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EXHIBIT 2.3
▇▇▇▇▇▇ COMMUNICATIONS INC.
BIENESTAR COMMUNICATIONS, INC.
LIPTON COMMUNICATIONS GROUP, INC.
LATIN REPORTS, LTD.
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ASSET PURCHASE AGREEMENT
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As of March 5, 1999
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TABLE OF CONTENTS
Page
1. Purchase and Sale....................................................1
1.1. Sale and Purchase of Assets....................................1
1.2. Title to the Assets............................................3
2. Liabilities of the Sellers...........................................4
2.1. Assumed Liabilities............................................4
2.2. Excluded Liabilities...........................................5
3. The Closing; Purchase Price, etc.....................................6
3.1. Time and Place; Closing Date...................................6
3.2. Purchase Price.................................................6
3.3. Allocation of Purchase Price...................................7
3.4. Cash Instead of NCI Shares.....................................7
4. Representations and Warranties of the Sellers........................7
4.1. Organization, Qualification and Stock Ownership................7
4.2. Subsidiaries...................................................8
4.3. Agreement; etc.................................................9
4.4. Financial Statements..........................................10
4.5. Title to Property, Absence of Encumbrances, etc...............11
4.6. Accounts Receivable and Accounts Payable......................12
4.7. Books and Records.............................................12
4.8. Patents, Trademarks, etc......................................12
4.9. Employee Remuneration, etc....................................13
4.10. Labor Matters.................................................15
4.11. Bank Accounts.................................................16
4.12. No Adverse Change.............................................16
4.13. Absence of Certain Changes....................................16
4.14. Litigation....................................................19
4.15. Compliance with Other Instruments and Laws....................20
4.16. Contracts, etc................................................20
4.17. Taxes.........................................................23
4.18. Permits.......................................................27
4.19. Employee Benefit Plans and Employment Agreements..............27
4.20. Clients.......................................................28
4.21. Brokers. ....................................................28
4.22. Disclosure....................................................28
4.23. Investment....................................................28
4.24. Actions Subsequent to November 30,1998........................31
4.25. Lease for Space at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇.......................▇▇
5. Representations and Warranties of NCI and the Buyer.................34
5.1. Organization and Qualification................................34
5.2. Agreement, etc................................................34
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5.3. Brokers.......................................................35
5.4. Capital Stock.................................................36
5.5. Financial Statements..........................................36
6. Covenants of the Sellers. .........................................37
6.1. Publicity; Confidentiality....................................37
6.2. Public Offering...............................................37
6.3. Taxes.........................................................38
6.4. Securities Law Matters........................................38
6.5. Latin Reports and LCG Latino..................................38
6.6. Compliance with Letter to Landlord............................39
7. Covenants of NCI and the Buyer......................................39
7.1. Publicity; Confidentiality....................................39
7.2. Public Offering Documents.....................................39
7.3. Permitted Transfer of NCI Shares..............................40
7.4. Employee Matters..............................................40
7.5. Change of Name................................................42
7.6. Filing of Reports.............................................42
7.7. Grant of Stock Option.........................................43
7.8. Compliance with Letter to Landlord............................43
8. Conditions to the Obligations of the Sellers........................43
8.1. Representations and Warranties................................44
8.2. Performance...................................................44
8.3. Closing Certificates..........................................44
8.4. Opinion of Counsel............................................44
8.5. Employment Agreements.........................................44
8.6. Stock Option Plans............................................45
8.7. Assumption of Liabilities.....................................45
8.8. Lease for Office Space........................................45
9. Conditions to the Obligations of NCI and the Buyer..................46
9.1. Representations and Warranties................................46
9.2. Performance...................................................46
9.3. Closing Certificate...........................................46
9.4. Opinion of Counsel............................................47
9.5. Consents; Permits.............................................47
9.6. Employment Agreements.........................................47
9.7. Instruments of Conveyance.....................................47
9.8. Lease for Office Space........................................48
10. Survival of Representations and Warranties; Indemnification ........48
10.1. Survival of Representations and Warranties...................48
10.2. Indemnification by the Sellers...............................49
10.3. Indemnification by NCI and the Buyer.........................49
10.4. Indemnification Procedures...................................50
11. General Provisions..................................................52
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11.1. Modification; Waiver.........................................52
11.2. Entire Agreement, etc. .....................................52
11.3. Expenses.....................................................52
11.4. Further Actions..............................................52
11.5. Bulk Sales Law...............................................53
11.6. Notices......................................................53
11.7. Assignment, etc..............................................54
11.8. Counterparts.................................................55
11.9. Headings.....................................................55
11.10. Governing Law................................................55
11.11. Separability.................................................55
11.12. Incorporation of Exhibits and Schedules......................55
11.13. Guaranty by NCI..............................................55
Schedules
Schedule 1.1 Certain Excluded Assets
Schedule 2.1 Certain Assumed Debts, Liabilities and Contracts
Schedule 3.2(b) Itemization of Cash Portion of Purchase Price
Schedule 4.4 Financial Statements of Sellers
Schedule 4.5 Properties, Equipment, etc.
Schedule 4.8 Patents, Trademarks, etc.
Schedule 4.9 Employee Remuneration, etc.
Schedule 4.10 Labor Matters
Schedule 4.11 Bank Accounts
Schedule 4.13 Certain Changes
Schedule 4.14 Litigation
Schedule 4.16 Contracts
Schedule 4.17 Taxes
Schedule 4.18 Permits
Schedule 4.19 Employee Benefit Plans
Schedule 4.20 Clients
Schedule 4.24 Certain Actions Subsequent to November 30, 1998
Schedule 5.5 Financial Statements of NCI
Schedule 7.4(a) Transferred Employees
Exhibits
Exhibit A - Opinion of Patterson, Belknap, ▇▇▇▇ & ▇▇▇▇▇ LLP
Exhibit B - Employment Agreement of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit C - Employment Agreement of ▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit D - NCI Stock Option Plan
Exhibit E - Assumption of Liabilities
Exhibit F - Amendment Letter
Exhibit G - Assignment and Assumption of Lease Agreement
Exhibit H - Opinion of Frankenthaler ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of March 5, 1999, by and among
▇▇▇▇▇▇ COMMUNICATIONS INC., a Delaware corporation ("NCI"), BIENESTAR
COMMUNICATIONS, INC., a Florida corporation (the "Buyer"), LIPTON COMMUNICATIONS
GROUP, INC., a New York corporation ("LCG"), and LATIN REPORTS, LTD, a New York
corporation ("LR"; LCG and LR, collectively, the "Sellers").
WHEREAS, the Buyer desires to purchase from the Sellers, and the
Sellers wish to sell to the Buyer, certain of the assets of LCG and LR;
WHEREAS, the Buyer is a wholly-owned subsidiary of NCI; and
WHEREAS, NCI is willing to issue shares of its common stock to the
Sellers as a portion of the consideration payable hereunder and to guaranty the
performance of this Agreement by the Buyer;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and covenants herein contained, the parties hereto
agree as follows:
1. Purchase and Sale.
1.1. Sale and Purchase of Assets. Subject to the terms and
conditions of this Agreement, and in reliance upon the representations,
warranties and covenants contained herein, each of the Sellers will sell,
convey, transfer, assign and deliver to the Buyer, and the Buyer will purchase
and acquire from each of
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the Sellers, the entire business of each Seller as a going concern, including
without limitation the businesses conducted under the names "LCG Latino" and
"Latin Reports," and all of the right, title and interest of each Seller in all
of the assets, properties and business of each Seller, of every kind and
description, real, personal or mixed, tangible or intangible, wherever located,
as the same shall exist on the Closing Date (as such term is defined in Section
3.1), other than the Excluded Assets described below, including without
limitation, good will, the trade names "LCG Latino" and "Latin Reports," and all
variants thereof and any related trade marks to the extent permitted by law, all
know-how, trade secrets, other trade names, governmental filings, licenses,
approvals and authorizations, leasehold improvements, equipment, fixtures,
rights under contracts, agreements and leases, prepaid expenses, franchises,
deposits, rights to funds of whatever nature, client lists, client
correspondence, advertising materials and files of any kind and other books and
records, and all other properties and rights of every kind of nature owned or
held by each Seller on the Closing Date or then used by it in its business,
whether or not referred to in this Agreement (collectively, the "Assets");
provided that the following assets of the Sellers ("Excluded Assets") are
excluded from the assets and properties being sold hereunder and shall be
retained by and remain the property of the Sellers:
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(i) All cash and all cash equivalents on hand as of the
Closing Date, amounting to a total of $346,604, in the accounts identified in
Schedule 1.1.
(ii) All art work and other personal effects of any of the
employees or shareholders of LCG which are on LCG's premises;
(iii) Computer equipment used by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ at his home;
and
(iv) Leasehold improvements at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ home, in the
amount of $9,040, as set forth in Schedule 1.1.
