Exhibit 2
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement (the "Agreement"), made and entered into as of
September 30, 2003, by News Communications Inc., a Nevada corporation ("NCI" or
"Seller") and World Business Media, LLC, a New York limited liability company
("World" or "Purchaser").
W I T N E S S E T H:
WHEREAS, NCI wishes to sell and World wishes to purchase the Assets (as
defined below), all upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in reliance upon the covenants, representations,
warranties and agreements set forth herein, the parties agree as follows:
SECTION I - SALE AND PURCHASE OF ASSETS
1.1. Transaction:
At the Closing (as hereinafter defined), Purchaser shall purchase from
Seller, and Seller shall sell to Purchaser, all of Seller's right,
title and interest in and to the Assets (as hereinafter defined) to the
extent transferable by Seller. For the purposes of this Agreement,
"Assets" shall mean only those assets and contract rights of Seller
related to the Seller's GSN Business (as hereinafter defined) being
conducted as of the date of this Agreement (but shall not include any
assets excluded pursuant to Section 1.2)) and listed in Section 1.1(a),
Schedule 1.1(b)-1 and Schedule 1.1(b)-2 or otherwise described in
Sections 1.1(a) - (g) below. For the purposes of this Agreement,
"Seller's GSN Business" shall mean Seller's GSN: Government Security
News magazine business, together with websites at
xxx.xxxxxxxxxxxxxxxxxxxxxx.xxx and xxx.XXXXxxxxxxx.xxx, as well as any
businesses conducted by Seller as of the date of this Agreement under
the name GSN: Government Security News or Government Security News. The
Assets shall be comprised of the following as they exist at and as of
the Closing, to the extent transferable:
(a) the computer, including the CPU, hard drive, monitor, keyboard,
mouse and printer used by Xxxxx Xxxxxxx;
(b) all the rights and benefits accruing to Seller under all contracts,
agreements, commitments and plans, written and oral, with all of
Seller's advertisers relating to Seller's GSN Business ("Advertiser
Contracts") listed on Schedule 1.1(b)-1 ("Transferred
Advertisers"), and all rights and benefits accruing to Seller under
any contracts, agreements, commitments or plans listed on Schedule
1.1(b)-2 (together with the Advertiser Contracts "Assigned
Contracts");
(c) subject to the provisions of Section 1.2(f), all work-in-process
and accounts receivable arising out of the ordinary operations of
Seller's GSN Business and related activities prior to the Closing,
and all cash proceeds in respect thereof;
(d) all operating data and records in Seller's possession relating to
the Assets which are separately maintained, including, without
limitation, all advertiser records and documents, including
contracts, advertiser lists and records, research and development
reports and records, equipment logs, operating guides and manuals,
projections, copies of financial, accounting and personnel records,
correspondence and other similar documents and records;
(f) all of Seller's interest in and to all intellectual property
relating to the Assets, including all rights to the name GSN, GSN:
Government Security News, all works made for hire for Seller's GSN
Business (including without limitation all the copyrights in and to
all issues of GSN: Government Security News magazine and all
original works of authorship therein owned by Seller as well as
inserts, press kits, flyers or the like) as well as any license
rights to any articles, research, designs, layouts, software (to
the extent transferable), processes, methods, plans, research,
data, marketing plans and strategies, forecasts, trademarks,
service marks, trade names, licenses (if transferable), including
those in development and negotiation, copyrights (both registered
and unregistered);
(g) any licenses, permits, approvals, qualifications, consents and
other authorizations held by Seller necessary or desirable for the
lawful conduct, ownership and operation of the Seller's GSN
Business but only to the extent solely applicable to Seller's GSN
Business and not in any manner applicable to NCI's other
businesses;
(h) all claims, warranty rights and other similar rights arising in
connection with the Transferred Advertisers, the Assigned Contracts
or with the tangible assets listed in Section 1.1(a); and all
proprietary or other confidential information necessary or
desirable to the conduct of Seller's GSN Business as conducted by
Seller prior to the Closing belonging to third parties to which
Seller has any rights; and
(i) All domain names, domain name registrations and other rights listed
in Schedule 1.1(i).
