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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of
September 29, 1997, among Independent News, Inc., a Delaware corporation
("INI") which is a subsidiary of Next Generation Media Corp., a Nevada
corporation ("NexGen"), Pompton Valley Publishing Co., Inc., a New Jersey
corporation ("Pompton Valley"), and each of Xxxxxx Xxxxxxxx and Xxxxxx
Xxxxxxxxxx (the "Principal Shareholders").
RECITALS
A. Pompton Valley is engaged in the community newspaper publishing
business (the "Publishing Business");
B. INI desires to purchase from Pompton Valley, and Pompton Valley
desires to sell, convey, transfer, assign and deliver to INI, certain assets,
rights and liabilities of Pompton Valley relating to the Publishing Business,
all upon the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
agreements and covenants hereinafter set forth, the parties hereto agree as
follows:
SECTION 1. Purchase and Sale of Assets.
(a) Subject to the terms and conditions of this
Agreement, INI shall purchase from Pompton Valley, and Pompton Valley shall
sell, convey, transfer, assign and deliver to INI for the purchase price
specified in Section 3 hereof, all of Pompton Valley's right, title and
interest in and to the following assets, subject only to the encumbrances
listed on Schedule 3(h) (all of such assets, except to the extent they are
Excluded Assets, are referred to herein as the "Assets"), free and clear of any
other encumbrances:
(1) all tangible personal property (including,
without limitation, computer and office
equipment and supplies) relating to or used in
the Publishing Business (each of which items
with a book value of more than $1,000 as of
June 30, 1997 is listed on Schedule 1(a)(1));
(2) all accounts receivable, all cash representing
the unexpended proceeds of borrowings by
Pompton Valley, to the extent such borrowings
are included in the Assumed Liabilities, and
prepayments for services not yet rendered by
Pompton Valley as of the Closing, all of which
amounts of cash are set forth in Schedule 1(a)
(2);
(3) all Intellectual Property (as defined below);
(4) all books, records and other documents of
Pompton Valley relating to the conduct of the
Publishing Business or the ownership of the
Assets;
(5) all Assumed Contracts (as defined below); and
(6) all other assets and rights of Pompton Valley,
tangible or intangible, relating to or used in
the Publishing Business, whether or not
specifically referred to herein or in any
instrument of conveyance delivered pursuant
hereto, except to the extent they are Excluded
Assets (as defined below).
(b) Notwithstanding anything to the contrary in this
Agreement, the Assets shall not include, and INI shall not purchase, any of the
following assets (the "Excluded Assets"):
(1) all cash (other than cash described in Section
1(a)(2)); and
(2) all contracts, leases, and other agreements
(written or oral) other than Assumed
Contracts.
(c) Upon the sale of the Assets by Pompton Valley, INI
shall assume, perform and discharge the following liabilities and obligations
of Pompton Valley (the "Assumed Liabilities"): all liabilities and obligations
of Pompton Valley arising after the Closing under contracts, leases, licenses
and other agreements (written or oral) specifically listed in Schedule 1(c)
(the "Assumed Contracts"), which are hereby assigned to and assumed by INI as
of the Closing Date. With respect to Pompton Valley's payment obligations under
the Assumed Contracts (w) between Pompton Valley and Xxx Xxxxxxxx in the amount
of $19,750, (x) between Pompton Valley and SMI in the amount of $30,800, (y)
between Xxx Xxxxxxxx and Visa in the amount of $19,000, and (z) between Xxx
Xxxxxxxxxx and American Express in the amount of $15,000, INI agrees to pay
such Assumed Liabilities on or before December 31, 1997. Except for the Assumed
Liabilities, INI shall not assume any liabilities, obligations or commitments
of Pompton Valley, whether absolute, accrued, contingent, known or unknown (the
"Excluded Liabilities").
(d) The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxxx &
Xxxxxxxx at 000 00xx Xx., XX, Xxxxxxxxxx, XX 00000 on the date hereof. The date
of closing is referred to herein as the "Closing Date".
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SECTION 2. PURCHASE PRICE.
(a) In addition to the assumption by INI of the Assumed
Liabilities, the aggregate purchase price to be paid by INI for the Assets and
the Principal Shareholders, non-competition, non-interference and related
covenants set forth in Section 9 shall be $15,000 in cash, which has already
been paid to Pompton Valley (the "Cash Purchase Price") and 100,000 shares of
common stock, par value $.001 (the "Shares"), of Next Generation Media
Corporation ("NexGen"), which Shares shall (at the request of Pompton Valley)
be issued of record to the persons listed on Schedule 6(a)(v) in proportion to
the percentage interests in Pompton Valley indicated thereon.
