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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) October 24, 1995
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Media General, Inc.
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(Exact name of registrant as specified in its charter)
Virginia 1-6383 54-0850433
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
333 E. Grace St., Richmond, Virginia 23219
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 649-6000
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N/A
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
On October 26, 1995, Virginia Newspapers, Inc., a newly formed, wholly
owned subsidiary of Media General, Inc. (Company), acquired the real property,
equipment, furniture, and certain other assets and intangibles of several
Virginia newspapers from Worrell Enterprises, Inc., and its affiliates. Daily
and Sunday newspaper properties acquired included The Daily Progress in
Charlottesville, The News & Advance in Lynchburg, the Culpeper Star-Exponent in
Culpeper and the Suffolk News-Herald in Suffolk, with a combined circulation of
more than 81,000 daily and 85,000 Sunday. In addition, the acquisition included
a number of weekly, monthly, semimonthly and other publications in
Charlottesville, Culpeper, Suffolk and Richlands, and in Orange, Madison and
Greene counties. Associated printing facilities are located in Lynchburg,
Charlottesville, Suffolk, Culpeper, Orange, and Richlands, Virginia. The
Company intends to continue to use the purchased assets for the same or similar
purposes as previously used.
The purchase price for the assets was approximately $230 million, and was based
principally on a multiple of cash flow. The source of funds for the acquisition
consisted of (i) $190 million of borrowings under a five-year, $320 million
Revolving Credit Facility with Wachovia Bank, Crestar Bank, NationsBank, Toronto
Dominion Bank (New York), First Union Bank of North Carolina, Signet Bank, Sun
Trust Bank, and Sanwa Bank, (ii) $17 million of borrowings under an existing
bank demand line with Crestar Bank, and (iii) cash on hand of approximately $23
million.
At the time of funding the acquisition, the Company entered into three interest
rate swap agreements totaling $200 million with maturities of three to five
years effectively converting floating rate debt to fixed rate debt with a
weighted average interest rate of 6.25%.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The required historical financial statements of the business acquired will
be filed as soon as practicable but, in any case not later than January 8, 1996.
(b) Pro Forma Financial Statements of the Company
The required pro forma financial statements of the Company will be filed as
soon as practicable but, in any case not later than January 8, 1996.
(c) Exhibits
2. Asset Purchase Agreement (Agreement) dated September 14, 1995, by and among
Worrell Enterprises, Inc., Antibes, Inc., Culpeper Communications Corporation,
Central Virginia Newspapers, Inc., Jefferson Leasing Company, and Ivy Leasing
Company as Sellers and Media General, Inc., as Buyer. The schedules and similar
attachments to this Agreement are omitted in accordance with Item 601(b)(2) of
Regulation S-K. A listing of such schedules and similar attachments is included
with the Agreement and the Company hereby undertakes to supply the Commission
supplementally with a copy of any such schedules and similar attachments upon
request.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Media General, Inc.
November 7, 1995 /s/ Marshall N. Morton
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Marshall N. Morton
Senior Vice President and Chief
Financial Officer
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into this 14th
day of September, 1995, by and among Worrell Enterprises, Inc., a Delaware
corporation ("Worrell"), Antibes, Inc., a Delaware corporation ("Antibes"),
Culpeper Communications Corporation, a Virginia corporation ("Culpeper"),
Central Virginia Newspapers, Inc., a Virginia corporation ("CVN"), Jefferson
Leasing Company, a Virginia general partnership ("Jefferson"), and Ivy Leasing
Company, a Virginia corporation ("Ivy," and together with Worrell, Antibes,
Culpeper, CVN and Jefferson, "Sellers"); and Media General, Inc., a Virginia
corporation ("Buyer").
PRELIMINARY STATEMENTS
A. Sellers own and operate the publications and related assets
listed on Exhibit A attached hereto (the "Newspapers").
B. Buyer desires to acquire the ongoing businesses and all of the
assets owned by each Seller and used in connection with the operation of the
Newspapers at each of their respective locations (except assets specifically
excluded herein), and Sellers desire to sell such businesses and assets to
Buyer, upon the terms and conditions stated herein.
In consideration of the mutual covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
SALE AND TRANSFER
1.1. The Sale. Upon the terms and subject to the conditions set forth
in this Agreement, on the Closing Date (as defined in Section 3.1 hereof),
Sellers jointly and severally agree to sell, assign, transfer and deliver to
Buyer, and Buyer agrees to purchase and accept from Sellers, free and clear of
all liens, encumbrances, mortgages or security interests, except as expressly
permitted in Section 3.2(a), all of the assets and properties of Sellers,
whether real, personal, tangible or intangible, which are owned by Sellers and
used in connection with the Newspapers at each of their respective locations
(specifically excepting the Excluded Assets described in Section 1.2 hereof),
including all additions thereto through and including the Closing Date, but less
all dispositions thereof as permitted pursuant to Section 6.1 hereof through and
including the Closing Date, such assets and properties being referred to herein
as the "Assets", and including without limitation the following:
(a) Sellers' parcels of real property owned in fee and used in
the ownership or operation of the Newspapers, and all buildings, structures and
other improvements located thereon, and all easements, rights of way and similar
authorizations used in the conduct of the business and operations of the
Newspapers, including the parcels of real property owned in fee and easements,
rights of way and similar authorizations which are described in Section 4.12 of
a document delivered by Sellers to Buyer contemporaneously with the execution of
this Agreement (such document is referred to herein as the "Disclosure
Schedule");
(b) All of the tangible personal property which is owned and
used in the conduct of the business and operations of the Newspapers, including
furniture, fixtures, machinery, equipment and vehicles, including without
limitation, the tangible personal property listed in Section 4.13 of the
Disclosure Schedule;
(c) All contracts, agreements, options, leases (whether of
realty or personalty, but other than any lease by and between a Seller and
another Seller or any of its affiliates, which shall be terminated as of Closing
in accordance with Section 3.2(g) hereof) and commitments of Sellers which are
related to the conduct of the business and operations of the Newspapers, whether
oral or written, express or implied, including leases of property used in the
operations of the Newspapers, rights and interests in and under purchase
contracts for new equipment, including purchase price deposits, advertising
sales and newspaper distribution contracts, supplier contracts, advertising
service contracts and all service and feature or other information provider
contracts, and which either (i) are listed in Section 4.7 of the Disclosure
Schedule; (ii) are advertising contracts entered into in the ordinary course of
business at published rates and on a form substantially the same as one of the
forms included in Section 4.7 of the Disclosure Schedule; (iii) are news carrier
contracts entered into in the ordinary course of business and on a form
substantially the same as the form included in Section 4.7 of the Disclosure
Schedule; (iv) are other contracts which were entered into in the ordinary
course of business consistent with past practice and do not involve monetary
obligations individually or in the aggregate of more than Fifty Thousand Dollars
($50,000) per annum; or (v) are entered into after the date hereof in the
ordinary course of business in accordance with Section 6.1 hereof or with the
prior written consent of Buyer (all of such contracts, agreements, options,
leases or commitments are sometimes referred to herein collectively as the
"Contracts");
(d) All orders for the sale of advertising and subscriptions
which relate to the Newspapers;
(e) All permits, licenses and authorizations issued by local,
state and federal authorities, and applications therefor, which are held by any
Seller or any Newspaper, that are used in the conduct of the business of any
Newspaper, including those set forth in Section 4.11 of the Disclosure Schedule
(all of such licenses, permits and authorizations are sometimes collectively
referred to herein as the "Licenses");
(f) All mastheads, trade names, trademarks, service marks,
service names and other similar intangible rights and interests, and the
goodwill associated therewith, which are used or useful in connection with the
business and operations of the Newspapers;
(g) All artwork, copyrights and other ownership rights related
to the contents of the Newspapers, all copies of previously published editions
of the Newspapers, the Newspapers' morgue or library and copies of all material
files, financial information and all accounting records relating to the assets
or operations of the Newspapers and located at any offices or facilities of the
Newspapers, including without limitation any current financial data with respect
to the Newspapers, together with computer print-outs thereof containing all
current and historical financial information (including state income tax returns
relating to the Newspapers and sales, use and property tax returns for the
Newspapers) maintained by Sellers with respect to the Newspapers (separate from
any such data maintained for any other publications of Sellers) and all related
intellectual property;
(h) All prepaid taxes and expenses with respect to the business
and operations of the Newspapers;
(i) All inventories of newsprint, ink, film, photographic paper
and plates, spare parts, supplies, fuel and other consumable items used or
useful in connection with the business and operations of the Newspapers;
(j) All surety bonds, surety deposits and security deposits
posted by or on behalf of Sellers as security for its or the Newspapers'
performance of any Contract or obligation to be assumed by Buyer pursuant to
this Agreement;
(k) All cash bonds and trust accounts related to carriers for
the Newspapers;
(l) All subscriber, advertiser and trade accounts receivable due
to Sellers as a result of the business and operations of the Newspapers prior to
the Closing Date;
(m) Sellers' records, files and data used in the business and
operations of the Newspapers, including maps, plans, diagrams, engineering data,
blueprints and schematics, if any; and
(n) All other assets owned by Sellers and used in the business
and operations of the Newspapers not specifically referred to above.
1.2. Excluded Assets. Notwithstanding anything contained herein to
the contrary, the following properties and assets (the "Excluded Assets") shall
be retained by Sellers and shall not be sold, assigned or transferred to Buyer:
(a) all of Sellers' cash in their respective bank accounts;
(b) Sellers' notes, accounts and other claims receivable of any
Seller from any affiliate of such Seller as set forth on Section 1.2 of the
Disclosure Schedule;
(c) any Employee Plan, Compensation Arrangement or
Multi-employer Plan (all as defined below in Section 1.3);
(d) contracts for acquisition of newsprint;
(e) the assets of the "Electric Knowledge" division of Worrell
("Electric Knowledge"), as set forth on Section 1.2 of the Disclosure Schedule;
and
(f) the other assets described on Section 1.2 of the Disclosure
Schedule.
1.3. Assumption of Obligations and Liabilities. As of the Closing
Date, Buyer shall assume, pay, discharge and perform according to Section 1.3 of
the Disclosure Schedule the following:
(a) all the obligations and liabilities of Sellers under the
Contracts (i) determined in accordance with generally accepted accounting
principles consistently applied ("GAAP"), attributable to the period after 12:01
a.m. on the Closing Date (the "Adjustment Time"), and (ii) which, by the terms
thereof, are to be observed, paid, discharged or performed, as the case may be,
at any time after the Adjustment Time;
(b) all obligations and liabilities (other than those relating
to any contract or agreement which is not a Contract) arising out of any fact or
circumstance which relates to the ownership and operation of the Newspapers and
the Assets and which occurs after the Adjustment Time;
(c) all of Sellers' obligations for future performance to
subscribers to the Newspapers;
(d) contracts for the acquisition of ink, film, photographic
paper and plates, spare parts, supplies, fuel and other consumable items either
listed in Section 1.3 of the Disclosure Schedule or included in the Contracts
but not required to be listed in Schedule 4.7 of the Disclosure Schedule but
only with respect to obligations and liabilities thereunder which in accordance
with GAAP are attributable to the period after the Adjustment Time; and
(e) other liabilities, determined in accordance with GAAP,
listed in Section 1.3 of the Disclosure Schedule.
Other than as specified herein, or in the Assignment and Assumption
Agreement (the "Assumption Agreement") in the form annexed hereto as Exhibit B,
Buyer shall not, nor shall it have the obligation to assume, pay, perform,
discharge or be responsible or liable for, any obligations, duties, claims,
commitments, expenses, agreements or other liabilities of any Seller or relating
to any Newspaper that either are by the terms thereof payable during, or are
attributable in accordance with GAAP to, the period prior to the Adjustment
Time, which obligations, duties and liabilities shall remain the obligations,
duties and liabilities of Sellers. Without limiting the generality of the
foregoing, Buyer shall not be liable for any obligation under any Employee Plan,
Compensation Arrangement, Multi-employer Plan or any obligation to employees of
the Newspapers to pay wages, commissions, salaries, bonuses, severance, accrued
sick leave, accrued vacation (except as set forth in Section 6.3(b)) or any
other form of employee compensation or benefits earned, vested or accrued prior
to the Adjustment Time or arising out of the transactions contemplated by this
Agreement (except as set forth in Section 6.3(c)), including without limitation,
any such compensation or benefits arising out of the termination of employment
of any employee of the Newspapers resulting from the transactions contemplated
by this Agreement.
