Exhibit 10.1
ASSET PURCHASE AGREEMENT, dated as of April 1, 2005 (this "Agreement"),
between (i) PRIMEDIA Inc., a Delaware corporation ("PRM"), its wholly-owned
entity PRIMEDIA Digital Video Holdings LLC, a Delaware limited liability company
("PDV") and PRIMEDIA Workplace Learning LP, a Delaware limited partnership
("PWPL"), ("PWPL"; collectively with PRM and PDV, "Seller"), on the one hand;
and (ii) Trinity Learning Corporation, a Utah corporation ("Trinity") and its
wholly-owned subsidiary Trinity Workplace Learning Corporation, a Delaware
corporation ("Purchaser"), on the other hand.
WHEREAS, upon the terms and subject to the conditions set forth herein,
Purchaser desires to purchase and Seller desires to sell certain assets of PWPL,
specifically those assets primarily(i) related to PWPL's (A) Healthcare Group,
(B) Government Services Group (including Homeland One), (C) Industrial Services
Group, (D) shared services group based in Carrolton, Texas, and (E) all other
assets of PWPL excluding only those assets primarily related to the operations
of PWPL Financial Services Group (which operates under the "BTCC" name) and/or
PWPL's Interactive Medical Network business (which operates under the "IMN"
name).; and (ii) all of the assets owned by PDV ((i) through (ii) collectively,
the "Business"); and
WHEREAS, upon the terms and subject to the conditions set forth herein,
Purchaser desires to assume and Seller desires to transfer certain liabilities
relating to the Business;
NOW, THEREFORE, in consideration of the mutual covenants and the respective
representations and warranties contained herein, the parties hereby agree as
follows:
ARTICLE I. PURCHASE AND SALE OF THE ASSETS.
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1.01 Assets Being Sold. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date (as defined in Section 3.01), Seller shall
sell, convey, assign and transfer to Purchaser, and Purchaser shall purchase and
acquire from Seller, all of Seller's right, title and interest in and to all of
the following assets of Seller comprising the Business, other than the Excluded
Assets (as defined in Section 1.02), all as and to the extent they shall exist
on the Closing Date (such assets collectively referred to herein as the
"Assets"):
(a) the content of the courses offered by the Business (the "Courses") and
all tangible embodiments thereof, including, without limitation, the library of
master tapes, the inventory of video tapes, DVDs and CD-ROMs containing same and
all related manuals and training materials;
(b) all lists (whether owned, leased or licensed by Seller), documents and
records (in both printed form and computer media) of Seller relating to past,
present and prospective customers of the Business;
(c) all promotional materials used in connection with the marketing,
advertising and sale of the Courses, including any and all telemarketing scripts
used in the Business;
(d) all imprints, titles, names, trade names, trademarks and service marks
owned by Seller and used in the Business, including, without limitation, the
Marks (as defined in Section 4.09), and all registrations and applications for
registration of each of the foregoing, but excluding in all cases the PRIMEDIA
name and any variations thereof and derivations therefrom;
(e) all patents and patent applications owned by Seller and used in the
Business, including, without limitation, the Patents (as defined in Section
4.09);
(f) all copyrights, copyright registrations and applications therefor owned
by Seller and relating to the content of the Courses;
(g) all files and accounting records of Seller, including data stored
electronically, to the extent relating solely to the Business;
(h) all accounts receivable due Seller in connection with the Business and
all prepaid expenses related to the Business, including all those accounts
receivable and prepaid expenses as they exist on the Closing Date determined in
a manner consistent with the Statement of Assets and Liabilities (as defined in
Section 4.08);
(i) all furniture, fixtures, equipment, tangible property and other fixed
assets located at the Business' leased premises at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (such premises, the "Texas Property"), but excluding the
furniture, fixtures, equipment, tangible property or other fixed assets listed
on Schedule 1.02(g) (the "Transferred Equipment");
(j) all software, software systems, databases and database systems relating
to the Business, but excluding any software referenced on Schedule 1.02(e);
(k) subject to Section 6.02, the Assumed Contracts (as defined in Section
1.03), including all of Seller's rights and benefits in existence on the Closing
Date or arising after the Closing Date under the Assumed Contracts;
(l) all of Seller's right, title and interest in and to the Domain Names
(as defined in Section 4.09) and all registrations thereof;
(m) all of the goodwill and going concern value relating solely to the
Business; and
(n) except as provided in Section 1.02, any and all other assets, real or
personal, tangible or intangible, that are not listed above and are used
primarily in the Business, including all assets owned by PDV.
1.02 Excluded Assets. Purchaser acknowledges and agrees that the "Assets"
shall not include, and Seller shall retain all right, title and interest in and
to, any and all of the following (collectively, the "Excluded Assets"):
(a) Seller's corporate books and records of internal corporate proceedings,
tax records, work papers and books and records;
(b) all rights and interests in and to the PRIMEDIA name and any variations
thereof and derivations therefrom;
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(c) all cash and cash equivalents held by or on behalf of Seller and all of
Seller's bank accounts;
(d) all files, accounting records and internal reports relating to the
business activities of Seller (but not relating solely to the Business);
provided, however, that Purchaser may obtain copies of all such files, records
and reports to the extent they are directly related to the Business;
(e) all software, software systems, databases and database systems listed
on Schedule 1.02(e);
(f) all hardware and equipment, whether owned, leased or licensed by Seller
not located at the Texas Property;
(g) all hardware and equipment, whether owned, leased or licensed by Seller
located at the Texas Property and listed on Schedule 1.02(g);
(h) all insurance policies maintained by Seller;
(i) any and all prepaid Taxes and Income Tax refunds of Seller, except to
the extent relating solely to the Business for any period on or after the
Closing Date; provided that, for purposes of this Agreement, (i) "Tax" or
"Taxes" shall mean all federal, state, local and foreign income, profits,
franchise, gross receipts, payroll, sales, employment, use, property, excise and
withholding taxes, duties and assessments, with all interest, penalties and
additions imposed with respect to such amounts, and (ii) "Income Taxes" shall
mean all Taxes imposed on or measured by net income or gross profits or gross
receipts (but excluding sales, use, value added and property Taxes), together
with all interest, penalties and additions imposed with respect to such amounts;
and
(j) any and all other assets of Seller of whatever kind or nature not used
primarily in the Business, including without limitation those assets primarily
related to BTCC and IMN.
1.03 Assumed Liabilities. On the Closing Date, Purchaser agrees to assume
and pay, perform, comply with and discharge or otherwise satisfy, as and when
due, the following liabilities and obligations of Seller (the "Assumed
Liabilities"):
(a) all liabilities reflected on the Closing Date Statement (as defined in
Section 2.02(a) below);
(b) all deferred revenue obligations of Seller solely related to the
Business as of the Closing Date;
(c) subject to Section 6.02, all obligations of Seller relating to the
Business under (i) all Material Contracts (as defined in Section 4.10(a)),
including without limitation all obligations under (w) PWPL's lease for the
Texas Property (the "Lease"), (x) PWPL's Transponder Lease (the "Transponder
Lease"), (y) PWPL's services agreement with IMN and (z) PWPL's services
agreement with BTCC; and (ii) all such other contracts and agreements related
solely to the Business that are not required to be scheduled pursuant to Section
4.10(a) (all of the contracts and agreements described in this Section 1.03(c),
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collectively, the "Assumed Contracts"), but in any case only to the extent that
such obligations (A) are to be performed on or after the Closing Date or
constitute warranty, repair or support obligations, and (B) arise under the
terms of such Assumed Contracts (but shall not include any obligations to be
performed prior to the Closing Date or any liabilities for any non-performance
or breach prior to the Closing Date, except that Purchaser will assume and
perform all warranty, repair and support obligations arising under the terms of
the Assumed Contracts);
(d) all expenses and obligations in connection with the Business Employees
(as defined in Section 6.03(a)), but only to the extent set forth in Section
6.03;
(e) certain obligations and liabilities of Seller relating to the dispute
set forth on Schedule 4.06 entitled "Argus 1 systems Corporation v. PWPL", but
only to the extent set forth in Section 6.12; and
(f) all other obligations and liabilities, regardless of the nature or
amount, arising out of or relating to the conduct of the Business, or the use of
any of the Assets, on or after the Closing Date.
1.04 Excluded Liabilities. Purchaser is not assuming (a) any liabilities in
respect of any Income Taxes, (b) any liabilities for Taxes relating to the
Business, including those reflected under the captions "Accrued Taxes" and
"State Tax Payable" on the Statement of Assets and Liabilities (as defined in
Section 4.08 below), (c) any accounts payable of Seller relating to the
Business, including those reflected under the caption "Accounts Payable - Trade"
on the Statement of Assets and Liabilities, (d) any liability of Seller for
legal, accounting or broker's fees incurred in connection with the negotiation
of this Agreement or the consummation of the transactions contemplated hereby,
(e) any liability owing by Seller to any shareholder or former shareholder of
Seller or any affiliate of Seller, (f) any obligations in respect of Seller's
bank accounts, (g) any Sale Retention Arrangements (as defined in Section
4.13(g)), (h) any expenses and obligations in connection with employees of
Seller not included as Business Employees, (i) certain obligations and
liabilities of Seller relating to the disputes set forth on Schedule 4.06
entitled "EEOC charge in Dallas District Office brought by ▇▇▇▇ ▇▇▇▇▇▇▇" and
"▇▇▇▇ ▇▇▇▇▇▇▇ v. PWPL", but only to the extent set forth in Section 6.12, (j)
all expenses and obligations in connection with, or relating to, the disputes
set forth on Schedule 1.04(j), or (k) any claims, liabilities or obligations
relating to the Excluded Assets. Such liabilities set forth in the preceding
sentence and any additional liabilities of Seller, other than Assumed
Liabilities, are herein referred to as the "Excluded Liabilities."
