ASSET
PURCHASE
AGREEMENT
between
M3 ACQUISITION CORP. ("M3" or "Buyer")
A subsidiary of
SCIENCE DYNAMICS CORPORATION ("SDC")
and
MODERN MASS MEDIA, INC. ("MMM" or "Seller")
TABLE OF CONTENTS
1. Definitions................................................1
2. Basic Transaction..........................................4
(a) Purchase and Sale of Assets..............................4
(b) Assumption of Liabilities................................5
(c) Purchase Price...........................................5
(d) The Closing..............................................5
(e) Deliveries at the Closing................................5
(f) Allocation...............................................5
3. Representations and Warranties of the Seller...............5
(a) Organization of the Seller...............................6
(b) Authorization of Transaction.............................6
(c) Noncontravention........................................6
(d) Title to Assets..........................................6
(e) Subsidiaries.............................................6
(f) Financial Statements.....................................6
(g) Events Subsequent to Most Recent Fiscal Year End.........7
(h) Undisclosed Liabilities..................................8
(i) Legal Compliance.........................................9
(j) Tax and Other Returns and Reports.......................9
(k) Intellectual Property....................................9
(l) Tangible Assets..........................................10
(m) Contracts...............................................10
(n) Accounts Receivable......................................12
(o) Powers of Attorney.......................................12
(p) Insurance................................................12
(q) Litigation...............................................12
(r) Employees................................................13
(s) Employee Benefits........................................13
(t) Guaranties...............................................13
(u) Environment, Health, and Safety..........................13
(v) Certain Business Relationships With the Seller...........14
(w) Disclosure...............................................14
4. Representations and Warranties of the Buyer................14
(a) Organization of the Buyer................................14
(b) Authorization of Transaction.............................14
(c) Noncontravention.........................................14
(d) Securities Filings.......................................14
5. Pre-Closing Covenants......................................14
(a) General..................................................15
(b) Notices and Consents.....................................15
(c) Operation of Business....................................15
(d) Preservation of Business.................................15
(e) Full Access..............................................15
(f) Notice of Developments...................................15
(g) Exclusivity..............................................15
6. Conditions to Obligation to Close..........................16
(a) Conditions to Obligation of the Buyer....................16
(b) Conditions to Obligation of the Seller...................17
7. Termination................................................17
(a) Termination of Agreement.................................18
8. Indemnification............................................18
(a) Survival of Representations and Warranties...............18
(b) Indemnification Provisions for Benefit of the Buyer......18
(c) Matters Involving Third Parties 19
(d) Indemnification Provisions for Benefit of the Seller.....20
9. Miscellaneous..............................................20
(a) Litigation Support.......................................20
(b) Restrictive Covenants....................................20
(c) No Third-Party Beneficiaries.............................21
(d) Entire Agreement.........................................21
(e) Succession and Assignment................................21
(f) Counterparts.............................................21
(g) Headings.................................................21
(h) Notices..................................................21
(i) Governing Law............................................22
(j) Amendments and Waivers...................................22
(k) Severability.............................................22
(l) Expenses.................................................22
(m) Brokers'/Finders' Fees...................................23
(n) Construction.............................................23
(o) Incorporation of Exhibits and Schedules..................23
(p) Specific Performance.....................................23
(q) Submission to jurisdiction...............................23
(r) Bulk Transfer Laws.......................................24
ASSET PURCHASE AGREEMENT
Agreement entered into effective as of April 1, 2003, by and between
M3 ACQUISITION CORP. a New Jersey corporation and a subsidiary of
SCIENCE DYNAMICS CORPORATION ("SDC" ), a New Jersey corporation, and
MODERN MASS MEDIA, INC. ("MMM" or "Seller") , a New Jersey corporation
.. The Buyer and the Seller are referred to collectively herein as the
"Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase all of the assets (and assume certain of the liabilities) of
the Seller in consideration of certain cash payments by buyer.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as
follows.
1. Definitions
"Acquired Assets" means all right, title, and interest in and to
certain of the assets of the Seller, as set forth in Schedule C1, in
detail, including the name "Modern Mass Media" and all of MMM's (a)
real property, leaseholds and subleaseholds therein, improvements,
fixtures, and fittings thereon, (b) tangible personal property (such
as machinery, equipment, inventories of supplies, manufactured and
purchased parts, work in process and finished work, furniture,
automobiles and trucks,), (c) Intellectual Property, goodwill
associated therewith, licenses and sublicenses granted and obtained
with respect thereto, and rights thereunder, remedies against
infringements thereof, and rights to protection of interests therein
under the laws of all jurisdictions, (d) leases, subleases, and rights
thereunder, (e) agreements, contracts, indentures, mortgages,
instruments, Security Interests, guaranties, other similar
arrangements, and rights thereunder, (f) claims, deposits,
prepayments, refunds, causes of action, chooses in action, rights of
recovery, rights of set off, and rights of recoupment (including any
such item relating to the payment of Taxes), (g) franchises,
approvals, permits, licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and
governmental agencies, (h) books, records, ledgers, files, documents,
correspondence, lists, plats, architectural plans, drawings, and
specifications, creative materials, advertising and promotional
materials, studies, reports, and other printed or written materials,
curricula, either finished, in process, or planned, and (i) rights in
and with respect to the assets associated with its Employee Health and
Disability Plans; provided, however, that the Acquired Assets shall
not include (i) the corporate charter, qualifications to conduct
business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification
numbers, seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization,
maintenance, and existence of the Seller as a corporation; (ii) any of
the rights of the Seller under this Agreement; or (iii) accounts,
notes and other receivables; or (iv) any other assets specifically
identified as being excluded from the Acquired Assets. The
enumeration of asset categories set forth herein shall not imply that
Seller necessarily owns each such type of asset.
