EXHIBIT 10.16
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ASSET PURCHASE AGREEMENT
BY AND AMONG
XXXX COMMUNICATIONS SYSTEMS, INC.,
XXXX COMMUNICATIONS OF INDIANA, INC.,
NEWS PRINTING COMPANY, INC.,
XXXX XXXXXX
AND
XXXX XXXXXX
DATED AS OF FEBRUARY 28, 1999
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TABLE OF CONTENTS
ARTICLE I SALE AND PURCHASE OF CERTAIN ASSETS
1.01 SALE AND PURCHASE OF CERTAIN ASSETS................................................1
1.02 PURCHASE PRICE; RESTRICTIVE COVENANTS..............................................2
1.03 PAYMENT OF THE PURCHASE PRICE......................................................2
1.04 PRORATIONS AND CERTAIN PAYMENTS....................................................2
1.05 PURCHASE PRICE ADJUSTMENT..........................................................3
1.06 CLOSING............................................................................3
1.07 DELIVERIES.........................................................................3
ARTICLE II ASSUMPTION OF LIABILITIES AND CONTRACTUAL OBLIGATIONS
2.01 GENERAL............................................................................4
2.02 CERTAIN OBLIGATIONS................................................................4
2.03 NO INTENTION TO BENEFIT THIRD PARTIES..............................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER,
XX. XXXXXX AND SELLER
3.01 CAPACITY AND VALIDITY..............................................................5
3.02 ORGANIZATION.......................................................................5
3.03 NO CONFLICT........................................................................5
3.04 SUBSIDIARIES.......................................................................5
3.05 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES...........................6
3.06 ABSENCE OF CHANGES.................................................................6
3.07 TAX MATTERS........................................................................6
3.08 TITLE TO ASSETS; ENCUMBRANCES; CONDITION...........................................6
3.09 REAL PROPERTY......................................................................7
3.10 PERSONAL PROPERTY..................................................................8
3.11 INTELLECTUAL PROPERTY..............................................................8
3.12 BARTER AND TRADE AGREEMENTS........................................................9
3.13 CIRCULATION........................................................................9
3.14 INVENTORIES........................................................................9
3.15 BONDS, LETTERS OF CREDIT AND GUARANTEES............................................9
3.16 COMPLIANCE WITH LAW................................................................9
3.17 BENEFIT PLANS.....................................................................10
3.18 CONTRACTS.........................................................................11
3.19 LABOR MATTERS.....................................................................13
3.20 BROKERS AND FINDERS...............................................................14
3.21 COMPLIANCE WITH THE IMMIGRATION REFORM AND CONTROL ACT............................14
3.22 ADVERTISERS AND CUSTOMERS.........................................................14
3.23 LITIGATION........................................................................14
3.24 PROSPECTIVE CHANGES...............................................................15
3.25 INTERESTED TRANSACTIONS...........................................................15
3.26 ENVIRONMENTAL.....................................................................15
3.27 YEAR 2000 COMPLIANCE..............................................................17
3.28 COMPUTER SOFTWARE AND DATABASE....................................................17
3.29 INSURANCE.........................................................................17
3.30 STATEMENTS TRUE AND CORRECT.......................................................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER AND XXXX
4.01 ORGANIZATION......................................................................18
4.02 AUTHORITY AND VALIDITY............................................................18
4.03 NO CONFLICT.......................................................................18
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4.04 BROKERS AND FINDERS...............................................................18
4.05 STATEMENTS TRUE AND CORRECT.......................................................18
ARTICLE V COVENANTS AND ADDITIONAL AGREEMENTS OF SELLER, THESHAREHOLDER, XX. XXXXXX,
THE PURCHASER AND XXXX
5.01 OPERATION OF BUSINESS PENDING CLOSING.............................................19
5.02 RIGHT OF INSPECTION, ACCESS.......................................................19
5.03 CONFIDENTIALITY...................................................................20
5.04 SCHEDULES.........................................................................20
5.05 OTHER OFFERS AND EXCLUSIVE DEALING................................................21
5.06 CERTAIN TAX AND OTHER MATTERS.....................................................21
5.07 CONSENTS AND APPROVALS............................................................21
5.08 SUPPLYING FINANCIAL STATEMENTS....................................................21
5.09 CONSUMMATION OF TRANSACTIONS; CLOSING CONDITIONS..................................21
5.10 USE OF NAME.......................................................................21
5.11 EXPENSES..........................................................................22
5.12 FURTHER ASSURANCES................................................................22
5.13 EMPLOYEES.........................................................................22
5.14 DELIVERY OF BOOKS AND RECORDS.....................................................23
5.15 TITLE SEARCH; DISCHARGE OF LIENS; TITLE INSURANCE.................................23
5.16 QUALIFICATION AND CORPORATE EXISTENCE.............................................23
5.17 PURCHASER'S ASSISTANCE TO SELLER..................................................23
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXX AND PURCHASER
6.01 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING...........................24
6.02 NO INJUNCTION, ETC................................................................24
6.03 NO MATERIAL ADVERSE CHANGE........................................................24
6.04 APPROVAL OF LEGAL MATTERS.........................................................24
6.05 XXXX OF SALE; ASSIGNMENTS; ETC....................................................24
6.06 OPINIONS OF COUNSEL...............................................................25
6.07 INCUMBENCY CERTIFICATE............................................................25
6.08 LICENSES..........................................................................25
6.09 WARRANTY DEED, TITLE INSURANCE AND SURVEY.........................................25
6.10 ENVIRONMENTAL REPORT..............................................................25
6.11 DUE DILIGENCE REVIEW..............................................................25
6.12 CERTIFIED COPIES OF RESOLUTIONS...................................................25
6.13 SALES AND USE TAXES...............................................................25
6.14 COVENANTS NOT TO COMPETE..........................................................25
6.15 NON-FOREIGN CERTIFICATE...........................................................26
6.16 LETTERS TESTAMENTARY..............................................................26
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER, XX. XXXXXX AND THE SHAREHOLDER
7.01 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING...........................26
7.02 NO INJUNCTION, ETC................................................................26
7.03 APPROVAL OF LEGAL MATTERS.........................................................26
7.04 ASSIGNMENT AND ASSUMPTION AGREEMENT...............................................26
7.05 INCUMBENCY CERTIFICATE............................................................26
7.06 CERTIFIED COPIES OF RESOLUTIONS...................................................27
ARTICLE VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ACKNOWLEDGMENT OF XXXX'X AND
PURCHASER'S RELIANCE.....................................................................27
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8.02 INDEMNIFICATION BY THE SHAREHOLDER, XX. XXXXXX AND SELLER.........................28
8.03 INDEMNIFICATION BY PURCHASER AND XXXX.............................................30
8.04 LIMITATIONS ON INDEMNIFICATION....................................................30
8.05 INDEMNIFICATION PAYMENTS..........................................................31
ARTICLE IX TERMINATION
9.01 METHOD OF TERMINATION.............................................................31
9.02 NOTICE OF TERMINATION.............................................................32
9.03 EFFECT OF TERMINATION.............................................................32
9.04 RISK OF LOSS......................................................................32
ARTICLE X DEFINITIONS
ACCOUNTS PAYABLE.......................................................................32
ACCOUNTS RECEIVABLE....................................................................32
AFFILIATE..............................................................................33
AGREEMENT..............................................................................33
ASSET PURCHASE PRICE...................................................................33
ASSETS.................................................................................33
ASSUMED LIABILITIES....................................................................33
BALANCE SHEET..........................................................................34
BALANCE SHEET DATE.....................................................................34
BUSINESS...............................................................................34
CLOSING................................................................................34
CLOSING DATE...........................................................................34
CODE...................................................................................34
COMPUTER SOFTWARE......................................................................34
CONTRACT...............................................................................34
CURRENT COMMUNITY COMMITMENTS..........................................................34
DATABASES..............................................................................34
DEFAULT................................................................................35
EMPLOYEE BENEFIT PLAN..................................................................35
ENVIRONMENTAL LITIGATION...............................................................35
ENVIRONMENTAL LAWS.....................................................................35
ENVIRONMENTAL MATTER...................................................................35
ERISA..................................................................................35
ERISA AFFILIATE........................................................................35
FINANCIAL STATEMENTS...................................................................36
GAAP...................................................................................36
XXXXXX REAL PROPERTY...................................................................36
XXXXXX REAL PROPERTY PURCHASE PRICE....................................................36
GOSHEN REAL PROPERTY...................................................................36
GOVERNMENTAL AUTHORITY.................................................................36
HAZARDOUS SUBSTANCE....................................................................36
INTELLECTUAL PROPERTY..................................................................36
INVENTORY..............................................................................37
IRS....................................................................................37
KNOWLEDGE..............................................................................37
LAW....................................................................................37
LIABILITY..............................................................................37
LICENSE................................................................................37
LIEN...................................................................................37
LITIGATION.............................................................................37
LOSS...................................................................................37
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MATERIAL OR MATERIALLY.................................................................38
MATERIAL ADVERSE CHANGE OR MATERIAL ADVERSE EFFECT.....................................38
ORDER..................................................................................38
OTHER AGREEMENTS.......................................................................38
PERMITTED LIENS........................................................................38
PERSON.................................................................................38
PERSONAL PROPERTY......................................................................38
PURCHASE PRICE.........................................................................38
RELATED PARTY OR RELATED PERSON........................................................38
RETAINED ASSETS........................................................................39
RETAINED LIABILITIES...................................................................39
SUBSIDIARY.............................................................................40
TAX....................................................................................40
TAX RETURNS............................................................................40
THIRD PARTY OR THIRD PARTIES...........................................................40
UNDISCLOSED LIABILITIES................................................................40
ARTICLE XI MISCELLANEOUS
11.01 NOTICES...........................................................................40
11.02 ENTIRE AGREEMENT, MODIFICATIONS, AMENDMENTS AND WAIVERS...........................40
11.03 SUCCESSORS AND ASSIGNS............................................................40
11.04 TABLE OF CONTENTS; CAPTIONS; REFERENCES...........................................41
11.05 PRONOUNS..........................................................................41
11.06 GOVERNING LAW.....................................................................41
11.07 SEVERABILITY......................................................................41
11.08 REMEDIES NOT EXCLUSIVE............................................................41
11.09 COUNTERPARTS AND INTERPRETATIONS..................................................41
11.10 ATTORNEYS' FEES...................................................................41
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INDEX OF SCHEDULES
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Schedule 1.02(d) - Purchase Price Allocation
Schedule 3.01 - Shareholders' Ownership
Schedule 3.02 - Articles and Bylaws
Schedule 3.02(a) - Foreign Qualifications
Schedule 3.03 - Conflicts
Schedule 3.04 - Seller's Ownership Interest in Another Person
Schedule 3.05 - Financial Statements
Schedule 3.09 - Real Property
Schedule 3.10 - Personal Property
Schedule 3.11 - Intellectual Property
Schedule 3.12 - Barter and Trade Agreements
Schedule 3.14 - Inventory of Seller
Schedule 3.16 - Licenses
Schedule 3.17 - Benefit Plans
Schedule 3.18(a)(i) - Xxxxxx Real Property Contracts
Schedule 3.18(a)(ii) - Goshen Real Property Contracts
Schedule 3.18(a)(iii) - Personal Property Contracts
Schedule 3.18(a)(iv) - Purchase Orders - Non-Capital Assets
Schedule 3.18(a)(v) - Purchase Orders - Capital Assets
Schedule 3.1(a)(vi) - Sales Contracts
Schedule 3.18(a)(vii) - Employment, Other Affiliate Contracts
Schedule 3.18(a)(viii)- Powers of Attorney
Schedule 3.18(a)(ix) - Intellectual Property Contracts
Schedule 3.18(a)(x) - Other Contracts
Schedule 3.18(c) - No Default
Schedule 3.19 - Employees and Independent Contractors
Schedule 3.22 - Advertiser and Customer Lists
Schedule 3.23 - Litigation
Schedule 3.26 - Environmental
Schedule 3.27 - Year 2000 Compliance
Schedule 3.29 - Insurance
INDEX OF EXHIBITS
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Exhibit 1.03(b) - Form of Escrow Agreement
Exhibit 5.13 - List of Employees
Exhibit 6.05 - Form of Xxxx of Sale
Exhibit 6.06 - Form of Opinion of Counsel to Seller and the
Shareholder
Exhibit 6.14 - Form of Non-Competition, Non-Solicitation and
Confidentiality Agreement
Exhibit 7.04 - Form of Assignment and Assumption Agreement
Exhibit X - Assumed Contracts
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated as of the 28th
day of February, 1999, is made and entered into by and among Xxxx Communications
Systems, Inc., a Georgia corporation ("Xxxx"), Xxxx Communications of Indiana,
Inc., a Georgia corporation ("Purchaser"), News Printing Company, Inc., an
Indiana corporation ("Seller"), Xxxx Xxxxxx, an individual residing in Goshen,
Indiana ("Xxx. Xxxxxx" or the "Shareholder") and Xxxx Xxxxxx, an individual
residing in Goshen, Indiana ("Xx. Xxxxxx") (Xxx. Xxxxxx and Xx. Xxxxxx are
sometimes referred to collectively as the "Gemmers").
BACKGROUND
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The Shareholder owns all of the issued and outstanding common stock of
Seller, which is engaged in the business of (i) printing and publishing the
daily newspaper, The Goshen News, and the weekly shopper, The Goshen Extra, and
(ii) commercial printing under the name News Printing Company. This Agreement
sets forth the terms and conditions upon which Seller shall sell to Purchaser,
and upon which Purchaser shall purchase, certain of Seller's assets, and the
terms upon which Xxx. Xxxxxx shall sell to Purchaser, and Purchaser shall
purchase from Xxx. Xxxxxx, the Xxxxxx Real Property.
Xx. Xxxxxx is the President of Seller, and is married to Xxx. Xxxxxx,
the sole shareholder of Seller. Xx. Xxxxxx acknowledges and agrees that he will
derive a substantial personal benefit from the transactions contemplated by this
Agreement. Certain terms used in this Agreement are defined in Article X hereof.
AGREEMENT
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In consideration of the foregoing, the mutual agreements, covenants,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
subject to the terms and conditions hereinafter set forth, the parties hereto
agree as follows:
ARTICLE I
SALE AND PURCHASE OF CERTAIN ASSETS
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1.01 SALE AND PURCHASE OF CERTAIN ASSETS. Subject to the terms and
conditions contained in this Agreement, at the Closing (i) Purchaser shall
purchase from Seller, and Seller shall sell, convey, transfer, assign, and
deliver to Purchaser, for the purchase price set forth in Section 1.02(a) below
(the "Asset Purchase Price"), all of the Assets (which do not include the
Retained Assets), free and clear of any and all Liens and (ii) Purchaser shall
purchase from Xxx. Xxxxxx, and Xxx. Xxxxxx shall sell, convey, transfer, assign
and deliver to Purchaser, for the purchase price set forth in Section 1.02(b)
below (the "Xxxxxx Real Property Purchase Price"), the Xxxxxx Real Property,
free and clear of any and all Liens (the Xxxxxx Real Property Purchase Price and
the Asset Purchase Price sometimes are referred to collectively as the "Purchase
Price").
1.02 PURCHASE PRICE; RESTRICTIVE COVENANTS.
(a) The total Asset Purchase Price for the acquisition of the
Assets from Seller is $14,850,000 plus (i) ninety-five percent (95%) of the
amount of the Accounts Receivable as of the date prior to the Closing Date and
(ii) the assumption of the Assumed Liabilities.
(b) The total Xxxxxx Real Property Purchase Price for the
acquisition of the Xxxxxx Real Property from Xxx. Xxxxxx is $350,000.
(c) Purchaser, Xxxx, Xxx. Xxxxxx and Xx. Xxxxxx shall enter into
a Non-Competition, Non-Solicitation and Confidentiality Agreement pursuant to
which Purchaser shall pay jointly to Xxx. Xxxxxx and Xx. Xxxxxx $1,500,000 as
consideration for entering into such agreement.
(d) The Asset Purchase Price shall be allocated among the Assets
on a preliminary basis as set forth in Schedule 1.02(d), and after the Closing
Date, Purchaser shall prepare a final allocation of the Purchase Price based
upon the preliminary allocations contained in Schedule 1.02(d) and applicable
Law. Purchaser and Seller shall execute and file with the IRS in a timely manner
Form 8594 with respect to such final allocation. Neither Purchaser nor Seller
shall file a Tax Return or take any position with any Taxing authority that is
inconsistent with such final allocation.
1.03 PAYMENT OF THE PURCHASE PRICE.
(a) On the Closing Date, Purchaser shall pay the cash portion of
the Asset Purchase Price to Seller by delivering (i) to Seller the sum of (A)
Thirteen Million Eight Hundred Fifty Thousand Dollars ($13,850,000) plus (B)
ninety-five percent (95%) of the amount of the Accounts Receivable as of January
31, 1999, and (ii) to The Bank of New York, as escrow agent (the "Escrow
Agent"), the sum of One Million Dollars ($1,000,000), each by wire transfer of
immediately available funds or in such other form and manner as may be mutually
satisfactory. On the Closing Date, Purchaser shall pay the Xxxxxx Real Property
Purchase Price by delivering to the Escrow Agent the sum of Three Hundred Fifty
Thousand Dollars ($350,000) by wire transfer of immediately available funds or
in such other form and manner as may be mutually satisfactory. On the Closing
Date, Purchaser shall pay $1,500,000 for the Non-Competition, Non-Solicitation
and Confidentiality Agreement to the Gemmers by delivering to the Gemmers the
sum of One Million Five Hundred Thousand Dollars ($1,500,000) by wire transfer
of immediately available funds or in such other form and manner as may be
mutually satisfactory.
