Exhibit 2.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 27th day of August 1999 by and
among XXXXXXX X. XXXXXX ("Kurson"), an individual having an address at 0
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, XXXX X. XXXXXX ("Xxxxxx"), an
individual having an address at 0 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000,
XXXXX XXXXXXXX ("Michaels") an individual having an address at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, GREEN MAGAZINE, INC., a Delaware corporation ("Green")
(Kurson, Packel, Michaels and Green are collectively referred to as the
"Seller"), and INTELLIGENT LIFE CORPORATION, a Florida corporation (the
"Purchaser").
WHEREAS, Seller is in the business of developing, writing, editing,
producing and publishing Green Magazine, a personal finance publication (the
"Business");
WHEREAS, on the terms and conditions contained in this Agreement, Seller
intends to sell and Purchaser intends to purchase those assets, properties and
rights of the Seller as set forth on Schedule 1.1 hereto for the consideration
set forth herein;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties agree as follows:
1. PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES.
---------------------------------------------------------
1.1 Sale of Purchased Assets. Seller agrees to sell, assign,
------------------------
transfer and deliver to Purchaser, and Purchaser hereby agrees to purchase and
accept, all right, title and interest in and to those assets, properties and
rights exclusively relating to the Business (the "Purchased Assets"), including
without limitation, the assets, properties and rights described below:
(a) all agreements, contracts, commitments, licenses and other
arrangements of every kind and description, whether fully executed, partially
executed or executory, and whether written or oral, relating exclusively to
Green Magazine, including (i) all its agreements with authors or contributors
(including illustrators and including all its agreements under which Seller is
the employer with respect to a work made for hire, as such term is defined in
the United States Copyright Act of 1976, as amended) (collectively, the "Author
Agreements"), (ii) all its agreements with consulting editors, other
consultants or independent contractors serving as editors or editorial
assistants and (iii) all its agreements with distributors (all of the foregoing
agreements, contracts, licenses or other arrangements are listed on Schedule
1.1(a) and are hereinafter referred to as the "Transferred Contracts");
(b) (i) the exclusive right, for the full term of copyright, including
any renewals and extensions thereof, to continue the publication of Green
Magazine;
(ii) the exclusive right, for the full term of copyright, including
any renewals and extensions thereof, to use, publish and authorize the use and
publication of all contents and components of Green Magazine (except non-
exclusive to the extent that individual contributors, including Kurson and
Xxxxxx Xxxxx), may have reserved and/or retained usage and publication rights
with respect thereto), including every issue thereof and all contributions
thereto (including those articles set forth in Schedule 1.1(b) (ii)), all
adaptations thereof or supplements or revisions thereto and all editions
thereof, whether such works are under development, are currently published or
were previously published by Seller, and whether in print, electronic,
multimedia, or other format or medium, and all titles and trade names of such
works (collectively, the "Works");
(iii) the non-exclusive right, for the full term of copyright,
including any renewals and extensions thereof, to use, publish and authorize the
use and publication of all articles, books and other writings of Kurson
heretofore written for publications other than Green Magazine, in connection
with which Kurson's involvement with Green Magazine was or will be identified,
described or stated, on the subjects of personal finance, money, and related
topics, and all adaptations thereof or supplements or revisions thereto and all
editions thereof, whether such works are under development, are currently
published or were previously published and whether in print, electronic,
multimedia, or other format or medium, and all titles and trade names of such
works, including those items listed on Schedule 1.1(b)(iii) (collectively, the
"Kurson Works") but excluding those articles written by Kurson and published in
"American Lawyer" Magazine; as to each such writing such non-exclusive right
shall be unrestricted except to the extent that Kurson provides Purchaser with
copies of any exclusive grants made by Kurson prior to the execution hereof, as
set forth in Schedule 1.1(b)(iii). Kurson hereby retains the non-exclusive
right to use, publish, and authorize the use and publication of all such
writings, provided, however, that Kurson shall not hereinafter use nor publish,
-------- -------
nor authorize the use or publication, of more than nine (9) such writings in any
calendar year, or of more than five (5) such writings by any one licensee or
assignee.
