Exhibit 10.1
COMMON UNIT PURCHASE AGREEMENT
THIS COMMON UNIT PURCHASE AGREEMENT (this “Agreement”), dated as of December 31,
2009, is by and between David A. Trott, Ellen Coon, Trustee of the Ellen Coon
Living Trust u/a/d 9/9/98, Marcy J. Ford, Trustee of the Marcy Ford Revocable
Trust u/a/d 7/12/04, William D. Meagher, Trustee of the William D. Meagher Trust
u/a/d 8/24/07 and Jeanne M. Kivi, Trustee of the Jeanne M. Kivi Trust u/a/d
8/24/07 (collectively, “Sellers”), Dolan APC LLC, a Delaware limited liability
company (“Buyer”), and, for certain limited purposes set forth in the Agreement,
Dolan Media Company, a Delaware corporation (“DM”) and Trott & Trott, P.C., a
Michigan corporation (“Trott”). Capitalized terms used but not otherwise defined
herein shall have the definitions ascribed to them in the LLC Agreement (defined
below).
RECITALS
A. Buyer and Sellers, among others, are parties to that certain Amended and
Restated Operating Agreement of American Processing Company, LLC, dated as of
March 14, 2006, as amended (the “LLC Agreement”).
B. Sellers own an aggregate 104,905 Common Units of American Processing Company,
LLC, a Michigan limited liability company (the “Company”), with each Seller
owning the number of Common Units set forth opposite their respective names on
the attached Exhibit A.
C. On the terms and subject to the conditions set forth in this Agreement,
Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers,
71,230 Common Units (the “Purchased Units”).
AGREEMENT
In consideration of the foregoing and the mutual covenants, representations,
warranties and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF UNITS
1.1. Purchase and Sale. Sellers hereby sell to Buyer, free and clear of any
claims, liens, security interests, pledges, charges or encumbrances whatsoever,
and Buyer hereby purchases from Sellers, all of the Sellers’ right, title and
interest in and to the Purchased Units for an aggregate purchase price, equal to
the sum of the Cash Payment and the Equity Payment (both as defined below)
(together, the “Purchase Price”), to be paid to Sellers as follows:
(a) An aggregate amount equal to Eight Million Dollars ($8,000,000), payable to
each Seller as set forth on Exhibit A, in immediately available funds by wire
transfer to the account specified by each Seller, due and payable in accordance
with the following payment schedule (collectively, the “Cash Payment”):

  (i)  
Four Million Dollars ($4,000,000) on January 4, 2010;
    (ii)  
One Million Dollars ($1,000,000) on February 1, 2010;

 

 

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    (iii)  
One Million Dollars ($1,000,000) on March 1, 2010;
    (iv)  
One Million Dollars ($1,000,000) on April 1, 2010; and
    (v)  
One Million Dollars ($1,000,000) on May 3, 2010.

(b) An aggregate 248,000 shares of the common stock of DM on the Closing Date,
issued to the Sellers in the amounts as set forth on Exhibit A (the “Equity
Payment”).
Sellers acknowledges that following the consummation of the purchase of the
Purchased Units by Buyer, Sellers shall have no further rights with respect to
the Purchased Units; provided, however, the parties acknowledge and agree that
Sellers shall continue to own 33,675 Common Units of the Company (the “Remaining
Units”) and thus shall continue to hold a Membership Interest in the Company
with respect to such Remaining Units.
1.2. Obligations of DM. DM hereby absolutely, irrevocably and unconditionally
guarantees to Sellers the payment of both the Cash Payment and Equity Payment
and agrees to (a) use its best efforts to ensure that any registration
statements and/or related reporting and filings with the Securities and Exchange
Commission with respect to the Equity Payment are filed on or before March 31,
2010 and that such registration statement is declared effective by the SEC no
later than May 15, 2010 unless the SEC notifies DM that such registration
statement will not be subject to review, in which case the effective date of the
registration statement shall be no later than seven (7) business days after such
notification, and (b) prepare, execute and deliver any and all documents,
instruments and papers, and to do and perform any and all acts or deeds, which
are or become necessary or proper to carry out and effectuate the Equity
Payment.
1.3. Default Rights of Sellers. In the event of a breach of Buyer with respect
to payment of any portion of the Cash Payment to Sellers and Buyer fails to make
such late payment within fifteen (15) calendar days following written notice
from the Seller of such breach, Trott may (but need not) set off the amount of
such breach against any payment due to from Trott to the Company under that
certain Services Agreement, dated as of March 14, 2006, as amended, between
Trott and the Company. Each Seller hereby consents to this right of set off, and
acknowledges and agrees that it will receive a direct benefit as a result.
1.4. Closing. The closing of the transactions that are the subject of this
Agreement (the “Closing”) shall be held at the offices of Jaffe, Raitt, Heuer &
Wiess, P.C. in Southfield, Michigan, at 10:00 a.m. (Southfield time) on
December 31, 2009 or at such other time or place as the parties hereto shall
mutually agree (the “Closing Date”).

