Remediation Project. TNI, at its sole
expense, shall complete the projects listed on Exhibit 5.08 (collectively, the
"Remediation Project") to the extent required under Environmental Law and, if
applicable, in accordance with any timetables required under applicable law by
any Governmental Authority with competent jurisdiction. The Remediation Project
shall be planned, conducted, and supervised by environmental consultants of
recognized standing selected by TNI (the "Consultants"). TNI shall keep the
Purchaser reasonably informed with respect to the Remediation Project, provided,
however, that TNI shall have control over all submissions to and negotiations
with any Governmental Authority, and any and all costs and expenses of the
Purchaser to monitor the Remediation Project, including legal fees, consultant
fees, and internal administrative overhead, shall be paid solely by the
Purchaser. The Purchaser acknowledges and agrees that the Real Property listed
in Exhibit 5.08 (the "Remediation Property") is used for commercial and/or
industrial purposes, and that the Remediation Project shall be limited to
measures that are reasonably determined by the Consultants to be applicable to
property used for such purposes, including risk-based or other cleanup
objectives that minimize the cost or expense of the Remediation Project. The
Purchaser further acknowledges and agrees that the Remediation Project may
include institutional and engineering controls (including capping or paving and
restrictions on the use of groundwater), deed restrictions, and property use
restrictions. The Purchaser covenants and agrees to consent to, execute,
deliver, and file such documents and to take such steps as may be necessary to
record such controls and restrictions with the appropriate Governmental
Authority. For purposes of this Agreement, the Remediation Project shall be
deemed complete when TNI delivers to the Purchaser, at TNI's option, a no
further action letter or equivalent determination from a Governmental Authority
with jurisdiction over each Remediation Project, or a certificate of completion
prepared by the Consultants stating that the Remediation Project has been
completed in accordance with applicable remediation standards or that no
remediation is required under applicable remediation standards. Upon completion
of the Remediation Project, TNI shall have no obligations to Purchaser under
this Section 5.08, including, without limitation, any obligation with respect to
the Remediation Property. In addition to and not by way of limiting the terms of
Section 5.03(b) hereof, the Purchaser hereby grants TNI and its officers,
directors, employees, agents, and representatives (including the Consultants) an
irrevocable license for full access to enter upon the Remediation Property,
after reasonable notice, and to perform any activity
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required or contemplated by this Section 5.08. Any contractual, governmental or
other reimbursements for the Remediation Project shall be payable exclusively to
TNI, and Purchaser shall immediately deliver any such reimbursements received by
the Purchaser to TNI. The Purchaser shall cause its officers, directors,
employees, agents and representatives not to take any action, or fail to take
any action, which would be reasonably likely to prevent, hinder or materially
increase the cost to TNI or its officers, directors, employees, agents or
representatives (including the Consultants) from undertaking or completing the
Remediation Project.
SECTION 5.09. Non-Competition Covenant; No Interference.
(a) Each Seller covenants and agrees that it and its Affiliates shall
not, for a period of two (2) years after the Closing Date, without the
Purchaser's written consent, by itself or in partnership or jointly in
conjunction with or as manager or agent of another Person, undertake or carry on
or be engaged (i) in any newspaper publishing business which publishes a print
edition newspaper or (ii) in any electronic or Internet publishing business, in
either case, primarily directed at the Market Area which contains content and
advertising primarily related to the Market Area; provided that nothing herein
shall prevent any Seller or its Affiliates from (x) owning not more than 10% of
the issued shares of a corporation, the shares of which are listed on any
recognized stock exchange, or trade in the over the counter market in Canada or
the United States; or (y) acquiring, being acquired by, merging with, entering
into a joint venture with or completing any other transaction of a similar
nature with, any entity which includes a newspaper publishing business in the
Market Area, provided that the aggregate amount of the revenues from such
newspaper publishing business are less than 10 percent of the aggregate revenues
of the relevant entity as a whole at the date of the transaction (for greater
certainty, this exception shall include undertaking or carrying on or being
engaged in such business); and provided further that, for greater certainty and
without limitation, nothing herein shall prevent any Seller or any of its
Affiliates from undertaking, carrying on or being engaged in any business which
operations include:
(i) the solicitation of subscribers or advertisers for, or the
publishing or distribution in print, electronic (including without
limitation, on the Internet) or other formats of, any Seller's or any
Seller's Affiliate's newspapers or other electronic media in the Market
Area, provided that these newspapers or other electronic media do not
publish separate print or electronic editions primarily directed at the
Market Area which contain content and advertising primarily relating to the
Market Area;
(ii) the production, sale and distribution of newsprint and other
similar products and all incidental services related thereto including
without limitation the Augusta paper mill operations in which certain of
the Sellers presently maintain a joint venture interest; or
(iii) the publication or other distribution in print, electronic
(including without limitation, on the Internet) or other formats of books,
journals, periodicals, other information and information services,
including without limitation, in the nature of financial, legal, medical,
professional business reference, scientific, academic, school,
vocational/technical and other library products.
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(b) Each Seller covenants and agrees that it and its Affiliates shall
not, for a period of one (1) year after the Closing Date, without the
Purchaser's written consent, by itself or in partnership or jointly in
conjunction with or as a manager or agent of another Person, solicit the
services of any Newspaper Employee for purposes of employment, whether for
remuneration or otherwise and whether as employee, independent contractor or
otherwise in any manner or for any purpose whatsoever. Nothing in this Section
5.09 shall prohibit any Seller from continuing to employ any Newspaper Employee
who does not accept the Purchaser's offer of employment.