"Assumed Liabilities" As set forth on Schedule C2 in detail.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction that forms or could,
with reasonable probability, form the basis for any specified
consequence.
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"Buyer" means Science Dynamics Corporation
"Cash" means cash and cash equivalents (including marketable
securities and short term investments) calculated in accordance with
GAAP applied on a basis consistent with the preparation of the
Financial Statements.
"Closing" has the meaning set forth in Section 2(d) below.
"Closing Date " has the meaning set forth in Section 2(d) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Employee Benefit Plan "means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee
Pension Benefit Plan, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c)
qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or
(d) Employee Welfare Benefit Plan or material fringe benefit plan or
program.
"Employee Pension Benefit Plan "has the meaning set forth in ERISA Sec. 3(2).
"Employee Welfare Benefit Plan "has the meaning set forth in ERISA Sec. 3(l).
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Resource Conservation and Recovery Act of 1976, and the Occupational
Safety and Health Act of 1970, each as amended, together with all
other laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Extremely Hazardous Substance" has the meaning set forth in Sec. 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as
amended.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statement" has the meaning set forth in Section 3(f) and
(g) below.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
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"Intellectual Property" means (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, trade
names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all
goodwill associated therewith, and all applications, registrations,
and renewals in connection therewith, (c) all copyrightable works, all
copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all trade secrets and confidential business
information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (e) all computer software
(including data and related documentation), (f) all other proprietary
rights, and (g) all copies and tangible embodiments thereof (in
whatever form or medium), (h) teaching or instructor notes, teaching
plans, or other syllabus.
"Knowledge" means actual knowledge after reasonable inquiry.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet of __________
_______, 2003.
"Most Recent Financial Statements" has the meaning set forth in
Section 3(f) and (g) below.
"Most Recent Fiscal Month End" has the meaning set forth in
Section3(f) and (g) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section
3(f) and (g) below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof.
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for Taxes not yet due and
payable or for Taxes that the taxpayer is contesting in good faith
through appropriate proceedings, (c) purchase money liens and liens
securing rental payments under capital lease arrangements, and (d)
other liens arising in the Ordinary Course of Business and not
incurred in connection with the borrowing of money.
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"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities
to elect a majority of the directors.
"Seller" means Modern Mass Media, Inc. ("MMM")
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes
under Code Sec. 59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
2. Basic Transaction
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the
Seller, and the Seller agrees to sell, transfer, convey, and deliver
to the Buyer, all of the Acquired Assets as set forth in Schedule C1,
at the Closing for the consideration specified below in this Section
2.
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become
responsible for the Assumed Liabilities at the Closing. The Buyer
will not assume or have any responsibility, however, with respect to
any other obligation or liabilities of the Seller not included within
the Schedule of Assumed Liabilities as set forth in Schedule C2.
(c) Purchase Price.
(i) The "Purchase Price" shall be $600,000.
(ii) The Purchase Price shall be paid as set forth in Exhibit A.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Levy &
Levy, P.A., Plaza 1000, Suite 000, Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx,
00000, and the offices of Xxxxx Xxxxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxx
Xxxxxx, Xxx Xxxxxx 00000 commencing at 1:00 P.M., local time on the
business day or at any other mutually agreed upon location or by
Federal Express, following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the
transactions contemplated hereby (other than conditions with respect
to actions the respective Parties will take, at the closing itself) or
such other date as the Parties may mutually determine (the "Closing
Date"); provided, however, that the Closing Date shall be no later
than April 1, 2003 unless any postponement is agreed upon by Buyer.
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(e) Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and
documents referred to (including UCC filings) in Section 6(a) below
(ii) the Seller will execute, acknowledge (if appropriate), and
deliver to the Buyer (A) assignments (including leases of real
property and Intellectual Property transfer documents) in the forms
attached hereto under Schedule (A) and (B) such other instruments of
sale, transfer, conveyance, and assignment as the Buyer and its
counsel may reasonably request; (iii) the Buyer will execute,
acknowledge (if appropriate), and deliver to the Seller (A) an
Assumption Agreement in the form attached hereto as Schedule B; and
(B) such other instruments of assumption as the Seller and its counsel
may reasonably request; (iv) the Buyer will deliver to the Seller the
consideration specified in Section 2(c) above; (iv) an Employment
Contract between Buyer and Chip Del Coro in form and content mutually
acceptable to them.
