ASSET PURCHASE AGREEMENT
Exhibit
10.1
ASSET
PURCHASE AGREEMENT dated February 6, 2006, between Impart Media Group, Inc.
(formerly known as Limelight Media Group, Inc.), a Nevada corporation, with
offices at 0000 Xxxxx Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxx 00000 (“Buyer”), and
Xxxxxx Capital Partners II, LLC, a Florida limited liability company, with
offices at 0000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000
(“Seller”).
Background
Pursuant
to a certain December 2, 2002 Request for Proposal, including a Letter of
Acceptance dated April 15, 2003, by and between the Port Authority of New York
and New Jersey (the “Port Authority”) and Black Experience, Inc., as amended by
a First Addendum dated March 2, 2004, and subsequently assigned to Seller (the
“PATH Contract”), Seller owns the exclusive right to provide advertising
services on the Port Authority’s PATHVISION Broadcasting System (the
“Business”). Seller conducts the Business under the name “InTransit Media” and
owns and uses in the Business the other assets listed on Schedule
A-1
annexed
hereto (collectively, with the PATH Contract, the “Assets”). Buyer and Seller
were previously parties to an Agreement, dated June 8, 2005, relating to the
sale of the Assets (the “Original Agreement”), which the parties acknowledge to
be null and void and of no force and effect. Seller desires to sell the Assets
to Buyer and Buyer desires to purchase the Assets from Seller on the terms
and
conditions set forth below.
Therefore,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Purchase
and Sale.
(a) In
consideration of Buyer’s payment of the Purchase Price, as provided below, on
the Closing Date (as hereinafter defined), Seller shall sell, assign, transfer
and deliver the Assets to Buyer. Anything in the foregoing to the contrary
notwithstanding, the Assets do not include those assets of Seller listed on
Schedule A-2 hereto (the “Excluded Assets”). The Purchase Price shall consist of
$500,000 and the number of Buyer Shares (as hereinafter defined) calculated
as
provided below and shall be paid by Buyer to Seller on the Closing Date as
follows: (i) Four Hundred Thousand Dollars ($400,000) by wire transfer of
immediately available funds to an account of Seller designated by it at least
two (2) days prior to the Closing Date; and (ii) by delivery to Seller of a
number of duly authorized, validly issued, fully paid and non-assessable,
unregistered shares (the “Buyer Shares”) of Buyer’s common stock, $.001 par
value per share (the “Common Stock”), determined by dividing $266,666 by the
average closing price of the Common Stock at the conclusion of twenty (20)
consecutive trading days ending on January 31, 2006. Buyer shall also receive
a
$100,000 credit for the Option Price previously paid by it to
Seller.
(b) The
current expiration date of the PATH Contract is December 31, 2007. Under the
terms of the PATH Contract, the Port Authority has the option (the “PATH
Option”) to extend from time to time the term thereof in increments of one or
more years for up to a total of four years. Buyer acknowledges that Seller
has
made no representation to it with regard to the Port Authority’s intention to
exercise the PATH Option for any period or at all. If and when the Port
Authority exercises the PATH Option, the following provisions shall be
applicable:
(i)
For
each
year by which the term of the PATH Contract is extended (but not to exceed
four
(4) years in total), Seller shall be entitled to receive as additional Purchase
Price that number of additional Buyer Shares as is determined by dividing
$333,333 by the average closing price of the Common Stock at the conclusion
of
twenty (20) consecutive trading days ending on the trading day most recently
preceding the last day of the term of the PATH Contract prior to extension.
Such
Buyer Shares shall be issued and delivered to Seller within five (5) business
days after such last day.
(ii)
In
the
event of a stock dividend, stock split, combination of shares or other similar
transaction effected in any period during which the average closing price of
the
Common Stock is to be determined, the closing prices of the Common Stock shall
be appropriately and equitably adjusted in calculating any such
average.
(iii) In
the
event that the term of the PATH Contract is extended otherwise than through
the
exercise of the PATH Option, Seller shall nevertheless be entitled to receive
the additional Purchase Price provided herein, subject to the terms and
conditions hereof.
