Heads of Option Agreement
date: July 27, 1993
Groupe de la Cite / ANTIA (GLC) desires to sell and SMG Associates (SMG) desires
to purchase all the business and the assets of the Millbrook Press, Inc.
(Millbrook).
This Heads of Option Agreement shall be completed if necessary by covenants
which may expand but not alter the following conditions:
1. If SMG exercises this option, SMG will pay to GLC $2.1 million (USD)
on/or before December 31, 1993. Simultaneously, as an additional part
of the purchase price, SMG will pay off the outstanding principal and
interest for the amount shown as a loan from Societe Generale on
Millbrook's books as of December 31, 1993, and take over the
liabilities of the business.
2. If SMG exercises this option, SMG agrees to transfer all of Millbrook's
rights in The Encyclopedia of the United States to Grisewood and
▇▇▇▇▇▇▇ (a subsidiary of GLC) in return for Grisewood and ▇▇▇▇▇▇▇'▇
payment to Millbrook of an amount equal to the unamortized plate
relating to the work as of December 31, 1993 which shall amount to
$94,205 (USD) and Millbrook's share of the inventory of bound books,
sheets and any other materials. Such payment will be made at the date
of the payment stated inss.1. At the same time, SMG / Millbrook and
Groupe de la Cite / CKG shall enter into an Agreement for the
distribution of this product, in the school and library market in the
US for 1994. The terms and conditions shall be those decided between
Millbrook and CKG for the distribution of Millbrook's products by CKG
in the US trade market in 1994.
3. Until the exercise of the option, SMG shall continue to manage
Millbrook under the conditions of the existing agreement pertaining to
the management fee, duties and responsibilities. It will waive all
other rights under the agreements dated October 5, 1989 and any other
agreement upon signing this Heads of Option Agreement. Both parties
agree to take no action in any way injurious to Millbrook. This waiver
shall remain valid even if SMG is unable to purchase Millbrook as
contemplated in this Agreement.
In the event that SMG is unable to purchase Millbrook as contemplated
in this agreement, it will have no other liability to GLC.
Heads of Option Agreement - continued
-------------------------------------
4. Should SMG not exercise the purchase option by December 31, 1993, new
management agreements will be entered into by the following
individuals:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
Such management agreements shall incorporate an annual rate of
compensation of $50,000(USD) each to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be paid at an annual rate of $150,000
(USD) which shall cover all benefits and expenses. These agreements
will be cancelable by either party with ninety (90) days notice
effective the first day of the subsequent month such notice is given.
5. GLC shall cooperate fully with SMG in allocating the purchase price
among all of Millbrook's assets.
6. SMG shall have the exclusive right to purchase Millbrook until December
31, 1993; SMG shall notify GLC not later than December 15, 1993 that it
shall exercise its option to buy.
7. SMG shall be provided with access to Antia's corporate accounting and
financial books and records as may be necessary to perform its due
diligence review. No warranty shall be given by GLC on Millbrook's
assets or business.
8. GLC and SMG shall keep an absolute confidentiality on this Agreement,
even if the transaction is not completed.
This Heads of Option Agreement is binding as of July 27, 1993 on both parties.
Any controversy or claim arising out of or relating to this agreement, or the
breach thereof, shall be settled by arbitration in accordance with the Rules of
the American Arbitration Association, and any hearings in connection with such
arbitration shall be held in New York City. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.
Heads of Option Agreement - continued
-------------------------------------
The signatures below indicate acceptance of the above agreement:
For SMG Associates:
-------------------
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Date
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Date
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date
For Groupe de la Cite / ANTIA
-----------------------------
----------------------------------
Baudouin de la Tour Date
AMENDMENT AGREEMENT TO THE
HEADS OF OPTION AGREEMENT
Amendment Agreement dated as of November 4, 1993 among GROUPE
DE LA CITE INTERNATIONAL, a Science Anonyme organized under French law with an
address at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ("GLC"), ANTIA CORPORATION, a
corporation with offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Antia"),
and SMG ASSOCIATES, a general partnership organized under the laws of
Connecticut with an address at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ ("SMG").
W I T N E S S E T H:
WHEREAS, on July 27, 1993, SMG, Antia and GLC entered into a
Heads of Option Agreement pursuant to which, inter alia, GLC, Antia and SMG
agreed to sell and SMG agreed to purchase all the business and the assets of the
Company (the "Heads of Option Agreement");
WHEREAS, the Heads of Option Agreement provided, among other
things, for SMG's exclusive right to purchase the business and the assets of the
Company (the "Assets") until December 31, 1993;
WHEREAS, GLC Antia and SMG desire to extend the Option
Expiration Date to February 28, 1994 and to amend the Heads of Option Agreement
in other respects;
NOW, THEREFORE, the parties, wishing to be legally bound and
hereby acknowledging their receipt and the sufficiency of the consideration
therefor hereby agree as follows:
1. To the extent that the terms of this Amendment Agreement
conflict with the terms of the Heads of Option Agreement, the terms of this
Amendment Agreement shall govern the relationship among the parties hereto. As
herein amended the Heads of Option Agreement is hereby ratified and confirmed.
2. (a) At the end of the first sentence of paragraph one of
the Heads of Option Agreement the period should be changed to a semicolon and
the following language should be added: "provided, however, SMG shall have the
option to extend the December 31, 1993 date to February 28, 1994 (December 31,
1993, or, if extended as herein provided, February 28, 1994 is hereinafter
referred to as the "Option Expiration Date") upon the payment to GLC on or
before December 31, 1993 of the sum of $45,000 to be applied as follows:
"(i) $23,000 shall be treated as a non- refundable
deposit which shall be applied by SMG in reduction of the purchase price paid by
SMG to GLC in the event that SMG exercises its option and the purchase of the
Assets takes place on or prior to February 28, 1994 (the "Closing") or retained
by GLC in the event SMG is unable to exercise its option and such purchase does
not occur on or prior to February 28, 1994.
"(ii) $23,000 shall be applied by GLC as additional
purchase price at the rate of $400 per day for each day or part thereof after
December 31, 1993 until the date of the Closing of the transaction whereby SMG
purchases the Assets from GLC. In the event such Closing occurs prior to
February 28, 1994 the balance of the $23,000 derived by subtracting therefrom
the additional purchase price shall be repaid by GLC to SMG at Closing. In the
event the Closing does not occur by February 28, 1994 then GLC shall promptly
refund the full $23,000 to SMG."
(b) Delete the words "December 31, 1993" in the last
line of the second sentence of paragraph one of the Heads of Option Agreement
and substitute therefor "the Closing (as hereinabove defined)".
3. Paragraph 4 of the Heads of Option Agreement shall be
amended by:
(a) Deleting "December 31, 1993" in the first line
thereof and substituting therefor "the Option Expiration Date"; and
(b) Changing of the period at the end of paragraph 4
to a semicolon and adding the following at the end of such paragraph: "provided,
however, if the Option Expiration Date is extended to February 28, 1994 as
provided in paragraph one hereof Messrs. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇ may
not give such notice prior to June 30, 1994".
4. Paragraph 6 of the Heads of Option Agreement shall be
deleted and replaced by the following: "SMG shall have the exclusive right to
purchase the Assets until the Option Expiration Date. SMG shall notify GLC not
later than 15 days prior to the Closing that it shall exercise its option to
purchase the Assets.
-2-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Extension Agreement as of the day and year first above written.