(c) Notwithstanding anything in this Section 5.09 to the contrary, the
Purchaser acknowledges and agrees that, in addition to the Transferred Assets,
the Sellers intend to sell all of their other newspaper and related assets and
properties (other than The Globe and Mail and Globe Interactive and related
assets) (such other newspaper and related assets and properties, the "Other
Newspaper Assets") to one or more purchasers and, accordingly, (i) Sections
5.09(a) and 5.09(b) shall only restrict and otherwise apply to the Sellers and
their Affiliates, (ii) Sections 5.09(a) and 5.09(b) shall not restrict or
otherwise apply to any purchaser (or its Affiliates) of all or any portion of
the Other Newspaper Assets or to any of the Other Newspaper Assets sold to any
such purchaser, and (iii) the Purchaser will not assert any claim against (1)
any of the Sellers or any other Seller Indemnified Party by reason of or in
connection with (x) any sale of all or any portion of the Other Newspaper Assets
or (y) any business or other activity conducted or proposed to be conducted by
any purchaser of all or any portion of the Other Newspaper Assets or (2) any
purchaser of all or any portion of the Other Newspaper Assets by reason of or in
connection with the covenants set forth in Sections 5.09(a) or 5.09(b).
SECTION 5.10. Corporate Service Agreements. Promptly after the date
hereof, TNI shall use its reasonable best efforts through the Closing Date to
cause each of the third parties (the "Vendors") which is a party to any of the
agreements identified as item 5 on Section 2.01(b) of the Disclosure Schedule
and to the Abitibi Contract (collectively, the "Existing Service Agreements")
to, at the election of TNI, either (a) enter into a new agreement with the
Purchaser, effective as of the Closing Date, on substantially similar material
terms and conditions as such Existing Service Agreement(s) between such Vendor
and TNI (or its Affiliate) (the "Replacement Service Agreements") or (b) consent
to the assignment of the Existing Service Agreement(s) to the Purchaser to the
extent relating to the Business and the assumption by the Purchaser of TNI's (or
its Affiliate's) obligations thereunder to the extent relating to the Business
effective as of the Closing Date (the "Consents"). The Purchaser hereby agrees
to use its reasonable best efforts to promptly cooperate with and assist TNI as
requested in connection with TNI's obligations under this Section 5.10,
including, without limitation, by promptly providing financial or other
information requested by any Vendor in connection with such Vendor's decision to
execute any Replacement Service Agreement or Consent. Subject to the
satisfaction of the conditions in Section 8.01 hereof, at the Closing the
Purchaser hereby agrees to (x) enter into each Replacement Service Agreement so
long as its material terms and conditions are substantially similar to the
corresponding Existing Service Agreement and (y) assume all obligations (to the
extent relating to the Business) under each Existing Service Agreement in the
event that the Vendor has executed a Consent relating thereto. Notwithstanding
any provision herein to the contrary, including, without limitation, Sections
2.01(b), 8.01 and 8.02 hereof, (i) in the event that any Vendor has executed a
Consent with respect to the assignment of any Existing Service Agreement as
aforesaid, then each such Existing Service Agreement shall, to the extent
relating to the Business, not be an Excluded
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Asset and all rights thereunder relating to the Business shall be Transferred
Assets and (ii) the failure to obtain any or all of the Replacement Service
Agreements and/or the Consents shall not be a condition to either the
Purchaser's or the Sellers' respective obligations to close the transactions
contemplated hereby.
ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01. Employees.
On the Closing Date, the Purchaser shall offer employment as of the
Closing Date to all of the Newspaper Employees employed immediately prior to the
Closing, including those Newspaper Employees on vacation, leave of absence,
disability, sick-leave or layoff (whether or not such Newspaper Employees return
to active employment with the Purchaser) on terms and conditions, with respect
to base salary or hourly wages, that are the same as the base salary or hourly
wages being provided by the Sellers on the Closing Date. In so doing, Purchaser
shall recognize the vacation benefits accrued during their previous employment
by the Sellers or any Affiliate thereof and not paid to or otherwise utilized by
such employee on or prior to the Closing Date. The Purchaser shall further offer
to all Newspaper Employees health, welfare, 401(k), holiday, vacation, sick
leave and other benefits comparable to those customarily provided to employees
of Purchaser or its Affiliates, pursuant to which such Newspaper Employees will
receive prior service credit for their previous employment by the Sellers and/or
their Affiliates for eligibility and vesting purposes and, solely with respect
to calculating entitlement to vacation days, sick days or severance payment,
benefit accrual. Notwithstanding anything to the contrary in this Agreement, (x)
Purchaser shall indemnify and hold harmless the Sellers and their Affiliates
fully for any and all Losses (including, but not limited to, severance
obligations) which may be incurred or sustained by the Sellers and/or their
Affiliates as a result of the Purchaser's failure to hire any Newspaper Employee
on the Closing Date or, except for Excluded Liabilities, as a result of the
termination by the Purchaser of any Newspaper Employee on or subsequent to the
Closing Date and (y) all Liabilities arising under the Non-Corporate Severance
Agreements shall be Assumed Liabilities.
SECTION 6.02 Health and Welfare Benefits.
(a) The Purchaser and the Sellers acknowledge and agree that, effective
as of the Closing Date, except as contemplated by subsection (c) below, coverage
under all health and medical insurance, life insurance, disability, accidental
death and disability and any other welfare or benefit plans or programs
sponsored or maintained by the Sellers and any of their Affiliates for Newspaper
Employees, former employees of the Business and Beneficiaries thereof
(collectively, the "Sellers' Health and Welfare Plan") shall cease and be of no
further force or effect as to the Newspaper Employees, former employees of the
Business and Beneficiaries thereof. Any expense incurred by a Newspaper
Employee, former employee of the Business or Beneficiary thereof prior to the
Closing Date that would have been covered under the Sellers' Health and Welfare
Plan shall continue to be the responsibility of the Sellers.
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(b) The Purchaser shall be responsible and liable for all expenses
incurred by Newspaper Employees or any Beneficiary thereof on and after the
Closing Date, with respect to claims arising thereafter under the health and
medical, life insurance, disability, accidental death and disability and any
other welfare or benefit plans or programs sponsored, maintained or contributed
to by the Purchaser for the Newspaper Employees, former employees and any
Beneficiary thereof.
(c) The Sellers and their Affiliates shall be responsible and liable
for all health and medical expenses incurred by any Retiree or any Beneficiary
thereof under any Plan, whether incurred before or after the Closing Date.