(c) In
connection with the sale of the Assets to Buyer, Seller shall execute and
deliver to Buyer on the Closing Date the xxxx of sale and the assignments of
contracts and domain name(s) attached hereto as Exhibits 1, 2 and 3,
respectively.
2. Liabilities.
Buyer
shall assume only those obligations and liabilities set forth on Schedule B
hereto (the “Assumed Liabilities”). Except for the Assumed Liabilities, Buyer is
not assuming any existing, contingent or future liability of Seller (the
“Excluded Liabilities”). Without limitations, the Excluded Liabilities
include:
(i)
any
liability for taxes of Seller;
(ii)
any
obligations of Seller in respect of the assets of Seller not included in the
Assets acquired hereunder;
(iii) any
liability of Seller pursuant to any employee benefit plan;
(iv) any
liabilities or obligations of Seller for borrowed money or interest on borrowed
money;
(v)
any
liabilities or obligations of Seller to affiliates of Seller;
(vi) all
claims, liabilities, or obligations of Seller as an employer, including, without
limitation, liabilities for wages, supplemental unemployment benefits, vacation
benefits, severance benefits, retirement benefits, Federal Consolidated Omnibus
Budget Reconciliation Act of 1985 benefits, Federal Family and Medical Leave
Act
of 1993 benefits, Federal Workers Adjustment and Retraining Notification Act
obligations and liabilities, or any other employee benefits, withholding tax
liabilities, workers’ compensation, or unemployment compensation benefits or
premiums, hospitalization or medical claims, occupational disease or disability
claims, or other claims attributable in whole or in part to employment or
termination by Seller or arising out of any labor matter involving Seller as
an
employer, and any claims, liabilities and obligations arising from or relating
to any employee benefit plans;
(vii) all
claims, liabilities, losses, damages, or expenses relating to any litigation,
proceeding, or investigation of any nature arising out of the Business or
ownership of the Assets on or prior to the Closing Date including, without
limitation, any claims against or any liabilities for injury to, or death of,
persons or damage to or destruction of property, any workers’ compensation
claims, and any warranty claims;
(viii)
except
for the Assumed Liabilities, any accounts payable, other indebtedness,
obligations or accrued liabilities of Seller;
(ix) all
claims, liabilities, or obligations of Seller arising or to be performed prior
to the Closing Date under the PATH Contract; and
(x)
any
contracts, agreements, leases, licenses or other commitments of Seller not
expressly assumed hereunder by Buyer.
3. Representations
and Warranties of Seller.
Seller
hereby represents and warrants to Buyer as follows:
(a) As
of the
Closing, Seller is a limited liability company duly organized and validly
existing under the laws of the State of Florida; Seller has full power and
authority to execute and deliver this Agreement and all other agreements to
be
executed and delivered by Seller hereunder or in connection herewith (the
“Ancillary Agreements”) and to consummate the transactions hereby or thereby
contemplated; all necessary limited liability company action has been taken
to
authorize Seller to enter into this Agreement and the Ancillary
Agreements;
(b) This
Agreement and the Ancillary Agreements have been duly executed and delivered
by
Seller and each such agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against it in accordance with its respective
terms, except as enforceability may be limited by (i) bankruptcy, insolvency
or
other laws for the protection of debtors and (ii) laws relating to the
availability of specific performance, injunctive relief and other equitable
remedies;
(c) Neither
the execution, delivery or performance of this Agreement, the Ancillary
Agreements, nor the transactions contemplated hereby or thereby will violate
Seller’s Articles of Organization or Operating Agreement or any other agreements
or instruments, law, regulation, judgment or order by which Seller is
bound;
(d) Seller
has, and at the Closing Date will transfer to the Buyer, good and valid title
to
all the Assets, free and clear of all liens, claims or other
encumbrances.