ARTICLE II. PURCHASE PRICE AND PAYMENT.
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2.01 Purchase Price. (a) In consideration of the sale, transfer, conveyance
and assignment of the Assets by Seller to Purchaser, Purchaser agrees (i) on the
Closing Date, to assume the Assumed Liabilities in accordance with Section 1.03
(the "Purchase Price") and (ii) to pay the amount, if any, required to be paid
to Seller pursuant to Section 2.02(f).
2.02 Working Capital Adjustment.
(a) Definitions. For the purposes of this Agreement, the following terms
shall have the following respective meanings:
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(i) "Closing Date Statement" shall mean the final statement of Closing
Date Assets and Closing Date Liabilities.
(ii) "Closing Date Assets" shall mean the net amount of those assets
of the Business on the Closing Date under the captions "Net Accounts
Receivable-Trade," "Inventories" and "Prepaid Expenses," as determined in a
manner consistent with the Statement of Assets and Liabilities (as defined in
Section 4.08 below), except that (A) all intercompany amounts shall be excluded
and (B) no amounts shall be included in respect of prepaid insurance.
(iii) "Closing Date Liabilities" shall mean the aggregate amount of
those liabilities of the Business on the Closing Date under the captions
"Accrued Payroll and Related," "Accrued Royalties," "Deferred Revenue" and
"Other Current Liabilities," as determined in a manner consistent with the
Statement of Assets and Liabilities, in each case to the extent incurred solely
by the Business, except that (A) all intercompany amounts shall be excluded and
(B) no amounts shall be included in respect of Excluded Liabilities.
(iv) "Working Capital Amount" shall mean the Closing Date Assets less
the Closing Date Liabilities. The Working Capital Amount can be represented by a
positive or negative number.
(v) "Target Working Capital Amount" shall mean $(4,000,000) (i.e.,
negative $4,000,000).
(vi) "Deficiency" shall mean the amount, if any, by which the Working
Capital Amount is less than the Target Working Capital Amount, as set forth on
the Closing Date Statement as modified as a result of the resolution of any
Disputed Items (as defined in Section 2.02(c) below).
(vii) "Excess" shall mean the amount, if any, by which the Working
Capital Amount exceeds the Target Working Capital Amount, as set forth on the
Closing Date Statement as modified as a result of the resolution of any Disputed
Items.
(b) Effect of Deficiency/Excess. The Purchase Price shall be reduced
dollar-for-dollar by the amount of the Deficiency, if any, or increased
dollar-for-dollar by the amount of the Excess, if any, with payment in respect
of any such adjustment of the Purchase Price to be made by the applicable party
in accordance with Sections 2.02(e) and (f) below.
(c) Delivery of Closing Date Balance Sheet:
(i) No later than 90 days after the Closing Date, Purchaser shall
deliver to Seller the Closing Date Statement setting forth the Closing Date
Assets and Closing Date Liabilities.
(ii) Seller shall have 45 days from its receipt of such statement to
notify Purchaser in writing of any objections to any item or items on the
Closing Date Statement (an "Objection Notice"). Any Objection Notice shall
specify the item or items in dispute (a "Disputed Item" or "Disputed Items").
Any Disputed Item shall be resolved in the manner set forth in Section 2.02(d)
below.
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(iii) If (A) Seller does not deliver an Objection Notice within 45
days of its receipt of the Closing Date Statement, (B) Seller acknowledges in
writing that the Closing Date Statement is accurate or (C) Purchaser and Seller
resolve all Disputed Items in accordance with Section 2.02(d) below, then the
Closing Date Statement shall be final, binding and conclusive on all parties.
(d) Arbitration. If Purchaser and Seller shall be unable to resolve any
Disputed Items within 30 days after delivery of an Objection Notice from Seller
to Purchaser, then Seller's independent accounting representative, Deloitte &
Touche LLP ("D&T"), and ▇▇▇▇▇▇▇▇, Bierwolf & ▇▇▇▇▇▇, LLC., Purchaser's
independent accounting representative ("CBN"), shall endeavor in good faith to
resolve any Disputed Item(s). Either party may change its representative to any
"big four" accounting firm other than D&T or CBN at any time prior to the 30th
day after an Objection Notice has been delivered, by notice in writing to the
other party, in which event the applicable references in this Agreement shall be
to such substitute representative. In the event that D&T and CBN are unable to
resolve the Disputed Item(s) within 30 days, D&T and CBN together shall, within
10 business days thereafter, appoint a representative from a "big four"
accounting firm (other than D&T or CBN) to arbitrate the dispute (the
"Arbitrator"). Seller and Purchaser shall, within the next 20 days thereafter,
present their positions with respect to the Disputed Item(s) to the Arbitrator,
together with such other materials as the Arbitrator deems appropriate. The
Arbitrator shall, after the submission of the evidentiary materials, submit its
written decision on each Disputed Item to Seller and Purchaser. Any
determination by the Arbitrator with respect to any Disputed Item shall be
final, binding and conclusive on each party to this Agreement. Except as
specifically set forth to the contrary in this Section 2.02(d) or specifically
agreed to by the parties in writing, the Arbitrator shall comply with, and the
arbitration shall be conducted in New York, New York in accordance with, the
commercial arbitration rules of the American Arbitration Association ("AAA") as
in effect for commercial arbitrations conducted in Manhattan by the AAA. Seller
and Purchaser agree that the cost of the Arbitrator shall be borne one-half by
Seller and one-half by Purchaser.
(e) Resolution of Deficiency/Excess. If it is finally determined pursuant
to the provisions of this Section 2.02 that there is a Deficiency, then within
10 days after all Disputed Items with respect thereto have been resolved, Seller
shall pay to Purchaser the amount of the Deficiency. If it is finally determined
pursuant to the provisions of this Section 2.02 that there is an Excess, then
within 10 days after all Disputed Items with respect thereto have been resolved,
Purchaser shall pay to Seller the amount of the Excess.
(f) Payment of Deficiency or Excess. Any payment of a Deficiency or an
Excess shall be made by wire transfer of immediately available funds to the
account or accounts designated by Purchaser or Seller, as the case may be,
within 10 days after the final determination thereof and shall be accompanied by
a payment of simple interest thereon calculated at the annual rate of 4%
(assuming a 360 day year) from the Closing Date to the actual date of payment.
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2.03 Allocation of Purchase Price. The parties to this Agreement agree to
comply with the allocation rules under Section 1060 of the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated thereunder (the
"Code"). The parties recognize that the Purchase Price does not include
Purchaser's acquisition expenses or Seller's disposition expenses and that
Purchaser and Seller shall allocate such expenses appropriately. Seller and
Purchaser shall use good-faith efforts to establish the fair market values of
the Assets and allocation of the Purchase Price by mutual agreement of the
parties as soon as possible after the date hereof. It is the intention of the
parties that such allocation will be arrived at by arm's-length negotiation and
in the judgment of the parties properly reflect the fair market value of the
Assets transferred pursuant to this Agreement and consistent with the Code.
Purchaser and Seller agree to file their respective federal Income Tax returns
and other Tax returns (including any forms or reports required to be filed
pursuant to Section 1060 of the Code, the regulations promulgated thereunder or
any provisions of state, local and foreign law ("1060 Forms")) reflecting such
allocation in accordance with the mutual determination of the parties made in
accordance with the foregoing, and to take no position contrary thereto unless
required to do so pursuant to a "determination" as defined in Section 1313(a) of
the Code. The parties further agree to cooperate in the preparation of any 1060
Forms and to file such 1060 Forms in the manner required by applicable law.
ARTICLE III. CLOSING.
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3.01 Date of Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Seller at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, simultaneously with the execution of this
Agreement by the parties hereto. The date on which the Closing takes place is
the date of this Agreement (the "Closing Date"). The effective time of the
Closing for purposes of this Agreement, including any calculations to be made as
of the Closing Date hereunder, shall be 12:01a.m., New York City time, on the
Closing Date.
3.02 Deliveries by Seller. At the Closing, Seller shall deliver to
Purchaser (a) an executed ▇▇▇▇ of sale, assignment and assumption agreement,
dated the Closing Date and substantially in the form of Exhibit A to this
Agreement, (b) an executed trademark and domain name assignment, dated the
Closing Date and substantially in the form of Exhibit B to this Agreement (the
"Trademark Assignment"), (c) an executed copyright assignment, dated the Closing
Date and substantially in the form of Exhibit C to this Agreement, (d) an
executed patent assignment agreement, dated the Closing Date and substantially
in the form of Exhibit D to this Agreement, (e) an executed Transition Services
Agreement, dated the Closing Date and substantially in the form of Exhibit E to
this Agreement (the "Transition Agreement"), (f) an executed IMN Transition
Services Agreement, dated the Closing Date and substantially in the form of
Exhibit F to this Agreement (the "IMN TSA"), and (g) a copy of resolutions
adopted by the general partner of PWPL and the member of PDV authorizing the
execution, delivery and performance of this Agreement and the other agreements
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and instruments referred to in this Agreement that Seller is executing and
delivering, and a certificate of the secretary or assistant secretary of PWPL
and PDV, dated the Closing Date, stating that such resolutions were duly adopted
and are in full force and effect at such date.
3.03 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Seller (a) an executed ▇▇▇▇ of sale, assignment and assumption agreement, dated
the Closing Date and substantially in the form of Exhibit A to this Agreement,
(b) an executed Guaranty, dated the Closing Date, executed by SBI USA LLC and
substantially in the form of Exhibit G to this Agreement (the "SBI Guarantee"),
which SBI Guarantee is being executed to secure performance under Building Lease
and Transponder Lease (as those terms are defined in the SBI Guarantee, (c) the
IMN TSA, and (d) a copy of resolutions adopted by the Board of Directors of
Purchaser authorizing the execution, delivery and performance of this Agreement
and the other agreements and instruments referred to in this Agreement that
Purchaser is executing and delivering, and a certificate of the secretary or
assistant secretary of Purchaser, dated the Closing Date, stating that such
resolutions were duly adopted and are in full force and effect at such date.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER.