1.2. Excluded Assets
Notwithstanding anything in Section 1.1 to the contrary, the Assets
shall exclude, and Seller shall not sell, assign or transfer to
Purchaser, any assets not specifically described in subsections 1.1(a)
through and including 1.1(h); and, notwithstanding anything in Section
1.1 to the contrary, the Assets shall not include:
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(a) Seller's rights under this Agreement, including the purchase price
payable to Seller;
(b) All rights and benefits accruing to Seller under all contracts,
agreements, commitments and plans that are not Assigned Contracts;
(c) all tax returns and rights to tax refunds for any period ending on
or prior to the Closing relating to the Seller's Business;
(d) any books or records of Seller which are not exclusively related to
the GSN Business or which Seller may be required to retain relating
to the Seller's Business pursuant to any statute, rule, regulation
or ordinance or relating solely to the conduct of the GSM Business
by the Seller prior to the Closing;
(e) any and all assets of Seller, of whatever description, not related
to the Transferred Clients, the Assigned Contracts, the tangible
assets listed in Schedule 1.1(a) and the other assets specifically
described in Section 1.1; and
(f) any contract rights of Seller which relate to revenue arising out
of the publication of Issue #1 of GSN:Government Security News
magazine and for which Seller is entitled to the revenue as
provided in Section 4.
(g) Any rights owned by Capitol Hill Publishing Corp. or The Hill
newspaper.
1.3. Assumed Liabilities and Excluded Liabilities.
Purchaser hereby assumes and agrees to perform, pay or discharge, in
accordance with their terms, and subject to the limitations contained
herein, all of Seller's obligations and liabilities arising under or in
connection with the following (collectively, the "Assumed
Liabilities"):
(a) all Advertiser Contracts, including any advertising commitments,
production contracts and other contracts entered into by Seller and
listed on Schedule 1.3(a);
(b) all liabilities relating to the Assets other than the liabilities
relating to Issue #1 of GSN:Government Security News magazine;
(c) all Assigned Contracts, including any performance obligations under
any of the Assigned Contracts.
Except as expressly set forth herein, Purchaser shall not assume, pay
or discharge, and shall not be liable for any liability, commitment or
expense of Seller as a result of or arising from the conduct of
Seller's GSN Business prior to the Closing, or from the conduct of its
other businesses ("Excluded Liabilities").
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1.4. Purchase Price
The purchase price payable to Seller for the Assets (the "Purchase
Price") shall be $125,000 of which (i) $25,000, payable by bank check
or wire transfer in confirmed-availability funds to Seller's account,
and (ii) $100,000 shall be payable in accordance with the Promissory
Note of the Company in the form of Exhibit A (the "Promissory Note").
Seller acknowledges that the $25,000 referred to in (i) may be provided
by Xxxxxx X. Xxxxx and Xxxxx Xxxxxxx, which provision forms their
capital contributions to the Purchaser.
1.5. Closing
The closing of such purchase of the Assets shall take place no later
than October 15, 2003 at the offices of the Purchaser, 100 Avenue of
the Americas, New York, New York, or such other time and place as the
Seller and Purchaser may agree.
1.6. Closing Deliveries
(a) At the Closing, Seller shall deliver to Purchaser a Xxxx of Sale in
the form attached as Schedule 1.6(a)-1, and Purchaser shall deliver
to Seller an Assumption Agreement in the Form attached as Schedule
1.6(a)-2. Seller shall also deliver such additional endorsements,
assignments and instruments of sale, conveyance, transfer and
assignment, reasonably satisfactory in form and substance to
Purchaser and its counsel, as may be reasonably requested by
Purchaser in order to convey to Purchaser title and interest in the
Assets, free and clear of all claims, charges, equities, liens,
security interests and encumbrances except for the lien, if any,
for current taxes not yet due and payable and other minor liens or
encumbrances which do not materially affect the use or utility of
the Assets ("Permitted Liens").
