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EXHIBIT 10.14
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of the ____
day of November, 1999, is by and among IDEA ENTERTAINMENT, INC., a Delaware
corporation, d/b/a EVERLAND ENTERTAINMENT (the "Purchaser"), and INTEGRITY
INCORPORATED d/b/a INTEGRITY FILMS and HOSANNA! MUSIC, a Delaware corporation
and INTEGRITY MUSIC, INC., a Delaware corporation (collectively, the "Seller").
WITNESSETH:
WHEREAS, Seller is the owner of and is engaged in the creation,
manufacture, and distribution of a series of children's video tapes entitled
"Adventures of The Royal Academy" (the "Property").
WHEREAS, Seller desires to sell, and Purchaser desires to acquire, an
undivided one hundred percent (100%) ownership interest in and to all of the
assets (including, but not limited to, any and all intellectual property rights)
associated with the Property, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and agreements contained herein, the parties hereto do hereby agree as
follows:
ARTICLE I
SALE AND PURCHASE OF ASSETS
Section 1.1 Definition of Assets. Effective as of the Closing Date (as
defined in Section 1.2), Seller shall sell, assign, transfer, convey and deliver
the following assets to Purchaser (collectively, the "Assets"):
(a) all worldwide right, title and interest in or to the following
property, whether known or unknown, now existing or hereafter arising, together
with all copyrights therein, the right to secure copyrights therein and the
right to renew, extend, continue and continue-in-part copyrights therein, in
each case throughout the world:
(i) the series title "Adventures of The Royal Academy"
and each of the titles of the Masters as such titles
are set forth on Schedule 1.1(a)(i);
(ii) each and every one of the video masters comprising or
relating to or created in connection with the
Property, a complete list of which is set forth on
Schedule 1.1(a)(ii) (the "Masters");
(iii) the literary works, scripts, storyboards, treatments
and concepts embodied in, relating to or created in
connection with the Masters or any future productions
relating to the Property;
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(iv) the characters, plots, themes and storylines embodied
in, relating to or created in connection with the
Masters;
(v) all tapes embodying the Masters and any advertising
therefor, including those set forth on Schedule
1.1(a)(v), and all negatives, cuts, outtakes and
edits prepared in connection with the Property,
whether or not embodied in the Masters;
(vi) all artwork embodied in the Masters and any outtakes
or edits not embodied in the Masters;
(vii) all adaptations, versions or derivative works of any
of the foregoing;
(viii) all future productions of video masters based on the
Property, the title thereto and the characters,
plots, themes or storylines embodied therein;
(ix) all other intangible property rights relating to the
Masters or the Property; and
(b) all worldwide right, title and interest in or to the trade names
and trademarks, whether registered or unregistered, used by Seller from time to
time in connection with the Property, together with the right to secure the same
therein and the right to renew and extend the same, in each case throughout the
world, including those listed on Schedule 1.1(b) (the "Trademarks"); and
(c) all worldwide right, title and interest in or to any artwork
created in connection with the marketing, distribution or packaging of products
consisting of the Property;
(d) all worldwide right, title and interest in or to each musical
composition embodied in the any of the Masters, all of which are listed on
Schedule 1.1(d) (the "Compositions"), including, without limitation,
the following:
(i) all right, title and interest in or to copyrights
(including registrations and applications for
registration therefor), the right to secure
copyrights and the right to renew, extend and
continue-in-part copyrights, in each case throughout
the world in connection with each Composition;
(ii) all right, title and interest in or to the lyrics,
music and title of each Composition, together with
all right, title and interest in or to all other
versions and derivative works;
(iii) all right, title and interest in or to any proceeds
from any Composition, from whatever source;
(iv) all rights to mechanically reproduce for use with any
device (alone or in synchronization with visual
images), publish in printed form, broadcast or
publicly perform each Composition;
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(v) all right, title and interest in or to any licenses
regarding any Composition (including mechanical
licenses);
(vi) all rights to administer, promote, exploit or
license, for any use whatsoever (including, without
limitation, the uses described in subsection (iv)
above), each Composition or any copyright associated
therewith or to sub-license the administration,
promotion or licensing thereof, all in Purchaser's
name;
(e) all worldwide right, title and interest in or to each Sound
Recording (whether sound only or audiovisual) embodying any Composition, all of