1.2. Title to the Assets. The Sellers shall sell, transfer, convey
and assign to the Buyer as of the Closing Date title to the Assets free and
clear of all liens, mortgages, security interests, charges, encumbrances,
claims, defenses, rights of others and other restrictions of any kind or
character (collectively, "Encumbrances") not disclosed in this Agreement or the
Schedules hereto and other than restrictions imposed by laws and regulations
applicable to the businesses conducted by the Sellers. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any agreement or other instrument, and the Buyer shall
not be deemed to have assumed the same or to be required to perform any
obligations thereunder, if an attempted assignment thereof, without the consent
of a third party thereto, would constitute a breach thereof or in any way affect
the rights under any such agreement or other instrument. Any transfer or
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assignment to the Buyer by the Sellers of any such agreement or other instrument
or any right or benefit arising thereunder or resulting therefrom which shall
require the consent or approval of any third party shall be made subject to such
consent or approval being obtained, and the Sellers shall use their best efforts
to obtain such consents and approvals. In the event such consent or approval
cannot be obtained, the Sellers will cooperate with the Buyer and use their best
efforts to provide for the Buyer all benefits to which either Seller is entitled
under such agreement or other instrument.
2. Liabilities of the Sellers.
2.1. Assumed Liabilities. On the Closing Date, the Buyer shall
assume, and agrees to pay or otherwise discharge, the following debts,
liabilities and obligations of the Sellers (the "Assumed Liabilities"):
(a) All of the debts, liabilities and obligations of the
Sellers under the contracts and commitments of the Sellers listed on Schedule
2.1 (the "Contracts");
(b) All other debts, liabilities and obligations of the
Sellers (other than Excluded Liabilities) related to the businesses of the
Sellers or the Assets that arose or accrued between November 30, 1998 and the
Closing Date to the extent not discharged or paid prior to the Closing Date and
to the extent that the incurrence by the Sellers of any such debts, liabilities
or obligations arose in the ordinary course of the business of
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LCG and is not contrary to any representation or warranty of the Sellers
contained herein.
2.2. Excluded Liabilities. Except as expressly provided in Section
2.1, the Buyer shall not and does not assume any other liabilities of any kind,
liquidated or contingent, asserted or unasserted, known or unknown, of the
Sellers (collectively, the "Excluded Liabilities"), including without limitation
all liabilities and all obligations related to:
(a) all employee benefit plans, as defined by Section 3(3) of
the Employee Retirement Income Securities Act of 1974, as amended ("ERISA"),
that are maintained, contributed to or required to be contributed to by either
of the Sellers, or under which either of the Sellers could incur any liability
for the benefit of current, former or retired employees of either of the Sellers
or any of their beneficiaries or dependents;
(b) each other plan, program, policy, contract, agreement, or
arrangement providing for bonuses, pensions, deferred compensation, stock or
stock related awards, severance pay, salary continuation or similar benefits,
hospitalization, medical, dental or disability benefits, life insurance, key man
life insurance or other employee benefits or compensation to or for any employee
of either of the Sellers or members or their families, whether or not insured or
funded;
(c) all liabilities for continuation coverage under any
hospitalization, medical or dental plan, program, policy, contract, agreement or
arrangement, maintained by either
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of the Sellers for any employee of either of the Sellers or members of their
families that is required by the Consolidated Omnibus Budget Reconciliation Act
of 1985 ("COBRA") or any similar state law; and
(d) any other liabilities of the Sellers which are not Assumed
Liabilities.
3. The Closing; Purchase Price, etc.
3.1. Time and Place; Closing Date. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Patterson, Belknap, ▇▇▇▇ & ▇▇▇▇▇ LLP, 1133 Avenue of the Americas, New York,
New York, at 10:00 a.m. local time on the date hereof. The date of the Closing
is referred to herein as the "Closing Date".
3.2. Purchase Price. In addition to assuming the Assumed Liabilities
and in consideration of the sale, assignment, transfer and delivery of the
Assets, the Buyer will pay the Sellers at the Closing a purchase price (the
"Purchase Price"), consisting of:
(a) $750,000 by delivery of 68,182 shares of the common stock,
par value $0.01 per share ("NCI Stock"), of NCI (the "NCI Shares") to be issued
by NCI on behalf of the Buyer. In the event that the price at which the NCI
Stock is sold in the contemplated initial public offering by NCI (the "IPO") is
less than $11.00 per share, then within ten days of the effective date of the
Registration Statement (as defined in Section 6.2) the
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Buyer will pay to the Sellers in cash an amount equal to (x) the difference
between the price per share at which the NCI Stock is sold to the public in the
IPO and $11.00 (y) multiplied by 68,182; and
(b) $829,805 in cash, as itemized on Schedule 3.2(b), by delivery to
LCG of an official bank check or checks.
3.3. Allocation of Purchase Price.
[Intentionally Omitted]
3.4. Cash Instead of NCI Shares. In the event that the closing of
the IPO does not occur within nine months after the Closing, then within ten
days after the expiration of such nine month period, NCI will repurchase the NCI
Shares to be issued to the Sellers pursuant to Section 3.2(a) for $750,000 in
cash, payable to Sellers upon return of the share certificates representing such
NCI Shares. NCI's obligation to repurchase the NCI Shares shall be an absolute
obligation and shall not be subject to any right of offset or counterclaim or
any other right to refuse to effect such repurchase.
4. Representations and Warranties of the Sellers. The Sellers
jointly and severally represent and warrant to NCI and the Buyer as follows:
4.1. Organization, Qualification and Stock Ownership. Each of the
Sellers is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York and has all requisite power and
authority to own, lease and
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operate its properties and carry on its business as now being conducted. Each of
the Sellers is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction where the failure to so qualify
would have a material adverse effect on the business or assets of such Seller.
As of the date hereof, the authorized capital stock of LCG consists of 200
shares of common stock, of which 100 shares are issued and outstanding. As of
the date hereof, the authorized capital stock of LR consists of 200 shares of
common stock, of which 95 shares are issued and outstanding. All of the issued
and outstanding shares of the Sellers' stock are owned by ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇ and are validly issued, fully paid and nonassessable. The Sellers have no
shares of capital stock reserved for issuance. Except as indicated above, as of
the date hereof (i) there are no shares of capital stock of the Sellers
authorized, issued or outstanding and (ii) there are no outstanding
subscriptions, options, warrants, calls, rights, convertible securities or other
agreements or commitments of any character obligating either Seller to issue,
transfer or sell any shares of its capital stock or any security convertible
into, exchangeable for, or evidencing the right to subscribe for any shares of
its capital stock.
4.2. Subsidiaries. The Sellers do not own or control, directly or
indirectly, individually or collectively, any shares of, or interest in, any
corporation, partnership, joint venture, association or other business entity.
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4.3. Agreement; etc. Each of the Sellers has all requisite corporate
power and authority to enter into this Agreement, to consummate the transactions
contemplated hereby and perform its obligations hereunder. This Agreement has
been duly executed and delivered by the Sellers and constitutes the legal and
binding obligation of the Sellers enforceable in accordance with its terms. The
execution and delivery by the Sellers of this Agreement, the consummation of the
transactions contemplated hereby, and the performance by the Sellers of their
respective obligations hereunder will not conflict with or result in any
violation of, or any default under (either immediately or with notice or lapse
of time), or any right to accelerate or the creation of any lien, charge or
encumbrance pursuant to, any provision of (a) the respective certificates of
incorporation or by-laws of the Sellers, (b) any agreement, contract, mortgage,
lease, license, note, bond, indenture, deed of trust or other instrument to
which the Sellers or either of them is a party or by which any of the Assets are
bound, (c) any governmental franchise, license, permit or authorization, or any
judgment or order of any tribunal or governmental body applicable to the Sellers
or any of the Assets, or (d) any law, statute, decree, rule or regulation of any
jurisdiction. No authorization, consent or approval of, or declaration of,
filing with or notice to any governmental body or authority by the Sellers is
necessary for the execution of this Agreement by the Sellers, the consummation
by the Sellers of the transactions contemplated
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hereby or the performance by the Sellers of their respective obligations
hereunder.
4.4. Financial Statements. Set forth in Schedule 4.4 are true and
complete copies of the combined balance sheets of the Sellers as of December 31,
1997 and the related statements of income, retained earnings and cash flows for
the year then ended and the notes thereto (the "1997 Financial Statements") and
of the combined balance sheets of the Sellers as of November 30, 1998 and the
related statements of income, retained earnings and cash flows for the 11-month
period then ended and the notes thereto (the "1998 Financial Statements" and,
together with the 1997 Financial Statements the "Financial Statements"), all of
which were compiled by Price and Company, certified public accountants. The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
specified, and present fairly the financial position of the Sellers as of the
respective dates specified and the results of operations and changes in
financial position of the Sellers for the respective periods specified. LR has
had no material business activity or revenues since prior to January 1, 1997.
Except as reflected in the 1998 Financial Statements or otherwise disclosed in
this Agreement or the Schedules hereto, the Sellers have no liabilities or
obligations (direct or indirect, contingent or absolute, matured or unmatured)
of any nature, whether arising out of contract, tort, statute or otherwise,
other than
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obligations to perform under contracts and commitments which (a) have been
incurred in the ordinary course of business, (b) would not be required to be
reflected in or reserved against in a balance sheet prepared in accordance with
generally accepted accounting principles and (c) would not be required to be
disclosed in this Agreement or in any Schedule hereto.