SMG ASSOCIATES
By: ▇▇▇▇▇▇ Int'l Publishing &
Research Inc., Partner
By:-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
By: Braben Inc. Partner
By:-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
By: ▇▇▇▇▇▇▇ Associates, Inc., Partner
By:-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
GROUPE DE LA CITE INTERNATIONAL/ANTIA
By:------------------------------------
Name
Title:
-3-
SECOND AMENDMENT TO HEADS OF OPTION AGREEMENT
ADDITIONAL ASSET PURCHASE COVENANTS AND AGREEMENTS
AGREEMENT made as of the first day of December, 1993, among
GROUPE DE LA CITE INTERNATIONAL, a Societe Anonyne organized under French law
with an address at ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ("GLC"), ANTIA
CORPORATION, a corporation with offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ (the "Antia"), The Millbrook Press Inc., a corporation with an office at ▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Seller") and SMG Associates, a
general partnership organized under the laws of Connecticut with an office at ▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Buyer").
W I T N E S S E T H:
WHEREAS, Antia is the wholly-owned subsidiary of GLC and the
Seller is a wholly-owned subsidiary of Antia;
WHEREAS, the Seller was incorporated in 1989 and Antia and
Buyer entered into a preliminary agreement (the "Preliminary Agreement") with
respect to the Seller dated July 31, 1989, prior to its formation, and Buyer,
Antia and the Seller entered into a Subscription Option Agreement dated as of
October 5, 1989 (the "Option Agreement");
WHEREAS, the Seller and the Buyer have entered into a
Management Agreement dated as of October 5, 1989 (the "Management Agreement")
pursuant to which Buyer provides management services to the Seller;
WHEREAS, on July 27, 1993, GLC, Buyer and Antia entered into a
Heads of Option Agreement, as amended as of November 4, 1993, pursuant to which
GLC and Antia agreed to sell and Buyer agreed to purchase the business and
assets of the Seller (the "Heads of Option Agreement") and the Buyer, GLC, and
Antia desire that the covenants, representations and agreements contained in
this Asset Purchase Agreement shall amplify the Heads of Option Agreement and
upon the occurrence of certain events as herein provided the Option Agreement
and Management Agreement shall terminate; and
WHEREAS, the Buyer desires to purchase from the Seller and the
Seller desires to sell to the Buyer all of the business and assets (other than
the Excluded Assets as hereinafter defined) of Seller as a going concern, and
the Seller desires to transfer and the Buyer desires to assume certain of the
liabilities and obligations of the Seller, each upon the terms and conditions
set forth herein.
NOW, THEREFORE, the parties, wishing to be legally bound
hereby and acknowledging the receipt and sufficiency of the consideration
therefor, hereby agree as follows:
1. SALE AND TRANSFER OF BUSINESS, PROPERTIES AND ASSETS.
Subject to the terms and conditions of this Agreement, the Seller hereby agrees
to sell, transfer, convey, assign and deliver to Buyer and the Buyer agrees to
purchase at the Closing (as hereinafter defined) all of the business and assets
(other than Excluded Assets) owned or otherwise held by Seller as a going
concern (the "Acquired Business") including, without limitation (i) the cash,
choses-in-action, properties, assets and other rights referred to in the ▇▇▇▇ of
sale (the "▇▇▇▇ of Sale") substantially in the form of Exhibit A attached
hereto, and (ii) as set forth below.
1.1 MACHINERY, EQUIPMENT AND SUPPLIES. All
tangible personal property, machinery, equipment and supplies (including, but
not limited to, computer equipment, production machinery, tools, and all
maintenance and other operating supplies, including small tools and spare parts
and other expendables or noninventories items which may not have been treated as
assets for accounting purposes in past years, including, without limitation,
those listed on Schedule 1.1 owned or leased by the Seller and used or useful in
the operation of the Acquired Business.
1.2 BOOKS AND RECORDS. All files, books and
records, invoices, accounts and surveys used or useful in connection with the
ownership and/or operation of the Acquired Business, including without
limitation all current supplier and customer lists relating to the Acquired
Business including, without limitation, those listed on Schedule 1.2.
1.3 INTANGIBLES. All of the Seller's right,
title and interest in and to (i) all contracts and agreements, including all
service contracts, employment contracts, contracts with suppliers and
distributors, and insurance policies, and all contracts with authors or others
granting to or creating for Seller rights in existing or future literary works
("Author Contracts"), and all contracts dealing with the paper, binding,
printing or other phases of book production ("Production Contracts"), and all
rights and benefits accruing to the Seller under such contracts and agreements;
(ii) all trademarks, tradenames, servicemarks, copyrights, patents and
applications therefor; (iii) all permits, leases, subleases, licenses,
franchises and privileges; (iv) all software in development and source codes,
flow charts, notes or outlines relating thereto, proposals, bids and other
documents and information, or copies thereof, relating to any marketing of
promotional efforts undertaken in connection therewith; (v) all goodwill
associated with the Acquired Business; (vi) all causes of action, judgments,
claims and demands of whatever nature; and (vii) all other intangible assets
owned by the Seller and/or used or
2
useful in connection with the Acquired Business, or held for the benefit of the
Seller, including, without limitation the intangibles described on Schedule 1.3
hereto.
1.4 INVENTORIES. All inventory items held by the
Seller on the Closing Date (as hereinafter defined), including, without
limitation all (i) raw materials, (ii) work in process, and (iii) finished
goods; but not including inventory relating to the Encyclopedia of the United
States to the extent denoted as such in Schedule 1.4 hereto. Schedule 1.4
attached hereto contains a list of the inventories valued at the lower of cost
or fair market value as of October 31, 1993.
1.5 ACCOUNTS RECEIVABLE. All of the Seller's
receivables for products sold or services rendered which are not collected as of
the Closing Date. Schedule 1.5 attached hereto contains a complete list of the
accounts receivable as of October 31, 1993.
1.6 PREPAID ITEMS. All of the Seller's prepaid
items as of the Closing Date. Schedule 1.6 attached hereto is a complete list of
all of the prepaid items as of October 31, 1993.
1.7 ALL ASSETS SCHEDULE. The assets described
in Section 1 are hereinafter referred to as the "Purchased Assets". At the
request of Buyer any of the Schedules 1.1, 1.2, 1.3, 1.4, 1.5, and/or 1.6 shall
be updated to a date within three days of the Closing Date and delivered to
Buyer at or prior to Closing.
1.8 EXCLUDED ASSETS. It is understood and
agreed that those assets listed on Schedule 1.8 attached hereto shall not be
included in the Purchased Assets (the "Excluded Assets").
2. ASSUMPTION OF LIABILITIES. As further consideration,
subject to the terms and conditions of this Asset Purchase Agreement, Buyer
shall undertake, assume and agree to satisfy and perform, pay or discharge, to
the extent not satisfied or performed, paid or discharged prior to the Closing,
all of the liabilities and obligations of the Acquired Business as of the
opening of business on the Closing date which are listed in Schedule 2 (the
"Assumed Liabilities"); provided that the Buyer is not assuming any liabilities
or obligations of the Acquired Business relating to or arising from (a) Income
Taxes and other Taxes (as hereinafter defined) of the Seller, (b) liabilities
created by the action or failure to act of GLC or Antia except to the extent
specifically listed and described in Schedule 2 hereto, (c) any liabilities,
duties or obligations of Seller arising under the Heads of Option Agreement,
this Asset Purchase Agreement or any agreement executed pursuant to this
Agreement, (d) any and all claims for damages to he extent insured by Seller,
and (e) claims which GLC or Antia have knowledge of or should have known of by
exercising reasonable diligence and which Buyer is unaware of (the
3
liabilities not being assumed by Buyer hereunder, collectively, the "Retained
Liabilities"). "Income Taxes" means (a) taxes imposed on (i) gross or net
income, revenue or receipts, (ii) franchise taxes, (iii) doing business taxes,
(iv) trade taxes, (v) business earnings taxes, (vi) capital taxes, and (vii)
profit taxes; (b) taxes imposed in lieu of taxes described in clause (a); and
(c) surcharges and taxes on taxes described in clauses (a) and (b); in each case
whether imposed by the United States, by any political subdivision thereof or
therein or by any foreign jurisdiction.