(c) all copies of Green Magazine and physical components thereof held in
inventory, and all work in progress, in production, in preparation or in process
relating thereto, to the extent such items are in Seller's possession or
control;
(d) all plates, plate-making film and other reproduction materials, tapes,
artwork and other components relating to the Works, to the extent such items are
in Seller's possession or control;
(e) all manuscripts or computer files and related materials in Seller's
possession or control for any published or unpublished Works, whether submitted
by authors and contributors or created by Seller;
(f) all prepaid assets, if any, including prepaid publication costs
relating to the Works;
-2-
(g) all books, records and files maintained by the Seller in respect of
the Business, including but not limited to all supplier lists, mailing lists,
subscriber lists, customer lists, survey material, sales, returns and royalty
histories, and all editorial, permission, marketing, sales, production or
manufacturing files in whatever form; and
(h) all trademarks, service marks, tradenames, trade dress, titles
(including series titles), imprints, logos, colophons, and domain names relating
exclusively to the Business, all compilation copyrights in the issues of Green
Magazine, all copyrights owned by Sellers in Works written by persons and
entities other than Sellers, any trade secrets and know-how of Seller relating
exclusively to the Business and any licenses related to any of the foregoing
intellectual property, and all applications and registrations therefor and good
will associated therewith (collectively, the "Intellectual Property"), as
further described in Section 3.5.
1.2 Allocation of Liabilities. (a) Purchaser hereby assumes and
-------------------------
agrees to pay, discharge, perform or otherwise satisfy in due course in
accordance with their respective terms, and indemnify and hold Seller harmless
in accordance with Article 7 from the deferred subscription liabilities (as
described more fully in Section 8.3 below) for Green Magazine published or to be
published by the Seller (the "Assumed Liabilities").
(b) Seller hereby retains and shall pay, perform and discharge all
liabilities and obligations relating to the Business other than the Assumed
Liabilities (collectively, the "Retained Liabilities"), including without
limitation: (i) all wages, salaries and benefits obligations due to each of its
employees with respect to such employee's employment by Seller in the Business;
provided, however, that such obligations shall not be deemed to be due so long
-------- -------
as such obligations are being disputed in good faith by Seller and (ii) all
other liabilities accrued or arising prior to the date hereof in respect of the
Works, the Kurson Works or the Transferred Contracts (collectively, the
"Retained Liabilities").
2. PURCHASE PRICE AND PAYMENT.
--------------------------
2.1 Purchase Price. Subject to the terms and conditions of this
--------------
Agreement and in consideration of, and in full payment for, the aforesaid sale,
conveyance, assignment, transfer and delivery of the Purchased Assets and other
rights and privileges set forth and conveyed in Section 1.1, and the execution
by each of Kurson and Xxxxxx of an employment agreement with the Purchaser,
Purchaser will (i) pay to Seller $200,000 in cash and (ii) issue 100,000 shares
of the Purchaser's common stock, $.01 par value (the "Shares"), which Shares
have not been registered under the Securities Act of 1933, as amended
(collectively, the "Purchase Price") and (iii) assume the Assumed Liabilities,
and no other liabilities of Seller. The Purchase Price shall be distributed
among Kurson, Xxxxxx and Michaels as set forth in Schedule 2.1. The Purchase
Price shall be allocated among the Purchased Assets as set forth on Schedule
2.1(a).
2.2 Payment. The Purchase Price will be delivered to Seller upon
-------
signing this Agreement as follows: (i) the cash portion shall be delivered by
wire transfer of immediately
-3-
available U.S. funds to such accounts as Seller shall designate in writing and
(ii) the Shares shall be delivered in the form of stock certificates as set
forth in Schedule 2.1.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
----------------------------------------
warrants to Purchaser that the following representations and warranties are true
as of the date hereof. For the purposes of Section 3, the term "knowledge"
shall mean the actual knowledge of Kurson, Xxxxxx and Michaels after due
inquiry.
3.1 Due Incorporation and Qualification. Green is a corporation
-----------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Green has the corporate power and lawful authority to own
its assets and to carry on its business as presently being conducted. Green is
duly qualified to do business as a foreign corporation in New York and is in
good standing in New York and is, to the best of Seller's knowledge, duly
qualified to do business as a foreign corporation in and is in good standing in,
all jurisdictions in which the operation of its business requires such
qualification.
