SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 6, 1996
DeNovo Corporation
(Exact name of registrant as specified in its charter)
Ontario, Canada 0-16355 98-0082860
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
214 Brazilian Ave., Suite 300, Palm Beach, FL 33480
(Address of principal executive offices) (Zip Code)
(561) 659-0121
Registrant's telephone number, including area code
---
(Former name or former address, if changed since last report.)
Total Number of Pages:
Exhibit Index appears on page: 3
Item 2. Acquisition or Disposition of Assets.
On September 6, 1996, the Registrant's wholly-owned subsidiary, Firestone
Publishing, Inc. ("Firestone"), completed the purchase of substantially all the
assets of Dugent Publishing Corp., a Florida corporation ("Dugent" or the
"Seller") which publishes four lifestyle magazines. Firestone paid
$1,000,000 toward the purchase on July 18, 1996, and completed the purchase
on September 6, 1996 by paying an additional $2,023,054.79 and executing and
delivering a secured promissory note in the amount of $4,000,000. The purchased
assets consist of intellectual property including trademarks, fixed assets, and
contract rights. Additionally, net cash flow from operations of Dugent from
July 18, 1996 through September 6, 1996 was segregated in the accounting records
and included in the purchase of assets, as was the taxable income of Dugent for
that period. The $4,000,000 note will accrue interest at prime plus 2% from the
date of the note for one year, at which time accrued interest will be added to
principal and the balance will be amortized over 48 months. Payment pursuant to
the note is secured with a lien on the acquired assets.
The Seller was in the business of publishing, printing and selling four
periodical magazines. The Registrant, through its subsidiary, Firestone,
intends to continue such use of the acquired assets.
The total consideration paid for the purchased assets was determined with
reference to the Seller s income statements for the past three years. There was
no prior relationship between any of the Seller and its affiliates, on the one
hand, and the Registrant and any of its affiliates, officers and directors, or
any associate of any officer or director, on the other hand.
The Registrant obtained the funds used to capitalize Firestone, for
purposes of making the first payment, through a short-term line of credit. The
funds for the second payment were obtained by the Registrant by way of sale of
convertible preferred stock pursuant to Regulation S, as well as an additional
short-term line of credit.
Item 7. Financial Statements and Exhibits.
It is impracticable for the Registrant to provide the required financial
statements at the time this report is being filed. The required financial
statements will be filed as an amendment to this Form as soon as practicable,
but not later than 60 days after the due date of this report.
The following exhibits are filed as a part of this report:
(c) Exhibits.
2.1 Asset Purchase Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DeNovo Corporation
Date: Sept. 9, 1996 By:/s/ Michael D. Herman
Michael D. Herman, President
EXHIBIT INDEX
2.1 Asset Purchase Agreement Page 4
The following attachments to Exhibit 2.1 are not filed herewith but will be
provided upon request of the Commission:
Exhibit A-1 - List of Tangible Assets
Exhibit A-2 - List of Contracts Being Assumed
Exhibit B-1 - Bill of Sale
Exhibit B-2 - Assignment of Trademark Application
Exhibit C - Assignment and Assumption Agreement
Exhibit D - Promissory Note $4,000,000
Exhibit E - Security Agreement and UCC-1's
Exhibit F - Purchase Price Allocation
Exhibit G - Tax Returns
Exhibit H - 1,2,3 - Employment Agreements
Disclosure Schedule
Firestone Publishing, Inc. Secretary's Certificate re: Incumbency and
Director's Consent
Dugent Publishing Corp. Secretary's Certificate re: Incumbency and
Director's Consent
Opinion of counsel to Firestone Publishing, Inc.
Opinion of counsel to Dugent Publishing Corp.
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of this 6th day of
September, 1996, by and between Firestone Publishing, Inc., a Delaware
corporation (the "Buyer") and Dugent Publishing Corporation (the "Seller").
The Buyer and the Seller are referred to collectively herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase substantially all of the assets (but assume no liabilities other than
as specifically provided herein) of the Seller in return for cash and the Buyer
Note.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Acquired Assets" means all right, title, and interest in and to all of the
assets of the Seller, including all (if any) of its (a) leaseholds and
subleaseholds in real property; (b) tangible personal property listed on Exhibit
A-1 hereto; (c) Intellectual Property, goodwill associated therewith, licenses
and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions; (d) those certain leases,
subleases, agreements, contracts, indentures, mortgages, instruments, Security
Interests, guarantees, other similar arrangements, and rights thereunder,
specifically identified or generally described on Exhibit A-2 hereto;
(e) transferable franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies; (f) books, records, ledgers, files,
documents, correspondence, lists, drawings, and specifications, creative
materials, advertising and promotional materials, studies, reports, and other
printed or written materials; (g) rights in and with respect to the assets
associated with its Employee Benefit Plans; (h) all right, title and interest in
and to materials previously published in writing, on film or otherwise by the
Seller, including Intellectual Property rights and layout rights; and (j) all
right, title and interest in and to electronically transmitted materials of,
developments by and publications of the Seller; (k) accounts receivable
attributable to the Buyer-Generated Issues (as hereinafter defined); (l) all UPC
codes previously used by Seller on any materials sold or published by Seller;
provided, however, that the Acquired Assets shall not include (i) the corporate
charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications, taxpayer
and other identification numbers, seals, minute books, stock transfer books,
blank stock certificates, and other documents relating to the organization,
maintenance, and existence of the Seller as a corporation and/or necessary for
preparation of any tax return which is or may be due, including audits;
(ii) cash on hand and cash equivalents; (iii) rights, obligations, or interest
in any lease, sublease, agreement, contract, indenture, mortgage, instrument,
Security Interest, guarantee, or other similar arrangement, not specifically
identified or generally described on Exhibit A-2 hereto; (iv) accounts, notes,
and other receivables (other than as set forth above), specifically including,
without limitation, accounts receivable attributable to the Seller-Generated
Issues (as hereinafter defined); (v) claims, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery, rights of set off, and
rights of recoupment (including any such item relating to the payment of taxes);
(vi) any of the rights of the Seller under this Agreement (or under any side
agreement between the Seller on the one hand and the Buyer on the other hand
entered into on or after the date of this Agreement); or (vii) inventory
consisting of paper (but see Section 2(i) with respect to purchase of paper
inventory as used).
