ASSET PURCHASE AGREEMENT
AGREEMENT (this "AGREEMENT"), dated as of the 28th day of
March, 2000, between TDD, L.L.C. ("BUYER"), a Delaware limited liability company
with its principal place of business at 105 Madison Avenue, Floor 15, New York,
NY 10016 and American Lawyer Media, Inc., a Delaware corporation with its
principal place of business at 345 Park Avenue South, New York, NY 10010
("MEDIA"), The New York Law Publishing Company, a New York corporation and a
wholly-owned subsidiary of Media ("NYLP") and NLP IP Company, a Delaware
corporation and a wholly-owned subsidiary of Media ("NLP IP"), a Delaware
corporation with its principal place of business 345 Park Avenue South, New
York, NY 10010 (together and individually, "SELLER").
RECITALS
A. Seller is engaged in the publication of "The Daily Deal"
and "Corporate Control Alert" in printed and electronic form (the "BUSINESS").
B. Seller wishes to sell to Buyer and Buyer wishes to purchase
from Seller, all of the assets, properties, rights and claims of Seller
relating, subject to the Assumed Liabilities (as defined below), upon the terms
and conditions of this Agreement (the "PURCHASE").
NOW, THEREFORE, the parties hereby agree as follows:
1. SALE OF THE BUSINESS.
(a) Seller hereby sells, transfers and assigns to Buyer (the
"TRANSFER"), and Buyer hereby purchases, acquires and accepts
from Seller, in each case free and clear of all Liens (as
defined below), all of Seller's right, title and interest in
and to all assets, properties, rights and claims of every kind
and description, tangible or intangible, vested or unvested,
contingent or otherwise of Seller other than the Excluded
Assets (as defined below), which are used in connection with
or otherwise relate to the Business (the "ASSETS"), including,
without limitation:
(i) all computer software, hardware and systems that are
used primarily in the Business;
(ii) the names "The Daily Deal" and "Corporate Control
Alert" and any and all other intellectual property of
Seller relating to the Business, including, without
limitation, the copyrights, trademarks, service
marks, trade names, business names, designs, or logos
listed on Schedule 3(f) hereto;
(iii) any and all Intellectual Property Rights (as defined
below), including but not limited to, the names "The
Daily Deal" and "Corporate Control Alert";
(iv) the e-mail and web-site addresses (including the
Uniform Resource Locator www.thedailydeal.com) and
toll-free telephone numbers and other
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identifying addresses and numbers of Seller used in
the conduct of the Business;
(v) any and all Contracts (as defined below) or other
arrangements to which Seller is party in connection
with the conduct of the Business, as identified on
Schedule 3(g) hereto;
(vi) all books and records relating to the assets,
properties and rights of Seller relating to the
Business;
(vii) all market research studies, surveys, reports,
analyses and similar information relating to the
Business;
(viii) all active and inactive customer files and data
relating to the Business, including all subscription
information;
(ix) all sales data, brochures, catalogues, literature,
forms, mailing lists, art work, photographs and
advertising material, in whatever form or media
relating to the Business;
(x) all claims, causes of action, choses in action,
rights of recovery and rights of set-off of any kind
in favor of Seller or pertaining to, or arising out
of, the Assets; and
(xi) the goodwill of the Business.
(b) If any Assets constituting Contracts or Permits are not by
their terms assignable or require the consent of a third party
in connection with the sale by Seller, Seller will use
reasonable efforts to assist Buyer to obtain such consent
promptly. During the period in which the applicable Contract
or Permit is not capable of being assigned to Buyer due to the
failure to obtain any required consent, Seller will make such
arrangements as may be necessary to enable Buyer to receive
all the economic benefits under such Contract or Permit
accruing on and after the execution of this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary,
(i) Seller will retain and not transfer to Buyer the assets
described in Schedule 1(c)(i) (the "EXCLUDED ASSETS"); and
(ii) Buyer will not assume and will be deemed not to have
assumed and be responsible for, and Seller will be solely and
exclusively liable and responsible for, any Indebtedness (as
defined below), obligations, Contracts or liabilities of
Seller relating to the Business, including but not limited to,
the obligations described in Schedule 1(c)(ii)(a) (the
"RETAINED LIABILITIES"), other than the Indebtedness,
obligations, Contracts or liabilities listed on Schedule
1(c)(ii)(b) (the "ASSUMED LIABILITIES").