(b) The $1,000,000 of the Asset Purchase Price and the $350,000
total Xxxxxx Real Property Purchase Price delivered to the Escrow Agent shall be
held by the Escrow Agent and released pursuant to the terms of an escrow
agreement substantially in the form of Exhibit 1.03(b) (the "Escrow Agreement").
(c) Each of the Asset Purchase Price and the Xxxxxx Real Property
Purchase Price shall be paid net of any necessary adjustment pursuant to Section
1.04, Section 5.11 and any other provision of this Agreement requiring payment
to or for the benefit of any of the parties hereto at Closing.
1.04 PRORATIONS AND CERTAIN PAYMENTS. The following prorations relating
to the Assets and to the Xxxxxx Real Property will be made as of the close of
business on February 28, 1999, with Seller
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(or in the case of the Xxxxxx Real Property, Xxx. Xxxxxx), liable to the extent
such items relate to any time period prior to the close of business on February
28, 1999 and Purchaser liable to the extent such items relate to periods on or
after the close of business on February 28, 1999:
(i) personal property, real estate, occupancy and other similar
Taxes;
(ii) the amount of sewer rents and charges for water, telephone,
electricity and other utilities and fuel;
(iii) the amount of prepaid circulation revenue; and
(iv) all other items that shall be paid by Purchaser or otherwise
affect the Business, the Assets or the Xxxxxx Real Property and
that relate, in whole or in part, to periods prior to the close
of business on February 28, 1999 (other than the Assumed
Liabilities).
The net amount of all such prorations will be settled and paid on the Closing
Date as a net against the Asset Purchase Price and the Xxxxxx Real Property
Purchase Price, as appropriate, pursuant to Section 1.03(c). In the event that
the amount of any of the items to be prorated pursuant to this Section 1.04 is
not Known by Seller (or in the case of the Xxxxxx Real Property, Xxx. Xxxxxx),
and Purchaser at the Closing, the proration shall be made based upon the amount
of the most recent cost of such item to Seller (or in the case of the Xxxxxx
Real Property, Xxx. Xxxxxx). After Closing, Purchaser and Seller (or in the case
of the Xxxxxx Real Property, Xxx. Xxxxxx), each shall provide to the other,
within five (5) business days after receipt, each Third Party invoice relating
to any item so estimated. Within ten (10) business days thereafter, Purchaser
and Seller (or in the case of the Xxxxxx Real Property, Xxx. Xxxxxx), each shall
make any payments to the other that are necessary to compensate for any
difference between the proration made at the Closing and the correct proration
based on the Third Party invoice.
1.05 PURCHASE PRICE ADJUSTMENT. Within thirty (30) days after the
Closing Date, Purchaser shall prepare and deliver to Seller a statement of the
amount of the Accounts Receivable as of February 28, 1999 (the "Closing
Receivables"). The Asset Purchase Price shall be increased by 95% of any amount
by which the Closing Receivables exceed the Accounts Receivable as of January
31, 1999 (the "January Receivables"). The Asset Purchase Price shall be
decreased by 95% of any amount by which the January Receivables exceed the
Closing Receivables. Any increase in the Asset Purchase Price shall be paid by
Purchaser to Seller and any decrease in the Asset Purchase Price shall be paid
by Seller to Purchaser. The payment required by this Section 1.05 shall be made
by wire transfer of immediately available funds within ten (10) days after
delivery of the statement of the Closing Receivables.
1.06 CLOSING. The Closing shall take place at the offices of McGladrey &
Xxxxxx, LLP, 000 X. Xxxx, Xxxxxx, Xxxxxxx 00000, on the Closing Date. Title to
the Assets shall pass from Seller (and in the case of the Xxxxxx Real Property,
from Xxx. Xxxxxx), to Purchaser upon the Closing to be effective as of the close
of business on February 28, 1999.
1.07 DELIVERIES. All deliveries, payments and other transactions and
documents relating to the Closing (i) shall be interdependent and none shall be
effective unless and until all are effective (except to the extent that the
party entitled to the benefit thereof has waived satisfaction or performance
thereof as a condition precedent to Closing) and (ii) shall be deemed to be
consummated simultaneously.
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ARTICLE II
ASSUMPTION OF LIABILITIES AND CONTRACTUAL OBLIGATIONS
-----------------------------------------------------
2.01 GENERAL. Except as otherwise expressly provided in Section 2.02,
Purchaser is not assuming any Liability or any contractual or other obligation
of Seller or, with respect to the Xxxxxx Real Property, Xxx. Xxxxxx, (including
without limitation any of the Retained Liabilities); and the Assets and the
Xxxxxx Real Property are being sold to Purchaser free and clear of all Liens and
Liabilities. Seller will pay all Taxes imposed on it and all Taxes payable by
reason of the sale by Seller to Purchaser of the Assets pursuant to the terms of
this Agreement. Xxx. Xxxxxx will pay all Taxes imposed on her and all Taxes
payable by reason of the sale by Xxx. Xxxxxx to Purchaser of the Xxxxxx Real
Property pursuant to the terms of this Agreement.
2.02 CERTAIN OBLIGATIONS.
(a) Purchaser hereby assumes the Assumed Liabilities.
(b) Nothing contained in this Agreement shall require Purchaser
to pay, perform or discharge any of the Assumed Liabilities so long as Purchaser
shall in good faith contest or cause to be contested the amount or validity
thereof or shall in good faith assert any defense or offset thereto, and Seller,
Xx. Xxxxxx and the Shareholder shall provide reasonable assistance to Purchaser
in so contesting and defending such claims.
(c) Nothing contained in this Article II or in any instrument of
assumption executed by Purchaser in connection with this Agreement shall be
deemed to release or relieve Seller or the Shareholder from their respective
representations, warranties, covenants and agreements contained in this
Agreement or any of the other agreements executed in connection with this
Agreement, including, without limitation, the obligations of Seller, the
Shareholder and Xx. Xxxxxx to indemnify Purchaser in accordance with the
provisions of Article VIII. Further, Seller (and, in the case of Retained
Liabilities with respect to the Xxxxxx Real Property, Xxx. Xxxxxx) shall pay,
satisfy and perform all of the Retained Liabilities, and no disclosures made or
exceptions noted with respect to the representations, warranties, covenants and
agreements of Seller, the Shareholder or Xx. Xxxxxx contained in this Agreement
or any of the Other Agreements shall affect Seller's (and, in the case of
Retained Liabilities with respect to the Xxxxxx Real Property, Xxx. Xxxxxx'x),
obligation to pay, satisfy and perform all of the Retained Liabilities.
2.03. NO INTENTION TO BENEFIT THIRD PARTIES. This Agreement is not
intended to, and shall not, benefit any person or entity other than Seller, Xx.
Xxxxxx, the Shareholder and Purchaser or create any Third Party beneficiary
right in any person.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER, XX. XXXXXX AND SELLER
The Shareholder, Xx. Xxxxxx and Seller, jointly and severally, hereby
represent and warrant to Purchaser as follows:
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3.01 CAPACITY AND VALIDITY. The Shareholder is the owner of all right,
title and interest (legal and beneficial) in and to that number of shares of
common stock of Seller listed opposite the name of such Shareholder in Schedule
3.01. Each of the Shareholder and Xx. Xxxxxx has the full power and capacity
necessary to enter into and perform her or his obligations under this Agreement
and the Other Agreements to which she or he is a party and to consummate the
transactions contemplated hereby and thereby. Seller has the corporate power and
authority necessary to enter into and perform its obligations under this
Agreement and the Other Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and such Other Agreements have been approved by
all necessary action of the Board of Directors and the shareholders of Seller.
This Agreement and the Other Agreements to which the Shareholder, Xx. Xxxxxx or
Seller is a party have been duly executed and delivered by the Shareholder, Xx.
Xxxxxx and by duly authorized officers of Seller, and each such agreement
constitutes, or when executed, will constitute, a legal, valid and binding
obligation of the Shareholder, Xx. Xxxxxx and Seller, enforceable against the
Shareholder, Xx. Xxxxxx and Seller in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other Laws affecting creditors' rights generally.
3.02 ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Indiana and has
full corporate power and authority to own, lease and operate its assets and to
carry on its Business. Complete and correct copies of the Articles of
Incorporation, and all amendments thereto, (certified by the Secretary of State
of the State of Indiana) and By-Laws of Seller, and all amendments thereto
(certified by the Secretary of Seller) are attached hereto as part of Schedule
3.02. Seller is duly qualified or licensed to transact business as a foreign
corporation in good standing in the jurisdictions listed in Schedule 3.02(a),
and the character of the Assets and the Xxxxxx Real Property or the nature of
the Business do not require such qualification or licensing in any other
jurisdiction, in which the failure to be duly qualified or licensed could have a
Material Adverse Effect on Seller. Copies of all records of the proceedings of
incorporators, shareholders and Board of Directors of Seller, including those
which are set forth in Seller's minute books ("Minute Books"), and the stock
record books of Seller ("Stock Record Books") have been made available to
Purchaser for review, are correct and complete and accurately reflect all
proceedings of Seller's incorporators, shareholders and Board of Directors and
all committees thereof and the stock ownership in Seller.
3.03 NO CONFLICT. Except as disclosed in Schedule 3.03, neither the
execution, delivery and performance of this Agreement or the Other Agreements to
which she, he or it is a party by the Shareholder, Xx. Xxxxxx or Seller nor the
consummation by the Shareholder, Xx. Xxxxxx or Seller of the transactions
contemplated hereby or thereby will (i) conflict with or result in a violation,
contravention or breach of any of the terms, conditions or provisions of the
Articles of Incorporation, as amended, or the By-Laws, as amended, of Seller,
(ii) result in a Default under or require the consent or approval of any party
to any Contract of Seller, Xx. Xxxxxx or the Shareholder, (iii) result in the
violation of any Law or Order, or (iv) result in the creation or imposition of
any Lien upon any of the Assets or any portion of the Xxxxxx Real Property.
3.04 SUBSIDIARIES. Seller has not in the past had, and does not
currently have, any Subsidiaries. Except as set forth on Schedule 3.04, Seller
has not in the past owned, and does not currently own, directly or indirectly,
any capital stock or other equity, ownership, proprietary or voting interest in
any Person.
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3.05 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES.
(a) The Financial Statements, correct and complete copies of
which are included in Schedule 3.05, (i) are in accordance with the books and
records of Seller which are correct and complete and which have been maintained
in accordance with good business practices; (ii) present fairly the financial
position of Seller as of the dates indicated and the results of its operations
and its cash flows for the periods then ended; (iii) have been prepared in
accordance with GAAP; and (iv) reflect reserves in conformity with GAAP that are
adequate for all known Liabilities and reasonably anticipated Losses.
(b) Seller has no Undisclosed Liabilities or any basis for or, to
the Knowledge of Seller, Xx. Xxxxxx or the Shareholder, any threat of an
assertion against Seller, the Business, the Xxxxxx Real Property or Seller's
assets of any Undisclosed Liability, except for Liabilities incurred since the
Balance Sheet Date in the ordinary course of business, none of which are
Material, individually or in the aggregate.
3.06 ABSENCE OF CHANGES. Since the Balance Sheet Date, (i) the Business
has been carried on only in the ordinary course consistent with past practice,
(ii) there has been no Material Adverse Change, and there has been no event or
circumstance which is reasonably anticipated to result in a Material Adverse
Change with respect to Seller, the Business, the Xxxxxx Real Property or the
Assets, and (iii) Seller has not made any change in any method of accounting or
accounting practice.
3.07 TAX MATTERS. Seller (and with respect to the Xxxxxx Real Property,
Xxx. Xxxxxx) has timely filed with the appropriate Governmental Authorities all
required Tax Returns in all jurisdictions in which Tax Returns are required to
be filed, and such Tax Returns are correct and complete. Seller (and with
respect to the Xxxxxx Real Property, Xxx. Xxxxxx), is not the beneficiary of any
extension of time within which to file any Tax Return. All Taxes (whether or not
shown on any Tax Return) for all periods ending on or before the Balance Sheet
Date, have been fully paid or appropriate deposits or adequate accruals have
been made therefor on the Balance Sheet. No basis exists for any additional
assessment of any Taxes.
3.08 TITLE TO ASSETS; ENCUMBRANCES; CONDITION.
(a) Seller has good, valid and marketable title to all of the
Assets free and clear of any and all Liens.
(b) Each of the improvements on the Xxxxxx Real Property and on
the Goshen Real Property and each item of Personal Property is in good condition
and repair, reasonable wear and tear excepted, and is usable in the ordinary
course of business consistent with past practices. Each improvement on the
Xxxxxx Real Property and on the Goshen Real Property and each item of Personal
Property is adequate for its present and intended uses and operation and Seller
has no intention to use or operate any such improvement or any item of Personal
Property other than as presently used or operated. The Assets (including
Seller's interest in all leased assets) together with the Xxxxxx Real Property
(i) include all assets required to operate the Business; (ii) constitute all of
the assets held for use or used in connection with the Business; and (iii) are
adequate to conduct the Business as currently conducted.
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3.09 REAL PROPERTY.
(a) Schedule 3.09 contains a correct and complete description
(including, without limitation, a legal description) of the Goshen Real Property
and the Xxxxxx Real Property (for purposes of this Agreement, the Goshen Real
Property and the Xxxxxx Real Property are sometimes collectively referred to as
the "Real Property"). Any and all rights and easements for public vehicular
ingress thereto and egress therefrom (including curb cut rights from all
adjacent public streets) necessary for the Business as presently conducted by
Seller are available to the Real Property. To the Knowledge of Seller, Xx.
Xxxxxx or the Shareholder, no facts or circumstances exist which do, or
potentially may, adversely affect any of the ordinary rights of access to and
from the Real Property, from and to the existing public highways and roads, and
there is no pending or threatened denial, revocation, modification or
restriction of such access.
(b) All public and private utilities required for the operation
of the Real Property and the Business either enter the Real Property through
adjoining public streets or, if they enter through adjoining private land, do so
in accordance with valid recorded public easements or private easements which
will inure to the benefit of Purchaser and all of such public and private
utilities are installed and operating and all installation and connection
charges have been paid in full.
(c) To the Knowledge of Seller, Xx. Xxxxxx or the Shareholder,
no zoning or similar land use restrictions are presently in effect or proposed
by any Governmental Authority that would impair the operation of the Business as
presently conducted by Seller or that would impair the use, occupancy and
enjoyment of any of the Real Property. All of the Real Property is in compliance
with all applicable zoning or similar land use restrictions of all Governmental
Authorities having jurisdiction thereof and with all recorded restrictions,
covenants and conditions affecting any of the Real Property and Seller or Xxx.
Xxxxxx has performed all affirmative covenants relating to the Real Property and
required to be performed by Seller or Xxx. Xxxxxx. Neither Seller nor Xxx.
Xxxxxx has received any notice from any Governmental Authority or Third Party
with regard to encroachments on or off the Real Property, violations of building
codes, zoning, subdivision or similar Laws or other material defects in the
good, valid, marketable and insurable fee simple title of said Real Property.
None of the Real Property or the current uses thereof constitutes a
nonconforming use or a "grandfathered" use under any applicable zoning or
building codes.
(d) As of the Closing Date, there will be no Contracts affecting
the Real Property or any part thereof, and there will be no Persons in
possession of, or with rights to possess, the Real Property or any part thereof
other than Seller. There are no leases or other occupancy agreements, written or
oral, in effect affecting the Real Property or any part thereof.
(e) To the Knowledge of Seller, Xx. Xxxxxx or the Shareholder,
no claim or right of adverse possession by any Third Party has been claimed or
threatened with respect to the Real Property and none of such property is
subject to any Order for its sale, condemnation, expropriation or taking (by
eminent domain or otherwise) by any Governmental Authority nor has any such
sale, condemnation, expropriation or taking been proposed or threatened.
(f) Xxx. Xxxxxx has good, valid, marketable and insurable fee
simple title to all of the Xxxxxx Real Property free and clear of any and all
Liens. Seller has good, valid, marketable and insurable fee simple title to all
of the Goshen Real Property free and clear of any and all Liens.
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(g) All improvements are located entirely on the Xxxxxx Real
Property and the Goshen Real Property, and there are no matters that would be
disclosed by current surveys of the Xxxxxx Real Property and the Goshen Real
Property that could have an adverse effect on the Business as currently
conducted.
3.10 PERSONAL PROPERTY. Schedule 3.10 contains a correct and complete
list of each item of Personal Property, other than Inventory (excluding office
furniture, equipment, supplies and miscellaneous items of personal property with
an aggregate book value of less than $10,000). Schedule 3.18(a)(iii) contains a
correct and complete description of all leased Personal Property. Each Contract
of Seller relating to such leased Personal Property is fully and accurately
identified and described on such Schedule 3.18(a)(iii) (including, without
limitation, duration, significant terms, and details of purchase options, if
any).
3.11 INTELLECTUAL PROPERTY. Schedule 3.11 contains a correct and
complete list of all of the Intellectual Property of Seller used in connection
with the Business, including all license agreements relating thereto, and
indicates which of such Intellectual Property is owned and which is licensed by
Seller as licensee.
