Graham and Danielle,
I write on behalf of Calderwood & Harkness LLP, counsel to Aurelius Media Holdings Inc. ("Seller"), in connection with the proposed sale of 100% of the membership interests in Meridian Press Holdings LLC, a Delaware limited liability company, to Ridgeline Publishing Acquisition Corp. ("Buyer"). Calderwood & Harkness LLP Matter No. 1043-00002.
**Attached Draft**
Please find attached an initial draft of the Membership Interest Purchase Agreement (the "MIPA") among Aurelius Media Holdings Inc. (as Seller), Ridgeline Publishing Acquisition Corp. (as Buyer), and, solely for purposes of certain specified provisions, Aurelius Global Media Group PLC and Pinnacle Ridge Capital Partners Fund IV, L.P. This is a clean opening draft; no redline accompanies the document at this stage.
Attachment: *draft-mipa-sellers-initial.docx*
**Key Features of the Draft**
By way of brief overview, the MIPA as drafted provides for the following:
- Sale of 100% of the membership interests in Meridian Press Holdings LLC at an enterprise value of $480,000,000, with the purchase price subject to customary adjustments for closing indebtedness, closing cash, transaction expenses of the target company, and net working capital (NWC target of $145,000,000), with a post-closing true-up mechanism within 90 calendar days of closing. The draft contemplates Kensington Forensic Advisors LLP as the neutral accounting firm for purposes of any NWC dispute resolution. - Comprehensive representations and warranties of both Seller and Buyer, with a negotiated material adverse effect definition containing customary carve-outs. Seller's representations and warranties are qualified by disclosure schedules (to follow, as noted below). - Pre-closing covenants, including interim operating covenants governing the conduct of the Business between signing and closing. - Closing conditions, including receipt of early termination or expiration of the applicable waiting period under the HSR Act (the HSR filing was submitted on May 20, 2024) and clearance under the Canadian Competition Act. - Indemnification provisions, including an escrow mechanism. Seller's draft proposes the escrow amount and the indemnification framework, and we anticipate these will be among the items for discussion. - Termination provisions. - The MIPA is governed by the laws of the State of Delaware.
**Ancillary Documents and Forthcoming Items**
We expect to separately circulate initial drafts of the following ancillary transaction documents in the coming days:
1. Transition Services Agreement (covering IT, finance/accounting, HR, and facilities services) 2. Escrow Agreement (with Granite Trust Company, N.A. as escrow agent) 3. Trademark License Agreement (license-back of the "Meridian" name to Aurelius) 4. Non-Competition and Non-Solicitation Agreement 5. Section 338(h)(10) Election Agreement
Additionally, the Seller disclosure schedules are currently in preparation in coordination with the Aurelius and Meridian Press management teams. The diligence process remains ongoing, and we will deliver the disclosure schedules when they are in substantially complete form.
**Timeline and Next Steps**
As you are aware, the exclusivity period under the LOI commenced on May 3, 2024, and we understand the parties share the objective of moving toward execution of a definitive agreement on an expeditious basis. We would appreciate receiving Hathaway, Locke & Barnett's markup of the MIPA at your earliest convenience.
In the interim, we are happy to arrange a call to walk through the draft and address any preliminary questions your team may have. Please let us know your availability, and we will coordinate with Beatrice Holloway and the Aurelius team accordingly.
Please note that this draft is circulated on behalf of Aurelius Media Holdings Inc. and remains subject to further review and comment by the client.
We look forward to working with you on this transaction.
Best regards,
Megan Chu Associate Calderwood & Harkness LLP 425 Park Avenue New York, NY 10022 T: (212) 506-3847 E: mchu@calderwoodharkness.com
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