(b) This Agreement shall not constitute an agreement to assign any
claim, contract, sublease, lease, commitment, or any claim or right
or any benefit arising thereunder or resulting therefrom, if an
attempted assignment thereof, without the consent of a third party
thereto which has not been obtained as of the Closing, would
constitute a breach thereof or in any way affect the rights of
Purchaser or Seller thereunder. Upon Purchaser's request, Seller
shall use its commercially reasonable efforts, without being
required to incur out of pocket expense, to obtain the consent of
any party to any Assigned Contract. If such consent is not
obtained, or if an attempted assignment thereof would be
ineffective or would affect the rights of Seller thereunder so that
Purchaser would not in fact receive all such rights, Seller shall
cooperate with Purchaser in any reasonable arrangement at no
expense to Seller designed to provide for Purchaser the benefits
under any such claims, contracts, licenses, subleases, leases or
commitments, including
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enforcement for the benefit of Purchaser of any and all rights of
Seller against a third party thereto arising out of the breach or
cancellation by such third party or otherwise; and any transfer or
assignment to Purchaser by Seller of any property or property
rights or any contract or agreement which shall require the consent
or approval of any third party shall be made subject to such
consent or approval being obtained.
(c) Purchaser shall pay all sales, transfer or stamp taxes, or similar
charges, payable by reason of the sale of the Assets hereunder.
(d) Purchaser shall deliver the Purchase Price to Seller at the
Closing.
1.7. Further Assurances
Seller and Purchaser agree that, from time to time, whether before, at
or after the Closing, each of them will execute and deliver such
further instruments of conveyance and transfer and assumption and take
such other actions as may be reasonably necessary or desirable to carry
out the intent and purposes of this Agreement and the transactions
contemplated hereby.
SECTION II - REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as of the date hereof and as of the
Closing as follows:
2.1. Seller is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. NCI
has full power and lawful authority to execute and deliver this
Agreement and to consummate and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered
by NCI and constitutes the legal, valid and binding obligation of NCI,
enforceable in accordance with its terms, except as enforceability may
be limited by laws of general application relating to bankruptcy,
reorganization, moratorium, insolvency and debtors' relief and similar
laws affecting the enforcement of creditors' rights, and by general
principles of equity ("Debtors' Rights"). Neither the execution and
delivery of this Agreement by NCI nor the consummation and performance
of the transactions contemplated hereby will conflict with or violate
any agreement to which NCI is a party or by which it is bound or any
federal, state, local or other governmental law or ordinance.
2.2. Seller has duly filed, obtained extensions for the filing of or been
included in all federal, state and local tax returns relating to the
Assets and no tax returns relating to the Assets are required to be
filed for foreign countries, provinces and any other governmental body
having jurisdiction to levy taxes upon Seller and all material related
information required to be filed or submitted by Seller as required by
applicable law has been filed or
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submitted, and has paid or accrued all taxes shown to be due on such
returns and on all assessments received by it to the extent that such
assessments have become due.
2.3. To the Knowledge of Seller, Seller has the right to use all the Assets
being transferred to Purchaser hereunder. Subject to the provisions of
Section 1.6(b), at the Closing, to the extent transferable without the
consent of any third party, Seller shall convey to Purchaser good and
valid title, or leasehold interest or other ownership or possessory
interest in all of the Assets being transferred to Purchaser hereunder,
free and clear of all mortgages, pledges, liens, conditional sales
agreements, encumbrances, restrictions or charges of any kind or
character other than Permitted Liens. For purposes of this Agreement,
"Knowledge" means that actual knowledge of the President and Chief
Financial Officer of Seller, without any requirement to make an
independent investigation or inquiry.
2.4. All machinery and equipment and other items listed in Section 1.1(a)
are being transferred to Purchaser to the extent permissible on an "as
is" "where is" basis with no warranties of any kind being made by
Seller.
SECTION III - REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as of the Closing that Purchaser is
a limited liability company duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Purchaser has full power
and lawful authority to execute and deliver this Agreement and the Promissory
Note and to consummate and perform the transactions contemplated hereby. This
Agreement and the Promissory Note has been duly authorized, executed and
delivered by Purchaser and constitutes the legal, valid and binding obligation
of Purchaser, enforceable in accordance with its terms, except as enforceability
may be limited by Debtors' Rights. Neither the execution and delivery of this
Agreement by Purchaser nor the consummation and performance of the transactions
contemplated hereby (a) will conflict with or violate any agreement to which
Purchaser is a party or by which it is bound or any federal, state, local or
other governmental law or ordinance or (b) will require the authorization,
approval or consent by, or any notice to or filing with, any third party.