(a) Neither Seller nor any of its predecessors or Affiliates (or
any goods or services sold by any of them) has violated, infringed upon or
unlawfully or wrongfully used or disclosed the Intellectual Property of any
Third Party and none of the Intellectual Property of Seller or any related
rights or any customer lists, subscriber lists, advertiser lists or mailing
lists, as used in the Business or in the other businesses now or heretofore
conducted by Seller, infringes upon or otherwise violates the rights of any
Third Party, and no Person has asserted a claim of such infringement or misuse.
Seller has taken all reasonable measures to enforce, maintain and protect its
interests and, to the extent applicable, the rights of Third Parties, in and to
the Intellectual Property. Seller has, and upon consummation of the transactions
contemplated by this Agreement, Purchaser will have, all right, title and
interest in or to, or the license to use in the Business, the Intellectual
Property identified on Schedule 3.11. The consummation of the transactions
contemplated by this Agreement will not alter or impair any Intellectual
Property rights of Seller. Seller is not obligated to make, nor has Seller
incurred any Liability to make, any payments for royalties, fees or otherwise to
any Person in connection with any of Seller's Intellectual Property used in the
Business. All patents, trademarks, trade names, service marks, assumed names,
and copyrights and all registrations thereof included in or related to the
Intellectual Property of Seller are valid, subsisting and in full force and
effect. Neither Seller, Xx. Xxxxxx nor the Shareholder has any Knowledge of any
infringement of the Intellectual Property of Seller, and there are no pending
infringement actions against another for infringement of the Intellectual
Property of Seller or theft of Seller's trade secrets.
(b) No present or former officer, director, partner, employee or
independent contractor of Seller owns or has any proprietary, financial or other
interest, direct or indirect, in any of the Intellectual Property of Seller,
including without limitation any trade secrets, know-how, inventions, designs,
formulae and processes relating to equipment or machinery used in connection
with the Business. No officer, director, partner or employee of Seller has
entered into any Contract, other than with Seller, that requires such officer,
director, partner, employee or independent contractor to assign any interest to
inventions or other Intellectual Property or keep confidential any trade
secrets, proprietary data, customer lists or other business information or that
restricts or prohibits such officer, director, partner, employee or independent
contractor from engaging in competitive activities with or the solicitation of
customers from any competitor of Seller.
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3.12 BARTER AND TRADE AGREEMENTS. Schedule 3.12 is a list or brief
description of any "barter," "trade" or other Contracts which relate to the
Business of Seller and that require performance by Seller of any obligation for
a period extending beyond the Closing Date. Schedule 3.12 includes an estimate
of the positive or negative trade balances associated with each such "barter,"
"trade" and other Contract.
3.13 CIRCULATION. Average net paid daily circulation of The Goshen News
for the twelve (12) month period prior to the Closing Date has been not less
than 17,000, as calculated on a basis consistent with that used by the Audit
Bureau of Circulation.
3.14 INVENTORIES. Schedule 3.14 contains a complete and correct list of
all Inventory of Seller and the cost of each item of Inventory as of January 31,
1999 with respect to newsprint and as of December 31, 1998 with respect to
supplies. All items of Inventory of Seller consist of items of a quality,
quantity and condition usable and salable in the ordinary course of the Business
without discount or reduction and conform to generally accepted standards in the
industry of which Seller is a part. The value of each item of Inventory
reflected on the Balance Sheet, was, in each instance, valued at a reasonable
amount in accordance with GAAP and based on the ordinary course of the Business
consistent with the historical valuation policy of Seller and is not subject to
any write-down or write-off in excess of the Inventory reserves stated in the
Balance Sheet. Purchase Contracts for raw materials, supplies, parts and
services are not at prices in excess of the prevailing market prices at the time
of the purchase. There are no pending or threatened claims by Seller seeking
return of, credit for, or reimbursement for any property, by reason of alleged
defects, or otherwise.
3.15 BONDS, LETTERS OF CREDIT AND GUARANTEES. Neither Seller, Xx.
Xxxxxx, the Shareholder nor any other Related Person has issued any bonds
(whether denominated bid, litigation, performance, fidelity, DD&D, or otherwise)
in excess of $1,000 individually or $5,000 in the aggregate, letters of credit,
and guarantees for the benefit of Seller or relating to Seller, the Xxxxxx Real
Property or the Business, and no such bond, letter of credit or guaranty is in
force or outstanding.
3.16 COMPLIANCE WITH LAW.
(a) Each of Seller and, with respect to the Xxxxxx Real Property,
Xxx. Xxxxxx has complied with and is in compliance with all Laws, Licenses and
Orders applicable to, required of or binding on Seller, Xxx. Xxxxxx (with
respect to the Xxxxxx Real Property), the Assets, the Xxxxxx Real Property or
the Business, and there is no basis for any claim of current or past
non-compliance with any such Law, License or Order. The transfer of the Assets
and the Xxxxxx Real Property to Purchaser pursuant to this Agreement will not
violate any Laws or Orders applicable to or binding on Seller, the Assets, the
Xxxxxx Real Property, the Shareholder or the Business. No notices from any
Governmental Authority with respect to any failure or alleged failure of Seller,
Xxx. Xxxxxx (with respect to the Xxxxxx Real Property), the Assets, the Xxxxxx
Real Property or the Business to comply with any Law, License or Order have been
received by Seller, Xx. Xxxxxx or the Shareholder, nor to the Knowledge of
Seller, Xx. Xxxxxx or the Shareholder are any such notices proposed or
threatened. Seller together with Xxx. Xxxxxx, her spouse and her minor children
and any other businesses of which any of the foregoing own 50% or more, have, in
the aggregate, neither sales nor total assets of $10,000,000 or more.
(b) Seller holds all Licenses necessary for or used in the
operations of the Business, and each such License is in full force and effect.
Schedule 3.16 contains a true and complete list of all
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such Licenses (showing, in each case, the expiration date). No application,
action or proceeding is pending for the renewal or modification of any of such
Licenses, and no application, action or proceeding is pending or, to the
Knowledge of Seller, Xx. Xxxxxx or the Shareholder, threatened that may result
in the denial of the application for renewal, the revocation, modification,
nonrenewal or suspension of any of such Licenses, the issuance of a
cease-and-desist order, or the imposition of any administrative or judicial
sanction with respect to the Business that may Materially and adversely affect
the rights of Purchaser or Seller under any such License. All returns, reports
and statements required to be filed by Seller with any Governmental Authority
relating to the Business have been filed and complied with and are complete and
correct as filed.
(c) There are no capital expenditures that Seller, Xx. Xxxxxx or
Xxx. Xxxxxx anticipates will be required to be made in connection with Seller's
Assets, the Xxxxxx Real Property or the Business as now conducted in order to
comply with any Law applicable to Seller, any of its Assets, the Xxxxxx Real
Property or the Business as now conducted.
3.17 BENEFIT PLANS.
(a) Neither Seller nor any member of a group of trades or
businesses under common control ("ERISA Affiliate") (as defined in Sections
4001(a)(14) or 4001(b)(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) with Seller have at any time sponsored, contributed
to, or been obligated under Title I or IV of ERISA to contribute to a "defined
benefit plan" as defined in ERISA Section 3(35) other than The News Printing
Company, Inc. Retirement Plan (the "Pension Plan"), or to any "multiemployer
plan" as defined in ERISA Section 3(37). Neither Seller nor any ERISA Affiliate
of Seller has at any time sponsored, contributed to, or been obligated to
contribute to any Employee Benefit Plan which is or has been intended to be
qualified under Section 401(a) of the Internal Revenue Code other than the
Pension Plan.
(b) Schedule 3.17 lists every Employee Benefit Plan that affects
or is available to employees performing duties in connection with the Business.
(c) Seller has delivered to Purchaser (i) copies of the Pension
Plan including any amendments, and the trust thereto; (ii) all determination
letters, rulings, opinion letters, information letters or advisory opinions
issued by the IRS, the Department of Labor or the Pension Benefit Guaranty
Corporation after December 31, 1988; (iii) annual reports or returns, audited or
unaudited financial statements, actuarial valuations and reports, and summary
annual reports prepared for the Pension Plan with respect to the most recent
three plan years; (iv) the most recent summary plan description and any material
modifications thereto; and (v) such other information and documents as Purchaser
has requested.
(d) The Pension Plan has been maintained in compliance with the
applicable terms of ERISA, the Code and any other applicable Law. The Pension
Plan has been administered in accordance with its written terms except to the
extent inconsistent with applicable Law. No oral or written representation or
communication with respect to any aspect of the Pension Plan has been made to
employees of the Seller prior to the Closing which is not in accordance with the
written or otherwise preexisting terms and provisions of such Pension Plan.
There are no unresolved claims or disputes under the terms of, or in connection
with, the Pension Plan other than claims for benefits which are payable in the
ordinary course of business, and no action, proceeding, prosecution, inquiry,
hearing or investigation has been commenced with respect to the Pension Plan.
The Pension Plan has received a determination
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letter from the IRS with respect to currently applicable tax laws, and the
Seller is not aware of any circumstances which could result in revocation of any
such favorable determination letter.
(e) Based on the actuarial report dated January 1, 1998, the
Pension Plan did not have, and to the Knowledge of Seller, the Shareholder or
Xxxx Xxxxxx, the Pension Plan does not have, any "unfunded current liability,"
as that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market
value of the assets of such plan exceeds the plan's "benefit liabilities," as
that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance with all
applicable legal requirements. Since the date of the most recent actuarial
valuation, there has been (i) no material change in the financial position of
the Pension Plan, (ii) no change in the actuarial assumptions with respect to
the Pension Plan, and (iii) no increase in benefits under the Pension Plan as a
result of plan amendments or changes in applicable Law. The Pension Plan does
not have an "accumulated funding deficiency" within the meaning of Section 412
of the Code or Section 302 of ERISA. The Seller has not provided, nor is it
required to provide, security to the Pension Plan pursuant to Section 401(a)(29)
of the Code.
(f) Within the six-year period preceding the Closing, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by the Seller with respect to the Pension Plan. No notice of a
"reportable event," within the meaning of Section 4043 of ERISA for which the
30-day requirement has not been waived, has been required to be filed for the
Pension Plan.
(g) There are no restrictions on the rights of the Seller to
amend or terminate the Pension Plan without incurring any Liability thereunder.
(h) All contributions or premium payments due or accrued with
respect to the Pension Plan through the Closing have been paid by the Seller to
or on behalf of each such plan.
(i) All Employee Benefit Plans have been maintained in compliance
with all applicable Laws in accordance with the terms of the governing Employee
Benefit Plan documents. All Employee Benefit Plans have been administered in
compliance with requirements necessary to secure the intended tax consequences
of such Plans.
3.18 CONTRACTS.
(a) Description.
(i) Xxxxxx Real Property. Schedule 3.18(a)(i) is a list
and brief description of all Contracts affecting or relating to the
Xxxxxx Real Property, including, without limitation, Contracts
evidencing Liens.
(ii) Goshen Real Property. Schedule 3.18(a)(ii) is a list
and brief description of all Contracts affecting or relating to the
Goshen Real Property, including without limitation, Contracts evidencing
Liens.
(iii) Personal Property. Schedule 3.18(a)(iii) is a list
and brief description of all Contracts affecting or relating to the
Personal Property, including, without limitation, Contracts evidencing
Liens.
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(iv) Purchase Orders -- Non-Capital Assets. Schedule
3.18(a)(iv) is a list of all outstanding Contracts of Seller for the
acquisition of goods, assets or services (other than purchase orders or
other commitments for the acquisition of capital assets and other than
purchase orders and other commitments that do not exceed $10,000 each),
all of which were executed in the ordinary course of business consistent
with past practice by Seller.
(v) Purchase Orders -- Capital Assets. Schedule 3.18(a)(v)
is a list of all outstanding Contracts of Seller for the acquisition of
capital assets that were executed in the ordinary course of business
consistent with past practice of Seller (other than purchase orders and
other commitments that do not exceed $10,000 each).
(vi) Sales. Schedule 3.18(a)(vi) is a brief description of
all Contracts that relate to the sale of products (other than
newspapers) or printing services by Seller. Except as set forth on
Schedule 3.18(a)(vi), all Contracts of Seller for advertising are for
one year or less and are consistent with the current rate schedule of
Seller or the rate schedule of Seller in effect at the time the Contract
was entered into, which in no event is more than one year prior to the
Closing Date.
(vii) Employment, Other Affiliate Contracts. Schedule
3.18(a)(vii) contains a list and brief description of all Contracts of
Seller with any trade union, employee, officer, agent, consultant, sales
representative, distributor, dealer or Affiliate of Seller. Schedule
3.18(a)(vii) contains a correct and complete copy of the form contract
used by Seller to engage each of its independent contractors and no
independent contractor has been engaged by Seller other than on terms
set forth on such form contract.
(viii) Powers of Attorney. Schedule 3.18(a)(viii) is a
list and brief description of all powers of attorney continuing in
effect, whether limited or general, given to any Person by Seller.
(ix) Intellectual Property Contracts. Schedule 3.18(a)(ix)
is a list of all Contracts of Seller that relate to the Business
relating to the Intellectual Property, including, without limitation,
Contracts evidencing Liens.
(x) Other Contracts. Schedule 3.18(a)(x) is a list and
brief description of any other Contracts of Seller that relate to the
Business and that: (A) provide for monthly payments in excess of $1000,
(B) provide for payments, or under which payments actually made were, by
or to Seller in any calendar year or fiscal year, in excess of $10,000,
(C) require performance by Seller of any obligation for a period of time
extending beyond six (6) months from the Closing Date or that is not
terminable by Seller without penalty or Liability upon sixty (60) days
or less notice, (D) evidence, create, guarantee or service indebtedness
of either Seller, (E) establish or provide for any joint venture,
partnership or similar arrangement involving Seller or the Shareholder,
or (F) guarantee or endorse the Liabilities of any other Person.
The lists or descriptions in all Schedules referred to above are correct
and complete as of the date unless otherwise noted thereon.
(b) Copies. Correct and complete descriptions of all Contracts
referred to in Section 3.18(a) have been delivered to Purchaser on or before the
Closing Date.
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(c) No Default. None of Seller, Xx. Xxxxxx, Xxx. Xxxxxx or any
other party is in Default under any of the Contracts referred to in Section
3.18(a), and there is no basis for any claim of Default under any of the
foregoing. Each of the Contracts referred to in this Section 3.18 (i) is in full
force and effect, (ii) constitutes a valid, legal and binding agreement of the
parties thereto, enforceable in accordance with its terms except for bankruptcy,
insolvency, reorganization, moratorium or other Laws affecting creditors' rights
generally and as otherwise set forth in Schedule 3.18(c), and (iii) was executed
in the ordinary course of business consistent with past practice by Seller and,
with respect to the Xxxxxx Real Property, Xxx. Xxxxxx. Neither Seller nor, with
respect to the Xxxxxx Real Property, Xxx. Xxxxxx is a party to or bound by any
Contract or Contracts that, either separately or in the aggregate has or will
have a Material Adverse Effect with respect to Seller, the Business, the Xxxxxx
Real Property or the Assets. The continuation, validity and effectiveness of
each of the Contracts referred to in this Section 3.18 will not be affected in
any way by the consummation of the transactions contemplated by this Agreement.
None of Seller, Xx. Xxxxxx or the Shareholder has any Knowledge of any party to
any Contract with Seller or, with respect to the Xxxxxx Real Property, Xxx.
Xxxxxx, that intends to cease to perform under such Contract or to withhold any
payment thereunder.
3.19 LABOR MATTERS. Schedule 3.19 contains a correct and complete list
of all employees of Seller. Schedule 3.19 contains a complete and accurate
schedule of the direct compensation (including wages, salaries and actual or
anticipated bonuses) plus a description of other annual benefits, paid or
provided in the fiscal year ended December 31, 1998 and in the current fiscal
year, to all of the officers, directors and employees of Seller. To the
Knowledge of Seller, Xx. Xxxxxx or the Shareholder, each independent contractor
meets the standards under all Laws (including without limitation IRS Regulations
and federal and state labor regulations) as independent contractors and no such
Person is an employee of Seller under any applicable Law; provided, however, for
purposes of the indemnification under Section 8.02(a), the foregoing sentence
shall be deemed to not be qualified to the Knowledge of Seller, Xx. Xxxxxx or
the Shareholder. Schedule 3.19 contains complete and accurate copies of each
Form 1099 for the year ended December 31, 1998 for each independent contractor
engaged by Seller in such year. The current compensation of each such
independent contractor currently engaged by Seller is not materially different
from that set forth on the Forms 1099 included in Schedule 3.19. With respect to
independent contractors initially engaged by Seller after December 31, 1998, the
compensation is not different in any material respect from the average
compensation indicated on the Forms 1099 included in Schedule 3.19. No other
compensation or benefit was paid or provided to the independent contractors of
Seller in the year ended December 31, 1998 or is being paid or provided in 1999.