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"Buyer Note" has the meaning set forth in Section 2(d) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec. 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec. 3(l).
"Environmental, Health, and Safety Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act of 1976, and the Occupational Safety and Health Act of 1970, each
as amended, together with all other laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all agencies thereof)
concerning pollution or protection of the environment, public health and safety,
or employee health and safety, including laws relating to emissions, discharges,
releases, or threatened releases of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Escrow Agreement" has the meaning set forth in Section 10 hereof.
"Financial Statement" has the meaning set forth in Section 3(g) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof; (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith and all applications, registrations, and renewals in connection
therewith; (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith; (d) all mask works and all
applications, registrations, and renewals in connection therewith; (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals); (f) all computer software (including data and
related documentation); (g) all other proprietary rights; and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.<PAGE>
"PBGC" means the Pension
Benefit Guaranty Corporation. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization, or a governmental
entity (or any department, agency, or political subdivision thereof) or other
legal entity.
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406 and Code
Sec. 4975.
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge, or
other security interest, other than (a) mechanic's, materialmen's, and similar
liens; (b) liens for taxes not yet due and payable; (c) purchase money liens and
liens securing rental payments under capital lease arrangements; and (d) other
liens arising in the Ordinary Course of Business and not incurred in connection
with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Seller Share" means any share of the Common Stock of the Seller.
"Seller Stockholder" means any Person who or which holds any shares of capital
stock in any Seller.
"Subsidiary" means any corporation with respect to which a specified Person (or
a Subsidiary thereof) owns a majority of the common stock or has the power to
vote or direct the voting of sufficient securities to elect a majority of the
directors.
2. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified below in this
Section 2 by way of Bill of Sale and Trademark Assignment Agreement in the forms
attached hereto as Exhibits B-1 and B-2. This transaction is being consummated
pursuant to Buyer's exercise of its "Rights" as defined in an Asset Purchase and
Sale Agreement dated July 18, 1996 between the parties hereto.
(b) Assumption of Specified Contracts. As part of the purchase
and sale of the Acquired Assets, Buyer shall assume, and Seller shall assign to
Buyer, all of Seller's right, title and interest in and to those contracts and
agreements enumerated on Exhibit A-2 hereto by way of Assignment and Assumption
Agreements in the form attached hereto as Exhibit C. None of the Assignment and
Assumption Agreements executed pursuant to this paragraph shall be deemed to
create any third-party beneficiary rights.
(c) No Assumption of Liabilities. Other than as set forth in
subsections (b), (h) and (j) of this Section 2, the Buyer does not hereby assume
or have any responsibility with respect to any obligation or liability of the
Seller.
(d) Purchase Price. The Buyer agrees to pay to the Seller at the
Closing $6,000,000 (the "Purchase Price") by delivery of (i) its promissory
note in the form of Exhibit D attached hereto in the principal amount of
$4,000,000 (the "Buyer Note"); and (ii) cash in the amount of $2,000,000,
representing the balance of the Purchase Price, payable by wire transfer or
delivery of other immediately available funds. Payment pursuant to the Buyer
Note is secured as set forth in a Security Agreement in the form of Exhibit E
attached hereto.
(e) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") is deemed to have taken place simultaneously with
the exercise by Buyer of its Rights described in Section 2(a) above (the
"Closing Date").
(f) Deliveries at the Closing. At the Closing, (i) the Seller has
executed, acknowledged (if appropriate), and delivered to the Buyer the various
certificates, instruments, and documents referred to in this Section 2 and in
Section 6(a) below; (ii) the Buyer has executed, acknowledged (if appropriate),
and delivered to the Seller the various certificates, instruments, and documents
referred to in this Section 2 and in Section 6(b) below; (iii) the Seller has
executed, acknowledged (if appropriate), and delivered to the Buyer
(A) assignments, (including Intellectual Property transfer documents) in forms
reasonably satisfactory to Buyer and (B) such other instruments of sale,
transfer, conveyance, and assignment as the Buyer and its counsel reasonably
have requested; (iv) the Buyer has executed, acknowledged (if appropriate), and
delivered to the Seller such instruments of assumption as the Seller and its
counsel reasonably have requested; and (v) the Buyer has delivered to the Seller
the consideration specified in Section 2(d) above in form reasonably
satisfactory to Seller and its counsel.