(b) For tax purposes, the aggregate purchase price shall
be allocated among the Assets of Pompton Valley and the Principal Shareholders'
non-competition, non-interference and related covenants set forth in Section 9,
as will be agreed among the parties in good faith, which allocation shall be
binding on all parties who shall report the federal, state, local and other tax
consequences of the transactions in a manner consistent with such allocation
and who shall not in any forum take any position inconsistent therewith.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
Pompton Valley and each of the Principal Shareholders hereby
jointly and severally represent and warrant as follows:
(a) Existence and Good Standing. Pompton Valley is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New Jersey. Pompton Valley has all necessary power and
authority under the laws of the State of New Jersey to own, lease or license its
property, including the Assets, and to conduct its business as such business is
being conducted on the date hereof.
(b) Authorization and Validity of Agreement. Pompton
Valley and each of the Principal Shareholders has fully power and authority to
execute and deliver this Agreement and all related documents in each case to
which it is a party, to perform its respective obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance by Pompton Valley has been duly and
validly authorized by all necessary corporate action. Each of this Agreement
and all related documents has been or will be duly and validly executed and
delivered by Pompton Valley and each of the Principal Shareholders, as
applicable, and is a valid and binding obligation of each such party
enforceable against such party in accordance with its terms.
(c) Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement and all related documents by
Pompton Valley and the Principal Shareholders, as applicable, and the
consummation by each such party of the transactions contemplated hereby and
thereby will not (with or without the giving of notice, the lapse of time, or
both): (i) in the case of Pompton Valley, violate, conflict with, or result in
a breach or default under any provision of the organizational documents of
Pompton Valley; (ii) violate any statute, ordinance, rule, regulation or order
of any court or of any governmental or regulation body, agency or authority
applicable to such party or by which the Assets or the Publishing Business may
be bound; (iii) require any filing by such party with, or require such party
to obtain any permit, consent or approval of, or require such party to give
any notice to, any governmental or regulatory body, agency or authority or any
other person; or (iv) result in a violation or breach by such party of,
conflict with, constitute a default by such party (or give rise to any right
of termination, cancellation, payment or acceleration) under, or result in the
creation of any encumbrance upon any of the Assets under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease or other instrument or obligation to which
such party is a party, or by which such party, the Assets or the Publishing
Business may be bound.
(d) Financial Statements. The profit and loss statements
of Pompton Valley as of December 31, 1995 and 1996, which are attached as
Schedule 3(d) are true and correct in all material respects and fairly present
the results of Pompton Valley's operations for the period covered thereby. The
balance sheet of Pompton Valley as of June 30, 1997, for the six month period
then ended, which is attached as Schedule 3(d), has been prepared in a manner
consistent with Pompton Valley's past practice, and such balance sheet is true
and correct in all material respects and fairly presents the financial
condition of Pompton Valley at its date.
(e) Change in Assets. Since June 30, 0000, Xxxxxxx
Xxxxxx has not sold, transferred or otherwise disposed of any of the assets of
the Publishing Business, except in the ordinary course of business or as
described on Schedule 3(e). There are no liabilities, debts, obligations or
expenses of Pompton valley relating to or in connection with the Publishing
Business, whether contingent or absolute, direct or indirect, matured or
unmatured, or otherwise, not shown or provided on Schedules 3(d) or 3(e).
Since June 30, 1997, there has been no material adverse change in the
Publishing Business, the prospects of the Publishing Business or the results
of operations of Pompton Valley. Since June 30, 1997, except as set forth in
Schedule 3(e), Pompton Valley has conducted the Publishing Business only in
the ordinary course and in a manner consistent with past practice.
(f) Financial Books and Records. All accounts, books,
ledgers, operating information, data and official and other financial records
necessary for the operation of the Publishing Business are included in the
Assets. All such accounts, books, ledgers, operating information, data and
official and other financial records of the Publishing Business have been
fully, properly, accurately and consistently kept, and collectively such
accounts, books, ledgers, operating information, data and official and other
financial records fairly present the financial condition of the Publishing
Business.
(g) Ownership of Capital Stock. The ownership of all of
the outstanding capital stock of Pompton Valley is set forth in Schedule 3(g).
Except as set forth in Schedule 3(g), there are no outstanding options,
warrants or other rights, arrangements
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or understandings (written or oral) to acquire capital stock of Pompton Valley,
and there are no agreements (written or oral) with respect to the right to
appoint directors or the voting of shares.
(h) Title to Assets; Location of Assets. Except as
provided on Schedule 3(h), Pompton Valley has good and valid title to each of
the Assets owned by it, free and clear of all encumbrances of any kind. All of
the Assets listed on Schedule 1(a)(1) are located at Pompton Valley's principal
office, 000 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxx 00000 (the "Principal
Office").