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Seller represents and warrants to Purchaser that each of the statements
contained in this Article IV is true and correct on and as of the Closing Date:
4.01 Organization. PRM is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the full
corporate power and authority to enter into this Agreement and the other
agreements and instruments referred to in this Agreement that Seller is
executing and delivering ("Seller's Additional Agreements") and to carry out the
transactions contemplated hereby and thereby. PWPL is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the full company power and authority to enter into this
Agreement and Seller's Additional Agreements and to carry out the transactions
contemplated hereby and thereby. PDV is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the full company power and authority to enter into this
Agreement and Seller's Additional Agreements and to carry out the transactions
contemplated hereby and thereby.
4.02 Authorization of Agreement. The execution, delivery and performance by
Seller of this Agreement and Seller's Additional Agreements, and the
consummation by Seller of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary company action of Seller. This Agreement
and Seller's Additional Agreements have been duly executed and delivered by
Seller, and constitute legal, valid and binding obligations of Seller,
enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the rights of creditors
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and by an
implied covenant of good faith and fair dealing.
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4.03 No Conflicts. Except as set forth on Schedule 4.03 attached hereto,
neither the execution, delivery or performance of this Agreement or any of
Seller's Additional Agreements by Seller, nor the consummation by Seller of the
transactions contemplated hereby or thereby, nor compliance by Seller with the
terms and provisions hereof or thereof, will (i) conflict with the Certificate
of Incorporation or By-Laws of PRM, the limited partnership agreement of PWPL or
the limited liability company operating agreement of PDV, (ii) conflict with, or
result in the breach or termination of, or constitute a default (or with notice
or lapse of time or both, constitute a default) under or result in the
termination or suspension of, or accelerate the performance required by the
terms, conditions or provisions of, any Assumed Contract; (iii) constitute a
violation by Seller of any law or statute or any judgment, ruling, order, writ,
injunction, decree, rule or regulation of any court or governmental authority
applicable to Seller; or (iv) result in the creation of any mortgage, pledge,
security interest, claim, lien, charge or encumbrance of any kind ("Lien") upon
any of the Assets; except, in the cases of clauses (ii) and (iii) above, for
such conflicts, defaults, breaches, terminations, suspensions or acceleration of
performance which, taken as a whole, would not be reasonably likely to have a
Material Adverse Effect. A "Material Adverse Effect" shall mean a material
adverse effect on the business, assets or condition (financial or otherwise) of
the Business and/or Assets, taken as a whole, excluding any such effects (i)
arising out of or resulting from changes in the general economy or general
market conditions or (ii) on the prospects of the Business arising out of or
resulting from entering into this Agreement, the announcement thereof or the
consummation of the transactions contemplated hereby.
4.04 No Consents. No order, permission, consent, approval, license,
authorization, registration, or validation of, or filing with, or notice to, or
exemption by, any governmental authority, commission, board, or agency is
required to authorize, or is required in connection with, the execution,
delivery or performance by Seller of this Agreement or any of Seller's
Additional Agreements, except as would not be reasonably likely to have a
Material Adverse Effect.
4.05 Compliance with Laws. (a) Seller is in compliance with all applicable
statutes, laws, rules, regulations, orders and ordinances of any governmental
authority, as the same apply to the Assets, except such as would not be
reasonably likely to have a Material Adverse Effect;
(b) the Assets and their uses comply with all applicable requirements of
laws and court orders, except where a failure to comply would not result in a
Material Adverse Effect; and
(c) to the knowledge of Seller, no legislative or regulatory proposal has
been adopted or is pending which could be reasonably likely to have a Material
Adverse Effect.
4.06 Litigation. Except as set forth on Schedule 4.06, there are no
actions, suits, inquiries, proceedings or investigations pending or, to Seller's
knowledge, threatened in writing before any court or governmental or
administrative body or agency either (a) relating to the Assets, and which, if
decided adversely to Seller, would have a Material Adverse Effect, or (b)
against Seller relating to the transactions contemplated by this Agreement or
Seller's Additional Agreements.
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4.07 No Brokers. Seller has not incurred any obligation or liability,
contingent or otherwise, for brokers' or finders' fees or commissions in
connection with the transactions contemplated by this Agreement other than fees
to be paid by Seller.
4.08 Financial Statements. Attached hereto as Schedule 4.08(a) are: (a)
unaudited statements of income for the Business for the years ended December 31,
2003 and December 31, 2004 (collectively, the "Income Statements"); and (b) an
unaudited statement of selected assets and liabilities of the Business as at
December 31, 2004 (the "Statement of Assets and Liabilities"; together with the
Income Statements, the "Financial Statements"). Except as set forth on Schedule
4.08(b) hereto, the Financial Statements have been prepared from books and
records maintained by the Seller, consistent with its past practices and in
accordance with generally accepted accounting principles as in effect in the
United States from time to time, consistently applied, and fairly present, in
all material respects, the financial condition of the Business for the periods
and as of the dates indicated and the results of operations for the periods then
ended, and are consistent with PRM's audited financial statements for the same
periods.
4.09 Intellectual Property. Schedule 4.09 attached hereto contains an
accurate and complete description of (a) all patents held by, used by, or
necessary for the conduct of the Business and all reissues, divisions,
continuations, continuations in part and extensions thereof and all pending
patent applications by the Business, including for each such patent the serial
or patent number, country, filing and expiration date and title (the "Patents");
(b) all registered United States federal trademarks owned by Seller and used in
connection with the Business and all existing and pending applications therefor
(the "Marks"); (c) all registered domain names owned by Seller and used in
connection with the Business (the "Domain Names"); (d) all registered copyrights
of, used by, or necessary for the conduct of the Business and applications by
the Business for registration of copyrights, including the registration number,
country and filing and expiration date of each such copyright (the
"Copyrights"); and (e) all trade names and common law marks of, used by, or
necessary for the conduct of the Business. To the knowledge of Seller, the
Patents, Marks, Copyrights and the Domain Names do not infringe on any
trademarks, patents, copyrights or any other rights of any person to such an
extent that any claim based on such infringement, if decided adversely to the
Seller, would be reasonably likely to have a Material Adverse Effect. Except as
set forth on Schedule 4.09, none of the Patents or Marks have been abandoned by
the Seller and none of the Patents, Marks or Copyrights is subject to any
outstanding order, decree, judgment, stipulation, injunction or written
restriction or agreement restricting the scope of use thereof, in any such case,
which would be reasonably likely to have a Material Adverse Effect. Except as
set forth on Schedule 4.09, to the knowledge of Seller, there are no material
infringing or diluting uses of the Patents or Marks. Seller has not granted any
material license (other than such licenses and permissions for one-time or
limited use granted in the ordinary course of business) to any person or entity
to use any of the Marks except for the license agreements listed on Schedule
4.10. None of the Patents, Marks, Domain Names or Copyrights are owned by a
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third party and licensed to Seller for use except as provided in license
agreements listed on Schedule 4.10 (such contracts, the "Third Party Licensing
Agreements"). The Third Party Licensing Agreements constitute all agreements
pursuant to which Seller is authorized to use or otherwise exploit such Patents,
Marks, Domain Names and Copyrights owned by a third party (such third party
intellectual property, the "Third Party Proprietary Assets"). To the knowledge
of Seller, Seller has legally enforceable rights to use all Third-Party
Proprietary Assets in the manner in which such Third Party Proprietary Assets
have been (and are being) used in connection with the Business.
4.10 Contracts and Commitments. (a) Schedule 4.10 attached hereto lists:
(i) all contracts relating solely to the Business that require the expenditure
or receipt of more than $100,000 by Seller in any consecutive twelve-month
period after the date hereof, other than those terminable on not more than 90
days' notice; (ii) all agreements governing long-term indebtedness or any
guarantee thereof, in each case, to which Seller is a party and which relate
solely to the Business; (iii) all licensing agreements with third parties
relating to the Business, the Patents, the Marks, the Domain Names or the
Copyrights to which Seller is a party and which require the expenditure of more
than $50,000, including Third Party Licensing Agreements; (iv) all real and
material personal property leases to which Seller is a party and which relate
solely to the Business; (v) all loans or advances to, or investment in, any
person or an agreement, contract or commitment relating to the making of any
such loan, advance or investment with third parties relating solely to the
Business in excess of $25,000; and (vi) any agreement, contract, or commitment
with third parties limiting the freedom of the Business to engage in any line of
business or to compete with any person (collectively, the "Material Contracts").
(b) Seller has not obtained any letter of credit for, or given any
irrevocable power of attorney to (in each case, relating to the Business), any
person, firm or corporation for any purpose whatsoever, in each case, that is
outstanding or in effect on the Closing Date.
(c) Seller is not in default, nor to Seller's knowledge is there any basis
for any claim of default, under any of the Material Contracts, except such claim
or default as would not be reasonably likely to have a Material Adverse Effect.
To the knowledge of the Seller, all of the Material Contracts are in full force
and effect and are valid and enforceable against the other party or parties to
the extent relating to the Business.
(d) Seller heretofore has delivered or made available to Purchaser true and
correct copies of all of the Material Contracts.