The employment of each employee and the Contract for each independent contractor
of Seller is terminable at will by Seller without any penalty or severance
obligation incurred by Seller. Except as set forth on Schedule 3.19, Seller will
not owe any amounts to any of its employees or independent contractors as of the
Closing Date, including, without limitation, any amounts incurred for wages,
bonuses, vacation pay, sick leave or any severance obligations. Except as and to
the extent set forth in Schedule 3.19, (i) Seller is not a party to any union
agreement or collective bargaining agreement or work rules or practices agreed
to with any labor organization or employee association applicable to any
employees of Seller, and to the Knowledge of Seller, the Shareholder or Xx.
Xxxxxx, no attempt to organize any of the employees of the Business has been
made, proposed or threatened, (ii) Seller has never had any Equal Employment
Opportunity Commission or state fair employment practice agency charges or other
claims of employment discrimination, harassment or wrongful discharge made
against it or any of its employees, (iii) no state or federal Wage and Hour
Department investigations have ever been made of Seller and no claims or charges
relating to wage and hour issues have been filed or, to the Knowledge of Seller,
Xx. Xxxxxx or the Shareholder, threatened, (iv) no labor strike, dispute,
slowdown, stoppage or lockout is pending or
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threatened against or affecting Seller, the Assets or the Business, and during
the past five (5) years there has not been any such action, (v) no unfair labor
practice charge or complaint against Seller is pending or threatened before the
National Labor Relations Board or any similar Governmental Authority, (vi) no
Office of Federal Contract Compliance Programs compliance review or
investigation or other United States Department of Labor or state department of
labor compliance review or investigation has been made of Seller, and Seller has
received no notice of any such compliance review or investigation, (vii) Seller
is not bound by any consent decree, Order or settlement agreement relating to
work place conditions, policies or practices, employment decisions or relations
with employees, independent contractors or applicants for employment, (viii) no
Occupational Safety and Health Administration investigations have been made of
Seller with respect to the Business in the past five (5) years, and (ix) Seller
has received no notice that any of the officers, employees, consultants, agents,
independent contractors, or other Persons performing services for the Business,
will terminate or contemplates terminating his or her employment or independent
contractor relationship currently or at any time within sixty (60) days after
the Closing Date or will otherwise not be available to Purchaser, or not agree
to employment by, or an independent contractor relationship with, Purchaser, on
substantially the same terms and conditions as his or her current employment by,
or independent contractor relationship with, Seller. Since the enactment of the
Worker Adjustment and Retraining Notification Act (the "WARN Act"), Seller has
not effectuated (i) a "plant closing" (as defined in the WARN Act) affecting any
site of employment or one or more facilities or operating units within any site
of employment or facility of Seller or (ii) a "mass layoff" (as defined in the
WARN Act) affecting any site of employment or facility of Seller; and Seller has
not been affected by any transaction or engaged in layoffs or employment
terminations sufficient in number to trigger application of any similar state or
local Law. Except as set forth in Schedule 3.19, none of Seller's employees has
suffered an "employment loss" (as defined in the WARN Act) since six (6) months
prior to the Closing Date.
3.20 BROKERS AND FINDERS. Except for Xxxxxx X. XxXxxxxx, whose
compensation is being paid by, and is the total responsibility of, Seller, no
finder or any agent, broker or other Person acting pursuant to authority of
Seller or the Shareholder is entitled to any commission or finder's fee in
connection with the transactions contemplated by this Agreement.
3.21 COMPLIANCE WITH THE IMMIGRATION REFORM AND CONTROL ACT. Seller is
in full compliance with and has not violated the terms and provisions of the
Immigration Reform and Control Act of 1986, and all related regulations
promulgated thereunder (the "Immigration Laws"). Seller has never been the
subject of any inspection or investigation relating to its compliance with or
violation of the Immigration Laws, nor has it been warned, fined or otherwise
penalized by reason of any failure to comply with the Immigration Laws, nor is
any such proceeding pending or threatened.
3.22 ADVERTISERS AND CUSTOMERS. A correct and complete copy of the names
of those Persons who are advertisers and commercial printing customers of the
Business is included in Schedule 3.22 (the "Advertiser and Customer Lists").
Seller maintains and is transferring to Purchaser as part of the Assets, a
correct and complete list of each paid subscriber to Seller's publications along
with current address, phone number and subscription information (the "Subscriber
List"). The Advertiser and Customer Lists and the Subscriber Lists have been
properly maintained and kept current, and have not been sold, leased, licensed
or otherwise disclosed either in whole or in part, to any Person not a party to
this Agreement (other than those employees of Seller whose duties require access
thereto).
3.23 LITIGATION. Except as disclosed on Schedule 3.23, within the past
fifteen (15) years there has not been and there currently is no Litigation
pending, or to the Knowledge of Seller, Xx. Xxxxxx or
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the Shareholder, threatened against Seller or otherwise with respect to the
Business, Assets, or Xxxxxx Real Property, and there is no basis for any such
Litigation or any facts or the occurrence of any event that reasonably might
give rise to any Litigation. Except as disclosed on Schedule 3.23, Seller is not
subject to ongoing obligations under any consent decree, Order or settlement of
any kind.
3.24 PROSPECTIVE CHANGES. None of Seller, Xx. Xxxxxx or the Shareholder
has Knowledge of any changes reasonably expected to occur within one (1) year
from the date of this Agreement to Seller, the Business, the Xxxxxx Real
Property, the Assets, Seller's Liabilities, relations with employees, relations
with customers, advertisers or subscribers, competitive situation or relations
with suppliers, or governmental actions or Laws affecting the Business, which,
if they occur, would have a Material Adverse Effect with respect to Seller.
3.25 INTERESTED TRANSACTIONS. Except for the lease of the Xxxxxx Real
Property to Seller, Seller is not a party to any Contract or other transaction
with any Affiliate of Seller, any Related Party of any Affiliate of Seller
(other than as a shareholder or employee of Seller), or any Person in which any
of the foregoing (individually or in the aggregate) beneficially or legally
owns, directly or indirectly, five percent (5%) or more of the equity or voting
interests. None of the Persons described in the preceding sentence owns, or
during the last three (3) years has owned, directly or indirectly, beneficially
or legally, (individually or in the aggregate) five percent (5%) or more of the
equity or voting interests of any Person that competes with the Business.
3.26 ENVIRONMENTAL. To the Knowledge of Seller, Xx. Xxxxxx or the
Shareholder, except as set forth in Schedule 3.26:
(a) There is no Environmental Litigation (or any Litigation
against any Person whose Liability for Environmental Matters, or any violation
of Environmental Laws, Seller has or may have retained or assumed contractually
or by operation of Law) pending or threatened with respect to (i) the ownership,
use, condition or operation of the Business, the Assets, the Xxxxxx Real
Property or any other asset of Seller or any asset formerly held for use or sale
by Seller or any of its predecessors or former Subsidiaries or formerly held for
use or sale by any of the current or former shareholders of Seller with respect
to the Business; or (ii) any violation or alleged violation of any Environmental
Law or any Order related to Environmental Matters. There are no existing
violations of (i) any Environmental Law or (ii) any Order related to
Environmental Matters, with respect to the ownership, use, condition or
operation of the Business, the Assets, the Xxxxxx Real Property or any other
asset of Seller or any asset formerly held for use or sale by Seller or any of
its predecessors or former Subsidiaries or formerly held for use of sale by any
of the current or former shareholders of Seller with respect to the Business.
There are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, any Environmental Matter,
that could form the basis of (i) any Environmental Litigation against Seller or,
with respect to the Xxxxxx Real Property, Xxx. Xxxxxx or (ii) any Litigation
against any Person whose Liability (or any portion thereof) for Environmental
Matters or violation of Environmental Laws Seller has or may have retained or
assumed contractually or by operation of Law. Neither Seller nor any of its
predecessors or former Subsidiaries nor anyone Known to Seller, Xx. Xxxxxx or
Xxx. Xxxxxx has used any assets or premises of Seller or any of its predecessors
or former Subsidiaries or any part thereof or any of the Xxxxxx Real Property
for the handling, treatment, storage or disposal of any Hazardous Substances.
The disclosure of facts set forth in Schedule 3.26 shall not relieve Seller, Xx.
Xxxxxx or the Shareholder of any of its, his or her obligations under this
Agreement, specifically including, without limitation, the obligation to
indemnify Purchaser as set forth in Article VIII hereof.
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(b) No release, discharge, spillage or disposal of any Hazardous
Substances has occurred or is occurring at any assets of Seller or any of its
predecessors or former Subsidiaries or any part thereof, or any of the Xxxxxx
Real Property while or before such assets or premises were owned leased,
operated, or managed, directly or indirectly, by Seller or in the case of the
Xxxxxx Real Property, while or before such assets were owned by Xxx. Xxxxxx.
(c) No soil or water in, under or adjacent to any assets or
premises of Seller or assets formerly held for use or sale by Seller or any of
its predecessors or former Subsidiaries or any part of the Xxxxxx Real Property
has been contaminated by any Hazardous Substance while or before such assets or
premises were owned, leased, operated or managed, directly or indirectly, by
Seller or any of its predecessors or former Subsidiaries or in the case of the
Xxxxxx Real Property, while or before such assets were owned by Xxx.
Xxxxxx.
(d) All waste containing any Hazardous Substances generated,
used, handled, stored, treated or disposed of (directly or indirectly) by Seller
or any of its predecessors or its former Subsidiaries has been released or
disposed of in compliance with all applicable reporting requirements under any
Environmental Laws, and none of Seller, Xx. Xxxxxx or the Shareholder has
Knowledge of any Environmental Litigation with respect to any such release or
disposal.
(e) All underground tanks and other underground storage
facilities presently or previously located at either the Goshen Real Property,
the Xxxxxx Real Property, or any other real property owned, leased, operated or
managed by Seller or any of its predecessors or former Subsidiaries or any such
tanks or facilities located at any of the Goshen Real Property, the Xxxxxx Real
Property or any other real property while any of these properties was owned,
leased, operated, or managed by Seller (or with respect to the Xxxxxx Real
Property, while it was owned by Xxx. Xxxxxx) or any of its predecessors or
former Subsidiaries are listed together with the capacity and contents (former
and current) of each such tank or facility in Schedule 3.26. None of such
underground tanks or facilities is leaking or has ever leaked.
(f) Except for ink and oil that are removed in a timely manner
and in the ordinary course of business of Seller, all waste, hazardous or
otherwise, has been removed from the Xxxxxx Real Property and the Goshen Real
Property and any other real property of Seller and its respective predecessors
or former Subsidiaries.
(g) Seller and its predecessors or former Subsidiaries and, with
respect to the Xxxxxx Real Property, Xxx. Xxxxxx have complied with all
applicable reporting requirements under all Environmental Laws concerning the
disposal or release of Hazardous Substances, and neither Seller nor any of its
predecessors or former Subsidiaries nor Xxx. Xxxxxx has made any such reports
concerning the Goshen Real Property, the Xxxxxx Real Property or any other real
property of Seller or concerning the operations or activities of Seller or any
of its predecessors or former Subsidiaries.
(h) No building or other Improvement on either the Goshen Real
Property or the Xxxxxx Real Property, or any other real property owned, leased,
operated or managed by Seller, or the Xxxxxx Real Property, contains any
asbestos-containing materials.
(i) Without limiting the generality of any of the foregoing, (i)
all on-site and off-site locations where Seller or any of its predecessors or
any of its former Subsidiaries has stored, disposed or
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arranged for the disposal of Hazardous Substances are identified in Schedule
3.26, and (ii) no polychlorinated biphenyls (PCB's) are used or stored on or in
the Goshen Real Property, or any other real property owned, leased, operated or
managed by Seller or any of its predecessors or any of its former Subsidiaries,
or the Xxxxxx Real Property.
3.27 YEAR 2000 COMPLIANCE. Except as set forth on Schedule 3.27,
Seller's business systems, including without limitation its computer hardware
and software are "Year 2000 Compliant." The expression "Year 2000 Compliant"
means that the system in question (the "System"): (i) will correctly and
unambiguously process date information at all times, including as the years 1999
and 2000 are approached and reached; (ii) will not suffer any amends, aborts,
improper operation or other interruptions in operation as a result of the
approach or reaching of any particular date or the improper processing of any
date. "Processing" of date information includes, but is not limited to,
accepting input of dates without ambiguity, outputting all dates in an
unambiguous form, and performing calculations, comparisons or operations or
taking action or making decisions using dates, portions of dates, or time
periods. The concept of Year 2000 Compliance includes all issues relating to the
handling of dates or time periods, including the processing of the leap year
that will occur in the year 2000. In the case of products with which the parties
provide that the System shall perform as a large system, then the expression
"Year 2000 Compliant" means that the larger system shall be Year 2000 Compliant.
3.28 COMPUTER SOFTWARE AND DATABASE. All Computer Software licensed,
leased or otherwise used in connection with the Business is standard,
pre-packaged and subject to a "Shrink Wrap" license and none of such Computer
Software is proprietary, internally developed or owned by Seller. Seller has,
and upon consummation of the transactions contemplated by this Agreement,
Purchaser will have, all Computer Software and Databases that are necessary to
conduct the Business as presently conducted by Seller and all documentation and,
to the Knowledge of Seller, Xx. Xxxxxx or the Shareholder, necessary licenses
relating to all such computer Software (other than type fonts) and Databases;
provided, however, for purposes of the indemnification under Section 8.02(a),
the foregoing sentence shall be deemed to not be qualified to the Knowledge of
Seller, Xx. Xxxxxx or the Shareholder.
3.29 INSURANCE. All of the Assets and the operations of Seller and the
Business of an insurable nature and of a character usually insured by companies
of similar size and in similar businesses are insured by Seller, and the Xxxxxx
Real Property is insured by Xxx. Xxxxxx, in such amounts and against such
losses, casualties or risks as is (i) usual in such companies and for such
assets, operations and businesses, (ii) required by any Law applicable to Seller
(or to Xxx. Xxxxxx with respect to the Xxxxxx Real Property) or the Business, or
(iii) required by any Contract of Seller or any Contract of Xxx. Xxxxxx relating
to the Xxxxxx Real Property. Schedule 3.29 contains a complete and accurate
summary of all insurance policies held or owned by Seller (or by Xxx. Xxxxxx
relating to the Xxxxxx Real Property) and now in force and such Schedule
indicates the name of the insurer, the type of policy, the risks covered
thereby, the amount of the premiums, the term of each policy, the policy number
and the amounts of coverage and deductible in each case and all outstanding
claims thereunder. All such policies are in full force and effect and
enforceable in accordance with their terms. Neither Seller nor Xxx. Xxxxxx, as
the case may be, is now in Default regarding the provisions of any such policy,
including, without limitation, failure to make timely payment of all premiums
due thereon, and neither has failed to give any notice or present any claim
thereunder in due and timely fashion. Neither Seller nor Xxx. Xxxxxx has been
refused, or denied renewal of, any insurance coverage in connection with the
ownership or use of the Assets or the Xxxxxx Real Property or the operation of
the Business. In
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addition to the deductibles set forth on Schedule 3.29, such Schedule discloses
all risks that are self-insured by Seller or Xxx. Xxxxxx that in the ordinary
course of business could be insured.
3.30 STATEMENTS TRUE AND CORRECT. No representation or warranty made by
Seller, Xx. Xxxxxx or the Shareholder, nor any statement, certificate or
instrument furnished or to be furnished to Purchaser pursuant to this Agreement
or any other document, agreement or instrument referred to herein or therein,
including, without limitation, the Financial Statements, contains or will
contain any untrue statement of fact or omits or will omit to state a fact
necessary to make the statements contained therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND XXXX
Each of Purchaser and Xxxx hereby represents and warrants to Seller and
the Shareholder that:
4.01 ORGANIZATION. Xxxx is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Georgia, with the
corporate power and authority to carry on its business and to own, lease and
operate its assets. Purchaser is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Georgia, with the corporate
power and authority to carry on its business and to own, lease and operate its
assets.
4.02 CAPACITY AND VALIDITY. Each of Purchaser and Xxxx has the corporate
power, capacity and authority necessary to enter into and perform its
obligations under this Agreement and the Other Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the Other Agreements
have been approved by all necessary action of the directors and shareholders of
each of Purchaser and Xxxx. This Agreement and the Other Agreements to which
Purchaser or Xxxx is a party have been executed and delivered by duly authorized
officers of Purchaser and of Xxxx, as the case may be, and each constitutes the
legal, valid and binding obligation of Purchaser and of Xxxx, enforceable
against Purchaser and against Xxxx in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other Laws affecting creditors' rights generally.
4.03 NO CONFLICT. Neither the execution, delivery and performance of
this Agreement and the Other Agreements to which it is a party by Purchaser or
by Xxxx nor the consummation of the transactions contemplated hereby or thereby,
will (i) conflict with or result in a violation, contravention or breach of any
of the terms, conditions or provisions of the Articles of Incorporation, as
amended, or By-Laws, as amended, of either Purchaser or Xxxx, (ii) result in a
Default under, any Contract or License to which Purchaser or Xxxx is a party or
by which Purchaser or Xxxx is bound, (iii) result in the violation of any Law or
Order, or (iv) result in the creation or imposition of any Lien.
4.04 BROKERS AND FINDERS. No finder or any agent, broker or other Person
acting pursuant to authority of Purchaser or Xxxx is entitled to any commission
or finder's fee in connection with the transactions contemplated by this
Agreement.
4.05 STATEMENTS TRUE AND CORRECT. No representation or warranty made by
Purchaser or by Xxxx, nor any statement, certificate or instrument furnished or
to be furnished to Seller or the Shareholder pursuant to this Agreement or any
other document, agreement or instrument referred to
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herein or therein, contains or will contain any untrue statement of fact or
omits or will omit to state a fact necessary to make the statements contained
therein not misleading.