(d) For purposes of the Purchaser's or any of its Affiliate's medical,
dental and other health and welfare plans for Newspaper Employees, former
employees and Beneficiaries thereof, the Purchaser shall or shall cause such
Affiliate to (i) waive limitations on benefits relating to any pre-existing
conditions and (ii) recognize, for purposes of annual deductible and
out-of-pocket limits under its medical, dental plans and other health and
welfare plans, deductible and out-of-pocket expenses paid by Newspaper
Employees, former employees and Beneficiaries thereof, under any of the Seller's
or any of its Affiliate's medical, dental and other health and welfare plans in
the calendar year in which the Closing Date occurs.
(e) Following the Closing Date, (i) the Purchaser shall provide
continuation health care coverage to all Newspaper Employees and their qualified
beneficiaries who incur a qualifying event on and after the Closing Date in
accordance with the continuation health care coverage requirements of Section
4980B of the Code and Title I, Subtitle B, Part 6 of ERISA and (ii) the Seller
and their Affiliates shall continue to be responsible for providing such
continuation coverage to former Newspaper Employees and their qualified
beneficiaries to whom the Sellers or any of their Affiliates are, on the Closing
Date, providing such continuation coverage or to whom the Sellers or any of
their Affiliates are under any obligation on the Closing Date to provide such
continuation coverage at the election of such former Newspaper Employees or
qualified beneficiary.
SECTION 6.03. Intentionally Omitted.
SECTION 6.04. Pension Plan. Effective as of the Closing Date, the
Newspaper Employees shall accrue no further benefits under the Pension Plan with
respect to service after the Closing Date. The Sellers shall retain
responsibility and liability for all benefits of the Newspaper Employees and
former employees of the Business under the Pension Plan accrued as of the
Closing Date.
SECTION 6.05. Defined Contribution Plan. (a) Effective as of the
Closing Date, the Newspaper Employees shall no longer participate in the Defined
Contribution Plans. As soon as practicable after the Sellers obtain a
determination letter from the IRS for each of the Defined Contribution Plans
that approves each Defined Contribution Plan's termination, the Sellers shall
cause the trustee(s) of the Defined Contribution Plans to distribute to the
Newspaper Employees the Defined Contribution Plans account balances of the
Newspaper Employees (other than Newspaper Employees, if any, whose account
balances are transferred to a 401(k) plan of
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the Purchaser pursuant to Section 6.05(b) below) in accordance with the terms of
the Defined Contribution Plans and any applicable laws, rules and regulations.
(b) At the election of the Purchaser, to be exercised, if at all, by
notice in writing to the Sellers within 30 days of the Closing, (it being agreed
that the failure so to timely send such notice shall be deemed to be an election
by the Purchaser not to have the provisions of this subsection (b) be effective,
and in such case, the provisions of subsection (a) above shall be applicable to
all Newspaper Employees and all Defined Contribution Plans), the Sellers shall
as soon as practicable after receipt of such notice cause the trustee(s) of the
Defined Contribution Plans to transfer all account balances (whether or not
vested and including any notes and loan documents) of the Newspaper Employees
who accept the Purchaser's offer of employment to a 401(k) plan sponsored by the
Purchaser; provided that such transfer shall be made in accordance with the
terms of the applicable Defined Contribution Plan, the Code and ERISA.
SECTION 6.06. Intentionally Omitted.
SECTION 6.07. WARN Act. In the event the Purchaser does not continue
all the operations of the Business or does not employ all Newspaper Employees on
and after the Closing Date, the Purchaser shall be liable and responsible for
any notification, payments and benefits required to be provided under the Worker
Adjustment and Retraining Notification Act.
ARTICLE VII
TAX MATTERS
SECTION 7.01. Cooperation and Exchange of Information. Without limiting
Section 5.03(b) hereof, the Sellers and the Purchaser will provide each other
with such cooperation and information as either of them may reasonably request
of the other in preparing and filing any Tax return, report or form ("Returns"),
amended Return or claim for refund, determining or contesting a liability for
Taxes or a right to a refund of Taxes, participating in or conducting any audit
or other proceeding in respect of Taxes. Such cooperation and information shall
include providing copies of relevant Returns or portions thereof, together with
accompanying schedules, related work papers and documents relating to rulings or
other determinations by Tax authorities. The Sellers and the Purchaser shall
make their respective officers, employees, agents and representatives available
on a basis mutually convenient to the Purchaser and the Sellers, to provide
explanations of any documents or information provided hereunder. Each Seller and
the Purchaser shall retain all Returns, schedules and work papers, records and
other documents in its possession relating to Tax matters of the Transferred
Assets for each taxable period first ending after the Closing Date and for all
prior taxable periods until the later of (i) the expiration of the statute of
limitations of the taxable periods to which such Returns and other documents
relate, without regard to extensions except to the extent notified by the other
party in writing of such extensions for the respective Tax periods, or (ii) six
years following the due date (without extension) for such Returns.
SECTION 7.02. Conveyance Taxes. The Purchaser shall be responsible and
liable for and shall indemnify and hold the Sellers harmless against any real
property transfer, real property gains, sales, use, transfer, value added and
other similar Taxes, and any transfer,
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recording, registration and other fees which become payable in connection with
or by reason of the transactions contemplated by this Agreement. The Purchaser,
after review and consent by the Sellers, shall file such applications and
documents as shall permit any such Tax to be assessed and paid on or prior to
the Closing Date in accordance with any available pre-sale filing procedure. The
Sellers shall execute and deliver all instruments and certificates reasonably
necessary to enable the Purchaser to comply with the foregoing. The Purchaser
shall complete and execute resale or other exemption certificates with respect
to the inventory items sold hereunder, and shall provide the Seller with
executed copies thereof.
SECTION 7.03. Treatment of Indemnity Payments. All payments made by the
Sellers or the Purchaser, as the case may be, to or for the benefit of the other
pursuant to any indemnification obligations under this Agreement (including
without limitation, pursuant to Article IX hereof) shall be treated as
adjustments to the Purchase Price for Tax purposes and such agreed treatment
shall govern for purposes of this Agreement.