3.2 Authority. Each of Green, Kurson, Xxxxxx and Michaels has the
---------
necessary power and authority to enter into this Agreement and the other
agreements, documents and instruments to be executed and delivered pursuant
hereto (the "Ancillary Documents") by Seller, and to carry out the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Ancillary Documents and the consummation of the transactions
contemplated hereby and thereby by Green have been duly authorized by action of
the Board of Directors of Green. Pursuant to the By-Laws of Green, which have
been duly adopted and approved by all necessary corporate action and which are
in full force and effect on the date hereof, the Board of Directors has all
corporate power necessary to authorize the execution and delivery of this
Agreement and the Ancillary Documents and the consummation of the transactions
contemplated hereby and thereby by Green. No further corporate or other
proceedings on the part of Green are necessary to authorize its execution and
delivery of this Agreement or the Ancillary Documents. This Agreement has been
duly and validly executed and delivered by the Seller and constitutes the legal,
valid and binding obligation of Seller, enforceable against each of Green,
Kurson, Xxxxxx and Michaels in accordance with its terms. When executed and
delivered by Seller at the Closing, each of the Ancillary Documents will
constitute valid and binding obligations of Seller, enforceable against each of
Green, Kurson, Xxxxxx and Michaels in accordance with their respective terms.
Neither the execution and delivery of this Agreement nor the execution and
delivery of the Ancillary Documents, nor the consummation of the transactions
contemplated hereby or thereby and the compliance with the terms hereof or
thereof by Green does or will (a) violate any provision of its Certificate of
Incorporation or By-laws, (b) violate or conflict with or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a
default) under, or will result in the termination of, or accelerate the
performance required by, any Transferred Contract or other agreement, contract,
license or other legally binding arrangement to or by which either Green,
Kurson, Xxxxxx or Michaels or any of Green's Affiliates (as defined in the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder) is bound, or to which any of the Purchased Assets is subject, (c)
violate or conflict with any law, statute, ordinance, rule, regulation,
judgment, order, or decree applicable to either Green, Kurson, Xxxxxx or
Michaels or
-4-
any of Green's Affiliates, (d) require any consent, approval, order, permit,
action or authorization of, or the registration or filing with, any court,
agency, governmental authority or third party or (e) result in the creation of
any lien, security interest, charge or encumbrance upon any of the Purchased
Assets.
3.3 Good Title; Assets. Each of Green and Kurson have, and upon
------------------
consummation of the transactions contemplated hereby, will, deliver to
Purchaser, except as otherwise specifically and expressly disclosed in this
Agreement or the Schedules hereto and subject to obtaining any required consents
and approvals, all of either Green or Kurson's right, title and interest in and
to all of the Purchased Assets (which right, title and interest with respect to
each Work and Kurson Work includes at least the non-exclusive rights to publish,
market, sell and distribute same), free and clear of any title defects, liens,
claims, charges, security interests, pledges or other encumbrances or claims
which interfere or would interfere with the use of any Purchased Asset in the
Business ("Liens"), except for Liens for current taxes and assessments not yet
delinquent or being contested in good faith by appropriate proceedings. All
assets that Seller has historically used in connection with the publication of
Green Magazine are included within the Purchased Assets and are being
transferred by Seller to Purchaser hereunder. The Seller has not transferred to
a third party, any assets necessary to the conduct of the Business. Stella
Media Inc. does not own and does not have any interest in any assets, properties
or intellectual property used or useful in the Business.
3.4 Agreements. As of the date hereof, all of Green's rights in the
----------
Transferred Contracts will be effectively assigned to Purchaser, subject to the
terms and conditions of this Agreement. All Transferred Contracts are in full
force and effect and are legal, valid and binding agreements, enforceable
against the non-Seller parties thereto, subject to applicable bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors' rights
generally and subject to general principles of equity. Except as set forth on
Schedule 3.4, Seller is not in default, nor does Seller have reason to believe
------------
that any other party thereto is in default, of any material term under any
Transferred Contract.