SECTION IV - POST-CLOSING ADJUSTMENTS
All revenues and expenses accrued and accounted for in the books and records of
Seller related to the publication of Issue #1 shall be for the account of
Seller, and all revenues and expenses accrued related to all subsequent issues
shall be for the account of Purchaser.
Any payments or demands for payment received by either party after the Closing
which are for the other party's account shall be immediately forwarded to such
other party and paid by such other party. Payments received shall be deemed made
for the earliest open receivable.
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SECTION V - POST-CLOSING MATTERS
5.1 Extinguishment of Outstanding Liability to Printer
Immediately upon receipt of the Purchase Price, Seller shall
immediately pay from its own funds $27,096.67 to Publisherspress, Inc.
of Shepherdsville, Kentucky, which is the full amount of its
outstanding invoice for all its services performed related to Issue #1
of GSN: Government Security News magazine.
5.2 Cooperation in Litigation and Other Proceedings
Subject to any limitations that are deemed necessary to preserve any
applicable attorney-client privilege, each party shall, after the
Closing, furnish or cause to be furnished to any other party, upon
reasonable request, as promptly as practicable, such information and
assistance relating to the Assets and the Seller's GSN Business as is
reasonably necessary for the preparation for, the prosecution or
defense of or the response to any pending or overtly threatened legal,
administrative, arbitration or other proceeding, suit, claim or action
of any nature or investigation, review or audit of any kind, provided
that this section is not intended to be applicable in the case of any
adversary matter between the parties to this Agreement or to any matter
that is covered by the indemnification sections of this Agreement. The
party requesting such information and assistance shall reimburse the
other party for all out-of-pocket costs and expenses incurred by such
party in providing such information and in rendering such assistance.
5.3 Access to Records
After the Closing, Seller and Purchaser shall grant to the other and
shall cause any assignee of each to grant to the other, reasonable
access and the opportunity to obtain copies of those books, records and
accounts, correspondence, production records, employment records and
other similar information as are transferred to Purchaser by Seller or
the originals of which are retained by Seller, for the limited purposes
of concluding Seller's involvement in Seller's GSN Business, including
the collection of accounts receivable owed to the other or in
connection with any legal or administrative proceeding or investigation
involving Seller's GSN Business, and complying with applicable tax laws
and other legal requirements. In addition, Purchaser shall, and shall
cause its assignees to, make available such financial, accounting, tax,
personnel or other information as may be reasonably requested by Seller
in connection with winding up its involvement in Seller's GSN Business,
dealing with post-Closing tax issues and like purposes. The cost of
providing any such records, including a reasonable charge for in-house
personnel, shall be paid by the party requesting copies of any books
and records required to be delivered to Purchaser pursuant to this
Agreement.
5.4 Insurance
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From and after the Closing and for a period of at least one year,
Seller shall maintain suitable "run-off" insurance covering any
obligation it may have under this Agreement to Purchaser unless the
Seller has sold all of its assets or otherwise ceased to conduct active
business operations.
5.5 Advertising
From and after the Closing, NCI shall provide to World on a
space-available basis an advertisement for GSN: Government Security
News in the publication The Hill of at least one-quarter page in every
other month for a rate not to exceed $150 per page; provided that NCI
shall own or control the management of The Hill and provided further
that the Promissory Note is still outstanding and Purchaser is not in
default thereunder.
5.6 Security.
In order to secure Purchaser's obligations under the Promissory Note,
the Purchaser shall grant a security interest in accordance with the
Security Agreement in the form of Exhibit B hereto.
SECTION VI - INDEMNIFICATION
6.1. Survival
All representations and warranties of each of the parties hereto shall
survive the Closing until the first anniversary of the Closing Date.
