<PAGE>
EXHIBIT 10.21
MASTER RESTRUCTURING AND PURCHASE AGREEMENT
AMONG
DAILY GAZETTE COMPANY,
MEDIANEWS GROUP, INC.,
CHARLESTON PUBLISHING COMPANY
AND
CHARLESTON NEWSPAPERS
DATED AS OF MAY 7, 2004
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S>
<C>
ARTICLE I
DEFINITIONS..........................................................................................
1
Section 1.1. Certain
Definitions......................................................................
1
ARTICLE II RESTRUCTURING;
CLOSING..............................................................................
3
Section 2.1. Restructuring
Transactions...............................................................
3
Section 2.2. Purchase
Price...........................................................................
5
Section 2.3. Assumption of
Liabilities................................................................
6
Section 2.4. Tax
Matters..............................................................................
7
Section 2.5. The Closing;
Deliveries..................................................................
8
ARTICLE III CONDITIONS TO
CLOSINGS.............................................................................
8
Section 3.1. Conditions of DGC to
Closing.............................................................
8
Section 3.2. Conditions of CPC and MNG to
Closing.....................................................
9
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF CPC AND
MNG.......................................................
10
Section 4.1. Organization, Qualification,
Etc.........................................................
10
Section 4.2. Corporate
Authority......................................................................
10
Section 4.3. No
Conflict..............................................................................
11
Section 4.4. No
Consents..............................................................................
11
Section 4.5. Assets and
Liens.........................................................................
11
Section 4.6. Covenants of CPC Under Letter of
Intent..................................................
12
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
DGC................................................................
12
Section 5.1. Organization, Qualification,
Etc.........................................................
12
Section 5.2. Corporate
Authority......................................................................
12
Section 5.3. No
Conflict..............................................................................
13
Section 5.4. No
Consents..............................................................................
13
ARTICLE VI COVENANTS AND
AGREEMENTS............................................................................
13
Section 6.1 Regulatory
Approvals and Newspaper Preservation Act
Notice............................... 13
Section 6.2
Cooperation..............................................................................
14
Section 6.3
Non-Disclosure...........................................................................
14
Section 6.4 MNG
Guaranty.............................................................................
14
ARTICLE VII
INDEMNIFICATION....................................................................................
14
Section 7.1. Indemnification by CPC and
MNG...........................................................
14
Section 7.2
Indemnification by
DGC...................................................................
14
Section 7.3
Survival.................................................................................
15
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
<S>
<C>
Section 7.4 Brokers'
Fees.............................................................................
15
ARTICLE VIII
MISCELLANEOUS.....................................................................................
15
Section 8.1.
Assignment...............................................................................
15
Section 8.2. Entire
Agreement.........................................................................
15
Section 8.3. Transactional
Costs/Expenses.............................................................
16
Section 8.4. Waiver, Amendment,
Etc...................................................................
16
Section 8.5. Binding Agreement; No Third Party
Beneficiaries..........................................
16
Section 8.6.
Notices..................................................................................
16
Section 8.7. Governing
Law............................................................................
17
Section 8.8.
Severability.............................................................................
17
Section 8.9 Rights
Cumulative........................................................................
17
Section 8.10 Further
Assurances.......................................................................
17
Section 8.11.Table of Contents;
Headings..............................................................
18
Section 8.12
Counterparts.............................................................................
18
</TABLE>
-ii-
<PAGE>
MASTER RESTRUCTURING AND PURCHASE AGREEMENT
MASTER
RESTRUCTURING AND PURCHASE AGREEMENT, dated as of May 7, 2004,
among DAILY GAZETTE COMPANY, a corporation
organized under the laws of the State
of West Virginia ("DGC"); MEDIANEWS GROUP,
INC., a corporation organized under
the laws of the State of Delaware ("MNG");
CHARLESTON PUBLISHING COMPANY, a
corporation organized under the laws of the
State of Delaware ("CPC"); and
CHARLESTON NEWSPAPERS, an unincorporated
joint venture under the laws of the
State of West Virginia (the "JOINT
VENTURE").