(e) No
consent, authorization, approval, order, license, certificate or permit of
or
from, or declaration or filing with, any federal, state, local or other
governmental authority or any court or other tribunal, and no consent or waiver
of any party to any Material Contract (as hereinafter defined) to which Seller
is a party is required or declaration to or filing with any governmental or
regulatory authority, or any other third party is required to: (i) execute
this
Agreement or any Ancillary Agreement, (ii) consummate this Agreement or any
Ancillary Agreement and the transactions contemplated hereby or thereby, or
(iii) permit Seller to assign or transfer the Assets (including without
limitation, the Material Contracts) to Buyer.
(f) There
are
no actions, suits, proceedings, orders or claims pending or, to its knowledge,
threatened against Seller, or pending or threatened by Seller against any third
party, at law or in equity, or before or by any governmental department,
commission, board, bureau, agency or instrumentality which relate to, or in
any
way affect, the Business or the Assets (including, without limitation, any
actions, suits, proceedings or investigations with respect to the transactions
contemplated by this Agreement or any Ancillary Agreement). Seller is not
subject to any judgment, order or decree of any court or other governmental
agency relating to the Business or the Assets, and Seller has received no
written opinion or memorandum from legal counsel to the effect that it is
exposed, from a legal standpoint, to any liability which relates to the Business
or the Assets.
(g) The
Seller does not use any patent, trademark, copyright, trade secrets or other
intellectual or industrial property rights, other than non-exclusively licensed
use of commercially available software, in the Business.
(h) Each
Material Contract (as listed on Schedule A-1 hereto) is valid and binding on
and
enforceable against Seller in accordance with its terms and, to the knowledge
of
Seller, each other party thereto and is in full force and effect. Seller is
not
in breach or default under any Material Contract. Seller does not know of,
and
has not received notice of, any violation or default under (nor, to the
knowledge of Seller, does there exist any condition which with the passage
of
time or the giving of notice or both would result in such a violation or default
under) any Material Contract by any other party thereto. In addition, to
Seller’s knowledge, there are no negotiations pending or in progress to revise,
modify, terminate or extend the PATH Contract, nor has the Port Authority
advised Seller orally or in writing that it is terminating or considering
terminating the PATH Contract. Prior to the date hereof, Seller has made
available to Buyer true and complete copies of all Material Contracts.
(i)
Seller
understands and acknowledges that the Buyer Shares are “restricted securities”
and have not been registered under the Securities Act of 1933, as amended (the
“1933 Act”) or any applicable state securities law and that such shares are
being sold pursuant to applicable exemptions from such registration
requirements. Seller further acknowledges that it is acquiring the Buyer Shares
as principal for its own account and not for the benefit of any other person
and
not with a view to or for distributing or reselling such Buyer Shares or any
part thereof, has no present intention of distributing any of such Buyer Shares
and has no arrangement or understanding with any other persons regarding the
distribution of such Buyer Shares (this representation and warranty not limiting
Seller’s right to sell the Buyer Shares in compliance with applicable,
registration, qualification or pursuant to applicable exemptions available
under
federal and state securities laws). Seller is an accredited investor as such
term defined under Rule 501(a) of Regulation D of the 1933 Act and acknowledges
that it has been furnished with or afforded access to, and has had the
opportunity to ask questions and receive answers concerning, all information
pertaining to the Buyer Shares. Seller acknowledges that all certificates
evidencing ownership of the Buyer Shares will contain appropriate legends
incorporating any applicable securities laws restrictions.
(j)
Seller
understands and acknowledges that Buyer, in reliance upon Seller’s
representation contained herein and the provisions of Section 7 of that certain
Addendum, dated March 2, 2004, to the PATH Contract, has agreed to execute
this
Agreement (and consummate the transactions contemplated herein) without an
express condition precedent to the Closing Date that Seller shall have obtained
the consent of the Port Authority of New York and New Jersey to the assignment
of the PATH Contract from Seller to Buyer. Accordingly, Seller represents to
Buyer that the Assets presently constitute, and on the Closing Date will
constitute, all or substantially all of the assets of Seller.
4. Representations
and Warranties of Buyer.