ARTICLE VIII
CONDITIONS TO THE CLOSING
SECTION 8.01. Conditions to Obligations of the Sellers. The obligations
of the Sellers to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
(a) Representations and Warranties; Covenants. The representations and
warranties of the Purchaser contained in this Agreement shall be true and
correct as of the Closing (except where the failure to be so true and correct
would not be reasonably likely to have a material adverse effect on the
Purchaser or on its ability to timely consummate the transactions contemplated
hereby on the terms and conditions herein (a "Purchaser Material Adverse
Effect")) with the same force and effect as if made as of the Closing (and, if
the Closing shall have occurred, such representations and warranties shall be
deemed to have been made as of the Closing Date for purposes of Section
9.02(a)(i)), and all the covenants contained in this Agreement to be complied
with by the Purchaser on or before the Closing shall have been complied with
(except where the failure so to comply would not be reasonably likely to have a
Purchaser Material Adverse Effect) and the Sellers shall have received a
certificate of the Purchaser to such effect signed by a duly authorized officer
thereof;
(b) HSR Act. Any waiting period (and any extension thereof) under the
HSR Act applicable to the purchase and sale of the Transferred Assets
contemplated hereby shall have expired or shall have been terminated;
(c) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
has the effect of making such transactions contemplated by this Agreement
illegal or otherwise restraining or prohibiting consummation of such
transactions;
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(d) Assumption Agreement. The Purchaser shall have executed and
delivered to the Sellers the Assumption Agreement;
(e) Resolutions. The Sellers shall have received true and complete
copies, certified by the Secretary or an Assistant Secretary of each of the
Purchaser and the Purchaser Guarantor, of the resolutions duly and validly
adopted by the Board of Directors of the Purchaser and the Purchaser Guarantor
evidencing their authorization of the execution and delivery of each of this
Agreement and the Assumption Agreement to which it is a party and the
consummation of the transactions contemplated hereby and thereby;
(f) Incumbency Certificate. The Sellers shall have received a
certificate of the Secretary or an Assistant Secretary of each of the Purchaser
and the Purchaser Guarantor certifying the names and signatures of the officers
of the Purchaser and the Purchaser Guarantor authorized to sign this Agreement,
the Assumption Agreement and the other documents to be delivered hereunder; and
(g) Opinion of Purchaser's Counsel. The Sellers shall have received an
opinion of Verner, Liipfert, Bernhard, McPherson and Hand, Chartered, counsel
for the Purchaser and the Purchaser Guarantor, in the form of Exhibit 8.01(g)
attached hereto.
SECTION 8.02. Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations and Warranties; Covenants. The representations and
warranties of the Sellers contained in this Agreement shall be true and correct
as of the Closing (except where the failure to be so true and correct would not
be reasonably likely to have a Material Adverse Effect), with the same force and
effect as if made as of the Closing (and, if the Closing shall have occurred,
such representations and warranties shall be deemed to have been made as of the
Closing Date for purposes of Section 9.03(a)(i)), and all the covenants
contained in this Agreement to be complied with by the Sellers on or before the
Closing shall have been complied with (except where the failure to so comply
would not be reasonably likely to have a Material Adverse Effect), and the
Purchaser shall have received a certificate of each Seller to such effect signed
by a duly authorized officer thereof;
(b) HSR Act. Any waiting period (and any extension thereof) under the
HSR Act applicable to the purchase and sale of the Transferred Assets
contemplated hereby shall have expired or shall have been terminated;
(c) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
has the effect of making the transactions contemplated by this Agreement illegal
or otherwise restraining or prohibiting consummation of such transactions;
provided, however, that the foregoing condition shall not limit or otherwise
modify any of the Purchaser's obligations in Section 5.05 hereof;
(d) Ancillary Agreements. Each Seller shall have executed and delivered
to the Purchaser the Ancillary Agreements to which such Seller is a party;
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(e) Resolutions. The Purchaser shall have received a true and complete
copy, certified by the Secretary or an Assistant Secretary of each Seller and
the Seller Guarantor, of the resolutions duly and validly adopted by the Board
of Directors of each Seller and the Seller Guarantor evidencing their
authorization of the execution and delivery of this Agreement and the Ancillary
Agreements to which it is a party and the consummation of the transactions
contemplated hereby and thereby;
(f) Incumbency Certificate. The Purchaser shall have received a
certificate of the Secretary or an Assistant Secretary of each Seller and the
Seller Guarantor certifying the names and signatures of the officers of each
Seller and the Seller Guarantor authorized to sign this Agreement, the Ancillary
Agreements to which it is a party and the other documents to be delivered
hereunder; and
(g) Opinion of Sellers' Counsel. The Purchaser shall have received an
opinion of Torys, counsel for the Sellers and the Seller Guarantor, in the form
of Exhibit 8.02(g) attached hereto.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Survival. The representations and warranties made by any
party and contained in or made pursuant to this Agreement shall expire on the
18-month anniversary of the Closing Date, provided that the representations and
warranties contained in Section 3.16 hereunder shall survive for the applicable
period under the statute of limitations therefor, provided further, that if
written notice is properly given under this Article IX with respect to any
alleged breach of a representation and warranty to which such party is entitled
to be indemnified hereunder prior to the applicable expiration date, such
representation and warranty shall continue to survive (with respect to the
subject matter of such written notice only) until the applicable claim is
finally resolved. All covenants and agreements made by any party hereunder which
are to be performed on or prior to the Closing Date shall expire at the Closing
and all covenants and agreements made by any party hereunder which are to be
performed after the Closing Date shall survive until the applicable statute of
limitations therefor has expired with respect to any breach thereof.
SECTION 9.02. Indemnification by the Purchaser.
(a) After the Closing, the Purchaser agrees, subject to the other terms
and conditions of this Agreement, to indemnify the Sellers and their Affiliates,
officers, directors, employees and representatives (each, a "Seller Indemnified
Party") against and hold them harmless from and reimburse them for all Damages
which such Seller Indemnified Party may at any time sustain or incur as a result
of or arising out of:
(i) the breach of any representation or warranty of the Purchaser
herein;
(ii) the breach of any covenant or agreement of the Purchaser contained
herein which is to be performed after the Closing Date or contained in the
Assumption
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Agreement or in any other documents executed and delivered by the Purchaser
to the Sellers at the Closing; and
(iii) the Assumed Liabilities.