(i) Assumed Contracts. Each Assumed Contract is in full
force and effect, and there exists no default or event of default or event,
occurrence, condition or act (including the sale of the Assets hereunder)
which, with the giving of notice, the lapse of time or both, would become a
default or event of default thereunder. Pompton Valley has not violated any of
the terms or conditions of any Assumed Contract, and all of the covenants to be
performed by any other party thereto have been fully performed to the extent
performance thereof has been or become due. With respect to each Assumed
Contract that is a lease or license of real or personal property: (i) no claims
or disputes exist between the parties thereto; (ii) all rents, fees and
additional amounts due to date and through the Closing Date have been or will
be paid; (iii) the lessee or licensee has been in peaceable possession or had
uncontested use of the applicable property since the commencement of the
original term thereof and is not in default thereunder; and (iv) no waiver,
indulgence or postponement of the lessee's or licensee's obligations thereunder
has been granted by the lessor or licensor. In addition, the amount and due
date of any rental or other payments required to be paid under such lease or
license is as set forth under the terms of such lease or license, as it may
have been amended or supplemented. Except as set forth in Schedule 3(i), each
Assumed Contract is assignable to INI by Pompton Valley without the consent of
any other person.
(j) Restrictive Documents. Neither Pompton Valley nor the
Principal Shareholders are subject to, or a party to, any charter, by-law,
mortgage, lien, lease, license, permit, agreement, contract, instrument, law,
rule, ordinance, regulation or order, or any other restriction of any kind or
character that: would prevent the continued operation of the Publishing
Business after the date hereof or the Closing Date on substantially the same
basis as heretofore operated; or would or does materially and adversely affect
the Assets or Publishing Business as presently being conducted. None of Pompton
Valley nor the Principal Shareholders is a party to, and Pompton Valley, the
Principal Shareholders, and the Publishing Business are not subject to, and, no
Employee is a party to or subject to, any agreement which limits the freedom of
Pompton Valley, the Principal Shareholders or Employee to compete in any line
of business included in the Publishing Business in any geographic area or with
any person.
(k) Litigation. Except as set forth in Schedule 3(k),
there is no claim, action, suit, arbitration, inquiry or proceeding before any
governmental authority pending, or, to the knowledge of each Principal,
threatened against or affecting any Pompton Valley, the Assets, the Assumed
Liabilities or the Publishing Business. There are no such claims, actions,
suits, arbitrations, inquiries or proceedings pending or threatened against
Pompton Valley or the Principal Shareholders, seeking to prevent or challenging
the transactions contemplated by this Agreement. Neither Pompton valley or the
Principal Shareholders are subject to any order entered in any lawsuit or
proceeding which may have a material adverse effect on: the Assets; the
Publishing Business, the prospects of the Publishing Business, or other
business, operations, condition (financial or otherwise) or results of
operations of Pompton Valley; or any party's ability to consummate the
transactions contemplated hereby.
(l) Returns; Taxes; S Corporation Status. Pompton Valley
has filed all returns, declarations, reports, statements and other documents
required to be filed in respect of Taxes ("Returns") by Pompton Valley. The
federal and state income tax Returns with respect to Pompton Valley for each of
the three full fiscal years ended December 31, 1994, 1995 and 1996 delivered to
INI are true and correct copies of such Returns. The income tax Returns of
Pompton Valley have never been audited by the IRS or any other taxing authority
or agency, nor has Pompton Valley been notified of any pending audits, except
as set forth in Schedule 3(k). Pompton Valley has not filed, requested or been
granted any waiver or extension of time within which to file any Return that
remains unfiled. Pompton Valley has not granted any waivers or extensions of
time with respect to any Tax audit date with respect to any currently open
Return period, determined without regard to such waiver. Any deficiency
assessments with respect to any such Returns have been paid by Pompton Valley.
There are no liens on the Assets for Taxes other than for Taxes not yet due and
payable. With regard to all amounts in respect of Taxes for which Pompton
Valley is or could be liable, whether to taxing authorities (as, for example,
under law) or to other persons or entities (as, for example, under tax
allocation agreements), with respect to all taxable periods or portions of
periods ending on or before the Closing Date, the Returns reflect appropriate
reporting positions under the applicable tax laws, and all amounts reported on
the Returns to be due to taxing authorities and all amounts due to others under
any agreements have been, or by the Closing Date will be, paid in full. Pompton
Valley has timely filed a valid election to be treated as an S corporation in
accordance with the provisions of Section 1362(a) of the Code and continues to
qualify as an S corporation for all years and periods from the effective date
of such election through and including the Closing Date.