RECITALS
WHEREAS,
DGC and CPC, as assignee of MNG (then known as Garden State
Newspapers, Inc.) previously entered into
an Amended and Restated Joint Venture
Agreement dated August 23, 1998 (the
"EXISTING JOA"), pursuant to which the
Joint Venture has managed and operated the
Newspapers (as defined in the
succeeding recital), except for the news
and editorial departments of each
Newspaper, which have remained separate and
independent;
WHEREAS,
prior to the date hereof DGC has published The Charleston
Gazette, a morning daily newspaper Monday
through Saturday, and The Sunday
Gazette-Mail on Sunday, and CPC has
published The Charleston Daily Mail, an
afternoon daily newspaper Monday through
Friday except for legal holidays, all
in Charleston, West Virginia (each a
"NEWSPAPER" and collectively the
"NEWSPAPERS"); and
WHEREAS,
DGC, MNG and CPC entered into a Letter of Intent on February
24,
2004 (the "LETTER OF INTENT"), pursuant to
which they agreed in principle to
restructure the ownership of the Joint
Venture and certain related assets and to
amend the Existing JOA, and they now desire
to memorialize their agreement in a
definitive document;
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants
and agreements set forth herein, each of
DGC, MNG, CPC and the Joint Venture
(each a "PARTY" and collectively the
"PARTIES") agrees as follows:
ARTICLE I
DEFINITIONS
Section
1.1. Certain Definitions. As used in this Agreement, the
following
terms shall have the meanings specified
below. Certain other terms are defined
elsewhere in this Agreement and shall have
the meanings so specified.
"ABRY"
means, collectively, ABRY Mezzanine Partners, L.P., a limited
partnership organized under the laws of the
State of Delaware, and ABRY
Investment Partnership, L.P., a limited
partnership organized under the laws of
the State of Delaware.
"ABRY-CO"
means ABRY/Charleston, Inc., a corporation newly formed under
the laws of the State of Delaware, and
which is wholly-owned by ABRY.
<PAGE>
"AGREEMENT" means this Master Restructuring and Purchase
Agreement,
including the Exhibits and Schedules
attached hereto, as it may be amended from
time to time.
"AMENDED
JOA" means the Amended and Restated Joint Venture Agreement to
be
executed and delivered at the Closing by
DGC, DGHC, the Limited Partnership,
DGPC, CPC and the Joint Venture.
"BUSINESS
DAY" means any day other than a day on which commercial banks
in
Charleston, West Virginia are required or
authorized by law to be closed.
"CLOSING"
means the closing of the transactions contemplated by this
Agreement, to be held on the date and at
the place fixed in accordance with
Section 2.5.
"CLOSING
DATE" means the date of the Closing.
"CODE"
means the Internal Revenue Code of 1986, as amended, and the
rules
and regulations promulgated thereunder.
"DGHC"
means Daily Gazette Holding Company, LLC, a limited liability
company newly formed by DGC under the laws
of the State of Delaware, which is
governed by the Limited Liability Company
Operating Agreement for DGHC dated as
of May 7, 2004 and whose sole member is
DGC.
"DGPC"
means Daily Gazette Publishing Company, LLC, a limited
liability
company newly formed by DGHC under the laws
of the State of Delaware, which is
governed by the Limited Liability Company
Operating Agreement for DGPC dated as
of May 7, 2004 and whose initial sole
member will be DGHC and whose sole member
after giving effect to the Closing
transactions will be the Limited Partnership.
"HSR ACT"
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"LIEN"
means any liability and any lien, pledge, claim, encumbrance,
mortgage or security interest in real or
personal property.
"LIMITED
PARTNERSHIP" means Charleston Newspapers Holdings, L.P., a
limited partnership newly formed by DGHC,
CPC and ABRY-Co under the laws of the
State of Delaware, which will be governed
by the Partnership Agreement and whose
sole general partner is DGHC and whose sole
limited partners are CPC and
ABRY-Co.
"NPA"
means the Newspaper Preservation Act, as amended.
"PARTNERSHIP AGREEMENT" means the Limited Partnership Agreement
for
Charleston Newspapers Holdings, L.P. to be
entered into at the Closing by DGHC,
as general partner, and CPC and ABRY-Co, as
limited partners.