4.11 Employee Benefits. (a) Schedule 4.11 attached hereto lists:
(i) all severance, written employment, material consulting and
employee confidentiality agreements or other material agreements protecting
proprietary information with, and all collective bargaining or other labor
agreements covering, any Business Employee (as defined in Section 6.03);
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(ii) each "Employee Benefit Plan" as such term is defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is covered by ERISA and that is maintained for the benefit of
any Business Employee (each, a "Plan"; collectively, the "Plans"); and
(iii) each written plan or arrangement not subject to ERISA and
maintained for the benefit of any Business Employee which provides for
retirement benefits, termination bonuses, deferred compensation, bonuses, stock
options, employee insurance coverage or any similar compensation or welfare
benefit plan (in each case, other than any agreement providing for any payment
by Seller to any Business Employee in connection with the sale of the Assets)
(each, an "Employee Benefit Program"; collectively, the "Employee Benefit
Programs").
(b) Each Plan and Employee Benefit Program has been maintained and
administered at all times in material compliance with all applicable laws, rules
and regulations, including but not limited to ERISA and the Code, applicable to
such Plan and Employee Benefit Program, except for such non-compliance as would
not have a Material Adverse Effect.
(c) No "Reportable Event" (as such term is used in Section 4043 of ERISA),
"Prohibited Transaction" (as such term is used in Section 406 of ERISA or
Section 4975 of the Code) or "Accumulated Funded Deficiency" (as such term is
used in Section 412 of ERISA or Section 4971 of the Code) has occurred with
respect to any Plan, and no condition or set of circumstances exists which could
result in a "Reportable Event" except such as would not have a Material Adverse
Effect.
(d) Complete and correct copies of all Plans and Employee Benefit Programs
listed on Schedule 4.11 have been delivered or made available to Purchaser.
4.12 Transactions with Affiliates. Except as described on Schedule 4.12 or
elsewhere herein there are no services currently being provided to the Business
by Seller or any affiliate thereof that are material to the Business.
4.13 Absence of Certain Changes. Since December 31, 2004, in connection
with the Business, Seller has not, except in the ordinary course of business and
except as set forth on Schedule 4.13 hereto:
(a) incurred any obligations or liabilities (whether absolute, accrued or
contingent and whether due or to become due) that are material to the Business,
taken as a whole;
(b) written off as uncollectible any notes or accounts receivable or any
portion thereof that are material to the Business, taken as a whole;
(c) sold, transferred or leased any properties or assets, whether real,
personal, fixed, tangible or intangible, that are material to the Business,
taken as a whole;
(d) made any capital expenditures or commitments for capital assets that
are material to the Business, taken as a whole;
(e) made any change in any accounting practice, principle, policy or
method, except as required by law, or a change in accounting standards that are
material to the Business, taken as a whole;
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(f) reduced insurance coverage in any manner that is material to the
Business, taken as a whole;
(g) (i) entered into any material written employment, deferred compensation
or other similar agreement (or any amendment to any such existing agreement)
relating to the Business, other than any agreement, plan or arrangement set
forth on a Schedule to this Agreement, (ii) amended any of the Plans described
on Schedule 4.11 relating to the Business or (iii) granted any general increase
in compensation, bonus or other benefits payable to any Business Employee;
(h) mortgaged, pledged or subjected to lien, restriction or any other
encumbrance any of the property, business or assets, tangible or intangible, of
the Business so as to create a Material Adverse Effect;
(j) suffered any damage, destruction or loss (whether or not covered by
insurance) which has had or could have a Material Adverse Effect; or
(j) agreed, whether in writing or otherwise, to take any action referred to
in this Section 4.13 in the future.
4.14 Title to and Condition and Sufficiency of the Assets. Seller has, and
is transferring to Purchaser at the Closing, good and marketable title to all of
the Assets, and a valid leasehold or license interest in all of the Assets
leased or licensed by Seller, in each case free and clear of all Liens except
(i) Liens for Taxes not yet due and payable, (ii) any statutory Lien which
secures a payment not yet due that arises, and is customarily discharged, in the
ordinary course of Seller's business, and (iii) any other imperfections in
Seller's title to, or minor encumbrances on, any of its assets or properties
that, individually and in the aggregate, do not and could not reasonably be
expected materially to impair the value of, or interfere with the use by
Purchaser from and after the Closing Date of, any of the Assets. The tangible
Assets are in good operating condition (normal wear and tear excepted) and are
suitable for the uses for which they are intended. The instruments of conveyance
and transfer to be executed by Seller and delivered to Purchaser at the Closing
will be valid in accordance with their terms and effective to assign, transfer
and convey to Purchaser at the Closing all of the Assets. The Assets will
collectively constitute (assuming all Assumed Contracts are assigned to
Purchaser at the Closing without the effect of Section 6.02, and subject to the
provisions of the Transition Agreement and the affiliate transactions listed on
Schedule 4.12, and excluding PRIMEDIA name and any variations thereof and
derivations therefrom), as of the Closing Date, all of the properties, rights,
interest and other tangible and intangible assets necessary to enable Purchaser,
immediately following the Closing, to conduct the Business and comply with,
perform under and receive the benefits of the Assumed Contracts.
4.15 Accounts Receivable. The accounts receivable appearing on the
Financial Statements and all accounts receivable created since that date through
the Closing Date represent and will represent valid obligations owing to the
Business.
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4.16 Environmental Matters. Except as set forth in Schedule 4.16:
(a) to the knowledge of Seller, the operations of the Business materially
comply with all requirements of laws derived from or relating to all federal,
state and local laws or regulations relating to or addressing the environment,
health or safety, including but not limited to CERCLA, OSHA and RCRA and any
state equivalent thereof ("Environmental Law");
(b) to the knowledge of Seller, the Seller is not subject to any on-going
investigation by, order from or agreement with any person respecting (i) any
Environmental Law, (ii) any actions required to: (A) clean up, remove, treat or
in any other way address contaminants in the indoor or outdoor environment; (B)
prevent the release or threatened release or minimize the further release of
contaminants; or (C) investigate and determine if a remedial response is needed
and to design such a response and post-remedial investigation, monitoring,
operation and maintenance and care or (iii) any claim of losses and expenses
arising from the release or threatened release of a contaminant into the
environment;
(c) Seller is not subject to any judicial or administrative proceeding,
order, judgment, decree or settlement alleging or addressing a violation of or
liability under any Environmental Law;
(d) to the knowledge of Seller, there is not now on or in any property
owned or operated by Seller any polychlorinated biphenyls (PCB) used in
pigments, hydraulic oils, electrical transformers or other equipment;
(e) Seller has not received any notice or claim to the effect that it or
any prior owner of the Assets is or may be liable to any person as a result of
the release or threatened release of a contaminant;
(f) to the knowledge of Seller, no encumbrance in favor of any governmental
body for (i) any liability under any Environmental Law, or (ii) damages arising
from, or costs incurred by such governmental body in response to, a release or
threatened release of a contaminant into the environment, has attached to any of
the Assets; and
(g) to the knowledge of Seller, any asbestos-containing material which is
on or part of any property owned or operated by Seller is in good repair
according to the current standards and practices governing such material, and
its presence or condition does not violate any currently applicable
Environmental Law.
4.17 Customers and Suppliers. Except as set forth in Schedule 4.17, since
January 1, 2005, no material supplier or material customer of the Business has
canceled or otherwise terminated, or made any written threat to Seller to cancel
or otherwise terminate, for any reason, including the consummation of the
transactions contemplated hereby, its relationship with the Business. Except as
set forth in Schedule 4.17, to Seller's knowledge, no such supplier or customer
intends to cancel or otherwise terminate its relationship with the Business or
to decrease materially its services or supplies to the Business or its usage of
the services or products of the Business, as the case may be.
4.18 Government Contracts.
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(a) Definitions. For purposes of this Section 4.18, the following terms
shall have the following respective meanings:
(i) "Government Contact" shall mean any contract, basic ordering
agreement, letter contract, purchase order, delivery order, change order,
arrangement or other commitment of any kind, between: (1) the Seller and a
Governmental Body (a "Prime Government Contract"), (2) the Seller and any prime
contractor to a Governmental Body (a "Prime Government Contractor") with respect
to a Prime Government Contract of such Prime Government Contractor, or (3) the
Seller and any direct subcontractor to a Prime Government Contractor with
respect to a Prime Government Contract. "Government Contract" shall also include
any "Contractor team arrangement" as defined in Federal Acquisition Regulation
Section 9.601.
(ii) "Government Contract Bid" shall mean any proposal, submission,
response to a request for proposal or invitation for bid, or other document or
collection of documented transmitted to Governmental Body for the purpose of
being considered for the award of a Government Contract.
(iii) "Governmental Body" shall mean any department of a local, state,
or federal government activity that is responsible for the solicitation, award,
administration, review, or investigation of a Government Contract.
(b) Government Contracts.
(i) The Seller represents that it is performing all Government
Contracts in compliance with all applicable laws, regulations, executive orders,
and contract-specific requirements, except for such non-compliance as would not
be reasonably likely to have a Material Adverse Effect. This representation
includes both performance and compliance obligations agreed to by the Seller in
its Government Contracts, whether those obligations are expressly stated in
Seller's Government Contracts or incorporated into those Government Contracts by
reference to the Federal Acquisition Regulation ("FAR"), Agency supplements to
the FAR, or other Agency acquisition regulations. This representation includes
all Government Contracts entered into or performed by the Seller since its
inception, and all active or expired Government Contract Bids.
(ii) The Seller represents that it is not in default in the
performance of any Government Contracts, except for such default as would not be
reasonably likely to have a Material Adverse Effect, and no termination for
convenience, termination for default, cure notice or show cause notice has been
issued to the Seller with respect to any Government Contract, nor has the Seller
nor any employee of the Seller is (or has been at any time since inception of
the Seller) suspended or debarred from doing business with the United States
Government or has been declared non-responsible or ineligible for United States
Government contracting.