SECTION 9.03. Indemnification by the Sellers.
(a) After the Closing, the Sellers agree, jointly and severally,
subject to the other terms and conditions of this Agreement, to indemnify the
Purchaser and its Affiliates, officers, directors, employees and representatives
(each, a "Purchaser Indemnified Party") against and hold them harmless from and
reimburse them for all Damages which such Purchaser Indemnified Party may at any
time sustain or incur as a result of or arising out of:
(i) the breach of any representation or warranty of any of the Sellers
herein (determined for this purpose, other than in the case of Sections
3.04(a) and 3.19 hereof, without regard to any reference therein to
"Material Adverse Effect", "material" or "in all material respects";
(ii) the breach of any covenant or agreement of any of the Sellers
contained herein which is to be performed after the Closing Date or
contained in the Ancillary Agreements or in any other documents executed
and delivered by any of the Sellers to the Purchaser at the Closing;
(iii) the Excluded Liabilities; and
(iv) all Liabilities of the Sellers to the extent arising out of the
operation of the Business prior to the Closing or to the extent arising
prior to the Closing with respect to the Transferred Assets, in each case,
other than Assumed Liabilities.
SECTION 9.04. Notification of Claims.
(a) A party entitled to be indemnified pursuant to Section 9.02 or 9.03
(the "Indemnified Party") shall promptly notify the party or parties liable for
such indemnification (the "Indemnifying Party") in writing of any claim or
demand which the Indemnified Party has determined has given or could give rise
to a right of indemnification under this Agreement (a "Notice of Claim");
provided, however, that a delay or failure to provide such notice shall not
relieve any Indemnifying Party of its obligations except to the extent that it
has been materially prejudiced by such delay or failure. Any Notice of Claim (i)
shall state (with reasonable specificity) the basis on which indemnification is
being asserted, (ii) shall set forth the amount of Damages for which
indemnification is being asserted and (iii) in the case of third party claims,
shall be accompanied by copies of all relevant pleadings, demands and other
papers served on the Indemnified Party.
(b) If the Indemnified Party shall notify the Indemnifying Party of any
claim or demand pursuant to Section 9.02 or 9.03 asserted by a third party, the
Indemnifying Party shall have the right (i) to employ counsel reasonably
acceptable to the Indemnified Party to defend any such claim or demand asserted
against the Indemnified Party, (ii) to control and conduct any proceedings or
negotiations in connection therewith and necessary or appropriate to
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defend the Indemnified Party and (iii) to take all other steps or proceedings to
settle or defend any such claims, provided that the Indemnifying Party shall not
settle any such claim without the prior written consent of the Indemnified
Party, which consent will not be unreasonably withheld or delayed. The
Indemnifying Party shall notify the Indemnified Party in writing, as promptly as
possible after receipt of the Notice of Claim (but in any case within 30 days of
receipt by the Indemnifying Party of a Notice of a Claim (the "Indemnity Notice
Period")) of its election to defend any such third party claim or demand. In the
event that the Indemnifying Party does assume the defense as provided above, the
Indemnified Party shall have the right to participate in such defense (including
without limitation, with counsel of its choice), at its own expense, and the
Indemnifying Party shall reasonably cooperate with the Indemnified Party in
connection with such participation. If the Indemnifying Party does not deliver
to the Indemnified Party written notice within the Indemnity Notice Period that
the Indemnifying Party will assume the defense of any such claim or litigation
resulting therefrom, the Indemnified Party may defend against any such claim or
litigation in such manner as it may deem appropriate and the Indemnified Party
may settle such claim or litigation, provided that the Indemnified Party shall
not settle any such claim without the prior written consent of the Indemnifying
Party, which consent will not be unreasonably withheld or delayed. In the event
that the Indemnifying Party does not assume the defense as provided above, the
Indemnifying Party shall have the right to participate in such defense
(including without limitation, with counsel of its choice), at its own expense,
and the Indemnified Party shall reasonably cooperate with the Indemnifying Party
in connection with such participation, and in all cases the Indemnified Party
shall keep the Indemnifying Party reasonably informed as to all matters
concerning such third party claim and shall promptly notify the Indemnifying
Party in writing of any and all significant developments relating thereto.
Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnified Party shall settle or compromise any such claim or demand unless the
Indemnified Party or the Indemnifying Party, as the case may be, is given a full
and complete release of any and all liability by all relevant parties relating
thereto.
(c) In the event that a Notice of Claim hereunder does not involve a
third party claim, the Indemnifying Party shall, within 30 days after the date
of receipt of a Notice of Claim, respond in writing to the Indemnified Party
(the "Indemnity Response") and set forth with reasonable specificity those
items, if any, in the Notice of Claim to which the Indemnifying Party does not
agree as well as the basis upon which such disagreement is founded. Within 30
days following the receipt of the Indemnity Response by the Indemnified Party,
representatives of the Indemnifying Party and the Indemnified Party shall meet
to attempt to resolve through good faith negotiations the applicable disputed
matters. The parties shall negotiate in good faith for up to 30 days in an
attempt to reach a settlement of any disputed matter. In the event that such
good faith negotiations are unsuccessful or in the event of any other dispute
under this Article IX, the parties shall proceed in accordance with Section
11.12 of this Agreement.
(d) Notwithstanding subsections (a) and (b) of this Section 9.04, and
without limiting Sections 2.02(a) and 9.02(a)(iii) hereof, no Notice of Claim
shall be required to be delivered with respect to any of the matters listed on
Section 3.05 of the Disclosure Schedule which are Assumed Liabilities (the
"Assumed Litigation Matters"), but all other applicable provisions of Section
9.04(b) shall apply to such Assumed Litigation Matters.