(f) Allocation. This transaction is structured as a taxable exchange
of assets for cash. The transaction does not qualify as a tax-free
reorganization under Internal Revenue Code 368. The Buyer and Seller
agree to report the transaction as a taxable exchange to the Internal
Revenue Service. Therefore, the parties agree to allocate the
purchase price (and all other capitalizable costs) among the acquired
assets as follows:
(i) The fixed assets shall be valued at approximately $350,000; and
(ii) Good will shall be valued at $250,000
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3. Representations and Warranties Regarding the Seller. MMM,
represents and warrant to the Buyer that the statements contained in
this Section 3 are correct and complete as of the date of this
Agreement except as set forth in the disclosure schedule accompanying
this Agreement and initialed by the Parties (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in
this Section 3.
(a) Organization of the Sellers. MMM is a corporation duly
organized, validly existing, and in good standing under the laws of
New Jersey.
(b) Authorization of Transaction. MMM has full corporate power and
authority, to execute and deliver this Agreement and to perform its
obligations hereunder. Without limiting the generality of the
foregoing, the board of directors of MMM has duly authorized the
execution, delivery, and performance of this Agreement by MMM. This
Agreement constitutes the valid and legally binding obligation of MMM,
enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in
Section 2 above), will (i) violate in any material respect any
constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject, (ii)
violate any provision of the charter or bylaws of MMM or (iii)
conflict with, result in a material breach of, constitute a material
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice under any material agreement, contract, lease, license,
instrument, or other arrangement to which MMM is a party or by which
it is bound or to which any of the Acquired Assets are subject (or
result in the imposition of any Security Interest upon any of the
Acquired Assets). MMM does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement (including
the assignments and assumptions referred to in Section 2 above).
(d) Title to Assets. MMM has good and marketable title to, or a
valid leasehold interest in, the assets used by it, located on its
premises, or shown on the Most Recent Balance Sheet or acquired after
the date thereof, free and clear of all Security Interests, except for
assets disposed of in the Ordinary Course of Business since the date
of the Most Recent Balance Sheet and except for liens disclosed in the
Notes to the Financial Statements. Without limiting the generality of
the foregoing, MMM has good and marketable title to all of the
Acquired Assets, free and clear of any Security Interest or
restriction on transfer, except for liens disclosed in the Notes to
the Financial Statements and in the Disclosure Schedule.
(e) Subsidiaries. MMM does not have any Subsidiaries.
(f) Financial Statements. Attached hereto as Schedule D are the
following financial statements (collectively the "Financial
Statements"): (i) balance sheets, statements of income, retained
earnings, and cash flows as of and for the last two fiscal years
ended December 31, 2002 and December 31, 2001 (the "Most Recent
Fiscal Year End") for MMM ; and (ii) unaudited balance sheet,
statements of income, retained earnings, and cash flows (the
"Most Recent Financial Statements" ) as of and for the months
ended February 28, 2003 (the "Most Recent Fiscal Month End " )
for MMM . The Financial Statements (including the Notes thereto
where applicable) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered
thereby, present fairly the financial condition of MMM as of such
dates and the results of operations of MMM for such periods, and
are consistent with the books and records of MMM. The financial
statements referenced in clause (ii) will be internally prepared
by MMM and such financial statement information as of February
28, 2003 is to the best of MMM 's knowledge, true and correct.
MMM hereby represent that MMM 's financial statements are able to
be audited for the time periods required under SEC and GAAP rules
and guidelines within 2 months from closing.
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(g) Events Subsequent to Most Recent Fiscal Year End. Since the
Most Recent Fiscal Year End, there has not been any material
adverse change in the business, financial condition, operations,
or results of operations of MMM or on behalf of MMM. Without
limiting the generality of the foregoing, since that date.
(i) MMM has not sold, leased, transferred, or assigned any of
MMM 's assets, tangible or intangible, of a value in excess of
$1,000, other than for a fair consideration and in the Ordinary
Course of Business;
(ii) MMM has not entered into any agreement, contract, lease,
or license (or series of related agreements, contracts, leases
and licenses) outside the Ordinary Course of Business;
(iii) No party (including MMM ) has accelerated, terminated,
modified, or canceled any material agreement, contract, lease or
license (or series of related agreements, contracts, leases and
licenses) to which the MMM is a party or by which it is bound;
(iv) MMM has not permitted any Security Interest upon any of
MMM 's material assets, tangible or intangible;
(v) MMM has not made any capital expenditure (or series of
related capital expenditures) outside the Ordinary Course of
Business;
(vi) MMM has not made any capital investment in, any loan to,
or any acquisition of the securities or assets of, any other
Person (or series of related capital investments, loans, and
acquisitions) ;
(vii) MMM has not issued any note, bond, or other debt security
or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation;
(viii) MMM has not delayed or postponed the payment of accounts
payable and other Liabilities or MMM , other than as consistent
with its Ordinary Course of Business.
(ix) The Seller has not canceled, compromised, waived, or
released any right or claim (or series of related rights and
claims in excess of $1,000), outside the Ordinary Course of
Business.
(x) The Seller has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(xi) MMM represents that there has been no change made or
authorized in the charter or bylaws of MMM that would adversely
affect this transaction.
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(xii) MMM has not experienced any material damage, destruction,
or loss (whether or not covered by insurance) to its property;
(xii) MMM has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees
outside the Ordinary Course of Business;
(xiv) MMM has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement outside the
Ordinary Course of Business;
(xv) MMM has not granted any increase in the base compensation
of any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xvi) MMM has not adopted, amended, modified or terminated any
bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors,
officers, and employees (or taken any such action with respect to
any other Employee Benefit Plan) on behalf of MMM ;
(xii) MMM has not made any other change in employment terms for
any of MMM 's directors, officers, and employees outside the
Ordinary Course of Business;
(xiii) MMM has not made or pledged to make any charitable or
other capital contribution.