3.5 Intellectual Property.
---------------------
(a) All copyrights with respect to the Works, the Kurson Works and
Green Magazine are unregistered. Except as set forth on Schedule 3.5, Green
------------
owns all compilation copyrights in all issues of Green Magazine, published or
unpublished. To the best of Seller's knowledge, none of the Works is in the
public domain. Schedule 3.5 lists all registered and unregistered trademarks
------------
and service marks, trademark applications and trade names, imprints, logos,
colophons and domain names owned by the Green and Kurson and which are material
to Green and Green Magazine. Green or Kurson own and have the right to use (or
has obtained valid and enforceable contracts, licenses and permissions to use)
and, will transfer to Purchaser upon signing this Agreement, an assignment of
trademarks in the form set forth in Exhibit B.
(b) Neither Green nor Kurson nor any Affiliate of Green is retaining
any trademarks, trade names, service marks or service names which are used in
connection with the business of Green.
-5-
(c) Except as set forth in Schedule 3.5 or for those Works, the
------------
copyright in all issues of Green is valid and subsisting as of the date of this
Agreement and is free and clear of any Liens.
(d) Except as set forth in Schedule 3.5, (a) to the knowledge of
------------
Seller, no Work or other materials published or proposed to be published by
Seller in connection with the Business infringes upon or violates the rights to
intellectual property owned by any third party, (b) there are no pending claims
and, to the knowledge of Seller, no threatened claims alleging any such
infringement or violation, (c) to the knowledge of Seller, no Work or other
materials published or proposed to be published by Seller in connection with the
Business contains material which is defamatory, libelous, obscene or injurious,
or violates the rights of privacy or publicity or other rights of any third
party, and (d) there is no pending or, to Seller's knowledge, threatened claim
to such effect.
3.6 Compliance with Applicable Law. Green has all licenses, permits,
------------------------------
approvals and other authorizations as are reasonably necessary in order to
enable it to own and conduct the Business as presently conducted. Except as set
forth in Schedule 3.6, the operations of the Business are in compliance with all
------------
federal, state and local ordinances, rules and regulations affecting the
Business or the Purchased Assets. Seller has not received notice of any
violation of, or liability or responsibility under, any applicable federal,
state, or local rule, regulation, order or decree relating to the Business or
the Purchased Assets, and, to the knowledge of Seller, Seller has not received
notice of any threatened claim of such a violation, liability or responsibility
(including any investigations relating thereto).
3.7 Employment Agreements. Except as set forth on Schedule 3.7,
--------------------- ------------
Seller has no employment agreement with any employee having substantial
operational responsibility for or otherwise engaged solely in the operation of
the Business.
3.8 Litigation. Except as listed on Schedule 3.8, there is no claim,
---------- ------------
action, suit, inquiry, proceeding, or investigation pending against Green or, to
the knowledge of Seller, any material claim, action, suit, inquiry, proceeding
or investigation threatened against Green, with respect to the Business or
involving or affecting the Business or the Purchased Assets.
3.9 Finder's Fee. Seller is not obligated to pay any finder's fee or
------------
commission or similar payment to any third party in connection with the
negotiation of this Agreement or the transactions contemplated hereby.
3.10 Investment Representation.
-------------------------
(a) Seller acknowledges that the Shares are not registered under the
securities laws of any jurisdiction and that each of Green, Kurson, Xxxxxx and
Michaels are acquiring the Shares for their own accounts, and not with a view to
distribution thereof. Each of Green, Kurson, Xxxxxx and Michaels is a
sophisticated investor with knowledge and experience in financial matters and
has received information from the Purchaser concerning the Purchaser and
-6-
has had the opportunity to obtain additional information in order to evaluate
the Shares.
(b) Seller is not relying on the Purchaser respecting the tax and
other economic considerations of the Shares, and Seller has relied on the advice
of, or has consulted with, only its own advisors. Seller and its advisors have
had the opportunity to obtain any additional information necessary to verify the
accuracy of and update where necessary the information contained in all
documents received or reviewed in connection with the Shares and have had the
opportunity to meet with representatives of the Purchaser and to have them
answer any questions and provide additional information regarding the finances,
operations, business and prospects of the Purchaser deemed relevant by Seller
and its advisors and all such questions have been answered and requested
information provided to their full satisfaction.
(c) Seller understands that it may bear the economic risk of the
Shares indefinitely because none of the Shares acquired by Seller hereunder may
be sold, hypothecated or otherwise disposed of unless subsequently registered
under the Securities Act of 1933, as amended and applicable state securities
laws or an exemption from such registration is available.