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(e) Notwithstanding subsections (a), (b) and (d) of this Section 9.04,
and without limiting Sections 2.02(a) and 9.02(a)(iii) hereof, with respect to
the matters referred to in Sections 2.02(b)(viii), 2.02(b)(ix) and 2.02(b)(xi)
(the "Excluded Litigation Matters"), no Notice of Claim shall be required to be
delivered with respect to the Excluded Litigation Matters, the provisions of
Section 9.04(b) shall not apply to such Excluded Litigation Matters, and TNI
and/or its Affiliates, for greater certainty, shall have the right in their sole
discretion (i) to employ counsel of its choice to defend any such matter, (ii)
to control and conduct any proceedings or negotiations in connection therewith
and necessary or appropriate to defend such matter and (iii) to take all other
steps or proceedings to settle or defend any such matter.
SECTION 9.05. Limitations.
(a) Notwithstanding anything herein to the contrary, no Indemnifying
Party shall have any obligation to indemnify any Indemnified Parties pursuant to
Sections 9.02(a)(i), 9.03(a)(i) or 9.03(a)(iv), and no Indemnified Party shall
make a claim pursuant to Sections 9.02(a)(i), 9.03(a)(i) or 9.03(a)(iv), unless
the aggregate amount of Damages sustained or incurred with respect to all claims
payable by the Purchaser pursuant to Section 9.02(a)(i) or payable by the
Sellers pursuant to Sections 9.03(a)(i) and 9.03(a)(iv), as the case may be,
exceeds $500,000 and then only to the extent of such excess up to (but not in
excess of) a maximum aggregate indemnity for such Damages payable by the
Purchaser pursuant to Section 9.02(a)(i) or the Sellers pursuant to Sections
9.03(a)(i) and 9.03(a)(iv), as the case may be, of an amount equal to 35% of the
Purchase Price.
(b) Notwithstanding anything herein to the contrary, payments by the
Indemnifying Party pursuant to Section 9.02 or 9.03 shall be limited to the
amount of Damages, if any, that remains after deducting therefrom (i) any Tax
benefit to the applicable Indemnified Parties resulting from such Damages, (ii)
any insurance proceeds and any indemnity, contribution or other similar payment
recoverable by the Indemnified Parties from any third party with respect
thereto, (iii) any provision or reserve provided for the item in question in the
Final Closing Statement of Net Assets and (iv) any adjustments to the Purchase
Price paid pursuant to Section 2.07 in respect of the item in question.
(c) The Sellers shall have no liability under any provision of this
Agreement for any Damages to the extent that such Damages relate to actions
taken or omitted to be taken by the Purchaser or any of its Affiliates after the
Closing Date and in no event shall the Sellers be liable for punitive or
consequential damages. The Purchaser shall take all reasonable steps to mitigate
all Damages incurred or sustained by any Purchaser Indemnified Party upon and
after becoming aware of any event which could reasonably be expected to give
rise to Damages.
(d) Notwithstanding any other provision of this Agreement, the
Purchaser acknowledges that the obligation of the Sellers to provide
indemnification for Damages arising out of Section 9.03 extends only to the
Purchaser Indemnified Parties, and that the Sellers shall not be obligated to
provide such indemnification to any other Persons other than a permitted
assignee pursuant to Section 11.08.
(e) Notwithstanding any other provision of this Agreement, the
obligations of each of TNLC and TNCHL under Section 9.03 shall only be several
as to itself with respect to
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any breach of any of its respective covenants, agreements, representations or
warranties referred to in Section 9.03 and neither TNLC nor TNCHL shall have any
obligation under Section 9.03 with respect to any breach by any other Seller of
any of their respective covenants, agreements, representations or warranties
referred to in Section 9.03.
SECTION 9.06. Exclusive Remedy. The parties hereto hereby acknowledge
and agree that the sole and exclusive remedy of the Purchaser Indemnified
Parties and the Seller Indemnified Parties, as the case may be, from and after
the Closing with respect to Damages and any and all claims for any breach or
liability under this Agreement or any of the Ancillary Agreements or otherwise
relating to the subject matter of this Agreement and the Ancillary Agreements
and the transactions contemplated hereby and thereby shall be solely in
accordance with, and limited by, the indemnification provisions set forth in
this Article IX. In furtherance of the foregoing, the Purchaser and the Sellers
hereby waive on their own behalf and on behalf of each other applicable
Indemnified Party, to the fullest extent permitted under applicable law, any and
all rights, claims and causes of action it or they may have against the Sellers
or the Purchaser, as the case may be, arising under or based upon any Federal,
state or local law, rule or regulation (including without limitation, (i) any
such rights, claims or causes of action arising under or based upon common law
or otherwise and (ii) any and all claims for Damages or contribution arising
under any Environmental Law).
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.01. Termination.
(a) This Agreement may be terminated at any time prior to the Closing:
(i) by the mutual written consent of each Seller and the Purchaser
on their own behalf and on behalf of each other applicable Indemnified
Party;
(ii) by the Sellers or the Purchaser, if the Closing shall not
have occurred prior to December 31, 2000 the ("Termination Date"),
provided, however, that the right to terminate this Agreement under this
Section 10.01(a)(ii) shall not be available to any party whose breach of
any of its representations or warranties under this Agreement or whose
failure to perform or fulfill any covenant or agreement contained in this
Agreement shall have been the cause of, or shall have resulted in, the
failure of the Closing to occur prior to such date;
(iii) by the Purchaser, if the Sellers shall have (i) failed to
perform any of their covenants or agreements contained this Agreement,
which failure to perform would be reasonably likely to have a Material
Adverse Effect and is incapable of being cured or has not been cured within
20 calendar days after the giving of written notice thereof by the
Purchaser to the Sellers or such longer period in the event that such
breach cannot reasonably be expected to be cured within such 20-day period
and the Sellers are diligently pursuing such cure, but in no event later
than the Termination Date or (ii) breached any of their representations or
warranties contained in this Agreement, which
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breach would be reasonably likely to have a Material Adverse Effect and is
incapable of being cured or has not been cured within 20 calendar days
after the giving of written notice thereof by the Purchaser to the Sellers;
provided, however, that Purchaser may not terminate this Agreement pursuant
to this Section 10.01(a)(iii) if Purchaser is then in breach in any
material respect of any of its representations, warranties, covenants or
agreements contained in this Agreement;
(iv) by the Sellers, if the Purchaser shall have breached any of
its representations, warranties, covenants or other agreements contained in
this Agreement, which breach or failure to perform would be reasonably
likely to have a Purchaser Material Adverse Effect and is incapable of
being cured or has not been cured within 20 days after the giving of
written notice thereof by the Sellers to the Purchaser; provided, however,
that the Sellers may not terminate this Agreement pursuant to this Section
10.01(a)(iv) if the Sellers are then in breach in any material respect of
any of their representations, warranties, covenants or agreements contained
in this Agreement; or
(v) by the Sellers, if any Governmental Authority shall have
issued a judgment, decree, injunction, order or ruling restraining or
prohibiting the consummation of the transactions contemplated hereby or any
divestiture order or hold separate order.