The following definitions shall be used in this Agreement:
(i) "Compensation Arrangement" shall mean any plan or
compensation arrangement other than an Employee Plan, whether written or
unwritten, which provides to employees or former employees of the Newspapers any
compensation or other benefits, whether deferred or not, in excess of base
salary or wages and excluding overtime pay, including, but not limited to, any
bonus or incentive plan, stock rights plan, deferred compensation arrangement,
life insurance, stock purchase plan, severance pay plan and any other
perquisites and employee fringe benefit plan.
(ii) "Employee Plan" shall mean any pension, retirement,
profit-sharing, deferred compensation, vacation, severance, bonus, incentive,
medical, vision, dental, disability, life insurance or any other employee
benefit plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to which the Sellers or any entity
related to any Seller (under the terms of Sections 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986, as amended (the "Code")) contributes or to
which the Sellers or any entity related to any Seller (under the terms of
Sections 414(b), (c), (m) or (o) of the Code), sponsors, maintains or otherwise
is bound.
(iii) "Multi-employer Plan" shall mean a plan, as
defined in ERISA Section 3(37), to which the Sellers or any entity related to
any Seller (under the terms of Sections 414(b), (c), (m) or (o) of the Code)
contributes or is required to contribute.
ARTICLE 2
PURCHASE PRICE CLOSING ADJUSTMENTS
2.1. Purchase Price and Covenants Not to Compete.
(a) In consideration of Two Hundred Twenty-Six Million Two
Hundred Forty-Six Thousand and Six Hundred Forty Dollars ($226,246,640)(the
"Purchase Price"), Sellers agree to sell, transfer and assign the Assets to
Buyer, Sellers (except for Jefferson) agree to enter into the Covenants Not to
Compete, substantially in the form of Exhibit C attached hereto (the "Covenants
Not to Compete"), and the Sellers agree to cause Thomas Worrell, Jr. to execute
a Covenant Not to Compete.
(b) The Purchase Price shall be payable by wire transfer in
immediately available funds payable at Closing (as hereinafter defined) to a
bank account to be designated by Seller.
2.2. Working Capital Settlement.
(a) For purposes of this Agreement, the following terms shall
have the following meanings:
(i) "Liabilities" shall be those liabilities of the
Newspapers which are to be assumed or discharged by Buyer and are listed on
Section 2.2 of the Disclosure Schedule, all of which shall be reflected on the
Pre-Closing Statement of Liabilities and Assets (defined in Section 2.2(b)
below) and Closing Date Statement of Liabilities and Assets (defined in Section
2.2(e) below), except each such statement shall exclude one-half of the
liabilities of the Newspapers listed on Section 2.2 of the Disclosure Schedule
for subscriptions paid in advance which are outstanding as of the date of such
statement.
(ii) "Current Assets" shall be the following, determined in
accordance with GAAP:
(A) the face amount of trade accounts receivable which
are less than 91 days old as of the Closing Date;
(B) All prepaid expenses of the Sellers, other than
prepaid insurance and prepaid audit fees;
(C) Inventory of the Sellers valued at the lower of
cost or market on a first-in-first-out (FIFO) basis, but excluding such items
which are not usable in the business of Newspapers, which exclusion shall
include, without limitation, damaged or obsolete rolls, colors and weights of
newsprint;
(D) Deposits classified as current assets, valued at
the lower of cost or market; and
(E) All other current assets of the Newspapers, valued
at the lower of cost or market.
(iii) "Working Capital Deficit" shall mean the amount by
which the Liabilities exceed the Current Assets.
(iv) "Working Capital Surplus" shall mean the amount by
which the Current Assets exceed Liabilities.
(b) At least ten (10) days prior to the Closing Date, Sellers
shall prepare and deliver to the Buyer a Statement of Liabilities and Assets as
of the end of the last calendar month prior to the Closing Date (the "Pre-
Closing Statement of Liabilities and Assets") for the Newspapers. The chief
financial officer of Worrell shall certify that such Pre-Closing Statement of
Liabilities and Assets has been prepared in accordance with subsection 2.2(a)
above.
(c) Prior to, or as of the Closing, Sellers shall (i) cause all
liabilities of the Newspapers not included in the Pre-Closing Statement of
Liabilities and Assets and/or Closing Date Statement of Liabilities and Assets,
or not otherwise expressly assumed by Buyer at the Closing, to be discharged in
full, at no cost or expense to Buyer or the Newspapers; or (ii) if not so
discharged, Sellers shall retain all responsibility and obligation for such
liabilities.
(d) At the Closing, in the event that the Pre-Closing Statement
of Liabilities and Assets has a Working Capital Deficit, Sellers shall remit to
Buyer by wire transfer at the Closing an amount equal to such deficit.
Conversely, in the event that the Pre-Closing Statement of Liabilities and
Assets has a Working Capital Surplus, Buyer shall remit to Sellers by wire
transfer at the Closing an amount equal to such surplus.
(e) Within sixty (60) days after the Closing, Buyer shall
prepare (with the full co-operation and assistance of Sellers, to the extent
requested by Buyer) a Statement of Liabilities and Assets as of the Adjustment
Time (the "Closing Date Statement of Liabilities and Assets"), which statement
shall be prepared in accordance with subsection 2.2(a) above, and submit such
statement to Sellers for review and approval.
(f) Within fifteen (15) days after receipt of the Closing Date
Statement of Liabilities and Assets, Sellers shall notify Buyer of any
objections Sellers may have to the Closing Date Statement of Liabilities and
Assets. In the absence of any such objections, Sellers shall be deemed to have
approved the Closing Date Statement of Liabilities and Assets for purposes of
the adjustment to be made pursuant to this subsection 2.2(f). If Sellers notify
Buyer of any such objections, Buyer and Sellers shall attempt to resolve such
objections in good faith for a period of fifteen (15) days from the date of such
notice of objections. If any objections of Sellers cannot be resolved by
Sellers and Buyer within such fifteen (15) day period, such dispute shall
immediately be referred to a mutually satisfactory independent certified public
accounting firm of national reputation which has not been employed by any of
Sellers or Buyer during the one year period preceding the date of such referral,
and which has agreed to meet the time deadlines imposed herein. The
determination of such firm with respect to such dispute, which shall occur on or
prior to ninety (90) days after Sellers' receipt of the Closing Date Statement
of Liabilities and Assets, shall be conclusive and binding on Sellers and Buyer.
Sellers, on the one hand, and Buyer, on the other, shall each pay one-half of
the fees of such firm.
(g) If, based on the Closing Date Statement of Liabilities and
Assets as finally approved, it is determined that the amount, if any, paid by
the Buyer at the Closing in accordance with subsection 2.2(d) should have been
more or less than what was paid on the Closing Date, then within ten (10) days
of the final approval of Closing Statement of Liabilities and Assets in
accordance with subsection 2.2(f), Buyer or Sellers, respectively, shall pay to
the other the amount of such underpayment or overpayment.
ARTICLE 3
THE CLOSING
3.1. Time and Place of Closing. Subject to (a) satisfaction or, to
the extent permissible by law, waiver (by the party for whose benefit the
closing condition is imposed), on the Closing Date of the closing conditions
described in Articles 7, 8 and 9, and (c) the provisions of Article 11 hereof,
the closing of the transactions contemplated by this Agreement (the "Closing")
shall take place at the offices of Dow, Lohnes & Albertson, 1255 Twenty-third
Street, N.W., Washington, D.C. or at such other place as the parties shall
mutually agree, at 10:00 a.m., local time, on a date (the "Closing Date") that
shall be a business day, specified by written notice from Buyer to Sellers,
which date shall be not less than 10 days nor more than 30 days after the
satisfaction of the conditions precedent set forth in Article 7 and Section 8.7
hereof, or as shall otherwise be mutually agreed upon by Sellers and Buyer. In
no event shall the Closing take place later than November 30, 1995 (the
"Termination Date"); provided that if the only condition to Closing not
satisfied as of such date is the condition contained in Article 7, the
Termination Date automatically shall be extended to the earlier of five (5)
business days after the satisfaction of such condition and July 1, 1996.
3.2. Deliveries by Sellers. At the Closing, Sellers shall deliver to
Buyer the following:
(a) Deeds to the parcels of real property owned by Sellers in
fee to be transferred to Buyer hereunder, in accordance with local practice and
subject to and consistent with the representations and warranties set forth
herein, together with bills of sale of personal property, assignments and other
instruments of transfer and conveyance, transferring and assigning to Buyer the
Assets, free and clear of all liens, mortgages, pledges and encumbrances other
than for (i) real estate taxes not yet due and payable and (ii) easements,
rights of way, mineral rights or other restrictions and encumbrances relating to
real property, which are either of record or which individually or in the
aggregate do not materially and adversely affect or interfere with the use of
such real property in the business and operations of the Newspapers
(collectively, "Permitted Liens");
(b) The Assumption Agreement;
(c) The opinions, certificates, consents and other documents
contemplated by Article 8 hereof;
(d) The Covenants Not to Compete, executed by each Seller
(except Jefferson) and certain affiliates of Sellers which are parties thereto;
(e) A Space Lease Agreement with respect to office space to be
utilized by Electric Knowledge in the form of Exhibit D attached hereto (the
"Space Lease Agreement"), executed by Worrell;
(f) A System License and Maintenance Agreement in the form of
Exhibit E attached hereto (the "System License and Maintenance Agreement"),
executed by Worrell;
(g) Agreements terminating any and all leases between a Seller
and another Seller or any of its affiliates with respect to the business and
operations of the Newspapers; and
(h) All other documents, certificates, instruments and writings
expressly required hereunder to be delivered by Sellers at or prior to the
Closing or which the Buyer reasonably may request.
3.3. Deliveries by Buyer. At the Closing, Buyer shall deliver to
Sellers and/or the Escrow Agent the following:
(a) Funds equal to the Purchase Price;
(b) The opinions, certificates and other documents contemplated
by Article 9 hereof;
(c) The Assumption Agreement;
(d) The Covenants Not to Compete, executed by Buyer;
(e) The Space Lease Agreement, executed by Buyer;
(f) The System License and Maintenance Agreement, executed by
Buyer; and
(g) All other documents, certificates, instruments and writings
expressly required hereunder to be delivered by Buyer at or prior to the Closing
or which Sellers reasonably may request.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers jointly and severally represent and warrant to Buyer as
follows:
4.1. Organization. Each Seller is a corporation duly incorporated, or
partnership duly formed, and validly existing under the laws of its state of
incorporation or organization. Each Seller has all requisite corporate or
partnership power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Each Seller is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified would not have a material
adverse effect on the business, assets, financial condition or results of
operations of the Newspapers taken as a whole (a "Material Adverse Effect").
Each Seller has delivered to Buyer true and correct copies of its articles of
incorporation and bylaws, or partnership agreement, as applicable, as amended to
date.
4.2. Authority Relative to this Agreement. Each Seller has the full
corporate or partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly and validly authorized and approved by all
necessary corporate or partnership action by each Seller. This Agreement has
been duly and validly executed and delivered by each Seller and, assuming this
Agreement constitutes a legal, valid and binding agreement of Buyer, constitutes
a legal, valid and binding agreement of such Seller, enforceable against each
Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general principles of
equity.
4.3. Noncontravention; Consents and Approvals.
(a) Except as set forth in Section 4.3(a) of the Disclosure
Schedule, assuming that all filings, permits, authorizations, consents and
approvals or waivers thereof have been duly made or obtained pursuant to Section
4.3(b), the execution and delivery of this Agreement by each Seller and the
consummation by each Seller of the transactions contemplated hereby will not (i)
conflict with or result in any breach of any provisions of the certificate or
articles of incorporation or bylaws, or partnership agreement, of such Seller,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture or other evidence or
instrument of, or agreement relating to, indebtedness to which any Seller is a
party or by which it or any of its properties or assets are bound, (iii) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation, or acceleration) under, any of the terms, conditions or provisions
of any license, agreement or other instrument or obligation to which any Seller
is a party or by which it or any of its properties of assets is bound, or (iv)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to such Seller or any of its properties or assets, excluding from the
foregoing clauses (ii), (iii) and (iv) violations, breaches or defaults that
would not, individually or in the aggregate, (A) reasonably be expected to have
a Material Adverse Effect or (B) impair any Seller's ability to consummate the
transactions contemplated hereby.
