Exhibit 2.0
ASSET PURCHASE AGREEMENT
CONTENTS
RECITALS
I. Defined Terms
1.1 Accounts Receivable
1.2 Agreement
1.3 Buyer
1.4 Business Agreements
1.5 Business
1.6 Business Records
1.7 Closing
1.8 Closing Date
1.9 Escrow Account
1.10 Escrow Fund
1.11 Goodwill
1.12 Intellectual Property Rights
1.13 Liabilities of the Business
1.14 Licenses and Authorizations
1.15 Most Recent Financial Statements
1.16 Permitted Exceptions
1.17 Promissory Note
1.18 Purchase Price
1.19 Seller
1.20 Termination Date
II.Purchase and Sale of Assets
2.1 Sale of Assets
2.2 Purchase Price and Method of Payment
(a) Purchase Price
(b) Method of Payment
(c) Allocation of Purchase Price
2.3 Delivery of the Business Assets
III. Closing
3.1 Closing
3.2 Prorations
3.3 Transfer Taxes, Etc.
3.4 Costs and Expenses
3.5 Performance by Seller at Closing
3.6 Performance by Buyer at Closing
3.7 Approval of Documents
IV. Representations and Warranties of Seller
4.1 Organization, Corporate Power and Authority
4.2 Authorization, Binding Effect and No Conflicts
4.3 Consents and Approvals
4.4 Accounts Receivable
4.5 Business Agreements
4.7 Intellectual Property Rights
4.8 Licenses and Authorizations
4.9 Financial Statements
4.10 Litigation
4.11 No Broker
4.12 Disclosure
4.13 Compliance with Laws
4.14 Non-foreign Status
V. Representations and Warranties of Buyer
5.1 Organization, Corporate Power and Authority
5.2 Authorization, Binding Effect and No
Conflicts
5.3 Consents and
Approvals
5.4 Availability of Funds
5.5 No Broker
VI. Covenants of Seller
6.1 Investigation and Access
6.2 Operation of the Business by Seller
6.3 Negative Covenants of Seller
6.4 Accounts Receivable
6.5 Further Assurances
VII. Conditions Precedent to Closing
7.1 Seller's Performance
7.2 Buyer's Performance
VIII. Indemnification; Risk of Loss
8.1 Assets to Be Conveyed
8.2 Indemnification of Buyer
8.3 Indemnification of Seller
8.4 Risk of Loss
IX. Termination
9.1 Right to Terminate Before Closing
9.2 Specific Performance in the Event of
Seller's Failure to Close
X. Miscellaneous
10.1 Schedules and Exhibits
10.2 No Assignment, Successors, Assigns, Etc.
10.3 Construction
10.4 Counterparts
10.5 Survival of Representations and Warranties
10.6 Notices
10.7 Amendment
10.8 Entire Agreement
10.9 Waiver
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of this 30 day of April, 2002, by and between Urban Television Network
Corporation, a Texas corporation (hereinafter referred to as "Seller"), and
Waste Conversion Systems, Inc., a Minnesota corporation (hereinafter referred to
as "Buyer").
RECITALS
A. Seller is engaged in the business of providing national television
network programming focusing on the interests and entertainment of the
African-American television viewing audience.
B. Seller desires to sell to Buyer certain Business Assets used in the
Seller's business, and Buyer desires to purchase the same, all on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained herein, and subject to the conditions
hereinafter set forth, Seller and Buyer hereby agree as follows:
I.
Defined Terms
For purposes of this Agreement, the following capitalized terms will have
the meanings set forth below, unless the context clearly indicates otherwise.
1.1 "Accounts Receivable" means all accounts receivable as of the Closing
Date. The Accounts Receivable will be listed and valued as of the close of
business on the day preceding the Closing Date on a schedule to be prepared by
Xxxx Xxxxx, Certified Public Accountant.
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1.2 "Agreement" means this Asset Purchase Agreement.
1.3 "Buyer" is defined in the first paragraph of this Agreement as Waste
Conversion Systems, Inc.
1.4 "Business Agreements" means those certain agreements, contracts and
commitments entered into by Seller in connection with the Business, as more
particularly described on Schedule I attached hereto, including all renewals,
extensions and modifications thereof.