which are listed on Schedule 1.1(e) (the "Sound Recordings"), including, without
limitation, the following:
(i) all right, title and interest in or to copyrights
(including registrations and applications for
registration therefor), the right to secure
copyrights and the right to renew, extend and
continue-in-part copyrights, in each case throughout
the world in connection with each such Sound
Recording;
(ii) all right, title and interest in or to any proceeds
from each Sound Recording, from whatever source;
(iii) all rights to mechanically reproduce for use with any
device (alone or in synchronization with visual
images), distribute, market, broadcast or publicly
perform each such Sound Recording;
(iv) all right, title and interest in or to any licenses
regarding any Sound Recording;
(v) all rights to administer, promote, exploit or
license, for any use whatsoever (including, without
limitation, the uses described in subsection (iv)
above), each such Sound Recording or any copyright
associated therewith or to sub-license the
administration, promotion or licensing thereof, all
in Purchaser's name;
(vi) all original multi-track tapes, two-track masters and
any derivatives or copies thereof of any Sound
Recording;
(f) all worldwide right, title and interest in or to the following
property, whether known or unknown, now existing or hereafter arising, together
with all copyrights therein, the right to secure copyrights therein and the
right to renew, extend, continue and continue-in-part copyrights therein, in
each case throughout the world:
(i) each of the activity books, and the titles and the
content thereof, as set forth on Schedule 1.1(f) (the
"Activity Books");
(ii) the literary works embodied in, relating to or
created in connection with the Activity Books;
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(iii) the characters, plots, themes and storylines embodied
in, relating to or created in connection with the
Activity Books;
(iv) all artwork embodied in the Activity Books;
(v) all adaptations, versions or derivative works of any
of the foregoing;
(vi) all future productions of any such activity books
based on the Property, the title thereto and the
characters, plots, themes or storylines embodied
therein;
(vii) all other intangible property rights relating to the
Activity Books; and
(g) all agreements, understandings or contracts, whether verbal or
written, pursuant to which Seller owns or has acquired rights in any of the
Property, all of which are set forth on Schedule 1.1(g) (the "Ownership
Contracts");
(h) all rights to xxx for past, present or future infringement of any
right in connection with any of the Assets (and all rights corresponding
thereto);
(i) all of Seller's books and records relating to any of the Assets,
including correspondence, records and book of account (the "Books and Records");
(j) all right to receive income or revenue associated with or derived
from the Assets at any time after the Closing Date (as hereafter defined).
Section 1.2 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Xxxxxxxx & Xxx, PLC in
Nashville, Tennessee, on the date the initial installment of the Purchase Price
(as described in Section 1.3 below) shall be paid by Purchaser (the "Closing
Date"), or at such other location and/or date as may be mutually agreed upon by
the parties. Notwithstanding the Closing Date, the transactions contemplated
hereby shall be effective as of 12:01 AM on the Closing Date.
Section 1.3 Purchase Price. In consideration of the transfer of the
Assets to Purchaser, Purchaser shall pay Seller $2,000,000 (the "Purchase
Price"), which amount shall be payable as follows: $1,000,000 at the Closing and
$250,000 on each of March 31, 2000, June 30, 2000, September 30, 2000 and
December 31, 2000, in each case by means of wire transfer of immediately
available funds in accordance with the instructions set forth on Schedule 1.3
hereto.
Section 1.4 Transfer of Assets. (a) The transfer and sale of Assets
will be effected by the delivery by the Seller to the Purchaser of a Xxxx of
Sale in the form attached as Exhibit A (the "Xxxx of Sale"), an Assignment and
Assumption Agreement in the form attached as Exhibit B (the "Assignment"),
Short-Form Assignments with respect to the Masters, the Compositions and the
Activity Books in the form attached as Exhibit C (the "Short-Form Assignments"),
all consents of third parties necessary to effectively vest in Purchaser title
to the Assets, free and clear of all liens, claims or encumbrances, except to
the extent disclosed herein or otherwise waived in writing by Purchaser, and the
Assets consisting of tangible property. This Agreement, the Xxxx of Sale, the
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Assignment and the Short-Form Assignment, together with the schedules and
attachments hereto and thereto, are collectively referred to herein as the
"Operative Documents."
(b) Additionally, Seller is herewith delivering copies of all federal
registrations of copyright on Form PA with regard to the Compositions, the
Masters and the Activity Books, copies of such registrations collectively
attached hereto as Exhibit D.