2.1 UNDERTAKING OF BUYER. Buyer shall at
Closing execute and deliver to Seller an undertaking substantially in the form
of Exhibit B attached hereto with respect to the Assumed Liabilities (the
"Undertaking").
3. THE CLOSING. The closing of the purchase of the Purchased
Assets (the "Closing") shall be held at 10:00 am. on December 31, 1993, or at
such earlier time as Buyer on five days prior notice shall establish, or at such
other time as Seller and Buyer may agree at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer
& ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; provided, however,
Buyer shall have the option to extend the December 31, 1993 date to February 28,
1994 (such time and date as same may be extended hereunder being called the
"Closing Date") upon the payment to Seller on or before December 31, 1993 of the
sum of $46,000 to be applied as follows:
(a) $23,000 shall be treated as a non-
refundable deposit which shall be applied by Buyer in reduction of the purchase
price paid by Buyer to Seller in the event that the Closing takes place on or
prior to the Closing Date or retained by Seller in the event the Closing does
not occur on or prior to February 28, 1994 through no fault of Seller.
(b) $23,000 shall be applied by Seller
as additional purchase price at the rate of $400 per day for each day or part
thereof after December 31, 1993 until the date of the Closing. In the event such
Closing occurs prior to February 28, 1994 the balance of the $23,000 derived by
subtracting therefrom the additional purchase price shall be repaid by Seller to
Buyer at Closing. In the event the Closing does not occur by February 28, 1994
then Seller shall promptly refund the full $23,000 to Buyer.
4. PURCHASE PRICE.
4.1 AGGREGATE PURCHASE PRICE. The aggregate
purchase price (the "Purchase Price") of the Purchased Assets to be conveyed
pursuant to this Asset Purchase Agreement shall be (a) an amount payable in cash
or certified check on the Closing Date of $2,100,000 as hereinafter adjusted;
plus (b) the assumption of liabilities as and to the extent provided in Section
2 hereof.
4
4.2 ADJUSTMENTS TO PURCHASE PRICE. The Purchase
Price shall be (a) increased as provided in Section 3(b), and (b) decreased by
$94,205 plus the cost of all books of the Encyclopedia of the United States in
Seller's inventory at Closing and comprising Excluded Assets, valued at Seller's
inventory cost therefor. In payment of the Purchase Price Buyer shall be
credited with the amounts as provided for in Sections 3(a) and 3(b).
4.3 ALLOCATION OF PURCHASE PRICE. The Purchase
Price shall be allocated as set forth in Schedule 4.3 attached hereto. Buyer and
Seller represent, warrant and agree that such allocation was determined through
arms-length negotiations. Seller and Buyer each agree that, to the extent
permitted by applicable law, it shall adopt and utilize the amounts allocated to
each asset or a class of assets for purposes of all federal, state and other Tax
returns or reports of any nature filed by it and that it will not voluntarily
take any position inconsistent therewith upon examination of such Tax returns or
reports, and any claim for refund, in any litigation or otherwise with respect
to such Tax returns or reports. Notwithstanding any other provisions of this
Asset Purchase Agreement, the foregoing agreement shall survive the Closing Date
without limitation. As used in this Asset Purchase Agreement, the term "Tax" or
"Taxes" means any federal, state, local, foreign or other taxes (including,
without limitation, income (net or gross), gross receipts, profits, alternate or
add-on minimum, franchise, license, capital, capital stock, intangible,
services, premium, transfer, sales, use, ad valorem, payroll, wage, severance,
employment, occupation, property (real or personal), windfall profits, import,
excise, custom, stamp, withholding or governmental charges of any kind
whatsoever (including interest, penalties, additions to tax or additional
amounts with respect to such items).
5. INSTRUMENTS OF CONVEYANCE, TRANSFER, ASSUMPTION,
ETC.
5.1 INSTRUMENTS OF CONVEYANCE. Seller shall
properly execute and deliver to Buyer at the Closing:
(a) the ▇▇▇▇ of sale and
(b) assignment with respect to each of
the contracts and other agreements and rights to be assigned to Buyer hereunder
and, where required for such assignment, the consent or waiver of any third
party to such assignment, in each case in the form reasonably satisfactory to
Buyer.
5.2 POSSESSION. Simultaneously with the Closing,
Seller shall take all steps requisite to put Buyer in actual possession and
operating control of the Purchased Assets, including, without limitation,
disclosure to such persons as Buyer
5
may designate of Seller's trade secrets, formulae and other proprietary
information.
5.3 UNDERTAKING. Buyer shall promptly execute
and deliver the Undertaking to Seller at the Closing.
6. FURTHER ASSURANCES. At the Closing, and from time
to time after the Closing,
(a) at the request of Buyer and without further
consideration, Seller shall promptly execute and deliver to Buyer such
certificates and other instruments of sale, conveyance, assignment and transfer,
and take such other action, as may be reasonably requested by Buyer to confirm
more effectively any obligation assumed by Buyer pursuant to the Undertaking and
to sell, convey, assign and transfer to and vest in Buyer or to put Buyer in
possession of the Purchased Assets.
(b) At the request of the Seller and without
further consideration, Buyer shall promptly execute and deliver to Seller such
certificates and other instruments of assumption and take such other action as
may be reasonably requested by Seller to confirm more effectively and carry out
the assumption by Buyer of the obligations of the Seller assumed by Buyer
pursuant to the Undertaking.
(c) To the extent that any consents, waivers or
approvals necessary to convey items of Purchased Assets to Buyer are not
obtained prior to the Closing and Buyer waives the failure to obtain any such
consent, waiver or approval, Seller shall use its best efforts to:
(i) provide to Buyer, at the request of
Buyer, the benefits of any such Purchased Asset, and hold the same in trust for
Buyer;
(ii) cooperate in any reasonable and lawful
arrangement, approved by Buyer, to provide such benefits to Buyer;
and
(iii) enforce and perform, at the request
of Buyer, for the account of Buyer any rights or obligations of Seller arising
from any such Purchased Asset against or in respect of any third person
(including a government or governmental unit), including the right to elect to
terminate any contract, arrangement or agreement in accordance with the terms
thereof or upon the advice of Buyer.
7. REPRESENTATIONS OF GLC/ANTIA AND SELLER. The parties
hereto acknowledge that Buyer, pursuant to the Management Agreement, had and
continues to have, operational responsibility over Seller. Accordingly, those
representations concerning the
6
business of Seller set forth in Sections 7.4 through and including 7.13 are made
to the knowledge of GLC, Antia and Seller on the assumption that Buyer in its
capacity as the manager of Seller pursuant to the terms of the Management
Agreement has not caused Seller to be in breach of any of such representations.
Based upon the foregoing each of the Seller, Antia and GLC hereby jointly and
severally represent to the Buyer as follows:
7.1 ORGANIZATION, STANDING AND QUALIFICATION OF
THE SELLER. Each of GLC, Antia and the Seller is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; has all requisite power and authority to own its property and
conduct its business and is qualified to do business in, and is in good standing
under the laws of, all jurisdictions in which the ownership of its property
makes such qualification necessary.