1.5 "Business Assets" means the assets of Sellers to be purchased by Buyer
pursuant to this Agreement, consisting of the (i) the Urban Television Affiliate
Network, (ii) Satellite Transponder Space Service Agreement (iii) three assigned
promissory notes receivable totaling $777,000 and (iv) Good Will associated with
these Agreements, if any.
1.6 "Business Records" means all logs, books, and business records,
operating manuals, and other files and documentation (or true copies thereof)
pertaining to the Business Assets and the operation of the Business Assets,
including (i) audited balance sheets, statements of income, statements of
changes in stockholders equity and statement of cash flow for since inception,
(ii) the Most Recent Financial Statements, and (iii) federal, state and local
income tax returns filed by Seller since inception.
1.7 "Closing" means the closing of the purchase and sale of the Assets in
accordance with this Agreement.
1.8 "Closing Date" means the date specified in Section 3.1 on which the
Closing will take place.
1.9 "Escrow Account" means a deposit account at Worth National Bank of Fort
Worth, Texas.
1.10 "Escrow Fund" means the sums to be held in escrow pursuant to Section
8.2(c) in the event of a dispute between the Buyer and Seller concerning Buyer's
right to indemnification from Seller.
1.11 "Goodwill" means the goodwill of the Business Assets, to the extent
such exists.
1.12 "Intellectual Property Rights" means all trade names, trademarks,
trademark applications, patents, patent applications, copyrights, copyright
applications and similar intangible rights used by Seller in connection with the
Business and more particularly described in Schedule V attached hereto. The term
includes, without limitation, the right to use the name "Urban Television
Network Corporation, Urban American Television Network and UATV."
1.13 "Liabilities of the Business" means all liabilities and obligations
that arise from or are related to the operation and ownership of the Business
(whether liquidated or unliquidated, absolute or contingent, known or unknown,
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due or to become due, and whether arising before or after the Closing Date),
including, but not limited to, obligations arising under the Business
Agreements.
1.14"Licenses and Authorizations" means all licenses, permits, and
authorizations issued by government agencies necessary to the ownership and
operation of any of the Assets or the Business, all as more particularly
described on Schedule II.
1.15 "Most Recent Financial Statements" means the unaudited balance sheet,
statement of income, statement of change in stockholders equity and statement of
cash flow for since Seller's inception.
1.16 "Permitted Exceptions" means those exceptions described on Schedule
III which Buyer has agreed in writing to accept.
1.17 "Promissory Note" means that note between Hispanic Television Network,
Inc. and Urban Television Network Corporation dated October 29, 2001 with a
principal balance of One Million Four Hundred Thousand ($1,400,000) Dollars
bearing interest at the rate of Twelve (12%) percent per annum attached as
Exhibit " A ".
1.18 "Purchase Price" means the price specified in Section 2.2 hereof to be
paid by Buyer to Seller at Closing.
1.19 "Seller" is defined in the first paragraph of this Agreement as Urban
Television Network Corporation.
1.20 "Termination Date" means the date specified in Section 9.1 on which
this Agreement will terminate if Closing has not taken place.
II.
Purchase and Sale of Assets
2.1 Sale of Assets. On the Closing Date, Seller will sell, convey assign,
transfer and deliver to Buyer, and Buyer will purchase and acquire from Seller,
all of Seller's right, title and interest in and to the Business Assets.
2.2 Purchase Price and Method of Payment.
(a) Purchase Price. At Closing, Buyer will pay to Seller as full
consideration for the Business Assets (i) the sum of One Million Five Hundred
Thousand ($1,500,000) Dollars payable in Buyer's corporate common stock totaling
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Sixteen Million (16,000,000) common shares, together with (ii) the assumption of
Seller's performance obligations on the Seller's assigned Promissory Note, (the
"Purchase Price").
(b) Method of Payment. On the Closing Date, Buyer will deliver to
Seller one share certificate representing Sixteen Million (16,000,000) common
shares of Waste Conversions Systems, Inc. In addition to Buyer's delivery of the
shares, buyer will deliver an Assumption and Assignment Agreement for the
Business Assets and Promissory Note payable. Additionally, Seller will deliver
Assignment and Assumption Agreements for the three promissory notes receivable
totaling $777,000.
(c) Allocation of Purchase Price. The Purchase Price will be allocated
for all purposes by the parties as follows:
(i) $1,500,000.00 allocated to the Network Affiliate rights.
(ii) $777,000 allocated to the three promissory notes recievable.