(iii) Except as disclosed on the Financial Statements, during the last
five (5) years, the Seller has not made any voluntary disclosure in writing to
any Governmental Body with respect to any material alleged irregularity,
misstatement or omission arising under or relating to a Government Contract or
Government Contract Bid, has not received any official notice that it is or was
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being specifically audited (other than routine DCAA or similar audits) or
investigated by the Government Accountability Office, any state or federal
agency Inspector General, the contracting officer with respect to any Government
Contract or the Department of Justice (including any United States Attorney),
and has not received any written notice of any outstanding claims against it
arising under or relating to any Government Contract or any Prior Government
Contract which have not been settled.
(iv) The Seller represents that no Government Contracts have funding
limits which have been exceeded or which, in the reasonable judgment of the
Seller's senior management based upon existing facts and the Seller's current
standards and practices, are likely to be exceeded in order to complete the
contract work. In the reasonable judgment of the Seller's senior management
based upon existing facts and the Seller's current standards and practices, no
Government Contracts that are fixed price contracts will be completed at a loss.
Seller further represents that no money due to the Seller under any Government
Contract has been withheld or set-off or has been subject to attempts to
withhold or set-off.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF TRINITY AND PURCHASER.
-------------------------------------------------------------------
Trinity and Purchaser jointly and severally represent and warrant to Seller
that each of the statements contained in this Article V is true and correct on
and as of the Closing Date:
5.01 Organization of Trinity and Purchaser. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the full corporate power and authority to enter into this
Agreement and the other agreements and instruments referred to in this Agreement
that Purchaser is executing and delivering ("Purchaser's Additional Agreements";
together with Seller's Additional Agreements, the "Additional Agreements") and
to carry out the transactions contemplated hereby and thereby. Trinity is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah and has the full corporate power and authority to enter
into this Agreement and the Purchaser's Additional Agreements that Trinity is
executing and delivering and to carry out the transactions contemplated hereby
and thereby.
5.02 Authorization of Agreement. The execution, delivery and performance by
Purchaser and Trinity of this Agreement and Purchaser's Additional Agreements,
and the consummation by Purchaser and Trinity of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary action of
Purchaser and Trinity. This Agreement and Purchaser's Additional Agreements to
which they are a party have been duly executed and delivered by Purchaser and
Trinity, and the case may be, and constitute legal, valid and binding
obligations of Purchaser and Trinity, enforceable in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting the rights of creditors generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing.
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5.03 No Conflicts. Neither the execution, delivery or performance of this
Agreement or any of Purchaser's Additional Agreements, nor the consummation by
Purchaser of the transactions contemplated hereby or thereby, nor compliance by
Purchaser and Trinity with the terms and provisions hereof or thereof will: (i)
conflict with the Certificate of Incorporation, Bylaws or other organizational
documents of Purchaser or Trinity; (ii) conflict with, or result in the breach
or termination of, or constitute a default (or with notice or lapse of time or
both, constitute a default) under or result in the termination or suspension of,
or accelerate the performance required by any of the terms, conditions or
provisions of, any note, bond, mortgage, indenture, license, lease, agreement,
commitment or other instrument to which Purchaser or Trinity is a party or by
which Purchaser or Trinity is bound; or (iii) constitute a violation by
Purchaser or Trinity of any law or statute or any judgment, ruling, order, writ,
injunction, decree, rule or regulation of any court or governmental authority
applicable to Purchaser or Trinity; except, in the case of clauses (ii) and
(iii) above, for such conflicts, defaults, breaches, terminations, suspensions
or acceleration of performance which, taken as a whole, would not be reasonably
likely to have a material adverse effect on the business, assets or condition
(financial or otherwise) of Purchaser.
5.04 No Consents. No order, permission, consent, approval, license,
authorization, registration, or validation of, or filing with, or notice to, or
exemption by, any governmental authority, commission, board, or agency is
required to authorize, or is required in connection with, the execution,
delivery or performance by Purchaser or Trinity of this Agreement or any of
Purchaser's Additional Agreements.
5.05 Litigation. There are no actions, suits, inquiries, proceedings or
investigations pending or, to Purchaser's or Trinity's knowledge, threatened
before any court or governmental or administrative body or agency against
Purchaser relating to the transactions contemplated by this Agreement or
Purchaser's Additional Agreements.
5.06 No Brokers. Neither Purchaser nor Trinity has incurred any obligation
or liability, contingent or otherwise, for brokers' or finders' fees or
commissions in connection with the transactions contemplated by this Agreement.
5.07 Purchaser's Acknowledgment. Purchaser and Trinity acknowledge and
agree that no representation or warranty has been or is being made by Seller
except as expressly set forth in this Agreement and no representation or
warranty is being made as to the future prospects of the Business.
ARTICLE VI. FURTHER AGREEMENTS OF THE PARTIES.
----------------------------------------------
6.01 Expenses. Each of Purchaser, Trinity and Seller shall bear their own
respective expenses incurred in connection with the negotiation and preparation
of this Agreement, the Additional Agreements and the consummation and
performance of the transactions contemplated hereby and thereby and in
connection with all obligations required to be performed by each of them under
this Agreement and the Additional Agreements, except as otherwise may be
expressly provided herein.
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6.02 Consents to Assignments of Contracts. (a) Purchaser acknowledges and
agrees that certain consents and approvals with respect to the transactions
contemplated by this Agreement may be required from parties to the Assumed
Contracts and that such consents and approvals have not been obtained. Seller
shall cooperate with Purchaser, upon Purchaser's request, in any reasonable
manner in connection with Purchaser's obtaining any such consents and approvals;
provided, however, that such cooperation in no event shall require Seller or any
of its affiliates to expend money, commence, defend or participate in any
litigation or offer or grant any accommodation (financial or otherwise) to any
third party.
(b) Any transfer or assignment to Purchaser by Seller on the Closing Date
of any interest under any Assumed Contract that requires the consent or approval
of a third party shall be made subject to such consent or approval being
obtained and Purchaser shall not assume any liabilities or obligations under any
such Assumed Contract until such consent or approval is obtained. At Purchaser's
request, Seller will cooperate with Purchaser to provide that Purchaser shall
receive Seller's interest in the benefits under any such Assumed Contract and
any Asset subject thereto, including (at Purchaser's request) performance by
Seller as agent or, to the extent permitted under such Assumed Contract (without
the need to obtain such third party's consent), grant Purchaser the exclusive,
perpetual, irrevocable and royalty or payment free right and license to receive
the benefit from the Assumed Contract and any Asset subject thereto; provided,
in each case, that (i) Purchaser shall undertake to pay or satisfy the
corresponding liabilities for the enjoyment of such benefit to the extent that
Purchaser would have been responsible therefor hereunder if such consent or
approval had been obtained and (ii) the reasonable out-of-pocket costs and
expenses incurred by Seller and its affiliates in connection with the
cooperative actions requested by Purchaser pursuant to this Section 6.02(b)
shall be paid by Purchaser or promptly reimbursed to Seller upon written
request.
6.03 Employees. (a) Schedule 6.03(a) sets forth the name, title, date of
hire, annual salary (including bonus and commissions) and 2004 commissions paid
of each of the employees employed by Seller solely in connection with the
Business immediately prior to the Closing Date (each, a "Business Employee";
collectively, the "Business Employees"). Purchaser shall offer employment to
each Business Employee and, following the Closing, each Business Employee shall
be employed at no less than the wage or salary, commission and bonus formula of
such employee in effect immediately prior to the Closing Date. Purchaser shall
be responsible for and shall pay, and Seller shall have no obligations
whatsoever for, any salary, bonus (other than (A) any Employee Incentive
Compensation Plan bonuses accrued through December 31, 2004 and (B) any
retention bonuses payable pursuant to agreements entered into in connection with
the sale of the Business, each of which shall be paid by Seller), sales
commissions, fringe or pension benefits, vacation or sick days or other benefits
or claims of any kind, including, without limitation, severance payments and
COBRA benefits, payable to, or accruable for, any Business Employee from and
after the Closing Date. For a period of one year following the Closing,
Purchaser shall provide to each Business Employee employee benefits programs
that are at least as beneficial as those in effect for comparable employees of
Purchaser and its affiliates.
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(b) Purchaser shall, as to all Business Employees, cause its insurance
carriers and benefit plan administrators or trustees to: (i) recognize service
with Seller (and any predecessors thereto and any other subsidiary or affiliate
of Seller) prior to Closing ("Prior Service") for purposes of eligibility to
enroll in its welfare plans (e.g., its life, medical, dental, accident,
disability and similar benefit plans); and (ii) provide each Business Employee
with credit under its medical plan for payments made under the PRIMEDIA Medical
Plan in satisfying any deductible or out-of-pocket limit requirements.
(c) Purchaser shall recognize Prior Service for all Business Employees for
purposes of determining entitlement to vacation and sick leave as employees
under its applicable vacation and sick leave policies. Purchaser shall recognize
Prior Service for purposes of determining entitlement to and the amount of any
severance benefits which may be payable by Purchaser to any Business Employee.
Purchaser shall pay to any Business Employee who has a written agreement
regarding severance as set forth on Schedule 4.11, the amount provided in such
agreement or, in the absence of a written agreement with such Business Employee,
for a period of one year following the Closing Date, Purchaser shall pay to any
Business Employee that is terminated "without cause" severance in an amount no
less than the amount payable consistent with Seller's customary practices as set
forth on Schedule 6.03(c).
(d) Purchaser shall recognize Prior Service for all Business Employees for
purposes of eligibility and vesting, but not for benefit accrual, under each
benefit program that provides pension, savings, or other deferred benefits which
is adopted, maintained, or contributed to by Purchaser or any of its affiliates
to the extent Business Employees participate or are eligible for participation
after the Closing.