(g) Allocation. The Parties agree to allocate the Purchase Price
(and all other capitalizable costs) among the Acquired Assets for all purposes
(including financial accounting and tax purposes) in accordance with the
allocation schedule attached hereto as Exhibit F.
(h) Subscription Fulfillment. The parties understand that Seller
has previously sold consumer subscriptions for magazines bearing either a
trademark or tradename which is included in the Acquired Assets conveyed
pursuant to this Agreement. Such subscriptions are described in detail in
Section 2(h) of the Disclosure Schedule. The parties agree that Buyer shall
assume all liability for fulfillment of those subscription orders and shall, at
Buyers's sole cost and expense, fulfill those subscription orders through their
present expiration date.
(i) Paper Inventory. Seller's paper inventory is not included in
the Acquired Assets; however, such paper inventory shall remain at the premises
of Seller's printer, Wisconsin Color Press, Inc., located at 5400 West Good Hope
Road, Milwaukee, Wisconsin, and Buyer shall purchase such paper inventory as
needed, with prompt payment to Seller within 10 days at Seller's original cost.
Buyer must use Seller's paper inventory before using or purchasing any other
paper stock and must pay therefor within 10 days of usage. Seller has provided
Buyer with a detailed schedule of inventory prior to the date hereof and Buyer
has had the opportunity to inspect such inventory to determine correctness of
said schedule.
(j) Revenues, Payables. The parties understand that certain
accounts receivable of the Seller are attributable to advertising, distribution
and the like with respect to publications shipped prior to July 22, 1996
("Seller-Generated Issues") bearing a trademark or tradename which is included
in the Acquired Assets conveyed pursuant to this Agreement. Section 2(j) of the
Disclosure Schedule sets forth a production schedule which shows Gent October as
the last Seller-Generated Issue and Nugget October as the first Buyer-Generated
Issue. All receivables attributable to Seller-Generated Issues shall remain the
property of Seller, and all accounts payable attributable to Seller-Generated
Issues shall remain the obligations of Seller. Buyer shall be responsible for
all costs incurred to third parties by Seller with respect to publications
shipped on or after July 22, 1996 ("Buyer-Generated Issues"). Buyer and Seller
shall each assist the other in collecting, endorsing (where applicable) and
applying payments on account of accounts receivable consistent with this
paragraph. Buyer shall assume at Closing all retail display allowances
attributable to Buyer-Generated Issues. Seller shall be responsible for all
retail display allowances attributable to Seller-Generated Issues.
(k) Joint Venture. Seller shall be entitled to one-half the
revenues accruing to Buyer on account of a joint venture with Creations (Nelson
Weisberg and Monty Palma) (the interest of Seller in which is being transferred
to Buyer as part of the Acquired Assets) for a period of one year after Closing.
Buyer shall remit said amounts to Seller not less than once monthly within
twenty (20) days of receipt by Buyer.
3. Representations and Warranties of the Seller and Seller
Stockholders. The Seller and Seller Stockholders jointly and severally
represent and warrant to the Buyer that the statements contained in this Section
3 are correct and complete as of the date of this Agreement except as set forth
in the disclosure schedule accompanying this Agreement and initialed by the
Parties (the "Disclosure Schedule"). The Disclosure Schedule is arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 3.
(a) Organization of the Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Section 3(a) of the Disclosure Schedule sets
forth with respect to the Seller (i) the number of shares of authorized capital
stock of each class of its capital stock; (ii) the number of issued and
outstanding shares of each class of its capital Stock, the names of the holders
thereof, and the number of shares held by each such holder; (iii) the number of
shares of its capital stock held in treasury; and (iv) its directors and
officers. The Seller is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required. The Seller has full corporate power and authority and, to the best of
its actual knowledge, all licenses, permits, and authorizations necessary to
carry on the businesses in which it is engaged and in which it presently
proposes to engage and to own and use the properties owned and used by it. The
Seller has delivered to the Buyer correct and complete copies of its Articles of
Incorporation and bylaws (as amended to date). All of the issued and
outstanding shares of capital stock of the Seller have been duly authorized and
are validly issued, fully paid, and nonassessable. The Seller Stockholders hold
of record and own beneficially all of the outstanding shares of the Seller,
free and clear of any restrictions on transfer (other than restrictions under
the Securities Act and state securities laws), taxes, Security Interests,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. The minute books (containing the records of meetings of the
stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of the
Seller are correct and complete. The Seller is not in default under or in
violation of any provision of its charter or bylaws. The Seller
does not control directly or indirectly or have any direct or indirect
equity participation in any corporation, partnership, trust, or other business
association.
(b) Authorization of Transaction. The Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Seller and the Seller
Stockholders have duly authorized the execution, delivery, and performance of
this Agreement by the Seller. This Agreement constitutes the valid and legally
binding obligation of the Seller, enforceable in accordance with its terms and
conditions.