(d) Tax Reporting of Allocations. Buyer and Seller will report the
sale and purchase of the Assets for all federal, state, local and foreign tax
purposes in a manner consistent with the allocation set forth in this Section
2.2(c).
2.3 Delivery of the Business Assets. Buyer will take delivery of all Assets
at Closing by Assignment and Assumption Agreement the form of which is set forth
in Exhibit " B ".
III.
Closing
3.1 Closing. The Closing of the purchase and sale contemplated by this
Agreement (the "Closing") will take place on April 30, 2002 (the "Closing
Date") at the offices of Waste Conversion Systems, Inc. or at such other time or
place as will be agreed by the parties in writing; provided, however, that all
conditions to the Closing herein set forth will have been satisfied.
3.2 Prorations. The operation of the Business Assets and all income and
expenses attributable thereto through the close of business on the day preceding
the Closing Date will be for the account of Seller. Thereafter, the operation of
the Business and all income and expenses attributable thereto will be for the
account of Buyer. Expenses such as power and utility charges, property taxes and
assessments, rents, license fees, dues, subscriptions, and other charges,
prepaid and deferred items, and all other items of income and expense connected
with the Business will be prorated between Seller and Buyer as of the Closing
Date. All prorations will be made and paid in cash within ten (10) days of the
Closing Date.
3.3 Transfer Taxes, Etc. To the extent applicable, any retail
sales/use/transfer taxes due as a result of the purchase and sale of Assets
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contemplated hereby will be paid entirely by Seller, and Seller will indemnity
and hold Buyer harmless therefrom.
3.4 Costs and Expenses. Except as otherwise provided in Sections 3.2 and
3.3, each party will separately bear the costs and expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that if any party will commence legal action to specifically
enforce or otherwise seek redress under, or for breach of, this Agreement, the
prevailing party in such action will be entitled to recover its costs and
reasonable attorneys' fees incurred to prosecute or defend the action, including
costs and fees incurred in any appellate proceeding.
3.5 Performance Seller at Closing. At Closing, Seller will deliver to Buyer
the following:
(a) An Assignment and Assumption Agreement in the form of Exhibit B
sufficient to convey to Buyer all right, title and interest of Seller in and to
the three promissory notes receivable, the Business Agreements and all other
intangible assets that are a part of the Assets.
(b) A certified copy of a resolution of Seller's board of directors
authorizing the execution of this Agreement and the transactions contemplated
hereby.
(c) A certificate of Seller to the effect that all warranties and
representations of Seller herein are true and correct as of the Closing Date.
(d) All other instruments and documents that Buyer or its counsel, in
the reasonable exercise of their discretion, will deem to be necessary (x) to
fulfill any obligation required to be fulfilled by Seller on the Closing Date,
and (y) to evidence satisfaction of any conditions to Closing referred to in
Section 7.2 hereof.
3.6 Performance by Buyer at Closing. At Closing, Buyer will deliver to
Seller the following:
(a) 16,000,000 shares of Buyer's common stock;
(b) Assignment and Assumption Agreement whereby Buyer assumes Seller's
performance obligation under the Promissory Note.
(c) A certified copy of a resolution of Buyer's board of directors
authorizing this transaction.
(d) A certificate of Buyer to the effect that all warranties and
representations of Seller herein are true and correct as of the Closing Date.
(e) All other instruments and documents that Seller or its counsel, in
the reasonable exercise of their discretion, will deem to be necessary (x) to
fulfill any obligation required to be fulfilled by Buyer on the Closing Date,
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and (y) to evidence satisfaction of any conditions to Closing referred to in
Section 7.2 hereof.
3.7 Approval of Documents. Unless otherwise provided herein, all
instruments and documents delivered pursuant to this Agreement will be dated as
of the Closing Date, and will be satisfactory to the parties and to their
respective counsel as to form and content
IV.