7.2 EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT; NO CONFLICT. The execution, delivery and performance of the Heads of
Option Agreement and this Asset Purchase Agreement and the agreements
contemplated hereby have been duly authorized by all requisite corporate action
and approval of GLC, the Seller and Antia and will not violate any provision of
law or any order of any court or other agency of government, and will not
conflict with, result in any breach of any of the provisions of, constitute
(with due notice and/or lapse of time) a default under or violation of, the
provisions of any agreement or other instrument to which GLC, the Seller or
Antia is a party or by which GLC, the Seller, Antia or their respective property
may be bound. Each of the heads of Option Agreement, this Asset Purchase
Agreement, and upon execution, the other agreements contemplated hereby,
constitutes the legal, valid and binding obligation of each GLC, the Seller and
Antia to the extent it is a party thereto, enforceable against it in accordance
with its terms.
7.3 NO CONSENTS. No permit, consent, approval
or authorization of, or declaration, filing or registration with, or the giving
of notice to, any public body or authority or other person or entity is
necessary in connection with the execution, delivery and performance of this
Asset Purchase Agreement, the agreements contemplated hereby and transactions
contemplated hereby and thereby.
7.4 LITIGATION. There are no actions, suits,
proceedings, investigations or claims pending or threatened against or affecting
GLC, or Antia, or, to the knowledge of GLC or Antia, the Seller, at law or in
equity, in any court or before any foreign, federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
wherein an unfavorable judgment, decree or order would (a) restrain, prohibit,
invalidate, rescind or make unlawful the execution, delivery and performance of
this Asset Purchase
7
Agreement or any of the agreements contemplated hereby or (b) result in a
material adverse change in the business, condition (financial or otherwise),
assets, liabilities, properties or prospects of the Seller or (c) materially and
adversely affect the ability of the Seller to conduct the Acquired Business as
presently conducted or (d) materially impact the ability of GLC, the Seller or
Antia to perform this Asset Purchase Agreement or the agreements contemplated
hereby or (e) apply to the Acquired Business (including, without limitation, any
Purchased Asset) (each of (a), (b), (c), (d) or (e) above, or any other event or
occurrence which results in a material adverse change in the business, condition
(financial or otherwise), assets, liabilities, properties or prospects of
Seller, each a "Material Adverse Effect").
7.5 ACQUIRED BUSINESS. The Acquired Business is
not conducted through any subsidiary of the Seller or any of its affiliates.
Except for the Excluded Assets, the Purchased Assets owned by Seller and the
assets utilized in the Acquired Business under the agreements included in the
Assumed Liabilities, constitute all of the assets of Seller. The Seller has no
subsidiaries and is not a general partner in any partnership or coventurer in
any joint venture or other business enterprise. The Seller has complied with all
laws, rules, regulations, ordinances, orders, judgments and decrees
(collectively "Applicable Laws") applicable to the Acquired Business or Seller's
properties used therein; neither the ownership of the Acquired Business by
Seller nor the use of such properties by Seller nor the conduct of such business
by Seller conflicts with the rights of any other person or entity or violates
any Applicable Laws. Seller has all approvals, authorizations, consents,
licenses, orders and other permits required to permit operation of the Acquired
Business.
7.6 FINANCIAL STATEMENTS; No Material Adverse
Effects. GLC, Antia and the Seller have delivered to Buyer true and complete
copies of financial statements of the Seller for the periods ending December 31,
1991 and 1992, certified by ▇▇▇▇▇▇ ▇. Lowenwarter & Co. in 1991 and by Guibert
in 1992 and the unaudited financial statements for the period ending August 31,
1993 (the "Financial Statements"). Such Financial Statements were prepared in
accordance with generally accepted accounting principles, consistently applied
in accordance with the past practice of the Company and, to the knowledge of
GLC, Antia and the Seller, are true, correct and complete in all respects and
fairly present the financial position of the Seller as of the date thereof.
Since the date of the Financial Statements, to the knowledge of the Seller,
Antia and GLC, there have been no Material Adverse Effects (as defined in
Section 7.4 hereof). The Financial Statements, as of the date thereof, reflect
and any other financial statements furnished to Buyer by Seller, Antia and/or
GLC shall reflect the Purchased Assets of the Seller owned by it and the amounts
reflected with respect to such Purchased Assets are and in the case of such
financial statements delivered after the date hereof shall
8
be stated in accordance with generally accepted accounting principles and
reflect all Purchased Assets that are required, in accordance with such
principles, to be reflected in the Financial Statements and such other financial
statements. All assets reflected in the Financial Statements constitute
Purchased Assets except for the Excluded Assets set forth in Schedule 1.8.
7.7 BOOKS AND RECORDS. The Company's books and
records are, and until the Closing will be, maintained currently and in good
order so that the Buyer and/or its representatives may inspect the same and use
the same, immediately upon and after the Closing, to conduct the Acquired
Business.
7.8 LIABILITIES. To the knowledge of Antia and
GLC, the Seller has not debt, liability or obligation of any nature, whether
accrued, absolute, contingent or otherwise, whether due or to become due, that
is not reflected or reserved against and fully shown in the Financial Statements
except for those (i) that may have been incurred after the date of the
applicable Financial Statements; and (ii) that are not required by generally
accepted accounting principles consistently applied in accordance with the past
practice of the Seller to be included in the Financial Statements. To the
knowledge of GLC and Antia all debts, liabilities, and obligations incurred
after the date of the Financial Statements were incurred in the ordinary course
of business of the Seller consistent with its past practice, and are usual and
normal in type and in amount. The outstanding principal of the loan owed by the
Seller and guaranteed by GLC to Societe Generale ("Societe Generale") as of the
date hereof amounts to $4,900,000 (the "Societe Generale Indebtedness"). All
interest on the Societe Generale Indebtedness has been paid to date except for
accrued interest since November 30, 1993. Interest will be paid when due on
December 31, 1993, January 30, 1994 and February 28, 1994.
7.9 ABSENCE OF CHANGES OR EVENTS. Except as set
forth on Schedule 7.9 attached hereto or except as authorized in writing by
Buyer or a direct or indirect owner of Buyer, Seller has heretofore conducted
and shall hereinafter conduct the Acquired Business only in the ordinary course
and has not:
(a) incurred any obligation or liability,
absolute, accrued, contingent or otherwise whether due or to become due, except
liabilities or obligations incurred in the ordinary course of the business of
Seller and consistent with its prior practice;
(b) mortgaged, pledged or subjected to
lien, charge or security interest or any other incumbrance or restricting of any
of the property, business or assets, tangible or intangible, of the Seller
including any Purchased Asset;
9
(c) sold, transferred, leased to others
or otherwise disposed of any of the assets of the Seller, or committed to do any
of the foregoing, including the payment of any loans owed to any affiliate,
except for inventory sold to customers or returned to vendors in the ordinary
course of business and consistent with its prior practice;
(d) cancelled or compromised andy debt
or claim, or waived or released any right of substantial value except in the
ordinary course of business and consistent with its prior practice;
(e) suffered any damage, destruction or
loss (whether or not covered by insurance) which has resulted in a Material
Adverse Effect;
(f) modified, amended or terminated any
Author Contracts or Production Contracts;
(g) made any change in the rate of
compensation, commission, bonus or other direct or indirect remuneration
payable, or paid or agreed or orally promise to pay, conditionally or otherwise,
any bonus, extra compensation, pension or severance or vacation pay, to any
employee of the Seller except in the ordinary course of business consistent with
prior practice;
(h) created any capital expenditures or
capital additions or betterments in excess of $10,000 and $50,000
in the aggregate;
(i) Instituted any litigation, action or
proceeding before any court or governmental body relating to it or its property
or waived or compromised any right of a substantial value to the Acquired
Business except for litigation, actions or proceedings instituted and waivers
and compromises given, in the ordinary course of business and consistent with
its prior practice;
(j) Suffered any Material Adverse
Effect;
7.10 PERSONAL PROPERTY.
(a) The personal property to be
transferred to Buyer by Seller on the Closing Date will include all of the
Purchased Assets, subject to (i) dispositions of assets in the ordinary course
of business provided such assets are replaced with similar assets of comparable
value and utility, and (ii) improvements or additions to such assets. The
Purchased Assets to be transferred hereunder constitute all of the properties,
assets, rights, contracts, leases, easements, licenses and personal property
utilized by Seller in the conduct of the Acquired Business except for the
Excluded Assets. Seller has good and marketable title to all the purchased
Assets constituting personal property
10
described in Section 1 of this Asset Purchase Agreement and will have the
ability to and shall transfer such to Buyer free and clear of any conditional
bills of sales, chattel mortgages, security agreements, financing statements or
other security interests or liens of any kind.