(c) Noncontravention. To the best of Seller's actual knowledge,
neither the execution and the delivery of this Agreement, nor the consummation
of the transactions contemplated hereby (including the assignments and
assumptions referred to in Section 2 above), will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
the Seller is subject or any provision of the Articles of Incorporation or
bylaws of the Seller in such a manner that it would have a materially adverse
effect on Seller's business, operations, or condition, or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license, instrument,
or other arrangement to which the Seller is a party or by which it is bound or
to which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets) in such a manner that it would have a
materially adverse effect on Seller's business, operations, or condition, except
as otherwise set forth in Section 3(c) of the Disclosure Schedule . The Seller
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to in Section 2
above), except for such approvals or consents which have been obtained by or
will be obtained prior to Closing.
(d) Brokers' Fees. The Seller has not entered into any agreement
which would create any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
(e) Title to Assets. The Seller has good and marketable title to
the tangible personal property described on Exhibit A-1, and all of the Acquired
Assets, free and clear of all Security Interests or restriction on transfer,
except as otherwise disclosed to Buyer herein, on the Disclosure Schedule, or on
an Exhibit hereto.
(f) Subsidiaries. The Seller has no Subsidiaries.
(g) Financial Statements. Attached hereto as Exhibit G are copies
of the Seller's Federal corporate income tax returns (Form 1120S) as filed with
the Federal government for the years ended December 31, 1993, December 31, 1994,
and December 31, 1995 (the "Most Recent Fiscal Year End"); and a year-to-date
trial balance (the "Financial Statements"). The Financial Statements (including
the Federal tax returns) have been prepared in accordance with the "Federal
income tax method of accounting - cash basis" applied on a consistent basis
throughout the periods covered thereby, present fairly the taxable income and
other information of the Seller shown thereon as of such dates and for such
periods, are correct and complete, and are consistent with the books and records
of the Seller (which books and records are correct and complete).
(h) Events Subsequent to Most Recent Fiscal Year End. Except as
disclosed in Section 3(h) of the Disclosure Schedule, since the Most Recent
Fiscal Year End, there has not been any material adverse change in the financial
condition, operations, or results of operations of the Seller. No change in the
publishing industry in general shall be deemed to affect this representation.
Without limiting the generality of the foregoing, since that date:
(i) the Seller has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, other than for a
fair consideration in the Ordinary Course of Business;
(ii) the Seller has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts,
leases, and licenses) outside the Ordinary Course of Business;
(iii) no party (including the Seller) has accelerated,
terminated, modified, or canceled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) involving more than $2,000 to which the Seller is a party
or by which it is bound;
(iv) the Seller has not imposed any Security Interest upon
any of its assets, tangible or intangible, which will not be
satisfied from proceeds of closing;
(v) the Seller has not made any capital expenditure (or
series of related capital expenditures) involving more than $2,000
and outside the Ordinary Course of Business, exclusive of paper, and
except as otherwise disclosed;
(vi) the Seller has not made any capital investment in, any
loan to, or any acquisition of the securities or assets of, any
other Person (or series of related capital investments, loans, and
acquisitions) outside the Ordinary Course of Business for more than
$2,000;
(vii) the Seller has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation
outside the Ordinary Course of Business for more than $2,000 singly
or $5,000 in the aggregate;
(viii) the Seller has not delayed or postponed the
payment of accounts payable and other Liabilities outside the
Ordinary Course of Business;
(ix) the Seller has not canceled, compromised, waived, or
released any right or claim (or series of related rights and claims)
outside the Ordinary Course of Business involving more than $2,000;
(x) the Seller has not granted any license or sublicense of
any rights under or with respect to any Intellectual Property
outside the Ordinary Course of Business, or without receiving fair
consideration therefor;
(xi) there has been no change made or authorized in the
charter or bylaws of the Seller, except as disclosed to Buyer;
(xii) the Seller has not issued, sold, or otherwise disposed
of any of its capital stock, or granted any options, warrants, or
other rights to purchase or obtain (including upon conversion,
exchange, or exercise) any of its capital stock, except as disclosed
to Buyer;
(xiii) the Seller has not taken any action which would
give rise to a claim or lien on any of its capital stock;
(xiv) the Seller has not experienced any materially
adverse damage, destruction, or loss (whether or not covered by
insurance) to its property;
(xv) the Seller has not made any loan to, or entered into any
other transaction with, any of its directors, officers, and
employees outside the Ordinary Course of Business which would have a
material adverse effect on its business or property;
(xvi) the Seller has not entered into any employment contract
or collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement outside the
Ordinary Course of Business, except as otherwise disclosed to Buyer;
(xvii) the Seller has not granted any increase in the
amounts of compensation of any of its directors, officers, and
employees shown in Section 9(h)(xvii) of the Disclosure Schedule;
(xviii) the Seller has not adopted, amended, modified or
terminated any bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of its
directors, officers, and employees (or taken any such action with
respect to any other Employee Benefit Plan) outside the Ordinary
Course of Business except as otherwise disclosed to Buyer;
(xix) the Seller has not made any other change in employment
terms for any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xx) the Seller has not made or pledged to make any
charitable or other capital contribution outside the Ordinary Course
of Business;
(xxi) there has not been any other occurrence, event,
incident, action, failure to act, or transaction outside the
Ordinary Course of Business involving the Seller; and
(xxii) the Seller has not committed to any of the
foregoing.