Representations and Warranties of Seller
Seller represents and warrants to Buyer that the following statements are
true and correct on the date hereof, and will be true and correct on the Closing
Date as though made on such date:
4.1 Organization, Corporate Power and Authority. Seller is a corporation
duly organized, validly existing and in good standing under the laws of Texas,
and has the requisite corporate power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
4.2 Authorization, Binding Effect and No Conflicts. The execution, delivery
and performance by Seller of this Agreement and the consummation by Seller of
the transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of Seller. This Agreement has been duly and validly
executed and delivered by Seller and constitutes the valid and binding
obligation of Seller, enforceable in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency or other similar laws relating to creditors'
rights generally, and (ii) general principles of equity. The execution, delivery
and performance by Seller of this Agreement and the consummation by Seller of
the transactions contemplated hereby will not (x) violate any provision of law,
rule or regulation to which Seller is subject, (y) violate any order, judgment
or decree applicable to Seller, or (z) conflict with, or result in a breach or
default under, any term or condition of the Articles of Incorporation or the
Bylaws of Seller, or any agreement or other instrument to which Seller is a
party or by which Seller may be bound; except, in each case, for violations,
conflicts, breaches or defaults which in the aggregate would not materially
hinder or impair the consummation of the transactions contemplated hereby.
4.3 Consents and Approvals. Neither the execution of this Agreement nor
the consummation of the sale of the Assets requires the approval or consent of
any governmental authority having jurisdiction over the business of Seller nor
of any party to any agreement with Seller.
4.4 Accounts Receivable. All Accounts Receivable of the Seller are
reflected properly on their books and records, are valid receivables subject to
no set offs or counterclaims, are presently current and collectible, and will be
collected in accordance with their terms at their recorded amounts, subject only
to the reserve for bad debt set forth in the Most Recent Financial Statements,
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as adjusted for the passage of time through the Closing Date in accordance with
past customs and practices of the Seller.
4.5 Business Agreements. The Business Agreements listed on Schedule I
hereto constitute valid and binding obligations of Seller and are in full force
and effect as of the date of this Agreement and, with the exception of those
Business Agreements which will have been completed prior to the Closing Date
according to their terms, will on the Closing Date constitute valid and binding
obligations of Seller and be in full force and effect. Neither Seller nor any
other party to such Business Agreements are in material default under any such
agreements.
4.6 Intellectual Property Rights. Seller owns or has the right pursuant to
license, sub- license, agreement or permission to use all Intellectual Property
Rights necessary for the operation of the Business as presently conducted and as
presently proposed to be conducted. Seller has taken all reasonable action to
protect each item of Intellectual Property that it owns or uses. To Seller's
knowledge, Seller is not infringing upon, misappropriating, violating or
otherwise acting adversely to the right of any other person under, or in respect
to, any trade names, trademarks, patents, copyrights, or similar intangible
rights, and the Seller has not received any charge, complaint, claim or notice
of such an infringement, misappropriation, violation or adverse act. To the
knowledge of the Seller, and the directors and officers of Seller, no third
party has infringed upon, misappropriated, violated or otherwise acted adversely
to the Intellectual Property Rights.
4.7 Licenses and Authorizations. On the date hereof, the Licenses and
Authorizations set forth in Schedule II hereto are in frill force and effect,
and, to the knowledge of Seller, constitute all licenses, permits and
authorizations from regulatory bodies which are required for the ownership and
operation of the Assets and the Business. Seller is not aware of any material
violation of any federal, state, or local law or regulation in respect to
Seller's ownership or operation of the Assets.
4.8 Financial Statements. All financial statements that Seller is required
to provide Buyer pursuant to this Agreement have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods covered by such financial statements, are correct and
complete, and are consistent with the books and records of the Seller; except,
however, that the Most Recent Financial Statements are subject to normal year
end adjustments, which will not be material, and lack footnotes.
4.9 Litigation. There are no actions, suits, claims, proceedings or
investigations pending or, to the knowledge of Seller, threatened against Seller
that would affect Seller's title or interest in any of the Assets. Seller has
received no notice, and has no knowledge, that it is in default of any order,
writ, injunction or decree of any court or federal, state, municipal or
governmental department, commission, board, bureau, agency or instrumentality
with respect to the ownership and operation of the Assets. To the best knowledge
of Seller, Seller has complied in all material respects with all laws,
regulations, franchises, licenses and orders applicable to the Assets.
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4.10 No Broker. Seller has not employed any broker, finder or agent, nor
otherwise become obligated for any broker's, finder's or agent's or similar fee
with respect to the transaction contemplated by this Agreement.
4.11 Disclosure. Neither this Agreement nor any of the Schedules or
Exhibits annexed hereto contains any untrue statement of any material fact, or
omits to state any material fact required to be stated in order to make the
statements contained herein or therein not misleading. To the best knowledge of
Seller, there is no fact which has not been disclosed in writing to Buyer prior
to the date hereof that materially adversely affects the prospects or the
financial or other condition of the Business or the Assets.