(m) Intellectual Property. Pompton Valley owns all right,
title and interest in and to, or have the right to use, all Intellectual
Property necessary for or used in the conduct of the Publishing Business as
presently conducted, free and clear of all encumbrances, and all of such
Intellectual Property will be included in the Assets. Pompton Valley is not
and no third party is, in default under any licenses, agreements or other
rights with respect to the Intellectual Property granted by any third party to
Pompton Valley, and there exists no event, occurrence, condition or act
(including the sale of the Assets hereunder) which, with the giving of notice,
the lapse of time or the happening of any other event or condition, would
become a default thereunder. Pompton Valley and/or the Principal Shareholders
have not received any notice of any infringement or misappropriation of, or
other conflict with, any third party with respect to, any Intellectual
Property, nor have Pompton Valley and/or the Principal Shareholders received
any claims of infringement or misappropriation of, or other conflict with, any
intellectual property of any third party in connection with the Publishing
Business, nor are Pompton Valley or the Principal Shareholders aware of any
such infringement, misappropriation or other conflict. After the Closing all
Intellectual Property will be owned by or available for use by INI on
identical terms and conditions to those existing with respect to Pompton
Valley immediately prior to the Closing. Neither Pompton Valley nor the
Principal Shareholders have taken or omitted to take any action which would
have the effect of waiving any rights to the Intellectual Property. For
purposes of this Agreement, "Intellectual Property" shall mean all technology,
know-how, trade secrets and client lists (including, without limitation, lists
of former and current
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clients and lists of clients to which Pompton Valley has presented a written
proposal) relating to or used in the Publishing Business, including the
computer programs, databases and software relating to or used in the Publishing
Business, together with the operating codes, source codes, updates, upgrades,
modifications, enhancements and any user and technical documentation or
utilities with respect thereto, and all patents, patent licenses and patent
applications, copyrights and copyright applications and other intellectual
property rights relating to the Publishing Business and the trademarks, trade
names (including, without limitation, all rights of Pompton Valley with respect
to the names "Independent News," "Coupon Clips," "Xxxxx Independent News,"
"Paterson Independent News," and any derivatives thereof), service marks and
logos (including any registration and any application for registration of any
of the foregoing), relating to or used in the Publishing Business.
(n) Compliance with Laws. Pompton Valley and the Principal
Shareholders are in compliance with all applicable laws, regulations and orders
in connection with the Publishing Business and the Assets.
(o) Insurance. Set forth in Schedule 3(o) is a complete
list of insurance policies which Pompton Valley maintain with respect to the
Publishing Business, the Assets or both, together with a copy of the
declarations page of each such policy setting forth, with respect to each
policy, the amount and type of coverage, limits and deductibles, inception and
expiration dates and insurance carrier. Such policies are in full force and
effect.
(p) Employees. Set forth in Schedule 3(p) is an accurate
and complete list of the names of all persons employed by Pompton Valley in
connection with the Publishing Business as of the Closing Date ("Employees"),
together with the following information with respect to each Employee: job
title; date of hire; last review date; base compensation; and additional
compensation (or the terms thereof, if determined pursuant to a scale or
formula), if any. Except as set forth in Schedule 3(p), no Employee has given
notice to terminate his or her employment, nor has any Employee threatened to
give notice of termination. Except as set forth in Schedule 3(p), Pompton
Valley has not promised or agreed to give any Employee a pay raise or any
additional compensation other than with respect to a review in the ordinary
course of business consistent with past practice. Schedule 3(p) also sets forth
the names of all Employees with whom Pompton Valley has entered into an
employment agreement and/or a non-compete agreement, as well as the material
terms of any such agreement.
(q) Employee Benefit Plans; ERISA Compliance. There is no
employee benefit plan, as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and every other fringe
benefit, stock option, bonus, incentive compensation, deferred compensation,
excess, supplemental executive compensation, employee stock purchase, vacation,
sickness or disability, severance or separation, restricted stock or other
employee benefit plan, policy or arrangement, whether written or oral,
maintained or contributed to within the last five years by Pompton Valley or by
a Common Control Entity (as defined below) for the benefit of Employees or
former employees or under which Pompton Valley has or may have any liability or
obligation, except for the medical plan set forth in Schedule 3(q) (the
"Benefit Plans"). Pompton Valley has not maintained or contributed to in any
way, directly or indirectly, and have no liability with respect to, any
"multiemployer plan" within the meaning of Section 3(37) of ERISA. No Benefit
Plan provides health, dental, life insurance or other welfare benefits (whether
on an insured or self-insured basis) to Employees or former employees after
their retirement or other termination of employment from Pompton Valley (other
than continuation coverage required under COBRA which may be purchased at the
sole expense of the employee or former employee).
(r) Employee Relations. Since January 1, 1989: Pompton
Valley has not engaged in any unfair labor practice with respect to any
Employees or former employees; no unfair labor practice complaint has been
brought or is pending before the National Labor Relations Board with respect
to any Employees or former employees; there has been no labor strike, dispute,
slowdown or stoppage involving any Employees or former employees, nor is there
any now pending or threatened; no representation question has been raised or
now exists respecting Employees or former employees; Pompton Valley has not
been notified of any material grievance, and no arbitration proceeding arising
out of or under any collective bargaining agreement has been brought or is
pending with respect to any Employees or former employees; and Pompton Valley
has not been and are not parties to any collective bargaining agreement.