"TRANSACTION DOCUMENTS" means this Agreement, the Amended JOA,
the
Partnership Agreement and all other
documents and instruments delivered pursuant
to this Agreement.
-2-
<PAGE>
ARTICLE II
RESTRUCTURING; CLOSING
Section
2.1. Restructuring Transactions. Upon the terms and subject to
the
conditions set forth in this Agreement, at
the Closing, the Parties shall take
the following actions. All of the following
actions to occur on the Closing Date
shall be deemed to have occurred at the
Closing, and none of such actions shall
be effective unless all of such actions
have occurred.
(a) Contribution of DGC's Assets. At the Closing, DGC shall
transfer,
assign and contribute to DGHC, all of its assets, including the
mastheads
of The Charleston Gazette and The Sunday Gazette-Mail and the
other
related intangible assets, all of its cash and other liquid
assets,
and the
entire DGC Joint Venture Interest. At the Closing, immediately
thereafter, DGHC shall, in turn, transfer, assign and contribute to
DGPC,
the entire
DGC Joint Venture Interest.
The term "DGC JOINT VENTURE INTEREST" means all of DGC's
rights,
claims and
interests under the Existing JOA and in the Joint Venture,
including,
but not limited to, DGC's entire 50% general partnership
interest
and joint venture interest in the Joint Venture and all rights
relating
thereto and all of DGC's rights and interests in all of the
assets of
the Joint Venture.
(b) Partnership Agreement. DGHC, as general partner, and CPC
and
ABRY-Co,
as limited partners, have formed the Limited Partnership as a
new
partnership and at the Closing shall enter into the Partnership
Agreement.
(c) Contribution of DGHC's Membership Interest in DGPC. At the
Closing,
after the contributions by DGC pursuant to Section 2.1(a), DGHC
shall
transfer, assign and contribute to the Limited Partnership its
entire
membership interest in DGPC and such portion of the cash and
other
liquid
assets received from DGC as determined by DGHC. In
consideration
for such
contribution, DGHC shall receive 100% of the general
partnership
interests
in the Limited Partnership, having the rights and being subject
to the
obligations that are provided in the Partnership Agreement.
(d) Transfer of CPC's Assets Relating to the Joint Venture. At
the
Closing,
CPC shall transfer, assign and contribute to the Limited
Partnership good and marketable title to (x) all of the CPC
Charleston
Assets,
free and clear of all Liens (subject to the Assumed Liabilities
and
subject to the provisions contained in the Amended JOA), and (y)
the
entire CPC
Joint Venture Interest, free and clear of all Liens (subject to
the
Assumed Liabilities and subject to the provisions contained in
the
Amended
JOA). At the Closing, in consideration of such assignment,
transfer
and contribution being made, CPC shall receive 100% of the
Class
A limited
partnership interests in the Limited Partnership, having the
rights and
being subject to the obligations that are provided in the
Partnership Agreement, and, subject to Section 2.1(f) below, from
the
Limited
Partnership an amount equal to the Purchase Price, as
determined
and
adjusted in accordance with Section 2.2.
-3-
<PAGE>
The term "CPC CHARLESTON ASSETS" means all assets of every kind
and
description wherever located, whether tangible or intangible,
real,
personal
or mixed, currently used or held for use in connection with the
business
and operation of the Newspapers, including the publication of
the
Newspapers
and ancillary activities, or in connection with the Joint
Venture,
that are owned or held by CPC outside the Joint Venture,
including,
without limitation, the assets referenced in Section 8.0 of the
Existing
JOA, all circulation lists of The Charleston Daily Mail and The
Sunday Gazette-Mail
and all rights of CPC to the trade names, trademarks,
mastheads,
service names and service marks, "The Charleston Daily Mail"
and "The
Sunday Gazette-Mail", and all other intellectual property used
or
held for
use in the business of the Newspapers including all related
websites
and URL's, including "dailymail.com," but excluding the CPC
Joint
Venture
Interest, CPC's Class A limited partnership interests in the
Limited
Partnership and the Excluded Assets.