4.12 Compliance With Laws. To Seller's knowledge, Seller is in compliance
with all laws, rules, regulations and orders applicable to the Business Assets
(including, without limitation, those relating to environmental protection,
occupational safety and health and equal opportunity employment practices),
except where the failure to comply therewith does not have a material adverse
effect on the financial condition of the Business Assets.
4.13 Non-foreign Status. Seller is not a "foreign person" (i.e., a
nonresident alien individual or foreign corporation) within the meaning of
Section 897(a) of the Internal Revenue Code. At Closing, Seller will furnish
Purchaser, in accordance with Internal Revenue Code Section 1445 and the
regulations thereunder, with an affidavit stating, under penalty of perjury,
that Seller is not a "foreign person," and stating Seller's taxpayer
identification number.
V.
Representations and Warranties of Buyer
Buyer represents and warrants to Seller that the following statements are
true and correct on the date hereof and will be true and correct on the Closing
Date as though made on such date:
5.1 Organization, Corporate Power and Authority. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of Nevada,
and has the requisite corporate power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
5.2 Authorization, Binding Effect and No Conflicts. The execution, delivery
and performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes the valid and binding obligation
of Buyer, enforceable in accordance with its terms, subject to (i) applicable
bankruptcy, insolvency or other similar laws relating to creditors' rights
generally, and (ii) general principles of equity.
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5.3 Consents and Approvals. Neither the execution of this Agreement nor the
consummation of the sale of the Assets requires the approval or consent of any
governmental authority having jurisdiction over the business of Buyer nor of any
party to any agreement with Buyer.
5.4 Availability of Shares. Buyer has available and will have available on
the Closing Date sufficient treasury shares to enable it to consummate the
transaction contemplated by this Agreement.
5.5 No Broker. Buyer has not employed any broker, finder or agent, nor
otherwise become obligated for any broker's, finder's or agent's or similar fee,
with respect to the transaction contemplated by this Agreement.
VI.
Covenants of Seller
6.1 Investigation and Access. Throughout the period from the date of this
Agreement until the Closing Date, Seller will comply with Buyer's reasonable
requests for information with respect to the Assets, and will provide Buyer and
its duly authorized representatives with reasonable access during regular
business hours to Seller's offices, records, files and books of account related
to the Assets. Such access will be provided for the limited purpose of allowing
Buyer to conduct an investigation into the condition and operation of, and title
to, the Assets. The investigation will be conducted in a manner that does not
unreasonably interfere with Seller's normal operations or with Seller's employee
and customer relationships. After the investigation, Buyer may terminate this
Agreement at any time prior to the Closing Date if it is not satisfied, in the
reasonable exercise of its discretion, with the condition of the Assets. In case
of such termination, neither Buyer nor Seller will have any further obligation
to the other party under this Agreement. Unless and until the purchase and sale
contemplated by this Agreement is closed, Buyer and its representatives will
treat all information obtained in the investigation of Seller's Assets and
otherwise not in the public domain as confidential, and will return all books,
records and documents made available to it by Seller.
6.2 Operation of the Business by Seller. Seller covenants that prior to the
Closing Date Seller will:
(a) Continue to operate the Business Assets in the usual and ordinary
course of business, and in conformity with all applicable laws, ordinances,
regulations, rules and orders;
(b) File all applications and other documents required to be filed in
connection with the operation of the Business and Assets;
(c) Maintain its Business Assets and in their present good operating
condition and repair, reasonable wear and tear and ordinary usage excepted;
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(d) Keep the Business Assets free of liabilities, liens, and
encumbrances of any kind whatsoever, except for the Permitted Exceptions;
(e) operate the Business Assets diligently, in the ordinary course of
business and consistently with past practice, and use its best efforts to
preserve existing customer and agency relationships and the business reputation
of Seller;
(f) Pay, or cause to be paid, all income, property, sales, use,
franchise, excise, social security, withholding, workmen's compensation and
unemployment insurance taxes and all other taxes of or relating to the Business
Assets that are due;
(g) Maintain complete and accurate books and records relating to the
Business Assets.