(b) All personal property used in the
Acquired Business is owned by Seller, free and clear of all liens and
encumbrances, except as set forth in Schedule 7.10(a) and none of such property
is leased except as set forth in said Schedule 7.10(a) or 7.11.
(c) To the knowledge of GLC, Antia an
Seller all books, records, files, client lists and other documents and
instruments delivered or required to be delivered to Buyer hereunder are true,
complete and correct originals or copies thereof. There will not exist at
Closing any duplicates, summaries, extracts or synopsis of the foregoing. All
information contained therein shall be kept confidential as provided in Section
9.7 hereof.
7.11 CONTRACTS AND OTHER INTANGIBLES. To the
knowledge of GLC or Antia: (i) Seller has good title free of all liens and
encumbrances to all of its intangible property other than as described on
Schedule 7.11; all intangible property owned by Seller is listed in Schedule
7.11 and no other intangible property is required by Buyer to operate the
Acquired Business after the Closing; (ii) Seller's rights to the intangible
property listed on Schedule 7.11 are valid and enforceable and not the subject
of any default or termination notice by any party thereto, (iii) Seller does not
know of any existing state of facts which would constitute an event of default
or give rise to termination rights by any of the parties thereto; and (iv)
Seller has received no notice from any party to any such contract with respect
to such parties unwillingness or inability to perform thereunder. To the
knowledge of GLC or Antia, set forth on Schedule 7.11 is a list and a brief
description or identification of (i) all licenses, patents, patent rights,
patent applications, trademarks, trademark applications, tradenames, service
marks, service ▇▇▇▇ applications and copyrights, if any, used by Seller in the
Acquired Business; (ii) all Author's Contracts, Production Contracts and other
material contracts or leases; and (iii) all trade secrets that Seller has used
in the Acquired Business and which Seller believes are to within the general
knowledge of the industry; and in each case a brief description of the nature of
such rights. Other than as set forth on Schedule 7.11, Seller is not a licensee
of and no third party has any rights to or in, any license, patent, patent
rights, patent application, trademarks, trademark applications, tradenames,
service marks, service ▇▇▇▇ applications or copyright insofar as any of the
foregoing relates to the Acquired Business. Seller owns or possesses adequate
licenses or other rights to use the foregoing necessary to conduct the Acquired
Business as now operated and as
11
it is contemplated to be operated. No claim is pending, or, to the knowledge of
Seller or its officers, has been made to the effect that the present or past
Acquired Business operations of Seller or the use by Seller of any of the
intangible assets described above infringe or conflict with any rights of
others.
7.12 TAXES. To the knowledge of Seller, (i) all
Taxes which are due and payable by Seller or any other corporation or legal
entity now or previously owned or controlled by Seller or a member of previously
a member of the Antia Consolidated Group, but only to the extent that Seller may
be liable for payment thereof, with respect to all periods prior to the Closing
Date or with respect to a period that includes but does not end on the Closing
Date (each a "Preclosing Period"), have been paid or adequate provision has been
made for the payment thereof, and (ii) the liabilities for all Taxes reflected
in the Financial Statements represent adequate provision for the payment of all
Taxes of the Acquired Business payable for all periods ending on or prior to the
Closing Date whether or not disputed and whether or not asserted prior to the
Closing Date.
7.13 ERISA. To the knowledge of GLC or Antia,
except as set forth on Schedule 7.13, Seller has no plan or arrangement that
would constitute or is intended to qualify as an employee benefit plan under
Section 3(3) of the Employee Retirement Income Security Agreement, as amended
("ERISA") or as an employee pension benefit plan under Section 3(2) of ERISA or
as an employee welfare benefit plan under Section 3(1) of ERISA. All plans or
arrangements listed in Schedule 7.13 are in compliance with all applicable laws.
7.14 SURVIVAL. All representations of Antia, GLC
and the Seller shall survive the Closing. Any statements contained in any
certificate delivered by Antia, GLC or the Seller pursuant to this Asset
Purchase Agreement shall be deemed a representation to Buyer under the Heads of
Option Agreement and this Asset Purchase Agreement.
7.15 "KNOWLEDGE". The term "to the knowledge of"
means that after due inquiry, the party neither knows, nor should have known of
the fact(s) in question.
8. REPRESENTATIONS OF BUYER. Buyer hereby represents
to the Seller as follows:
8.1 ORGANIZATION AND STANDING OF BUYER. The
Buyer is duly organized, validly existing and in good standing under the laws of
Connecticut.
8.2 EXECUTION; DELIVERY AND PERFORMANCE OF
AGREEMENT. Any and all partnership action necessary to approve the execution and
delivery of the Heads of Option Agreement and this
12
Asset Purchase Agreement has been taken and the Heads of Option Agreement and
this Asset Purchase Agreement represents a valid and binding obligation of
Buyer.
8.3 NO CONFLICTS. The execution, delivery and
performance of this Asset Purchase Agreement and the agreements contemplated
hereby will not violate any provision of law or any order of any court or other
agency of government, and will not conflict with, or result in any breach of any
of the provisions of, constitute (with due notice and/or lapse of time) a
default under or a violation of, the provisions of any agreement or other
instrument to which the Buyer is a party or by which the Buyer or its property
may be bound.
8.4 SURVIVAL. All representations of the Buyer
shall survive the Closing. Any statement contained in a certificate delivered by
or pursuant to the Asset Purchase Agreement shall be deemed an representation to
the Seller under the Asset Purchase Agreement.
9. COVENANTS.
9.1 CONDUCT OF COMPANY BUSINESS PENDING THE
CLOSING. The Seller, GLC and Antia shall not take any action (or intentionally
omit to take a required action) which shall cause the Seller to, operate the
Acquired Business other than in the ordinary course of business consistent with
the Seller's past practice during the period commencing with the execution and
delivery of this Asset Purchase Agreement and ending with the Closing Date and
shall avoid any act that might injure or detract from the Acquired Business'
good will and reputation. The Seller, Antia and GLC shall not take any action
(or intentionally omit to take a required action) which shall adversely affect
the good will of the Acquired Business' suppliers, customers, distributors,
sales representatives and others having business relations with the Seller.
Notwithstanding the foregoing, GLC, Antia and Seller shall not be responsible
for any action taken by Buyer or its employees or agents pursuant to the
Management Agreement.
9.2 DUE DILIGENCE ACCESS. Buyer shall be
provided with such access to the corporate, accounting and financial books and
records and physical plants and offices of the Seller and Antia as the Buyer
shall reasonably request in order to perform a due diligence investigation of
the Acquired Business (the "Due Diligence").
9.3 INSTRUMENTS EVIDENCING CONVEYANCE OF
PURCHASED ASSETS. At the Closing, the Seller shall execute and deliver to Buyer
such instruments of sale, transfer, conveyance, assignment and or confirmation
and shall take such action as Buyer may reasonably request in order to
effectively transfer, assign and convey to Buyer, and to confirm Buyer's title,
in the Purchased
13
Assets. Seller, GLC and Antia shall also execute and deliver such
other documents and instruments as Buyer may reasonably request.