4.5. Title to Property, Absence of Encumbrances, etc. Set forth in
Schedule 4.5 is a complete and accurate list of (a) all real property and (b)
all material equipment, furniture and fixtures owned or leased by the Sellers,
and of all mortgages, liens and material encumbrances to which such real
property, equipment, furniture and fixtures are subject. Except for leased
property and as specified in such Schedule 4.5, the Sellers have good and
marketable title to all assets, real or personal, tangible or intangible, owned
or used by either or both of them, including, without limitation, all assets
reflected in the most recent balance sheet included in the 1998 Financial
Statements, free and clear of all mortgages, pledges, liens, security interests
or encumbrances of any nature (other than liens for taxes, assessments or other
governmental charges not yet due and payable, or presently payable without
penalty or interest) including, without limitation, any governmental
restrictions on the operation of such assets. All buildings, equipment,
furniture and fixtures listed on Schedule 4.5 owned or leased by the Sellers are
in good operating condition and repair.
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4.6. Accounts Receivable and Accounts Payable. The accounts
receivable of the Sellers reflected in the Financial Statements, to the extent
not yet collected, are from bona fide accounts receivable created in the
ordinary course of business. All accounts payable reflected on the balance sheet
as of November 30, 1998 included in the 1998 Financial Statements and all
accounts payable arising subsequent to the date of such balance sheet, have
arisen in the ordinary course of business and represent valid obligations of
LCG. The accounts payable of LCG reflected on the balance sheet as of November
30, 1998 included in the 1998 Financial Statements have been paid or are being
paid in accordance with past practices.
4.7. Books and Records. The stock record books, and other material
non-financial records of the Sellers (other than the minute books), all of which
have been made available to the Buyer, are complete and correct in all material
respects and have been maintained in accordance with sound business practices
and substantially reflect the basis for the financial condition and results of
operations of the Sellers set forth in the Financial Statements and the Interim
Financials.
4.8. Patents, Trademarks, etc. Schedule 4.8 contains a complete and
correct list of all patents, trademarks registered or claimed by the Sellers,
trade names and registered copyrights owned or used by, or registered in the
name of, the Sellers, and of all applications for patents or for registration of
trademarks, trade names or copyrights made by the Sellers, or by
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any of their employees, for the benefit of the Sellers. Except as otherwise
indicated in Schedule 4.8, one or the other of the Sellers is the registered and
beneficial owner of all such patents, trademarks, trade names and registered
copyrights, free and clear of any license, royalty, lien, encumbrance or other
interest of any third party. The Sellers own or have the right to use all
patents, patent applications, trademarks, trade names, copyrights or other
intellectual property rights, including, without limitation, trade secrets,
technology and know-how, necessary for the conduct of their respective
businesses. Other than as set forth on Schedule 4.8, there is no existing,
pending or threatened claim by either of the Sellers against any third party for
infringement, misuse or misappropriation of any patent, trademark, trade name,
copyright or other intellectual property (including without limitation any trade
secrets or know-how) owned by either of the Sellers or in which either of the
Sellers have an interest. There is no existing, pending or, to the knowledge of
the Sellers threatened, action, suit, or proceeding against either of the
Sellers for infringement, misuse or appropriation by either of the Sellers of
any patent, trademark, trade name, copyright or other intellectual property
(including without limitation any trade secret or know-how) owned by any third
party or any basis therefor.
4.9. Employee Remuneration, etc. (a) Schedule 4.9 lists the position
and the current salaries, bonuses, or any other form of compensation paid
(together with pending or
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anticipated increases therein) to each director, officer, employee, consultant
or agent of either of the Sellers, including any bonuses which either of the
Sellers has promised or currently anticipates paying to any such person. Except
as indicated on Schedule 4.9, no officer or other key employee of either of the
Sellers has indicated an intention to terminate his or her employment with
either of the Sellers.
(b) Schedule 4.9 also lists each officer, employee, consultant
and agent of either of the Sellers who has entered into an employment contract,
consulting contract or other special arrangement with either of the Sellers, and
true and complete copies of all such contracts and descriptions of all such
arrangements have been previously delivered to the Buyer.
(c) Except as set forth on Schedule 4.9, neither of the
Sellers has entered into any agreement or arrangement with any employee,
officer, director or provider of services of either of the Sellers to pay any of
them any amount beyond their regular salary or other compensation as an
inducement to remain at their present position until, or contingent upon, the
execution of this Agreement or the consummation of the transactions contemplated
hereby or pursuant to which either of the Sellers or the Buyer could have any
obligation to pay any of them compensation in the event of, or as a consequence
of (i) the severance of their employment or relationship with the Sellers
following a change of control of either of the Sellers or their employment by
the Buyer or (ii) a change of control of either of the Sellers.
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4.10. Labor Matters. Neither of the Sellers is a party to any
collective bargaining agreement. Except as disclosed on Schedule 4.10, no
attempt to organize the employees of either of the Sellers has been made, nor is
any such attempt now threatened or, to the knowledge of the Sellers, being
planned. The Sellers are in compliance with all applicable Federal, state and
local laws, rules and regulations regarding employment conditions and practices,
have withheld all amounts required by law or agreement to be withheld from the
wages or salaries of their respective employees and are not liable for any
arrears of wages or any taxes or penalties for failure to comply with any of the
foregoing. The Sellers have not engaged in any unfair labor practices and have
not discriminated on the basis of age, sex or other discrimination prohibited by
law in their respective employment conditions or practices. Except as set forth
on Schedule 4.10, there are no unfair labor practice or age or sex
discrimination charges or complaints or other charges or complaints alleging
illegal discriminatory practices pending or threatened against either of the
Sellers before any Federal, state or local board, department, commission or
agency nor to the knowledge of the Sellers does any basis therefor exist. There
are no existing or threatened labor strikes, disputes, grievances, controversies
or other labor troubles affecting the Sellers. There are no pending or
threatened representation questions respecting the employees of the Sellers or
any pending arbitration proceedings.
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4.11. Bank Accounts. Schedule 4.11 lists the name and location of
each bank or other institution in which either of the Sellers has any account or
safe deposit box, the number or other identification thereof and the names of
all persons authorized to draw thereon or have access thereto.
4.12. No Adverse Change. Since January 1, 1998, there has not been
any material adverse change in the financial condition, operations, business or
prospects of either of the Sellers.
4.13. Absence of Certain Changes. Except as set forth on Schedule
4.13 or any other Schedule to this Agreement, since January 1, 1998, the Sellers
have not, either individually or together, (a) incurred any material obligations
or liabilities, whether absolute, accrued, contingent or other, other than
obligations and liabilities incurred in the ordinary course of business, (b)
mortgaged, pledged or subjected to any lien, lease, security interest or other
encumbrance (other than liens for taxes, assessments or other governmental
charges not yet due and payable, or presently payable without penalty or
interest), any of their assets, real or personal, tangible or intangible, (c)
acquired or disposed of any assets or properties, or entered into any agreement
for any such acquisition or disposition, except in the ordinary course of
business, (d) incurred any obligation for borrowed money which remains
outstanding on the date hereof, except for borrowings in an aggregate amount not
exceeding $10,000 incurred in the ordinary course of business, (e) forgiven
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or canceled any debts or claims or waived any rights of material value not
previously accrued, (f) granted or promised any increase in compensation in any
form of more than 10% to any officer or other employee or granted any severance
or termination pay, agreed to or indicated the intention of paying to any
officer or other employee a bonus or other compensation not included in such
person's base salary in excess of the bonus or other compensation previously
paid such person, or entered into any employment agreement, or any modification
of a previously existing employment agreement, with any officer or any other
salaried employee, (g) adopted, amended or entered into any collective
bargaining, bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation or other plan, agreement or arrangement for
the benefit of employees, (h) granted any rights or licenses under any of its
trademarks, trade names, copyrights or other intellectual property rights, (i)
made any capital expenditure or binding commitment therefor which individually
or in the aggregate exceeds $10,000, (j) sold, assigned or transferred any of
its assets (tangible or intangible) or otherwise disposed of any property,
trademark, trade name, assumed name, copyright (or pending application therefor)
or interest thereunder, except in each case in the ordinary course of business,
(k) suffered any material loss of, or adverse change in its relationship with,
any material client or customer or has knowledge that any such client or
customer intends or is contemplating any action which would constitute or
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lead to such a loss or adverse change, or written down the value of any
work-in-process or written off as uncollectible any notes or accounts
receivable, except write-downs and write-offs in the ordinary course of
business, (l) suffered any damage, destruction or loss (whether or not covered
by insurance) which has had a material adverse effect on its business, (m)
suffered any strike or other labor trouble which has materially affected its
operations, (n) terminated or made any substantial revision of, or engaged in
any renegotiation of, any material contract, (o) materially decreased the level
of maintenance on, or its expenditures for maintenance of, the real property,
equipment, furniture and fixtures owned or leased by it, (p) made any change in
accounting principles or methods or in classification, depreciation or
amortization policies or rates, (q) settled any dispute involving payment by
either of the Sellers in excess of $5,000, or canceled, forgiven or reduced any
obligation of any person or entity in an amount in excess of $5,000, (r) made
any loan or advance in excess of $5,000 to any person or entity other than
travel or expense advances in accordance with its normal policies which have
been accounted for or repaid and extension of trade credit in accordance with
its normal business practices, (s) amended or terminated any agreement which is
material to its business, except amendments in the ordinary course of business
which have not had and will not have a material adverse effect on the business
of the Sellers or the Assets; (t) renewed, extended or modified any lease of
real property or personal property,
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except in the ordinary course of business, in circumstances that have not had
and will not have a material adverse effect on the business of the Sellers or
the Assets; or (u) entered into any other material transaction other than in the
ordinary course of business.