 

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1.5. Distributions to Sellers. Sellers and Buyer acknowledge and agree that
Sellers are entitled to distributions made by the Company after the Closing with
respect to (a) Distributable Cash for each calendar month ending prior to and
through the Closing Date and (b) tax liability distributions for the 2009 Fiscal
Year, in each case pursuant to the LLC Agreement and in accordance with each
Seller’s respective Participating Percentage (as it existed just prior to
Closing), and the Buyer as Manager, will cause the Company to make such
distributions.
ARTICLE II
CLOSING ACTIONS AND DELIVERIES
At the Closing, the Buyer and the Sellers shall take the following actions and
make the following deliveries:
2.1. Sellers shall deliver certificate(s) evidencing the Purchased Units duly
endorsed in blank or accompanied by duly executed assignments separate from
certificates;
2.2. Sellers shall each execute and deliver a non-foreign affidavit dated as of
the Closing sworn under penalty of perjury and in form and substance required
under the Treasury Regulation pursuant to Section 1445 of the Code stating that
such Seller is not a “Foreign Person” as defined in Section 1445 of the Code;
2.3. Buyer shall deliver distribution statements evidencing the Equity Payment
delivered to the Sellers in the amounts set forth on Exhibit A; and
2.4. All other documents and instruments contemplated by this Agreement to be
delivered at the Closing shall be delivered.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller, severally and not jointly, hereby represents and warrants to Buyer
as of the Closing Date or, if a representation or warranty is made as of a
specified date, as of such date, as follows with respect to such Seller (but not
with respect to any other Seller):
3.1 Authority. Such Seller has the requisite power and authority, and if such
Seller is a trust, has the requisite trustee powers, to enter into this
Agreement and to carry out and perform its obligations under it.
3.2 Authorization. All action on the part of such Seller necessary for the
authorization, execution, delivery and performance by it of this Agreement and
the consummation of the transactions contemplated by it has been taken. This
Agreement (assuming due authorization, execution and delivery by the other
parties to it) constitutes the legal, valid and binding obligations of such
Seller, enforceable against it in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors’ rights and as limited
by general principles of equity that restrict the availability of specific
performance, injunctive relief or other equitable remedies.

 

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3.3 Title to Units. Such Seller is the record and beneficial owner of the
Purchased Units set forth on Exhibit A opposite such Seller’s name, free and
clear of any claims, liens, security interests, pledges, charges or encumbrances
whatsoever. Such Seller has good and marketable title to the Purchased Units
transferred by it under this Agreement, and full right, power and authority to
sell such Purchased Units to Buyer as provided in this Agreement. Seller has not
granted any option or rights and is not a party to any other agreement that
requires (or upon the passage of time, the payment of money, or the occurrence
of any other event may require) such Seller to transfer any of the Purchased
Units to any Person other than Buyer as contemplated in this Agreement. Upon
consummation of the transactions contemplated by this Agreement, Buyer will
acquire good and marketable title to the Purchased Units transferred by such
Seller, free and clear of all claims, liens, security interests, pledges,
charges or encumbrances whatsoever other than those imposed by or through Buyer.
3.4 No Violation. Neither the execution and delivery of this Agreement and
consummation of the transactions provided for in it, nor the fulfillment by such
Seller of the terms of this Agreement will (with or without notice or passage of
time or both): (a) violate any law, order, decree, rule or regulation of any
Governmental Authority (as defined below) applicable to Seller or (b) result in
the breach of any agreement, contract, instrument or other obligation of any
kind or nature by which Seller or its properties may be subject or bound. For
purposes of this Agreement, “Governmental Authority” means any (i) nation,
state, county, city, town, village, district, or other jurisdiction of any
nature, (ii) federal, state, local, municipal, foreign, or other government
entity, (iii) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or other
entity and any court or other tribunal), or (iv) body exercising, or entitled or
purporting to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature.
3.5 Opportunity to Review. Such Seller has received and reviewed the all
information that it has requested from Buyer and the Company regarding the
business, properties, condition (financial and otherwise) and prospects of the
Company, such Seller has had the opportunity to make inquiries of management and
representatives of the Company as to all such matters, and it has received
satisfactory responses to all such inquiries. In making its investment decision
to sell the Purchased Units, such Seller has relied on its own investigation and
acknowledges that Buyer has made no representations and warranties regarding the
Company or Buyer except as expressly provided in this Agreement. Such Seller
acknowledges that any future sales of equity in the Company could be at a
premium or a discount to the purchase price set forth in this Agreement and such
sales could occur at any time or not at all. Such Seller acknowledges that it
has been advised, and has had an opportunity, to consult with its own attorney
and tax advisor regarding the transaction contemplated by this Agreement.
3.6 Brokers and Finders. Neither such Seller nor any Person acting on its behalf
has incurred any obligation or liability, contingent or otherwise, for brokerage
or finders’ fees or agents’ commissions or other similar payment in connection
with this Agreement or the transactions contemplated by it.