9.4 NEGATIVE COVENANTS. The parties acknowledge
that Buyer has operational responsibilities for the Seller under the Management
Agreement. GLC, Antia and the Seller covenant to Buyer that, except as permitted
by the written consent of Buyer or except for affirmative action taken by Buyer
to the contrary, the Seller shall operate the Acquired Business only in the
ordinary course consistent with its past practice and the Seller shall not, and
Antia and GLC shall not permit the Seller to, take any of the following actions:
(a) propose or adopt any amendment to
the Seller's Articles of Incorporation or By-laws or similar governing
documents;
(b) enter into any agreement (including
any agreement in principle) with respect to any merger, consolidation or
business combination (other than the transactions contemplated by this Asset
purchase Agreement), any acquisition of a material amount of assets or
securities of any other entity, any disposition of a material amount of its own
assets or securities or any material change in its capitalization, or any
release or relinquishment of any material contract right not in the ordinary
course of business consistent with past practice;
(c) waive, release, grant or transfer
any rights of value or modify or change in any respect any existing license,
lease, contract or document, other than in the ordinary course of business
consistent with past practice;
(d) fail to maintain its existing
insurance coverage on Purchased Assets in effect on the date of this Asset
Purchase Agreement or, in the event any such coverage shall be terminated or
lapse, procure substantially similar substitute insurance policies with
financially sound and reputable insurance companies in at least such amounts and
against such risks as are currently covered by such terminated or lapsed
policies;
(e) adopt or amend in any respect any
bonus, profit sharing, compensation, severance, termination, stock option,
pension, retirement, deferred compensation, employment or other employee benefit
agreement, trust, plan, fund or other arrangement for the benefit or welfare of
any of the Seller's directors, officers or employees, or (except for normal
increases in the ordinary course of business consistent with past practices)
increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any material benefit not required by any existing
plan or arrangement (including, without limitation, the granting of stock
options or stock appreciation
14
rights) or enter into any contract, agreement, commitment or arrangement to do
any of the foregoing;
(f) make any capital expenditures or
commitments for capital expenditures in excess of $1,000 with respect to any
single capital expenditure or $5,000 in the aggregate;
(g) fail to advise the Buyer in writing
within three (3) business days upon obtaining knowledge of any material change
in the Acquired Business or Purchased Assets;
(h) use the proceeds of the Societe
Generale Indebtedness other than in the Acquired Business or amend or modify the
terms of the Societe Generale Indebtedness in any respect;
(i) permit the dismissal of any Seller
employee, management person or consultant who is associated with the Buyer
(including without limitation Messrs. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇); or
permit the assignment of any such employee, management person or consultant to
duties which are, individually or in the aggregate, materially inconsistent with
the respective duties, responsibilities, titles or offices enjoyed as of the
date of this Asset Purchase Agreement;
(j) terminate or be in breach of the
terms of the Management Agreement;
(k) incur any additional indebtedness
for borrowed money or place a lien on any Purchased Asset; or
(l) enter into, amend or terminate any
Author Contract or Production Contract;
(m) agree in writing or otherwise to
take any of the foregoing actions or any action which would constitute or result
in a violation of or make any representation or warranty contained in Article
VII of this Asset Purchase Agreement untrue or incorrect in any material
respect.
9.5 NEW ENCYCLOPEDIA DISTRIBUTION AGREEMENT. At
the Closing, Seller shall, or shall cause it's designee to, enter into a
distribution agreement with Buyer for sales of the Encyclopedia of the United
States to the school and library market in calendar year 1994 upon the same
terms and conditions as decided between the Buyer and ▇▇▇▇▇▇▇▇ Kingfisher ▇▇▇▇▇▇
incorporated ("CKG") for the distribution of the Acquired Business' products by
CKG in the United States trade market in calendar year 1994 (the "New
Encyclopedia Distribution Agreement"). The New Encyclopedia Distribution
Agreement shall be in the form annexed hereto as Exhibit C.
15
9.6 EFFECT OF TERMINATION ON MANAGEMENT AGREEMENT.
The parties hereby agree that if the consummation of the transactions
contemplated by this Asset Purchase Agreement do not take place on or prior to
the Closing Date, or this Asset Purchase Agreement is terminated by GLC, Antia
or Seller prior to the Closing Date pursuant to Section 12.1(d) or Section 12.3
of this Asset Purchase Agreement or by Buyer pursuant to Section 12.2 of this
Asset Purchase Agreement; then, on the earliest to occur of (i) the Closing
Date, (ii) the date this Asset Purchase Agreement is terminated by Seller
pursuant to Section 12.1(d) or Section 12.3 of this Asset Purchase Agreement,
and (iii) the date this Asset Purchase Agreement is terminated by Buyer pursuant
to Section 12.2 of this Asset Purchase Agreement, the Management Agreement shall
terminate and no party thereto shall have any continuing obligations thereunder,
including, without limitation, the obligations to keep confidential, to not
compete with the Seller, to provide future management services on request and
any other obligations under provisions intended to survive termination, and
Antia and GLC shall cause the Seller to, enter into new management agreements
(the "New Management Agreements") with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, respectively, providing for full-time management services of
▇▇. ▇▇▇▇▇▇▇▇ and part-time management services of ▇▇. ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇,
and containing an annual rate of compensation of $50,000 in the case of each of
▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ and of $150,000 in the case of ▇▇. ▇▇▇▇▇▇▇▇. The New
Management Agreements shall be cancelable by either party thereto upon ninety
90) days notice (the "Notice Period") to the other party and such cancellation
shall be effective on the first day of the month subsequent to the expiration of
the Notice Period; provided, however, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇
may not give such notice prior to June 30, 1994.
9.7 CONFIDENTIALITY. Each of Seller, Antia and
GLC, jointly and severally, represent, warrant and agree that, after the
Closing, it shall (i) keep confidential and (ii) furnish to the Buyer or its
designees, if possible, all information and data (whether written or oral) in
its possession relating to the Acquired Business. Each of Seller, Antia and GLC
acknowledges that such information and data is confidential information
constituting trade secrets of the Acquired Business and agrees such data and
information in its possession shall be treated as such. Each of GLC, Antia and
the Seller agrees that, after the Closing, it shall not directly or indirectly
make use or allow the use of such data or information for its benefit or to the
detriment of the Buyer or the Acquired Business or for the benefit of anyone
else nor divulge such information to any party.
9.8 CONTINUING MANAGEMENT SERVICES. Buyer will
continue to provide the services of its principals under the terms of the
Management Agreement during the period commencing with the execution and
delivery of this Asset Purchase Agreement and ending
16
on the first to occur of the Closing Date or the date this Asset Purchase
Agreement is terminated by Antia pursuant to Section 12.1(d) or Section 12.3 of
this Asset Purchase Agreement or by Buyer pursuant to Section 12.2 of this Asset
Purchase Agreement.
9.9 SOCIETE GENERALE INDEBTEDNESS. Buyer will at
or prior to Closing pay the Societe Generale Indebtedness in an amount not to
exceed $4,900,000 plus accrued and unpaid interest from the last interest
payment date to the Closing Date.
9.10 COOPERATION. Each of GLC, the Seller, Antia
and Buyer agree to take all reasonable actions necessary to comply promptly with
all legal and other requirements which may be imposed or necessary in connection
with the purchase of the Purchased Assets pursuant to this Asset Purchase
Agreement and will promptly cooperate with each other and furnish information to
each other in connection with ensuring the consummation of the transactions
contemplated by this Asset Purchase Agreement.