4.14. Litigation. Other than as set forth on Schedule 4.14, there is
no judicial or administrative action, suit, proceeding or governmental
investigation pending or threatened before any court or tribunal or governmental
instrumentality, or any citation, order or notice of violation of any law,
decree, rule or regulation, by or against either of the Sellers or any of the
Sellers' properties, or which relates in any way to the Sellers' respective
businesses, properties, assets or operations, or which has or is likely to
result in an imposition of a lien on any of the properties or assets owned or
leased by either of the Sellers, or which questions the validity of this
Agreement or any action to be taken in connection herewith, nor is there any
such action, suit, proceeding or investigation, pending or, to the knowledge of
any director or officer of the Sellers, threatened, which involves any director,
officer, employee, consultant or independent contractor of the Sellers in its or
his capacity as such. Except as set forth in Schedule 4.14, neither the Sellers
nor any property or assets of either of the Sellers is subject to any judicial
or administrative order, judgment, injunction or decree nor has either of the
Sellers been a party to any product or professional liability litigation within
the last five years.
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4.15. Compliance with Other Instruments and Laws. Neither of the
Sellers is in violation of any provision of (a) its charter or by-laws, or (b)
any agreement, contract, mortgage, lease, license or other instrument,
governmental franchise, license, permit or authorization, judgment or order of
any tribunal or governmental body, or law, statute, decree, rule or regulation
applicable to it or any of its properties or to which it is a party or by which
it is bound.
4.16. Contracts, etc. Schedule 4.16 contains a complete and correct
list and attachments thereto (to the extent not listed on any other Schedule to
this Agreement) of each (a) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension, retirement or similar plan, agreement or
arrangement of either of the Sellers, (b) mortgage, debenture, note or
installment obligation, or other instrument or contract for the borrowing or
lending of money by either of the Sellers, including without limitation any
agreement or arrangement relating to the maintenance of compensating balances or
the availability of a line of credit, (c) license agreement, sales agency
agreement or franchise agreement (other than off-the-shelf software licenses) to
which either of the Sellers is a party, (d) guaranty of any obligation of any
person by either of the Sellers, including without limitation any keep-well,
make-whole or maintenance of working capital or earnings or similar agreement,
(e) agreement for the sale of any properties or assets by either of the Sellers
other than sales of products or services
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in the ordinary course of business to clients or customers which in 1997
generated or which in 1998 obligates the customer or client to pay, revenues of
less than $50,000, (f) contract, purchase order or other agreement, other than a
contract, purchase order or other agreement (i) for the purchase of equipment,
furniture or fixtures with an aggregate consideration of less than $5,000, made
in the ordinary course of business, or (ii) for the purchase of materials or
supplies made in the ordinary course of business, pursuant to which either of
the Sellers is or may be obligated to make payments, contingent or otherwise, on
account of or arising out of the acquisition, prior, pending or future, of the
shares, business, or other assets of another enterprise, (g) secrecy or
invention agreement under which either of the Sellers or any of the present
officers or employees of either of the Sellers has any obligation and relating
to the business of either of the Sellers, (h) agreement for the purchase or sale
of goods or services not terminable without liability by the applicable Seller
on 90 days' (or less) notice or involving payments by or to it in excess of
$5,000, (i) agreement or arrangement with a customer or client of either of the
Sellers for rebates, sharing of expenses or any similar device for the effective
reduction or increase of prices or other charges and involving products or
services with a value in excess of $5,000, (j) lease of real or personal
property with either of the Sellers as lessor or lessee, involving rents of more
than $5,000 per year, (k) agreement or arrangement limiting the
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freedom of either of the Sellers or, to the knowledge of either of the Sellers,
any of the present or former officers or employees of either of the Sellers, to
compete in any line of business similar to the businesses of the Sellers, with
any person or other entity or in any geographical area, (l) governmental
license, franchise, permit or authorization held by and material to the business
of either of the Sellers and not listed on any other Schedule hereto, (m)
outstanding powers of attorney executed by or on behalf of either of the
Sellers, (n) joint venture agreement or partnership, profit sharing or other
similar agreements to which either of the Sellers is a party, (o) contract,
commitment or agreement not referred to above in this Section 4.16 or in any
other Schedule to this Agreement and any one of which involves aggregate
payments by or to either of the Sellers of $5,000 or more. All such contracts
and agreements are, with respect to the Sellers, valid, binding and in full
force and effect, neither the Seller which is a party thereto nor any other
party is in material default thereunder and no event has occurred which, whether
with notice, lapse or time or otherwise, would constitute a default by such
Seller thereunder, and such Seller has not received or sent any notice of
cancellation or termination thereunder. Except as disclosed in Schedule 4.16
hereto, no consent of any party or the payment of any penalty or incurrence of
any additional obligation or change of any terms is necessary so that all rights
of the Sellers under
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contracts extending beyond the Closing Date may be transferred to the Buyer on,
and continue in effect after, the Closing Date.
4.17. Taxes. (a) As used in this Section 4.17, the following terms
have the following meanings:
(i) "Tax" means any federal, state, local, or foreign
income, gross income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code ss.59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, ad valorem, lease,
service use, registration, value added, alternative or add-on minimum,
estimated, or other tax, fee, assessment or charge of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not,
together with any expenses incurred in connection with the determination,
settlement or litigation of any Tax liability:
(ii) The term "Tax Return" means any return,
declaration, report, claim for refund, information return or any statement or
other document required to be filed in respect of Taxes, including, where
permitted or required, combined or consolidated returns for any group of
entities that includes the Sellers, including any schedule or attachment thereto
and any amendment thereof;
(iii) The term "Code" means the Internal Revenue Code of
1986, as amended; all citations to the Code, or
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to the Treasury Regulations promulgated thereunder, shall include any amendments
or any substitute or successor provisions thereto; and
(iv) Any reference in this Section 4.17 to the Sellers
includes a reference to a person acting on behalf of the Sellers.
(b) The Sellers have timely filed all Tax Returns that they
were required to file. All such Tax Returns were correct and complete in all
respects. All Taxes owed by the Sellers (whether or not shown on any Tax Return)
have been paid. The Sellers currently are not the beneficiary of any extension
of time within which to file any Tax Return. No claim has ever been made by an
authority in a jurisdiction where the Sellers do not file a Tax Return that it
is or may be subject to taxation by that jurisdiction. There are no liens or
other encumbrances on any of the Assets that arose in connection with any
failure (or alleged failure) to pay any Tax.
(c) The Sellers have withheld and paid to the appropriate
governmental or regulatory authority all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
(d) No stockholder, director or officer (or employee
responsible for Tax matters) of the Sellers expects any authority to assess any
additional Taxes for any period for which tax returns have been filed. There is
no dispute or claim
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concerning any Tax liability of the Sellers either (i) claimed or raised by any
authority in writing or (ii) as to which any of the Sellers and the
stockholders, directors and officers (and employees responsible for Tax matters)
of the Sellers has knowledge based upon personal contact with any agent of such
authority.
(e) Schedule 4.17 lists all federal, state, local and foreign
income Tax Returns filed with respect to either of the Sellers for the taxable
period ended on or after December 31, 1991, indicates those Tax Returns that
have been audited, and lists all Tax Returns, from whatever taxable period, that
are currently the subject of audit. The Sellers have delivered to the Buyers
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by
Sellers.
(f) Neither of the Sellers has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(g) None of the assets of the Sellers is "tax- exempt use
property" within the meaning of Section 168(h) of the Code. Except as set forth
in Schedule 4.17, neither of the Sellers has agreed to make, nor is it required
to make, any adjustment under Section 481(a) of the Code by reason of a change
in accounting method or otherwise. None of the assets of the Sellers is property
that either Seller is required to treat as being owned by any other person
pursuant to the safe harbor lease
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provisions of former section 168(f)(8) of the Code. The Sellers have not
participated in an international boycott within the meaning of Section 999 of
the Code. Neither of the Sellers has been a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code. Neither of the Sellers
has had a permanent establishment in any foreign country, as defined in any
applicable tax treaty or convention between the United States and such foreign
country.
(h) The unpaid taxes of the Sellers (i) did not, as of the
most recent month end, exceed the reserve for Tax liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the most recent balance sheet
(rather than in any notes thereto) and (ii) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of the Sellers in filing their tax returns.