6.04 Further Assurances. Each of Purchaser, Trinity and Seller shall
execute such documents and other papers and take such further actions as the
other party may reasonably request in order to carry out the provisions hereof
and the transactions contemplated hereby, including, without limitation, to
obtain any consents from any party to any Assumed Contract which is required in
connection with the transactions contemplated hereby, provided that such
obligation shall be subject to the provisions of Section 6.02. The parties shall
cooperate with each other in connection with any litigation relating to the
Business, including providing reasonable access to books and records and
employees (current or former); provided that in no event shall either party be
required to make any expenditure of money in connection therewith.
6.05 Correspondence. Each party promptly will remit to the other party any
correspondence or amounts received by it which properly belong to such other
party.
6.06 Record Retention. Each party shall maintain the agreements, documents,
books, records and files relating to the Business (collectively, "Records") for
a period of six years following the Closing Date. From and after the Closing
Date, upon reasonable prior written notice from Purchaser or Seller, as the case
may be, the other party shall furnish or cause to be furnished to such other
party and its respective representatives, employees, counsel and accountants,
access, during normal business hours, Records relating to periods prior to the
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Closing Date, and shall permit such persons to examine and copy, at such
persons' sole cost and expense, such Records to the extent reasonably requested
by the other party as is reasonably necessary for financial reporting and
accounting matters, the preparation and filing of any returns, reports or forms
or the defense of any claim or assessment. The parties agree to cooperate so
that such access does not unreasonably disrupt the normal operations of
Purchaser or Seller, as the case may be.
6.07 Discontinuance of Obligation to Provide Services or Benefits. Except
as otherwise provided pursuant to the Transition Agreement, any services or
benefits provided by Seller or any of its affiliates to or for the Business or
to any of its officers or employees automatically shall terminate as of the
Closing Date.
6.08 No Disclosure. Neither Purchaser, Trinity nor Seller shall produce,
distribute, publish or issue, or consent or cause to be produced, distributed,
published or issued, any press release, public announcement or other publicity
referring to this Agreement or any related agreements, the subject matter or
content hereof or of any related agreements or the transactions contemplated
hereby or thereby, without the express, prior written approval of the other
party, unless Purchaser, Trinity or Seller (a) is ordered to make any such
disclosure by a court of competent jurisdiction or (b) is advised by legal
counsel that such disclosure is required under applicable laws or the rules and
regulations of any stock exchange upon which Trinity's or PRM's securities are
traded, in which case the party making the required disclosure shall inform the
other party as to the timing and contents of such disclosure prior to making
such disclosure.
6.09 Covenant Not to Solicit Business. (a) In furtherance of the sale of
the Assets to Purchaser hereunder by virtue of the transactions contemplated
hereby, Seller covenants and agrees that, for a period ending on the first (1st)
anniversary of the Closing Date (in regards to clause (i) below) or the second
(2nd) anniversary of the Closing Date (in regards to clause (ii) below), without
the prior written approval of Purchaser, which approval shall be granted or
withheld in Purchaser's sole discretion, neither Seller nor any if its
affiliates will:
(i) (A) induce or attempt to persuade any employee of the Business to
terminate such employment in order to enter into any such relationship on behalf
of any other business organization in competition with the Business or (B)
recruit or offer employment to any employee of Purchaser engaged in the conduct
of the Business after the Closing Date; or
(ii) induce or attempt to persuade any agent or customer of the
Business to terminate such agency or business relationship in order to enter
into any such relationship on behalf of any other business organization in
competition with the Business.
Notwithstanding anything to the contrary in this Section 6.09(a), clauses
(i) and (ii) of this Section 6.09(a) are not breached by general solicitations,
advertisements, marketing campaigns, or promotions that are not specifically
targeted to such employee, agent or customer, so long as Seller and any entity
owned by Seller does not (A) enter into any employment, agency or business
relationship on behalf of any other business organization in competition with
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the Business for purposes of recruiting, soliciting or hiring such employees,
agents or customers of the Business; or (B) employ any employee of Purchaser
engaged in the conduct of the Business after the Closing Date.
(b) In the event Seller or any affiliate of Seller violates any of the
obligations under this Section 6.09, Purchaser may proceed against them in law
or in equity for such damages or other relief as a court may deem appropriate.
Seller acknowledges that a violation of this Section 6.09 may cause Purchaser
irreparable harm which may not be adequately compensated for by money damages.
Seller therefore agrees that in the event of any actual or threatened violation
of this Section 6.09, Purchaser shall be entitled, in addition to other remedies
that it may have, to a temporary restraining order and to preliminary and final
injunctive relief against Seller and/or such affiliate of Seller to prevent any
violations of this Section 6.09, without the necessity of posting a bond. The
prevailing party in any action commenced under this Section 6.09 shall also be
entitled to receive reasonable attorneys' fees and court costs. It is the intent
and understanding of each party hereto that if, in any action before any court
or agency legally empowered to enforce this Section 6.09, any term, restriction,
covenant or promise in this Section 6.09 is found to be unreasonable and for
that reason unenforceable, then such term, restriction, covenant or promise
shall be deemed modified by limiting its scope or applicability to the extent
necessary to make it enforceable by such court or agency. Seller agrees and
acknowledges that the its obligations under this Section 6.09 are not subject to
the limitations on indemnification set forth in Sections 7.02(b) and 7.02(c).
6.10 Bulk Sales Law. Each party waives all compliance by Seller and
Purchaser with the requirements of any bulk sales law, if and to the extent
applicable to the transactions contemplated by this Agreement.
6.11 Guarantees, Joint Obligations. To the extent that PRM or any of its
affiliates has any liability or obligation under or with respect to any Assumed
Contract, whether joint or several or in connection with a guarantee, but
subject to the provisions and limitations of Section 6.02, Purchaser agrees that
Purchaser (i) shall be solely responsible for the breach of any such contract to
the extent that such breach arises from the conduct of the Business from and
after the Closing Date and (ii) shall indemnify and hold harmless each of PRM,
PWPL, PDV and their respective affiliates from and against any and all losses,
liabilities or damages arising out of or relating to Purchaser's obligations
under such contracts or guarantees, as the case may be, arising from and after
the Closing Date, or arising prior to the Closing Date to the extent such
losses, liabilities or damages from obligations are considered Assumed
Liabilities. Notwithstanding the foregoing, in the event that any lease
guaranteed by PRM, PWPL, PDV or any of their respective affiliates contains an
option to renew, Purchaser shall not renew such lease without having PRM, PWPL,
PDV or such affiliate or affiliates, as applicable, released from such
guarantee.
21
6.12 Argus 1 Systems Corp. Litigation. (a) PWPL, PRM and certain other
entities and individuals are named as defendants in the case entitled Argus 1
Systems Corporation v. Primedia Workplace Learning L.P., et al., ▇▇.
▇▇-▇▇-▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Texas (the "Argus Claim"),
regarding claims made by Argus 1 Systems Corporation ("Plaintiff") resulting
from that certain Memorandum of Understanding, dated May 22, 2003, by and
between Plaintiff and PWPL (the "Argus MOU"). This Section 6.12 sets forth the
understandings, obligations and covenants of each of Seller and Purchaser in
regards to the Argus Claim.
(b) As of the Closing Date, Purchaser shall accept and assume the defense
of the Argus Claim and, subject to the provisions of this Section 6.12, be
responsible for payment of legal fees and costs associated with defending the
Argus Claim for services rendered from and after the Closing Date; provided,
however, that Purchaser shall only be responsible for the payment of legal fees
and expenses associated with the retention by Purchaser of one law firm for the
benefit of Purchaser, Seller and the other defendants. If required by law,
Purchaser shall consent to being joined in the Argus Claim as a defendant. All
attorneys' fees and costs incurred prior to the closing Date shall be the sole
responsibility of Seller.
(c) Purchaser shall have the sole discretion and control and sole decision
making authority with respect to defending the Argus Claim, and Seller shall
cooperate in good faith with Purchaser in the planning and defense of the Argus
Claim and shall provide all reasonable assistance at Purchaser's expense,
including, where feasible, providing access to Seller employees, documents,
information, files, and all other data and materials related to the claims
asserted in the Argus Claim. Seller shall provide all requested waivers and
authorities for Purchaser to act on behalf of Seller in regards to the Argus
Claim, and execute all documents necessary or useful to effect the provisions of
this Section 6.12. Without limiting Purchaser's rights hereunder, Seller shall
have the right to be represented by its own counsel at its own expense, its
participation to be subject to the reasonable direction and discretion of
Purchaser.
(d) Subject to Section 6.12(f), in the event Plaintiff recovers damages,
costs, on-going royalties or license fees or other relief resulting from or in
connection with the Argus Claim, whether by settlement or judgment entered
against the Seller and/or Purchaser ("Recovery"), the allocation of such
Recovery shall be as follows:
(i) Seller shall be responsible for paying that portion of any
Recovery relating to the failure to pay Plaintiff license fees based on sales of
the Software (as that term is defined in the MOU) prior to the Closing Date and
the failure to pay Plaintiff the remainder of the license fee for the exclusive
license to Plaintiff's software granted to Seller, and any other actions or
inactions by Seller and the other defendants to the Argus Claim relating to the
MOU and the period prior to the Closing Date.
(ii) Purchaser shall be responsible for paying that portion of any
Recovery relating to license fees, royalty fees, or other damages arising from
any sales of Software or other conduct after the Closing Date and shall be
responsible for the payment of all on-going license or royalty fees relating to
periods on or after the Closing Date.
22
(iii) Subject to Section 6.12(f)(ii), each of Seller and Purchaser
shall be responsible for 50% of any Recovery relating to Plaintiff's claim for
being unable to market its software as a result of the MOU.
(iv) Subject to Section 6.12(f)(ii), each of Seller and Purchaser
shall be responsible for 50% of any attorneys' fees and costs awarded or
allocated to Plaintiff in regards to the Argus Claim.