(xix) MMM has not paid any amount to any third party with
respect to any Liability or obligation (including any costs and
expenses MMM has incurred or may incur in connection with this
Agreement and the transactions contemplated hereby) which would
not constitute an Assumed Liability if in existence as of the
Closing, other than accounting fees equal in amount to the usual
accounting costs which would have been incurred by MMM in the
Ordinary Course of Business.
(xx) to the knowledge of MMM, there has not been any other
material occurrence, event, incident, action, failure to act, or
transaction involving MMM which will have a material adverse
effect upon the business of the Seller; and
(h) Undisclosed Liabilities. MMM does not have any undisclosed
liabilities affecting their assets being sold herewith. There is
no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand
against any of the assets to be acquired giving rise to any
liability.
(i) Legal Compliance. MMM has complied in all material respects
with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against it
alleging any failure so to comply.
-8-
(j) Tax and Other Returns and Reports. All federal, state,
local and foreign Tax Returns and other similar filings required
to be filed by MMM with respect to any federal, state, local or
foreign tax have been filed with the appropriate governmental
agencies in all jurisdictions in which such Tax Returns are
required to be filed, and all such Tax Returns properly reflect
the liabilities of MMM or Taxes for the periods, property or
events covered thereby. All Taxes which are called for in the
Tax Returns, or claimed to be due by any taxing authority from
Seller, have been properly accrued or paid. Seller has not
received any notice of assessment or proposed assessment in
connection with any Tax Returns and there are no pending tax
examinations of or tax claims asserted against the Acquired
Assets. There are no tax liens (other than any lien for current
taxes not yet due and payable) in any of the Acquired Assets.
(k) Intellectual Property.
(i) MMM owns or has the right to use pursuant to ownership
license, sublicense, agreement or permission all Intellectual
Property used in the operation of the businesses of the Seller
as presently conducted. Each item of Intellectual Property owned
or used by MMM immediately prior to the Closing hereunder will be
owned or available for use by the Buyer on identical terms and
conditions immediately subsequent to the Closing hereunder.
(ii) To the knowledge MMM , MMM has not interfered with,
infringed upon, misappropriated, otherwise come into conflict
with any material Intellectual Property rights of third parties,
and none of MMM has ever received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation. To the knowledge of MMM , the
directors and officers of MMM , no significant competitor of MMM
has interfered with infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of MMM
for commercial purposes.
(iii) Section 3(k)(iii) of the Disclosure Schedule identifies
each item of Intellectual Property that any third party owns and
that the Seller uses pursuant to license, sublicense, agreement,
or permission (other than commercially available software which
is subject to a "shrinkwrap" license (the "Shrinkwrap
Software").The Seller has delivered to the Buyer correct and
complete copies of all such licenses, sublicenses, agreements,
and permissions (as amended to date) that are being purchased
herewith. With respect to each item of Intellectual Property
required to be identified in Section 3(k)(iii) of the disclosure
Schedule, to the knowledge of MMM:
(A) the license, sublicense, agreement, or permission covering
the item is legal, valid, binding, enforceable, and in full force
and effect;
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of
the transactions contemplated hereby (subject, however, to the
assignments and assumptions referred to in Section 2 above and
the receipt of any necessary consents);
(C) to the knowledge of the Seller, no party to the license,
sublicense, agreement, or permission is in material breach or
default, and no event has occurred which with notice or lapse of
time would constitute a material breach or default or permit
termination, modification, or acceleration thereunder;
(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
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(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above are
true and correct with respect to the underlying license;
(F) the Seller has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or
permission.
(iv) To the knowledge of any of the directors and officers of
MMM, MMM will not interfere with, infringe upon, misappropriate,
or otherwise come into conflict with, any Intellectual Property
rights of third parties as a result of the continued operation of
its business as presently conducted.
(l) Tangible Assets. Substantially all of the tangible assets
that are being purchased herewith used by MMM in the conduct of
its business are in good operating condition and repair (subject
to normal wear and tear), and is suitable for the purposes for
which they presently are used, subject to technological
obsolescence.
(m) Contracts. Section 3(m) of the Disclosure Schedule lists
the following contracts and other agreements to which MMM is a
party:
(i) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for
aggregate remaining lease payments in excess of $3,000;
(ii) any agreement (or group of related agreements) for the
purchase or sale of supplies, products, or other personal
property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one
year, result in a material loss to the Seller, or involve
consideration in excess of $3,000;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or, guaranteed any
indebtedness for borrowed money, or any capitalized lease
obligation, in excess of $3,000 or under which it has imposed a
Security Interest on any of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or noncompetition;
(vi) any agreement between MMM and its Affiliates
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors,
officers, and employees which would result in liability to the
Buyer;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation or providing severance benefits;
(x) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside
the Ordinary Course of Business;
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(xi) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations of MMM ;
or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $5,000.