(b) Except for those consents and approvals as set forth on
Section 4.3(b) of the Disclosure Schedule (the "Required Consents"), no filing
or registration with, or notification to, and no permit, authorization, consent
or approval of, any governmental entity is necessary for the execution and
delivery of this Agreement by any Seller or the consummation by each Seller of
the transactions contemplated by this Agreement except (i) in connection with
the applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), and (ii) such filings, registrations,
notifications, permits, authorizations, consents or approvals that result solely
from the specific legal or regulatory status of Buyer or as a result of any
other facts that specifically relate to the business or activities in which
Buyer is engaged.
4.4. Financial Statements. Sellers have furnished Buyer, with respect
to the Newspapers, (i) unaudited balance sheets as of December 31, 1994,
December 31, 1993 and December 31, 1992, and statements of income for the years
then ended, prepared in accordance with GAAP, and (ii) an unaudited balance
sheet as of July 31, 1995 and an unaudited statement of income for the seven (7)
months then ended (collectively, the "Financial Statements"). Except as
disclosed in Section 4.4 of the Disclosure Schedule, the Financial Statements
fairly present the results of operations and balance sheets of the Newspapers
for the periods and as of the dates set forth in accordance with GAAP (subject
to the absence of statements of cash flows and footnotes). In addition, Sellers
have furnished Buyer, with respect to the Newspapers, as Section 4.4 of the
Disclosure Schedule, a computation of operating cash flow for the Newspapers for
the twelve months ended July 31, 1995, and each Seller hereby certifies that
such unaudited computation of operating cash flow for such twelve month period
has been prepared in accordance with the methodology set forth in the worksheet
included in Section 4.4 of the Disclosure Schedule, and represents a true and
fair presentation of the operating cash flows of the Newspapers for such twelve
month period.
4.5. Undisclosed Liabilities. There is not any obligation or
liability with respect to the Newspapers or the Assets, except: (i) as set forth
in Section 4.5 of the Disclosure Schedule, (ii) such liabilities and obligations
that are reflected in the Financial Statements, (iii) liabilities listed in
Section 1.3 or in Section 1.3 of the Disclosure Schedule or (iv) such
liabilities and obligations that were incurred after July 31, 1995 in the
ordinary course of business consistent with past practice, and which do not
individually or in the aggregate exceed Fifty Thousand Dollars ($50,000).
4.6. Absence of Certain Changes. Except as disclosed in Section 4.6
of the Disclosure Schedule, since December 31, 1994, Sellers have conducted the
business of the Newspapers only in the ordinary course of business consistent
with past practice, and there has not been (i) any material adverse change in
the financial condition, properties, business or results of operations of the
Newspapers, taken as a whole; (ii) any material change by the Sellers in
accounting principles, practices or methods of the Newspapers; (iii) any
material increase in the number of employees of the Newspapers or any material
increase, individually or in the aggregate, in the rate or terms of compensation
payable to or to become payable to employees of the Newspapers; (iv) any
material modifications in employee benefits to the employees of the Newspapers;
(v) entry into, termination of (except by reason of the occurrence of a
contractually specified termination date) or material amendment to any contract
or commitment or license or permit material to the business of the Newspapers,
except for the entry into advertising contracts at published rates on a form
substantially the same as one of the forms included in Section 4.7 of the
Disclosure Schedule or the entry into news carrier contracts on a form
substantially the same as the form included in Section 4.7 of the Disclosure
Schedule; (vi) any creation of or assumption of any mortgage, pledge or other
lien or encumbrance upon any of the Assets other than Permitted Liens;(vii) any
sale, assignment, lease, transfer or other disposition of any material assets of
any of the Newspapers; (viii) entry into any agreement pursuant to which the
aggregate annual financial obligation of the Newspapers may exceed Fifty
Thousand Dollars ($50,000), or which is not terminable by the Newspapers without
penalty upon ninety (90) days' notice or less, except for the entry into
advertising contracts at published rates on a form substantially the same as one
of the forms included in Section 4.7 of the Disclosure Schedule; (ix) any
commitment to make any purchase or sale of any inventories except in the
ordinary course of business consistent with past practice; (x) any commitment in
excess of Fifty Thousand Dollars ($50,000) for any capital expenditure for which
Buyer shall have any financial obligation to discharge subsequent to Closing; or
(xi) any other material transaction not in the ordinary course of business
consistent with past practice.
4.7. Certain Contracts and Arrangements. All Contracts to which any
Seller is a party with respect to the Newspapers are either (i) listed in
Section 4.7 of the Disclosure Schedule; (ii) are advertising contracts entered
into in the ordinary course of business at published rates and on a form
substantially the same as one of the forms included in Section 4.7 of the
Disclosure Schedule; (iii) are news carrier contracts entered into in the
ordinary course of business and on a form substantially the same as the form
included in Section 4.7 of the Disclosure Schedule; or (iv) entered into in the
ordinary course of business consistent with past practice and do not involve
monetary obligations individually or in the aggregate of more than Fifty
Thousand Dollars ($50,000) per annum. Except as set forth in Section 4.7 of the
Disclosure Schedule, there is not, under any of the Contracts, any (A) existing
default, (B) event of default or (C) other event which, with or without due
notice or lapse of time or both, would constitute a default or event of default
on the part of any Seller or any Newspaper which would, individually or in the
aggregate, have a Material Adverse Effect.
4.8. Litigation. Except as set forth on Section 4.8 of the Disclosure
Schedule, there are no legal, administrative, arbitration or other proceedings
or governmental investigations pending against any Seller, the Newspapers or the
Assets that may impair the ability of any Seller to consummate transactions
contemplated by this Agreement. To the knowledge of any Seller, except as set
forth on Section 4.8 of the Disclosure Schedule, there are no such proceedings
or investigations threatened against any Seller, the Newspapers or the Assets
that may have a Material Adverse Effect or may impair the ability of any Seller
to consummate the transactions contemplated by this Agreement.
4.9. Labor Matters; Personnel Data.
(a) Except as set forth in Section 4.9 (a) of the Disclosure
Schedule, neither Seller nor any Newspaper is a party to any collective
bargaining agreement or any other union labor agreement covering or relating to
any of the employees of the Newspapers, or has recognized, agreed to recognize
or received a demand for recognition of any collective bargaining representative
with respect thereto. No collective bargaining representative has been
certified as representing any of the employees of the Newspapers. To Sellers'
knowledge, there is no union organizing activity underway or threatened relating
to any of the employees of the Newspapers. There are no strikes, work
stoppages, work slowdowns, picketing or any other labor dispute in effect or, to
Sellers' knowledge, threatened against any Seller or any Newspaper. Sellers
have materially complied with all applicable laws and regulations with respect
to the employment of labor, including without limitation, those related to
wages, hours, collective bargaining, occupational safety, discrimination, and
the payment of Social Security or similar payroll taxes. There are no unfair
labor practices claims or charges pending or, to the best of Sellers' knowledge,
threatened, involving any Seller or any Newspaper.
(b) Section 4.9(b) of the Disclosure Schedule lists the names,
titles and current rates of pay or total annual compensation of all persons
employed by any Seller or any Newspaper in connection with the business or
operations of any Newspaper or the Assets. Except as set forth in
Section 4.9(b) of the Disclosure Schedule, none of the Sellers and none of the
Newspapers has any employment agreement of any kind, oral or written, express or
implied, that would require Buyer to employ any employee of the Sellers or the
Newspapers after the Adjustment Time. Sellers have provided Buyer with a true
and correct copy of each employee handbook and employment policy applicable to
any of the employees of the Newspapers.
(c) Sellers do not contribute to and are not required to
contribute to any Multi-employer Plan with respect to their employees, and
neither the Sellers nor any other trade or business under common control with
any Seller (within the meaning of Section 414(b), (c), (m) or (o) of the Code)
has incurred or reasonably expects to incur any "withdrawal liability," as
defined under Section 4201 et. seq. of ERISA.
4.10. Taxes.
(a) Except as set forth in Section 4.10 of the Disclosure
Schedule and except for Federal and state income tax returns for which the
filing dates have been lawfully extended, all tax returns, reports, statements
and other similar filings required to be filed by each Seller with respect to
the Newspapers (collectively, "Tax Returns") with respect to any taxes,
assessments, interest, penalties, deficiencies, fees and other governmental
charges or impositions (including without limitation all income tax,
unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school and any other tax or
similar governmental charge or imposition under laws of the United States or any
state or municipality or political subdivision thereof or any foreign country or
political subdivision thereof) (collectively, "Taxes") have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed. All Taxes, including without limitation those that are
called for by the Tax Returns, or heretofore claimed to be due by any taxing
authority from any Seller, have been properly accrued or paid. No Seller has
received any notice of assessment or proposed assessment in connection with any
non-income Tax Returns and there is not any pending tax examination of or tax
claim asserted against any Seller or any of its assets or properties. Except as
set forth in Section 4.10 of the Disclosure Schedule and except for Federal and
state income taxes, no Seller has extended, or waived the application of, any
statute of limitations of any jurisdiction regarding the assessment or
collection of any Taxes. There are no tax liens (other than any lien for
current taxes not yet due and payable) on any of the assets or properties of any
Seller. Sellers have no knowledge of any basis for any additional assessment of
any Taxes. There is not, and there will not be, any liability for any Taxes
arising out of, or attributable to, or affecting the Assets or the Newspapers
through the Adjustment Time, or attributable to the conduct of the operations of
Sellers at any time for which Buyer will have any liability for payment or
otherwise. There does not exist any liability for Taxes (except for sales, use,
property and transfer taxes, if any, incident to the consummation of the
transactions contemplated herein) which may be asserted by any taxing authority
against the Assets or the business and operations of the Newspapers, and no lien
or other encumbrance for Taxes has attached or, to Seller's knowledge, could
attach to the Assets or the operations of the Newspapers. No Seller is a
"United States real property holding corporation" within the meaning of Section
897 of the Code.
4.11. Licenses and Authorizations. Section 4.11 of the Disclosure
Schedule lists all Licenses. All the Licenses are in full force and effect,
with no material violations of any of them having occurred or, to the knowledge
of any Seller, alleged to have occurred, and with no proceedings pending or, to
the knowledge of any Seller, threatened, that would have the effect of revoking
or limiting or affecting the transfer or renewal of any of the Licenses. Except
as set forth in Section 4.11 of the Disclosure Schedule, (a) the Licenses are
not subject to any restrictions or conditions that would limit the business of
any Newspaper as presently conducted and (b) there are no applications by any
Seller or complaints by others pending or threatened in writing before any
governmental agency relating to any Seller or any Newspaper.
4.12. Title to Real Property. Section 4.12 of the Disclosure
Schedule lists all real property currently owned or leased by any Seller in
connection with the business or operations of the Newspapers. With respect to
such leased property, Section 4.12 of the Disclosure Schedule describes which
leased property is leased by a Seller from another Seller or any of its
affiliates and which leased property is leased by a Seller from a third party
which is not a Seller or any of its affiliates. Except with respect to any
leased property leased by a Seller from a third party which is not a Seller or
any of its affiliates or as set forth in Section 4.12 of the Disclosure
Schedule, Sellers have good and marketable fee simple title to all of such owned
and leased real property free and clear of all liens, mortgages, pledges and
encumbrances whatsoever other than Permitted Liens. No condemnation of any such
real property has occurred, is pending or, to the knowledge of any Seller, is
threatened. Sellers have delivered to Buyer true and complete copies of all
leases listed in Section 4.12 of the Disclosure Schedule, all of which are valid
and binding on the Seller party thereto and with respect to which such Seller is
not in default. The approximate 5.2 acres owned by Sellers in Lynchburg and
which will be conveyed to Buyer pursuant to this Agreement is currently zoned
for B-5 uses. The remaining real property owned by Sellers located in
Lynchburg, Virginia which is approximately 50 acres is currently zoned for R-1
uses. No Seller has any plans, nor is any Seller aware of any pending proposal
of any third party, to develop either parcel of such property in a manner
inconsistent with its current zoning or to change or seek to change such current
zoning. The Lynchburg facilities and all Lynchburg operations are located on a
lot separate from Sellers' other Lynchburg real estate holdings, and such lot
can be conveyed by Sellers to Buyer without further subdivision or any other
governmental action or consent.