Section 1.5 Assumption of Liabilities. Purchaser assumes no liabilities
incurred by Seller or any other person in connection with the Assets at any time
prior to the Closing Date, except as and to the extent specifically set forth on
Schedule 3.12(a).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
REGARDING SELLER
Seller hereby represents and warrants as follows:
Section 2.1 Status. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation
and has the power to own and operate its properties, to carry on its business as
now conducted and to enter into and to perform its obligations under each of the
Operative Documents. Seller is qualified to do business and is in good standing
in each state or other jurisdiction in which such qualification is necessary
under applicable provisions of law, except where the failure to so qualify would
not have a materially adverse effect on Seller.
Section 2.2 Authorization; Absence of Conflicts. Seller has full legal
right, power and authority to enter into and perform each of its obligations
under all of the Operative Documents to which it is a party. The execution and
delivery of this Agreement by Seller and the performance by Seller of its
obligations hereunder and/or thereunder, do not and will not (i) contravene or
conflict with the articles or certificate of incorporation, as amended, of
Seller, the Bylaws, as amended, of Seller, or any other organizational document
of Seller, (ii) contravene or conflict with any material agreement to which
Seller is a party or by which any of its properties is bound, or constitute a
default thereunder, or result in the creation or imposition of any lien, charge,
security interest, or encumbrance of any nature upon any of the property or
assets of Seller pursuant to the terms of any such agreement or instrument, or
(iii) violate any provision of law or any applicable judgment, ordinance,
regulation or order of any court or governmental agency material to Seller.
Section 2.3 No Required Consents. No consent, approval, qualification,
order or authorization of or filing with any governmental authority, and no
consent of any other person, is required on the part of Seller in connection
with Seller's execution, delivery or performance of any of the Operative
Documents, which consent has not been obtained in writing.
Section 2.4 Validity and Binding Effect. Each of the Operative
Documents is the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
Section 2.5 No Defaults. No default or event of default by Seller
exists under (i) any of the Operative Documents or (ii) any other instrument or
agreement to which Seller is a party or by which
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Seller or its properties may be bound, except (in the case of defaults or events
of defaults other than under the Operative Documents) for defaults or events of
default which are, individually or in the aggregate, immaterial. To the
knowledge of Seller, no event has occurred and is continuing that with notice or
the passage of time or both would constitute a default or event of default by
Seller or any other party under any of the Operative Documents or any other
instrument or agreement to which Seller is a party or by which Seller or its
respective properties may be bound.
Section 2.6 Compliance With Law. Seller is in compliance with all
federal, state or local laws, regulations, decrees and orders applicable to any
of them, except to the extent that noncompliance cannot reasonably be expected
to have a materially adverse effect on Seller.
Section 2.7 Taxes. Seller has filed, or caused to be filed, all
federal, state and local income, excise and franchise tax returns required to be
filed (except for returns that have been appropriately extended), and has paid,
or provided for the payment of, all taxes shown to be due and payable on said
returns and all other taxes, impositions, assessments, fees or other charges
imposed on it by any governmental authority, agency or instrumentality, prior to
any delinquency with respect thereto (other than taxes, impositions,
assessments, fees and charges which are, individually or in the aggregate,
immaterial, or are currently being contested in good faith by appropriate
proceedings, and for which appropriate amounts have been reserved). No tax liens
have been filed against Seller or any of its properties.
Section 2.8 Fees/Commissions. Seller has not agreed to pay any finder's
fee, commission, origination fee or other fee or charge to any person or entity
with respect to or as a result of the consummation of the transactions
contemplated hereunder.
Section 2.9 Bulk Sales Law. There is no bulk sales law applicable to
the transactions contemplated hereby.
Section 2.10 Disclosure. No representation or warranty given as of the
date hereof by Seller in this Article II contains or will (as of the time so
furnished) contain any untrue statement of a material fact, or omits or will (as
of the time so furnished) omit to state any material fact which is necessary in
order to make the statements contained herein or therein untrue in any material
respect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
REGARDING THE CONDITION OF THE ASSETS
Seller hereby represents and warrants as follows:
Section 3.1 Title to the Assets. Seller owns all worldwide right, title
and interest in and to, and has good and marketable title in and to, all of the
Assets, including specifically all copyrights therein, free and clear of all
liens, claims, mortgages, pledges, security interests, encumbrances or charges
of every kind, nature, and description whatsoever. Without limiting the
foregoing, Seller has not transferred its ownership in or to any copyright
pertaining to the Assets to any person or in any place throughout the world.