(s) Suppliers. Schedule 3(s) sets forth a list of all
outstanding purchase commitments and orders of Pompton Valley with respect to
the Publishing Business which are in excess of $1,000 or are not in the
ordinary course of business of the Publishing Business. Schedule 3(s) also sets
forth a list of all advertisers who spend more than $1,000 per year on
advertising with Pompton Valley. Except as set forth in Schedule 3(s), no
advertiser or supplier of the Publishing Business has, in the six months prior
to the date hereof, given written notice to Pompton Valley or any Principal
Shareholder to cancel or otherwise terminate or reduce, or, to the knowledge of
any Principal, given such notice orally or threatened to cancel, terminate or
reduce, its relationship with Pompton Valley other than in the ordinary course
of business consistent with past experience.
(t) Sufficiency and Condition of Assets; Shared Services.
The Assets are sufficient to provide the products and services currently
provided by the Publishing Business. There are no assets or property necessary
for the conduct of the Publishing Business as presently conducted which are
not owned, leased or licensed by Pompton Valley or made available to Pompton
Valley and are included in the Assets. The tangible assets included in the
Assets are in satisfactory operating condition for the purpose of operating
the Publishing Business as it is presently conducted.
(u) Subsidiaries. Pompton Valley has no subsidiaries.
(v) Environmental Laws. None of Pompton Valley or any
Principal Shareholder has received any notification that: Hazardous Materials
have been generated, used, treated or stored at, or transported to or from,
any real property included among the Assets or used in the Publishing Business;
Hazardous Materials have been released or disposed of on any such property; or
Pompton Valley is not in compliance with applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws with respect
to any such property, nor have any of the foregoing events occurred. There are
no pending or
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threatened claims, suits, demands, investigations, proceedings or other actions
relating to any Environmental Law with respect to any such property. For
purposes of this Agreement, "Environmental Laws" shall mean any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, permit,
policy or order now in effect and in each case as amended to date and any
judicial or administrative interpretation thereof relating to Hazardous
Materials, environmental matters, the protection of public health and safety
from environmental or health concerns or otherwise relating to environmental
conditions; and "Hazardous Materials" shall mean all hazardous substances,
wastes, materials or constituents, solid wastes, special wastes, toxic
substances, pollutants, contaminants, petroleum or petroleum derived substances
or wastes, radioactive materials, urea formaldehyde, polychlorinated biphenyls,
radon gas and related materials, including, without limitation, any such
materials defined, listed, identified under or described in any Environmental
Laws.
(w) Disclosure. There is no fact known to Pompton Valley
or to any Principal Shareholder that materially adversely affects the assets,
liabilities, business, condition (financial or otherwise), results of
operations or prospects of Pompton Valley, or which materially adversely
affects the Publishing Business or any of the Assets that has not been set
forth in this Agreement or in a writing that has been provided to INI.
(x) Brokers. No agent, broker, person or firm (other than
professional service providers such as attorneys or accountants, acting as
such) acting on behalf of Pompton Valley or the Principal Shareholders is, or
will be, entitled to any fee, commission, or broker's or finder's fee from any
of Pompton Valley or the Principal Shareholders in connection with this
Agreement or any of the transactions contemplated thereby.
(y) Information Regarding Shares. Pompton Valley and the
Principal Shareholders have received copies of the Quarterly Reports on Form
10-Q filed by NexGen for the first and second fiscal quarters of 1997. Pompton
Valley and the Principal Shareholders have had the opportunity to question
various officers of NexGen regarding its assets, business and prospects, and
have received satisfactory answers to all such questions. No representative of
NexGen or INI has made any representation regarding the current or future value
of the Shares, and Pompton Valley and the Principal Shareholders have not
relied on any such representation in deciding to undertake the transactions
contemplated by this Agreement.
The representations and warranties of Pompton Valley and the Principal
Shareholders set forth above (other than in paragraphs 3(a), (b), (c), (g),
(h), and (y)) shall survive the Closing for a period of three years. The
representations and warrantee of Pompton Valley and the Shareholder set forth
in paragraphs 3(a), (b), (c), (g), (h), and (y), and the covenants of Pompton
Valley and the Principal Shareholders set forth herein, shall survive the
Closing indefinitely.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF INI.
INI hereby represents and warrants as follows.
(a) Existence and Good Standing; Authorization and
Validity of Agreements. INI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. INI has full
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance by INI of this Agreement,
the INI and the consummation by INI of the transactions contemplated hereby,
have been duly and validly authorized and approved by all necessary corporate
action of INI. This Agreement has been duly and validly executed and delivered
by INI and is a valid and binding obligation of INI enforceable against INI in
accordance with its terms.