4.13. Title to Personal Property. Section 4.13 of the Disclosure
Schedule lists all tangible personal property owned or leased by any Seller in
connection with the business and operations of any Newspaper, other than assets
with an original cost of less than Five Hundred Dollars ($500) individually.
Such tangible personal property includes all tangible personal property owned or
leased by any Seller in connection with the business or operations of the
Newspapers as of March 31, 1995, except for assets with an original cost of less
than Five Hundred Dollars ($500) individually, and except as set forth on
Section 4.13 of the Disclosure Schedule, where any transfer or disposition of
any such tangible personal property is specifically described. With respect to
such leased property, Section 4.13 of the Disclosure Schedule describes which
leased property is leased by a Seller from another Seller or any of its
affiliates and which leased property is leased by a third party which is not a
Seller or any of its affiliates. Except with respect to any leased property
leased by a Seller from a third party which is not a Seller or any of its
affiliates, or as set forth in Section 4.13 of the Disclosure Schedule, Sellers
own and have good and valid title to such properties, free and clear of all
liens and encumbrances, other than Permitted Liens. Sellers have delivered to
Buyer true and complete copies of all leases and other agreements or documents
affecting the properties listed in Section 4.13 of the Disclosure Schedule, all
of which are valid and binding on the applicable Seller, and with respect to
which such Seller is not in default.
4.14. Inventories and Other Assets.
(a) Except as set forth on Section 4.14 of the Disclosure
Schedule, the value at which the inventories of the Newspapers is booked
appropriately reflects the value of all items that are below standard quality,
damaged, obsolete or of a quantity or quality not usable or suitable in the
ordinary course of the business of the Newspapers.
(b) The amount of inventory of the Newspapers on the Closing
Date will be sufficient to permit the continued maintenance and operation of the
business and operations conducted by the Newspapers for a period of at least
five (5) days.
(c) Except as disclosed in Section 4.14 of the Disclosure
Schedule, the buildings, plant, structures and equipment owned by each Seller
and used in the business of the Newspapers are structurally sound with no known
defects and are in operating condition and repair, normal wear and tear excepted
in consideration for age of each asset, and none of such buildings, plant,
structures and equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost.
4.15. Accounts Receivable. All of the trade accounts receivable
of each Newspaper are valid and genuine and were acquired or arose in the
ordinary course of business consistent with past practice. Sellers make no
representations or warranty with respect to the collectibility of such accounts
receivable.
4.16. Intellectual Property. All registered trademarks,
registered copyrights, patents or patent applications owned by any Seller with
respect to the Newspapers or otherwise included within the Assets are listed in
Section 4.16 of the Disclosure Schedule. Sellers have the right to use all
patents, trademarks, trade names, and copyrights as the Newspapers presently use
them. To the knowledge of each Seller, no patent, trademark, trade name, or
copyright used by any Newspaper or otherwise included within the Assets is the
subject of any infringement action or action seeking to deny, modify or revoke
any registration or application therefor or renewal thereof. Each Newspaper is
entitled to use all designs, processes and licenses and all other industrial
property or intellectual property rights used by it, and except as disclosed in
Section 4.16 of the Disclosure Schedule, no Seller has granted to any third
party any right, title or interest in or to any such intellectual property.
4.17. Circulation and Advertising Linage. Section 4.17 of the
Disclosure Schedule sets forth the paid circulation as of December 31, 1994, and
August 31, 1995, for each of the Newspapers which has paid circulation. There
has been no material decline in paid circulation for any of such Newspapers with
paid circulation since August 31, 1995. Section 4.17 of the Disclosure Schedule
sets forth circulation as of December 31, 1994, and August 31, 1995 for each of
the Newspapers which does not have a paid circulation. There has been no
material decline in circulation for any of such Newspapers since August 31,
1995. Section 4.17 of the Disclosure Schedule includes a description of the
monthly advertising linage sold for each Newspaper for the twelve-month period
ending December 31, 1994, and for the eight (8) month period ending August 31,
1995.
4.18. Postal Permits. All reports filed with the United States
Postal Service in connection with any Second-Class Mail postal permit applicable
to any Newspaper were true and correct in all material respects at the time of
filing. True and complete copies of all such reports for second class postage
qualification filed in October 1994 have previously been furnished to Buyer.
4.19. ABC Reports. All reports filed with the Audit Bureau of
Circulation ("ABC") during the preceding three years in connection with the
Newspapers which are audited by the ABC were true and correct in all material
respects at the time of filing. True and complete copies of all such reports for
the past year which have been filed by such Newspapers with ABC have previously
been furnished to Buyer.
4.20. Legal Advertisements. All the Newspapers which can qualify
are qualified under Virginia law to accept and publish legal notices required by
the governmental units described in Section 4.20 of the Disclosure Schedule.
4.21. Environmental Laws.
(a) Except as disclosed in Section 4.21 of the Disclosure
Schedule, (i) Sellers' operations with respect to the Newspapers, and all Real
Property owned or leased by Sellers in connection with the Newspapers,
materially comply with all applicable Environmental Orders and Laws (as defined
in Section 6.6), (ii) none of Sellers' operations on such Real Property is
subject to any judicial or administrative proceeding alleging the violation of
any Environmental Order or Law, (iii) to Sellers' knowledge, none of such Real
Property is the subject of any federal or state investigation concerning any use
or release of any Hazardous Material (as defined in Section 6.6), (iv) neither
the Sellers nor, to Sellers' knowledge, any predecessor-in-title to such Real
Property has filed any notice under federal or state law indicating past or
present treatment, storage or disposal of a hazardous waste or reporting a spill
or release of a Hazardous Material into the environment, (v) Sellers have no
contingent liability in connection with any release of any Hazardous Material
into the environment and no release which could require remediation has
occurred, (vi) none of Sellers' operations on such Real Property involves the
generation, transportation, treatment, storage or disposal of Hazardous
Materials of "Reportable Quantity" (as defined by the Comprehensive
Environmental Response Compensation Liability Act, as amended, 42 U.S.C.
Section 9601, et seq. ("CERCLA")), and (vii) except in accordance with all
requirements of law, Sellers have not disposed of any Hazardous Material of
Reportable Quantity in, on or about such Real Property and, to Sellers'
knowledge, neither has any lessee, prior owner or other person. Notwithstanding
the foregoing, the representation and warranties of Sellers contained in this
Section 4.21 with respect to such Real Property leased by Sellers from any
Person other than another Seller or any affiliate of another Seller relating to
periods prior to the applicable Seller's leasing thereof, are being given only
to the best knowledge of Sellers.
(b) No surface impoundments or underground storage tanks are
located in, on or about such Real Property, and no surface impoundments have
ever existed on such Real Property. All underground storage tanks which have
been removed from such Real Property have been removed in material compliance
with all then and currently applicable Environmental Orders and Laws (as defined
in Section 6.6).
4.22. Compliance with Laws. Each Seller has materially complied,
and is in material compliance with, all applicable laws relating to ownership,
leasing and operation of the Assets and the conduct of the business of the
Newspapers.
4.23. Relationships with Affiliates. Except as set forth in
Section 4.23 of the Disclosure Schedule, neither the stockholders or partners of
any Seller (except for Jefferson) nor any "affiliate" of any Seller,
individually or collectively, owns or has owned of record or beneficially, an
equity interest or any other financial or profit interest in any firm,
corporation or any other entity or person that (a) has had business dealings or
a financial interest in any transaction with any Seller with respect to the
business of any Newspaper or the Assets, or (b) is engaged in the media
business, including without limitation, newspapers, magazines and other print
media, television, radio and other broadcast media, and other services SMATV,
MMDS and personal communications services, operating to any extent in the
Commonwealth of Virginia, in each case except for interests of less than 1% of
the outstanding capital stock of any such competing business that is publicly
traded on any recognized securities exchange or in the over-the-counter market.
Except as set forth in Section 4.23 of the Disclosure Schedule, no stockholder
or partner of any Seller or any affiliate of any Seller or such stockholder or
partner is in competition with any Seller with respect to the business of any
Newspaper or the Assets, or any lease, sublease, indebtedness, contract,
agreement, commitment, understanding or arrangement of any kind whatsoever with
any other stockholder or partner of any Seller or any affiliate of any Seller or
such stockholder or partner pertaining to the business or operations of any of
the Newspapers or the Assets. As of the Closing, no stockholder or partner of
any Seller or any affiliate of any Seller has any right or claim against any
Seller with respect to any of the Newspapers. Since December 31, 1994, no
Seller has made any sales, transfers or conveyances of any kind of inventory or
other assets related to any of the Newspapers or the Assets to a stockholder,
partner or affiliate of any Seller other than those for which the Newspapers
have received fair market value.
4.24. Totality of Assets. The Assets include all of the tangible
and intangible assets and rights necessary to conduct the business and
operations of the Newspapers as presently conducted.
4.25. Brokers and Finders. No Seller or any of their respective
officers, directors, partners or employees has employed any broker or finder in
connection with the transactions contemplated by this Agreement, other than
Wingate Ventures Limited and Stovo Holdings Limited, or incurred any liability
for any brokerage fees, commissions or finders' fees in connection with the
transactions contemplated by this Agreement, other than to Wingate Ventures
Limited and Stovo Holdings Limited.
4.26. Disclosure. No representation or warranty by any Seller in
this Agreement (including the Disclosure Schedule) contains any untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make any statement made therein, in light of the
circumstances under which it is made, not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to Sellers as follows:
5.1. Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia.
5.2. Authority Relative to this Agreement. Buyer has the full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by the Board of Directors of
Buyer, and no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Buyer and, assuming this Agreement constitutes a legal, valid and binding
agreement of each Seller, constitutes a legal, valid and binding agreement of
Buyer, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and to general principles of equity.
5.3. Noncontravention; Consents and Approvals.
(a) Assuming that all filings, permits, authorizations, consents
and approvals or waivers thereof have been duly made or obtained as contemplated
by Section 5.3(b), the execution and delivery of this Agreement by Buyer and the
consummation by Buyer of the transactions contemplated hereby will not (i)
conflict with or result in any breach of any provision of the articles of
incorporation or bylaws of Buyer, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default under
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license agreement or other instrument or obligation to which Buyer is a party,
or by which Buyer or any of its respective properties or assets is bound, or
(iii) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Buyer or any of its respective properties or assets, excluding
from the foregoing clauses (ii) and (iii) violations, breaches or defaults
which, either individually or in the aggregate, would not impair the ability of
Buyer to consummate the transactions contemplated hereby.
(b) Assuming the accuracy of the representations and warranties
of the Sellers set forth in Article IV, no filing or registration with, or
notification to, and no permit, authorization, consent or approval of, any
governmental entity is required by Buyer in connection with the execution and
delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby, except (i) in connection with the applicable
requirements of the HSR Act, (ii) in connection, or in compliance, with the
Securities Exchange Act of 1934, as amended, (iii) the Required Consents and
(iv) as disclosed in Section 5.3 of the Disclosure Schedule.
5.4. Compliance With Securities Exchange Act of 1934. Buyer has taken
all actions and made all filings necessary to comply with its obligations under
the Securities Exchange Act of 1934, as amended, as of the date hereof, in
connection with the transactions contemplated by this Agreement.