The Seller has furnished or made available to the Buyer a
correct and complete copy of each written agreement listed in
Section 3(m) of the Disclosure Schedule (as amended to date) and
a written summary setting forth the terms and conditions of each
oral agreement referred to in Section 3(m) of the Disclosure
Schedule. With respect to each agreement required to be
disclosed hereunder: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect subject to laws
limiting or affecting creditors' rights generally; (B) the
agreement will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby (including
and subject to the assignments and assumptions referred to in
Section 2 above and the receipt of any necessary consents)
subject to laws limiting or affecting creditors' rights
generally; (C) no party is in breach or default, in any material
respect, and no event has occurred which with notice or lapse of
time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement;
and (D) to MMM 's knowledge no party has repudiated any material
provision of the agreement. With respect to verbal employment
arrangements, the Disclosure Schedule shall only be required to
list the name, title, base compensation, and full or part-time
status of employees and those consultants currently performing
active services for the Seller.
(n) Intentionally Omitted.
(o) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of the Seller.
(p) Insurance. MMM 's business has been insured through
insurance policies maintained by MMM which at the time of closing
will be current and in force.
(q) Litigation. Section 3(r) of the Disclosure Schedule sets
forth each instance in which MMM(i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is
a party or to MMM 's knowledge, is threatened to be made a party
to any action, suit, proceeding, hearing, or investigation of,
in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator. None of the actions, suits, proceedings,
hearings' and investigations set forth in Section 3(q) of the
Disclosure Schedule could result in any material adverse change
in the assets being sold and liabilities being assumed, business,
financial condition, operations or results of operations of MMM.
Neither MMM , nor the directors and officers of MMM has any
reason to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against
MMM .
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(r) Employees. MMM has not been informed that any executive,
key employee, employee engaged in training, or group of employees
comprising the majority of the employees of any department that
he, she or they intend to terminate employment with MMM , or that
if offered employment by MMM/SDC. that they would not accept
same. MMM is not a party to or bound by any collective
bargaining agreement, nor has it experienced any strikes,
grievances, claims of unfair labor practices, or other collective
bargaining disputes. MMM has not committed any unfair labor
practice. MMM nor the directors and officers of has any
knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to
employees of MMM .
(s) Employee Benefits. The employees of MMM are covered by
employee benefit plans sponsored by _____________.
(t) Guaranties. MMM is not a guarantor or otherwise liable for
any Liability or obligation (including indebtedness) of any other
Person except as set forth in Schedule C2.
(u) Environment, Health, and Safety.
(i) To the knowledge of the Seller, the Seller and their
respective Affiliates have complied with all Environmental,
Health, and Safety Laws, and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or
notice has been filed or commenced against any of them alleging
any failure so to comply. Without limiting the generality of the
preceding sentence, the Seller has obtained and been in
compliance with all of the material terms and conditions of all
permits, licenses, and other authorizations which are required
under, and has complied in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are
contained in, all Environmental, Health, and Safety Laws.
(ii) The Seller does not have any Liability (and the Seller has
not handled or disposed of any substance, arranged for the
disposal of any substance, exposed any employee or other
individual to any substance or condition, or owned or operated
any property or facility in any manner that could form the basis
for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against the
Seller giving rise to any Liability) for damage to any site,
location, or body of water (surface or subsurface), for any
illness of or personal injury to any employee or other
individual, under any Environmental, Health, and Safety Law
except with respect to possible such liabilities associated with
the use and operation of equipment used in the ordinary course of
the Seller's business, including electromagnetic radiation.
(iii) To the knowledge of the Seller, all properties and
equipment used in the business of MMM have been free of asbestos,
PCB'S, methylene chloride, trichloroethylene, 1,2-trans-
dichloroethylene, dioxins, dibenzofurans, and Extremely Hazardous
Substances other than in de minimus quantities.
(v) Certain Business Relationships With MMM . Chip Del Coro
has not been volved in any business arrangement or relationship
with MMM other than as stockholders, directors, officers and
employees, within the past 12 months, and none of Chip Del Coro
or his Affiliates own any asset, tangible or intangible, which is
used in the business of MMM or the assets being sold herewith
except Mr. Del Coro being landlord
(w) Disclosure. The representations and warranties contained in
this Section 3 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements and information contained in this Section 3
not misleading.
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4. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller that the statements
contained in this Section 4 are correct and complete as of the
date of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date
were substituted for the date of this Agreement throughout this
Section 4), except as set forth in the Disclosure Schedule. The
Disclosure Schedule will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this Section 4.
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws
of New Jersey.
(b) Authorization of Transaction. SDC has full power and
authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally
binding obligation of the SDC, enforceable in accordance with its
terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby (including the assignments and assumptions
referred to in Section 2 above), will (i) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is
subject or any provision of its charter or bylaws or (ii)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or
other arrangement to which the Buyer is a party or by which it is
bound or to which any of its assets is subject. The Buyer does
not need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section 2 above).
(d) Securities Filings. SDC has made all filings required by
the Securities Act of 1933 and the Securities Exchange Act of
1934, as amended, and such filings did not contain any material
misstatement or omit to state a material fact required to make
the statements therein not misleading.
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(e) Disclosure. The representations and warranties contained in
this paragraph 4 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this paragraph 4 not
misleading.