The term "EXCLUDED ASSETS" means the following assets:
(i) all cash and
cash equivalents on deposit for or held by
or for CPC as of the Closing for the account of or related to
the
Newspapers, other than cash or cash equivalents of the Joint
Venture;
(ii) all claims and
rights in and to any refunds of Federal,
state or local income taxes of CPC relating to the Newspapers;
(iii) all deposits and prepaid expenses of CPC, if any, as of
the Closing relating to other Excluded Assets; and
(iv) all assets of CPC
or one or more affiliates, including,
in particular and without limitation those of a corporate
overhead
nature, which in addition to being utilized in the
business/operations of the Newspapers are also utilized in the
business/operations of one or more affiliates of CPC.
The term "CPC JOINT VENTURE INTEREST" means all of CPC's
rights,
claims and
interests under the Existing JOA and in the Joint Venture,
including,
but not limited to, CPC's entire 50% general partnership
interest
and joint venture interest in the Joint Venture and all rights
relating
thereto and all of CPC's rights and interests in all of the
assets of
the Joint Venture.
(e) Subsequent Transfers of Certain CPC Charleston Assets. At
the
Closing,
immediately after the actions required by Section 2.1(d) are
taken, all
rights and interests in any real property or tangible personal
property,
if any, included in the CPC Charleston Assets shall be
transferred by the Limited Partnership to the Joint Venture.
(f) Financing
Transactions. At the Closing, immediately after the
actions
required by Section 2.1(e) are taken, (i) the Joint Venture
shall
assume the
Limited Partnership's obligation to pay the Purchase Price, as
determined
and adjusted in accordance with Section 2.2, to CPC, (ii) the
Limited
Partnership shall transfer to the Joint Venture that portion of
the cash
and other liquid assets transferred to the Limited Partnership
by
DGHC
pursuant to Section 2.1(c), (iii) the Joint Venture shall
obtain
-4-
<PAGE>
financing
proceeds from General Electric Capital Corporation and ABRY or
their
affiliates, and (iv) the Joint Venture shall pay the portion of
the
Purchase
Price payable at the Closing to CPC in the manner provided in
Section
2.5(c).
(g) Amended JOA. At the Closing, DGC, DGHC, the Limited
Partnership,
DGPC, CPC
and the Joint Venture shall enter into the Amended JOA.
Section
2.2 Purchase Price. The "PURCHASE PRICE" shall be Fifty-Five
Million Dollars ($55,000,000), subject to
adjustment and payment as provided
herein.
(a) Adjustments at Closing. The following adjustments shall be
made
to the
Purchase Price at Closing, and the amount of the Purchase Price
as
so
adjusted shall be the amount paid at the Closing to CPC pursuant
to
Section
2.5(c).
(i) Provisional
Working Capital Adjustment. A provisional
increase in the amount of $786,480 representing CPC's 50% share
of
the Joint Venture's positive working capital as of the end of
the
month of March, 2004 (the "REFERENCE MONTH"), as reflected on
the
Estimated Statement of Working Capital and Long Term Debt which
is
described in Section 2.2(b), with the final working capital
adjustment to be determined following the Closing in the manner
set
forth in Section 2.2(c). In determining the working capital
adjustment, current assets and current liabilities shall be
determined in accordance with generally accepted accounting
principles consistent with the Joint Venture's past practices,
except that (A) in calculating the value of current assets, the
value of all Excluded Assets and all intercompany receivables
shall
be excluded (as thus calculated, "CURRENT ASSETS"), and (B) in
calculating the value of current liabilities, all of the
Excluded
Liabilities, the current maturities of all long term debt
(including
the portion associated with the unsecured notes due DGC and
CPC)
and, so that there is no duplication, all liabilities that are
otherwise taken into account and result in a downward adjustment
to
the Purchase Price pursuant to subparagraphs (iii) and (iv)
below
shall be excluded (as thus calculated, "CURRENT LIABILITIES").
(ii) Provisional Long
Term Debt Adjustment. A provisional
reduction in the amount of $2,236,074 representing CPC's 50%
share
of the Joint Venture's long term debt as of the end of the
Reference
Month as reflected on the Estimated Statement of Working Capital
and
Long Term Debt, with the final debt adjustment to be determined
following the Closing in the manner set forth in Section 2.2(c).