6.3 Negative Covenants of Seller. Between the date of this Agreement and
the Closing Date, except as contemplated by this Agreement, Seller will not,
without the prior written consent of Buyer:
(a) Create, assume or permit to exist any new security interest or
pledge, or subject to any lien or encumbrance any of the Assets, whether now
owned or hereafter acquired;
(b) Sell, assign, lease or otherwise transfer or dispose of any of the
Assets, whether now owned or hereafter acquired, except for retirements in the
usual and ordinary course of business in connection with the acquisition of
similar property or assets.
(c) Cancel any customer or agency relationship, except in the usual
and ordinary course of business; renegotiate, modify, amend or terminate any
Business Agreement listed on Schedule I; or fail to comply with all of the terms
and conditions of said Business Agreements and all Licenses and Authorizations.
6.4 Accounts Receivable. Seller will promptly remit in cash to Buyer the
proceeds of all checks and other payments for accounts receivable-purchased by
Buyer under this Agreement and coming into the possession of Seller.
6.5 Further Assurances. At any time or from time to time after the Closing
Date, Seller will, at the request of Buyer and at Buyer's expense, execute and
deliver any further instruments or documents and take all such further actions
as Buyer may reasonably request in order to evidence the consummation of the
transactions contemplated hereby.
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VII.
Conditions Precedent to Closing
7.1 Seller's Performance. The obligation of Seller to close on the Closing
Date is subject to the fulfillment at or prior to such date of each of the
following conditions (any one or more of which may be waived in whole or in part
by Seller in writing):
(a) The representations and warranties of Buyer contained herein will
be true and correct in all material respects on the Closing Date with the same
force and effect as though such representations and warranties had been made on
and as of the Closing Date.
(b) Buyer will have performed and complied with all material terms,
covenants and conditions of this Agreement that are required to be performed or
complied with by it on or before the Closing Date.
(c) No action, investigation, or proceeding will have been instituted
or threatened that would adversely affect the ability of Buyer to comply with
the provisions of this Agreement.
7.2 Buyer's Performance. The obligations of Buyer to close hereunder on the
Closing Date are subject to the fulfillment at or prior such date of each of the
following conditions (any one or more of which may be waived in whole or in part
by it in writing):
(a) The representations and warranties of Seller contained herein will
be true and correct in all material respects on the Closing Date with the same
force and effect as though such representations and warranties had been made on
and as of the Closing Date.
(b) Seller will have performed and complied with all material terms,
covenants and conditions of this Agreement required to be performed or complied
with by it on or before the Closing Date.
(c) No action or proceeding will have been instituted or, to the
knowledge of Seller, threatened that would adversely affect or relate materially
to the Assets, or adversely affect the ability of Seller to comply with the
provisions of this Agreement.
(d) No damage, destruction or loss will have occurred that would
entitle Buyer to terminate this Agreement, as provided in Section 8.4.
(e) All actions, proceedings, instruments, signatures of Seller, and
documents required to carry out this Agreement or incident thereto will have
been approved by counsel for Buyer. Such approval will not be unreasonably
withheld.
(f) All governmental and other consents and approvals, if any,
necessary to permit the consummation of the transactions contemplated by this
Agreement will have been received.
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VIII.
Indemnification: Risk of Loss
8.1 Assets to Be Conveyed. Except for performance of the Business
Agreements expressly assumed by Buyer hereunder, Buyer assumes no liabilities or
obligations of Seller of any kind whatsoever, whether fixed or contingent and
whether known or unknown, in connection with the Business Assets. At Closing,
Seller will convey to Buyer title to all of the Assets free and clear of all
liens, charges, claims and encumbrances, subject only to the Permitted
Exceptions; and Seller will, in accordance with Section 8.2 hereof, indemnity
and hold Buyer harmless from any and all such liabilities, liens, charges,
claims and encumbrances to which the Assets are or may become subject.
8.2 Indemnification of Buyer.
(a) Seller agrees to indemnity and hold Buyer, its successors and
assigns, harmless from and against:
(1) Any and all claims, liabilities and obligations of every kind
and description, contingent or otherwise, arising out of or related to the
operation of the Business or to ownership of the Assets by Seller prior to the
Closing. Such claims, liabilities and obligations include, but are not limited
to, any and all claims, liabilities and obligations arising or required to be
performed prior to the Closing under any contract, agreement, lease or
instrument assumed by Buyer, except for performance of those Business Agreements
and the Permitted Exceptions.