(i) None of the assumed liabilities is an obligation to make a
payment that will not be deductible under Section ss.280G of the Code. Each of
the Sellers have disclosed on their federal income Tax Returns all positions
taken therein that would give rise to a substantial understatement of tax within
the meaning of Section ss.6622 of the Code. Neither of the Sellers is a party to
any Tax allocation or sharing agreement. Neither of the Sellers (i) has been a
member of an Affiliated Group filing a
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consolidated federal income Tax Return nor (ii) has any liability for the Taxes
of any person (other than the Sellers) under Reg. ss.1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
4.18. Permits. The Sellers have obtained and hold all licenses,
permits, authorizations, consents and orders or approvals of all foreign,
Federal, state or local governmental or regulatory bodies that are necessary for
the lawful conduct of their respective businesses and to operate the Assets as
presently being operated (the "Permits"). All of the Permits are listed on
Schedule 4.18 and are validly issued and in full force and effect and the
Sellers are in compliance therewith. No proceeding is pending or threatened
which seeks or may result in the cancellation, suspension, restriction or
modification of any Permit. The businesses of the Sellers are being operated in
all respects in accordance with the terms and conditions of the Permits.
4.19. Employee Benefit Plans and Employment Agreements. Except for
the Sellers' tax-qualified Profit Sharing Plan (the "Profit Sharing Plan") and
certain medical and other welfare benefit plans maintained currently by either
of the Sellers, as set forth on Schedule 4.19 (the "Welfare Plans", and with the
Profit Sharing Plan, collectively, the "Plans"), the Sellers are not a party to,
do not sponsor or maintain, or have any obligation or liability arising for any
periods ending prior to, on or after the Closing Date under or in connection
with, any
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collective bargaining agreement, pension, profit sharing, deferred compensation,
incentive compensation, welfare benefit or other similar plan or arrangement or
understanding providing benefits to any Transferred Employee (as defined in
Section 7.4(a)) or any other obligation or liability arising from the employment
or termination of employment of any Transferred Employee.
4.20. Clients. Schedule 4.20 sets forth the ten largest clients
(measured by fees generated) of each of the Sellers as of December 31, 1997 and
November 30, 1998.
4.21. Brokers. No finder, broker, agent or other intermediary has
acted on behalf of the Sellers in connection with this Agreement or the
transactions contemplated hereby for whose fees the Buyer is liable.
4.22. Disclosure. This Agreement, the Schedules hereto, the
Financial Statements and any other information furnished or to be furnished to
the Buyer in connection with this Agreement and the transactions contemplated
hereby do not contain any untrue statement of a material fact or omit to state
any fact necessary to make the statements contained therein not false or
misleading. There is no fact known to the Sellers or their respective directors
or officers which materially affects or will materially affect the businesses of
the Sellers or the Assets which has not been set forth in this Agreement, the
Schedules hereto or the Financial Statements.
4.23. Investment.
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4.23.1. The Sellers (a) understand that the NCI Shares that
they will receive as part of the Purchase Price have not been, and will not be,
registered under the Securities Act, or under any state securities laws, and are
being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (b) are acquiring the NCI Shares
solely for each of their own accounts for investment purposes, and not with a
view to the distribution thereof, (c) are sophisticated investors with knowledge
and experience in business and financial matters, (d) have received certain
information concerning NCI, and have had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks inherent in
holding the NCI Shares, (e) are "Accredited Investors", as such term is defined
in Rule 501 promulgated under the Securities Act, (f) are able to bear the
economic risk and lack of liquidity inherent in holding the NCI Shares, and (g)
acknowledge that, except as specifically set forth herein, no party has made any
representation or warranty regarding NCI or the NCI Shares.
4.23.2. The Sellers acknowledge that they have been advised
that (a) the NCI Shares must be held indefinitely and the Sellers must continue
to bear the economic risk of holding the NCI Shares unless (i) the NCI Shares
are subsequently registered for sale under the Securities Act and any applicable
state laws, (ii) an exemption from such registration is available or (iii) the
NCI Shares are repurchased by NCI pursuant to
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Section 3.4 of this Agreement, (b) there is presently no public market for the
NCI Shares and there is no assurance that a public market for the NCI Shares
will develop; (c) Rule 144 promulgated under the Securities Act ("Rule 144") is
not currently available with respect to sales of NCI Shares, and, except to the
extent set forth in Section 7.6 hereof, NCI has made no agreement with the
Sellers to take such actions as may be necessary to make Rule 144 available; (d)
if and when the NCI Shares may be disposed of in reliance on Rule 144, such
disposition may be made only in limited amounts in accordance with the terms and
conditions of Rule 144; (e) if sale under Rule 144 is not available, public sale
of the NCI Shares without registration will require the availability of another
exemption under the Securities Act; (f) a notation will be made in the records
of NCI and any transfer agent that the NCI Shares are subject to restrictions on
transfer; and (g) a restrictive legend will be placed on the certificates
representing the NCI Shares in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE TRANSFERRED, SOLD, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND THE
REGISTRATION REQUIREMENTS OF ANY APPLICABLE
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STATE SECURITIES OR "BLUE SKY" LAWS, OR (B) IF
▇▇▇▇▇▇ COMMUNICATIONS INC. (THE "COMPANY") HAS
PREVIOUSLY BEEN FURNISHED WITH AN OPINION OF
COUNSEL FOR THE HOLDER, WHICH OPINION AND
COUNSEL SHALL BE REASONABLY SATISFACTORY TO
THE COMPANY, TO THE EFFECT THAT SUCH TRANSFER,
SALE, PLEDGE OR OTHER DISPOSITION IS EXEMPT
FROM REGISTRATION UNDER THE ACT AND THE RULES
AND REGULATIONS THEREUNDER AND SUCH STATE
SECURITIES OR "BLUE SKY" LAWS. THE TRANSFER OF
SUCH SHARES MAY ALSO BE SUBJECT TO CONTRACTUAL
RESTRICTIONS UNDER ONE OR MORE AGREEMENTS,
COPIES OF WHICH ARE ON FILE AT THE OFFICES OF
THE COMPANY.
4.24. Actions Subsequent to November 30, 1998. From November 30,
1998 until the Closing Date, the Sellers have (a) conducted their respective
affairs only in the ordinary course of business, in substantially the manner as
theretofore conducted and in accordance with all laws, rules, regulations,
orders, approvals, authorizations, exemptions, classifications and
registrations, (b) maintained all of their respective Assets in
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as good condition and repair as of November 30, 1998, reasonable wear and tear
excepted, (c) performed all of their respective obligations under all contracts
to which either of them is a party, and, except as reflected in any Schedule to
this Agreement (each item so reflected in any such Schedule to this Agreement
representing only transactions entered into in the ordinary course of business),
not amended, altered or modified any provision of any such contract or entered
into any new contract or transaction involving consideration in excess of $5,000
or disposed of any assets having a value in excess of $5,000 in the aggregate
without the prior written consent of NCI and the Buyer, (e) used their best
efforts to maintain the existing relationships with all clients, customers and
others having business dealings with either of the Sellers, (f) used their best
efforts to keep available the services of each of the Sellers' officers and
employees, (g) promptly delivered to NCI and the Buyer interim financial
statements and internal financial records as and when requested by the Buyer and
NCI, (h) conferred on a regular and frequent basis with representatives of NCI
or the Buyer to report material operational matters and the general status of
ongoing operations, (i) not permitted the imposition of any lien, security
interest or other encumbrance upon any of the Assets; (j) not made any capital
investment in, made any loan to, or acquired the securities or assets of any
other entity or person; (k) not made any change in employment terms for any of
their respective directors, officers, and employees outside the
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ordinary course of business; (l) except as reflected in Schedule 4.24 or any
other Schedule to this Agreement (each item so reflected in any such Schedule to
this Agreement representing only transactions entered into in the ordinary
course of business), not incurred any obligation or liability, whether absolute,
accrued, contingent or other and (m) not, without the prior written consent of
NCI and the Buyer, taken any action or engaged in any transaction not expressly
permitted by this Section 4.24 or otherwise contemplated by this Agreement which
would cause any of the representations and warranties made by the Sellers herein
to be untrue as of the Closing Date or a breach of the terms and conditions of
this Agreement.
4.25. Lease for Space at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇. ▇▇▇ has not committed
a breach or violation of, is not in default under and has committed no act which
with the passage of time or any applicable grace period would in the future
constitute a default under the lease between ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.▇. [(as
successor to RKC Tribune Associates)] as Landlord (the "Landlord") and LCG as
Tenant dated June 9, 1993, as modified by various agreements including but not
limited to First Amendment of Agreement of Lease dated June 26, 1996 and a
further agreement to be dated as of the date hereof (collectively, the "Lease")
for LCG's office space located on the 17th floor of the building known as ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇. There is no ongoing dispute between LCG
and the Landlord (or any of their representatives) relating to the Lease, LCG
has paid all rent
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required to be paid under the Lease through February 28, 1999, and all
alterations and modifications made by LCG to the space subject to the Lease have
been made in accordance with the terms of the Lease and all applicable laws and
regulations.