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Section 3.2 Adverse Claims. No adverse claims exist with respect to any
of the Assets, including, without limitation, any claims asserting the
invalidity, abuse, misuse or unenforceability of any of Seller's rights in any
of the Assets, and there are no grounds for the same.
Section 3.3 Infringement. Neither the Assets nor the conduct of
Seller's business with respect to the Assets infringes upon or violates the
rights of any person, including, without limitation, the copyright, other
proprietary or privacy rights of any person, and Seller has not received any
notice of the same.
Section 3.4 Original Works; Original Publication. All Assets consisting
of intellectual property, including, without limitation, the Masters and the
Compositions, are wholly original with Seller, whether pursuant to valid and
enforceable "work-made-for-hire" agreements included in the Ownership Contracts
or otherwise, and as such are susceptible of exclusive copyright and other
protection by Purchaser throughout the world. All Assets consisting of works
subject to publication were originally published by Seller.
Section 3.5 Options to Purchase. No person has any written or oral
agreement, option, understanding or commitment, or any right or privilege
capable of becoming an agreement, for the purchase of all or any part of any of
the Assets.
Section 3.6 Registration of Copyrights; Notice of Copyrights. (a)
Schedule 3.6 contains a complete list of all copyright registrations with
respect to the Assets consisting of intellectual property, including, without
limitation, the Compositions. Except as set forth on Schedule 3.6, no filings or
registrations with any governmental authorities have been made with respect to
perfection or protection of interests in any of the Assets consisting of
intellectual property, and no such filings or registrations are required.
(b) The Masters contain a copyright notice complying with the laws of
the United States and any foreign territory in which the Masters are distributed
as of the Closing Date, such notice appearing in the main or end title of each
of the Masters.
Section 3.7 Existing Licenses; Administration. There are no existing
licenses to third persons with regard to any of the Assets, including, without
limitation, any of the Masters, Compositions or Sound Recordings. Except as set
forth on Schedule 3.7, no person other than Seller has any right to administer,
promote, exploit or license, for any use whatsoever, any copyright or other
right in or to any of the Assets consisting of intellectual property, including,
without limitation, the Masters, Compositions or Sound Recordings.
Section 3.8 Outstanding Advances. There are no outstanding advances to
Seller from any performing rights society, subpublisher, printer or other
person.
Section 3.9 Licenses and Permits. Seller possesses all clearances,
licenses and other required approvals, permits, or authorizations applicable to
the Assets. Schedule 3.9 sets forth a complete list of all such clearances,
licenses, approvals, permits, and authorizations. All such clearances, licenses,
approvals, permits, and authorizations are in full force and effect, and Seller
is in material compliance with the requirements thereof. None of such
clearances, licenses, approvals,
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permits, and authorizations is or will be impaired or in any way affected by the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
Section 3.10 No Defaults Under Certain Contracts. No default or event
of default exists under any, and Seller has made all payments required to be
made by it in connection with, (i) any Ownership Contract or (ii) any contract
with illustrators, animators or personnel, for studio hire, purchases or
licenses, in each case with the production of the Masters and the Sound
Recordings, and there exists no state of facts which after notice or lapse of
time or both would constitute such a default or breach and such contracts are
now in full force and effect. All considerations required to be paid under each
of the agreements, licenses, assignments or other documents relating to the
production of the Masters have been paid in full, or otherwise discharged in
full, and, except as set forth on Schedule 3.12(a), there is no outstanding
obligation whatsoever, either present or future, under any of said agreements,
licenses, assignments or other documents.
Section 3.11 Guild and Union Payments. Seller has made all guild, union
or similar payments required to be made by it in connection with the production,
distribution or sale of the Masters or the Sound Recordings (including any
so-called "special fund" payments) through the Closing Date. Without limiting
the foregoing, all musicians rendering services in connection with the Sound
Recordings were paid the sums required to be paid to them under the applicable
American Federation of Musicians (the "AFM") Phonograph Record Labor Agreement.
The foregoing representations are included for the benefit of the AFM, all other
appropriate unions, their respective members whose performances are embodied in
the Masters or the Sound Recordings, and they may be enforced by the unions,
their respective designees or Purchaser. Seller has not been and is not
currently obligated to make any guild or union payments in connection with the
Assets.