ARTICLE 6
COVENANTS OF THE PARTIES
6.1. Conduct of Business. Except as specifically provided in this
Agreement, during the period from the date of this Agreement to the Closing
Date, Sellers will conduct the business and operations of the Newspapers in the
ordinary course of business consistent with past practice. Without limiting the
generality of the foregoing, except as otherwise expressly provided in this
Agreement, prior to the Closing Date, without the prior written consent of
Buyer, no Seller will:
(a) sell, transfer, lease, license, pledge, encumber, mortgage,
remove from the premises of any Newspaper or otherwise dispose of, or agree to
sell, transfer, lease, license, pledge, encumber, mortgage, remove from the
premises of any Newspaper or otherwise dispose of ("Transfer"), any assets or
properties, real or personal, relating to the Newspapers, except in the ordinary
course of business consistent with past practice and, in no event shall the
Sellers Transfer any such assets or properties, the original cost of which
exceeds Fifty Thousand Dollars ($50,000) in the aggregate, other than to the
extent such assets are ordinarily consumed in connection with the production of
newspapers or other printed material sold by Sellers in the ordinary course of
business consistent with past practice;
(b) enter into or renew any agreements, commitments or contracts
relating to the Newspapers, except agreements for the purchase, sale or lease of
goods or services in the ordinary course of business consistent with past
practice and, in no event, to exceed annual obligations of the Newspapers in
excess of Fifty Thousand Dollars ($50,000) in the aggregate (other than with
respect to advertising contracts entered into in the ordinary course of business
at published rates and on one of the forms included in Section 4.7 of the
Disclosure Schedule or news carrier contracts entered into in the ordinary
course of business and on a form substantially the same as the form included in
Section 4.7 of the Disclosure Schedule), or modify, amend, waive or terminate
any of the Contracts;
(c) authorize or commit to make capital expenditures in an
amount in excess of Twenty Five Thousand Dollars ($25,000);
(d) (i) increase the compensation of any employees of the
Newspapers without the consent of Buyer, which consent shall not be unreasonably
withheld; (ii) increase the number of employees of the Newspapers; or (iii)
become obligated under any new pension plan, welfare plan, multiemployer plan,
employee benefit plan, benefit arrangement, or similar plan or arrangement with
respect to any employees or former employees of the Newspapers, including any
bonus, incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, employment agreement,
retirement or other benefit plan, agreement or arrangement, with or for the
benefit of any person, or amend any of such plans or any of such agreements in
existence on the date hereof;
(e) permit any insurance policy relating to any Newspaper to be
canceled or terminated;
(f) make any change to the accounting methods, principles or
practices with respect to any Newspaper or the Assets; or
(g) maintain the books and records of the Newspapers in a manner
other than in the ordinary course of business consistent with past practice.
6.2. Access to Information. From the date of this Agreement to the
Closing Date, each Seller will (a) give Buyer and its authorized representatives
reasonable access during normal business hours to the facilities, personnel and
operations of the Newspapers and to all of its books and records relating to the
Newspapers including, without limitation, all personnel records, (b) permit
Buyer and such authorized representatives to make such inspections thereof as
Buyer may reasonably request and to conduct such tests, studies and surveys and
take samples as it deems necessary for evaluating the structural and
environmental condition of the property and improvements thereon (including
without limitation, the reports referred to in Sections 6.6(a) and (c)), (c)
cause its officers or other appropriate officials to furnish Buyer with such
financial and operating data and other information with respect to the business
operations of the Newspapers as the Buyer may from time to time reasonably
request, and (d) use commercially reasonable efforts to obtain any consent
necessary to the assignment of any of the Contracts to Buyer without any changes
in the terms and conditions of such contracts (provided that no such changes
will be made without the prior written consent of Buyer). Buyer will notify
Edwin M. Freakley, President of Worrell, in advance of its desire to have access
to the information described in classes (a), (b) and (c) of the preceding
sentence, and will coordinate such access with Mr. Freakley.
6.3. Employees and Employee Benefits.
(a) The Sellers shall assume full responsibility and liability
for offering and providing "continuation coverage" to any "qualified
beneficiary" who is covered by a "group health plan" sponsored, maintained or
contributed to by the Sellers with respect to employees of the Newspapers and
who has experienced a "qualified event" or is receiving such "continuation
coverage" on or prior to the Closing Date. Continuation coverage, qualified
beneficiary, qualifying event and group health plan shall have the meanings
given such terms under Section 4980B of the Code and Section 601 et seq. of
ERISA. Sellers shall hold Buyer and any entity required to be combined with the
Buyer under Section 414 of the Code ("Affected Parties") harmless from and fully
indemnify such Affected Parties against any costs, expenses, losses, damages and
liabilities incurred or suffered by such Affected Parties directly or
indirectly, including, but not limited to, reasonable attorneys' fees and
expenses, which arise under a group health plan sponsored, maintained or
contributed to by Sellers with respect to employees of the Newspaper as a result
of any action or omission of Sellers prior to the Closing Date or because Buyer
is deemed to be a successor employer to Sellers.
(b) It is clearly understood, except as set forth in Section
6.3(c), that Buyer has no obligation to employ any of Sellers' employees and
that Sellers shall be responsible for and shall cause to be discharged and
satisfied in full all amounts owed to any employee, including without
limitation, wages, commissions, salaries, bonuses, severance, sick pay, accrued
vacation (except as provided in the penultimate sentence of this Section
6.3(b)), any payments due under any other Employee Plan or any other form of
employee compensation or benefits earned, vested or accrued prior to the
Adjustment Time or arising out of the transactions contemplated by this
Agreement, including without limitation, any such compensation or benefits
arising out of the termination of employment resulting from the transactions
contemplated by this Agreement, and Sellers hereby agree to indemnify Buyer and
hold Buyer harmless from any such liabilities. Notwithstanding the foregoing,
Buyer such shall have the option to employ any of Sellers' employees (the
"Transferred Employees") after Closing on terms to be agreed upon by Buyer and
such Transferred Employees, and Buyer shall recognize accrued vacation benefits
of any such Transferred Employees consistent with existing policies of Sellers.
No later than three (3) business days prior to Closing, Buyer will notify
Sellers of the names of the employees of the Newspapers to whom Buyer does not
intend to offer employment.
(c) Buyer covenants that it will not, on or within ninety (90)
days of the Closing Date, take any action or fail to take any action which would
cause a Plant Closing or Mass Layoff resulting in Employment Loss at any of the
employment sites to be acquired from Sellers, as those terms are defined by the
Worker Adjustment and Retraining Notification Act, Public Law 100-379 (August 4,
1988)("WARN Act"). Buyer hereby indemnifies and holds harmless Sellers from any
loss, cost, expense or liability which may be incurred by Seller as a result of
any claim made by an employee of any Newspaper pursuant to the WARN Act and
which claim results from the failure of Buyer to hire any employees of the
Newspapers or from any action by Buyer to dismiss or terminate any employees of
Newspapers following the Closing.
(d) The parties agree that employees of the Sellers hired by
Buyer will close participation in the health care and 401(k) plans sponsored by
Sellers as of the Closing Date; Buyer shall have no responsibility for
obligations with respect to such plans and Worrell hereby indemnifies and holds
harmless Buyer from any liability with respect to such plans (including
termination thereof). Buyer will make reasonable efforts to implement health
care coverage for employees of the Sellers hired by Buyer in such a manner that
such employees will not suffer a lapse of coverage. Buyer is not obligated to
duplicate Sellers' coverage nor to pay any premiums therefor.
6.4. HSR Act Filing. As soon as practicable after the date of this
Agreement, Sellers and Buyer will file, or cause to be filed, with the United
states Federal Trade commission (the "FTC") and the Antitrust Division of the
United States Department of Justice (the "DOJ") pursuant to the HSR Act all
requisite documents and notifications in connection with the transactions
contemplated hereby. Buyer shall bear the filing fees required in connection
with such compliance with the HSR Act. Each Seller and Buyer will make or cause
to be made all such other filings and submissions under laws and regulations
applicable to it, if any, as may be required of it for the transactions
contemplated hereby. The Sellers and Buyer will coordinate and cooperate with
one another in exchanging such information and assistance as the other may
reasonably request in connection with all of the foregoing.
6.5. Other Consents, Waivers and Approvals. Except as otherwise
provided in Section 6.4, Sellers shall, at their own expense, use their
commercially reasonable efforts in preparing, filing, prosecuting, and taking
any other actions with respect to any applications, requests, or actions that
are or may be reasonable and necessary to obtain the Required Consents.
6.6. Environmental Matters.
(a) As soon as practicable following the date hereof, Buyer will
obtain from a nationally recognized engineer (the "Environmental Engineer"),
Phase I Environmental Assessment reports (the "Assessments") for all Real
Property owned in fee or leased by Sellers which is being transferred to Buyer
hereunder (collectively, the "Properties"). Such Assessments shall, in addition
to any other matters customarily shown in such reports, identify the scope and
source of any actual or potential environmental liability or problem on the
Properties and set forth an estimate of the cost of remediating such liability
or problem. Buyer shall promptly forward to Sellers a copy of the Assessments
after receipt thereof by Buyer. The costs of such Assessments shall be borne by
Buyer.
(b) If any Assessment reveals the existence of any Environmental
Conditions or Environmental Noncompliance (each as defined below), Sellers shall
be solely responsible for the costs of remediation of the same, subject to the
terms and conditions set forth herein. If the cost of such remediation exceeds
an aggregate of Five Million Dollars ($5,000,000), then either (i) Buyer may
elect (A) to pay for the costs of remediation in excess of Five Million Dollars
($5,000,000) in which event the Purchase Price will be reduced by such costs of
remediation, not to exceed Five Million Dollars ($5,000,000) or (B) terminate
this Agreement and shall have no further obligation or liability to Sellers; or
(ii) Sellers may elect to pay for all costs of remediation, and in such event
shall either complete such remediation prior, to the Closing Date or provide
Buyer with a plan for completing such remediation in form and substance
satisfactory to Buyer for all costs of remediation not completed by Closing.
The amount of cash and Cash Equivalents (as defined in Section 10.2(d) required
to be retained by Worrell pursuant to Section 10.2(d) shall be increased by an
amount equal to the estimated costs of any such post-Closing remediation, as
determined by the Environmental Engineer. As any such remediation is subsequent
to Closing effected and paid for by Worrell, the amount of such cash and Cash
Equivalents required to be retained by Worrell shall be reduced but not in any
event below Five Million Dollars ($5,000,000).
(c) As soon as practicable after the date hereof, Buyer will use
commercially reasonable efforts to obtain a report from the Environmental
Engineer, in form and substance reasonably satisfactory to Buyer, certifying (i)
that all required permits or registrations from any applicable governmental
authority for any underground storage tanks located on the Properties have been
obtained by Sellers; and (ii) that there has been no, and as of the date of the
report there is no, adverse environmental impact from the operation or presence
of any such storage tanks that could result in the creation of liability under
any Environmental Orders or Laws (as defined below) to any party. The costs of
such report shall be borne by Buyer. If such report shows either (x) that
required permits and registrations have not been obtained and reasonably cannot
be obtained by Sellers prior to Closing without any cost or liability to Buyer,
or (y) that there has been or is an adverse environmental impact that could
result in liability, then Buyer shall obtain from the Environmental Engineer an
estimate of (x) the cost of removing all underground storage tanks for which
such permits and registrations cannot be obtained and (y) the cost of
remediating such adverse environmental impact, as applicable, in each case to
the extent required to bring such Properties into compliance with all
Environmental Orders and Laws. Sellers shall be solely responsible for the
costs of such remediation, subject to the terms and conditions set forth herein.
If the cost of such remediation exceeds an aggregate of Five Million Dollars
($5,000,000), then either (i) Buyer may elect (A) to pay for the costs of
remediation in excess of Five Million Dollars ($5,000,000) in which event the
Purchase Price will be reduced by such costs of remediation, not to exceed Five
Million Dollars ($5,000,000) or (B) terminate this Agreement and shall have no
further obligation or liability to Sellers; or (ii) Sellers may elect to pay for
all costs of remediation, and in such event shall either complete such
remediation prior to the Closing Date or provide Buyer with a plan for
completing such remediation in form and substance satisfactory to Buyer for all
costs of remediation not completed by Closing. The amount of cash and Cash
Equivalents required to be retained by Worrell pursuant to Section 10.2(d) shall
be increased by an amount equal to the estimated costs of any such post-Closing
remediation, as determined by the Environmental Engineer. As any such
remediation is subsequent to Closing effected and paid for by Worrell, the
amount of such cash and Cash Equivalents required to be retained by Worrell
shall be reduced but not in any event below Five Million Dollars ($5,000,000).