(e) Notwithstanding anything to the contrary in this Section 6.12, neither
Purchaser nor Seller shall enter into any settlement, consent judgment, or other
voluntary final disposition of the Argus Claim without the prior written consent
of the other party, which consent shall not be unreasonably withheld; provided,
however, that Purchaser in its sole discretion shall not be required to consent
to any settlement of the Argus Claim where such settlement contains an ongoing
royalty or license fee.
(i) In the event that Plaintiff presents a good faith written
settlement proposal for the final settlement of all claims in the Argus Claim
and any and all other claims arising out of the MOU (a "Proposed Argus
Settlement"), and Seller or Purchaser desires to accept the Proposed Argus
Settlement (such party desiring to settle, the "Settling Party"), the Settling
Party shall advise the other party (the "Non-Settling Party") in writing of the
Settling Party's desire to accept the Proposed Argus Settlement, including the
Settling Party's good faith allocation between the Seller and Purchaser of the
Recovery to be paid in settlement based on the allocations set forth in Section
6.12(d); provided, however, that, unless agreed to by Purchaser in its sole
discretion, no settlement proposal that contains an ongoing royalty or license
fee shall constitute a Proposed Argus Settlement. The Non-Settling Party shall
have 20 days after the Non-Settling Party's receipt of the notice of the
Proposed Argus Settlement or two days prior to the expiration date of the
proposed Argus Settlement, whichever is earlier, to advise the Settling Party in
writing whether it accepts the Proposed Argus Settlement and the Settling
Party's allocations regarding same. In so notifying the Settling Party of its
decision, the Non-Settling Party may accept the Proposed Argus Settlement, but
dispute the allocation of the Recovery among the Seller and Purchaser, in which
case the Non-Settling Party must propose a good-faith alternative allocation.
(ii) In the event the Non-Settling Party does not provide its written
objection to the Proposed Argus Settlement or does not propose a good-faith
alternative allocation of the Recovery within the timeframe required herein,
then the Non-Settling Party shall be deemed to have agreed to the Proposed Argus
Settlement and the allocation of the Recovery proposed by the Settling Party,
and shall cooperate with the Settling Party in the execution of such documents
as necessary to effect and Proposed Argus Settlement.
(iii) If the Non-Settling Party notifies the Settling Party that it
accepts the Proposed Argus Settlement, but disputes the allocation of the
Recovery pursuant to the provisions of Subsection (i) of this Section 6.12(e),
each of the Non-Settling Party and the Settling Party shall cooperate in good
faith to come to a temporary agreement on the allocation of the Recovery so that
the Proposed Argus Settlement can be effected and the Argus Claim and all maters
relating to the MOU can be resolved with the Plaintiff.
23
(f) In the event the Non-Settling Party objects to the Proposed Argus
Settlement, the Non-Settling Party shall, from and after the Non-Settling
Party's receipt of the notice of the Proposed Argus Settlement, be responsible
for and shall assume the continuing defense of the Argus Claim and shall be
responsible for payment of all legal fees, costs and expenses associated with
defending the Argus Claim from and after such date.
(i) The Non-Settling Party shall have the sole discretion and control
and sole decision making authority with respect to defending the Argus Claim
from and after the date the Non-Settling Party takes over the defense, and the
Settling Party shall cooperate in good faith with the Non-Settling Party in the
planning and continued defense of the Argus Claim, and shall provide all
reasonable assistance at the Non-Settling Party's expense, including, where
feasible, providing access to the Settling Party's employees, documents,
information, files, and all other data and materials related to the claims
asserted in the Argus Claim, and execute all documents necessary or useful to
effect the provisions of this Section 6.12. The Settling Party shall have the
right to be represented by its own counsel at its own expense, its participation
to be subject to the reasonable direction of the Non-Settling Party.
(ii) In the event Plaintiff is entitled to Recovery allocable to the
Settling Party pursuant to Section 6.12(d), in excess of the Recovery that would
have been allocable to the Settling Party if the Proposed Argus Settlement had
been accepted, the obligations of the Settling Party in regards to its portion
of such Recovery shall be limited to the Recovery allocable to the Settling
Party in the Proposed Argus Settlement, and the Non-Settling Party shall be
responsible for the payment of all other Recovery amounts (notwithstanding the
provisions of Sections 6.12(d)(iii) and 6.12(d)(iv)) recovered by the Plaintiff
in excess of such amount.
(g) If the Seller and Purchaser accept the proposed Argus Settlement but
are unable to agree upon the allocation between them of the payment of the
Recovery and other terms within 30 days after the complete settlement of the
Argus Claim and all other claims arising out of or relating to the MOU, then
either Seller or Purchaser may serve the other with a written demand for binding
"baseball" arbitration. Such arbitration shall be held in New York City and
shall be conducted before a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, provided that the
arbitrator's award shall be consistent with the allocation provisions of Section
6.12(d). The arbitrator shall be required to accept one or the other of the
final allocations previously exchanged and proposed by the two parties pursuant
to Section 6.12(e)(i) above, and such decision of the arbitrator regarding the
allocation of Recovery between the Seller and Purchaser shall be binding and
conclusive. The parties agree to complete such arbitration as expeditiously as
reasonably possible.
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ARTICLE VII. INDEMNIFICATION.
-----------------------------
7.01 Survival. The covenants, representations and warranties of Seller, on
the one hand, and Purchaser and Trinity, on the other hand, shall survive the
Closing Date until the date that is eighteen months after the Closing Date,
other than (a) Seller's indemnification obligation under Sections 7.02(a)(iii)
and (iv) and Purchaser's and Trinity's indemnification obligation under Sections
7.03(iii), (iv) and (v), each of which shall survive indefinitely, (b) Seller's
indemnification obligations under Section 6.09, which shall survive until the
period set forth in Section 6.09(a), or (c) Purchaser's and Seller's obligations
under Section 6.12, which shall survive until the final resolution of the Argus
Claim. The expiration of any covenant, representation or warranty shall have no
effect on the continued validity of any claim if written notice was given in
accordance with this Article VII before the date of such expiration.
7.02 Indemnification by Seller. (a) Seller shall indemnify and hold
harmless Purchaser Trinity, Purchaser's and Trinity's subsidiaries and their
respective officers, directors and employees (collectively, "Purchaser
Indemnified Parties") from, against and in respect of any and all damages,
losses, claims, penalties, liabilities, costs and expenses (including, without
limitation, all fines, interest, reasonable legal fees and expenses and amounts
paid in settlement) (collectively, "Claims"), that arise from or relate or are
attributable to (i) any misrepresentation by Seller or breach of a warranty made
by Seller, in each case, under Article IV hereof, (ii) any breach of any
covenant or agreement on the part of Seller set forth herein or in any of
Seller's Additional Agreements, (iii) any liability or obligation to brokers
retained by Seller in connection with the transactions contemplated by this
Agreement and (iv) the Excluded Liabilities.
(b) Notwithstanding the foregoing, Seller shall have no liability to
indemnify any Purchaser Indemnified Party on account of any Claim pursuant to
clauses (i) and (ii) of Section 7.02(a) unless and until and only to the extent
that the liability of Seller in respect of such Claims, when aggregated with
Seller's liability in respect of all other Claims made pursuant to clauses (i)
and (ii) of Section 7.02(a), amounts to more than $100,000 (the "Threshold
Amount"), whereupon Seller shall be liable to pay amounts due pursuant to
clauses (i) and (ii) of Section 7.02(a) only in excess of the Threshold Amount.
(c) The maximum aggregate liability of Seller for any and all claims under
clauses (i) and (ii) of Section 7.02(a) shall not exceed $4,000,000.
(d) Notwithstanding anything to the contrary in this Section 7.02, the
limitations on indemnification set forth in Subsections (b) and (c) of this
Section 7.02 shall not apply to Seller's obligations and covenants, and any
breaches thereof, contained in Sections 6.09 or 6.12.
7.03 Indemnification by Purchaser and Trinity. (a) Each of Purchaser and
Trinity shall jointly and severally indemnify and hold harmless Seller, Seller's
subsidiaries and their respective officers, directors and employees
(collectively, "Seller Indemnified Parties") from, against and in respect of any
and all Claims that arise from or relate or are attributable to (i) any
misrepresentation by Purchaser or Trinity or breach of a warranty made by
Purchaser or Trinity, in each ease, under Article V hereof, (ii) any breach of
25
any covenant or agreement on the part of Purchaser or Trinity set forth herein
or in any of Purchaser's Additional Agreements, (iii) any liability or
obligation to brokers retained by Purchaser or Trinity in connection with the
transactions contemplated by this Agreement, (iv) any obligation to any Business
Employee arising on or after the Closing Date and (v) the Assumed Liabilities.
(b) Notwithstanding the foregoing, neither Purchaser nor Trinity shall have
any liability to indemnify any Seller Indemnified Party on account of any Claim
pursuant to clauses (i) and (ii) of Section 7.03(a) unless and until and only to
the extent that the liability of Purchaser or Trinity in respect of such Claims,
when aggregated with Purchaser's and Trinity's liability in respect of all other
Claims made pursuant to clauses (i) and (ii) of Section 7.03(a), amounts to more
than the Threshold Amount, whereupon Purchaser and Trinity shall be liable to
pay amounts due pursuant to clauses (i) and (ii) of Section 7.03(a) only in
excess of the Threshold amount.
(c) The maximum combined aggregate liability of Purchaser and Trinity for
any and all claims under clauses (i) and (ii) of Section 7.03(a) shall not
exceed $4,000,000.
(d) Notwithstanding anything to the contrary in this Section 7.03, the
limitations on indemnification set forth in Subsections (b) and (c) of this
Section 7.03 shall not apply to Purchaser's obligations and covenants, and any
breaches thereof, contained in Section 6.12.