(i) Undisclosed Liabilities. Except as otherwise disclosed,
neither Seller nor any of Seller Stockholders has actual knowledge of any
liability of Seller or any presently existing or overtly threatened claim,
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against it giving rise to any liability.
(j) Legal Compliance. Neither Seller nor any of Seller
Stockholders has any actual knowledge of any failure of Seller to comply with
all applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof) affecting Seller's
business, the failure of which would have a material adverse effect on the
business, operations or condition of Seller; and neither Seller nor any of
Seller Stockholders has any actual knowledge of any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice having been
filed or commenced against Seller alleging any failure so to comply.
(k) Tax Matters.
(i) To the best of Seller's and Seller Stockholders'
knowledge (A) the Seller has filed all tax returns that it was
required to file and (B) all such tax returns were correct and
complete in all respects. All taxes indicated on such returns as
being owed by the Seller have been paid. The Seller is not
currently the beneficiary of any extension of time within which to
file any tax return. Neither Seller nor any of Seller Stockholders
has actual knowledge of any claim having been made by an authority
in a jurisdiction where the Seller does not file tax returns that it
is or may be subject to taxation by that jurisdiction, except as
otherwise disclosed. There are no Security Interests on any of the
assets of the Seller which have been filed in connection with any
failure (or alleged failure) to pay any tax.
(ii) To the best of Seller's and Seller Stockholders' actual
knowledge, the Seller has withheld and paid all taxes required to
have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, Stockholder, or
other third party.
(iii) Neither Seller nor any of Seller Stockholders has actual
knowledge of any dispute or claim concerning any tax liability of
the Seller either (A) claimed or raised by any authority in writing
or (B) as to which any of the Seller Stockholders and the directors
and officers (and employees responsible for tax matters) of the
Seller has knowledge based upon personal contact with any agent of
such authority. Section 3(k) of the Disclosure Schedule lists all
federal, state, local, and foreign income tax returns filed with
respect to the Seller for taxable periods ended on or after December
31, 1993, indicates those tax returns that have been audited, and
indicates those tax returns that currently are the subject of audit.
The Seller has delivered to the Buyer correct and complete copies of
all federal income tax returns, examination reports, and statements
of deficiencies assessed against or agreed to by the Seller since
1993.
(iv) The Seller has not waived any statute of limitations in
respect of taxes or agreed to any extension of time with respect to
a tax assessment or deficiency which would have a material adverse
effect on its business.
(v) To the best of its actual knowledge, the Seller has not
filed a consent under Code Sec. 341(f) concerning collapsible
corporations. The Seller has not made any payments, is not
obligated to make any payments, nor is a party to any agreement that
under certain circumstances could obligate it to make any payments
that will not be deductible under Code Sec. 280G. The Seller has
not been a United States real property holding corporation within
the meaning of Code Sec. 897(c)(2) during the applicable period
specified in Code Sec. 897(c)(1)(A)(ii). The Seller is not a party
to any tax allocation or sharing agreement. The Seller (A) has not
been a member of an Affiliated Group filing a consolidated federal
income tax return and (B) has no liability for the taxes of any
Person other than the Seller under Treas. Reg. Section 1.1502-6 (or
any similar provision of state, local, or foreign law), as a
transferee or successor.
(l) Intellectual Property.
(i) The Seller has filed an application for trademark
registration and has attached relevant information in connection
therewith in Section 3(l) of the Disclosure Schedule. Seller has
placed a copyright notice on all or substantially all of its issues
published. To the best of Seller's and Seller Stockholders'
knowledge, Seller owns, unencumbered, all Intellectual Property
necessary or desirable for the operation of the business of the
Seller as presently conducted. Each item of Intellectual Property
owned or used by the Seller immediately prior to the Closing
hereunder will be owned or available for use by the Buyer on
identical terms and conditions immediately subsequent to the Closing
hereunder.
(ii) Neither Seller nor any of Seller Stockholders have any
actual knowledge of the Seller's having interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of the
Seller or Seller Stockholders has ever received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim
that the Seller must license or refrain from using any Intellectual
Property rights of any third party). To the best of the knowledge
of Seller and Seller Stockholders, no third party has interfered
with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of the Seller.
(iii) Section 3(l)(iii) of the Disclosure Schedule identifies
each trade name or unregistered trademark ever used by the Seller in
connection with any of its businesses and not previously sold or
otherwise disposed of by Seller, to the best of Seller's actual
knowledge (subject to reasonable recollection), including trademarks
used with respect to all forms of publications, including but not
limited to magazines, film, and electronic media. With respect to
each item of Intellectual Property required to be identified in
Section 3(l)(iii) of the Disclosure Schedule, to the best of the
knowledge of Seller and Seller Stockholders:
(A) the Seller possesses all right, title, and
interest in and to the item, free and clear of any Security
Interest, license, or other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or is overtly threatened which challenges the legality,
validity, enforceability, use, or ownership of the item; and
(D) the Seller has not ever agreed to indemnify any
Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item,
except as otherwise disclosed.