Buyer
represents and warrants to Seller as follows:
(a) Buyer
is
a corporation duly organized and validly existing under the laws of the State
of
Nevada; Buyer has full power and authority to execute and deliver this Agreement
and the Ancillary Agreements and to consummate the transactions hereby or
thereby contemplated; all necessary corporate action has been taken to authorize
Buyer to enter into this Agreement and the Ancillary Agreements;
(b) This
Agreement and the Ancillary Agreements have been duly executed and delivered
by
Buyer and each such agreement constitutes the legal, valid and binding
obligations of Buyer enforceable against it in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency or other laws for
the
protection of debtors;
(c) Neither
the execution, delivery or performance of this Agreement, the Ancillary
Agreements, nor the transactions contemplated hereby or thereby will violate
Buyer’s Articles of Incorporation or by-laws or any other agreements or
instruments, law, regulation, judgment or order by which Buyer is
bound;
(d) No
consent, authorization, approval, order, license, certificate or permit of
or
from, or declaration or filing with, any federal, state, local or other
governmental authority or any court or other tribunal, and no consent or waiver
of any party to any contract to which Buyer is a party is required or
declaration to or filing with any governmental or regulatory authority, or
any
other third party is required to: (i) execute this Agreement or any Ancillary
Agreement, or (ii) consummate this Agreement or any Ancillary Agreement and
the
transactions contemplated hereby or thereby;
(e) The
Buyer
has filed all reports required to be filed by it under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as Buyer was required by law to file such material) (the foregoing
materials, including the exhibits thereto, being collectively referred to herein
as the “SEC Reports”). As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have
been
prepared in accordance with generally accepted accounting principles applied
on
a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required
by
GAAP, and fairly present in all material respects the financial position of
the
Company and its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject,
in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments; and
(f)
Since
the
date of the latest audited financial statements included within the SEC Reports,
except as disclosed in the SEC Reports, (i) there has been no event, occurrence
or development that has had or that could reasonably be expected to result
in a
material adverse effect on Buyer, its business or operations, (ii) Buyer has
not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent
with
past practice and (B) liabilities that would not be required to be reflected
in
the Company’s financial statements pursuant to GAAP or that would not be
required to be disclosed in filings made with the Commission, (iii) the Company
has not altered its method of accounting, and (iv) the Company has not declared
or made any dividend or distribution of cash, securities or other property
to
its stockholders.
5. Closing.
The
closing of the transactions contemplated hereby shall occur at 10:00 am,
prevailing Eastern Time, on February 3, 2006 (the “Closing Date”).
6. Accounts
Payable It
is the
intention of the parties that liability for the payment of the ordinary accounts
payable arising from the Material Contracts shall be assumed by Buyer from
Seller (the “Assumed Payables”). At Closing, Seller shall deliver to Buyer a
complete statement of each Assumed Payable. Buyer agrees to pay and discharge
in
the ordinary course all such Assumed Payables and, upon request, provide
evidence of such payment to Seller.
7. Indemnification
by Seller.
Seller
agrees to indemnify, defend and hold Buyer and its affiliates harmless from
and
against any and all losses, liabilities, obligations, suits, proceedings,
demands, judgments, damages, claims, expenses and costs, including, without
limitation, reasonable fees, expenses and disbursements of counsel
(collectively, “Damages”), which any of them may suffer, incur or pay in
connection with (i) any breach of a representation or warranty made by Seller,
(ii) any liability accruing prior to the Closing Date incurred in connection
with the Business or Assets other than those constituting Assumed Liabilities,
(iii) the non-fulfillment by Seller of any covenant contained herein or in
the
Ancillary Agreements or (iv) any Excluded Liabilities.
8. Indemnification
by Buyer.
Buyer
agrees to indemnify defend and hold Seller and its affiliates harmless from
and
against any and all Damages which any of them may suffer, incur or pay in
connection with (i) any breach of a representation or warranty made by Buyer
herein, (ii) any liability arising under or in connection with the use and/or
ownership of the Assets arising on or after the Closing Date, (iii) the
non-fulfillment by Buyer of any covenant contained herein or in the Ancillary
Agreements or (iv) any Assumed Liabilities.
9.
Publicity;
Non-Disclosure.