"Environmental Conditions" means conditions of the environment,
including the ocean, natural resources (including flora and fauna), soil,
surface water, ground water, any present or potential drinking water supply,
subsurface strata or the ambient air, relating to or arising out of the use,
handling, storage, treatment, recycling, generation, transportation, dumping,
Release, or threatened Release of Hazardous Materials by any Person. With
respect to claims by employees, Environmental Conditions also includes the
exposure of persons to Hazardous Materials within a work place on the
Properties.
"Environmental Orders and Laws" means any applicable order,
judgment, injunction, award, decree or writ or any applicable law, statute,
code, ordinance, regulation or other requirement of any government or political
subdivision thereof, whether federal, state, local or foreign, or any agency,
regulatory authority or instrumentality of any such government or political
subdivision, or any court or arbitrator relating to pollution or protection of
health, public welfare or the environment, including, without limitation,
Environmental Orders and Laws relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
"Environmental Noncompliance" means, but is not limited to: (1)
the Release or threatened Release of any Hazardous Materials into the
environment, any storm drain, sewer, septic system or publicly owned treatment
works, in violation of any effluent or emission limitations, standards or other
criteria or guidelines established by any federal, state or local law,
regulation, rule, ordinance, plan or order or other Environmental Order or Law;
and (2) any facility operations, procedures, designs, etc., which do not conform
with the requirements of any Environmental Orders and Laws.
"Hazardous Materials" means (1) hazardous materials,
contaminants, constituents, hazardous wastes and hazardous substances as those
terms are defined in the following statutes and their implementing regulations,
as amended: the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801
et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., the Comprehensive Environmental Response, Compensation and Liability Act,
as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C.
Section 9601 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., and
the Toxic Substance Control Act, 15 U.S.C. Section 2601 et seq., (2) petroleum,
including crude oil and any fractions thereof, (3) natural gas, synthetic gas
and any mixtures thereof, (4) asbestos and/or asbestos-containing materials, (5)
PCBs, or PCB-containing materials or fluids, (6) any other substances with
respect to which any federal, state or local agency or other governmental
authority may require either an environmental investigation or environmental
remediation, and (7) any other hazardous or noxious substance, material,
pollutant or solid or liquid waste that is regulated by any Environmental Orders
and Laws.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, emptying, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), or into or out of any
Properties, including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.
6.7. Consummation of Agreement. Each Seller and Buyer will use
commercially reasonable efforts to perform or fulfill all other conditions and
obligations to be performed or fulfilled by it under this Agreement so that the
transactions contemplated hereby shall be consummated as expeditiously as
possible. If any event should occur, either within or outside the control of
any Seller or Buyer that would materially delay or prevent fulfillment of the
conditions upon the obligations of any party hereto to consummate the
transactions contemplated by this Agreement, each Seller and Buyer will use
their respective commercially reasonable efforts to cure or minimize the same as
expeditiously as possible.
6.8. Public Announcements. Each Seller, on the one hand, and Buyer,
on the other hand, will consult with each other before issuing any other press
release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement and shall not issue any such press
release or make any such public statement that is not approved by the other
party which approval shall not be unreasonably withheld, except as may be
required by law (including without limitation federal securities laws) or court
order.
6.9. Interim Financial Statements. Within five (5) business days
after the date of this Agreement and thereafter within five (5) business days
after the end of each succeeding calendar month between the date hereof and the
Closing Date, Sellers shall furnish Buyer, with respect to the Newspapers,
unaudited balance sheets and statements of income with respect to the then most
recently ended calendar month prepared in a manner consistent with the
preparation of the Financial Statements pursuant to Section 4.4.
6.10. Allocation of Purchase Price. The parties agree that the
allocation of the Purchase Price between the Assets and the Covenants Not to
Compete shall be as set forth in Section 6.10 of the Disclosure Schedule. The
parties agree that the portion of the Purchase Price allocable to the Assets,
together with any amount paid by Buyer to Sellers in accordance with Section
2.3, will be allocated among such Assets in accordance with a reasonable
appraisal obtained by Buyer, and that both parties shall use such allocations
for purposes of any filings required by Section 1060 of the Code.
ARTICLE 7
CONDITION TO THE OBLIGATIONS OF
ALL PARTIES
Hart-Scott-Rodino. The respective obligations of all parties to
effect the sale of the Assets contemplated by this Agreement shall be subject to
the fulfillment at or prior to the Closing of the condition that Thomas E.
Worrell, Jr. and Buyer and any other Person (as defined in the HSR Act) required
in connection with the transactions contemplated hereby to file a Notification
and Report Form for Certain Mergers and Acquisitions with the DOJ and the FTC
pursuant to the HSR Act shall have made such filing, all applicable waiting
periods with respect to each such filing (including any extensions thereof)
shall have expired or been terminated and no actions shall have been instituted
by the DOJ or FTC challenging or seeking to enjoin the consummation of the
transactions contemplated by this Agreement unless such actions shall have been
withdrawn or terminated.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer to purchase the Assets from Sellers and to
perform its other obligations hereunder to be performed at or subsequent to the
Closing shall be subject to the fulfillment at or prior to the Closing of each
of the following additional conditions, any one or more of which may be waived
by Buyer:
8.1. Representations and Warranties. All representations and
warranties of Sellers contained herein shall be true and correct in all material
respects on the Closing Date as though such representations and warranties were
made as of such date except for changes expressly permitted by this Agreement.
8.2. Covenants. Sellers shall have performed and complied in all
material respects with all covenants and agreements contained in this Agreement
required to be performed or complied with by them on or prior to the Closing
Date.
8.3. Certificates. Sellers shall furnish such certificates of their
respective officers or partners to evidence compliance with the conditions set
forth in Sections 8.1 and 8.2 as may be reasonably requested by Buyer.
8.4. Certain Proceedings. No writ, order, decree or injunction of a
court of competent jurisdiction or governmental entity shall have been entered
against Buyer or any Seller that prohibits or restricts the sale of Assets
contemplated hereby, limits or restricts the operation of the businesses of the
Newspapers or other Assets as they are currently conducted, or otherwise
restricts Buyer's exercise of full rights to own and operate the Newspapers and
other Assets.
8.5. Opinion of Counsel. Buyer shall have received the favorable
opinion of Dennis S. Rooker, Esq., counsel to Sellers, substantially in the form
of Exhibit F attached hereto.
8.6. No Adverse Change. Since the date of this Agreement, Sellers
shall have suffered no material adverse change to the business, operations,
assets or financial condition of any of the Newspapers or Assets taken as a
whole.
8.7. Consents. All Required Consents shall have been duly and validly
obtained and shall remain effective as of the Closing.
8.8. Document Delivery. Sellers shall have delivered the following
documents, appropriately executed, to Buyer:
(a) All documents required to be delivered to Buyer pursuant to
Section 3.2;
(b) Certified copies of the resolutions of the Board of
Directors or partners of each Seller authorizing the execution and delivery of
this Agreement and consummation of the transactions contemplated hereby;
(c) Certificates of good standing for each Seller from their
respective states of incorporation or organization issued as of a date not more
than 10 days prior to the Closing Date;
(d) Possession of all books, accounts, records, documents,
files, agreements and reports located at the offices or premises of each of the
Newspapers relating to the Newspapers or the Assets;
(e) All such other documents as may be reasonably requested by
Buyer, including secretaries' certificates relating to incumbency and corporate
proceedings;
(f) All Required Consents; and
(g) Such other and further releases or other documents as may be
reasonably necessary, in the opinion of counsel to Buyer, to effectuate the
transactions contemplated by this Agreement.
ARTICLE 9
CONDITIONS TO THE OBLIGATIONS OF SELLERS
The obligations of Sellers under this Agreement to effect the sale of
the Assets to Buyer and to perform their other obligations hereunder to be
performed at the Closing shall be subject to the fulfillment at or prior to the
Closing of each of the following additional conditions, any one or more of which
may be waived by Sellers:
9.1. Representations and Warranties. All representations and
warranties of Buyer contained herein shall be true and correct in all material
respects on the Closing Date as though such representations and warranties were
made as of such date except for changes expressly permitted by this Agreement.
9.2. Covenants. Buyer shall have performed and complied in all
material respects with all covenants and agreements contained in this Agreement
required to be performed or complied with by it on or prior to the Closing Date.
9.3. Certificates. Buyer shall furnish such certificates of its
officers to evidence compliance with the conditions set forth in Sections 9.1
and 9.2 as may be reasonably requested by Sellers.
9.4. Certain Proceedings. No writ, order, decree or injunction of a
court of competent jurisdiction or governmental entity shall have been entered
against Buyer or any Seller which prohibits or restricts the sale of Assets
contemplated hereby.
9.5. Opinion of Counsel. The Company shall have received the
favorable opinion of George L. Mahoney, Esq., General Counsel of Buyer,
substantially in the form of Exhibit G attached hereto.
9.6. Document Delivery. Buyer shall have delivered the following to
Sellers, and where documents are involved, the documents shall be appropriately
executed:
(a) Payment of the Purchase Price to Sellers and/or the Escrow
Agent as contemplated by Section 2.2;
(b) All documents required to be delivered to Sellers pursuant
to Section 3.3;
(c) Certified copy of the resolutions of the Board of Directors
of Buyer authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby;
(d) Certificate of good standing from the Commonwealth of
Virginia issued with respect to Buyer as of a date not more than 10 days prior
to the Closing Date; and
(e) All such other documents as may be reasonably requested by
Sellers, including secretaries' certificates relating to incumbency and
corporate proceedings.
ARTICLE 10
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
10.1. Survival of Representations. All representations,
warranties, covenants and agreements made by any party in this Agreement or in
documents and instruments delivered pursuant hereto shall survive the Closing,
but all claims made by virtue of such representations, warranties and agreements
shall be made under, and subject to the limitations set forth in, this Article
10.
10.2. Sellers' Agreement to Indemnify.
(a) Indemnification. Subject to the limitations, conditions and
provisions set forth herein, Worrell agrees to indemnify, defend and hold
harmless Buyer (including Buyer's officers, directors, shareholders, employees,
agents or affiliates) (collectively, "Buyer's Indemnitees") from and against all
demands, claims, actions, losses, damages, liabilities, costs and expenses,
including without limitation, reasonable attorney's fees, asserted against or
incurred by Buyer's Indemnitees resulting from (i) a breach of any covenant,
agreement, representation or warranty of any Seller to Buyer contained in this
Agreement or any other document or instrument delivered pursuant hereto;
(ii) liabilities or other obligations relating to any Employee Plan,
Compensation Arrangement or Multi-employer Plan; (iii) liabilities which arise
from or relate to any litigation referred to or disclosed in Section 4.8 of the
Disclosure Schedule; or (iv) liabilities which arise from facts which occurred
prior to the Adjustment Time or which relate to the operations of the Newspapers
or the Assets prior to the Adjustment Time and which have not been assumed by
Buyer (collectively, "Buyer's Damages").
(b) Limitation of Liability. Worrell's obligation to indemnify
Buyer against any Buyer's Damages shall be subject to all of the following
limitations:
(i) No indemnification shall be required to be made under
this Section 10.2 until the aggregate amount of Buyer's Damages exceeds Five
Hundred Thousand Dollars ($500,000); provided that once Buyer's Damages exceed
Five Hundred Thousand Dollars ($500,000), indemnification shall be made by
Worrell for all Buyer's Damages without regard to such limitation.
(ii) Buyer's Indemnitees shall be entitled to indemnity only
for those Buyer's Damages as to which Buyer has given Worrell written notice
thereof (A) except for Buyer's Damages resulting from a breach of any
representation set forth in Sections 4.9, 4.10 and 4.21, within two (2) years
after the Closing Date, and (B) with respect to Buyer's Damages resulting from a
breach of any representation set forth in Sections 4.9, 4.10 and 4.21, upon
expiration of the applicable statute of limitations with respect thereto. Any
written notice delivered by Buyers to Worrell pursuant to this subparagraph (ii)
shall set forth with specificity the basis of the claim for Buyer's Damages and
a reasonable estimate of the amount thereof, based on all of the facts then
known by Buyer.