(b) Consents and Approvals; No Violations. The execution,
delivery and performance of this Agreement INI and the consummation by INI of
the transactions contemplated hereby and thereby will not (with or without the
giving of notice or the lapse of time or both): violate, conflict with, or
result in a breach or default under any provision of the certificate of
incorporation or by-laws of INI; violate any statute, ordinance, rule,
regulation or order of any court or of any governmental or regulatory body,
agency or authority applicable to INI or by which any of its properties or
assets may be bound; 1. require any filing by INI with, or require INI to
obtain any permit, consent or approval of, or require INI to give any notice
to, any governmental or regulatory body, agency or authority or any other
person; or result in a violation or breach by INI of, conflict with, constitute
a default by INI (or give rise to any right of termination, cancellation,
payment or acceleration) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, franchise, permit, agreement,
lease or other instrument or obligation to which INI is a party, or by which
INI may be bound.
(c) Broker's or Finder's Fees. No agent, broker, person
or firm (other than professional service providers such as attorneys or
accountants, acting as such) acting on behalf of INI is, or will be, entitled
to any fee, commission or broker's or finder's fees from INI, in connection
with this Agreement or any of the transactions contemplated hereby, other than
X.X. Xxxxxx, Inc.
(d) Title to Shares. Upon the issuance of the Shares at
the Closing, the Shares will be duly authorized, validly issued, fully paid and
nonassessable, and will be owned by Pompton Valley free and clear of all liens,
encumbrances, charges, assessments and adverse claims arising by or through
NexGen, INI or any affiliate thereof.
SECTION 5. COVENANTS.
Pompton Valley and the Principal Shareholders hereby jointly and
severally covenant and agree as follows:
(a) Cooperation by Pompton Valley and the Principal
Shareholders. Pompton Valley and the Principal Shareholders shall cooperate
with INI to secure all necessary consents, approvals, authorizations,
exemptions and waivers from third parties as shall be required in order to
enable Pompton Valley and the Principal Shareholders to effect the transactions
contemplated hereby, and Pompton Valley and the Principal Shareholders shall
each otherwise use their best efforts to cause the consummation of such
transactions in accordance with the terms and conditions hereof and to cause
all conditions contained in this Agreement to be
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satisfied. Pompton Valley and the Principal Shareholders further agree to
deliver to INI prompt written notice of any event or condition known to them,
subsequent to the execution hereof and prior to the Closing, which if it
existed on the date of this Agreement, would result in any of the
representations and warranties of Pompton Valley and the Principal Shareholders
contained herein being untrue.
(b) Notice of Sale. As reasonably requested by INI, from
time to time within the first thirty (30) days following the Closing Date,
Pompton Valley will, and Principals will cause Pompton Valley to, promptly
prepare and mail notices to the other party under any of the Assumed Contracts,
advising such other party that such Assumed Contract has been assigned to INI
and directing such other party to send to INI all future notices, correspondence
and payments relating to such Assumed Contract. Pompton Valley will provide INI
with copies of the forms for all such notices for INI's reasonable approval
prior to any such mailing.
SECTION 6. DELIVERIES AT CLOSING.
(a) Pompton Valley shall deliver the following at the
Closing:
(i) Xxxx of Sale and Assignment and Assumption
Agreement in the form attached as Exhibit
6(a)(i) and all other instruments that INI
reasonably deems necessary to convey the
Assets and to vest in INI good and
marketable title to them;
(ii) all necessary acknowledgements and other
documentation authorizing INI (A) to sign,
sign over to INI or otherwise endorse in
the name of INI all checks, drafts, notes
and other instruments made payable to
Pompton Valley, and (B) to receive and
deposit for the account of INI such checks,
drafts, notes, and other instruments into
any account maintained by INI;
(iii) a certificate of the Secretary of Pompton
Valley dated the Closing Date setting forth
a copy of resolutions adopted by the Board
of Directors and by the stockholders of
Pompton Valley authorizing and approving
the execution and delivery of this
Agreement and the consummation of the
transactions contemplated hereby;
(iv) UCC financing statements, in form and
substance acceptable to INI, perfecting the
transfer to INI of all accounts and chattel
paper constituting Assets;
(v) a representation letter signed by each
person listed on Schedule 3(g) hereto, in
the form attached hereto as Exhibit
6(a)(v).
(b) INI shall deliver the following at the Closing:
(i) the Shares; and
(ii) employment agreements between INI and each
of the Principal Shareholders, dated as of
the Closing Date (the "Employment
Agreements"), in the forms attached as
Exhibit 6(b)(ii).
SECTION 7. OTHER AGREEMENTS.