Section 3.12 Royalty Obligations; Advances. (a) A summary of all
continuing royalty obligations with respect to the manufacture, sale or
distribution of the Masters or the Sound Recordings, or the use of the
Compositions embodied therein, is set forth on Schedule 3.12(a) hereto. Except
as set forth on Schedule 3.12(a), no other such royalty obligations exist.
Seller represents and warrants that the royalties payable to Classic
Entertainment, Inc. f/b/o Xxxx Xxxxxxx and Xxxx Xxxxxx as described in items 1
and 6 appearing on Schedule 3.12(a) are only required to be paid by Purchaser
prospectively following recoupment of all production costs of the Masters
(determined on a Master by Master basis), which recoupment shall be determined
from Purchaser's "net receipts" as such term is defined in Section 9(b) of the
Production Services Agreement (as such term is defined in Section 3.23 hereof).
(b) The balance as of the Closing Date of each recoupable advance made
by Seller to any person in connection with the Assets is set forth on Schedule
3.12(b), and each such balance is subject to recoupment by Purchaser prior to
the payment by Purchaser of any royalties whatsoever in respect of the Assets to
the person for the account of whom such balance is maintained.
Section 3.13 Credits; Quality; Content. (a) All credits required to
appear in the Masters appear in the Masters in appropriate form and location;
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(b) The Masters are completely finished, fully edited and titled and
fully synchronized with language dialogue, sound and music and in all respects
of a quality, both artistic and technical, adequate for commercial public
exhibition.
(c) The Masters consist of a continuous and connected series of scenes,
telling or presenting a story, free from any obscene, vulgar, salacious,
controversial or partisan political matters.
Section 3.14 Other Musical Compositions. No musical compositions other
than the Compositions are embodied in any of the Masters.
Section 3.15 No Advertising Matter. The Masters do not contain any
advertising matter for which compensation, direct or indirect, has been or will
be received by Seller or any other person.
Section 3.16 Insurance. A list of all insurance policies of Seller with
regard to any of the Assets, including, without limitation, any policy of errors
and omissions insurance, is set described on Schedule 3.16 hereto.
Section 3.17 Power of Attorney. Seller has not given or granted any
power of attorney in regard to the Assets, whether limited or general, to any
person, firm, corporation, or otherwise that is in effect as of the date hereof
or is continuing in effect.
Section 3.18 Restrictions on Competition. Seller is not a party to any
contract, agreement or understanding expressly restricting or purporting to
restrict competition by the Seller in regard to the Assets.
Section 3.19 Books and Records. The Books and Records are complete and
correct in all material respects, have been maintained in accordance with sound
business practices and accurately and fairly reflect, in all material respects,
Seller's transactions with regard to the Assets.
Section 3.20 Letters of Direction. The Letters of Direction are
sufficient to enable Purchaser to register and claim its rights in and to the
Assets and income or revenue associated with or derived from the Assets at any
time after the Closing Date.
Section 3.21 Sufficiency of Assets. The Assets constitute all of the
property necessary for the conduct of Seller's business as it relates to the
Property.
Section 3.22 Inventory. Schedule 3.22 sets forth a brief description of
all of the existing inventory consisting in whole or in part of any of the
Property (the "Inventory").
Section 3.23 No Production in Process. No production of any video
masters based in whole or in part on the Property is currently in process, and
Purchaser shall not be obligated to engage in any additional video production or
expend any sums pursuant to the provisions of that certain Productions Services
Agreement, dated as of December 1, 1994, by and among Seller, Classic
Entertainment, Inc. and Xxxx Xxxxxxx, prior to its expiration on December 1,
1999 (the "Production Services Agreement").
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Section 3.24 Litigation; Judgments. There is no pending or threatened
litigation, arbitration, claim, proceeding or investigation which would
adversely affect or prejudice Purchaser's rights in any of the Assets. There are
no outstanding judgments, orders or decrees issued by any governmental authority
with respect to any of the Assets.
Section 3.25 Disclosure. No representation or warranty given as of the
date hereof by Seller in this Article III contains or will (as of the time so
furnished) contain any untrue statement of a material fact, or omits or will (as
of the time so furnished) omit to state any material fact which is necessary in
order to make the statements contained herein or therein untrue in any material
respect.