(d) Seller understands that the Purchaser is relying on Seller's
representations and warranties contained herein in issuing the Shares to Seller
and confirms that such representations and warranties may be relied upon by the
Purchaser in determining the availability of an exemption from registration
under Federal and state securities laws in connection with the issuance of the
Shares to Seller.
3.11 Legend. The Seller understands that the certificates representing
the Shares shall bear the following legend:
"THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
-------------------------------------------
Purchaser represents and warrants to Seller as follows:
4.1 Due Incorporation. Purchaser is a corporation duly organized,
-----------------
validly existing and in good standing under the laws of the State of Florida.
Purchaser has the full corporate power and authority to carry on its business as
presently being conducted.
4.2 Authority. Purchaser has the necessary corporate power and
---------
authority to enter into this Agreement and the Ancillary Documents to be
executed and delivered pursuant hereto by Purchaser, and to carry out the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Ancillary Documents and the consummation of
-7-
the transactions contemplated hereby and thereby by Purchaser have been duly
authorized by action of the Board of Directors of Purchaser. No further
corporate or other proceedings on the part of Purchaser are necessary to
authorize its execution and delivery of this Agreement or the Ancillary
Documents. This Agreement has been duly and validly executed and delivered by
Purchaser and constitutes the legal, valid and binding obligation of Purchaser,
enforceable against it in accordance with its terms. When executed and delivered
by Purchaser at the Closing, each of the Ancillary Documents will constitute
valid and binding obligations of Purchaser, enforceable against it in accordance
with their respective terms. Neither the execution and delivery of this
Agreement nor the execution and delivery of the Ancillary Documents nor the
consummation of the transactions contemplated hereby or thereby nor compliance
with the terms hereof or thereby by Purchaser does or will (a) violate any
provision of the Certificate of Incorporation or By-laws of either Purchaser,
(b) violate or conflict with or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or will
result in the termination of, or accelerate the performance required by, any
agreement, contract, license or other legally binding arrangement to or by which
either Purchaser or any of their Affiliates are bound, (c) violate or conflict
with any law, statute, ordinance, rule, regulation, judgment, order or decree
applicable to either Purchaser or any of their Affiliates, or (d) require any
material consent, approval, order or authorization of, or the registration or
filing with, any court, agency, governmental authority, except in the case of
matters covered by clauses (b), (c) and (d) above, occurrences which
individually or in the aggregate do not and will not have a materially
significant adverse effect on the Purchaser or prevent the consummation of the
transactions contemplated hereby and thereby.
4.3 Validly Issued. The Shares are duly and validly authorized and
--------------
issued, fully paid and non-assessable.
4.4 Finder's Fee. Other than any fee payable to ING. Barrings, LLC,
------------
which fee shall be paid by Purchaser, Purchaser is not obligated to pay any
finder's fee or commission or similar payment to any third party in connection
with the negotiation of this Agreement or the transactions contemplated hereby.
5. DELIVERIES AT SIGNING.
---------------------
5.1 Deliveries of Seller. Upon signing this Agreement, Seller shall
--------------------
deliver to Purchaser:
(a) a duly executed xxxx of sale in the form of Exhibit A hereto;
---------
(b) a duly executed assignment of trademarks in the form of
Exhibit B hereto;
---------
(c) duly executed instruments of assignment and other
instruments, where required to transfer the other Intellectual Property, as well
as all of the licenses and agreements included in the Purchased Assets; and
(d) such other documents and instruments as may be reasonably
required to effectuate the terms of this Agreement and to comply with the terms
hereof.
-8-
5.2 Deliveries by Purchaser. Upon signing this Agreement and subject
-----------------------
to the simultaneous due execution by Kurson and Xxxxxx of employment agreements
with Purchaser, Purchaser shall deliver or cause to be delivered to Seller:
(a) the Purchase Price by wire transfer of immediately available
U.S. funds to the account designated in writing by Seller; and
(b) 100,000 shares of restricted common stock issued to the
Seller in stock certificates as provided in Schedule 2.1.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
------------------------------------------
warranties made by any party hereto in this Agreement shall survive the Closing
hereof and any investigation at any time made by or on behalf of any other party
through the third anniversary of the date hereof, but thereafter shall be of no
further force or effect. All statements in any schedule hereto or in any
Ancillary Document (as defined in Section 3.2) shall be deemed representations
and warranties of such party within the meaning of this Section 6. No
investigation by Purchaser shall relieve Seller from any liability for any
misrepresentation, misleading statement or omission made in this Agreement or in
connection with the transactions contemplated hereby.
