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Exhibit 2(cc)
DOCUMENT ESCROW AGREEMENT
The Xxxxx Companies
This agreement is made and entered into __________________, 1997, among
United Magazine Company, an Ohio corporation ("UNIMAG"), Geo. X. Xxxxx News
Company, an Ohio corporation, Central News Company, an Ohio corporation,
Newspaper Sales, Inc., an Ohio corporation (collectively, the "XXXXX
COMPANIES"), Xxxxx'x shareholder (the "XXXXX SHAREHOLDER"), and Xxxxx &
Xxxxxxxxx LLP ("ESCROW AGENT").
BACKGROUND INFORMATION
A. Unimag, the Xxxxx Companies and the Xxxxx Shareholder are parties to a
Stock Transfer and Exchange Agreement dated effective August 30, 1997, as
amended by that certain Amendment to Acquisition Agreement dated effective
__________, 1997 (collectively, the "EXCHANGE AGREEMENT"), and certain other
documents executed in connection with the transactions contemplated by the
Exchange Agreement (the "ADDITIONAL DOCUMENTS").
B. Unimag, the Xxxxx Companies, and the Xxxxx Shareholder desire to
consummate the Exchange (defined in the Exchange Agreement) and the other
transactions contemplated by the Exchange Agreement upon the satisfaction of
certain conditions (as described in Section 6.5 of the Exchange Agreement and as
also described more fully in this agreement).
C. Unimag, the Xxxxx Companies, and the Xxxxx Shareholders desire to
deposit the Additional Documents into escrow with the Escrow Agent, to be held
by the Escrow Agent upon the terms and subject to the conditions of this
agreement. Any and all agreements, instruments, and other documents delivered to
Escrow Agent to be held by it pursuant to the terms and subject to the
conditions of this agreement are sometimes referred to hereinafter,
collectively, as the "CLOSING DOCUMENTS".
D. Escrow Agent is willing to serve as the escrow agent upon the terms and
subject to the conditions of this agreement.
STATEMENT OF AGREEMENT
The parties to this Agreement (each a "PARTY," and collectively, the
"PARTIES") hereby acknowledge the accuracy of the above Background Information
and, in consideration of the mutual covenants and agreements set forth in this
agreement, the Parties agree as follows:
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Section 1. Unless otherwise defined in this agreement, all capitalized
words and phrases in this agreement shall have the same meanings as set forth in
the Exchange Agreement.
Section 2. Unimag, the Xxxxx Companies, and/or the Xxxxx Shareholder have
executed and/or delivered to Escrow Agent and Escrow Agent hereby acknowledges
receipt of the agreements and documents described on Exhibit A.
Section 3. Unimag has executed and/or delivered to Escrow Agent and Escrow
Agent hereby acknowledges receipt of the documents and instruments described on
Exhibit B.
Section 4. The Xxxxx Companies has executed and/or delivered to Escrow
Agent and Escrow Agent hereby acknowledges receipt of the documents and
instruments described on Exhibit C.
Section 5. The Xxxxx Shareholder has executed and/or delivered to Escrow
Agent and Escrow Agent hereby acknowledges receipt of the documents and
instruments described on Exhibit D.
Section 6. Unimag, the Xxxxx Companies and/or the Xxxxx Shareholder, as
the case may be, may hereafter deliver to Escrow Agent various other agreements,
instruments, and other documents to be held upon the terms and subject to the
conditions of this agreement. Upon delivery of such items to Escrow Agent, they
shall become Closing Documents under this agreement.
Section 7. Unless Unimag, the Xxxxx Companies, and the Xxxxx Shareholder
all otherwise agree and collectively instruct Escrow Agent in writing
accordingly, the delivery of the Closing Documents out of escrow shall be
subject to the fulfillment of the following conditions:
(a) The Exchange Agreement (with all of its schedules and exhibits)
and the Exchange shall have been finally approved by Unimag's Board of
Directors. This condition shall be satisfied by delivery to Escrow Agent
of resolutions of Unimag's Board of Directors providing such approval,
certified by Unimag's Secretary.
(b) The Exchange, the Michiana Acquisition, the Xxxxx Acquisition,
and the Xxxxxxx Companies Acquisitions (except for the acquisition of
Read-mor), shall have been approved by the affirmative vote of the
shareholders of Unimag entitled to exercise voting power over at least a
majority of the outstanding common shares, without par value, of Unimag.