5. Representations and Warranties of NCI and the Buyer. NCI and the
Buyer represents and warrants to the Sellers as follows:
5.1. Organization and Qualification. NCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, lease and operate its
properties and business as now being conducted. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and has all requisite power and authority to own, lease and operate its
properties and business as it is now being conducted. NCI and the Buyer are duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction where the character of the properties they own or
lease or the nature of their activities makes such qualification necessary.
5.2. Agreement, etc. Each of NCI and the Buyer has all requisite
corporate power and authority to enter into this Agreement, to consummate the
transactions contemplated hereby and perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by NCI and the Buyer
and constitutes the legal and binding obligation of NCI and the Buyer
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enforceable in accordance with its terms. The execution and delivery by NCI and
the Buyer of this Agreement, the consummation of the transactions contemplated
hereby, and the performance by NCI and the Buyer of their respective obligations
hereunder will not conflict with or result in any violation of, or any default
under (either immediately or with notice or lapse of time) any provision of (a)
the respective certificates of incorporation or by-laws of NCI or the Buyer, (b)
any agreement, contract, mortgage, lease, license, note, bond, indenture, deed
of trust or other instrument to which NCI and the Buyer or either of them is a
party, (c) any governmental franchise, license, permit or authorization, or any
judgment or order of any tribunal or governmental body applicable to NCI or the
Buyer, or any of NCI's or the Buyer's properties or other assets, or (d) any
law, statute, decree, rule or regulation of any jurisdiction. No authorization,
consent or approval of, or declaration of, filing with or notice to any
governmental body or authority by NCI or the Buyer is necessary for the
execution of this Agreement by NCI and the Buyer, the consummation by NCI and
the Buyer of the transactions contemplated hereby or the performance by NCI and
the Buyer of their respective obligations hereunder.
5.3. Brokers. No finder, broker, agent or other intermediary
has acted on behalf of NCI or the Buyer in connection with this Agreement or the
transactions contemplated hereby for whose fees the Sellers are liable.
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5.4. Capital Stock. The authorized capital stock of NCI consists of
100,000,000 shares of the common stock, par value $0.01 per share of NCI and
2,000,000 shares of undesignated preferred stock of NCI. On the date hereof (i)
24,348,408 shares of the authorized common stock were validly issued and
outstanding, fully paid and nonassessable, (ii) no shares of the authorized
preferred stock were issued and outstanding, and (iii) an aggregate of 5,056,445
shares of the authorized common stock and no shares of the authorized preferred
stock are reserved for issuance upon the exercise of warrants, options and other
rights heretofore issued by NCI or which NCI is committed to issue. The NCI
Shares when issued by NCI to the Sellers at the Closing shall be validly issued,
fully paid and nonassessable.
5.5. Financial Statements. Set forth in Schedule 5.5 are true and
complete copies of (a) the unaudited balance sheet of NCI as of December 31,
1997 and the related statements of income, retained earnings and cash flow for
such year (the "1997 Financial Statements") and (b) the preliminary unaudited
balance sheet of NCI as of December 31, 1998 and the related statements of
income and, retained earnings for the year then ended (the "1998 Financial
Statements"). The 1997 Financial Statements (i) present fairly the financial
position of NCI as of the date specified and the results of operations and
changes in financial position of NCI for the respective period indicated and
(ii) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the period
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specified. Since December 31, 1997 no change has occurred in the financial
condition, assets, liabilities or business of NCI, other than (a) as shown on
the 1998 Financial Statements or (b) changes which are in the aggregate not
materially adverse.
6. Covenants of the Sellers. The Sellers covenant as follows:
6.1. Publicity; Confidentiality. The Sellers will not, without the
consent of NCI and the Buyer, issue or cause the publication of any press
release or other public announcement with respect to this Agreement after the
date hereof, except where such release or announcement is required by law.
6.2. Public Offering. The Sellers understand that NCI expects to
file a registration statement (together with all amendments thereto, the
"Registration Statement") with the SEC for the IPO. In connection with the IPO,
the Sellers agree to execute such documents and take such actions as may
reasonably be requested by NCI or the underwriters of the IPO; provided,
however, that in no event shall the Sellers or their designees be required to
sign any agreement or undertaking which restricts them from selling any NCI
shares for a period in excess of 180 days from the closing of the IPO. In
addition, the Sellers will not disclose to any third party the intention of NCI
to consummate the IPO prior to the filing by NCI of the Registration Statement
with the SEC.
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6.3. Taxes. The Sellers shall be solely liable for any obligation
for Taxes attributable to, arising from or associated with the sale or transfer
from the Sellers to the Buyer of the Assets, other than federal, state and local
income taxes, if any, of NCI or the Buyer and any sales taxes attributable to or
in connection with such sale or transfer, which taxes shall be paid by the Buyer
or NCI.
6.4. Securities Law Matters. (a) The Sellers will not, directly or
indirectly, offer, transfer, sell, pledge or otherwise dispose of any NCI
Shares, unless such offer, transfer, sale, pledge or other disposition is either
(i) pursuant to an effective registration statement under the Securities Act and
registration under any applicable state laws, or (ii) effected only after
furnishing NCI with an opinion of counsel, which counsel shall be reasonably
satisfactory to NCI and which opinion shall be in form and substance reasonably
satisfactory to NCI, stating that no such registration of the NCI Shares is
required because of the availability of an exemption from registration under the
Securities Act and under applicable state laws.
6.5. Latin Reports and LCG Latino. Promptly after the Closing LR and
LCG shall take such steps as NCI and the Buyer shall reasonably request so as to
allow the Buyer to use the names "Latin Reports" and "LCG Latino" including
without limitation the change of name or dissolution of LR and the filing by LCG
of a certificate of termination of use of the assumed name "LCG Latino" with the
State of New York.
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6.6. Compliance With Letter to Landlord. No later than 3 business
days after the Closing Date, LCG shall, in accordance with the Letter to
Landlord (as defined in Section 8.8(b) hereof), deliver to ▇▇▇▇▇▇▇▇ & Fleece,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attn. ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇), the attorneys for the Landlord, the Closing Notice (as defined in
Section 8.8(b) and, if not delivered prior thereto, evidence of the corporate
authorization of LCG to execute the Amendment Letter and the Assignment and
Assumption (each as defined in Section 8.8 hereof).
7. Covenants of NCI and the Buyer. NCI and the Buyer covenant as
follows:
7.1. Publicity; Confidentiality. NCI and the Buyer shall consult
with the Sellers as to the contents of any press release or other public
announcement with respect to this Agreement after the date hereof and will not,
without the consent of the Sellers, issue or cause the publication of any press
release or other public announcement with respect to this Agreement after the
date hereof, except where such release or announcement is required by law,
including without limitation NCI's Registration Statement for the IPO.
7.2. Public Offering Documents. In connection with the IPO, NCI will
deliver to the Sellers copies of the Registration Statement and the Prospectus,
and will keep the Sellers informed of the expected timing of the IPO. In
addition,
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NCI will deliver to the Sellers, upon request, any exhibits to the Registration
Statement.
7.3. Permitted Transfer of NCI Shares. If the Sellers distribute
their assets to their shareholders then NCI will permit the transfer of the NCI
Shares by the Sellers to such shareholders, provided that any such shares
received by the shareholders contain the legend set forth above in Section
4.23.2, are subject to the same sale restrictions as are applicable to the
Sellers and the opinion of counsel referenced therein is received by NCI.
7.4. Employee Matters.
(a) Subsequent to the Closing, the Buyer shall make offers of
employment to each employee of the Sellers listed on Schedule 7.4(a) hereto (the
"Transferred Employees") effective as of the Closing Date, and such offer of
employment with Buyer shall be at rates of regular compensation generally
enjoyed by similarly situated employees of the Buyer, with such benefits as are
generally offered by the Buyer to similarly situated employees of the Buyer;
provided, however, that ▇▇▇▇▇ ▇▇ will be hired at a salary not less than $4,000
per year greater than his present salary. If a Transferred Employee is on
disability leave (short or long term) as of the Closing Date, such offer of
employment shall not be effective until termination of such leave. The Sellers
agree that, with respect to any employees of the Sellers who do not become
Transferred Employees, the Sellers shall retain all liabilities and obligations,
with respect to
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compensation or benefits to which such employees are entitled. The Sellers
further agree that with respect to any employees of the Sellers who become
Transferred Employees, except as set forth in Schedule 7.4(a), the Sellers shall
retain all liabilities and obligations with respect to compensation or benefits
to which such employees were entitled by virtue of their employment by the
Sellers prior to the Closing Date and Buyer's liability and obligations with
respect to such Transferred Employees shall apply only with respect to any such
amounts that become payable with respect to, and which are directly attributable
to, such employees' employment with the Buyer after the Closing Date.
(b) The Buyer shall credit each Transferred Employee under the
Buyer's Benefit Plans (as defined in Section 7.4(d) below) with service equal to
such employee's period of service with the Sellers prior to the Closing Date for
purposes of eligibility to participate in or receive benefits (including for
vesting purposes) under the Buyer's Benefit Plans, and any waiting period under
the Buyer's Benefit Plans shall be waived with respect to such Transferred
Employees.