7. INDEMNIFICATION.
---------------
7.1 Obligation of Seller to Indemnify. After the Closing, Seller
---------------------------------
shall indemnify, defend and hold harmless Purchaser and any of its Affiliates
and their respective officers, directors, employees and agents (the "Purchaser
Indemnitees") from and against any losses, liabilities, damages, deficiencies,
costs or expenses (including reasonable attorneys' fees incurred in
investigation or defense) ("Losses") imposed upon or incurred by any Purchaser
Indemnitee in connection with third party claims, actions or proceedings arising
out of or in connection with or due to (a) any breach of any of Seller's
representations, warranties or agreements contained in this Agreement or any
Ancillary Document, (b) Seller's conduct of the Business prior to the date
hereof other than the Assumed Liabilities, or (c) allegations of infringement,
defamation, libel or invasion of privacy based on Works published by Seller
prior to Closing.
7.2 Obligation of Purchaser to Indemnify. After the Closing,
------------------------------------
Purchaser shall indemnify, defend and hold harmless Seller and any of its
affiliates and their respective officers, directors, employees and agents (the
"Seller Indemnitees") from and against any Losses imposed on or incurred by any
Seller Indemnitee in connection with any claim, action or proceeding asserted or
brought by persons or entities other than Seller Indemnitees arising out of or
in connection with or due to (a) any breach of any of Purchaser's
representations, warranties or agreements contained in this Agreement or any
Ancillary Document, (b) the Assumed Liabilities or (c) Purchaser's conduct of
the Business from and after the date hereof.
-9-
7.3 Notice to Indemnifying Party.
----------------------------
(a) If a Purchaser Indemnitee or a Seller Indemnitee becomes
aware of any claim or event with respect to which Seller or Purchaser (the
"Indemnifying Party") is or may be obligated to provide indemnification pursuant
to Section 7.1 or 7.2, the Indemnitee shall promptly give the Indemnifying Party
notice thereof, stating in reasonable detail the nature and basis of said claim
and a good faith estimate of the amount thereof (provided that the fact that the
detail set forth is insufficient shall in no event prevent any party from
asserting its rights under this Agreement), and in the case of any claim for
indemnification hereunder arising out of any claim, action, suit or proceeding
brought by a third party (a "Third Party Claim"), the Indemnitee shall give to
the Indemnitor a copy of any written claims, process or legal pleadings with
respect thereto promptly after such documents are received by the Indemnitee.
The failure to give such notice shall not relieve the Indemnifying Party of its
obligations under this Section 7 except to the extent that such failure has
materially adversely prejudiced the Indemnifying Party under the provisions for
indemnification contained in this Agreement. Subject to paragraph (c) hereof,
the Indemnifying Party may compromise or defend, at such Indemnifying Party's
own expense and by such Indemnifying Party's own counsel, any Third Party Claim.
(b) In the event that the Indemnifying Party, within a reasonable
time after receipt of an indemnification notice, does not so elect to defend a
Third Party claim, the Indemnitee will have the right (upon further notice to
the Indemnifying Party) to undertake the defense, compromise or settlement of
such claim for the account of the Indemnifying Party, subject to the right of
the Indemnifying Party to assume the defense of such claim at any time prior to
settlement, compromise or final determination thereof, provided that the
Indemnifying Party first reimburses in full all costs of the Indemnitee
(including reasonable attorney's fees) incurred by it in connection with such
defense prior to such assumption.
(c) The Indemnitee, the Indemnifying Party and the Indemnifying
Party's counsel shall cooperate in the compromise of, or defense against, any
Third Party Claim; provided that the Indemnitee shall be entitled to participate
in the defense and to employ counsel, at the Indemnitee's expense, to assist
therein. The Indemnitee may not settle or compromise any claim over the
objection of the Indemnifying Party, except that the Indemnitee may settle any
claim with respect to which it waives its indemnification under this Agreement.