(a) Further Assurances. Each party shall, at the request
of any other, at any time and from time to time following the Closing Date,
execute and deliver to the requesting party such further instruments as may be
reasonably necessary or appropriate in order more effectively: to assign,
transfer and convey to INI, or to perfect or record INI's title to or interest
in the Assets; to evidence and confirm the assumption by INI of the Assumed
Liabilities pursuant to this Agreement; or otherwise to confirm or carry out
the provisions of this Agreement.
(b) Taxes. Real property, personal property and ad
valorem or other similar Taxes or assessments levied or assessed on or with
respect to the Assets for the tax year which includes the Closing Date, shall
be prorated between Pompton Valley and INI on a per diem basis based upon their
respective period of ownership during such year, with Pompton Valley being
allocated any such taxes or assessments apportioned to and including the
Closing Date. Pompton Valley shall not enter into any settlement or agreement
in compromise of any claim relating to Taxes with any government or taxing
authority which purports to bind INI with respect to any tax period ending
after the Closing Date without INI's consent, such consent not to be
unreasonably withheld, conditioned or delayed. INI shall not enter into any
settlement or agreement in compromise of any claim relating to Taxes with any
government or taxing authority which purports to bind Pompton Valley with
respect to any tax period ending on or before the Closing Date without Pompton
Valley's consent, such consent not to be unreasonably withheld, conditioned or
delayed. No new elections with respect to Taxes, or any changes in current
elections with respect to Taxes, affecting the Assets or the Publishing
Business shall be made by any of Pompton Valley or the Principal Shareholders
or any of their Affiliates after the date of this Agreement without the prior
written consent of INI. In the event any taxing authority shall assess any
sales, use, goods and services or other similar Taxes against Pompton Valley in
connection with the conduct of the Publishing Business on or prior to the
Closing Date, such entities shall have no recourse against, and shall not seek
reimbursement from, the clients of the Publishing Business with respect to
which such Taxes shall have been assessed unless such entities have received
INI's consent (such consent to be at INI's sole discretion) to seek such
reimbursement.
SECTION 8. INDEMNIFICATION.
Pompton Valley and Principal Shareholders shall jointly and
severally indemnify, defend and hold harmless INI (and its affiliates,
directors, officers, stockholders, employees, attorneys and representatives)
from and against any and all costs, losses,
7
damages and liabilities (including, without limitation, reasonable costs and
attorneys' fees, and interest and any penalties) (collectively, "Losses")
incurred or suffered by any or all of them with respect to or in connection
with:
(i) any breach or non-fulfillment of any
representation, warranty, covenant or obligation of Pompton Valley under this
Agreement or any other agreement, certificate or document delivered in
connection with the closing pursuant hereto by Pompton Valley; or
(ii) any claims with respect to, except to the
extent of any Assumed Liabilities, any liabilities, obligations or commitments
of Pompton Valley, whether absolute, contingent, known or unknown or otherwise,
relating to the ownership and operation of Pompton Valley or the Assets on or
prior to the Closing Date.
SECTION 9. NON-COMPETITION; NON-INTERFERENCE; NON-HIRE;
NON-SOLICITATION; NON-DISCLOSURE.
(a) In order to induce INI to purchase the Assets and
assume the Assumed Liabilities pursuant to this Agreement, Pompton Valley
hereby covenants and agrees that for a period of four years following the
Closing Date, Pompton Valley shall not, within a thirty (30) mile radius of
Pompton Valley's Principal Office, directly or indirectly do any of the
following, other than by or through INI:
(i) own, manage, operate, control or otherwise
become interested in (other than pursuant to ownership of no
more than five percent of the outstanding capital stock of a
publicly traded entity or ownership of debt of a publicly traded
entity, other than debt convertible into ownership of more than
five percent of the outstanding capital stock of such publicly
traded entity) any entity that provides products or performs
services that are the same as, substantially similar to, or
competitive with, the Publishing Business;
(ii) provide any products or perform any services
that are the same as, substantially similar to, or competitive
with, the Publishing Business, whether on behalf of itself or
himself or others;
(iii) enter into any agreement or arrangement with
any person or entity (other than INI or any of its Affiliates),
pursuant to which products or services which are the same as,
substantially similar to, or competitive with, the Publishing
Business are to be provided or performed; or
(iv) persuade or attempt to persuade any client
of the Publishing Business to terminate, or materially reduce
the scope of, its relationship with INI.