This condition shall be satisfied by delivery to Escrow Agent of a
certificate executed by the inspector of elections for this shareholders'
meeting, in the form attached hereto as Exhibit E, certifying that the
Exchange, the Michiana Acquisition, Xxxxx Acquisition, and the Xxxxxxx
Companies Acquisitions (except for the acquisition of Read-mor) were
approved by the affirmative vote of shareholders entitled to exercise
voting power over at least a majority of the outstanding common shares of
Unimag.
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(c) A 1 for 10 reverse stock split of the outstanding common shares,
without par value, of Unimag shall have been effected. This condition
shall be satisfied by delivery to Escrow Agent of a certificate from the
Ohio Secretary of State certifying the effectiveness of an amendment to
Unimag's articles of incorporation, which has a provision providing for
such reverse stock split.
Section 8. Upon the satisfaction of the conditions set forth in Section 7
by Escrow Agent's receipt of all of the certificates and consents described in
Section 7, the Parties will attend the Closing (as contemplated by the Exchange
Agreement) and Escrow Agent will distribute (a) the Debenture Agreement
counterpart signature pages listed on Exhibit A and the Shareholder Voting
Agreement counterpart signature pages listed as item 1 on Exhibit D to the
trustee under the Debenture Agreement with instructions to distribute fully
executed copies of the Debenture Agreement and the Shareholder Voting Agreement
(once all of the closings have been completed) to (i) Xxxxxxxx X. Xxxxxxx (who
shall represent Michiana and its shareholders for purposes of receipt of such
documents), (ii) Xxxxxxx Xxxxx, Xx. (who shall represent Xxxxx and its
shareholders for purposes of receipt of such documents), (iii) Xxxxxx X. Xxxxxxx
(who shall represent the Xxxxxxx Companies and their shareholders for purposes
of receipt of such documents), and (iv) Xxxxxx X. Xxxxx (who shall represent the
Xxxxx Companies and their shareholders for purposes of receipt of such
documents); (b) the documents listed in Exhibit B to Xxxxxx X. Xxxxx (who shall
represent the Xxxxx Shareholders for purposes of the receipt of such documents);
(c) the documents listed as item 2 of Exhibit C to the trustee under the
Debenture Agreement to be filed by the trustee; (d) the remaining documents
listed in Exhibit C to an officer of Unimag; and (e) the document listed as item
2 in Exhibit D to an officer of Unimag. If instructed to do so by a Party
entitled to receive documents, the Escrow Agent may deliver such documents to
another person or entity.
Section 9. If all of the conditions set forth in Section 7 have not been
satisfied by ______________, 1997, or such later date as Unimag and the Xxxxx
Companies may agree to and so instruct Escrow Agent in writing, then Escrow
Agent shall (a) destroy the Closing Documents described in Exhibit A, (b) return
the Closing Documents described in Exhibit B to Unimag, (c) return the Closing
Documents described in Exhibit C to the Xxxxx Companies and (d) return the
Closing Document described as item 2 in Exhibit D to the Xxxxx Shareholder, and
destroy those Closing Documents listed as item 1 of Exhibit D; and all of the
Closing Documents shall be deemed void and of no further force and effect.
Notwithstanding the foregoing, the Exchange Agreement shall be deemed terminated
and each of Unimag, the Xxxxx Companies, and the Xxxxx Shareholder shall remain
responsible for its or their costs and expenses associated with the transactions
contemplated by the Exchange Agreement in accordance with the provisions of
Section 9.10 of the Exchange Agreement.
Section 10. In the event of any dispute between or among any of the
Parties relating to distribution of the Closing Documents by Escrow Agent or any
other matter, Escrow Agent may submit the matter to any court of competent
jurisdiction in an interpleader or similar action.
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Any and all costs incurred by Escrow Agent in connection therewith, including
reasonable attorneys' fees and costs, shall be shared equally by Unimag and the
Xxxxx Shareholder. Escrow Agent shall perform any acts ordered by any court of
competent jurisdiction without any liability or obligation to any other Party by
reason of such act.
Section 11. Escrow Agent shall have no liability to any other Party, or
such Party's successor or assigns, or to any person or entity claiming under or
in the right of any other Party, based upon or on account of any action taken or
omitted by Escrow Agent, unless such action or omission shall have been the
result of Escrow Agent's gross negligence or intentional misconduct.
Notwithstanding the foregoing to the contrary, in no event shall the Escrow
Agent be liable to any party for acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram, facsimile transmission or other
paper or document believed by Escrow Agent to be genuine and correct and to have
been signed or sent by the proper person or persons. Unimag, the Xxxxx
Companies, and the Xxxxx Shareholder shall, jointly and severally, hold harmless
and indemnify Escrow Agent from and against any and all losses, liabilities,
damages, claims, suits, actions, costs, and expenses (including attorneys' fees)
which may be asserted against or incurred by Escrow Agent as a result of it
serving as escrow agent under this agreement.