(b) The party(s) desiring to terminate this Agreement pursuant to
Section 10.01(a)(ii), (iii), (iv) or (v) shall give written notice of such
termination to the other party(s) in accordance with Section 11.02 below.
SECTION 10.02. Effect of Termination.
(a) In the event of termination of this Agreement as provided in
Section 10.01, this Agreement shall forthwith become void and there shall be no
liability on the part of any party hereto except (i) as set forth in Section
5.04, Section 10.02(b) and Section 11.01 and (ii) nothing herein shall relieve
any party from liability for any willful and intentional breach hereof.
(b) In the event that this Agreement is terminated (i) by the Purchaser
or the Sellers pursuant to Section 10.01(a)(ii) and provided that the conditions
set forth in Sections 8.01(b) and 8.02(b) have not been satisfied or (ii) by the
Sellers pursuant to Section 10.01(a)(vi), then the Purchaser shall pay to the
Sellers on the date of such termination an aggregate amount in cash equal to 5%
of the Purchase Price by wire transfer of immediately available funds to an
account designated by the Sellers.
SECTION 10.03. Exclusive Remedy. Prior to the Closing, each party
hereto acknowledges and agrees that such party's sole and exclusive remedy with
respect to Damages and any and all claims for any breach or liability under this
Agreement or otherwise relating to the subject matter of this Agreement and the
transactions contemplated hereby shall be solely in accordance with, and limited
by, Sections 10.01 and 10.02 hereof.
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ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. Expenses. Subject to Section 7.02 hereof, all costs and
expenses, including without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses, whether or not the Closing shall have occurred. Without
limiting the foregoing, Sellers shall pay any and all brokerage, finder's or
other fees or commissions in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Sellers or
any of their Affiliates, including without limitation, Goldman Sachs & Co. and
Dirks Van Essen & Murray, and the Purchaser shall pay any and all brokerage,
finder's or other fees or commissions in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Purchaser or any of its Affiliates.
SECTION 11.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by FedEx or other nationally recognized courier service, by telecopy,
or by registered or certified mail (postage prepaid, return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to the Sellers or Seller Guarantor:
The Thomson Corporation
One Station Place
Stamford, CT 06902
Attention: General Counsel
Telecopy: (203) 328-8385
with a copy to:
Torys
237 Park Avenue
New York, NY 10017
Attention: Bradley P. Cost, Esq.
Telecopy: (212) 682-0200
(b) if to the Purchaser or Purchaser Guarantor:
MediaNews Group, Inc.
1560 Broadway, Suite 2100
Denver, CO 80202
Attention: Joseph J. Lodovic, IV
Telecopy: (303) 820-1929
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with a copy to:
Verner, Liipfert, Bernhard,
McPherson and Hand, Chartered
901 Fifteenth Street, N.W., Suite 700
Washington, DC 20005
Attention: Howell E. Begle, Jr., Esq.
Telecopy: (202) 371-6279
SECTION 11.03. Public Announcements. Except as may be required by
applicable law or regulation (including the rules of any stock exchange on which
any of the parties or their respective Affiliates are listed), no party to this
Agreement shall make, or cause to be made, any public announcement in respect of
this Agreement or the transactions contemplated herein or otherwise communicate
with any news media with respect thereto without the prior written consent of
the other parties, and, in any event, the parties shall reasonably cooperate as
to the timing and contents of any such announcement or communication.
SECTION 11.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of this
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 shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially 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 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.
SECTION 11.06. Disclosure Schedule. Disclosure of information in any
portion of the Disclosure Schedule shall be deemed disclosure in any other
portion of the Disclosure Schedule. In addition, (i) the fact that any
disclosure on any Section of the Disclosure Schedule is not required to be
disclosed in order to render the applicable representation or warranty to which
it relates true, or that the absence of such disclosure on any Section of the
Disclosure Schedule would not constitute a breach of such representation or
warranty, shall not be deemed or construed to expand the scope of any
representation or warranty hereunder or to establish a standard of disclosure in
respect of any representation or warranty and (ii) disclosure of a particular
matter on any Section of the Disclosure Schedule shall not in any circumstance
be construed to mean that such matter would be reasonably likely to have a
Material Adverse Effect.
SECTION 11.07. Entire Agreement; Time of the Essence. This Agreement
(including the Exhibits and the Disclosure Schedule), the Ancillary Agreements
and, subject to Section 5.04, the Confidentiality Agreement, taken together,
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior
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agreements and undertakings, both written and oral, with respect to the subject
matter hereof and thereof and except as otherwise expressly provided herein or
therein. Time shall be of the essence in this Agreement.
SECTION 11.08. Assignment; Like Kind Exchange.
(a) This Agreement shall not be assigned by any party hereto by
operation of law or otherwise without the prior written consent of the other
parties hereto; provided, however, that the Purchaser may assign this Agreement
(or any portion of its rights hereunder) to any of its Affiliates or, subject to
subsection (b), to a QI, in any case, so long as such assignment does not
relieve the Purchaser of any of its obligations hereunder. Any attempted
assignment in violation of the foregoing shall be null and void.