All agreement of each of the parties hereto shall survive the Closing
until the expiration of the applicable statute of limitation,
notwithstanding any investigation at any time by or on behalf of the
other party and shall not be considered waived by consummation of the
transactions contemplated by this Agreement.
6.2. Indemnification
In addition to any indemnity obligations set forth in Section VII
below, Seller shall indemnify, defend and hold harmless Purchaser from
and against any claim, loss, liability, damage or expense (including
reasonable fees and expenses of counsel) Purchaser may suffer, sustain
or become subject to as a result of (i) any breach of any
representation, warranty, covenant or other agreement of Seller
contained in this Agreement or in any agreement, instrument,
certificate or document delivered by Seller to Purchaser pursuant to
the provisions of this Agreement and (ii) the failure by Seller to pay,
perform or discharge any of Seller's obligations, liabilities,
agreements or commitments not expressly assumed by Purchaser pursuant
to this Agreement. Purchaser shall indemnify, defend and hold harmless
Seller from and against any claim, loss, liability, damage or expense
(including reasonable fees and expenses of counsel) Seller may suffer,
sustain or become subject to as a result of any breach of any
representation, warranty, covenant or
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other agreement of Purchaser contained in this Agreement or in any
certificate or document delivered by Purchaser to Seller pursuant to
the provisions of this Agreement or failure by Purchaser to pay,
perform or discharge any of its obligations under this Agreement or any
of the Assumed Liabilities.
6.3 Non-Exclusive Remedy
From and after the Closing, the indemnification provided by this
Article VI and under Article VII shall be in addition to any other
remedy under this Agreement, at law or in equity, for any breach of
representation, warranty, covenant, obligation or agreement in this
Agreement.
6.4 Limitation of Liability
In no event shall any party hereto be liable to any other party hereto
for punitive, consequential or special damages in any action or dispute
arising out of or relating to this Agreement, any related instrument or
agreement or any transaction contemplated hereby or thereby. In no
event shall the liability of Seller hereunder exceed the cash payments
that it has received hereunder in respect of the Purchase Price.
SECTION VII - CERTAIN TAX MATTERS
7.1. [Intentionally Omitted]
7.2. Subsequent Liability
If, subsequent to the Closing, any liability for Taxes relating to
Seller is imposed on Purchaser with respect to any period prior to the
Closing, then Seller shall indemnify and hold Purchaser harmless, from
and against, and shall pay the full amount of such tax liability,
including any interest, additions to tax and penalties thereon,
together with interest on such additions to tax or penalties (as well
as reasonable attorneys' or other fees and disbursements of Purchaser
incurred in determination thereof or in connection therewith). Seller
shall, at its sole expense and upon consultation with Purchaser, either
settle any tax claim that may be the subject of indemnification under
this Section 7.2 at such time and on such terms as it shall deem
appropriate or assume the entire defense thereof, provided, however,
that Seller shall in no event take any position in such settlement or
defense that subjects Purchaser to any civil fraud or any civil or
criminal penalty. Purchaser shall not settle any such claim without the
express written consent of Seller, which consent shall not be
unreasonably withheld.
ARTICLE VIII - MISCELLANEOUS
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8.1 Releases
To the extent that any of the employees of Seller were bound by any
agreements or covenants with or to Seller, not to compete or solicit,
Seller shall waive such agreements or covenants with respect to their
employment at Purchaser. Seller shall have received a general release
from Xx Xxxxx and Xxxxx Xxxxxxx relating to their engagement by NCI
with respect to the GSN Business.
8.2 Nondisclosure; Publicity
The parties to this Agreement shall not, at any time directly or
through others, use, disclose, publish or otherwise disseminate any and
all confidential information of the other parties discovered, developed
or known as a consequence of their participation in the transactions
contemplated by this Agreement, except that a party may disclose
information to such party's attorney, accountant or financial advisors
provided such third party is bound by the same duty of confidentiality
as the party or as required by law or legal process. Information shall
not be deemed to be confidential if it (i) is or becomes public
knowledge other than as a result of breach of this Agreement by any
party or any of its representatives; (ii) was known by a party prior to
disclosure thereof; (iii) is made known to a party by a third party who
is entitled to make such disclosure without restriction, penalty, or
liability; or (iv) a party is required by law to disclose. None of the
parties shall make any press release or public announcement with
respect to the transactions contemplated by this Agreement without the
prior approval of the other parties, except as may be required by law
or regulations of securities exchanges. None of the parties shall make
any press release or public announcement with respect to the
transactions contemplated by this Agreement without the prior approval
of the other parties, except as may be required by law or regulations
of securities exchanges. Approvals under this Section 8.2 shall not be
unreasonably withheld.