(iv) The Seller does not use any item of Intellectual
Property pursuant to license, sublicense, agreement, or permission.
(v) Seller makes no other representations or warranties
regarding its Intellectual Property rights, if any.
(m) Tangible Assets. The Seller owns all tangible assets listed
on Exhibit A-1 hereto. Seller and Seller Stockholders are unaware of any other
tangible assets necessary for the conduct of its business as presently
conducted. The tangible assets have been maintained in accordance with normal
industry practice and are in good operating condition and repair (subject to
normal wear and tear). Seller and Seller Stockholders have no knowledge of any
latent defects therein.
(n) Inventory. No inventory of the Seller is being purchased at
Closing; however, paper inventory of Seller shall be purchased by Buyer pursuant
to Section 2(i) hereof. Such paper inventory was purchased in the Ordinary
Course of Business.
(o) Contracts. The Seller has delivered to the Buyer a correct
and complete copy of each written agreement listed on Exhibit A-2 hereto. With
respect to each such agreement, to the best of the actual knowledge of Seller
and Seller Stockholders: (i) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (ii) the agreement will continue to
be legal, valid, binding, enforceable, and in full force and effect on identical
terms following and subject to the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in Section 2
above); (iii) no party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement; and (iv) no
party has repudiated any provision of the agreement.
(p) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of the Seller.
(q) This section intentionally omitted.
(r) Litigation. There do not exist any instances in which the
Seller (i) is subject to any outstanding injunction, judgment, order, decree,
ruling, or charge or (ii) is a party or, to the actual knowledge of Seller or
any of the Seller Stockholders, has been overtly threatened to be made a party
to any action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator which would have a material
adverse effect on Seller's business.
(s) Employees. To the actual knowledge of Seller and Seller
Stockholders, no executive, key employee, or group of employees has any plans to
terminate employment with the Seller. The Seller is not a party to or bound by
any collective bargaining agreement, nor has it experienced any strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes, except as otherwise disclosed. The Seller has not committed any
unfair labor practice. Neither Seller nor Seller Stockholders has any actual
knowledge of any organizational effort presently being made or threatened by or
on behalf of any labor union with respect to employees of the Seller nor of any
claim of unfair labor practices.
(t) Employee Benefits.
(i) Seller provides the following benefits for its
employees:
(A) Medical insurance plan; a copy of the policy terms
and conditions is attached in Section 3(t) of the Disclosure
Schedule;
(B) 401(k) Plan;
(C) Customary and required workers compensation
coverage;
(D) Traditional custom of Christmas bonuses equal to
1/2 to 3/4 of a month's compensation and annual cost of living
increases.
The Seller has delivered to the Buyer correct and complete
copies of the plan documents and summary plan descriptions,
the most recent determination letter received from the
Internal Revenue Service, the most recent Form 5500 Annual
Report, and all related trust agreements, insurance contracts,
and other funding agreements which implement each such
Employee Benefit Plan.
(ii) Although neither Seller nor Seller Stockholders make any
warranty or representation with respect to the following
matters contained in this subsection (t), Seller (but not
Seller Stockholders) agrees that it shall indemnify and hold
harmless Buyer from, against and in respect of any and all
out-of-pocket damages, loss, deficiency, costs or expenses
directly resulting from any of the following provided, that in
any such event, Seller shall be given notice and a reasonable
opportunity to cure:
(A) Any of such Employee Benefit Plans (and each
related trust, insurance contract, or fund) having failed to
comply in form and in operation in all respects with the
applicable requirements of ERISA, the Code, and other
applicable laws;
(B) Any required reports or descriptions (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's,
and Summary Plan Descriptions) failing to have been filed or
distributed appropriately with respect to each such Employee
Benefit Plan;
(C) Any contributions (including all employer
contributions and employee salary reduction contributions)
which are due having failed to be paid to each such Employee
Benefit Plan which is an Employee Pension Benefit Plan; any
contributions for any period ending on or before the Closing
Date which are not yet due having failed to be paid to each
such Employee Pension Benefit Plan or accrued in accordance
with the past custom and practice of the Seller.
(D) Any failure of any such Employee Benefit Plan
which is an Employee Pension Benefit Plan to meet the
requirements of a "qualified plan" under Code Sec. 401(a) or
to have received, within the last two years, a favorable
determination letter from the Internal Revenue Service.
(E) The failure of the market value of assets under
each such Employee Benefit Plan which is an Employee Pension
Benefit Plan (other than any Multiemployer Plan) to equal or
exceed the present value of all vested and nonvested
liabilities thereunder determined in accordance with PBGC
methods, factors, and assumptions applicable to an Employee
Pension Benefit Plan terminating on the date for
determination.