In
calculating long term debt, current maturities of long term
debt
shall be included, but all of the Excluded Liabilities and the
portion of long term debt associated with the unsecured notes
due
DGC and CPC shall be excluded (as thus calculated, "LONG TERM
DEBT").
(iii) Pension Plan Adjustment. A reduction of $1,142,750.50,
representing CPC's 50% share of the amount of the estimated
unfunded
accrued benefit obligation for the Charleston Newspapers
Retirement
Benefit Plan as of December 31, 2003 as reported by the Plan's
actuaries, Aon Consulting, in its letter dated April 9, 2004.
-5-
<PAGE>
(iv) Medical Benefit
Program Adjustment. A reduction of
$723,000, representing CPC's 50% share of the estimated
unfunded
accrued benefit obligation for the Charleston Newspapers Post
Retirement Medical Benefit Program as of December 31, 2003.
(b) Estimated Working Capital and Long Term Debt Statement. CPC
has
prepared
and delivered to DGC a working capital and long term debt
statement
for the Joint Venture as of the end of the Reference Month (the
"ESTIMATED
WORKING CAPITAL AND LONG TERM DEBT STATEMENT"). DGC has
reviewed
the Estimated Working Capital and Long Term Debt Statement
delivered
by CPC, and DGC and CPC have agreed to the final form of the
Estimated
Working Capital and Long Term Debt Statement, which is attached
hereto as
Exhibit A, subject to final adjustments being made after the
Closing as
provided in Section 2.2(c). In order to effectuate the
provisional adjustments provided for in subparagraphs (i) and (ii)
of
Section
2.2(a) hereof, the Purchase Price has been reduced by one-half
the
amount by
which the aggregate value of Current Liabilities and Long Term
Debt
reflected on the Estimated Working Capital and Long Term Debt
Statement
exceeds the value of the Current Assets reflected on such
statement.
(c) Final Working Capital and Long Term Debt Statement. Not
later
than
ninety (90) days following the Closing, DGC shall prepare and
deliver
to CPC a
working capital and long term debt statement for the Joint
Venture
based upon the books and records thereof as of the Closing.
Such
statement
(the "FINAL WORKING CAPITAL AND LONG TERM DEBT STATEMENT")
shall
be
prepared in accordance with generally accepted accounting
principles
consistent
with the Joint Venture's past practices and fairly present the
Current
Assets, Current Liabilities and Long Term Debt of the Joint
Venture as
of the Closing and otherwise determined in a manner consistent
with this
Section 2.2. To the extent that the Current Assets, Current
Liabilities and Long Term Debt, as thus calculated, of the Joint
Venture
which is
reflected on the Final Working Capital and Long Term Debt
Statement
results in a final aggregate adjustment to the Purchase Price
under
subparagraphs (i) and (ii) of Section 2.2(a) that is greater or
lesser
than the provisional aggregate adjustment made at the Closing
as
reflected
on the final Estimated Working Capital and Long Term Debt
Statement,
a corresponding adjustment equal to one-half of such difference
shall be
made to the Purchase Price, and CPC or DGC, as appropriate,
shall
pay the
amount of such adjustment, by bank draft or wire transfer of
immediately available funds, within five (5) Business Days of
DGC's
delivery
to CPC of the Final Working Capital and Long Term Debt
Statement
or the
resolution of any dispute as provided in the following sentence,
as
the case
may be. Any dispute between CPC and DGC regarding the Final
Working
Capital and Long Term Debt Statement shall be resolved by
Deloitte
&
Touche LLP or such other nationally recognized firm of
independent
public
accountants as shall be mutually selected by CPC and DGC, with
the
cost and
fees of such firm being shared equally by CPC and DGC.
Section
2.3 Assumption of Liabilities. Effective as of the Closing,
DGHC
shall assume and be responsible for all of
CPC's duties and obligations under
the Existing JOA and CPC's pro rata share
pursuant to the Existing JOA of all
liabilities of the Joint Venture, arising
prior to or subsequent to the Closing,
as well as all obligations and liabilities
arising subsequent to the Closing
relating to the business and operations of
the Newspapers, provided that DGHC