8.3 Notices
Unless otherwise specifically provided in this Agreement, all notices
and other communications required or permitted to be given hereunder
shall be in writing and shall be (i) delivered by hand, (ii) delivered
by a nationally recognized commercial overnight delivery service, (iii)
mailed postage prepaid by certified mail in any such case directed or
addressed to the respective addresses set forth at the beginning of
this Agreement; or (iv) transmitted by facsimile to a facsimile number
provided for such purpose, with receipt confirmed. Such notices shall
be effective: (a) in the case of hand deliveries, when received; (b) in
the case of an overnight delivery service, on the next business day
after being placed in the possession of such delivery service, with
delivery charges prepaid; (c) in the case of certified mail, upon
receipt of the written signature card indicating acceptance by
addressee; and (d) in the case of facsimile notices, the Business Day
following the date on which electronic indication of receipt is
received. Any party may
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change its address and provide a facsimile number by written notice to
the other parties given in accordance with this Section 8.3.
8.4 Entire Agreement; Amendment; Waiver
This Agreement, including the Schedules and Exhibits hereto and the
other instruments, agreements and documents delivered pursuant to this
Agreement contains all of the terms, conditions and representations and
warranties agreed upon by the parties relating to the subject matter of
this Agreement and supersedes all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or
written, respecting such subject matter. This Agreement shall not be
amended or modified except by a writing duly executed by the parties
hereto. Waiver of any term or condition of this Agreement by any party
shall only be effective if in writing and shall not be construed as a
waiver of any subsequent breach or failure of the same term or
condition, or a waiver of any other term or condition of this
Agreement.
8.5 Construction Principles
As used in this Agreement, the singular shall be deemed to include the
plural and vice versa. The captions and article and section headings in
this Agreement are inserted for convenience of reference only and are
not intended to have significance for the interpretation of or
construction of the provisions of this Agreement.
8.6 Counterparts
This Agreement may be executed in two or more counterparts by the
parties hereto, each of which when so executed will be an original, but
all of which together will constitute one and the same instrument.
8.7 Severability
If any provision of this Agreement is held to be invalid or
unenforceable for any reason, such provision shall be ineffective to
the extent of such invalidity or unenforceability; provided, however,
that the remaining provisions will continue in full force without being
impaired or invalidated in any way unless such invalid or unenforceable
provision or clause shall be so significant as to materially affect the
parties' expectations regarding this Agreement. Otherwise, the parties
hereto agree to replace any invalid or unenforceable provision with a
valid provision which most closely approximates the intent and economic
effect of the invalid or unenforceable provision.
8.8 Binding Effect
This Agreement shall be binding upon, and inure to the benefit of, the
parties and their respective successors and permitted assigns.
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8.9 Additional Documents and Laws
Each party agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms,
provisions, and conditions of this Agreement and of the transactions
contemplated hereby.
8.10 No Third Party Beneficiary
This Agreement is made solely for the benefit of the parties hereto and
their successors and permitted assigns and no other Person shall have
any rights, interest, or claims hereunder or otherwise be entitled to
any benefits under or on account of this Agreement as a third party
beneficiary or otherwise.
8.11 Expenses
Except as specifically set forth in this Agreement, each of the parties
shall pay their own out of pocket costs and expenses (including all
legal and accounting fees incurred by it or by him) relating to this
Agreement, the negotiations leading up to this Agreement and the
transactions contemplated by this Agreement. Each of the parties
represents that there are no brokers or finders fees or any other
similar payment payable to any third party in connection with the
transactions contemplated by this Agreement.