9.11 RESTRICTIVE COVENANT.
(a) Each of GLC, Antia and Seller agrees
that during the period commencing with the date hereof and ending two (2) years
after the Closing Date it shall not solicit any current, past or future (i)
employee of the Acquired business (ii) applicant for employment by the Acquired
Business or (iii) consultant of the Acquired Business to leave the Acquired
Business or to do business with any enterprise or business which competes with
the business of the Acquired Business.
(b) In the event of a breach or
threatened breach by either of GLC, Antia and the Seller of the provisions of
this Section 9.11, the Buyer shall be entitled to an injunction restraining such
breach, since the remedy at law would be inadequate and insufficient. In
addition, the Buyer shall be entitled to such damages as it can show it has
sustained by reason of such breach. Nothing herein contained shall be construed
as prohibiting the Buyer or the Acquired Business from pursuing any other
remedies available for such breach or threatened breach of this Section 9.11.
9.12 SETTLEMENT AGREEMENTS. From the date of
this Asset Purchase Agreement through the Closing date, the Seller, Antia and
GLC shall promptly advise the Buyer of, and consult with Buyer concerning, the
terms and conditions of any proposed settlement agreement in connection with
litigation relating to the Acquired Business prior to the execution of such
Settlement Agreement.
9.13 RELEASE OF INDEBTEDNESS. Antia will at or
prior to Closing against payment of the Societe Generale
Indebtedness by Buyer as provided in Section 9.9 hereof, cause the
17
Acquired Business and Buyer to be released from all obligations to Societe
Generale under any agreements or instruments executed in connection with the
Societe Generale Indebtedness or otherwise.
9.14 TRANSFER TAXES. All transfer Taxes, realty
Taxes, documentary Taxes, stamp Taxes and sales and use Taxes, if any, payable
by reason of this transaction or the sale, transfer or delivery of the Acquired
Business shall be paid and borne by GLC or Antia.
9.15 BULK SALES REQUIREMENTS. Buyer hereby
waives compliance by Seller of any bulk sales notice requirements of applicable
law, and GLC and Antia jointly and severally shall indemnify and hold Buyer
harmless from any and all losses, liabilities and expenses which shall arise
against or be incurred by Buyer for the failure to comply with such
requirements.
9.16 NEW FINANCIAL STATEMENTS. Seller shall
deliver unaudited financial statements of Seller as of and through a date not
later than 90 days prior to Closing which financial Statements shall be in the
same form and detail and shall contain the same types of financial statements as
are contained in the Financial Statements and such financial statements shall be
deemed Financial Statements for purposes of Section 7.6 of this Agreement and
for all other purposes of this Agreement.
10. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER TO
CLOSE. The obligation of the Buyer to enter into and complete the Closing is
subject to the fulfillment prior to or on the Closing date of each of the
following conditions, all of which are for the sale and exclusive benefit of the
Buyer and any of which may be waived by it:
10.1 REPRESENTATIONS TRUE. All representations
of GLC, Antia and the Seller contained in Article 7 hereof shall be true and
correct in all material respects on the Closing Date with the same effect as if
made at and as of the Closing Date.
10.2 COVENANTS AND AGREEMENTS PERFORMED. The
Seller, GLC and Antia shall have performed and complied in all respects with all
agreements and conditions contained in this Asset Purchase Agreement which are
required to be performed or complied with by the Antia, GLC and the Seller prior
to or at the Closing.
10.3 NO ACTIONS, SUITS OR PROCEEDINGS. No action,
suit, or proceeding before any court or governmental regulatory authority shall
be pending, no investigation by any governmental regulatory authority shall have
been commenced, and no action, suit or proceeding by any governmental or
regulatory authority shall have been threatened against Buyer, Seller, GLC,
Antia or any of their principals, officers or directors, seeking to restrain,
prevent or change the transactions contemplated by this ▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ Agreement or by any of the agreements contemplated hereby or question
the legality or validity of any such transaction or agreements or seeking
damages in connection with any such transactions or agreements.
10.4 DELIVERY OF BOOKS AND RECORDS. The Buyer
shall have received all books and records of the Acquired Business.
10.5 NO ADVERSE EFFECT. Since the date of the
Financial Statements, the financial condition, business prospects and the
ability of the Seller to conduct the Acquired Business in the manner in which
such business was conducted on or prior to that date shall not have been
materially adversely affected in any manner or by any cause whatsoever, whether
or not beyond the control of Antia, GLC or the Seller and whether or not covered
by insurance.
10.6 AGREEMENTS. Seller and Antia shall have
executed and delivered the New Encyclopedia Distribution Agreement.
10.7 OFFICER'S CERTIFICATE. The Buyer shall
receive the certificate of an officer of each of GLC, Antia and the Seller
certifying to the fulfillment of the conditions specified in Sections 10.1 and
10.2 above.
10.8 LEGAL OPINION. Seller shall have furnished
Buyer with the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq. in the form and substance
satisfactory to Buyer and its counsel.
10.9 UPDATED SCHEDULES. Buyer shall have
received updated Schedules pursuant to Section 1.7 to the extent requested by
Buyer.
11. CONDITIONS PRECEDENT TO THE SELLERS'S OBLIGATIONS TO
CLOSE. The obligation of the Seller to enter into and complete the Closing is
subject to the fulfillment prior to or at the Closing Date of each of the
following conditions, all of which are for the sole and exclusive benefit of
GLC, Antia and any of which may be waived by the Seller.
11.1 REPRESENTATIONS TRUE. All representation of
the Buyer contained in Article 8 hereof shall be true and correct in all
material respects on the Closing Date with the same effect as if made at and as
of the Closing Date.
11.2 COVENANTS AND AGREEMENTS PERFORMED. The
Buyer shall have performed and complied in all material respects with all
agreements and conditions contained in this Asset Purchase Agreement, which are
required to be performed or complied with by the Buyer prior to or at the
Closing.
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11.3 NO ACTIONS, SUITS OR PROCEEDINGS. No action,
suit or proceeding before any court or governmental regulatory authority shall
be pending, no investigation by any governmental regulatory authority shall have
been commenced, and no action, suit or proceeding by any governmental or
regulatory authority shall have been threatened against GLC, Buyer, Seller,
Antia or any of their principals, officers or directors, seeking to retrain,
prevent or change the transactions contemplated by this Asset Purchase Agreement
or by any of the agreements contemplated hereby or question the legality or
validity of any such transactions or agreements or seeking damages in connection
with any such transactions or agreements.
12. TERMINATION; EXPENSES.
12.1 TERMINATION BY EITHER PARTY PRIOR TO CLOSING
DATE. This Asset Purchase Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date as
follows:
(a) by mutual consent of the Seller and
the Buyer; or
(b) by either Buyer or Seller if the
consummation of the purchase of the Purchased Assets pursuant to this Asset
Purchase Agreement has not occurred on or before the Closing Date without fault
of the terminating party; or
(c) by either the Seller or the Buyer if
any court of competent jurisdiction in the United States, foreign jurisdiction
or any governmental body shall have issued an order, decree or ruling or have
taken any other action restraining, enjoining or otherwise prohibiting the
consummation of the transaction contemplated by this Asset Purchase Agreement or
the agreements contemplated hereby; or
(d) by the Seller if the Buyer breached
a material representation or agreement set forth in this Asset Purchase
Agreement; or by Buyer if Seller, GLC or Antia breached a material
representation or agreement set forth in this Asset Purchase Agreement.
12.2 TERMINATION BY BUYER. This Asset Purchase
Agreement may be terminated and the consummation of the transactions
contemplated hereby may be abandoned at any time by Buyer for any reason prior
to the Closing Date.