All
notices to third parties and all other publicity concerning the transactions
contemplated by this Agreement shall be jointly planned and coordinated by
and
between Buyer and Seller. Neither of the parties shall act unilaterally in
this
regard without the prior written approval of the other party, which approval
shall not be unreasonably withheld. Except by mutual agreement or as may be
required to obtain financing for the transactions contemplated by this Agreement
or unless compelled to disclose by judicial or administrative process or by
other requirements of law, no party shall disclose any of the terms and
conditions of this Agreement except as may be necessary to enforce its terms,
or
as ordered by a court of competent jurisdiction.
10.
Taxes
and Other Fees.
Seller
shall pay any and all sales taxes or other taxes or recording fees payable
as a
result of the sale of the Assets hereunder.
11.
Limitations
on Indemnification.
The
representations, warranties, indemnification, covenants and agreements of Seller
and Buyer contained in this Agreement shall survive the execution and delivery
hereof for a period of one year. For the purposes hereof, Damages shall be
computed net of any insurance coverage with respect thereto that reduces the
Damages that would otherwise be suffered. An indemnified party shall be entitled
to indemnification hereunder with respect to a breach by the indemnifying party
of any representation or warranty only to the extent that the amount of all
Damages suffered by the indemnified party as a result of the breach by the
indemnifying party of one or more representations and warranties exceeds in
the
aggregate $25,000 (the “Basket”), whereupon Seller shall be liable for all such
Damages, dollar for dollar, including such $25,000 amount. In no event shall
Buyer be entitled to indemnification hereunder with respect to one or more
breaches by Seller of its representations or warranties in an aggregate amount
that exceeds the Purchase Price.
12.
Registration
Rights Agreement.
On the
Closing Date, Buyer and Seller shall execute and deliver the Registration Rights
Agreement in the form of Exhibit 4 hereto relating to the Buyer
Shares.
13.
Trade
Names.
On the
Closing Date, Seller shall file any and all certificates as necessary to cancel
or terminate all assumed or trade name certificates in connection with Seller’s
use of the names “Intransit” or “Intransit Media”. Not later than five days
after the Closing Date, Seller shall provide Buyer with evidence of such
cancellations and terminations.
14.
Severability.
If any
provision of this Agreement is determined to be invalid, illegal or incapable
of
being enforced by reason of any rule of law or public policy, all other
provisions of this agreement shall remain in full force and effect.
15.
No
Waiver.
No
waiver by any party of any breach or nonperformance of any provision or
obligation of this Agreement shall be deemed to be a waiver of any preceding
or
succeeding breach of the same or any provision of this Agreement.
16.
Entire
Agreement; Amendment.
This
Agreement and the Ancillary Agreements are the entire agreement of the parties
with respect to the subject matter hereof, supersede all prior agreements and
understandings, oral and/or written, relating to the subject matter hereof,
and
may not be amended, supplemented, or modified, except by written instrument
executed by all parties hereto and thereto. Without limiting the foregoing,
the
parties hereby agree that upon execution of this Agreement, the Original
Agreement shall be deemed void ab initio and no party shall have any rights,
obligations or liabilities thereunder. This Agreement shall be binding upon
and
inure to the benefit of the parties hereto, their successors and permitted
assigns. Where the context so requires, the singular shall include the plural
and vice versa.
17. Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall constitute one and the same
document.
18. Governing
Law; Counsel.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without giving effect to conflict of laws principles. The
parties acknowledge that they have each had an opportunity to be represented
by
legal counsel of their choice and that they enter into this Agreement and the
transactions contemplated hereby freely and voluntarily with full knowledge
and
understanding of its contents.
[remainder
of page intentionally left blank; signature page follows]
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date first written
above.
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IMPART
MEDIA GROUP, INC.
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By:
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/s/Xxxxxx
X. Xxxxxxxx
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Name: Xxxxxx
X. Xxxxxxxx
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Title:
Chairman of the Board and Chief Financial Officer
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XXXXXX
CAPITAL PARTNERS II, LLC D/B/A INTRANSIT MEDIA
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By:
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/s/Xxxxxxx
Xxxxxxx
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Name: Xxxxxxx
Xxxxxxx
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Title: Manager
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