(c) Condition of Indemnification. The obligations and
liabilities of Worrell under Section 10.2(a) hereof with respect to claims for
Buyer's Damages ("Buyer's Claims"), shall be subject to the following terms and
conditions:
(i) Buyer will give Worrell notice of any Buyer's Claim
within ten (10) business days after receiving notice, or becoming aware,
thereof.
(ii) After Worrell receives notice of a Buyer's Claim which
relates to an assertion of liability by a third party other than Buyer or an
affiliate of Buyer, Worrell shall have the right to defend any such claim and to
control negotiations toward resolution of such claim, and, if litigation ensues,
to defend the same with counsel chosen by Worrell, at Worrell's expense. Buyer
shall extend reasonable cooperation to Worrell's in connection with such
defense. In the event that, within ten (10) business days after notice of any
such Buyer's Claim, Worrell fails to notify Buyer of Worrell's intention to
defend, Buyer will (upon further notice to Worrell) have the right (but not the
obligation) to undertake the defense, compromise or settlement of such Buyer's
Claim for the account of Buyer. Worrell shall have the right to assume the
defense of such Buyer's Claim at any time prior to final settlement, compromise
or determination thereof, provided that any such assumption shall be conditioned
upon Worrell's written acknowledgment of its indemnification obligation for such
claim.
(iii) Notwithstanding anything in subparagraphs (i) and
(ii) of this Section 10.2(c) to the contrary, a failure by any party to meet the
time limits prescribed in such subparagraphs shall not affect the rights
provided to the parties in this Agreement, unless the rights of the party not
required to meet such time limits are materially and adversely affected by the
failure to comply with such time
(d) Capitalization of Indemnitor.
(i) Until the fourth (4th) anniversary of the Closing Date,
Worrell shall (A) maintain its valid corporate existence under the laws of the
State of Delaware and shall be duly qualified to do business as a foreign
corporation wherever legally required; (B) retain Five Million Dollars
($5,000,000) of reserves of cash and other Cash Equivalents; and (C) have a
"Residual Value" (as defined below) of at least Fifteen Million Dollars
($15,000,000).
(ii) For purposes of this Agreement the following terms
shall be defined as follows:
"Cash Equivalents" means investments in (i) certificates of deposit
and other interest bearing deposits or accounts with any bank or any state or
U.S. commercial bank having a combined capital and surplus of at least One
Hundred Million Dollars ($100,000,000), which mature within five (5) years from
the date of investment, (ii) deposits (other than time deposits) with any bank,
any state or U.S. commercial bank or federal savings and loan institution having
a combined capital and surplus of at least One Hundred Million Dollars
($100,000,000), which mature within five (5) years from the date of investment,
(iii) obligations issued or unconditionally guaranteed by the U.S. government,
or issued by an agency thereof and backed by the full faith and credit of the
United States of America, which obligations mature within five (5) years from
the date of investment, (iv) direct obligations issued by any state of the
United States of America or political subdivision thereof, which mature within
five (5) years from the date of investment and have the highest or second
highest rating obtainable from Standard & Poor's Corporation or Moody's
Investors Service, Inc. on the date of investment, or (v) commercial paper which
has the highest rating obtainable from Standard & Poor's Corporation or Moody's
Investors Service, Inc. on the date of investment, which obligations mature
within five (5) years from the date of investment.
"Residual Value" shall mean the amount equal to the greater of (A)
Worrell's net worth as set forth on a balance sheet prepared according to GAAP;
and (B) eleven (11) times the "Worrell's Cash Flow" (as defined below).
"Worrell's Cash Flow" means the consolidated operating revenues of
other Worrell newspapers less the consolidated operating expenses of other
Worrell newspapers exclusive of interest, depreciation and amortization, and
income taxes (it being agreed and acknowledged that consolidated operating
expenses shall not include capital expenditures, deferred taxes and payments on
indebtedness and any other item not included in consolidated operating expenses
under generally accepted accounting principles), during the preceding quarter
multiplied by eleven (11).
(iii) Within forty-five (45) days after the close of each
calendar quarter after the Closing Date Worrell shall deliver to Buyer (A) a
balance sheet of Worrell prepared in accordance with generally accepted
accounting principles consistently applied, and (B) a calculation of the
Residual Value in accordance with the foregoing formula. Such calculation shall
be accompanied by a certificate from the chief financial officer of Worrell to
the effect that Worrell's Cash Equivalents exceed Five Million Dollars
($5,000,000) and that Worrell's Cash Flow used in the calculation of the
Residual Value is accurate and correct and that the Residual Value has been
calculated in accordance with this Section. For purposes of this Section,
Worrell shall promptly notify Buyer as soon as Worrell becomes aware that
Worrell's Cash Equivalents has fallen below Five Million Dollars ($5,000,000) or
that the Residual Value has fallen below Fifteen Million Dollars ($15,000,000),
or will fall, on account of incurring debt, selling assets, or any other reason,
below Fifteen Million Dollars ($15,000,000).
10.3. Buyer's Agreement to Indemnify.
(a) Indemnification. Subject to the limitations, conditions and
provisions set forth herein, Buyer hereby agrees to indemnify, defend and hold
Sellers (and their respective partners, officers, directors, shareholders,
employees, agents or affiliates) (collectively, the "Sellers' Indemnitees")
harmless from and against all demands, claims, actions, losses, damages,
liabilities, costs and expenses, including without limitation, reasonable
attorney's fees, asserted against or incurred by the Sellers' Indemnitees
resulting from (i) a breach of any covenant, agreement, representation or
warranty of Buyer contained in this Agreement or any other document or
instrument delivered pursuant hereto; or (ii) liabilities which relate to the
operations of the Newspapers or the Assets after the Closing Date (collectively,
"Sellers' Damages").
(b) Limitation of Liability. Buyer's obligation to indemnify
against any Sellers' Damages shall be subject to all of the following
limitations:
(i) No indemnification shall be required to be made by
Buyer under this Section 10.3 (other than for Sellers' Damages on account of
Buyer's failure to pay in full any of the Purchase Price, any amount included in
the liabilities assumed by Buyer pursuant to Section 1.3, or any amount owed by
Buyer pursuant to Section 2.2) until the aggregate amount of Sellers' Damages
exceeds Five Hundred Thousand Dollars ($500,000); provided that once Sellers'
Damages exceed Five Hundred Thousand Dollars ($500,000), indemnification shall
be made by Buyer for all Sellers' Damages without regard to such limitation.
(ii) Sellers' Indemnitees shall be entitled to indemnity
with respect to claims based on Section 10.3(a) only for those Sellers' Damages
as to which Sellers have given Buyer written notice thereof within two (2) years
after the Closing Date. Any written notice delivered by Sellers to Buyer
pursuant to this subparagraph (ii) shall set forth with specificity the basis of
the claim for Sellers' Damages and a reasonable estimate of the amount thereof,
based on all of the facts then known by Sellers.
(c) Conditions of Indemnification. The obligations and
liabilities of Buyer under Section 10.3(a) hereof with respect to claims for
Sellers' Damages ("Sellers' Claims"), shall be subject to the following terms
and conditions:
(i) Sellers will give Buyer notice of any Sellers' Claim
within ten (10) business days after receiving notice, or becoming aware,
thereof.
(ii) After Buyer receives notice of a Sellers' Claim which
relates to an assertion of liability by a third party other than a Seller or an
affiliate of a Seller, Buyer shall have the right to defend any such claim and
to control negotiations toward resolution of such claim and, if litigation
ensues, to defend the same with counsel chosen by Buyer, at Buyer's expense.
Sellers shall extend reasonable cooperation to Buyer in connection with such
defense. In the event that, within ten (10) business days after notice of any
such Sellers' Claim, Buyer fails to notify Sellers of its intention to defend
such Sellers' Claim, Sellers will (upon further notice to Buyer) have the right
(but not the obligation) to undertake the defense, compromise or settlement of
such Sellers' Claim for the account of Sellers. In such event, Buyer shall have
the right to assume the defense of such Sellers' Claim at any time prior to
final settlement, compromise or determination thereof, provided that any such
assumption shall be conditioned upon Buyer's acknowledgment of its
indemnification obligation for such claim.
(iii) Notwithstanding anything in subparagraphs (i) and
(ii) of this Section 10.3(c) to the contrary, a failure by any party to meet the
time limits prescribed in such subparagraphs shall not affect the rights
provided to the parties in this Agreement, unless the rights of the party not
required to meet such time limits are materially and adversely affected by the
failure to comply with such time limit.
ARTICLE 11
TERMINATION
11.1. Termination. This Agreement may be terminated:
(a) at any time by mutual consent of Sellers and Buyer;
(b) by either party, if Closing hereunder has not taken place on
or before the Termination Date (as it may be extended in accordance with Section
3.1), provided that the party seeking such termination shall not then be in
material breach of its obligations under this Agreement;
(c) by Sellers if all conditions set forth in Articles 7 and 9
have not been satisfied or waived on or prior to the Closing Date, and Sellers
are not in material breach of their respective obligations under this Agreement;
and
(d) by Buyer if all conditions set forth in Articles 8 and 9
have not been satisfied or waived on or prior to the Closing Date; and Buyer is
not in material breach of its obligations under this Agreement;
(e) by Buyer pursuant to Section 6.6; and
(f) by Buyer pursuant to Section 12.13.
11.2. Procedure and Effect of Termination.
(a) In the event of termination of this Agreement and
abandonment of the transactions contemplated hereby by any or all of the parties
pursuant to Section 11.1, prompt written notice thereof shall forthwith be given
to the other parties and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned without further action by any of the
parties hereto. If this Agreement is terminated as provided herein:
(i) None of the parties hereto nor any of their directors,
officers, shareholders, partners, employees, agents or affiliates shall have any
liability or further obligation to the other party or any of its partners,
directors, officers, shareholders, employers, agents or affiliates pursuant to
this Agreement with respect to which termination has occurred, except as stated
in Sections 11.2(b), 12.1 and 12.2 hereof;
(ii) All filings, applications and other submissions
relating to the transactions contemplated hereby shall, to the extent
practicable, be withdrawn from the agency or other person to which made; and
(iii) Buyer shall return any information received by Buyer
from Sellers and will cause all confidential information obtained by Buyer from
Sellers concerning the Newspapers to be treated as such.
(b) Notwithstanding anything to the contrary contained in this
Agreement, if any of Sellers or Buyer is in breach in any material respect of
its respective obligations under this Agreement prior to the date of termination
of this Agreement, then and in that event, as appropriate, the following
provisions shall apply:
(i) if any Seller is in breach of its obligations under
this Agreement, Buyer shall have the right to seek all remedies available to it
as provided hereunder or at law or equity, including the remedy of specific
performance as provided in Section 12.9; and
(ii) if Buyer is in breach of its obligations under this
Agreement, Sellers shall have the right to seek all remedies available to them
as provided hereunder or at law or equity.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1. Expenses. Whether or not the transactions contemplated
hereby are consummated, except as otherwise specifically provided herein, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring such costs
and expenses.
12.2. Further Assurances. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the sale contemplated by this
Agreement. From time to time after the Closing Date, without further
consideration, Sellers will, at their expense, execute and deliver, or cause to
be executed and delivered, such documents to Buyer as Buyer may reasonably
request in order to more effectively vest in Buyer good title to the Assets and
to evidence the representations and warranties of Sellers. From time to time
after the Closing Date, without further consideration, Buyers will, at Buyer's
expense, execute and deliver such documents to Sellers as they may reasonably
request in order more effectively to consummate the sale of the Assets pursuant
to this Agreement. Sellers acknowledge that Buyer is a public company and that
this transaction will require Buyer to file a Form 8-K with the Securities and
Exchange Commission including audited financial statements of the business and
operations of the Newspapers for the years ended 1993 and 1994, as well as
unaudited comparative financial statements for the pertinent 1995 and 1994
interim periods. Sellers agree to prepare such historical financial statements
of the business and operations of the Newspapers and to assist Buyer with
Buyer's audit of the required audited financial statements. All costs and
expenses of the preparation of such required audited financial statements (other
than any cost related to any of Sellers' employees) shall be borne by Buyer.
12.3. Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of Sellers and Buyer at any
time prior to the Closing Date with respect to any of the terms contained
herein.