8.12 Governing Law; Arbitration
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the
principles of conflicts of law. Any controversy, claim or dispute
arising out of or relating to this Agreement or the breach,
termination, enforceability or validity thereof, including, without
limitation, the determination of the scope or applicability of this
agreement to arbitrate, shall be settled by arbitration in New York
City in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, provided that persons eligible to be
selected as arbitrators shall be limited to attorneys-at-law who have
practiced law for at least 10 years as an attorney in New York
specializing in either general commercial litigation or general
corporate and commercial matters. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first written above.
NEWS COMMUNICATIONS INC. WORLD BUSINESS MEDIA, LLC
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By By
------------------------ ------------------------------
Name: Name:
-------------------- ---------------------------
Title: Title: Managing Member
--------------------
Date: Date:
---------------------- ----------------------------
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Schedule 1.1(b)-1
Transferred Advertisers
All advertising contracts with GSN
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Schedule 1.1(b)-2
Non-Advertiser Contracts Assigned to Purchaser
1. Lease Agreements between Dell Computer and News Communications Inc. covering
the lease of 5 (five) Inspiron 1100 laptop computers, bearing lease numbers
003-006-238-000-004
003-006-238-000-007
003-006-238-000-008
001-006-238-000-001
2. Media Sponsorship Agreement between Equity International, Inc. and GSN
Government Security News covering a Term starting May 28, 2003 to May 28, 2004.
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Schedule 1.1(i)
List of Domain Names
xxx.xxxxxxxxxxxxxxxxxxxxxx.xxx
xxx.XXXXxxxxxxx.xxx
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Schedule 1.3(a)
List of assumed advertising commitments, production contracts and other
contracts
None.
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Schedule 1.6(a)-1
Form of Xxxx of Sale
XXXX OF SALE
This GENERAL ASSIGNMENT AND XXXX OF SALE (the "Xxxx of Sale") is made
as of this 30th day of September, 2003, by NEWS COMMUNCATIONS INC., a Nevada
corporation (the "Assignor"), in favor of WORLD BUSINESS MEDIA, LLC, a New York
limited liability company (the "Assignee").
R E C I T A L S
WHEREAS, Assignor and Assignee are parties to that certain Asset
Purchase Agreement dated as of September 30, 2003 (the "Agreement") pursuant to
which Assignee is purchasing from Assignor, and Assignor is selling to Assignee,
the Assets (as such term is defined in the Agreement); and
WHEREAS, Assignor desires to assign, and the Assignee desires to
acquire, all of Assignor's right, title and interest in and to the Assets.
NOW, THEREFORE, for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Acquired Assets. Assignor hereby sells, conveys, assigns, transfers
and delivers to Assignee, and Assignee hereby purchases, acquires and accepts
from Assignor, all of Assignor's right, title and interest in and to the Assets.
2. Terms of Agreement Controlling; Representations of the Parties. This
Assignment is made pursuant to and is subject to the terms and conditions of the
Agreement and does not confer any different, additional or inconsistent rights,
duties or obligations from the terms of the Agreement. In the event of a
conflict between the Assignment and the Agreement, the terms of the Agreement
shall control.
3. Further Assurances. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents or
take such other action as may be reasonably necessary or convenient to carry out
the transactions contemplated hereby.
4. Successors and Assigns. This Xxxx of Sale shall be binding on and
inure to the benefit of the successors and assigns of the parties to this Xxxx
of Sale. Neither party hereto shall assign its rights or obligations under this
Xxxx of Sale without the prior written consent of the other party to this Xxxx
of Sale, which consent shall not be unreasonably withheld.
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5. Counterparts. This Xxxx of Sale may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6. Capitalized Terms. Capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Agreement.
7. Governing Law. This Xxxx of Sale shall be construed in accordance
with the laws of the State of New York without reference to conflicts of laws
principles.
IN WITNESS WHEREOF, the Assignor and Assignee have executed this Xxxx
of Sale and Xxxx of Sale on the day and year first above written.