5. Pre-Closing Covenants. The Parties agree as follows with respect
to the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its best efforts to take
all action, and to do all things necessary, in order to consummate and
make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set
forth in Section 6 below).
(b) Notices and Consents. MMM will give any notices to third
parties, and MMM will use its best efforts to obtain any third party
consents, that the Buyer reasonably may request in connection with the
matters referred to in Section 3(c) above. Each of the Parties will
give any notices to, make any filings with, and use its best efforts
to obtain any authorizations, consents, and approvals of governments
and governmental agencies in connection with the matters referred to
in Section 3(c) and Section 4(c) above.
(c) Operation of Business. MMM will not engage in any practice,
take any action, or enter into any transaction outside the Ordinary
Course of Business. Without limiting the generality of the foregoing,
MMM will not (i) declare, set aside, or pay any dividend or make any
distribution with respect to MMM 's capital stock, (ii) pay any amount
to any third party with respect to any Liability or obligation
(including any costs and expenses the Seller has incurred or may incur
in connection with this Agreement and the transactions contemplated
hereby other than Seller's usual accounting-related costs) which would
not constitute an Assumed Liability if in existence as of the Closing,
or (iii) otherwise engage in any practice, take any action, or enter
into any transaction of the sort described in Section 3(g) above.
(d) Preservation of Business. MMM will keep MMM 's business and
properties substantially intact, including its present operations,
physical facilities, working conditions, and relationships with
lessors, licenser, suppliers, customers, and employees.
(e) Full Access. MMM will permit representatives of the Buyer to
have access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of MMM to all premises,
properties, personnel, books, records (including Tax records),
contracts, and documents of or pertaining to MMM provided, however,
that no activities will be carried out within MMM 's premises except
by prior arrangement with a representative of MMM who shall be
designated for that purpose. Buyer shall use its best efforts to
minimize the need to conduct on-site activities and, when they are
necessary, to avoid unnecessary disruption of MMM 's business. Seller
will make available to Buyer those of MMM 's employees who are
reasonably necessary in order for Buyer to complete its due diligence
investigations.
(f) Notice of Developments. Each Party will give prompt written
notice to the other Party of any material adverse development causing
a breach of any of its own representations and warranties in Section 3
and Section 4 above. No disclosure by any Party pursuant to this
Section 5(f), however, shall be deemed to amend or supplement the
Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant provided that if the party
to whom a disclosure was made proceeds to closing, that party shall be
deemed to have waived such breach and any remedies which may have been
available with respect thereto.
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(g) Exclusivity. MMM will not (i) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or
any substantial portion of the assets of MMM (including any
acquisition structured as a merger, consolidation, or share exchange)
or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to
do or seek any of the foregoing.
6. Conditions to Obligation to Close
(a) Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in Section 3 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) the Seller shall have procured all of the third party consents
specified in Section 5(b) above;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any
arbitrator, wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely and materially the right of the
Buyer to own the Acquired Assets and to operate the former businesses
of the Seller;
(v) The Seller and the Buyer shall have received all authorizations,
consents, and approvals of governments and governmental agencies
referred to in Section 3(c) and Section 4(c) above;
(vi) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.
(vii) compliance with miscellaneous covenants in Paragraph 9 and
elsewhere in this Agreement.
(viii) MMM's working capital exceed $0 at Closing based on GAAP and
its most recent financial statements.
(ix) Execution of Chip Del Coro's Employment Agreement.
(x) Execution of Lease Agreement with Passiac Avenue Properties, Inc.
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The Buyer may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, or
charge shall be in effect);
(iv) The Seller and the Buyer shall have received all other
authorizations, consents, and approvals of governments and
governmental agencies referred to in Section 3(c) and Section 4(c)
above;
(v) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
(vi) compliance with miscellaneous covenants in Paragraph 9 and
elsewhere in this Agreement
The Buyer may waive any condition specified in this Section 6(b) if
it executes a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing (A) in the event the
Seller has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has
notified the Seller of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach or (B)
if the Closing shall not have occurred on or before April 1, 2003 by
reason of the failure of any condition precedent under Section 6(a)
hereof (unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant contained in this
Agreement; and
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(iii) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event
the Buyer has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the
Seller has notified the Buyer of the breach, and the breach has
continued without cure for a period of 5 days after the notice of
breach or (B) if the Closing shall not have occurred on or before
April 1, 2003, by reason of the failure of any condition precedent
under Section 6(b) hereof (unless the failure results primarily from
the Seller itself breaching any representation, warranty, or covenant
contained in this Agreement).
8. Indemnification
(a) Survival of Representations and Warranties. All of the
representations of the Buyer and the Seller contained in this
Agreement shall survive the Closing and continue in full force and
effect thereafter for a period of nine (9) months following the date
of Closing (subject to any applicable statutes of limitations, the
last day of which shall be the "Expiration Date").
(b) Indemnification Provisions for Benefit of the Buyer.
Subject to the limitations set forth in 8(e) below:
(i) MMM agrees to indemnify the Buyer from and against the entirety
of any Losses the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by any Liability of MMM which
is not an Assumed Liability (including any Liability of MMM that
becomes a Liability of the Buyer under any bulk transfer law of any
jurisdiction, under any common law doctrine of de facto merger or
successor liability, or otherwise by operation of law). This
indemnity obligation with respect to Losses arising from any Third
Party Claim (as defined below) shall not be limited to the survival
period set forth in Paragraph 8(a) above.