ARTICLE V
COVENANTS AND ADDITIONAL AGREEMENTS OF SELLER, THE SHAREHOLDER,
XX. XXXXXX, THE PURCHASER AND XXXX
5.01 OPERATION OF BUSINESS PENDING CLOSING.
Prior to the Closing Date, except with the prior written consent of
Purchaser or Xxxx and except as necessary to effect the transactions
contemplated in this Agreement, Seller shall, and the Shareholder and Xx. Xxxxxx
shall cause Seller to:
(a) conduct its Business in substantially the same manner as presently
being conducted, and refrain from entering into any transaction or Contract
other than in the ordinary course of business consistent with past practice;
(b) confer on a regular and frequent basis with Purchaser to report
Material operational matters and to report the general status of ongoing
operations;
(c) notify Purchaser of any unexpected emergency or other change in the
normal course of the operation of the Business, the Assets or the Xxxxxx Real
Property and of any Litigation (or communications indicating that the same may
be contemplated), affecting the Business, the Assets or the Xxxxxx Real Property
and keep Purchaser fully informed of such events and permit its representatives
prompt access to all materials prepared in connection therewith;
(d) except in the ordinary course of business consistent with past
practice, not make any capital expenditure;
(e) not take any action, or omit to take any action, that would cause
the representations and warranties contained in Article III hereof to be
incorrect or incomplete;
(f) promptly notify Purchaser in writing of any Material Adverse Change
with respect to Seller, or any condition or event that threatens to result in a
Material Adverse Change with respect to Seller, of which it is aware; and
(g) not make any agreement or commitment that will result in or cause to
occur a Default of any of the items contained in paragraphs (a) through (f)
above.
5.02 RIGHT OF INSPECTION; ACCESS. In order to allow Purchaser to conduct
its due diligence investigation, including, without limitation, environmental
due diligence, Seller and, with respect to the Xxxxxx Real Property, Xxx.
Xxxxxx, shall give to Purchaser and its designees, during normal working hours,
full and free access to all of the Assets, the Xxxxxx Real Property, Contracts,
reports and other records of the Business and shall furnish to Purchaser and its
designees all additional financial, legal and other information with respect to
Seller, the Xxxxxx Real Property, the Business and the Assets that Purchaser may
reasonably request. Seller shall also allow and arrange for Purchaser and its
designees free and full access and opportunity, during normal business hours, to
consult and meet with the officers,
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directors, employees, attorneys, accountants and other agents of Seller. Seller
shall instruct such individuals to cooperate fully with Purchaser and its
designees. Purchaser and its designees shall have the right to make copies of
any of the records referred to above. Purchaser shall give Seller reasonable
prior notice of its intention to conduct any inspections and Seller may have a
representative present.
5.03 CONFIDENTIALITY. For a period of three years from and after the
date hereof, each of Purchaser, Xxxx, Seller, Xx. Xxxxxx and the Shareholder
agrees that it will not, and will use reasonable efforts to ensure that none of
its representatives or Affiliates will, use in the conduct of its business
(except as contemplated by this Agreement), or disclose to or file with any
other Person, (a) any confidential or non-public information relating to the
other parties to this Agreement or (b) the existence of this Agreement or the
fact of the transactions contemplated hereby, except (i) for a disclosure that
is required by Law or by a Governmental Authority or a securities exchange, or
in connection with a filing by Xxxx under federal or state securities laws or is
reasonably believed to be so required; (ii) information that is ascertainable or
obtained from public or published information; (iii) information received from a
Third Party not Known to the disclosing party to be under an obligation to keep
such information confidential; (iv) information independently developed by the
disclosing party; or (v) information disclosed to or filed with any Persons
necessary to obtaining the consents, the equity and the financing relating to
the transactions contemplated by this Agreement. Notwithstanding the foregoing,
(i) Purchaser shall not, in the course of any investigation it shall deem
necessary and desirable in connection with the transactions contemplated by this
Agreement, be prohibited from discussing Seller, the Business, the Assets and
the Xxxxxx Real Property with others having business dealings with Seller; (ii)
the foregoing provisions of this Section 5.03 shall not apply to Xxxx or
Purchaser or any of their respective representatives or Affiliates after
consummation of the transactions contemplated hereby at the Closing, and (iii)
Xxxx shall be permitted to disclose this Agreement, except for the Purchase
Price and the consideration paid for the Non-Competition, Non-Solicitation and
Confidentiality Agreement, in its press release.
5.04 SCHEDULES.
(a) At any time and from time to time between the date hereof and the
Closing Date, Seller, Xx. Xxxxxx and the Shareholder shall have the right and
the continuing obligation to supplement any of the Schedules contained in
Article III hereof with respect to any matter arising after the date hereof
that, if existing or occurring at such date, would have been required to be set
forth or described in such Schedules; provided, however, that Purchaser may
unilaterally extend the Closing Date if necessary to allow Purchaser ten (10)
business days to review such supplements to the Schedules prior to the Closing
Date. If, in Purchaser's reasonable determination, any such supplements to the
Schedules reveal any Material Adverse Change with respect to Seller, or any
condition or event that threatens to result in a Material Adverse Change with
respect to Seller, Purchaser may terminate this Agreement pursuant to Section
9.01.
(b) Within ten (10) days after the Closing Date, Seller may deliver to
Purchaser complete and correct copies of Contracts that Seller would like
Purchaser to assume. Purchaser will determine in its sole and absolute
discretion which, if any, of the Contracts proposed by Seller pursuant to the
foregoing sentence it will assume. To the extent that Purchaser agrees to assume
any of such Contracts, it may unilaterally amend Exhibit X to reflect such
additional Contracts that are included in the Assumed Liabilities.
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5.05 OTHER OFFERS AND EXCLUSIVE DEALING. Unless and until this Agreement
is terminated prior to Closing pursuant to Article IX, neither Seller, Xx.
Xxxxxx nor the Shareholder, acting in any capacity, will either directly or
indirectly, through any officer, director, employee, agent or otherwise of
Seller, Xx. Xxxxxx or of the Shareholder, (A) solicit, initiate, encourage or
entertain submission of proposals or offers from any Person relating to (i) any
purchase of the Assets, the Xxxxxx Real Property or any portion thereof, (ii)
any merger, sale of substantial assets, or sale of stock of Seller or (iii) any
similar transaction involving Seller or the shareholders, (B) participate in any
discussions or negotiations regarding, or, except as required by a legal or
judicial process, furnish to any other Person any information with respect to,
or otherwise cooperate in any way with, or assist or participate in, facilitate
or encourage, any effort or attempt by any other Person to consummate any of the
transactions described in clauses (A)(i) through (iii) above involving Seller,
Xx. Xxxxxx or the shareholders, or (C) approve or undertake any such
transaction. Seller shall promptly communicate to Purchaser the terms of any
such proposal or offer upon Knowledge or receipt of such proposal or offer or
upon Knowledge that such a proposal or offer is likely to be made.
5.06 CERTAIN TAX AND OTHER MATTERS.
(a) Seller shall file timely all Tax Returns required to be filed by it
with respect to periods ending on or before the Closing Date and with respect to
the Xxxxxx Real Property, Xxx. Xxxxxx shall file timely all Tax Returns required
to be filed by her for periods ending on or before the Closing Date.
(b) Purchaser, on the one hand, and Seller, Xx. Xxxxxx and the
Shareholder, on the other hand, shall provide the other parties to this
Agreement, at the expense of the requesting party, with such assistance as may
reasonably be requested by any of them in connection with the preparation of any
Tax Return, any audit or other examination report or filings by any Governmental
Authority, or any judicial or administrative proceedings relating to Liability
for Taxes, and each will retain and provide the requesting party with any
records or information that may be relevant to any of the foregoing.
5.07 CONSENTS AND APPROVALS. Seller shall obtain all waivers, consents
and approvals of, and provide all notices to, all Persons whose waiver, consent
or approval is required by any Contract, Order, Law or License relating to
Seller or to Xxx. Xxxxxx with respect to the Xxxxxx Real Property in order to
consummate the transactions contemplated by this Agreement. All written waivers,
consents and approvals obtained by, and all notices provided by, Seller shall be
delivered to Purchaser at or before the Closing in form and content reasonably
satisfactory to Purchaser.
5.08 SUPPLYING FINANCIAL STATEMENTS. Seller shall deliver to Purchaser
true and complete copies of unaudited balance sheets of Seller as of the end of
each calendar month ending subsequent to the date hereof and prior to the
Closing Date and the related statements of income and cash flows for each month
then ended. All such unaudited interim financial statements shall be in the same
format as the Financial Statements.
5.09 CONSUMMATION OF TRANSACTIONS; CLOSING CONDITIONS. Subject to the
terms and conditions herein provided, each of the parties hereto agrees to take,
or cause to be taken, all commercially reasonable actions to consummate the
transactions contemplated by this Agreement and to satisfy the conditions
precedent to Closing set forth in Articles VI and VII of this Agreement.
5.10 USE OF NAME. Within ten (10) days after the Closing Date, Seller
(i) shall change its name to a name wholly dissimilar to "The Goshen News," "The
Goshen Extra," "News Printing
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Company" or any variations or derivations thereof; (ii) shall provide evidence
of such name change as Purchaser may reasonably request; and (iii) shall not
thereafter use, or permit any of its Affiliates to use, the names "The Goshen
News," "The Goshen Extra," "News Printing Company" or any similar names or any
variations or derivations thereof in any circumstances. In connection with
enabling Purchaser, at or after the Closing Date, to use the names "The Goshen
News," "The Goshen Extra," "News Printing Company" and any variations or
derivations thereof, Seller shall execute and deliver to Purchaser all consents
related to such use of name, and related trademarks, as may be reasonably
requested by Purchaser from time to time. All rights to the names "The Goshen
News," "The Goshen Extra," and "News Printing Company" and any variations or
derivations thereof, and all rights to all names, and related trademarks used in
connection with the Business are being conveyed to Purchaser as part of the
Assets.
5.11 EXPENSES.
(a) Except as provided below, regardless of whether the
transactions contemplated by this Agreement are consummated, Seller shall be
responsible for all expenses and fees incurred by it and by the Shareholder in
connection with the transactions contemplated hereby. In no event shall any of
the Assets be utilized for or reduced by the payment of any such fees or
expenses. Seller and the Shareholder hereby, jointly and severally, represent
and warrant that no such fees or expenses have been paid by Seller from the
Assets prior to the date of this Agreement.
(b) Simultaneously with the execution and delivery of this
Agreement, Seller shall pay out of the Asset Purchase Price all Taxes, if any,
relating to the transfer of the Assets to Purchaser, and Xxx. Xxxxxx shall pay
out of the Xxxxxx Real Property Purchase Price all Taxes, if any, relating to
the transfer of the Xxxxxx Real Property to Purchaser. Seller and Xxx. Xxxxxx
shall each file all necessary documentation and Tax Returns required to be filed
by it or by her with respect to such Taxes.
(c) On or before the Closing Date, Seller (and with respect to
the Xxxxxx Real Property, Xxx. Xxxxxx) shall pay any fees and expenses in
connection with the prepayment, release, satisfaction or removal of any Liens
affecting the Assets or the Xxxxxx Real Property.
5.12 FURTHER ASSURANCES. At any time and from time to time after the
Closing Date, Seller, Xx. Xxxxxx and the Shareholder shall, at the request of
Purchaser, take any and all actions necessary to fulfill their respective
obligations hereunder, to put Purchaser in actual possession and control of the
Assets and the Xxxxxx Real Property and execute and deliver such further
instruments of conveyance, sale, transfer and assignment, and take such other
actions necessary or desirable to effectuate, record or perfect the transfer of
the Assets and the Xxxxxx Real Property to Purchaser free and clear of all
Liens, to confirm the title of the Assets and the Xxxxxx Real Property to
Purchaser, to assist Purchaser in exercising rights relating thereto, or to
otherwise effectuate or consummate any of the transactions contemplated hereby.
5.13 EMPLOYEES. Concurrent with the Closing, the employment by Seller of
its employees shall terminate. Seller, Xx. Xxxxxx and Purchaser understand and
agree that Purchaser shall offer employment to all current employees of Seller,
except Xxxx Xxxxxx, and Xxxx Xxxxxx, specifically including those employees set
forth on Exhibit 5.13, at their current pay rates, such employment to be at will
and subject to Purchaser's employment policies and practices and without
restriction on Purchaser's ability to end the employment relationship with any
of such individuals. Purchaser shall hire employees for no particular term, and
Purchaser may discharge such hired employees for any reason or no reason
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without further Liability to employees or to Seller. The former employees of
Seller hired by Purchaser shall be eligible for Purchaser's then current benefit
plans and shall receive credit for their prior service with Seller for purposes
of participation in Purchaser's insurance, 401(k) and vacation benefits.
Notwithstanding the foregoing sentence, such employees will be eligible to
participate in Purchaser's Retirement Plan only after one year of employment
with Purchaser.
5.14 DELIVERY OF BOOKS AND RECORDS. Seller and, with respect to the
Xxxxxx Real Property, Xxx. Xxxxxx, shall deliver to Purchaser at the Closing all
original documents, books and records pertaining to the Business (except minute
books and stock records) and to the Assets and the Xxxxxx Real Property that are
legally significant or useful to the Business and shall deliver copies of all
other documents, books and records pertaining to the Business and to the Assets
and the Xxxxxx Real Property. Seller may retain copies of any of the foregoing
for its own use and Purchaser shall provide Seller with reasonable access to, or
provide Seller with copies of, such documents, books and records. Without
limiting the generality of the foregoing, Seller shall deliver to Purchaser at
the Closing all documents and records relating to the Intellectual Property,
including without limitation, the original Certificates of Registration for all
Letters Patent, trademarks and service marks listed on Schedule 3.11 and all
such documents relating thereto along with any other documents necessary to
transfer title thereto and to record such transfer before the respective patent
and trademark offices or similar Governmental Authorities.
5.15 TITLE SEARCH; DISCHARGE OF LIENS; TITLE INSURANCE. As soon as
practicable after the date hereof, Seller, Xx. Xxxxxx and the Shareholder shall
(i) each use commercially reasonable efforts to ascertain all Liens, if any, to
which any of the Assets or the Xxxxxx Real Property is subject, (ii) notify
Purchaser in writing of the nature and extent thereof, and (iii) discharge all
such Liens (other than Permitted Liens). Without limiting the generality of the
foregoing, Seller and the Shareholder shall provide to Purchaser Uniform
Commercial Code searches (conducted as soon as possible after the date hereof
and updated through a date not more than ten (10) days prior to the Closing
Date) of filings made pursuant to Article 9 thereof in all jurisdictions where
Seller has any Assets.
5.16 QUALIFICATION AND CORPORATE EXISTENCE.
(a) Seller shall deliver to Purchaser (i) certificates of the
Secretary of State of the State of Indiana stating that Seller is a corporation
in existence under the Laws of such state and has paid all applicable Taxes due
to such state and (ii) certificates of the appropriate officials of the states
and foreign jurisdictions listed on Schedule 3.02(a), each dated not more than
ten (10) days prior to the Closing Date, stating that Seller is duly qualified
and in good standing to transact business as a foreign corporation as stated in
Section 3.02 of this Agreement in each such state or foreign jurisdiction and
has paid all applicable Taxes due to each such state or foreign jurisdiction.
(b) Xxxx and Purchaser shall deliver to Seller certificates of
the Secretary of State of the State of Georgia dated not more than ten (10) days
prior to the Closing Date, stating that Xxxx or Purchaser, as the case may be,
is a corporation in existence under the laws of such state. Purchaser shall
deliver to Seller a certificate of the Secretary of State of the State of
Indiana dated not more than ten (10) days prior to the Closing Date, stating
that Purchaser is a corporation qualified or licensed to do business as a
foreign corporation under the laws of such state.
5.17 PURCHASER'S ASSISTANCE TO SELLER. After the Closing Date, Purchaser
agrees to allow Seller use of its computer software and hardware so that Seller
may prepare a financial statement for the
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time period up to and including the date prior to the Closing Date at no expense
to Seller. Purchaser agrees to provide laborers and transportation to move
certain corporate records to Seller's new office. Purchaser agrees to continue
Accounts Payable processing and payroll processing on its computers using
Purchaser's employees, facilities and equipment for up to sixty (60) days after
the Closing. Further, Purchaser will allow Seller reasonable access to corporate
records of News Printing Company, Inc. necessary to prepare filings of industry
or governmental reports. For a period of thirty-seven (37) months after the
Closing Date, Purchaser will notify Seller prior to any records disposal.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXX AND PURCHASER
The obligations of Xxxx and Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each of the following conditions, any of which may
be waived, in whole or in part, by Xxxx and Purchaser for purposes of
consummating such transactions:
6.01 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING. The
representations and warranties made by Seller, the Shareholder or Xx. Xxxxxx in
this Agreement and the Other Agreements shall be complete and correct on the
Closing Date with the same force and effect as if this Agreement had been
executed on and as of the Closing Date. Seller, the Shareholder and Xx. Xxxxxx
each shall have duly performed all of the agreements and covenants and satisfied
all of the conditions to be performed or complied with by either of them on or
prior to the Closing Date. Seller, the Shareholder and Xx. Xxxxxx each shall
execute and deliver to Purchaser a certificate dated as of the Closing Date
certifying the fulfillment of the conditions of this Section 6.01.