Section 12. Instructions to Escrow Agent shall be addressed to:
Xxxxx & Xxxxxxxxx LLP
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
and shall be deemed to have been delivered to the Escrow Agent when delivered
personally, by facsimile (which is confirmed), mailed by registered or certified
mail (return receipt requested), or delivered to Federal Express, United Parcel
Service, or any other nationally recognized express delivery service.
Section 13. The Parties hereby: (a) designate the Court of Common Pleas of
Franklin County, Ohio, as a court of proper jurisdiction and venue for any
actions or proceedings relating to this agreement; (b) irrevocably consent to
such designation, jurisdiction and venue; and (c) waive any objections or
defenses relating to jurisdiction or venue with respect to any action or
proceedings initiated in the Court of Common Pleas of Franklin County, Ohio.
Section 14. The rights and obligations of the Parties under this agreement
shall be construed and resolved in accordance with the laws of the State of
Ohio, exclusive of conflict of laws principles. This agreement shall be binding
upon, inure to the benefit of, and be enforceable by and against the respective
successors and permitted assigns of the Parties. This agreement may be executed
in one or more separate counterparts, which, when read together, shall be as
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fully-effective as a single, executed counterpart and all of which shall
constitute one and the same document.
Section 15. If the Escrow Agent receives a written notice from any of the
Parties of a dispute as to completion of any of the conditions set forth in
Section 7, and such notice is received prior to the distributions from escrow
set forth in Section 8, then Escrow Agent shall, until such dispute is resolved,
either submit the documents held in escrow to another law firm selected by it to
act as successor escrow agent, or deposit such documents with a court of
competent jurisdiction or continue to retain the documents and act as Escrow
Agent. In the event of such dispute, the escrow documents shall be held by the
Escrow Agent or its successor or the court until otherwise directed in writing
by agreement of the parties or otherwise directed by a court of competent
jurisdiction. In any such event, the parties agree that Xxxxx & Xxxxxxxxx LLP
may continue to represent Unimag in any matter, including any dispute under this
agreement, and the parties hereby waive any conflict of interest of Xxxxx &
Xxxxxxxxx LLP in that regard.
UNITED MAGAZINE COMPANY
By__________________________________
Xxxxxx X. Xxxxxxx, Chairman
THE GEO. X. XXXXX NEWS COMPANY
By__________________________________
G. Xxxxxx Xxxxx, Chairman
CENTRAL NEWS COMPANY
By__________________________________
G. Xxxxxx Xxxxx, Chairman
[Signatures continued on the following page.]
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NEWSPAPER SALES, INC.
By__________________________________
Xxxxxx X. Xxxxx, Chairman
THE XXXXX SHAREHOLDER
____________________________________
Xxxxxx X. Xxxxx
XXXXX & XXXXXXXXX LLP
By__________________________________
Xxxx Xxxxxxxx, Partner
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EXHIBIT A
DOCUMENTS DELIVERED BY UNIMAG, THE XXXXX COMPANIES,
AND/OR THE XXXXX SHAREHOLDER
1. Debenture Agreement dated as of October 9, 1996, among Unimag, the Xxxxx
Shareholder, and certain other parties. (Includes counterpart signature
pages for only the Xxxxx Shareholder. The remaining counterpart signature
pages will be provided in connection with the other Escrow Closings.)
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EXHIBIT B
DOCUMENTS DELIVERED BY UNIMAG
1. Certified articles of incorporation of Unimag.
2. Good standing certificate of Unimag.
3. Certified code of regulations of Unimag.
4. Incumbency certificate of Unimag.
5. Certificate of president of Unimag.
6. Certified board of directors resolutions.
7. Letters from shareholders of Unimag entitled to vote more than 51% of
Unimag common shares indicating they will vote in favor of the Exchange.
8. Letter or copy of federal register notice from Federal Trade Commission
terminating HSR Act waiting period.
9. Letter of Xxxxxx Xxxxxxxx LLP with respect to tax effect on Unimag of the
Section 351 exchange.
10. Irrevocable instruction letter to Unimag's transfer agent for the issuance
of Unimag Shares to the Xxxxx Shareholder as required by the Exchange.
11. One Senior Debenture to be issued to the Xxxxx Shareholder (or its
designee) under the Debenture Agreement.