(ii) For purposes of this Section8, the term "Losses" shall mean all
actions, suits, proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, amounts paid in
settlement, liabilities, obligations, taxes, liens, losses, expenses,
and fees, including court costs and reasonable attorneys' fees and
expenses.
(iii) At the option of Buyer, Buyer may set off any damages or
liabilities due Buyer by reducing Buyer's future payment obligations.
(c) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may
give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Paragraph 8, then the Indemnified
Party shall promptly notify each Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notified the Indemnified Party in writing with
15 days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will, to the full extent
required by this Agreement, indemnify the Indemnified Party from and
against the entirety of any Losses the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Indemnifying Party provides
the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial
resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third Party Claim
involves only money damage and does not seek an injunction or other
equitable relief, (D) settlement of, or an adverse judgment with
respect to, the Third Party Claim is not, in the good faith judgment
of the Indemnified Party, likely to establish a prejudicial custom or
practice materially adverse to the continuing business interests of
the Indemnified Party, and (E) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
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(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section8(c)(ii) above, (A)
the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim,
(B) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not
to be withheld unreasonably), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section8(c)(ii) above is
or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B ) the Indemnifying Parties will reimburse
the Indemnified party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable
attorneys' fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Losses the Indemnified Party may suffer,
result from, arising out of, relating to, in the nature of, or caused
by the Third Party Claim to the fullest extent provided in this
paragraph 8.
(d) Indemnification Provisions for Benefit of the Seller.
(i) In the event the Seller breaches (or in the event any third
party alleges facts that, if true, would mean MMM has breached) any of
its material representations, warranties, and covenants contained in
the Asset Purchase Agreement, and, provided that the Buyer makes a
written claim for indemnification against the Seller within the
survival period set forth in Section8(a) above, then MMM, jointly and
severally, agrees to indemnify the Buyer from and against the entirety
of any losses the Buyer may suffer through and after the date of the
claim for indemnification including any Losses the Buyer may suffer
after the end of any applicable survival period resulting from,
arising out of, relating to, in the nature of, or caused by the breach
(or the alleged breach).
(ii) The Buyer agrees to indemnify the Seller from and against the
entirety of Losses the Seller may suffer resulting from, arising out
of, relating to, in the nature of, or caused by (A) any Liability of
the Seller which is an Assumed Liability, and (B) Buyer's breach of
any material representation, warranty or covenant.
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(e) Limitations and Conditions on Indemnification. Except as otherwise
specifically provided in this Agreement:
(i) Indemnity obligations of MMM hereunder may at MMM's election, be
satisfied through the payment of cash.
(ii) Except as specifically set forth in this Agreement, no party shall
be entitled to indemnity for claims or conditions which have been waived,
or deemed to be waived, by such party.
(iii) Notwithstanding any provision herein to the contrary, no
Indemnified Party shall be entitled to make any claim for
indemnification hereunder after the appropriate Expiration Date,
provided, however, that if prior to the close of business on the
Expiration Date an Indemnifying Party shall have been notified of a
claim for indemnity hereunder and such claim shall not have been
finally resolved or disposed of at such date, the basis for such claim
shall continue to survive with respect to such claim and shall remain
a basis for indemnity hereunder with respect to such claim until such
claim is finally resolved or disposed of in accordance with the terms
hereof.
(iv) Upon making a claim for indemnification, the Indemnifying
Party shall be subrogated, to the extent of such payment, to any
rights that the Indemnified Party may have against any other parties
with respect to the subject matter underlying such indemnified claim.
(v) Each party's rights under Section 8 hereof (as specifically
limited thereby) shall be the exclusive means by which such party
shall seek money damages against another party in connection with the
transactions contemplated hereby.
9. Miscellaneous
(a) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit,
proceedings, hearing, investigation, charge, complaint, claim, or
demand in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction on or prior to the Closing Date
involving the Seller, each of the other parties will cooperate
reasonably with the contesting or defending Party and his or its
counsel in the contest or defense, make available his or its
personnel, and provide such testimony and access to his or its books
and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled
to indemnification therefor under Section 8).
(b) Restrictive Covenants.
(i) MMM and Chip Del Coro agree not to compete against Buyer in the
business in which MMM is engaged as of the Closing for a period of
three (3) years in any cities which MMM is currently engaged.
(ii) For a period of two (2) years, Seller agrees not to solicit,
directly or indirectly, alone or as principal, partner, joint venture,
officer, director, employee, consultant, agent, independent contractor
or stockholder, or in any other capacity whatsoever, employ, retain,
or enter into any employment, agency, consulting or other similar
arrangement with, any person who became an employee of Buyer to
purchase the Acquired Assets and who was at the time of closing an
employee of MMM , or induce or attempt to induce such person to
terminate his employment with Buyer, including but not limited to
employees listed on Schedule K.
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(iii) MMM shall not for a period of two (2) years, directly or
indirectly, alone or as principal, partner, joint venturer, officer,
director, employee, consultant, agent, independent contractor or
stockholder, or in any other capacity whatsoever, directly or
indirectly, for his, her or its own account, or for the account of
others, solicit orders for services of a kind or nature like or
similar to services performed by MMM as of the Closing, from any party
that was a customer or client of MMMduring the preceding twenty four
(24) month period preceding the Closing, including but not limited to
the "Key Customer List" on Schedule J.