The Indemnifying Party may not settle or compromise any claim over the objection
of the Indemnitee unless such settlement or compromise fully and unconditionally
releases Indemnitee from any restriction, liability or obligation related to
such claim. If the Indemnifying Party chooses to defend any such claim, the
Indemnitee shall make available to the Indemnifying Party any books, records or
other documents or personnel within its control that are necessary or
appropriate for such defense. Consents referred to in this Section 7.3 shall
not be unreasonably withheld.
7.4 Limitation on Indemnification. The maximum amount of damages for
-----------------------------
which Seller or Purchaser may be liable under this Article VII shall be the
Purchase Price. Seller shall have the option, exercisable in its sole
discretion to satisfy any indemnification obligation hereunder by transferring
to Purchaser such number of Shares that in the aggregate have a Current Market
Price equal to the amount of such indemnification obligation. For the purpose
of
-10-
this section, "Current Market Price" shall mean the average closing price per
Share for the ten (10) consecutive trading days ending three (3) days prior to
the Determination Date. "Determination Date" shall mean the date on which the
indemnification obligation amount is collected from the Indemnifying Party. The
closing price for each day shall be, as reported in The Wall Street Journal or,
-----------------------
if not reported therein, as reported in another newspaper of national
circulation chosen by the Board of Directors of Purchaser, the closing sales
price or, in case no such sale takes place on such day, the average of the
closing bid and asked prices regular way, on the NASDAQ National Market System,
or if the common stock of Purchaser is not then listed or admitted to trading on
the NASDAQ National Market System, on the largest principal national securities
exchange on which such stock is then listed or admitted to trading.
7.5 Remedies Cumulative. The remedies provided to any Indemnitee
-------------------
herein shall be cumulative and shall not preclude an Indemnitee from asserting
any other rights or seeking any other remedies against an Indemnifying Party or
his, her or its respective heirs, successors and assigns.
8. CERTAIN TAX MATTERS.
-------------------
8.1 Transfer Taxes. Any and all sales, use, transfer, recording, ad
--------------
valorem and similar taxes and fees incurred as a result of the transactions
contemplated by this Agreement shall be paid by the party upon whom the law
imposes the primary liability for such taxes. Purchaser shall be liable for all
taxes attributable to the ownership of the Purchased Assets and the operation of
the Business for all periods on and after the date hereof, and Seller shall be
liable for all taxes attributable to the ownership of the Purchased Assets and
the operation of the Business for all periods ending on or before the date
hereof.
8.2 Cooperation; Records. Each party hereto, at its own expense,
--------------------
shall provide the other party hereto with such assistance as may reasonably be
requested by the requesting party in connection with the preparation of any tax
return, audit or other examination by a taxing authority, and any judicial or
administrative proceeding which may arise relating to liability for taxes
attributable to the Purchased Assets or the operation of the Business, or in
connection with the collection of such party's debts relating to the Business,
for litigation (other than litigation between the parties), for audit or other
legitimate business purpose and each party, at its own cost and expense, shall
retain for a reasonable period of time (but not less than six years after the
date hereof or until the expiration of all applicable statutes of limitation,
whichever is later) and provide the other party with all accounting, business,
financial and tax records or information which may be relevant to such financial
statement, return, audit or examination, proceedings or determination.
8.3 Deferred Subscription Revenue Liability. Seller represents and
---------------------------------------
warrants that as of July 31, 1999 the deferred subscription income of the Seller
with respect to the Business was $51,906.02. The parties agree that the
Purchaser shall determine in good faith, as soon as possible after the Closing,
the amount of the liability that it will incur with respect to the fulfillment
of the prepaid subscription income of the Business as of the date hereof.
Although neither party makes any representation or warranty with respect to the
tax treatment thereof, the
-11-
parties acknowledge that, for federal, state and local income and franchise tax
purposes, the assumption of the liability so determined will be treated as
additional consideration paid by Purchaser to Seller in connection with the
transactions contemplated by this Agreement and that Seller intends to take an
offsetting deduction to the extent that such treatment is not inconsistent with
the amount of the liability so determined. The parties hereto agree to take
positions on their respective tax returns that are consistent with the
foregoing.
8.4 Taxable Transaction. The parties agree that the transaction
-------------------
contemplated herein shall be treated as a taxable transaction.