6.02 NO INJUNCTION, ETC. No Litigation, Law or Order shall have been
instituted, enacted, entered, threatened or proposed by a Third Party before any
court or Governmental Authority to enjoin, restrain, prohibit, or obtain damages
in respect of this Agreement or the consummation of the transactions
contemplated hereby, if such Litigation, Law or Order, in the reasonable
judgment of Purchaser, would make it inadvisable to consummate such
transactions.
6.03 NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
Material Adverse Change with respect to Seller, the Business or the Xxxxxx Real
Property, or any condition or event which threatens a Material Adverse Change
with respect to Seller, the Business or the Xxxxxx Real Property, from the
Balance Sheet Date. Seller and the Shareholder each shall have delivered to
Purchaser a certificate dated as of the Closing Date executed by Seller and the
Shareholder, respectively, certifying the foregoing statement.
6.04 APPROVAL OF LEGAL MATTERS. All actions, proceedings, instruments
and documents reasonably deemed necessary or appropriate by Xxxx and Purchaser
or their attorneys to effectuate this Agreement and to consummate the
transactions contemplated hereby shall have been approved by such attorneys in
the exercise of their reasonable discretion.
6.05 XXXX OF SALE; ASSIGNMENTS; ETC. Purchaser shall have received from
Seller an executed xxxx of sale substantially in the form attached hereto as
Exhibit 6.05, an executed Assignment and Assumption Agreement substantially in
the form attached hereto as Exhibit 7.04, and such other assignments and other
conveyance documents reasonably necessary or desirable to transfer the Assets to
Purchaser.
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6.06 OPINIONS OF COUNSEL. Purchaser shall have received an opinion,
dated the Closing Date, of Xxxxxx Xxxxxxx Xxxxxxxx Xxxxxxxxxx Holderead &
Xxxxxx, counsel to Seller and the Shareholder, substantially in the form
attached hereto as Exhibit 6.06.
6.07 INCUMBENCY CERTIFICATE. Seller shall have delivered to Purchaser an
incumbency certificate or certificates dated the Closing Date certifying the
incumbency of all officers of Seller who have executed this Agreement or any of
the Other Agreements. These certificates shall contain specimens of the
signatures of each of such officers and shall be executed by an officer of
Seller other than an officer whose incumbency or authority is certified.
6.08 LICENSES. Purchaser shall have received all Licenses necessary to
operate the Business and to own and operate the Assets and the Xxxxxx Real
Property as currently operated by Seller.
6.09 WARRANTY DEED, TITLE INSURANCE AND SURVEY. Purchaser shall have
received general warranty deeds in form and substance reasonably satisfactory to
Purchaser in respect of the Goshen Real Property and the Xxxxxx Real Property
(which general warranty deeds shall include a transfer or assignment of any
warranties of title, whether general, statutory or limited, which Seller or Xxx.
Xxxxxx has received from any of its or her grantors).
6.10 ENVIRONMENTAL REPORT. Purchaser shall have received such
independent verifications as Purchaser reasonably deems necessary that no
condition exists with respect to the Assets previously or currently owned,
leased, operated, or controlled by Seller, any of its predecessors or any of its
former Subsidiaries or with respect to any of the Xxxxxx Real Property that has
resulted in, or would reasonably be expected to result in, any violation of an
Environmental Law, any Environmental Litigation, or in any Liability relating to
an Environmental Matter. Such independent verifications shall include an
estimate of the total cost of remedying any such condition reported therein.
6.11 DUE DILIGENCE REVIEW. Purchaser and its lenders each shall have
been reasonably satisfied with its review of the Schedules provided by Seller
and the Shareholder pursuant to this Agreement and each also shall have been
reasonably satisfied with its review of the Business, Assets, Contracts, books
and records of Seller and the Xxxxxx Real Property.
6.12 CERTIFIED COPIES OF RESOLUTIONS. Seller shall have delivered to
Purchaser copies, certified by the duly qualified and acting Secretary or
Assistant Secretary of Seller, of resolutions adopted by the Board of Directors
and the shareholders approving this Agreement, the Other Agreements and the
consummation of the transactions contemplated hereby and thereby, which
resolutions shall be in form and substance reasonably satisfactory to Purchaser
and Xxxx.
6.13 SALES AND USE TAXES. Purchaser shall have received from Seller a
certificate or certificates from the Indiana Department of Revenue and from any
other state and foreign Tax authority listed on Schedule 3.02(a) stating that no
sales or use Taxes are due relating to the Business, Assets or the Xxxxxx Real
Property prior to Closing.
6.14 COVENANTS NOT TO COMPETE. Seller, Xxxx Xxxxxx and Xxx. Xxxxxx shall
have entered into an agreement with Purchaser containing covenants not to
compete and covenants prohibiting disclosure of confidential information and
trade secrets and covenants prohibiting the solicitation of customers and
employees, substantially in the form attached hereto as Exhibit 6.14.
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6.15 NON-FOREIGN CERTIFICATE. Seller and Xxx. Xxxxxx shall each deliver
to Purchaser a certificate in form and substance satisfactory to Purchaser
stating that neither Seller nor Xxx. Xxxxxx is a "foreign person" as defined in
Section 1445 of the Code and the regulations thereunder.
6.16 LETTERS TESTAMENTARY. Purchaser shall have received a certified
copy of Letters Testamentary related to the Estate dated not more than 30 days
prior to the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER, XX. XXXXXX AND THE SHAREHOLDER
The obligations of Seller, Xx. Xxxxxx and the Shareholder to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions, any of which may be waived, in whole or in part, by Seller and the
Shareholder for purposes of consummating such transactions:
7.01 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING. The
representations and warranties made by Xxxx and Purchaser in this Agreement and
the Other Agreements shall be correct and complete on the Closing Date with the
same force and effect as if this Agreement had been executed on and as of the
Closing Date. Xxxx and Purchaser shall have duly performed all of the agreements
and covenants and satisfied all of the conditions to be performed or complied
with by it on or prior to the Closing Date. Xxxx and Purchaser shall execute and
deliver to Seller and the Shareholder a certificate dated as of the Closing Date
certifying the fulfillment of the conditions of this Section 7.01.
7.02 NO INJUNCTION, ETC. No Litigation, Law or Order shall have been
instituted, enacted, entered, threatened or proposed by a Third Party before any
court or Governmental Authority to enjoin, restrain, prohibit, or obtain damages
in respect of this Agreement or the consummation of the transactions
contemplated hereby, if such Litigation, Law or Order, in the reasonable
judgment of Seller or the Shareholder, would make it inadvisable to consummate
such transactions.
7.03 APPROVAL OF LEGAL MATTERS. All actions, proceedings, instruments
and documents reasonably deemed necessary or appropriate by Seller, the
Shareholder or their respective attorneys to effectuate this Agreement and to
consummate of the transactions contemplated hereby shall have been approved by
such attorneys in the exercise of their reasonable discretion.
7.04 ASSIGNMENT AND ASSUMPTION AGREEMENT. Seller shall have received
from Purchaser an executed Assignment and Assumption Agreement, substantially in
the form attached hereto as Exhibit 7.04.
7.05 INCUMBENCY CERTIFICATE. Each of Xxxx and Purchaser shall have
delivered to Seller and the Shareholder an incumbency certificate or
certificates dated the Closing Date certifying the incumbency of all officers of
Xxxx and Purchaser who have executed this Agreement or any of the Other
Agreements. These certificates shall contain specimens of the signatures of each
of such officers and shall be executed by an officer of each of Xxxx and
Purchaser other than an officer whose incumbency or authority is certified.
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7.06 CERTIFIED COPIES OF RESOLUTIONS. Xxxx and Purchaser shall have
delivered to Seller and the Shareholder copies, certified by the duly qualified
and acting Secretary or Assistant Secretary of each of Xxxx and Purchaser, of
resolutions adopted by the Board of Directors of Purchaser approving this
Agreement, the Other Agreements and the consummation of the transactions
contemplated by this Agreement.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ACKNOWLEDGMENT OF
XXXX'X AND PURCHASER'S RELIANCE. All of Seller's, Xx. Xxxxxx'x, the
Shareholder's, Xxxx'x and Purchaser's representations, warranties, covenants,
and agreements set forth in this Agreement shall survive the closing of the
transactions contemplated by this Agreement, shall not merge in the performance
of any obligation by any party hereto and (1) shall terminate and expire (i)
with respect to any "General Claim" (as herein defined), on the later of (x)
eighteen (18) months after the date of this Agreement or (y) eighteen (18)
months after the date on which such covenant or agreement is to be performed
hereunder; (ii) with respect to any "Tax Claim" (as herein defined), on the
later of (x) the date upon which the Liability to which any such Tax Claim may
relate is barred by all applicable statutes of limitation, taking into account
any extensions or waivers thereof, and (y) the date upon which any claim for
refund or credit related to such Tax Claim is barred by all applicable statutes
of limitation; (iii) with respect to any "Employee Benefit Plan Claim" (as
herein defined), on the date upon which the Liability to which any such Employee
Benefit Plan Claim may relate is barred by all applicable statute of
limitations; (iv) with respect to any "Third Party Liability Claim" (as herein
defined), on the date upon which the Liability to which any such Third Party
Liability Claim may relate is barred by all applicable statutes of limitations;
and (v) with respect to any "Environmental Claim" (as defined herein), on the
sixth (6th) anniversary of the date of this Agreement. As used in this
Agreement, the following terms have the following meanings:
(a) "General Claim" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in any representation or
warranty or any breach of any covenant or agreement made or to be
performed by Seller, Xx. Xxxxxx, the Shareholder, Xxxx or
Purchaser pursuant to this Agreement or the Other Agreements,
provided that a "General Claim" shall not include any Tax Claim,
Employee Benefit Plan Claim, Third Party Liability Claim or
Environmental Claim;
(b) "Tax Claim" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in any representation or
warranty or any breach of any covenant or agreement made or to be
performed by Seller, Xx. Xxxxxx or the Shareholder pursuant to
this Agreement or the Other Agreements, related to any Taxes,
including, without limitation, those representations, warranties,
covenants and agreements made by Seller and the Shareholder in
Section 3.07 and any claim made under Section 8.02(e);
(c) "Environmental Claim" means any claim based upon, arising out
of or otherwise in respect of any inaccuracy in any
representation or warranty or any breach of any covenant or
agreement made or to be performed by Seller, Xx. Xxxxxx or the
Shareholder pursuant to this Agreement or the Other Agreements
related to any Environmental Matter or Environmental Litigation,
including without limitation, those
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representations, warranties, covenants and agreements made by
Seller, Xx. Xxxxxx and the Shareholder in Section 3.26, or any
claim arising out of or otherwise in respect of the condition or
occurrences described in Section 8.02(d).
(d) "Employee Benefit Plan Claim" means any claim based upon,
arising out of or otherwise in respect of any inaccuracy in any
representation or warranty or any breach of any covenant or
agreement made or to be performed by Seller, Xx. Xxxxxx or the
Shareholder pursuant to this Agreement or the Other Agreements
related to any Employee Benefit Plan, including without
limitation, those representations, warranties, covenants and
agreements made by Seller and the Shareholder in Sections 3.07
and 3.17 and any claim made under Section 8.02(c), 8.02(e) or
8.02(f) in connection with an Employee Benefit Plan.
(e) "Third Party Liability Claim" means any claim made under
Section 8.02(c), Section 8.02(f) or 8.02(g) that relates to any
claim or other Litigation by a Third Party.
Seller, Xx. Xxxxxx, the Shareholder, Xxxx and Purchaser acknowledge and agree
that Xxxx and Purchaser have performed a limited investigation of the Business
and the Assets and the Xxxxxx Real Property; however, no investigation by Xxxx
or Purchaser will diminish or obviate any of the representations, warranties,
covenants, indemnities or agreements made or to be performed by Seller, Xx.
Xxxxxx or the Shareholder pursuant to this Agreement or the Other Agreements or
Purchaser's right to fully rely upon such representations, warranties,
covenants, indemnities and agreements. Seller, Xx. Xxxxxx, the Shareholder and
Purchaser acknowledge and agree that Purchaser has assisted Seller, Xx. Xxxxxx
and the Shareholder in the preparation of certain of the Schedules referred to
in Article III; provided, however, that Seller, Xx. Xxxxxx, the Shareholder and
Purchaser acknowledge and agree that Purchaser prepared such Schedules from
information provided by Seller and in no event shall Purchaser have any
Liability with respect to such Schedules nor shall any of Seller's, Xx. Xxxxxx'x
or the Shareholder's representations, warranties, indemnities, or other
agreements be obviated or diminished by Purchaser's preparation of any of such
Schedules.
8.02 INDEMNIFICATION BY THE SHAREHOLDER, XX. XXXXXX AND SELLER. Subject
to the limitations contained in Section 8.04, the Shareholder, Xx. Xxxxxx and
Seller, jointly and severally, agree to indemnify, defend, and hold harmless
Purchaser and Xxxx (and each of their respective directors, officers,
shareholders, employees, affiliates and assigns) from and against any and all
Losses asserted against, imposed upon or incurred by any of the foregoing by
reason of, resulting from, arising out of, based upon or otherwise in respect of
the following notwithstanding any actual or alleged negligence of any of the
Persons indemnified hereunder:
(a) any inaccuracy in any representation or warranty made by
Seller, Xx. Xxxxxx or the Shareholder pursuant to this Agreement or the Other
Agreements;
(b) any breach of any covenant or agreement made or to be
performed by Seller, Xx. Xxxxxx or the Shareholder pursuant to this Agreement or
the Other Agreements;
(c) any Undisclosed Liability;
(d) any of the following conditions or occurrences relating to
the environment: (i) any cleanup, corrective removal or remedial actions, or
property damage arising out of any condition
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relating to the Business, the Assets or the Xxxxxx Real Property and existing
prior to March 1, 1999; (ii) Third Party claims for personal injury where the
exposure, incident or condition out of which the claim arises occurred in whole
or in part on or prior to March 1, 1999 and relates to the Business, the Assets
or the Xxxxxx Real Property; (iii) with respect to the Business, any
transportation or disposition commenced, arranged or initiated on or before
March 1, 1999 by or on behalf of Seller any of its predecessors or any of its
former Subsidiaries of any substance owned or controlled by Seller, any of its
predecessors or any of its former Subsidiaries or any substance from any
premises owned or operated by Seller, any of its predecessors or any of its
former Subsidiaries or from the Xxxxxx Real Property for any purpose, including,
but not limited to, treatment, storage, disposal or recycling; (iv) with respect
to the Business or the Xxxxxx Real Property, fines or penalties on account of
the ownership, use, condition or operation of the Business or any of the Assets
or the Xxxxxx Real Property by Seller, any of Seller's predecessors or any of
its former Subsidiaries at any time prior to March 1, 1999; (v) any Liability to
modify, restore, change or improve any of the Assets, any of the Xxxxxx Real
Property or any assets of any of Seller's predecessors or any of its former
Subsidiaries in order to effectuate compliance with any applicable Law or Order
in effect as of March 1, 1999; or (vi) the removal of any and all asbestos or
asbestos-containing materials that existed on or before March 1, 1999 in any
premises owned, leased, operated or managed on or before March 1, 1999 by
Seller, any of its respective predecessors or any of its former Subsidiaries or
that existed on or before March 1, 1999 in any of the Xxxxxx Real Property;
provided, however, Purchaser and Xxxx shall be solely responsible for, and none
of Seller, Xx. Xxxxxx or the Shareholder will be required to indemnify, defend
or hold harmless Purchaser or Xxxx for any Losses in connection with the removal
of any and all asbestos or asbestos-containing materials resulting from, arising
out of, based upon or otherwise in respect of any remodeling or other voluntary
structural or physical change by Purchaser or Xxxx after the Closing Date in any
premises that were owned, leased, operated or managed on or before the Closing
Date by Seller;
(e) any Liability for any Taxes of Seller (or, with respect to
the Xxxxxx Real Property, Xxx. Xxxxxx) that either accrued on or before March 1,
1999 or arose out of or relate to Seller or the operations of the Business or
the Xxxxxx Real Property on or before March 1, 1999; and
(f) any Retained Liability; and
(g) any claim by any Person relating in any respect to (A) the
ownership (legal or beneficial) of the capital stock of Seller, (B) this
Agreement, the transactions contemplated hereby or corporate actions of Seller
related thereto, or (C) the Estate of Dow X. Xxxxxx.
Seller, Xx. Xxxxxx and the Shareholder, acting collectively, shall have the
right at their own cost and expense to undertake to defend against any claim or
cause of action under the hold harmless and indemnity provisions of this Section
8.02. Purchaser and Xxxx agree to provide written notice of any Third Party
claims that may arise under this Section 8.02 promptly after Purchaser's or
Xxxx'x receipt of notice of any such claim from any Third Party. However, if the
notice of such claim received by Purchaser and Xxxx consists of legal service of
process, Purchaser or Xxxx shall provide telephone notice within 48 hours,
followed by written notice within ten (10) days, after Purchaser's or Xxxx'x
receipt of notice of such claim. Failure to provide such written notice within
the time specified shall not constitute a waiver of the provisions of this
Section by Purchaser or by Xxxx, except to the extent that such failure shall
have prejudiced Seller's, Xx. Xxxxxx'x or the Shareholder's rights and abilities
to defend a lawsuit that is the basis of such a claim. Any obligations or
liabilities owed by Seller, Xx. Xxxxxx or the Shareholder to Purchaser or to
Xxxx by reason of this Agreement, may be satisfied by Purchaser or Xxxx
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offsetting against such amounts any and all sums due from Purchaser or Xxxx to
Seller, Xx. Xxxxxx or the Shareholder for any reason whatsoever.