(b) Without the prior written consent of INI, Pompton
Valley shall not offer employment to or hire any Employee (other than
individuals who, without solicitation or persuasion by Pompton Valley nor the
Principal Shareholders, cease to be an Employee prior to such employment) or
persuade or attempt to persuade any such Employee: (i) not to accept employment
by INI or any of its Affiliates; (ii) to leave the employ of INI or any of its
Affiliates; or (iii) to become employed by any person or entity other than INI
or any of its Affiliates until such Employee has ceased to be an employee of
INI or any of its Affiliates for a period of at least one year; and Pompton
Valley shall not at any time hereafter disclose, furnish or make accessible to
any person or entity (except INI and its Affiliates), or to any officer,
director, stockholder, partner, business associate, employee, agent or
representative of any such person or entity, any proprietary information which
is not in the public domain (including, without limitation, any customer lists,
procedures, pricing and marketing structure and strategy, source or object
codes, experimental or research work, names and addresses of current, former
and prospective clients or employees, or any other trade secrets or technical
data of any kind) relating to the Publishing Business or to INI or any
Affiliate thereof; and
(c) Pompton Valley shall not engage in any practice the
purpose of which is to evade the provisions of this Section 9. In addition to
the foregoing, in order to induce INI to purchase the Assets and assume the
Assumed Liabilities pursuant to this Agreement, each of the Principal
Shareholders, jointly and severally, hereby covenants and agrees to the terms
and conditions set forth in Section 7 of his Employment Agreement.
(d) It is the intent of the parties to this Agreement
that the provisions of Section 9 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. If any particular provision of Section 9 shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to the minimum extent necessary to render such provision valid and
enforceable, such amendment to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made.
The parties acknowledge that damages and remedies at law for any breach of
Sections 9(a), (b) or (c) will be inadequate and that INI shall be entitled to
specific performance and other equitable remedies (including an injunction) and
such other relief as a court or tribunal may deem appropriate in addition to
any other remedies INI may have.
SECTION 10. MISCELLANEOUS.
(a) Entire Agreement. This Agreement (including the
Schedules) sets forth the entire understanding of the parties hereto with
respect to the subject matter hereof. Any prior agreements or undertakings
among the parties hereto regarding the subject matter hereof are merged into
and superseded by this Agreement.
(b) Successors and Assigns. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors, heirs and personal representatives of the parties hereto; provided,
however, that this Agreement may not be assigned by the parties hereto without
the prior written consent of the other parties hereto.
8
(c) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
(d) Headings. The headings of the Articles and Sections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
(e) Modification and Waiver. No amendment, modification
or alteration of the terms or provisions of this Agreement shall be binding
unless the same shall be in writing and duly executed by INI and the
Representative, except that any of the terms or provisions of this Agreement
may be waived in writing at any time by the party which is entitled to the
benefits of such waived terms or provisions. No waiver of any of the provisions
of this Agreement shall be deemed to or shall constitute a waiver of any other
provision hereof (whether or not similar). No delay on the part of any party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof.
(f) No Third Party Beneficiary Rights. This Agreement is
not intended to and shall not be construed to give any person other than the
parties hereto any interest or rights (including, without limitation, any third
party beneficiary rights) with respect to or in connection with any agreement
or provision contained herein or contemplated hereby.
(g) Expenses. Except as otherwise provided in this
Agreement and regardless of whether the Closing occurs, each of Pompton Valley,
the Principal Shareholders and INI shall pay all costs and expenses incurred by
it or on its behalf in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, fees and expenses of its
own financial consultants, accountants, legal counsel, brokers and finders.
Notwithstanding anything to the contrary contained herein, all such expenses
incurred by Pompton Valley shall be deemed Excluded Liabilities and shall be
payable by Pompton Valley and/or Principals.
(h) Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party shall be
in writing and shall be sufficiently given if delivered in person, sent by
nationally recognized overnight courier service or sent by registered or
certified mail, postage prepaid, return receipt requested, as follows:
if to INI, to:
Independent News, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
with a copy (not itself constituting notice) to:
Xxxxxxx Xxxxx, Esq.
Xxxxxxxx & Xxxxxxxx
000 00xx Xx., XX
Xxxxxxxxxx, XX 00000
if to Pompton Valley or any Principal Shareholder, to:
000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
with a copy (not itself constituting notice) to:
Xxx Xxxxxxxx, Esq.
00 Xxxxxx Xxxxx
Xxxxx, Xxx Xxxxxx 00000
or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided herein shall be
effective upon actual receipt by such party. Any notice which is addressed and
mailed in the manner herein provided shall be deemed to have been given seven
days after the day it is so placed in the mail. Any notice which is sent by
nationally recognized overnight courier service in the manner provided herein
shall be deemed to have been given on the next business day after the day it is
deposited with such courier service.
(i) Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New Jersey, without regard to any otherwise applicable principles of conflicts
of laws.
(j) Severability. If any provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transaction contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled.
9
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed on its behalf as of the date first above written.
INDEPENDENT NEWS, INC.
By: /s/ Xxxx Xxxx
Xxxx Xxxx
President
POMPTON VALLEY PUBLISHING CO., INC.
By: /s/ Xxx Xxxxxxxx
Xxx Xxxxxxxx
President
PRINCIPAL SHAREHOLDERS
/s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