(c) On and after the Closing Date, the Buyer's 401(k) Plan (as
defined in Section 7.4(d) below) shall accept rollovers of amounts held under
the Lipton Communications Group Profit Sharing Plan ("Sellers' Profit-Sharing
Plan") on behalf of any Transferred Employee, provided such rollover meets the
requirements of Code Section 402(c). The Sellers hereby represent that (i) the
Sellers' Profit-Sharing Plan has been the
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subject of a favorable determination letter from the IRS which was filed with
the IRS within the remedial amendment period prescribed under Section 401(b) of
the Code with respect to compliance with the Tax Reform Act of 1986 to the
effect that Sellers' Profit-Sharing Plan is qualified under Section 401(a) of
the Code, subject to the customary reservations as to the plan's operational
compliance with the Code's requirements, (ii) no such determination letter has
been revoked, (iii) to the Sellers' knowledge, the IRS has not issued written
notice of its intent to revoke the qualified status of the Sellers'
Profit-Sharing Plan, and (iv) and to the Sellers' knowledge, no circumstances
exist that would reasonably be expected to result in disqualification of the
Sellers' Profit-Sharing Plan.
(d) For purposes of this Section 7.4, "Buyer's Benefit Plans"
shall mean all employee benefit plans and programs maintained by the Buyer,
including, but not limited to, the ▇▇▇▇▇▇ Communications, Inc.
Savings/Investment Plan (the "Buyer's 401(k) Plan"), the Buyer's medical,
dental, group life, accidental death and dismemberment and long-term disability
plan, and the Buyer's vacation program.
7.5. Change of Name. Promptly following the Closing, the Buyer will
change its name to Bienestar/LCG Communications, Inc.
7.6. Filing of Reports. If the IPO is completed, NCI confirms that,
while the Sellers (or their designees) own any NCI shares, it expects to take
all steps and file all reports
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required of an issuer of restricted securities to enable the Sellers (or their
designees) to make sales of the NCI Shares pursuant to Rule 144.
7.7. Grant of Stock Option. No later than 14 days after the Closing
Date, NCI shall grant to ▇▇▇▇▇ ▇▇ a nonqualified option to purchase $30,000 in
NCI Shares, with an exercise price of $7.00 per share, subject to other terms
and conditions with respect to exercise period and other matters that are
generally applicable to similarly situated employees of NCI or the Buyer, as
determined by NCI's Compensation Committee under the terms of the NCI 1998 Stock
Incentive Plan, attached hereto as Exhibit D.
7.8. Compliance With Letter to Landlord. No later than 3 business
days after the Closing Date, NCI shall, in accordance with the Letter to
Landlord (as defined in Section 8.8(b) hereof), deliver to ▇▇▇▇▇▇▇▇ & Fleece,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attn. ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇), the attorneys for the Landlord, the following documents: The Closing
Notice (as defined in Section 8.8(b) hereof) and, if not delivered prior
thereto, certified or bank checks for $5,201.33 and $39,870.00, a Form W-9.
completed by NCI and evidence of the corporate authorization of NCI to execute
the Assignment and Assumption (as defined in Section 8.8(a) hereof).
8. Conditions to the Obligations of the Sellers. The obligations of
the Sellers to effect the transactions
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contemplated hereby are subject to the fulfillment prior to or at the Closing of
the following conditions:
8.1. Representations and Warranties. The representations and
warranties of NCI and the Buyer contained herein are true and correct when made
and shall be true and correct at and as of the Closing as though such
representations and warranties were made at and as of the Closing.
8.2. Performance. NCI and the Buyer shall have performed and
complied with each covenant or condition required by this Agreement to be
performed or complied with by them before or at the Closing.
8.3. Closing Certificates. NCI and the Buyer shall each have
delivered to the Sellers a certificate, dated the Closing Date and executed by a
principal executive or financial officer, certifying that the conditions
specified in Sections 8.1 and 8.2 applying to NCI or the Buyer, as the case may
be have been fulfilled.
8.4. Opinion of Counsel. The Sellers shall have received from
Patterson, Belknap, ▇▇▇▇ & Tyler LLP, counsel for NCI and the Buyer, an opinion,
dated the Closing Date, addressed to the Sellers and in substantially the form
of Exhibit A.
8.5. Employment Agreements. The Buyer shall have entered into
employment agreements (the "Employment Agreements") with:
(a) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in substantially the form set forth in
Exhibit B; and
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(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇ in substantially the form set forth in
Exhibit C.
8.6. Stock Option Plans. NCI shall have granted to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a
nonqualified option to purchase $100,000 in NCI Shares, with an exercise price
of $7.00 per share, subject to other terms and conditions with respect to
exercise period and other matters that are generally applicable to similarly
situated employees of NCI or the Buyer, as determined by NCI's Compensation
Committee under the terms of the NCI 1998 Stock Incentive Plan, attached hereto
as Exhibit D.
8.7. Assumption of Liabilities. The Buyer shall have executed an
Assumption of Liabilities in substantially the form set forth in Exhibit E.
8.8 Lease for Office Space.
(a) The Landlord shall have signed and returned to NCI and LCG
(I) a letter agreement (the "Amendment Letter") in the form attached hereto as
Exhibit F between LCG and the Landlord further amending the Lease and (ii) an
Assignment and Assumption of Lease Agreement in the form attached hereto as
Exhibit G (the "Assignment and Assumption") among the Landlord, LCG and NCI.
(b) NCI and LCG shall have each signed the Closing Notice (the
"Closing Notice") directed to the Landlord and ▇▇▇▇▇▇▇▇ & Fleece, referred to in
the letter from NCI and LCG to the Landlord dated March 1, 1999 (the "Letter to
Landlord") attached to the Amendment Letter and the Assignment and
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Assumption, and NCI shall, unless previously delivered to the Landlord, have
available at the Closing the following documents referred to in the Letter to
Landlord: Certified or bank checks for $5,201.33 and $39,870.00, a Form W-9
completed by NCI and evidence of the corporate authorization of NCI to execute
the Assignment and Assumption.
9. Conditions to the Obligations of NCI and the Buyer. The
obligations of NCI and the Buyer to effect the transactions contemplated hereby
are subject to the fulfillment before or at the Closing of the following
conditions:
9.1. Representations and Warranties. The representations and
warranties of the Sellers contained in this Agreement (including the Schedules
hereto) shall have been true and correct when made and shall be true and correct
in all material respects at and as of the Closing as though such representations
and warranties were made at and as of the Closing.
9.2. Performance. The Sellers shall have performed and complied with
each covenant and condition required by this Agreement to be performed or
complied with by each of them before or at the Closing.
9.3. Closing Certificate. The Sellers shall have delivered to the
Buyer a certificate, dated the Closing Date and executed by a principal
executive or financial officer of each
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Seller, certifying that the conditions specified in Sections 9.1 and 9.2 have
been fulfilled.
9.4. Opinion of Counsel. NCI and the Buyer shall have received from
Frankenthaler ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Sellers, an opinion, dated
the Closing Date, addressed to NCI and the Buyer and in substantially the form
of Exhibit H.
9.5. Consents; Permits. The Sellers shall have obtained, and NCI and
the Buyer shall have received, in form and substance satisfactory to NCI and the
Buyer, all consents which are required to consummate the transactions
contemplated hereby or to avoid the termination of any Permit or contract upon
such consummation, including without limitation waivers of due-on-sale clauses
contained in any contracts and any consents to the change of ownership of the
Assets required under the terms of any Permit or contract.
9.6. Employment Agreements. The persons listed as parties to the
Employment Agreements set forth in Exhibits B and C shall have entered into
employment agreements in substantially the respective forms set forth therein.
9.7. Instruments of Conveyance. The Sellers shall have executed and
delivered such bills of sales, assignments of intellectual property and other
assignments and instruments as the Buyer may reasonably require to transfer the
Assets to the Buyer free and clear of all Encumbrances not disclosed in this
Agreement or the Schedules hereto.
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9.8 Lease for Office Space.
(a) The Landlord shall have signed and returned to NCI and LCG
the Amendment Letter and the Assignment and Assumption.
(b) NCI and LCG shall have each signed the Closing Notice and
LCG shall, unless previously delivered to the Landlord, have available at the
Closing evidence of the corporate authorization of LCG to execute the Assignment
and Assumption and the Amendment Letter.
10. Survival of Representations and Warranties; Indemnification.
10.1. Survival of Representations and Warranties. The
representations and warranties contained in Sections 4 and 5 of this Agreement
shall survive any investigation by any party and the Closing but shall expire
and be extinguished on the third anniversary of the Closing Date, except that
the Sellers' representations and warranties set forth in Sections 4.17 and 4.19
shall survive until 90 days after expiration of the applicable statute of
limitations for any affected taxable period. No action for indemnification under
this Section 10 may be brought with respect to such representations and
warranties after the applicable date indicated in the preceding sentence unless,
before the date such representations and warranties expire, the party seeking
indemnification has notified in
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reasonable detail the party from whom indemnification is sought of a claim for
indemnity hereunder.