8.03. INDEMNIFICATION BY PURCHASER AND XXXX. Subject to the limitations
contained in Section 8.04, Purchaser and Xxxx agree to indemnify, defend and
hold harmless Seller (and its respective directors, officers, employees,
affiliates and assigns), Xx. Xxxxxx and the Shareholder from and against all
Losses asserted against, imposed upon or incurred by any of the foregoing by
reason of, resulting from, arising out of, based upon or otherwise in respect of
the following notwithstanding any actual or alleged negligence of any of the
Persons indemnified hereunder:
(a) any inaccuracy in any representation or warranty made by
Purchaser or Xxxx pursuant to this Agreement or the Other Agreements;
(b) any breach of any covenant or agreement made or to be
performed by Purchaser or Xxxx pursuant to this Agreement or the Other
Agreements;
(c) any Assumed Liability; and
(d) the removal of any and all asbestos or asbestos-containing
materials resulting from, arising out of, based upon or otherwise in respect of
any remodeling or other voluntary structural or physical change by Purchaser or
Xxxx after the Closing Date in any premises that were owned, leased, operated or
managed on or before the Closing Date by Seller.
Purchaser and Xxxx each shall have the right at its own cost and expense to
undertake to defend against any claim or cause of action under the hold harmless
and indemnity provisions of this Section 8.03. Seller, Xx. Xxxxxx and the
Shareholder agree to provide written notice to Purchaser and to Xxxx of any
Third Party claims that may arise under this Section 8.03 promptly after
Seller's, Xx. Xxxxxx'x or the Shareholder's receipt of notice of any such claim
from any Third Party. However, if the notice of such claim received by Seller,
Xx. Xxxxxx and the Shareholder consists of legal service of process, Seller, Xx.
Xxxxxx or the Shareholder receiving such notice shall provide telephone notice
within 48 hours, followed by written notice within ten (10) days, after
Seller's, Xx. Xxxxxx'x or the Shareholder's receipt of notice of such claim.
Failure to provide such written notice within the time specified shall not
constitute a waiver of the provisions of this Section by Seller, Xx. Xxxxxx and
the Shareholder, except to the extent that such failure shall have prejudiced
Purchaser's or Xxxx'x rights and abilities to defend a lawsuit that is the basis
of such a claim.
8.04 LIMITATIONS ON INDEMNIFICATION.
(a) Except as provided in Section 8.04(b), none of Seller, Xx.
Xxxxxx, the Shareholder, Xxxx or Purchaser shall be required to indemnify any of
the Persons specified in Section 8.02 or 8.03, as the case may be, until the
amount of such Loss, when aggregated with all other Losses indemnified under
such Section 8.02 or 8.03, respectively, shall exceed $50,000 (the "Minimum
Aggregate Liability Amount"), at which time Losses may be asserted for the
Minimum Aggregate Liability Amount and all amounts in excess thereof; provided,
however, that the foregoing Minimum Aggregate Liability Amount shall not apply
to any Loss that results from or arises out of (i) a breach of a covenant or
agreement, (ii) fraud, intentional misrepresentation or an intentional breach of
warranty on the part of any of Seller, Xx. Xxxxxx, the Shareholder, Xxxx or
Purchaser in this Agreement or the
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Other Agreements, (iii) any Employee Benefit Plan Claim, (iv) any Tax Claims or
(v) any Third Party Liability Claims that arise out of Section 8.02(g).
(b) No Person otherwise entitled to indemnification under this
Agreement shall be indemnified pursuant to this Agreement to the extent that
such Person's Losses are increased or extended by the willful misconduct,
violation of Law or bad faith of such Person.
(c) The Shareholder and Xx. Xxxxxx, in the aggregate, shall not
be liable for indemnification under Section 8.02 in an amount greater than Nine
Million Six Hundred Fifty-Two Thousand Six Hundred Dollars ($9,652,600).
Notwithstanding the foregoing sentence, the Shareholder and Xx. Xxxxxx, in the
aggregate, shall not be liable in an amount greater than $1,250,000 for
indemnification with respect to an Environmental Claim for diminution in the
value of the Xxxxxx Real Property or the Goshen Real Property that is the sole
and direct result of a Phase II environmental review of the Xxxxxx Real Property
or the Goshen Real Property that was not required by a Governmental Authority.
8.05 INDEMNIFICATION PAYMENTS. Subject to the terms hereof, a party
obligated to make indemnification payments pursuant to this Agreement shall pay
to the indemnified party the full amount of any and all Losses (other than
Losses resulting from a Third Party claim) within thirty (30) days of receipt of
the notice thereof and the full amount of any Loss resulting from a Third Party
claim within thirty (30) days of the date such Litigation is terminated or the
date a final judgment or award is rendered and no appeal is taken, and
thereafter the amount of such Loss shall bear interest at a rate equal to the
lesser of one and one-half percent (1-1/2%) per month or the maximum amount
permitted by Law. Purchaser and Xxxx shall be entitled to offset from any
payments due to Seller, Xx. Xxxxxx or the Shareholder for any reason whatsoever,
any amount due and owing to Purchaser or to Xxxx by way of indemnification
pursuant to Section 8.02, and Purchaser and Xxxx shall not be liable for any
amounts so offset.
ARTICLE IX
TERMINATION
9.01 METHOD OF TERMINATION. This Agreement and the transactions
contemplated by it may be terminated at any time prior to the Closing Date:
(a) By the mutual consent of Seller and Purchaser at any time;
(b) By Seller or the Shareholder at any time after March 3, 1999
if any of the conditions set forth in Article VII hereof have not been fulfilled
or waived, unless such fulfillment has been frustrated or made impossible by any
act or failure to act by Seller or Shareholder;
(c) By Purchaser or Xxxx at any time after March 3, 1999, if any
of the conditions set forth in Article VI hereof have not been fulfilled or
waived, unless such fulfillment has been frustrated or made impossible by any
act or failure to act of Purchaser;
(d) By Purchaser at any time, if Purchaser determines in good
faith that any Material Adverse Change, or any condition or event which
threatens to cause a Material Adverse Change, with respect to Seller or the
Business shall have occurred or been discovered since the Balance Sheet Date;
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(e) By Purchaser pursuant to Section 9.04; or
(f) By Purchaser pursuant to Section 5.04.
9.02 NOTICE OF TERMINATION. Notice of termination of this Agreement, as
provided for in this Article IX, shall be given by the parties so terminating to
the other parties hereto in accordance with Section 11.01 of this Agreement.
9.03 EFFECT OF TERMINATION. In the event of a termination of this
Agreement pursuant to Section 9.01 hereof, this Agreement shall become void and
of no further force and effect, and each party shall pay the costs and expenses
incurred by it in connection with this Agreement, and no party (or any of its
agents, counsel, representatives, Affiliates or assigns) shall be liable to any
other party for any Loss hereunder; provided, however, if non-occurrence of
Closing is the direct or indirect result of the Default of any party of its
obligations hereunder, including, without limitation, any Material inaccuracy in
any representation or warranty made by such party, such defaulting parties shall
be fully liable to the other parties hereto for any such Default. It is agreed
that time is of the essence in the performance and satisfaction of this
Agreement and each of the conditions specified in Articles VI and VII of this
Agreement are material for purposes of this Agreement.
9.04 RISK OF LOSS. Seller assumes all risk of condemnation, destruction
or Loss due to fire or other casualty from the date of this Agreement until the
Closing. If the condemnation, destruction or Loss is such that the Business is
interrupted or curtailed or the Assets or the Xxxxxx Real Property are
Materially affected, then Purchaser shall have the right to terminate this
Agreement. If the condemnation, destruction or Loss is such that the Business is
neither interrupted nor curtailed nor the Assets or the Xxxxxx Real Property
Materially affected, or if the Business is interrupted or curtailed or the
Assets or the Xxxxxx Real Property are Materially affected and Purchaser
nevertheless foregoes the right to terminate this Agreement, the Purchase Price
shall be adjusted at the Closing to reflect such condemnation, destruction or
Loss, to the extent that insurance or condemnation proceeds paid or to be paid
to Purchaser are not sufficient to cover such destruction or Loss. If Purchaser
and Seller are unable to agree upon the amount of such adjustment, the dispute
shall be resolved jointly by the independent accounting firms then employed by
Purchaser and Seller, and if said accounting firms do not agree, an arbitrator
shall be selected by such accounting firms.
ARTICLE X
DEFINITIONS
The following terms (in their singular and plural forms as appropriate)
as used in this Agreement shall have the meanings set forth below unless the
context requires otherwise:
"ACCOUNTS PAYABLE" means all accounts payable as of the date prior to
the Closing Date, and other monies due from Seller for purchases of goods and
the performance of services prior to the Closing Date and any other debt or
Liability relating to the operation of the Business prior to the Closing Date.
"ACCOUNTS RECEIVABLE" means all accounts receivable, notes receivable
(including without limitation all notes receivable from Xxx and Xxx Xxxxxx), and
other monies due to Seller for (i)
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published advertising (both billed and unbilled) through the day prior to the
Closing Date, (ii) newspaper sales (both direct and circulation) and (iii)
commercial printing through the day prior to the Closing Date.
"AFFILIATE" of a Person means: (i) any Person directly, or indirectly
through one or more intermediaries, controlling, controlled by or under common
control with such Person; (ii) any officer, director, partner, employee, agent,
or representative or direct or indirect beneficial or legal owner of any 10% or
greater equity or voting interest of such Person; (iii) any entity for which a
Person described in (ii) above acts in any such capacity.
"AGREEMENT" means this Asset Purchase Agreement, including the Exhibits
and Schedules hereto each of which is incorporated herein by reference.
"ASSET PURCHASE PRICE" means the total consideration to be paid to
Seller by Purchaser for the purchase of the Assets pursuant to this Agreement
and which shall be paid in accordance with Section 1.02(a) of this Agreement.
"ASSETS" means all of the assets, properties and rights of Seller of
every kind, nature, character and description, whether real, personal or mixed,
whether tangible or intangible, whether accrued, contingent or otherwise (other
than the Retained Assets) relating to or utilized in the Business, directly or
indirectly, in whole or in part, in existence on the Closing Date whether or not
carried on the books and records of Seller, and whether or not owned in the name
of Seller or any Affiliate of Seller and wherever located, including but not
limited to the following:
(i) the Personal Property;
(ii) Accounts Receivable;
(iii) the Inventory;
(iv) the Intellectual Property of Seller;
(v) the Contracts of Seller;
(vi) the Licenses of Seller;
(vii) the Computer Software;
(viii) the Databases;
(ix) the Goshen Real Property;
(x) the Goodwill of the Business, including, but not
limited to, goodwill associated with the trademarks, service marks, and
tradenames and assumed names;
(xi) all rights, choses in action and claims, Known or
unknown matured or unmatured, accrued or contingent, against Third Parties;
(xii) all intangible personal property and assets other
than the foregoing including, without limitation, franchises, guarantees,
warranties, indemnities, certificates of authority and waivers;
(xiii) the customer lists, advertiser lists, subscriber
lists, mailing lists, customer files, supplier files, advertiser files,
subscriber files, sales agent files, credit files, and credit data relating to
the Assets or the Business, all other files, records, drawings, catalogues,
stationery, advertising materials and other documents (or copies thereof)
related to the Assets or the Business and the use of any telephone numbers that
are used in the operation of the Business; and
(xiv) any other assets used in the Business and owned by
Seller.
"ASSUMED LIABILITIES" means (i) all obligations first arising after the
Closing Date under or pursuant to Contracts of Seller related to the Business,
listed on Exhibit X (as amended pursuant to Section 5.04(b)); and assigned to
Purchaser pursuant to this Agreement; provided, however, the Assumed
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Liabilities shall not include any Liabilities resulting from or arising out of
any Default by Seller prior to the Closing Date under or with respect to any of
such Contracts; (ii) Current Community Commitments (as defined herein); (iii)
the obligation of Purchaser to provide coverage under the health plan that
Purchaser makes available to its employees to Xxx Xxxxxxx until the earlier of
his sixty-fifth (65th) birthday or eighteen (18) months after the Closing Date;
and (iv) the obligation of Purchaser to provide coverage at Purchaser's cost
under the health plan that Purchaser makes available to its employees to Xxxxxx
Xxxxxxxx, provided that such coverage shall be available (A) only for the period
for which Xxxxxx Xxxxxxxx was eligible to elect COBRA coverage under Seller's
health plan; (B) provided Xxxxxx Xxxxxxxx makes or has made a proper election to
elect COBRA coverage under Seller's health plan within the time periods
specified under COBRA; and (C) provided that any amounts paid to or for the
benefit of Xxxxxx Xxxxxxxx by Seller or its insurer for health related matters
shall be credited against the maximum lifetime benefits available to Xxxxxx
Xxxxxxxx under Purchaser's health plan.
"BALANCE SHEET" means collectively, the unaudited balance sheet of
Seller as of November 30, 1998 and included in the Financial Statements.
"BALANCE SHEET DATE" means November 30, 1998.
"BUSINESS" means Seller's business of publishing the daily newspaper The
Goshen News, and the weekly shopper, The Goshen Extra, and commercial printing
under the name News Printing Company.
"CLOSING" means the consummation of the asset acquisitions and the other
transactions contemplated by this Agreement.
"CLOSING DATE" means March 3, 1999 or such other date as the parties may
agree, but with economic effect as of the close of business on February 28,
1999.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"COMPUTER SOFTWARE" means all computer programs, materials, tapes,
source and object codes, and all prior and proposed versions, releases,
modifications, updates, upgrades and enhancements thereto, as well as all
documentation and listings related thereto used in the Business.
"CONTRACT" means any written or oral contract, agreement, understanding,
lease, usufruct, license, plan, instrument, commitment, restriction,
arrangement, obligation, undertaking, practice or authorization of any kind or
character or other document to which any Person is a party or that is binding on
any Person or its securities, assets or business.
"CURRENT COMMUNITY COMMITMENTS" means those certain charitable
commitments of Seller to The Boy's and Girl's Club of up to $20,000 payable
ratably over four years, The Goshen Chamber of Commerce of up to $6,700 payable
ratably over two years and Sponsorship of the Ride-A-Bike Event for the benefit
of the Association of Disabled of Elkhart County with a cost of up to $6,000.
"DATABASES" means databases in all forms, versions and media, together
with prior and proposed updates, modifications and enhancements thereto, as well
as all documentation and listings therefor used in the Business, other than
Licenses.
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"DEFAULT" means (1) a breach of, default under, or misrepresentation in
or with respect to any Contract or License, (2) the occurrence of an event that
with the passage of time or the giving of notice or both would constitute a
breach of, default under, or misrepresentation in any Contract or License, or
(3) the occurrence of an event that with or without the passage of time or the
giving of notice or both would give rise to a right to terminate, change the
terms of or renegotiate any Contract or License or to accelerate, increase, or
impose any Liability under any Contract or License.
"EMPLOYEE BENEFIT PLAN" means collectively, each pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus or other incentive plan, any other written or
unwritten employee program, arrangement, agreement or understanding, any
medical, vision, dental or other health plan, any life insurance plan, or any
other fringe benefit plan, currently or previously adopted, maintained by,
sponsored in whole or in part by, or contributed to by Seller or any ERISA
Affiliate thereof or under which Seller or any ERISA Affiliate thereof has any
Liability for the benefit of employees, retirees, dependents, spouses,
directors, or other beneficiaries, including but not limited to any such plan
that could result in a Material Liability to Seller, under Title IV of ERISA or
otherwise.
"ENVIRONMENTAL LITIGATION" means any Litigation in any court or before
or by any Governmental Authority or private arbitrator, mediator or tribunal
against Seller, the Business, the Xxxxxx Real Property or the Assets (including,
without limitation, notice or other communication written or oral by any Person
alleging potential liability for investigatory costs, cleanup costs, private or
governmental response or remedial costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based upon, or
resulting from (i) any Environmental Matter or (ii) any circumstances or state
of facts forming the basis of any Liability, or alleged Liability under, or
violation or alleged violation under, any Environmental Law.
"ENVIRONMENTAL LAWS" means all Laws relating to pollution or protection
of human health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), including,
without limitation, the Comprehensive Environmental Response Compensation and
Liability Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and
other Laws relating to emissions, discharges, releases or threatened releases of
any Hazardous Substance, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Substance.
"ENVIRONMENTAL MATTER" means any matter or circumstances related in any
manner whatsoever to (i) the emission, discharge, disposal, release or
threatened release of any Hazardous Substance into the environment, or (ii) the
treatment, storage, recycling or other handling of any Hazardous Substance or
(iii) the placement of structures or materials into waters of the United States,
or (iv) the presence of any Hazardous Substance, including, but not limited to,
asbestos, in any building, structure or workplace or on any of the Goshen Real
Property or the Xxxxxx Real Property.
"ERISA" means Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any member of the "controlled group" as defined
in ERISA section 4001(a)(14) which includes, or at any time during the preceding
5 years included, the Seller.