12.4. Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 12.4.
12.5. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally or by
facsimile transmission, telexed or mailed by registered or certified mail
(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice; provided that notices of a change of address shall be effective only
upon receipt thereof):
(a) if to Sellers:
c/o Worrell Enterprises, Inc.
1450 South Dixie Highway
Boca Raton, Florida 33432
Attention: Mr. Edwin M. Freakley
Telecopy : (407) 338-0056
Copies (which shall not constitute notice) to:
Dennis S. Rooker, P.C.
115 South Pantops Drive
Charlottesville, Virginia 22901
Attention: Dennis S. Rooker, Esq.
Telecopy : (804) 977-7428
(b) if to Buyer:
Media General, Inc.
333 East Grace Street
Richmond, Virginia 23293
Attention: Mr. J. Stewart Bryan III
Chairman
Telecopy : (804) 649-6898
Copies (which shall not constitute notice) to:
Media General, Inc.
333 East Grace Street
Richmond, Virginia 23293
Attention: Mr. Marshall N. Morton
Senior Vice President
and
George L. Mahoney, Esq.
General Counsel
Telecopy : (804) 649-6898
12.6. Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interest or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties, nor is this
Agreement intended to confer upon any other person except the parties hereto any
rights or remedies hereunder. Notwithstanding the foregoing, Buyer shall be
entitled to assign its rights and interest under this Agreement to any affiliate
of Buyer, provided that Buyer shall not be released from its obligations
hereunder.
12.7. No Solicitation. From the date hereof until the earlier of
(a) the termination of this Agreement pursuant to Article 11 and (b) the
Closing, none of the Sellers shall (nor will they permit any of their respective
partners, officers, directors, stockholders, affiliates or agents to) directly
or indirectly solicit or participate or engage in or initiate any negotiations
or discussions, or enter into (or authorize) any agreement or agreement in
principle, or announce any intention to do any of the foregoing, with respect to
any offer or proposal to acquire all or a substantial part of the Assets,
whether by merger, purchase of assets or equity or otherwise, except with
respect to Buyer as contemplated by this Agreement.
12.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE COMMONWEALTH OF VIRGINIA (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW)
AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
12.9. Specific Performance. The parties recognize that if any
Seller breaches this Agreement and refuses to perform under the provisions of
this Agreement, monetary damages alone would not be adequate to compensate Buyer
for its injury, due to the unique nature of the Newspapers and the Assets.
Buyer shall therefore be entitled, in addition to any other remedies that may be
available, including money damages and reimbursement of all related costs and
expenses (including legal fees), to obtain specific performance of the terms of
this Agreement. If any action is brought by Buyer to enforce this Agreement,
each Seller shall waive the defense that there is an adequate remedy at law.
12.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.11. Interpretation. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
12.12. Entire Agreement. This Agreement, including the Exhibits
hereto, the Disclosure Schedule and the documents delivered pursuant to this
Agreement, embody the entire agreement and understanding of the parties hereto
in respect of the transactions contemplated by this Agreement. The Exhibits
hereto and the Disclosure Schedule are an integral part of this Agreement and
are incorporated by reference herein. There are no representations, warranties
or covenants made with respect to the Newspapers except as expressly set forth
in this Agreement, the Exhibits, the Disclosure Schedule or any agreement,
document or certificate delivered pursuant to this Agreement, and no action may
be maintained for any alleged misrepresentation or breach of warranty or
covenant unless the representation, warranty or covenant is expressly set forth
in this Agreement, the Exhibits, the Disclosure Schedule or any agreement,
document or certificate delivered pursuant to this Agreement.
12.13. Risk of Loss.
(a) The risk of loss, damage or destruction to the Newspapers
and the other Assets from fire, theft or other casualty or cause shall be borne
by the Sellers at all times up to the Adjustment Time. It is expressly
understood and agreed that in the event of any material loss or damage to any
material portion of the Assets from fire, casualty or other cause prior to the
Closing, Sellers shall notify Buyer of same in writing immediately. Such notice
shall specify with particularity the loss or damage incurred, the cause thereof,
if known or reasonably ascertainable, and the insurance coverage subject to
subsection (b) of this Section 12.13.
(b) Notwithstanding any other provision contained in this
Agreement:
(i) in the event there is damage to the Assets in excess of
Two Million Five Hundred Thousand Dollars ($2,500,000) which is not repaired,
replaced or restored prior to the Closing, Buyer, at its sole option upon ten
(10) days prior written notice to Sellers: (1) may elect to consummate the
Closing and accept the property in its then existing condition, in which event
Sellers shall pay or assign to Buyer all proceeds of insurance theretofore
received or to be received covering the property involved, and the Purchase
Price shall be reduced by an amount equal to any applicable insurance
deductible; or (2) may rescind this Agreement and declare it of no further force
and effect, in which event there shall be no Closing and this Agreement and all
the terms and provisions hereof shall thereupon be deemed null and void and the
parties shall have no further liability to each other except as set forth in
Section 11.2;
(ii) if the damage sustained is less than Two Million Five
Hundred Thousand Dollars ($2,500,000) and all damages sustained would not
materially impair the ability of Buyer to conduct the business and operations of
the Newspapers as presently conducted, this Agreement shall remain in full force
and effect without any abatement of the Purchase Price (other than for any
applicable insurance deductible and uninsured amount which will reduce the
Purchase Price by such appropriate amount) and the Buyer shall be entitled to
any proceeds of insurance received or receivable by Sellers; provided, however,
that if such insurance proceeds receivable are not received by Buyer within
sixty (60) days of the Closing Date, Buyer shall assign to Sellers all of
Buyer's right to receive such proceeds and Sellers thereupon shall pay to Buyer
the amount of such proceeds receivable under the relevant insurance policy with
respect to such damage.
12.14. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
12.15. Bulk Sales. Buyer hereby waives any necessary compliance by
Sellers with any bulk sales laws. Sellers hereby agree to indemnify, defend and
hold Buyer harmless from and against any loss, claim, liability, cost or expense
which Buyer may suffer or incur because of Sellers' non-compliance with such
bulk sales laws.
12.16. Cooperation With Respect to Taxes and Other matters. Sellers
and Buyer will cooperate fully, including allowing each other full access to and
right to copy documents, with each other after the Closing in connection with
any audit examination by any governmental taxing authority or otherwise with
respect to the business of the Newspapers or any of the Assets including, but
not limited to, furnishing or making available records, files, financial
information, accounting records, books of account or other materials (the "Tax
and Accounting Records") necessary or helpful for the defense against the
assertions of any taxing authority as to any tax returns, tax declarations or
tax reports of Buyer, Sellers or any of their respective affiliates, or
otherwise reasonably required by Buyer in the operation of the Newspapers or the
Assets. Neither Buyer, on the one hand, nor Sellers, on the other, will destroy
any Tax and Accounting Records for a period of six (6) years after the Closing
Date without having given thirty (30) days prior notice to Sellers or Buyer,
respectively, and, in the event Sellers or Buyer wishes to copy any such
records, cooperate in making such records available for such copying, provided
arrangements are made for reimbursement of all expenses reasonably incurred as a
result of such cooperation.
12.17. Glossary of Defined Terms. The following is a list of terms
used in this Agreement and a reference to the section hereof in which such term
is defined:
Term Section
---- -------
Adjustment Time 1.3(a)
Affected Parties 6.3(a)
Agreement Preamble
Antibes Preamble
Assessments 6.6(a)
Assets 1.1
Assumption Agreement 1.3
Buyer Preamble
Buyer's Claims 10.2(c)
Buyer's Damages 10.2(a)
Buyer's Indemnitees 10.2(a)
CERCLA 4.21(a)
Closing 3.1
Closing Date 3.1
Closing Date Statement of
Liabilities and Assets 2.3(e)
Code 1.3
Compensation Arrangement 1.3
Contracts 1.1(c)
Covenants Not to Compete 2.1(a)
Culpeper Preamble
Current Assets 2.2(a)(ii)
CVN Preamble
Disclosure Schedule 1.1(a)
DOJ 6.4
Electric Knowledge 1.2(f)
Space Lease Agreement 3.2(e)
Employee Plan 1.3
Environmental Conditions 6.6
Environmental Engineer 6.6(a)
Environmental Noncompliance 6.6
Environmental Orders and Laws 6.6
Excluded Assets 1.2
Financial Statements 4.4
FTC 6.4
GAAP 1.3(a)
Hazardous Material 6.6
HSR Act 4.3(b)
Ivy Preamble
Jefferson Preamble
Liabilities 2.2(a)(i)
Licenses 1.1(e)
Liquid Assets 6.11
Material Adverse Effect 4.1
Multi-employer Plan 1.3
Newspapers Preliminary Statement A
Pay Newspaper 4.17
Permitted Liens 3.2(a)
Pre-Closing Statement of
Liabilities and Assets 2.3(b)
Properties 6.6(a)
Purchase Price 2.1(a)
Release 6.6
Reportable Quantity 4.21(a)
Required Consents 4.3(b)
Sellers Preamble
Sellers' Claims 10.3(c)
Sellers' Damages 10.3(a)
Software Maintenance Agreement 3.2(f)
Sellers' Indemnities 10.3(a)
Tax and Accounting Records 12.16
Tax Returns 4.10
Taxes 4.10
Termination Date 3.1
Transfer 6.1(a)
Transferred Employees 6.3(b)
Working Capital Deficit 2.2(a)(iii)
Working Capital Surplus 2.2(a)(iv)
Worrell Preamble
IN WITNESS WHEREOF, Sellers and Buyer have caused this Agreement to be
signed by their respective duly authorized partners as of the date first above
written.
BUYER:
MEDIA GENERAL, INC.
By: /s/ J. Stewart Bryan
----------------------------
Name : J. Stewart Bryan
Title: Chairman and President
SELLERS:
WORRELL ENTERPRISES, INC.
By: /s/ Ed M. Freakley
----------------------------
Edwin M. Freakley
Title: President
ANTIBES, INC.
By: /s/ Ed M. Freakley
----------------------------
Edwin M. Freakley
Title: Executive Vice President
CULPEPER COMMUNICATIONS CORPORATION
By: /s/ Ed M. Freakley
----------------------------
Edwin M. Freakley
President
CENTRAL VIRGINIA NEWSPAPERS, INC.
By: /s/ Ed M. Freakley
----------------------------
Edwin M. Freakley
Title: Executive Vice President
JEFFERSON LEASING COMPANY
By: /s/ Thomas E. Worrell
----------------------------
Thomas E. Worrell, Jr.
General Partner
IVY LEASING COMPANY
By: /s/ Ed M. Freakley
----------------------------
Edwin M. Freakley
Title:
EXHIBITS
Exhibit A - Publications and Related Assets
Exhibit B - Assignment and Assumption Agreement
Exhibit C - Form of Covenant Not to Compete
Exhibit D - Space Lease Agreement
Exhibit E - System License and Maintenance Agreement
Exhibit F - Opinion of Counsel to Sellers
Exhibit G - Opinion of Counsel to Buyer
DISCLOSURE SCHEDULE
1.2 - Excluded Assets
1.3 - Assumed Liabilities
2.2 - Liabilities Included in Working Capital Settlement
4.3(a) - Transaction Conflicts and Defaults
4.3(b) - Required Consents
4.4 - Financial Statement Exceptions
4.5 - Undisclosed Liabilities
4.6 - Certain Changes
4.7(a) - Certain Contracts and Arrangements
4.7(b) - Advertising and Newscarrier Forms of Agreement
4.7(c) - Defaults and Events of Default
4.8 - Litigation
4.9(a) - Collective Bargaining Agreements
4.9(b) - Employees
4.10 - Tax Matters
4.11 - Licenses
4.12(a) - Real Property Owned by Sellers
4.12(b) - Real Property Leased by Sellers
4.12(c) - Encumbrances on Real Property
4.13 - Personal Property
4.14 - Condition of Inventory
4.16 - Intellectual Property
4.17 - Circulation and Advertising Lineage
4.20 - Legal Notice Jurisdictions
4.21 - Environmental Matters
4.23 - Relationship with Affiliates
5.3 - Buyer's Consents
6.10 - Allocation of Purchase Price