(b) The parties acknowledge that the Purchaser is considering acquiring
the Transferred Assets through a qualified intermediary within the meaning of
Treas. Reg. Section 1.1031(k)-1(g)(4) (the "QI") for the purpose of effecting a
like kind exchange (an "Exchange") within the meaning of Section 1031 of the
Code. If the Purchaser decides to effect an Exchange, the Purchaser may, in its
sole discretion, notify the Sellers, in writing, and the Sellers shall
reasonably cooperate with the Purchaser to enable the Purchaser to effect the
Exchange, at the Purchaser's sole cost and expense, provided that nothing herein
or as a result of the Exchange shall limit or otherwise waive the Purchaser's
obligations hereunder or shall delay or otherwise adversely affect the Closing
hereunder.
SECTION 11.09. No Third-Party Beneficiaries. Except for the provisions
of Article IX relating to Indemnified Parties and the provisions of Section 5.06
relating to Transition Services Providers, this Agreement is for the sole
benefit of the parties hereto and their 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.
SECTION 11.10. Further Action. From and after the Closing Date, each of
the parties hereto shall execute and deliver such documents and other papers and
take such further actions as may be reasonably required to carry out the
provisions of this Agreement and the Ancillary Agreements and give effect to the
transactions contemplated hereby and thereby, including, without limitation, the
assumption and payment by the Purchaser of the Assumed Liabilities pursuant to
Section 2.02(a). Without limiting the foregoing, from and after the Closing
Date, subject to Section 5.05(b), (i) the Sellers shall do all things reasonably
necessary as reasonably requested by the Purchaser to put the Purchaser in
effective possession, ownership and control of the Transferred Assets and the
Purchaser shall reasonably cooperate with the Sellers for that purpose and (ii)
the Purchaser shall do all things reasonably necessary as reasonably requested
by the Sellers to put the Sellers in effective possession, ownership and control
of the Excluded Assets and the Sellers shall reasonably cooperate with the
Purchaser for that purpose.
SECTION 11.11. Amendment; Waiver.
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(a) This Agreement may not be amended or modified except by (a) an
instrument in writing signed by the Sellers and the Purchaser and in the case of
an amendment or modification of Section 11.16 hereof, by the Seller Guarantor or
(b) by a waiver in accordance with Section 11.11(b). Waiver of any term or
condition of this Agreement shall not be construed as a waiver of any subsequent
breach of the same term or condition, or a waiver of any other term or condition
of this Agreement.
(b) At any time prior to the Closing, any party hereto may (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered
pursuant hereto or (iii) waive compliance with any of the agreements or
covenants of the other party or conditions contained herein. Any such extension
or waiver shall be valid only in the instance given and only if set forth in an
instrument in writing signed by the party to be bound thereby.
SECTION 11.12. Governing Law; Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
applicable to contracts executed in and to be performed entirely in that State.
Subject to Section 2.07(b), all actions, suits and proceedings arising out of or
relating to this Agreement shall be heard and determined in a New York state or
Federal court sitting in the County of New York, and the parties hereto hereby
irrevocably and unconditionally (i) submit to the exclusive jurisdiction of such
courts in any such action, suit or proceeding, (ii) waive any objection to the
laying of venue in such courts and (iii) waive the defense of an inconvenient
forum to the maintenance of any such action, suit or proceeding.
SECTION 11.13. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
SECTION 11.14. Construction. The parties hereto agree that this
Agreement is the product of negotiations among sophisticated parties, each of
whom was represented by counsel, and each of whom had an opportunity to
participate in, and did participate in, the drafting of each provision hereof.
Accordingly, ambiguities in this Agreement, if any, shall not be construed
strictly or in favor of or against any party hereto but rather shall be given a
fair and reasonable construction without regard to the rule of contra
proferentem.
SECTION 11.15. No Conflict of Interest. Each of the parties to this
Agreement hereby agrees that Torys may serve as counsel to each of the Sellers
and their Affiliates and Verner, Liipfert, Bernhard, McPherson and Hand,
Chartered may serve as counsel to the Purchaser and its Affiliates in connection
with the negotiation, preparation, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, and that Torys (or any
successor) may serve as counsel to the Sellers, Sellers' Affiliates or any
director, officer, employee or Affiliate of any or more of them and Verner,
Liipfert, Bernhard, McPherson and Hand, Chartered (or any successor) may serve
as counsel to the Purchaser, the Purchaser's Affiliates or any director,
officer, employee or Affiliate of any one or more of them, in any case, in
connection with any litigation, claim or obligation arising out of or relating
to this
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Agreement or the transactions contemplated by this Agreement, and each of the
parties hereto hereby consents thereto and waives any conflict of interest
arising therefrom. This Agreement shall not limit, impair or modify any existing
agreement, arrangement or understanding relating to the representation by or of
any of the parties hereto or any beneficial owner of any such party.
SECTION 11.16. Guarantee.Thomson Delaware Holdings Inc., a Delaware
corporation (the "Seller Guarantor"), hereby guarantees to the Purchaser, as a
primary obligor, payment and performance by each Seller of their respective
obligations under this Agreement and under each of the Ancillary Agreements to
which they are parties (including without limitation, all amendments hereof and
thereof), in each case, subject to the terms, conditions and limitations hereof
and thereof. The Seller Guarantor hereby waives suretyship defenses, demand,
payment, protest and notice of dishonor or nonperformance of any such
obligations, and no consent of the Seller Guarantor shall be required with
respect to any amendment or waiver of this Agreement (other than this Section
11.16) that is effected in accordance with this Agreement. The liability of the
Seller Guarantor under this Agreement by reason of this Section 11.16 is
primary, and Purchaser shall not be required to make any demand on the Sellers
for performance of any of their obligations under this Agreement, nor to exhaust
any legal, contractual or equitable remedies against the Sellers, prior to
proceeding against the Seller Guarantor.
* * *
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IN WITNESS WHEREOF, the Sellers and the Purchaser have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
THOMSON NEWSPAPERS INC.
By:
--------------------------------
Name:
Title:
THOMSON NEWSPAPERS LICENSING CORPORATION
By:
--------------------------------
Name:
Title:
TN CUSTOMER HOLDING LLC
By:
--------------------------------
Name:
Title:
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MEDIANEWS GROUP, INC.
By:
--------------------------------
Name:
Title:
For purposes of Article XI only:
THOMSON DELAWARE HOLDINGS INC.
By:
--------------------------------
Name:
Title:
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