(F) Any such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any Multiemployer
Plan) having been completely or partially terminated or been
the subject of a Reportable Event as to which notices would be
required to be filed with the PBGC; any proceeding by the PBGC
to terminate any such Employee Pension Benefit Plan (other
than any Multiemployer Plan) having been instituted;
(G) The occurrence of any Prohibited Transaction with
respect to any such Employee Benefit Plan; the liability of
any Fidicuary for breach of fiduciary duty or any other
failure to act or comply in connection with the administration
or investment of the assets of any such Employee Benefit Plan;
any action, suit, proceeding, hearing, or investigation with
respect to the administration or the investment of the assets
of any such Employee Benefit Plan (other than routine claims
for benefits) being pending;
(H) The Seller's incurring any liability to the PBGC
(other than PBGC premium payments) or otherwise under Title IV
of ERISA (including any withdrawal liability) or under the
Code with respect to any such Employee Benefit Plan which is
an Employee Pension Benefit Plan;
(I) The Seller's having ever contributed to, and ever
having been required to contribute to any Multiemployer Plan
or having any liability (including withdrawal liability) under
any Multiemployer Plan; and
(J) The Seller's having ever maintained or
contributed, or ever having been required to contribute to any
Employee Welfare Benefit Plan providing medical, health, or
life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or
their dependents (other than in accordance with Code Sec.
4980B).
(u) Guaranties. The Seller is not a guarantor nor is it otherwise
liable for any liability or obligation (including indebtedness) of any other
Person which would affect the Seller's obligations hereunder.
(v) Environment, Health, and Safety.
(i) To the best of the actual knowledge of Seller and Seller
Stockholders, Seller has complied with all Environmental, Health,
and Safety Laws. No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to
comply. Seller has received no notice claiming that it has violated
any limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables which are
contained in, or otherwise not been in compliance with, all
Environmental, Health, and Safety Laws or that it has failed to
obtain or be in compliance with all of the terms and conditions of
all permits, licenses, and other authorizations which are required
under the same, any of which would have a material adverse effect on
Seller's business, operations or condition.
(ii) To the best of Seller's and Seller Stockholders' actual
knowledge, all properties and equipment used in the business of the
Seller have been free of asbestos, PCB's, methylene chloride,
trichloroethylene, 1,2-transdichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous Substances.
(w) Certain Business Relationships With the Seller. None of the
Seller Stockholders and their Affiliates has been involved in any business
arrangement or relationship with the Seller within the past 12 months, and none
of the Seller Stockholders and their Affiliates owns any asset, tangible or
intangible, which is used in the business of the Seller, except as otherwise
disclosed to Buyer.
(x) Disclosure. The representations and warranties contained in
this Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
(y) Investment. The Seller (i) understands that the Buyer Note
has not been, and will not be, registered under the Securities Act, or under any
state securities laws, and is being offered and sold in reliance upon federal
and state exemptions for transactions not involving any public offering; (ii) is
acquiring the Buyer Note solely for its own account for investment purposes, and
not with a view to the distribution thereof (except to the Seller Stockholders);
(iii) is a sophisticated investor with knowledge and experience in business and
financial matters; (iv) has received certain information concerning the Buyer
and has had the opportunity to obtain additional information as desired in order
to evaluate the merits and the risks inherent in holding the Buyer Note; and (v)
is able to bear the economic risk and lack of liquidity inherent in holding the
Buyer Note. Nothing herein shall in any way limit Seller's right to sell,
assign, encumber, give away or transfer the Note or any interest therein to any
party.
4. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement, except as set forth in
the Disclosure Schedule. The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Section
4.
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. The Buyer's authorized capital stock
consists of 1500 shares of no par common stock, 100 shares of which are issued
and outstanding and owned by DeNovo Corporation ("DeNovo"). James J. McNamara
is the sole officer and director of Buyer. The Buyer is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required. The Buyer has full corporate power and
authority and, to the best of its actual knowledge, all licenses, permits, and
authorizations necessary to carry on the businesses in which it is engaged and
in which it presently proposes to engage and to own and use the properties owned
and used by it. All of the issued and outstanding shares of capital stock of
the Buyer have been duly authorized and are validly issued, fully paid, and
nonassessable. DeNovo holds of record and owns beneficially all of the
outstanding shares of the Buyer, free and clear of any restrictions on transfer
(other than restrictions under the Securities Act and state securities laws),
taxes, Security Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. The minute books (containing the
records of meetings of the stockholders, the board of directors, and any
committees of the board of directors), the stock certificate books, and the
stock record books of the Buyer are correct and complete. The Buyer is not in
default under or in violation of any provision of its charter or bylaws. The
Buyer does not control directly or indirectly or have any direct or indirect
equity participation in any corporation, partnership, trust, or other business
association.
(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Buyer has duly
authorized the execution, delivery, and performance of this Agreement by the
Buyer. This Agreement constitutes the valid and legally binding obligation of
the Buyer, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject. The Buyer does not need to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and assumptions
referred to in Section 2 above).
(d) Brokers' Fees. The Buyer has no liability or obligation to
pay any fees or commissions to any broker, finder, agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
(e) No Impediment. Buyer is a start-up corporation which was
formed within the past 100 days for the purpose of consummating the transaction
contemplated hereby. Buyer has no operating history, is not involved in any
litigation, has not been threatened with any litigation, has no encumbered
assets, and is not a party to any contract, arrangement or transaction other
than in connection with Buyer's corporate formation and the transaction
contemplated hereby.