ASSIGNOR:
NEWS COMMUNICATIONS INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ASSIGNEE:
WORLD BUSINESS MEDIA, LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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Schedule 1.6(a)-2
Form of Instrument of Assumption of Liabilities
INSTRUMENT OF ASSUMPTION OF LIABILITIES
This INSTRUMENT OF ASSUMPTION OF LIABILITIES (the "Assumption") is made
as of this 30th day of September, 2003, by WORLD BUSINESS MEDIA, LLC, a New York
limited liability company ("World"), in favor of NEWS COMMUNICATIONS, INC. , a
Nevada corporation ("NCI"),.
R E C I T A L S
WHEREAS, NCI and World are parties to that certain Asset Purchase
Agreement dated September 30, 2003 (the "Agreement") pursuant to which World is
purchasing from NCI, and NCI is selling to World, the Assets (as such term is
defined in the Agreement); and
WHEREAS, the Agreement requires World to assume the Assumed Liabilities
(as defined in the Agreement).
NOW, THEREFORE, for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Assumption of Liability. World hereby assumes and agrees to perform
and timely pay and discharge the Assumed Liabilities.
2. Terms of Agreement Controlling; Representations of the Parties. This
Assumption is made pursuant to and is subject to the terms and conditions of the
Agreement and does not confer any different, additional or inconsistent rights,
duties or obligations from the terms of the Agreement. In the event of a
conflict between the Assumption and the Agreement, the terms of the Agreement
shall control.
3. Further Assurances. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents or
take such other action as may be reasonably necessary or convenient to carry out
the transactions contemplated hereby.
4. Successors and Assigns. This Instrument shall be binding on and
inure to the benefit of the successors and assigns of the parties to this
Assumption. Neither party hereto shall assign its rights or obligations under
this Assumption without the prior written consent of the other party to this
Assumption, which consent shall not be unreasonably withheld.
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5. Counterparts This Assumption may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6. Capitalized Terms Capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Agreement.
7. Governing Law. This Assumption shall be construed in accordance with
the laws of the State of New York without reference to conflicts of laws
principles.
IN WITNESS WHEREOF, World and NCI have executed this Instrument of
Assumption of Liabilities on the day and year first above written.
NEWS COMMUNICATIONS INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
WORLD BUSINESS MEDIA, LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
21
EXHIBIT A
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
$100,000 September 30, 2003
FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order
of NEWS COMMUNICATIONS, INC. ("Payee"), the principal sum of One Hundred
Thousand Dollars ($100,000), in lawful money of the United States according to
the following schedule:
Date Amount
---- ------
September 30, 2004 $10,000
September 30, 2005 $10,000
September 30, 2006 $80,000
Interest shall accrue on the unpaid principal balance of this Note from
September 30, 2003, until paid in full at the rate of 5% per annum, compounded
annually. All accrued interest shall be due and payable on September 30, 2005.
All payments made shall be credited first to principal and then to interest.
This note may be pre-paid at any time in whole or in part, without penalty. This
Note shall at the option of the holder hereof be immediately due and payable
upon failure to make any payment due hereunder or upon the filing by any of the
undersigned of an assignment for the benefit of creditors, bankruptcy, or for
relief under any provisions of the Bankruptcy Code; or by suffering an
involuntary petition in bankruptcy or receivership not vacated within thirty
days, whereupon all such indebtedness shall become due and payable, without
22
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by the undersigned,
In the event this Note shall be in default, the undersigned agrees to
pay all collection costs and expenses, including all reasonable attorney's fees.
Any amounts not paid when due shall accrue interest at the rate of 20% per
annum, or the highest rate allowed by applicable law.
The obligations of the undersigned under this Note are secured by a
security interest in all of the assets of the undersigned pursuant to a Security
Agreement of even date herewith.
The undersigned waives demand, presentment and protest and all notices
thereto and further agree to remain bound, notwithstanding any extension,
modification, waiver, or other indulgence by any holder or upon the discharge or
release of any obligor hereunder or to this Note, or upon the exchange,
substitution, or release of any collateral granted as security for this Note.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
This Note and all the provisions, conditions, promises and covenants
hereof shall inure to the benefit of Lender, its successors and assigns, and
shall be binding in accordance with the terms hereof upon Borrower, its
successors and assigns.
WORLD BUSINESS MEDIA, LLC
By
-----------------------
Its: Managing Member
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