 

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3.7 No Consent Required. No consent, notification, approval, order or
authorization of, or declaration, filing or registration with, any Person or
Governmental Authority is required to be made or obtained by such Seller in
connection with the authorization, execution, delivery, performance or lawful
completion of this Agreement or the transactions contemplated by it.
3.8 Investment Representations.
(a) Seller will acquire Seller’s portion of the Equity Payment for investment
and not with a view to distributing all or any part thereof in any transaction
which would constitute a “distribution” within the meaning of the Securities
Act. Seller acknowledges that (i) none of the Equity Payment has been registered
under the Securities Act or any applicable state securities laws, (ii) the
Equity Payment can only be sold or otherwise transferred pursuant to
registration under the Securities Act and applicable state securities laws or an
exemption therefrom (in which case Seller shall first provide DM an opinion of
counsel, which counsel and the form and substance of the opinion, must be
reasonably satisfactory to the Company) to the effect that such exemption is
available, and (iii) except as set forth in this Agreement, DM is under no
obligation to file a registration statement with the SEC or any other
governmental body with respect to the Equity Payment.
(b) Seller (i) has such knowledge and experience in financial and business
matters that Seller is capable of evaluating the merits and risks of Seller’s
investment in the Equity Payment, (ii) is able to bear the complete loss of
Seller’s investment in the Equity Payment, (iii) has reviewed all forms, reports
and documents required to be filed by DM with the SEC since it is first became
subject to the filing and reporting requirements of the Exchange Act
(collectively, the “SEC Reports”) and has had the opportunity to ask questions
as Seller has deemed necessary of, and to receive answers from, DM, the Buyer
and their respective management concerning the terms and conditions of the
transfer of the Equity Payment to Seller pursuant to the Purchase Agreement and
to obtain additional information about the financial condition, results of
operations, business, properties, management and prospects sufficient to make an
informed investment decision regarding the equity payment, and (iv) is an
“accredited investor” within the meaning of Rule 501 of the regulations
promulgated under the Securities Act.
(c) Seller agrees to complete and deliver to DM any registration statement
questionnaires or other information DM may require to prepare any registration
statement or other filings required by applicable state securities laws in
connection with the Equity Payment and that the answers to such questionnaires,
when made, will be true and correct in all material respects as of the date made
and the effective date of any registration statement.

 

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(d) Seller agrees that the distribution statements for the Equity Payment that
are issued electronically through the Direct Registration System (the
“Distribution Statements”) shall bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of the
Equity Payment):
“THE SECURITIES REPRESENTED BY THIS DISTRIBUTION STATEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTED FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACTS OR (C) WRITTEN ASSURANCE,
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACTS.”
(e) To the extent that the Seller sells any shares issued as part of the Equity
Payment pursuant to any registration statement, the Seller covenants that such
sale of the shares will be made in accordance with the registration statement,
including the plan of distribution set forth therein. The Seller acknowledges
and agrees that the shares issued to him or her under this Agreement are not
transferable on DM’s books pursuant to a resale under the registration statement
unless the shares are sold in accordance with the registration statement.
Further, the Seller covenants to (i) notify DM of any changes to the information
regarding the Seller or his or her plan of distribution in the registration
statement or the prospectus or any amendment or supplement thereto or any
free-writing prospectus; and (ii) upon DM’s request, notify DM of how many
shares the Seller still owns at the time of the request.
3.9 SEC Filings. Seller covenants and agrees to timely file with the SEC all
filings required to be filed by such Seller pursuant to the Exchange Act,
including without limitation, pursuant to Section 13(d) and 16(a) of the
Exchange Act, in connection with the ownership of the shares issued to Seller
under this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND DM
Buyer hereby represents and warrants to Seller as follows and, with respect to
those representations and warranties in Sections 4.6 and 4.7 hereof, only, DM
represents and warrants to the Seller as follows:
4.1 Organization and Standing. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the requisite legal and company power and authority to carry
on its business as it is now being conducted.
4.2 Authority. Buyer has the requisite company power and authority to enter into
this Agreement and to carry out and perform its obligations under it.