12.3 TERMINATION BY SELLER. This Asset Purchase
Agreement may be terminated by the Antia and the consummation of the
transactions contemplated hereby may be abandoned at any time after the Closing
Date if the Buyer has not satisfied the closing conditions set forth in Section
11 above.
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12.4 PROCEDURES AND EFFECT OF TERMINATION. In
the event of the termination or abandonment of the purchase of the Purchased
Assets contemplated by this Asset Purchase Agreement, by any party hereto
pursuant to Sections 12.1, 12.2 and 12.3 above, written notice shall be given by
the terminating party to the other party and the Heads of Option Agreement and
this Asset Purchase Agreement shall forthwith become void and have no effect,
without any liability on the part of any party or its directors, officers
stockholders or partners, other than any rights, remedies, fees and expenses the
parties may be entitled to pursuant to Section 12.5 hereof; provided, however,
the rights, duties and obligations under Sections 9.6 and 12.5 and under Article
13 shall survive such termination. Nothing contained in this Section 12.4 shall
relieve any party from liability for any intentional breach of this Asset
Purchase Agreement.
12.5 EXPENSES; RIGHTS AND REMEDIES. Whether or
not the purchase of the Purchased Assets contemplated by this Asset Purchase
Agreement is consummated, all costs and expenses, including reasonable legal and
accounting fees and disbursements, in connection with the preparation and
negotiation of this Asset Purchase Agreement and the agreements contemplated
hereby and the consummation of the transactions contemplated hereby and thereby
("Transaction Costs") incurred by Buyer will be paid by Buyer and all
Transaction Costs incurred by GLC, Antia and the Seller will be paid by GLC;
provided that if this Asset Purchase Agreement is terminated by a party pursuant
to Section 12.1(d) above as a result of another party's wilful breach of a
material representation or agreement set forth in this Asset Purchase Agreement,
then the terminating party shall be entitled to the reimbursement of its
Transaction Costs and (a) the Buyer in the case such breach is by Buyer or (b)
each of GLC and Antia in the case such breach is by any of GLC, the Seller or
Antia, shall be obligated to pay to such terminating party the Transaction Costs
of the terminating party. In addition to the right hereunder to be reimbursed
for Transaction Costs in the event of a wilful breach of this Asset Purchase
Agreement, the terminating party shall be entitled to whatever rights and
remedies at law or in equity or otherwise it may have against the party which
has committed such breach. In determining such rights all of the provisions of
this Agreement shall be deemed in force and applicable.
13. TERMINATION OF OPTION AGREEMENT AND PRELIMINARY AGREEMENT.
On the earlier to occur of (a) the Closing Date if the Closing shall not have
occurred and (b) the date this Asset Purchase Agreement is terminated (i) by
Seller pursuant to Section 12.1(d) or Section 12.3 of this Asset Purchase
Agreement or (ii) by Buyer pursuant to Section 12.2 of this Asset Purchase
Agreement; each of the Option Agreement and the Preliminary Agreement shall be
terminated and no party thereunder shall have any continuing rights, duties or
obligations thereunder, including, without limitation, the obligations to keep
confidential, to not compete
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with the Seller and the rights, duties and obligations contained in any other
provisions which had been intended to survive termination.
14. INDEMNIFICATION; BREACH OF REPRESENTATION.
14.1 INDEMNIFICATION BY GLC/ANTIA. GLC and
Antia, jointly and severally, hereby agree to indemnify, defend and hold the
buyer harmless from and against and to pay for as incurred any and all loss,
liability, damage or deficiency (including interest, penalties and reasonable
attorneys' fees) ("Losses") arising out of or due to a breach of any of the
representations or covenants of GLC, the Seller and Antia contained in this
Asset Purchase Agreement.
14.2 INDEMNIFICATION BY BUYER. The Buyer hereby
agrees to indemnify, defend and hold the Seller harmless from and against and to
pay for as incurred any and all Losses arising out of or due to a breach of any
of the representations or covenants of the Buyer contained in this Asset
Purchase Agreement.
15. Binding Agreement. This Asset Purchase Agreement is
binding upon, and shall inure to the benefit of, the parties hereto, their
respective legal representatives, successors and assigns.
16. Notices. Any notice or communication given pursuant
hereto by either of the parties hereto to the other party hereto shall be in
writing and be hand delivered or mailed by registered mail, postage prepaid, in
either case to be effective upon actual receipt, as follows:
If to the Seller, at:
The Millbrook Press Inc.
▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to Antia, at:
Antia Corporation
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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If to GLC:
Group de la ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇-▇▇-▇▇-▇▇
Fax: ▇▇▇-▇▇▇-▇▇-▇▇-▇▇-▇▇
With a copy to [GLC's, Antia's and Antia's Counsel]:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Groupe de la ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇-▇▇-▇▇-▇▇
Tel: ▇▇▇-▇▇▇-▇▇-▇▇-▇▇-▇▇
If to the Buyer, at:
SMG Associates
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a Copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 16 by any of the parties hereto to the
other parties hereto.
17. INTEGRATION, INTERPRETATION AND MISCELLANEOUS.
17.1 PRIOR AGREEMENTS; SEVERABILITY.
(a) This Asset Purchase Agreement, which
for all purposes shall include the Annexes hereto and the Schedules, amplifies
the heads of Option Agreement and supersedes all other prior agreements,
arrangements and understandings written or oral, relating to the subject matter
hereof. Any conflict between the provisions of this Agreement and the Heads of
Option Agreement shall be resolved in favor of this Agreement.
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(b) The invalidity, illegality or
unenforceability in any jurisdiction of any provision in or obligation under
this Asset Purchase Agreement or the other agreements contemplated hereby shall
not affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Asset Purchase Agreement or the other
agreements contemplated hereby or of such provision or obligation in any other
jurisdiction.
17.2 APPLICABLE LAW. This Asset Purchase
Agreement shall be construed in accordance with the laws of the State of New
York without regard to principals of conflicts of law.
17.3 CURRENCY. Unless otherwise indicated, all
dollar amounts referred to in this Asset Purchase Agreement are in United States
dollars.
17.4 HEADINGS. The headings contained in this
Asset Purchase Agreement are for reference purposes only and shall not affect
the meaning or interpretation of such instruments.
17.5 WAIVERS. This Asset Purchase Agreement and
the other instruments to be executed pursuant hereto may be amended, modified,
superseded, canceled, renewed or extended, and the terms or covenants hereof may
be waived, only by a written instrument executed by the parties hereto, or in
the case of a waiver, by the party waiving compliance. The failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect its right at a later time to enforce the same. No waiver by any
party of the breach of any term or covenant contained in Asset Purchase
Agreement or in any other such instrument, whether be conduct or otherwise, in
any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any breach, or a waiver of the breach of any other term or
covenant contained herein.
17.6 ENTIRE AGREEMENT. The Heads of Option
Agreement and this Asset Purchase Agreement, including the Annexes hereto, the
Disclosure Schedule and the documents referred to herein, constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Asset Purchase Agreement as of the date and year first above written.
THE MILLBROOK PRESS INC., as Seller
By:--------------------------------
Name:
Title:
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SMG ASSOCIATES, as Buyer
By: ▇▇▇▇▇▇ Int'l Publishing
& Research, Inc., Partner
By:---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
By: Braben, Inc., Partner
By:---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
By: ▇▇▇▇▇▇▇ Associates, Inc., Partner
By:---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
GROUPE DE LA CITE INTERNATIONAL
By:----------------------------------
Name:
Title:
ANTIA CORPORATION
By:----------------------------------
Name:
Title:
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