7.04 Notice to the Indemnitor. Promptly after the assertion of any Claim by
a third party or the occurrence of any event which may give rise to a claim for
indemnification from an indemnifying party ("Indemnitor") under this Article
VII, an indemnified party ("Indemnitee") shall notify the Indemnitor in writing
of such Claim. The Indemnitor shall then have 30 days to advise the Indemnitee
whether the Indemnitor accepts the defense of such Claim and Indemnitor shall
have no obligation to Indemnitee for legal fees incurred by lndemnitee before or
after the date of any assumption of the defense by Indemnitor; provided that the
Indenmitor automatically agrees to accept the defense of any Claim referred to
in clause (iv) of Section 7.02(a). The Indemnitor shall in no way be liable to
the Indemnitee for any Claim not presented to the Indemnitor by the Indemnitee
for a defense within 30 days of the Claim being presented in writing to the
Indemnitee by the party making the Claim.
7.05 Right of Parties to Settle or Defend. If the Indemnitor determines to
accept the defense of such Claim, the Indemnitee shall have the right to be
represented by its own counsel at its own expense, its participation to be
subject to the reasonable direction of the Indemnitor, and the Indemnitee shall
provide all requested waivers and authorities for the Indemnitor to act on
behalf of the Indemnitee. If the Indemnitor fails to undertake the defense of or
settle or pay any such third party Claim within 30 days after the Indemnitee has
given written notice to the Indemnitor of the Claim, or if the Indemnitor, after
having given such notification to the Indemnitee, fails within 30 days to
defend, settle or pay such claim, then the Indemnitee may take any and all
necessary action to dispose of such Claim; provided, however, that in no event
shall the Indemnitee settle such Claim without the prior consent of the
Indemnitor as provided in Section 7.06 below.
26
7.06 Settlement Proposals. (a) In the event that the Indemnitee desires to
settle any third-party Claim the defense of which has not been assumed by
Indemnitor, the Indemnitee shall advise the Indemnitor in writing of the amount
it proposes to pay in settlement thereof (the "Proposed Settlement"). The
Indemnitor shall have 20 days after the Indemnitee's receipt of the notice of
the Proposed Settlement to advise the Indemnitee whether it accepts the Proposed
Settlement. If the Indemnitor notifies the Indemnitee that it accepts the
Proposed Settlement, the Indemnitee may offer the Proposed Settlement to the
third party making the Claim. If, after approval by the Indemnitor, the Proposed
Settlement is not accepted by the party making such Claim, any new Proposed
Settlement which the Indemnitee may wish to present to the party making such
Claim shall again first be presented to the Indemnitor in accordance with the
provisions of this Section 7.06.
(b) Except as provided in the immediately following sentence, the
Indemnitor may settle any third-party Claim as to which it has agreed to accept
the defense, on any terms which it may deem reasonable. In the event that the
Indemnitor desires to settle any such third-party Claim, the Indemnitor shall
not, without the Indemnitee's prior written consent, (i) settle or compromise
any proceeding, claim or demand, or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by the claimant
or plaintiff to the Indemnitee of a written release from all liability in
respect of such proceeding, claim or demand, or (ii) settle or compromise any
such proceeding, claim or demand in any manner that adversely affects the
Indemnitee. Following the Closing, the indemnification obligations of this
Article VII shall be the exclusive remedy for breaches of this Agreement and the
Additional Agreements and no other remedy shall be had in contract, tort or
otherwise.
7.07 Reimbursement. At the time the amount of any liability on the part of
the Indemnitor under this Article VII is determined (which in the case of
payments to third persons shall be the earlier of (i) the date of such payments
by the Indemnitee and (ii) the date that a court of competent jurisdiction shall
enter a final judgment, order or decree (after exhaustion of appeal rights)
establishing such liability), the Indemnitor shall, within 30 days after receipt
of notice from the Indemnitee, pay to the Indemnitee the amount of the indemnity
claim.
7.08 Certain Adjustments. (a) The parties agree that any indemnification
payments made pursuant to this Agreement shall be treated for Tax purposes as an
adjustment to the Purchase Price, unless otherwise required by applicable law.
(b) For all purposes of this Article VII, any amounts payable in respect of
indemnification claims shall be net of any insurance payable to the Indemnitee
from its own insurance policies in connection with the facts giving rise to the
right to indemnification.
27
ARTICLE VIII. MISCELLANEOUS.
----------------------------
8.01 Entire Agreement. This Agreement (together with the Schedules and
Exhibits hereto and the Additional Agreements and other documents referred to
herein) contains, and is intended as, a complete statement of all of the terms
of the arrangements between the parties with respect to the matters provided for
herein, and supersedes any previous agreements and understandings between the
parties with respect to those matters; provided, however, that the terms of the
Confidentiality Agreement by and between Seller and Trinity (the
"Confidentiality Agreement") shall remain in full force and effect.
8.02 Governing Law; Jurisdiction. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
Purchaser, Trinity and Seller hereby irrevocably submit to the jurisdiction of
any New York State or United States Federal Court sitting in New York City (and
any appellate court therefrom) over any action or proceeding arising out of or
relating to this Agreement. Each of Purchaser, Trinity and Seller hereby
irrevocably waives any objection that it may have to venue and the defense of an
inconvenient forum to the maintenance of such action or proceeding. Purchaser
and Trinity hereby appoints ▇▇▇▇ ▇▇▇▇▇ LLP (at the address set forth below) as
its agent for service of process in connection with the foregoing.
8.03 Amendment; Waiver. No provision of this Agreement may be amended or
modified except by an instrument or instruments in writing signed by the parties
hereto. Any party may waive compliance by another with any of the provisions of
this Agreement. No waiver of any provision hereof shall be construed as a waiver
of any other provision or subsequent breach. Any waiver must be in writing. The
failure of any party hereto to enforce at any time any provision hereof shall
not be construed to be a waiver of such provision, nor in any way to affect the
validity hereof or any part hereof or the right of any party thereafter to
enforce each and every such provision.
8.04 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally, mailed
by registered mail, return receipt requested, sent by documented overnight
delivery service or, to the extent receipt is confirmed, by facsimile to the
parties at the following addresses (or to such other address as a party may have
specified by notice given to the other party pursuant to this provision):
If to Seller, to it at:
PRIMEDIA Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
PRIMEDIA Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
28
If to Purchaser or Trinity, to it at:
Trinity Learning Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
8.05 Separability. If any provision of this Agreement is held by any court
of competent jurisdiction to be illegal, invalid or unenforceable, such
provision shall be of no force and effect, but the illegality, invalidity or
unenforceability shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.
8.06 Assignment and Binding Effect. Neither party hereto may assign any of
its rights or delegate any of its duties under this Agreement without the prior
written consent of the other party hereto. All of the terms and provisions of
this Agreement shall be binding on, and shall inure to the benefit of, the
respective legal successors and permitted assigns of the parties.
8.07 No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the parties
hereto and their respective successors and permitted assigns and they shall not
be construed as conferring and are not intended to confer any rights on any
other persons.
8.08 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and may be delivered by
facsimile transmission thereof, and each party thereto may become a party hereto
by executing a counterpart hereof. This Agreement and any counterpart so
executed shall be deemed to be one and the same instrument.
8.09 Interpretation. Article titles and headings to sections are inserted
for convenience of reference only and are not intended to be a part or to affect
the meaning or interpretation hereof. The Schedules referred to herein shall be
construed with and as an integral part of this Agreement to the same extent as
if they were set forth verbatim herein. The specification of any dollar amount
in the representations and warranties contained in this Agreement or the
29
inclusion of any specific item in any schedule hereto is not intended to imply
that such amounts or higher or lower amounts, or the items so included or other
items, are or are not material, and no party hereto shall use the fact of the
setting of such amounts or the inclusion of any such item in any dispute or
controversy between the parties as to whether any obligation, item or matter not
described herein or included in a Schedule is or is not material for purposes
hereof. As used herein, "include", "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; "writing", "written" and comparable terms
refer to printing, typing, lithography and other means of reproducing words in a
visible form; references to a person are also to its successors and permitted
assigns; "hereof', "herein", "hereunder" and comparable terms refer to the
entirety hereof and not to any particular article, section or other subdivision
hereof or attachment hereto; references to any gender include references to the
plural and vice versa; references to this Agreement or other documents are as
amended or supplemented from time to time; unless otherwise expressly provided
where such reference is made, references to "Article", "Section" or another
subdivision or to an attachment or "Schedule" are to an article, section or
subdivision hereof or an attachment or "Schedule" hereto; references to
"generally accepted accounting principles" shall mean generally accepted
accounting principles in effect in the United States.
8.10 Disclosure. For the purposes of this Agreement, any disclosure made on
one Schedule to this Agreement shall be deemed to be a disclosure for the
purposes of all Schedules to this Agreement, where such disclosure would be
appropriate and reasonably apparent on its face. In addition, any representation
made "to the knowledge of Seller" or "to Seller's knowledge" shall mean to the
knowledge of the persons listed on Schedule 8.10(a) attached hereto, and any
representation made "to the knowledge of Purchaser" or "to Purchaser's
knowledge" shall mean to the knowledge of the persons listed on Schedule 8.10(b)
attached hereto.
8.11 No Presumption. This Agreement shall be construed without regard to
any presumption or rule requiring construction or interpretation against the
party drafting.
(Remainder of page intentionally left blank.)
30
IN WITNESS WHEREOF, the undersigned have executed this Asset Purchase
Agreement as of the date first above written.
TRINITY LEARNING CORPORATION PRIMEDIA INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President Title: Senior Vice-President, Law
TRINITY WORKPLACE LEARNING PRIMEDIA WORKPLACE LEARNING, L.P.
CORPORATION
By: ▇▇▇▇ Publishing Companies, Inc.,
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary and Chief Title: Senior Vice-President, Law
Financial Officer
PRIMEDIA DIGITAL VIDEO HOLDINGS LLC
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice-President, Law