(f) Benefit Programs. Buyer shall assume at Closing all employee
benefit programs described in Section 3(t) hereof; provided, however, that with
respect to Section 3(t)(iv), Buyer's obligations shall be subject to the
reasonable discretion of Buyer's Board of Directors. Buyer agrees to provide
cost of living adjustments to employee salaries commensurate with previous
practices of Seller, which are disclosed on Section 4(f) of the Disclosure
Schedule.
5. Indemnification.
(a) By Seller and Seller Stockholders. Seller and Seller
Stockholders, jointly and severally, agree to defend, indemnify and hold
harmless Buyer from, against and in respect of any and all damages, loss,
deficiency, costs or expenses (i) resulting from any material misrepresentation,
breach of warranty, or nonfulfillment of any agreement or covenant on the part
of Seller or Seller Stockholders under this Agreement or any material
misrepresentation in or omission from any list, schedule, certificate, or other
instrument furnished or to be furnished to Buyer pursuant to the terms of this
Agreement or (ii) arising from, in connection with or with respect to Seller-
Generated Issues. Seller and Seller Stockholders shall only be liable for
claims made within one (1) year of the Closing Date. The maximum liability
hereunder shall be $1.5 million, except in the case of liability in connection
with fraudulent acts or omissions on the part of Seller or any of Seller
Stockholders, in which case no maximum shall apply.
(b) By Buyer. Buyer agrees to defend, indemnify and hold harmless
Seller from, against and in respect of any and all damages, loss, deficiency,
costs or expenses (i) resulting from any material misrepresentation, breach of
warranty, or nonfulfillment of any agreement or covenant on the part of Buyer
under this Agreement or any material misrepresentation in or omission from any
list, schedule, certificate, or other instrument furnished or to be furnished to
Seller pursuant to the terms of this Agreement or (ii) arising from, in
connection with or with respect to Buyer-Generated Issues. Buyer shall only be
liable for claims made within one (1) year of the Closing Date. The maximum
liability hereunder shall be $1.5 million, except in the case of liability in
connection with fraudulent acts or omissions on the part of Buyer, in which case
no maximum shall apply.
6. Miscellaneous.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder.
(b) This section intentionally omitted.
(c) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they relate in any way to
the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. Seller may not assign this Agreement or any
of its rights, interests, or obligations hereunder without the prior written
approval of Buyer.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given when sent by
facsimile (with confirmation of transmittal) and simultaneously by registered or
certified mail, return receipt requested, postage prepaid, and addressed to the
intended recipient as set forth below:
If to the Seller: Copy to:
Dugent Publishing Corp. William S. Kramer, Esq.
14411 Commerce Way Abrams Anton
Suite 420 One Boca Place, Suite 411-E
Miami Lakes, FL 33016 2255 Glades Road
Fax: (305) 557-6005 Boca Raton, FL 33431
Fax: (407) 994-8494
If to the Buyer: Copy to:
Firestone Publishing, Inc. Julia K. O'Neill
c/o Robert F. Kendall Fleming & O'Neill
214 Brazilian Ave. Two Newton Place
Suite 300 Suite 200
Palm Beach, FL 33480 Newton, MA 02158
Fax: (407) 659-0214 Fax: (617) 964-1694
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
ordinary mail, or electronic mail), but no such notice, request, demand, claim,
or other communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Florida without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Florida or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Florida.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. The Buyer will bear its own costs and expenses and
the Seller and Seller Stockholders will each bear their own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby. The Seller also agrees that it has
not paid any amount to any third party, and will not pay any amount to any third
party until after the Closing, with respect to any of the costs and expenses of
the Seller and the Seller Stockholders (including any of their legal fees and
expenses) in connection with this Agreement or any of the transactions
contemplated hereby.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule identifies
the exception with particularity and describes the relevant facts in detail.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document or other
item itself). The Parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any Party has
breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty, or covenant.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(o) Specific Performance. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 6(p)
below), in addition to any other remedy to which it may be entitled, at law or
in equity.
(p) Submission to Jurisdiction. Each of the Parties submits to
the jurisdiction of any state court sitting in Dade County, Florida and any
federal court for the Southern District of Florida, Dade County Division, in any
action or proceeding arising out of or relating to this Agreement and agrees
that proper venue for all claims in respect of the action or proceeding shall be
in any such court. Each party also agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other Court. Each of the
Parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security
that might be required of any other Party with respect thereto. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or in equity.
(q) Seller and Seller Stockholders shall reasonably cooperate with
Buyer in providing Buyer with access to Seller's records and the like which
Buyer may reasonably require in connection with DeNovo's obligations pursuant to
Securities and Exchange Commission or Nasdaq requirements and related
obligations.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
on the date first above written.
BUYER:
Firestone Publishing, Inc.
By:/s/ Robert F. Kendall
Title: Chief Financial Officer
SELLER:
Dugent Publishing Corporation
By:/s/ Walter Weidenbaum
Title: President
SELLER STOCKHOLDERS:
/s/ Walter Weidenbaum
Walter Weidenbaum
/s/ Olive Ainger
Olive Ainger
/s/ Milton Fialkow
Milton Fialkow
/s/ Stanley Place
Stanley Place