10.2. Indemnification by the Sellers. Subject to Section 10.1, from
and after the Closing, the Sellers jointly and severally agree to indemnify and
defend NCI and the Buyer, and hold NCI and the Buyer harmless from and against,
any out-of-pocket loss, liability, damage, penalty, claim or expense (including
reasonable attorneys' and consultants' fees and other costs and expenses)
incurred or sustained by NCI or the Buyer as a result of or relating to:
(a) the non-fulfillment or breach of any covenant or agreement
or the breach of any representation or warranty of the Sellers set forth in this
Agreement;
(b) any investigation, claim, lawsuit, arbitration, or
regulatory or administrative suit, proceeding, order or action relating to, or
arising out of, any acts, omissions or activities of the Sellers before the
Closing Date, whether or not disclosed herein or in the Schedules hereto; and
(c) the non-fulfillment or breach by LCG prior to the Closing
Date of any covenant or agreement set forth in the Lease.
10.3. Indemnification by NCI and the Buyer. Subject to Section 10.1,
from and after the Closing, NCI and the Buyer jointly and severally agree to
indemnify and defend the Sellers, and hold the Sellers harmless from and against
any out-of-pocket loss, liability, damages, penalty, claim or expense (including
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reasonable attorneys' and consultants' fees and other costs and expenses)
incurred or sustained by the Sellers as a result of or relating to:
(a) the non-fulfillment or breach of any covenant or agreement
or the breach of any representation or warranty of NCI or the Buyer set forth in
this Agreement; and
(b) any investigation, claim, lawsuit, arbitration, or
regulatory or administrative suit, proceeding, order or action relating to, or
arising out of, any acts, omissions or activities of NCI or the Buyer before the
Closing Date, whether or not disclosed herein or in the Schedules hereto, or
with respect to the conduct of the businesses presently conducted by the Sellers
or the Assets after the Closing Date.
10.4. Indemnification Procedures. The procedures set forth in this
Section 10.4 are applicable to any claims made or which may be made by a third
party against a party indemnified pursuant to Section 10.2 or 10.3. A party
entitled to indemnification hereunder shall herein be referred to as an
"Indemnitee." A party obligated to indemnify an Indemnitee hereunder shall
herein be referred to as an "Indemnitor." Promptly after receipt by an
Indemnitee of notice of any claim or the commencement of any action, or upon
discovery of any facts which an Indemnitee believes may give rise to a claim for
indemnification from an Indemnitor hereunder, such Indemnitee shall, if a claim
in respect thereof is to be made against an Indemnitor under this Section 10,
notify such Indemnitor in
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writing in reasonable detail of the claim or the commencement of such action. If
any such claim shall be brought against such Indemnitee, it shall notify such
Indemnitor thereof, the Indemnitor shall be entitled to participate therein, and
to assume the defense thereof with counsel reasonably satisfactory to the
Indemnitee, and to settle or compromise any such claim or action; provided,
however, that any such settlement or compromise shall be effected only with the
consent of the Indemnitee, which consent shall not be unreasonably withheld; and
provided further, that if the Indemnitee rejects a settlement that would have
included a complete release of the Indemnitee from any further liability, its
right to indemnification from the Indemnitor shall be limited to the amount that
would have been payable by the Indemnitor under such settlement or compromise.
After notice to the Indemnitee of the Indemnitor's election to assume the
defense of such claim or action, the Indemnitor shall not be liable to the
Indemnitee under this Section 10 for any legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof; provided,
however, that the Indemnitee shall have the right to employ counsel to represent
it if, in the Indemnitee's reasonable judgment, it is advisable for the
Indemnitee to be represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the Indemnitor. If the
Indemnitor does not elect to assume the defense of such claim or action, the
Indemnitee shall act reasonably and in accordance with its good faith business
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judgment with respect thereto, and shall not settle or compromise any such claim
or action without the consent of the Indemnitor, which consent shall not be
unreasonably withheld. The parties hereto agree to render to each other such
assistance as may reasonably be requested in order in insure the proper and
adequate defense of any such claim or proceeding.
11. General Provisions.
11.1. Modification; Waiver. This Agreement may be modified only by a
written instrument executed by the parties herein. Any of the terms and
conditions of this Agreement may be waived in writing at any time on or before
the Closing Date by the party entitled to the benefits thereof.
11.2. Entire Agreement, etc. This Agreement, together with the
schedules and exhibits hereto, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the parties in connection therewith.
11.3. Expenses. Whether or not the transactions contemplated herein
shall be consummated, NCI, the Buyer and the Sellers shall each pay its own
expenses incident to the preparation and performance of this Agreement;
provided, however, that the Buyer will pay at the Closing the Sellers' actually
incurred legal fees and disbursements up to a maximum of $30,000.
11.4. Further Actions. Each party shall execute and deliver such
certificates, agreements and other documents and
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take such other actions as may reasonably be requested by the other parties in
order to consummate or implement the transactions contemplated hereby.
11.5. Bulk Sales Law. The Sellers shall not be required to comply
with the New York bulk sales law. However, the Sellers shall indemnify and hold
NCI and the Buyer harmless from and against all claims and liabilities,
including reasonable attorneys' fees and costs, arising out of any suit, action
or proceeding against NCI or the Buyer in which any claim is made due to or on
account of the Sellers' failure to comply with the New York bulk sales law,
provided that the claim in any such suit, action or proceeding is for an amount
owing by the Sellers to any creditor as of November 30, 1998 or for an amount
owing by the Sellers to any creditor which was incurred by the Sellers after
November 30, 1998 and prior to the Closing Date if such incurrence was contrary
to any representation or warranty of the Sellers contained herein.
11.6. Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed, registered mail, first-class postage paid,
return receipt requested, or any other delivery service with proof of delivery:
(a) If to the Sellers:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
LCG Latino
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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with a copy to:
Frankenthaler ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
(b) If to NCI or the Buyer:
Bienestar Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Operating
Officer
with a copy to:
Patterson, Belknap, ▇▇▇▇ & ▇▇▇▇▇ LLP
1133 Avenue of the Americas
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
or to such other address or to such other persons as the Parties shall have last
designated by notice to the other Parties.
11.7. Assignment, etc. (a) This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
permitted assigns and legal representatives, but shall not be assignable, by
operation of law or otherwise, by any party hereto without the prior written
consent of the other parties.
(b) Any payments or other distributions to be made by the
Buyer or NCI to the Sellers hereunder shall be made to the designees of the
Sellers (as provided in writing to the Buyer or NCI) if the Sellers shall have
been dissolved or be in
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the process of dissolution prior to or at the time of such payment or
distribution.
11.8. Counterparts. This Agreement may be executed in several
counterparts, each of which is an original but all of which shall constitute one
instrument.
11.9. Headings. The Section and other headings in this Agreement are
for convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provision hereof.
11.10. Governing Law. The validity, performance and enforcement of
this Agreement shall be governed by the laws of the State of New York without
giving effect to the principles of conflicts of law thereof.
11.11. Separability. Any term or provision of this Agreement which
is invalid or unenforceable shall be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement.
11.12. Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
11.13. Guaranty by NCI. NCI hereby unconditionally guarantees to the
Sellers the prompt and complete performance by the Buyer of all the terms,
covenants, conditions and agreements contained in this Agreement. This guaranty
shall apply with the same force and effect to all modifications or amendments to
this
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Agreement. Recovery may be had on this guaranty without first asserting,
prosecuting or exhausting any remedy or claim against the Buyer or its
successors, assigns or legal representatives.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
▇▇▇▇▇▇ COMMUNICATIONS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title:
BIENESTAR COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇-Gisiko
------------------------------------
Title:
LIPTON COMMUNICATIONS GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title:
LATIN REPORTS, LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title:
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EXHIBITS AND SCHEDULES TO ASSET PURCHASE AGREEMENT
Pursuant to Item 601(b)(2) of Regulation S-K, ▇▇▇▇▇▇ Communications Inc. agrees
to furnish supplementally a copy of any of the following omitted exhibits or
schedules to the Commission upon request:
Exhibit Description
------ -----------
A Opinion of Patterson, Belknap, ▇▇▇▇ & Tyler LLP
B Employment Agreement of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
C Employment Agreement of ▇▇▇▇▇▇ ▇▇▇▇▇▇
D NCI Stock Option Plan
E Assumption of Liabilities
F Amendment Letter
G Assignment and Assumption of Lease Agreement
H Opinion of Frankenthaler ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
Schedule Description
-------- -----------
1.1 Certain Excluded Assets
2.1 Certain Assumed Debts, Liabilities and
Contracts
3.2(b) Itemization of Cash Portion of Purchase Price
4.4 Financial Statements of Sellers
4.5 Properties, Equipment, Etc.
4.8 Patents, Trademarks, Etc.
4.9 Employee Remuneration, Etc.
4.10 Labor Matters
4.11 Bank Accounts
4.13 Certain Changes
4.14 Litigation
4.16 Contracts
4.17 Taxes
4.18 Permits
4.19 Employee Benefit Plans
4.20 Clients
4.24 Certain Actions Subsequent to November 30, 1998
5.5 ▇▇▇▇▇▇ Communications Inc. Financial Statements
7.4 (a) Transferred Employees