ARTICLE IV
ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER
Section 4.1 Name and Likeness. Seller hereby grants Purchaser, for no
additional consideration, the perpetual right to use the name, image, likeness
and voice of any person rendering services in connection with the production of
any Master, Composition or Sound Recording for the purpose of advertising,
publicizing or exploiting the same, including commercial tie-ins.
Section 4.2 Post-Closing Payments. Seller shall be responsible for the
payment of all songwriters' or composers' royalties due to the Composers in
respect of monies received by Seller prior to the Closing Date, and Purchaser
shall be responsible for the payment of such royalties in respect to monies
received by Purchaser after the date of execution of this Agreement. If Seller
shall receive any monies relating to the Compositions after execution of this
Agreement, Seller shall promptly pay over to Purchaser all such monies.
Section 4.3 Inventory. The parties agree that they will negotiate terms
and conditions regarding the disposition by Seller of the Inventory following
the Closing Date.
Section 4.4 Allocation of Purchase Price. The parties agree that the
Purchase Price shall be allocated among the assets as follows: $1,200,000 in
respect of goodwill and $800,000 in respect of general intangibles other than
goodwill. It is the intention of the parties that all of the Assets, including
goodwill and general intangibles other than goodwill, shall be treated as
"Section 197 intangibles" pursuant to Section 197 of the Internal Revenue Code,
as amended. Each of the parties agrees to prepare and timely submit a Form 8594
consistent with the provisions of this Section 4.4.
Section 4.5 Seller's Further Assurances. From time to time after the
date hereof, the Seller shall, at the request of Purchaser, execute and deliver
such additional conveyances, transfers, copyright assignments and other
documents or assurances (including letters of direction to the extent necessary
to claim income or revenue associated with or derived from the Assets at any
time after the Closing Date) as may, in the opinion of Purchaser, be reasonably
required to effectively carry out the intent of this Agreement and to transfer
the Assets to Purchaser, including, without limitation, any Assets consisting in
whole or in part of intellectual property.
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ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
The obligation of Purchaser to purchase and pay Purchase Price on the
Closing Date shall be subject to the fulfillment on or before the Closing Date
of each of the following conditions:
Section 5.1 Representations and Warranties. The representations and
warranties of Seller, or any of them, contained in this Agreement and the other
Operative Documents shall have been true and correct when made and shall be true
and correct as of the Closing Date, except to the extent such representations
and warranties expressly relate to a specific date. Seller shall have duly
performed all of the covenants and agreements to be performed by it hereunder on
or prior to the Closing Date.
Section 5.2 Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement and the other
Operative Documents necessary to the consummation thereof shall be satisfactory
in form and substance to Purchaser's counsel, and Seller shall have delivered to
Purchaser a certificate, dated the Closing Date, signed by the Secretary of
Seller to such effect in form and substance satisfactory to Purchaser's counsel.
Section 5.3 Operative Documents. Seller and each of the other
signatories thereto shall have executed and delivered to Purchaser each of the
Operative Documents.
Section 5.4 Existence and Authority. Seller shall have delivered to
Purchaser a certificate as to the legal existence and good standing of the
Company issued by the Secretary of State or other appropriate official in the
jurisdiction each such entity is organized.
Section 5.5 Required Consents. Any consents or approvals required to be
obtained by Seller from any other person, and any amendments of agreements which
shall be necessary to permit the consummation of the transactions contemplated
hereby on the Closing Date, shall have been obtained and all such consents or
amendments shall be satisfactory in form and substance to Purchaser's counsel.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Survival. The representations and warranties of Seller
contained herein or any of the other Operative Documents shall survive the
Closing and, notwithstanding such Closing, and regardless of any investigation
by or on behalf of Purchaser with respect thereto, shall continue in full force
and effect for the benefit of Purchaser.