(2) Any and all damage or deficiency resulting from any
misrepresentation, breach of warranty, or nonfulfillment of any agreement on the
part of Seller under this Agreement, or from any misrepresentation in or
omission from any certificate or other instrument furnished to Buyer pursuant to
this Agreement or in connection with any of the transactions contemplated
hereby.
(3) Any and all actions, suits, proceedings, damages,
assessments, judgments, costs and expenses, including reasonable attorneys' fees
incurred by Buyer as a result of Seller's failure or refusal to compromise or
defend any claim incident to the foregoing provisions.
(b) If any claim or liability will be asserted against Buyer which
would give rise to a claim by Buyer against Seller for indemnification under the
provisions of this section, Buyer will promptly notify Seller in writing of the
same, and Seller will, at its own expense, compromise or defend any such claim;
provided, however, that Buyer may, at its own cost and expense, join and
xxxxxx-ate with Seller in defending or compromising such claim.
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(c) In the event Seller fails to indemnity Buyer as required under the
terms of this Article VIII, Buyer will have the right to withhold any payment
due under the Promissory Note until such time as Seller indemnifies Buyer or
make other provisions satisfactory to Buyer for correction of any breach of this
Agreement or disposition of any claim, lien, or other encumbrance giving rise to
Seller's obligation to indemnity. Buyer will give Seller prompt notice of any
intention to withhold payment. Upon receipt by Seller of such notice from Buyer,
Seller will give Buyer notice of any disagreement Seller may have with Buyer's
assertion of its right to indemnification. Thereafter, Buyer establish an
account with Worth National Bank called UTVN Escrow Account and will pay the
amount in dispute ("Escrow Fund") into the Escrow Account. The Escrow Fund will
remain in the account until the parties hereto give joint instructions as to its
disposition or release, or until it receives a final court order or
determination of arbitration pertaining to the Escrow Fund. The Escrow Fund will
be held in an interest-bearing deposit account, with interest payable to Seller
on the amount ultimately paid to Seller and interest payable to Buyer on the
amount of the Escrow Fund ultimately paid to Buyer.
8.3 Indemnification of Seller.
(a) Buyer hereby agrees to indemnity and hold Seller and its
successors and assigns harmless from and against:
(1) Any and all claims, liabilities and obligations of every kind
and description, contingent or otherwise, arising from or related to the
ownership of the Assets by Buyer subsequent to the Closing. Such claims,
liabilities, and obligations include, but are not limited to, any and all
claims, liabilities and obligations arising or required to be performed
subsequent to Closing under any Business Agreement assumed by Buyer pursuant to
this Agreement.
(2) Any and all damage or deficiency resulting from any
misrepresentations, breach of warranty, nonfulfillment of any agreement or
obligation assumed or required to be assumed by Buyer under this Agreement, or
from any misrepresentation in or omission from any certificate or other
instrument furnished to Seller pursuant to this Agreement, or in connection with
any of the transactions contemplated hereby.
(3) Any and all actions, suits, proceedings, damages,
assessments, judgments, costs and expenses incident to any of the foregoing
provisions, including reasonable attorneys' fees incurred by Seller as the
result of Buyer's failure or refusal to defend or compromise any claim.
(b) If any claim or liability will be asserted against Seller which
would give rise to a claim by Seller against Buyer for indemnification under the
provisions of this section, Seller will promptly notify Buyer of the same and
Buyer will, at its own expense, compromise or defend any such claim; provided
that Seller may, at its own cost and expense, join and cooperate with Buyer in
the defense or compromise of such claim.
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8.4 Risk of Loss. The risk of any loss or impairment of any of the Business
Assets to be transferred to Buyer pursuant to this Agreement from any cause will
be borne by Seller at all times prior to the Closing Date. Upon the occurrence
of any loss or damage to any material part of the Assets prior to Closing,
Seller will notify Buyer of same in writing immediately, stating with
particularity the extent of loss or damage incurred, the cause thereof, if
known, and the extent to which restoration will be reimbursed under any
insurance policy with respect thereto. Subject to the provisions hereof, Buyer
will have the option (but not the obligation) exercisable within ten (10) days
after receipt of such notice from Seller, to:
(1) Terminate this Agreement.
(2) Postpone the Closing until such time as the Business Assets have
been restored, but in no case longer than within three (3) weeks from
notification.