(iv) In the event that Mr. Del Coro's employment is terminated
prior to all of the payments for each of the 5 years being made
(except "for cause"), and/or in the event that Buyer and/or Science
Dynamics Corporation fails to make such payment in accordance with
Exibit "A" on a timely basis, then Xx Xxx Coro's restrictive covenant
obligations shall cease.
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(f) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(g) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the
extent they related in any way to the subject matter hereof.
(h) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign
either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Party;
provided, however, that the Buyer may (i) assign any or all of its
rights and interests hereunder to one or more of its Affiliates and
(ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the Buyer
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
(i) Counterparts. This Agreement may be executed in any number of
counterparts, including counterparts transmitted by telecopier or FAX,
any one of which shall constitute an original of this Agreement. When
counterparts of facsimile copies have been executed by all parties,
they shall have the same effect as if the signature to each
counterpart or copy were upon the same document and copies of such
documents shall be deemed valid as originals. The parties agree that
all such signatures may be transferred to a single document upon the
request of any party.
(j) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(k) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is personally
delivered, sent by reputable overnight delivery service or by
registered or certified mail, return receipt requested, postage
prepaid, and addressed to the intended recipient as set forth below:
If to Seller: Copy to:
Chip Del Coro, Pres. Xxxxx X. Xxxxxxxx, Esq.
Modern Mass Media, Inc. 000 Xxxxxxxxxx Xxx.
X.X. Xxx 000 Xxxx Xxxxxx, XX 00000
Xxxxx Xxxxxxx, XX 00000 (000) 000-0000
(000) 000-0000 (Fax)
If to the Buyer: Copy to:
M3 Acquisition Corp. . Levy & Levy, P.A.
ATTN: Xxxx Xxxxxxxx Pres. & CEO Plaza 1000, Suite 309
0000 Xxxxxxxxxx Xxxx, Xxxxx 000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000 Xxxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
(000) 000-0000 (Fax) (000) 000-0000 (fax)
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Any Party may send any notice, request, demand, claim, or other
communication hereunder to the recipient at the address set forth
above using any other means (including personal delivery, expedite
messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand other communication shall
be deemed to have been duly given unless and until it actually is
received by its intended recipient. Any Party may change the address
to which notices, requests, demands, claims, and other' communications
hereunder are to be delivered by giving the other Party notice in the
manner herein set forth.
(l) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New Jersey
without giving effect to any choice or conflict of law provision or
rule (whether of the State of New Jersey, or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other
than the State of New Jersey.
(m) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and
signed by the Buyer and the Seller. The Seller or Buyer may consent
to any such amendment at any time prior to the Closing with the prior
authorization of its board of directors. No waiver by any Party of
any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(n) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
(o) Expenses. The Buyer and the Seller will bear their own costs and
expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. Buyer
and Seller agree that each will be solely responsible for all its own
legal, accounting and consulting fees, if any, for the review and
completion of this transaction, except that Buyer will pay the cost of
the audit fee required for it's auditor or any other auditor firm as
designated by Buyer, and Buyer shall pay Seller's legal fees in an
amount not to exceed $4,000.
(p) Brokers'/Finders' Fees. Buyer nor Seller has not incurred or
will become liable for any broker's commission or finder's fee
relating to or in connection with the transactions contemplated by
this Agreement.
(q) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties and no presumption
or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this Agreement.]
Any reference to any federal, state, local, or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception
to a representation or warranty made herein unless the Disclosure
Schedule identifies the exception with particularity and describes the
relevant facts in reasonable detail.
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(r) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(s) Specific Performance. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that the other Party, shall be
entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted
in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the
provisions set forth in Section 9(t) below), in addition to any other
remedy to which it may be entitled, at law or in equity (except as
limited by this Agreement).
(t) Submission to jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in New Jersey, in
any action or proceeding arising out of or relating to this Agreement
and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each party also agrees not
to bring any action or proceeding arising out of or relating to this
Agreement in any other court. Each of the Parties waives any defense
of inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety, or other security that might
be required of any other Party with respect thereto. Any Party may
make service on the other Party by sending or delivering a copy of the
process (i) to the Party to be served at the address and in the manner
provided for the giving of notices in Section 9(k) to the Party to be
served at the address and in the manner provided for the giving of
notices in Section 9(i) above.
(u) Bulk Transfer Laws.
(i) The Parties acknowledge that it may be subject to the bulk
transfer laws of New Jersey in connection with the transactions
contemplated by this Agreement. However, M3 waives New Jersey tax
clearance based on Del Coro's representation that all taxes are paid
to date.
(v) Guarantee. Science Dynamics Corporation, the majority
shareholder of M3, hereby guarantees to pay the $400,000 sales price
consideration solely in the event that M3 fails to make timely
payments.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
MODERN MASS MEDIA, Inc. (Seller)
By: Chip Del Coro, Pres.
M3 ACQUISITION CORP. (Buyer)
By:
SCIENCE DYNAMICS CORPORATION
__________________________________________
By: Xxxx Xxxxxxxxx, Pres.