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Section 6.2 Obligation of Seller to Indemnify. Seller agrees to
indemnify, defend, and hold harmless Purchaser and its affiliates, controlling
persons, directors, officers, employees, representatives, agents, partners,
joint venturers and assigns from and against any Losses (as defined below)
relating to, based upon, arising out of, or otherwise in respect of any breach
of any representation of any of Seller's warranties, representations or
agreements contained herein or in any of the other Operative Documents or any
actual or threatened claim, demand or action by any third party which is
inconsistent with any of Seller's warranties, representations or agreements
contained herein or in any of the Operative Documents. With respect to third
party claims, Purchaser shall give notice to Seller of any asserted liability
and shall thereafter have the right to pay, compromise or contest any asserted
liability on behalf of and for the account and risk of Seller; provided that (i)
Purchaser will not compromise any asserted liability without obtaining either an
unconditional release of liability of Seller with respect to such matter or
Seller's prior written consent and (ii) Seller may participate, at its own
expense, in any contest by Purchaser of any asserted liability. In any event,
Purchaser shall give Seller prompt written notice of, and Seller shall reimburse
Purchaser on demand for, any Losses to Purchaser.
Section 6.3 Definition of "Losses". As used in this Agreement, the term
"Loss" or "Losses" means any and all claims, actions, suits, proceedings,
demands, assessments, judgments, losses, remedial action requirements, costs,
expenses, deficiencies, damages, fines, penalties, liabilities, or expenses
(including, but not limited to, court costs and reasonable attorneys' fees).
Section 6.4 Right to Set-Off. Seller agrees that Purchaser may set off
any amount of Losses to which it is entitled pursuant to Section 6.2 by reducing
the amounts otherwise payable to Seller under any contract, agreement,
arrangement or otherwise, including, without limitation, this Agreement or any
of the Operative Documents. Neither the exercise of nor the failure to exercise
such right of set-off will constitute an election of remedies or limit Purchaser
in any manner in the enforcement of any other remedies that may be available to
it under this Agreement.
Section 6.5 Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude the assertion by Purchaser of any other rights
or the seeking of any other remedies against Seller.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective
successors and assigns.
Section 7.2 Powers and Rights Not Waived; Remedies Cumulative. No delay
or failure on the part of Purchaser in the exercise of any power or right shall
operate as a waiver thereof; nor shall any single or partial exercise of the
same preclude any other of further exercise thereof, or the exercise of any
other power or right, and the rights and remedies Purchaser are cumulative to
and are not exclusive of any rights or remedies any such holder would otherwise
have, and no waiver or consent shall extend to or affect any obligation or right
not expressly waived or consented to.
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Section 7.3 Persons Directly or Indirectly. Where any provision in this
Agreement refers to action or a prohibition on action by any person, such
provision shall be applicable whether the action in question is taken directly
or indirectly by such person.
Section 7.4 Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect the
validity of any remaining portion, which remaining portion shall remain in force
and effect as if this Agreement had been executed with the invalid or
unenforceable portion thereof eliminated and it is hereby declared the intention
of the parties hereto that they would have executed the remaining portion of
this Agreement without including therein any such part, parts or portion which
may for any reason, be hereafter declared invalid or unenforceable.
Section 7.5 Governing Law; Venue. This Agreement shall be governed by
and construed in accordance with Tennessee law, without regard to its conflict
of law rules. This Agreement and its subject matter have substantial contacts
with Tennessee, and all actions, suits, or other proceedings with respect to
this Agreement shall be brought only in a court of competent jurisdiction
sitting in Davidson County, Tennessee, or in the Federal District Court having
jurisdiction over that County. In any such action, suit, or proceeding, such
court shall have personal jurisdiction of all of the parties hereto, and service
of process upon them under any applicable statutes, laws, and rules shall be
deemed valid and good.
Section 7.6 Captions; Counterparts. The descriptive headings of the
various sections or parts of this Agreement are for convenience only and shall
not affect the meaning or construction of any of the provisions hereof. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 7.7 Notices. All communications provided for hereunder shall be
in writing and shall be delivered personally, or mailed by registered mail, or
by prepaid overnight air courier, or by facsimile communication, in each case
addressed:
If to Purchaser: Idea Entertainment, Inc.
00 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx
with a copy to: Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx
If to Seller: Integrity Incorporated
0000 Xxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxx
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or such other address as Purchaser, the Company or the Shareholders may
designate to the others in writing; provided, however, that a notice sent by
overnight air courier shall only be effective if delivered at a street address
designated for such purpose by such person and a notice sent by facsimile
communication shall only be effective if made by confirmed transmission at a
telephone number designated for such purpose by such person.
Section 7.8 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed and delivered by their duly authorized officers as of
the date first written above.
INTEGRITY INCORPORATED
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
INTEGRITY MUSIC, INC.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
IDEA ENTERTAINMENT, INC.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
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