9. MISCELLANEOUS.
-------------
9.1 Notices. Any notice or other communication required or which may
-------
be given hereunder shall be in writing and either delivered personally to the
addressee, or mailed, certified or registered mail, postage prepaid, and shall
be deemed given when so delivered personally, or if mailed, five days after the
date of mailing, as follows:
(i) if to Seller, to:
Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, 00000
and to:
Xxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, 00000
and to:
Xxxxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, 00000
with a copy to:
Xxx Xxxxxx, Esq.
0000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
(ii) if to Purchaser, to:
-12-
Intelligent Life Corporation
00000 X.X. Xxxxxxx 0
Xxxxx 000
Xxxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
and to:
Intelligent Life Corporation
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Any party may change its address for receiving notice by written
notice given to the others named above in the manner provided above.
9.2 Entire Agreement. This Agreement (including the Exhibits and
----------------
Schedules hereto) contains the entire agreement between the parties with respect
to the transactions contemplated hereby and supersedes all prior agreements,
undertakings, commitments and representations, written or oral, with respect
thereto. Purchaser acknowledges that no representation or warranty, express or
implied, has been made as to the accuracy or completeness of any information
regarding the Business not included in this Agreement or the Schedules hereto,
and neither Seller nor its agents, representatives, advisors or employees will
be subject to any liability to Purchaser or any other person resulting from the
disclosure to Purchaser, or Purchaser's use of, any such information (including
any offering materials previously submitted).
9.3 Waivers and Amendments. This Agreement may only be amended,
----------------------
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may only be waived, by a written instrument signed by the
parties, or in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. The
waiver in writing of any failure of any party to comply with any obligation,
agreement or condition hereunder shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
-13-
9.4 Governing Law; Jurisdiction. This Agreement shall be governed
---------------------------
and construed in accordance with the laws of the State of New York applicable to
agreements made and performed entirely within such State, without regard to
principles of conflicts of law. Each of Purchaser and Seller irrevocably
submits to the exclusive jurisdiction of the federal and state courts of the
United States located in the borough of Manhattan in the City of New York for
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby.
9.5 Announcements. Except as required by law, no announcement of
-------------
this Agreement or the transactions contemplated hereby may be made by Seller
without the written approval of Purchaser, which approval shall not be
unreasonably withheld.
9.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9.7 Exhibits and Schedules. The Exhibits and Schedules to this
----------------------
Agreement are a part of this Agreement as if set forth in full herein.
9.8 Third Parties. Nothing contained herein is intended to confer
-------------
upon or give to any person or entity other than the parties hereto and their
Affiliates, successors or assigns, any rights or remedies under or by reason of
this Agreement.
9.9 Severability. If any term or provision of this Agreement is held
------------
by a court of competent jurisdiction to be invalid, void or unenforceable, such
term or provision shall, if possible, be deemed amended to the extent, if any,
found necessary by such court for it to be valid, binding and enforceable, and
the remainder of the terms and provisions of this Agreement shall remain in full
force and effect and shall not be impaired or affected.
9.10 Headings. The headings or captions in this Agreement are for
--------
reference only and shall not affect in any way the meaning or interpretation of
this agreement.
9.11 Parties in Interest. This Agreement shall bind and inure to the
-------------------
benefit of the parties named herein and their respective Affiliates, successors
and assigns. This Agreement shall not be assignable by any party without the
prior written consent of the other party, except that Purchaser may assign this
Agreement to one of its Affiliates, provided that Purchaser shall remain liable
for all of their respective obligations under this Agreement.
9.12 Expenses. Purchase shall pay its own expenses incurred in
--------
connection with this Agreement and the transactions contemplated hereunder as
well as the reasonable legal fees and expenses incurred by Seller in connection
with this Agreement and the transactions contemplated hereunder.
-14-
IN WITNESS WHEREOF, the parties have executed this Agreement the date
above first written.
GREEN MAGAZINE, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------
Title: Vice President
--------------------------------
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
XXXXXXX X. XXXXXX
-----------------------------------------
/s/ Xxxx X. Xxxxxx
-----------------------------------------
XXXX X. XXXXXX
-----------------------------------------
/s/ Xxxxx Xxxxxxxx
-----------------------------------------
XXXXX XXXXXXXX
-----------------------------------------
INTELLIGENT LIFE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Executive Vice President
-15-