12. One Subordinated Debenture to be issued to the Xxxxx Shareholder (or its
designee) under the Debenture Agreement.
13. Management Agreement between Unimag and Xxxxxx X. Xxxxx.
14. Employment Agreement between Unimag and Xxxxxx Xxxxx.
15. Employment Agreement between Unimag and Xxxx Xxxxxxx.
16. [Resolutions of Unimag as sole shareholder of each of the Xxxxx Companies
electing new directors.]
17. [Resolutions of Unimag as directors of each of the Xxxxx Companies
electing new officers for each of the Xxxxx Companies.]
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EXHIBIT C
DOCUMENTS DELIVERED BY THE XXXXX COMPANIES
1. Two fully executed Security Agreements between the Xxxxx Companies and the
Trustee granting to the Trustee (for the benefit of the Debenture Holders)
a security interest in all of the personal property of the Xxxxx
Companies.
2. Six UCC-1 Financing Statements, two for each of the Xxxxx Companies (to be
filed in the office of the Ohio Secretary of State and the Recorder of
Cuyahoga County).
3. Certified articles of incorporation of each of the Xxxxx Companies.
4. Good standing certificate of each of the Xxxxx Companies.
5. Certified Code of Regulations of each of the Xxxxx Companies.
6. Incumbency certificates of each of the Xxxxx Companies.
7. Certificate of president or other officers of each of the Xxxxx Companies.
8. Written actions of board of directors and shareholder of each of the Xxxxx
Companies.
9. Opinion letter of the Xxxxx Companies' legal counsel.
10. Each of the Xxxxx Companies' minute books and other corporate records.
11. Consent from Welsh News Agency, Inc. to the security interest granted by
Geo. X. Xxxxx News Company to the Trustee pursuant to the Security
Agreement.
12. Consent from City News Agency, Inc. the security interest granted Central
News Company to the Trustee pursuant to the Security Agreement.
13. [Leases between the Xxxxx Companies and related parties with fair market
rental rates.]
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EXHIBIT D
DOCUMENTS DELIVERED BY THE XXXXX SHAREHOLDER
1. Shareholder Voting Agreement dated October 9, 1996, among the Xxxxx
Shareholder and certain other parties (includes counterpart signature
pages for only the Xxxxx Shareholder).
2. All of the certificates for the Xxxxx Shares endorsed for transfer to
Unimag.
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EXHIBIT E
CERTIFICATE OF INSPECTOR OF ELECTIONS
The undersigned, as the inspector of elections for the annual meeting of
shareholders of United Magazine Company, an Ohio corporation ("UNIMAG"), held on
______________, 199__, hereby certifies to Xxxxx & Xxxxxxxxx LLP that the
acquisitions described below have been approved by the affirmative vote of
shareholders entitled to exercise voting power over at least a majority of the
outstanding common shares of Unimag:
1. The Merger Agreement among Unimag, Ohio Periodical Distributors,
Inc. ("OPD"), and all of its shareholders;
2. The Stock Transfer and Exchange Agreement among Unimag, The Xxxxx
Companies ("XXXXX"), and all of its shareholders and the acquisition
of the stock of Xxxxx in accordance with the terms of such exchange
agreement;
3. The Asset Transfer and Exchange Agreement between Unimag and
Northern News Company ("NORTHERN") and the acquisition of certain
assets and liabilities of Northern in accordance with the terms of
such exchange agreement;
4. The Stock Transfer and Exchange Agreement among Unimag, Michiana
News Service, Inc. ("MICHIANA"), and all of its shareholders and the
acquisition of the stock of Michiana in accordance with the terms of
such exchange agreement;
5. The Stock transfer and Exchange Agreement among Unimag, The Xxxxxxx
Companies ("XXXXXXX"), and all of its shareholders and the
acquisition of the stock of Xxxxxxx in accordance with the terms of
such exchange agreement; and
6. The Asset Transfer and Exchange Agreement between Unimag and
Wholesalers Leasing Corp. ("WHOLESALERS") and the acquisition of
certain assets of Wholesalers in accordance with the terms of such
exchange agreement.
7. The Stock Transfer and Exchange Agreement among Unimag, The Xxxxxx
X. Xxxxx News Co., Central News Co., Newspaper Sales, Inc.
(collectively, the "XXXXX COMPANIES"), and all of their shareholders
and the acquisition of the stock of the Xxxxx Companies in
accordance with the terms of such exchange agreement.
Date: _____________, 199__ ____________________________________
____________, Inspector of Elections
