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RoweCom release 1/8/2003
- To: liblicense-l@lists.yale.edu
- Subject: RoweCom release 1/8/2003
- From: Ann Okerson <ann.okerson@yale.edu>
- Date: Thu, 9 Jan 2003 12:58:09 -0500 (EST)
- Reply-To: liblicense-l@lists.yale.edu
- Sender: owner-liblicense-l@lists.yale.edu
FOR IMMEDIATE RELEASE January 8, 2003 RoweCom, Inc. ("RoweCom" or the "Company"), doing business as Faxon or Divine Information Services, announced today that two parties are in the process of performing due diligence procedures regarding a potential purchase transaction for all or portions of its business. These due diligence procedures include an examination of the current financial condition of the Company as well as discussions with various publishers regarding possible financial accommodations that may be available to facilitate a potential transaction. Management continues to work with the Steering Committee (see description below) and has been working with divine in an attempt to obtain a satisfactory resolution to RoweCom's continuing financial problems. In an effort to reach a global resolution of these financial issues, a meeting has been scheduled for next Tuesday and Wednesday, January 14th and 15th with representatives for RoweCom and the two possible potential purchasers, the Steering Committee and divine inc ("divine"). As previously announced, RoweCom is experiencing financial difficulties that has resulted in RoweCom not being able to place or make payments for the substantial majority of its customer orders for 2003 subscriptions. RoweCom has been advised recently by its parent company, divine, that divine has recently decided to no longer support the subscription aggregation business. Without the support of divine, RoweCom has been forced to explore strategic alternatives that may ultimately include the sale or shutdown of the business. Initially, three publishers (Elsevier, John Wiley and Blackwell), as a significant accommodation to this process, agreed to continue to distribute journals through January 2003 to RoweCom's customers. Since that time, additional publishers have agreed to do the same. However, without the satisfactory placement of orders and related payments, there can be no assurance that other publishers will distribute journals or that any journals will be distributed by any publisher after January 2003. RoweCom will continue limited operations during this exploration period. The Company is attempting to cooperate with the publishers by providing them with listings of pending orders. However, due to the current financial position, no additional orders are being placed for fulfillment nor payments being released to publishers. Any funds received prospectively for subscriptions will be maintained in a segregated account pending resolution. Funds received from clients will not be released to publishers nor will they be refunded to customers during this exploration period. A status of an individual client subscription account is available from your customer service representative. An ad hoc committee (the "Informal Committee") has been formed in order to, among other things, perform investigations and analyses of the operations and financial condition of RoweCom and its parent corporation, divine, initiate negotiations with RoweCom and divine, and to take such other actions that the Informal Committee may determine are in the best interests of its constituency. The Informal Committee has met telephonically and appointed a Steering Committee that includes five publishers and five clients of Rowecom. The Steering Committee has retained legal counsel and a financial advisory firm to assist them in evaluating the situation. Correspondence to the ad hoc committee can be sent to adhoccommittee@nyc.rr.com. RoweCom asks for the continued patience of its clients during the next week and will provide you with a further update as to status of the process no later than January 18th, 2003. If during the meantime, you have not received a publication that you have ordered, please contact your customer service representative at (800) 769-3266. Thank you for consideration and understanding during this most difficult period. RoweCom is a subsidiary of divine, inc. (NASDAQ: DVN). This press release contains certain forward-looking statements with respect to the Company that are subject to risks and uncertainties that include, but are not limited to, those identified in the Company's press releases. For example, such risks and uncertainties include the ability of the Company to implement a restructuring plan to maximize the amount realized for stakeholders; continued cooperation of the Company's leading publishers; the availability of strategic alternatives for the Company; the adequacy and availability of cash to operates its business; the Company's ability to maintain sufficient cash flow and liquidity; the availability and accessibility of financing at affordable levels for the Company and the ability of the Company to tightly control expenditures. --end--
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