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"FINANCIAL STATEMENTS" means the unaudited balance sheets of Seller as
of December 31, 1993, December 31, 1994, December 31, 1995, December 31, 1996,
December 31, 1997 and November 30, 1998 and the related statements of income and
cash flows for the periods then ended as compiled by McGladrey & Xxxxxx, LLP
thereon.
"GAAP" means generally accepted accounting principles consistently
applied.
"XXXXXX REAL PROPERTY" means collectively all the real property or
interests therein owned, leased, occupied, used or controlled by Xxx. Xxxxxx and
used in connection with the Business as of the date of this Agreement or
acquired prior to the Closing Date, together with (i) all rights, easements,
tenements, hereditaments, appurtenances, privileges, immunities, mineral rights
and other benefits belonging or appertaining thereto that run with said real
property and (ii) all right, title and interest, if any, of Xxx. Xxxxxx in and
to (A) any land lying in the bed of any street, road or avenue, open or
proposed, adjoining said real property, (B) any award made or to be made in lieu
of the land described in the preceding clause (A), (C) any unpaid award for
damage to said real property, and (D) all strips and rights-of-way abutting or
adjoining said real property, if any. The Xxxxxx Real Property includes, without
limitation, all buildings, structures, fixtures and other improvements located
on the land described in the preceding sentence.
"XXXXXX REAL PROPERTY PURCHASE PRICE" means the total consideration to
be paid to Xxx. Xxxxxx by Purchaser for the purchase of the Xxxxxx Real Property
pursuant to this Agreement and which shall be paid in accordance with Section
1.02(b) of this Agreement.
"GOSHEN REAL PROPERTY" means collectively all the real property or
interests therein owned or controlled by Seller and used in connection with the
Business as of the date of this Agreement or acquired prior to the Closing Date,
together with (i) all rights, easements, tenements, hereditaments,
appurtenances, privileges, immunities, mineral rights and other benefits
belonging or appertaining thereto that run with said real property and (ii) all
right, title and interest, if any, of Seller in and to (A) any land lying in the
bed of any street, road or avenue, open or proposed, adjoining said real
property, (B) any award made or to be made in lieu of the land described in the
preceding clause (A), (C) any unpaid award for damage to said real property, and
(D) all strips and rights-of-way abutting or adjoining said real property, if
any. The Goshen Real Property includes, without limitation, all buildings,
structures, fixtures and other improvements located on the land described in the
preceding sentence.
"GOVERNMENTAL AUTHORITY" means any federal, state, county, local,
foreign or other governmental or public agency, instrumentality, commission,
authority, board or body.
"HAZARDOUS SUBSTANCE" means (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil.
"INTELLECTUAL PROPERTY" means Seller's (i) U.S. and foreign patents and
pending patent applications together with any and all continuations,
continuations in part, divisions, reissues, extensions and renewals thereof,
(ii) trade secrets, know-how, inventions, designs, formulae and processes,
whether trade secrets or not, (iii) trade names, trademarks, service marks,
logos, assumed names, brand names and all registrations and applications
therefor together with the goodwill of the business symbolized thereby,
including but not limited to, the names "The Goshen News," "The Goshen Extra,"
"News
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Printing Company" and any other names under which Seller has conducted its
business or sold products or advertising at any time, (iv) copyrights and any
registrations and applications therefor, (v) technology rights and licenses, and
(vi) all other intellectual property owned by, registered in the name of, or
used in the Business or in which Seller or its Business has any interest.
"INVENTORY" means all inventories of raw materials, supplies, purchased
parts to be incorporated in finished products, operating parts and supplies,
work-in-process, finished products, advertising materials, and other
inventories.
"IRS" means the Internal Revenue Service of the United States of
America.
"KNOWLEDGE" or "KNOWN" with respect to Seller or the Shareholder, means,
collectively, those facts the Shareholder, Xxxx Xxxxxx, and Xxx Xxxxx, after due
inquiry knows or reasonably should have known.
"LAW" means any code, law, legal principal, order, ordinance,
regulation, rule, or statute of any Governmental Authority.
"LIABILITY" means any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, expense (including, without
limitation, costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of notes,
bills and checks presented to banks for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute, contingent,
liquidated, unliquidated, matured, unmatured or otherwise.
"LICENSE" means any license, franchise, notice, permit, easement, right,
certificate, authorization, approval or filing to which any Person is a party or
that is or may be binding on any Person or its securities, property or business.
"LIEN" means any mortgage, lien, security interest, pledge,
hypothecation, encumbrance, restriction, reservation, encroachment,
infringement, easement, conditional sale agreement, title retention or other
security arrangement, defect of title, adverse right or interest, charge or
claim of any nature whatsoever of, on, or with respect to any property or
property interest.
"LITIGATION" means any action, administrative or other proceeding,
arbitration, cause of action, claim, complaint, criminal prosecution, inquiry,
hearing, governmental or regulatory investigation, governmental or regulatory
charge, litigation, notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting Seller in
connection with the Business, the Assets (including, without limitation,
Contracts relating to Seller), the Xxxxxx Real Property or the transactions
contemplated by this Agreement.
"LOSS" means any and all direct or indirect demands, claims, payments,
obligations, recoveries, deficiencies, fines, penalties, interest, assessments,
actions, causes of action, suits, losses, diminution in the value of assets,
damages, punitive, exemplary or consequential damages (including, but not
limited to, lost income and profits and interruptions of business), liabilities,
costs, expenses (including without limitation, (i) interest, penalties and
reasonable attorneys' fees and expenses, (ii) attorneys' fees and expenses
necessary to enforce rights to indemnification hereunder, and (iii) consultants'
fees and other costs of defense or investigation), and interest on any amount
payable to a Third Party as a result of the
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foregoing, whether accrued, absolute, contingent, Known, unknown, or otherwise
as of the Closing Date or thereafter.
"MATERIAL" or "MATERIALLY" shall be determined in light of the facts and
circumstances of the matter in question; provided, however, that any specific
monetary amount cited in this Agreement shall be deemed to determine materiality
in that instance.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means (A) any
Material adverse change in or effect on (i) the business, operations, assets,
Liabilities, condition (financial or otherwise), results of operations, value or
prospects of such Person, (ii) the ability of such Person to consummate the
transactions contemplated by this Agreement or any of the Other Agreements to
which it is a party, or (iii) the ability of such party to perform any of its
obligations under this Agreement or any of the Other Agreements to which it is a
party, if such change or effect Materially impairs the ability of such party to
perform its obligations hereunder or thereunder, taken as a whole or (B) any
adverse change in or effect on the assets, liabilities, results of operations of
such Person that results in a Loss in excess of $50,000.
"ORDER" means any decree, injunction, judgment, order, ruling, writ,
quasi-judicial decision or award or administrative decision or award of any
federal, state, local, foreign or other court, arbitrator, mediator, tribunal,
administrative agency or Governmental Authority to which any Person is a party
or that is or may be binding on any Person or its securities, assets or
business.
"OTHER AGREEMENTS" means the agreements, documents, assignments and
instruments to be executed and delivered by Seller, Xx. Xxxxxx or the
Shareholder pursuant to this Agreement.
"PERMITTED LIENS" means (i) Liens for current real property Taxes not
yet due and payable, (ii) Liens that do not affect the value or use of any
parcel of the Goshen Real Property or any parcel of the Xxxxxx Real Property,
and (iii), Liens, if any, relating to Purchaser's financing to which the Assets
are contemplated to be subject at Closing.
"PERSON" means a natural person or any legal, commercial or governmental
entity, such as, but not limited to, a business association, corporation,
general partnership, joint venture, limited partnership, limited liability
company, limited liability partnership, trust, or any person acting in a
representative capacity.
"PERSONAL PROPERTY" means collectively all of the personal property or
interests therein owned, leased, used or controlled by Seller, including,
without limitation, machinery, tools, equipment (including office equipment and
supplies), furniture, furnishings, fixtures, vehicles, leasehold improvements,
all other tangible personal property other than Inventory (which is specifically
excluded from the definition of Personal Property).
"PURCHASE PRICE" means the total consideration to be paid to Seller and
to Xxx. Xxxxxx by Purchaser for the purchase of the Assets and the Xxxxxx Real
Property pursuant to this Agreement and which shall be paid in accordance with
Section 1.03 of this Agreement.
"RELATED PARTY" or "RELATED PERSON" means, with regard to any natural
Person, his or her spouse, parent, sibling, child, aunt, uncle, niece, nephew,
in-law, grandparent and grandchild (including by adoption) and any trustees or
other fiduciaries for the benefit of such relatives.
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"RETAINED ASSETS" means all cash on hand and in banks, cash investments,
prepaid expenses (including the deposit made to PAGE under Seller's Contract
with PAGE for newsprint and including cash in postage meter machine and postage
accounts for business reply and second class postage), prepaid insurance
premiums, cash value of life insurance policy on Xxxx Xxxxxx (all of the
foregoing as of the close of business on February 28, 1999), 1999 GMC Yukon, the
Computer Concepts personal computer with Pentium processor and Okidata printer
4W located at the home of Xxxx and Xxxx Xxxxxx, and four (4) season tickets to
Notre Dame home football games.
"RETAINED LIABILITIES" means any Liability of Seller (or with respect to
the Xxxxxx Real Property, Xxx. Xxxxxx) which is not an Assumed Liability,
including, without limitation, the following:
(i) all Accounts Payable;
(ii) any Liabilities for any Taxes of Seller or the
Shareholder;
(iii) any Liabilities relating to current or former
assets of Seller or the Shareholder not being
acquired by Purchaser pursuant to this Agreement;
(iv) any Contract of Seller not validly assigned to
Purchaser;
(v) any Liability incurred by Seller as a result of any
Default by Seller under any provision of this
Agreement or the Other Agreements;
(vi) any Liability of Seller for severance payments or
other severance obligations relating to any Person
employed by Seller on or before the Closing Date;
(vii) any Liability of Seller to pay bonuses or other
compensation to Affiliates of Seller on account of
the transactions contemplated by this Agreement;
(viii) any Undisclosed Liability;
(ix) any Liability of Seller, of any nature whatsoever,
to any current or former shareholder or Affiliate
of Seller;
(x) any Liability (including without limitation, any
Liability relating to any Litigation) relating to,
based upon, or arising out of (A) the conduct of
the Business or the ownership of the Assets prior
to the Closing Date or (B) any act, omission,
transaction, circumstance, sale of goods or
services, state of facts or other condition that
occurred or existed prior to the Closing Date,
whether or not then Known, due or payable and
whether or not disclosed in this Agreement or the
Other Agreements;
(xi) any Liability that Purchaser may incur in
connection with any Litigation brought against
Purchaser under the Worker Adjustment and
Retraining Notification Act or any similar Law that
relates to actions taken by Seller with regard to
any employees or any site of employment;
(xii) any Liability of Seller under or relating to any
Employee Benefit Plan;
(xiii) any Liability to or Lien of any Third Party
pursuant to the bulk sales or fraudulent conveyance
or other Laws of any jurisdiction that may be
asserted against any of the Assets (whether
asserted against Seller, the Shareholder, the
Assets or Purchaser) or the Xxxxxx Real Property;
and
(xiv) any claim by any broker, finder or other Person
employed or allegedly employed by Seller or the
Shareholder in connection with the transactions
contemplated by this Agreement.
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"SUBSIDIARY" means any Person of which at least a majority of the
securities or interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such Person, is at the time directly or indirectly
owned or controlled by another Person, or by any one or more Subsidiaries of
such other Person, or by such other Person and one or more of its Subsidiaries
or Affiliates.
"TAX" or "TAXES" means any federal, state, county, local, foreign and
other taxes, assessments, charges, fees, and impositions for which Purchaser
could have successor liability, including, without limitation, obligations to
withhold such amounts and including interest and penalties thereon or with
respect thereto, whether disputed or not.
"TAX RETURNS" means all returns, reports, filings, declarations and
statements relating to Taxes that are required to be filed, recorded, or
deposited with any Governmental Authority, including any attachment thereto or
amendment thereof.
"THIRD PARTY" or "THIRD PARTIES" means any Person that is not Xxxx,
Purchaser, Seller, Xx. Xxxxxx or the Shareholder or an Affiliate of Xxxx,
Purchaser, Seller, Xx. Xxxxxx or the Shareholder.
"UNDISCLOSED LIABILITIES" means any Liability that is not fully
reflected or reserved against in the Financial Statements or fully disclosed in
a Schedule to this Agreement.
ARTICLE XI
MISCELLANEOUS
11.01 NOTICES. All notices and other communications hereunder shall be
deemed to have been given (i) on the date of receipt if delivered by hand,
overnight courier service or if sent by facsimile, graphic scanning or other
telegraphic communications equipment or (ii) on the date three (3) business days
after depositing with the United States Postal Service if mailed by United
States registered or certified mail, return receipt requested, first class
postage prepaid and properly addressed. The address for such notices shall be to
the address as set forth below each party's signature to this Agreement. Any
party hereto may change its address specified for notices herein by designating
a new address by notice in accordance with this Section 11.01.
11.02 ENTIRE AGREEMENT, MODIFICATIONS, AMENDMENTS AND WAIVERS. This
Agreement, the Schedules, the Exhibits and the Other Agreements constitute the
entire agreement with respect to the subject matter hereof and thereof and
supersede all prior and contemporaneous agreements and understandings of the
parties with respect thereto, including without limitation, that certain letter
of intent from Xxxx dated February 1, 1999. No change, alternation, modification
or addition to this Agreement shall be effective unless in writing and properly
executed by the parties hereto.
11.03 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the parties hereto, and
their respective estates, successors, legal or personal representatives, heirs,
distributees, designees and assigns, but no assignment shall relieve any party
of the obligations hereunder. This Agreement or any portion hereof cannot be
assigned by any party without the prior written consent of the other parties
hereto; provided, however, that Xxxx and Purchaser may assign this Agreement to
their lenders as collateral security.
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11.04 TABLE OF CONTENTS; CAPTIONS; REFERENCES. The table of contents and
the captions and other headings contained in this Agreement as to the contents
of particular articles, sections, paragraphs or other subdivisions contained
herein are inserted for convenience of reference only and are in no way to be
construed as part of this Agreement or as limitations on the scope of the
particular articles, sections, paragraphs or other subdivisions to which they
refer and shall not affect the interpretation or meaning of this Agreement.
Except as specifically provided herein, all references in this Agreement to
"Section" or "Article" shall be deemed to be references to a Section or Article
of this Agreement.
11.05 PRONOUNS. All pronouns used herein shall be deemed to refer to the
masculine, feminine or neuter gender as the context requires.
11.06 GOVERNING LAW. This Agreement shall be controlled, construed and
enforced in accordance with the substantive Laws of the State of Indiana,
without respect to the Laws related to choice or conflicts of Laws.
11.07 SEVERABILITY. Should any term or provision of this Agreement be
held to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.
11.08 REMEDIES NOT EXCLUSIVE. No remedy conferred by any of the specific
provisions of this Agreement is intended to be, nor shall be, exclusive of any
other remedy available at law, in equity or otherwise.
11.09 COUNTERPARTS AND INTERPRETATIONS. This Agreement may be executed
in any number of counterparts, each of which shall be an original; but all of
such counterparts shall together constitute one and the same instrument.
11.10 ATTORNEYS' FEES. In the event of any dispute between the parties
hereto in connection with the enforcement or interpretation of any terms of this
Agreement, the prevailing party in such dispute shall be entitled to recover
his, her or its reasonable attorneys' fees and costs.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Xxxx, Purchaser, Seller, Xxx. Xxxxxx and Xx.
Xxxxxx have duly executed this Agreement under seal as of the date first above
written.
XXXX:
Xxxx Communications Systems, Inc.
Attest: By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Title: Vice President
____________________ Address: 0000 Xxxxxxxxx Xxxx, XX
Its: ________________ Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxx
Facsimile: 000-000-0000
[CORPORATE SEAL]
PURCHASER:
Xxxx Communications of Indiana, Inc.
Attest: By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Title: President
____________________ Address: 0000 Xxxxxxxxx Xxxx, XX
Its: ________________ Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxx
Facsimile: 000-000-0000
[CORPORATE SEAL]
In the case of notice to Xxxx or Purchaser,
with a copy to:
Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
-42-
SELLER:
NEWS PRINTING COMPANY, INC.
Attest: By:/s/ Xxxx X. Xxxxxx
------------------------------------
Title: President
/s/ Xxxx X. Xxxxxx Address: 0000 Xxxxxx Xxxxxx
------------------------ Xxxxxx, Xxxxxxx 00000
Its: Secretary
------------------
Facsimile: (219)
-------------------
[CORPORATE SEAL]
XXXX XXXXXX:
/s/ Xxxx Xxxxxx (SEAL)
--------------------------------------
Xxxx Xxxxxx
Address: 0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Facsimile: (219)
------------------------
THE SHAREHOLDER:
/s/ Xxxx X. Xxxxxx (SEAL)
--------------------------------------
Xxxx Xxxxxx
Address: 0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Facsimile: (219)
------------------------
In the case of notice to Seller or either of
the Gemmers, with a copy to:
Xxxxxxx X. Xxxxxxx, Xx., Esq.
Xxxxxx Xxxxxxx Xxxxxxxx Xxxxxxxxxx Holderead
& Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
X. X. Xxx 000
Xxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
-43-