 

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4.3 Authorization. All company action on the part of Buyer and its equityholders
necessary for the authorization, execution, delivery and performance by Buyer of
this Agreement, and the consummation of the transactions contemplated by it, has
been taken. This Agreement constitutes the legal, valid and binding obligation
of Buyer, enforceable against it in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors’ rights and as limited
by general principles of equity that restrict the availability of specific
performance, injunctive relief or other equitable remedies.
4.4 No Violation. Neither the execution and delivery of this Agreement and the
consummation of the transactions provided for in it, nor the fulfillment by
Buyer of the terms of this Agreement will (with or without notice or passage of
time or both): (a) violate any law, order, decree, rule or regulation of any
Governmental Authority applicable to Buyer or (b) result in the breach of any
agreement, contract, instrument or other obligation of any kind or nature by
which Buyer or its properties may be subject or bound.
4.5 No Consent Required. No consent, notification, approval, order or
authorization of, or declaration, filing or registration with, any Person or
Governmental Authority is required to be made or obtained by Buyer in connection
with the authorization, execution, delivery, performance or lawful completion of
this Agreement or the transactions contemplated by it.
4.6 SEC Reports. DM has on a timely basis filed all SEC Reports. The SEC Reports
(x) were prepared in accordance with the requirements of the Securities Act and
the Exchange Act, as the case may be, and the rules and regulations thereunder;
and (y) did not at the time they were filed with the SEC contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. To DM’s
knowledge, it is in compliance with the applicable listing requirements of the
New York Stock Exchange and has not received any notice from the New York Stock
Exchange asserting any non-compliance with such rules. As used in this
Section 4.6, the term “file” shall be broadly construed to include any manner in
which a document or information is furnished, supplied or otherwise made
available to the SEC.
4.7 Issuance, Sale and Delivery of the Equity Payment. The shares to be issued
to the Sellers under this Agreement as the Equity Payment have been duly and
validly authorized and, when issued and delivered against delivery of the
Purchased Units as provided for in this Agreement, will be duly and validly
issued, fully paid and non-assessable and are free from all taxes, liens and
charges with respect to the issue thereof by DM.
ARTICLE V
INDEMNIFICATION
5.1 Each Seller shall save, defend, indemnify and hold harmless Buyer and its
affiliates (including the Company), and its and their employees, officers,
managers, equityholders, representatives, agents, successors and assigns
(collectively, the “Buyer Parties”), from and against any and all losses,
liabilities, damages, penalties, fines, expenses, costs and attorneys’ fees
(collectively, “Damages”), which any Buyer Party may sustain or become subject
to as a result of or relating to any breach by such Seller of any representation
or warranty or covenant made by such Seller in this Agreement, such indemnity to
be on a several, not joint, basis.

 

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5.2 Buyer shall save, defend, indemnify and hold harmless Sellers and their
affiliates, employees, officers, managers, equityholders, representatives,
agents, successors and assigns (collectively, the “Seller Parties,” and together
with the Buyer Parties, the “Indemnified Parties”), from and against any
Damages, which any Seller Party may sustain or become subject to as a result of
or relating to any breach by Buyer of any representation or warranty or warranty
made by Buyer in this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 Interpretative Matters. Unless the context clearly otherwise requires,
(a) all references to Articles or Sections are to Articles and Sections
contained in this Agreement, (b) words in the singular or plural include the
singular and plural and pronouns stated in either the masculine, the feminine or
neuter gender shall include the masculine, feminine and neuter and (c) the use
of the word “including” in this Agreement shall be by way of example rather than
limitation. The subject headings of Articles and Sections of this Agreement are
included for convenience of reference only and shall not affect the construction
or interpretation of any of the provisions of this Agreement. All references
herein to “Dollars” or “$” are references to currency of the United States of
America. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party.
6.2 Successors and Assigns. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties will bind and inure to the
benefit of the respective successors and assigns of the parties, whether so
expressed or not.
6.3 Notices. Any notices, consents or other communication required or desired to
be sent or given under this Agreement by any of the parties shall in every case
be in writing and shall be deemed properly served if (a) delivered personally or
(b) delivered by a recognized overnight courier service, to the parties at the
addresses as set forth below or at such other addresses as may be furnished in
writing:
If to a Seller, to the address of such seller set forth on Exhibit A.
with a copy to (which shall not constitute notice):