(3) Elect to consummate the Closing and accept the Business Assets in
its "then" condition, with an adjustment to the purchase price for the loss or
destruction of any of the Assets.
IX.
Termination
9.1 Right to Terminate Before Closing. This Agreement may be terminated at
any time prior to Closing, and the transactions contemplated hereby may be
abandoned at any such time.
(1) by Buyer, as provided in Sections 6.1 or 8.4;
(2) by mutual consent of Buyer and Seller;
(3) unilaterally by Buyer or Seller, if there has been a default by
the other party in any material respect in the performance of any covenant
herein, and such default has not been cured by the Closing Date;
(4) unilaterally by Buyer or Seller, any representation or warranty of
the other party is untrue in any material respect; or
(5) unilaterally by Buyer or Seller if the Closing has not taken place
by (the "Termination Date").
9.2 Specific Performance in the Event of Seller's Failure to Close. If all
the conditions precedent to the obligations of either party to close as set
forth in this Agreement have been satisfied, but such party will refuse to close
as provided in Article III hereof, or in the event of a material breach by
either party of its obligations hereunder which is not cured by the Closing
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Date, then the other party, in addition to any other right or remedy it may have
at law or in equity, will have the right to enforce the terms of this Agreement
by decree of specific performance.
X.
Miscellaneous
10.1 Schedules and Exhibits. All schedules and exhibits attached to this
Agreement will be deemed part of this Agreement and incorporated herein, where
applicable, as if fully set forth herein.
10.2 No Assignment, Successors, Assigns, Etc. The terms and conditions of
this Agreement will inure to the benefit of, and will be binding upon, the
parties hereto, their respective heirs, personal representatives, successors and
assigns; provided, however, that this Agreement will not be assigned or conveyed
by any party to any person or entity without the prior written consent of the
other party hereto, except that Buyer may assign this Agreement without consent
to any corporation controlling or controlled by it (the term control will mean
an ownership and controlling interest of greater than 50.1%). In the event of an
assignment, the assigning party will not be relieved of any of its obligations
and undertakings contracted for herein.
10.3 Construction. This Agreement will be construed and enforced in
accordance with the laws of the State of Texas.
10.4 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which will be deemed an original and all of
which will constitute one and the same instrument. 10.5 Survival of
Representations and Warranties. All of Seller's and Buyer's representations and
warranties contained herein will survive the Closing for a period of one year
from the Closing Date, after which they will be null and void.
10.6 Notices. Any notices or other communications will be in writing and
will be considered to have been duly given on the earlier of (1) the date of
actual receipt or (2) three days after deposit in the first-class certified U.S.
mail, postage prepaid, return receipt requested:
(a) If to Seller, to:
Urban Television Network Corporation
000 Xxxxxxxx Xx.
Xx. Xxxxx, XX 00000
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(b) If to Buyer, to:
Waste Conversion Systems, Inc.
00000 Xxxxxxx 000 Xxxxx
Xxxx Xxxxx, XX 00000
10.7 Amendment. This Agreement may be amended at any time prior to Closing
by written instrument executed by the parties hereto.
10.8 Entire Agreement. This Agreement contains the entire understanding of
the parties hereto relating to the subject matter herein.
10.9 Waiver. Any default, misrepresentation or breach of any covenant or
warranty by a party in connection with this Agreement may be waived in writing
by the other party. No such waiver will be deemed to extend to any prior or
subsequent default, misrepresentation or breach of any covenant or warranty, or
affect any rights arising by virtue of any prior or subsequent default,
misrepresentation or breach of any covenant or warranty.
10.10 Governing Law. This Agreement will be construed in accordance with,
and governed by, the law of the state of Texas applicable to agreements made and
to be performed wholly within this jurisdiction.
10.11 Public Announcements. Neither Seller nor Buyer will make any public
statements, including, without limitation, any press releases, with respect to
this Agreement and the transactions contemplated hereby without the prior
written consent of the other party (which consent may not be unreasonably
withheld), except as may be required by law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed by their/its duly authorized officers on
the day and year first above written.
SELLER:
URBAN TELEVISION NETWORK
CORPORATION
By /s/ Xxxxx Xxxxxxx
------------------
Its President
BUYER:
WASTE CONVERSION SYSTEMS, INC.
By /s/ Xxxxx Xxxxxxx
------------------
Its President
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