Jaffe, Raitt, Heuer & Weiss, P.C.
27777 Franklin Road, Suite 2500
Southfield, Michigan 48034
Attn: William E. Sider

 

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If to Buyer, to:

Dolan APC, LLC
c/o Dolan Media Company
222 South Ninth Street, Suite 2300
Minneapolis, Minnesota 55402
Attn: James P. Dolan, its President
6.4 Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement, and the performance of the obligations imposed
by this Agreement, shall be governed by the laws of the State of Michigan
without regard to any principles of conflicts of laws.
6.5 Third Parties. Nothing in this Agreement expressed or implied is intended or
shall be construed to confer upon or give to any Person, other than the parties
to this Agreement and their respective permitted successors and assigns and the
Indemnified Parties, any rights or remedies under or by reason of this
Agreement.
6.6 Further Assurances. Sellers shall execute such further documents, and
perform such further acts, as may be reasonably requested by Buyer in order to
evidence the transfer and convey all the Purchased Units to Buyer on the terms
contained herein, and to otherwise comply with the terms of this Agreement and
consummate the transactions contemplated by it. Sellers acknowledge and agree
that this Agreement and the terms of it, may be required to be filed or
disclosed pursuant to securities laws applicable to Buyer, DM or its Affiliates.
6.7 Entire Agreement. This Agreement constitutes the complete and entire
agreement of the parties concerning the matters referred to in it, and
supersedes all prior agreements and understandings, whether written or oral.
6.8 Amendment and Waiver. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each party to this Agreement, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege under this
Agreement shall operate as a waiver of it nor shall any single or partial
exercise of it preclude any other or further exercise of it or the exercise of
any other right, power or privilege.

 

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6.9 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute one instrument. This
Agreement, and any amendments to it, to the extent signed and delivered by means
of a facsimile machine or email of a PDF file, shall be treated in all manner
and respects as an original agreement and shall be considered to have the same
binding legal effect as if it were the original signed version of it delivered
in person. At the request of any party, any other party shall re-execute
original forms and deliver them to such requesting party. No party shall raise
the use of a facsimile machine or e-mail of a PDF file to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine or e-mail of a PDF file as a
defense to the formation or enforceability of a contract and each such party
forever waives any such defense.
[Signatures on the following page]

 

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The parties have executed this Agreement on the date first set forth above.

            SELLERS:
      /s/ David A. Trott       DAVID A. TROTT            /s/ Ellen Coon      
ELLEN COON, TRUSTEE OF THE ELLEN COON LIVING TRUST U/A/D 9/9/98            /s/
Marcy J. Ford       MARCY J. FORD, TRUSTEE OF THE MARCY FORD REVOCABLE TRUST
U/A/D 7/12/04            /s/ William D. Meagher       WILLIAM D. MEAGHER,
TRUSTEE OF THE WILLIAM D. MEAGHER TRUST U/A/D 8/24/07            /s/ Jeanne M.
Kivi       JEANNE M. KIVI, TRUSTEE OF THE JEANNE M. KIVI TRUST U/A/D 8/24/07   
        BUYER:

DOLAN APC LLC
      By:   /s/ James P. Dolan         Print Name: James P. Dolan      Its: 
President   

[Signatures continued on the following page]

 

 

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[Continuation of signature page to Common Unit Purchase Agreement]

            DM:

DOLAN MEDIA COMPANY
      By:   /s/James P. Dolan         Print Name : James P. Dolan      Its: 
Chairman, CEO and President   

            TROTT:

TROTT & TROTT, P.C.
      By:   /s/ David A. Trott         Print Name: David A. Trott      Its: 
President   

 

 

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EXHIBIT A
SELLER ALLOCATION