(d) Notwithstanding anything in this Agreement to the contrary,
Buyer will not assume and will be deemed not to have assumed
and be responsible for, and Seller will be solely and
exclusively liable and responsible for, any debt,
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obligations or liabilities of Seller with respect to (i) any
federal, state, local or foreign taxes relating to tax periods
(or any portion thereof) ending on or prior to the date
hereof, or (ii) any tax liability of Seller arising out of or
in connection with the consummation or performance of the
transactions contemplated by this Agreement (the "RETAINED
TAXES").
(e) For purposes of this Agreement,
(i) "CONTRACT" means any contract, license, lease
(including any lease for real property), commitment,
purchase order or any other agreement, whether
written or oral, relating to the Business;
(ii) "GAAP" means U.S. generally accepted accounting
principles, consistently applied.
(iii) "INDEBTEDNESS" means with respect to any Person, at
any date, without duplication, (A) all obligations of
such Person for borrowed money, including, without
limitation, all principal, interest, premiums, fees,
expenses, overdrafts and penalties with respect
thereto, (B) all obligations of such Person evidenced
by bonds, debentures, notes or other similar
instruments, (C) all obligations of such Person to
pay the deferred purchase price of the property or
services, except trade payables incurred in the
ordinary course of business, (D) all obligations of
such Person to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or
similar instrument, (E) all capitalized lease
obligations as defined in accordance with GAAP, (F)
all other obligations of a Person which would be
required to be shown as indebtedness on a balance
sheet of such Person prepared in accordance with
GAAP, and (G) all indebtedness of any other Person of
the type referred to in clauses (A) to (F) above
directly or indirectly guaranteed by such Person or
secured by any assets of such Person;
(iv) "INTELLECTUAL PROPERTY RIGHT" means any trademark,
service mark, trade name, invention, patent, trade
secret, copyright, know-how, proprietary computer
software, computer databases, Internet addresses or
domain names (including any registrations or
applications for registration or renewal of any of
the foregoing) or any other similar type of
proprietary intellectual property right, in each case
which is used or held for use or otherwise necessary
in connection with the conduct of the Business;
(v) "PERMIT" means any governmental or regulatory
license, authorization permit, franchise consent or
approval which is obtained in connection with the
conduct of the Business;
(vi) "PERSON" means an individual, corporation,
partnership, limited liability company, association,
trust or other entity or organization, including a
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government or political subdivision or an agency or
instrumentality thereof;
(vii) "TAXES" means (A) any net income, alternative or
add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, value added, transfer,
franchise, profits, license, withholding on amounts
paid to or by Seller, payroll, employment, excise,
severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or
other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any
interest, penalty, addition to tax or additional
amount imposed by any Taxing Authority in connection
with the conduct of the Business, (B) any liability
of Seller for the payment of any amounts of any of
the foregoing types as a result of being a member of
an affiliated, consolidated, combined or unitary
group, or being a party to any agreement or
arrangement whereby liability of Seller for payment
of such amounts was determined or taken into account
with reference to the liability of any other Person,
and (C) any liability of Seller for the payment of
any amounts as a result of being a party to any
tax-sharing agreements in connection with the conduct
of the Business or with respect to the payment of any
amounts of any of the foregoing types as a result of
any express or implied obligation to indemnify any
other Person; and
(viii) "TAXING AUTHORITY" means any Governmental Authority
(as defined below) responsible for the imposition of
any Tax.
2. PRICE AND PAYMENT.
(a) In consideration for the Transfer by Seller to Buyer of the
Assets in accordance with this Agreement, Buyer will deliver
to Seller consideration in an aggregate amount of
$10,000,000.00 (the "CONSIDERATION") to be held by Media on
behalf of itself, NYLP, and NLP IP, which will consist of the
following:
(i) $7,500,000.00, payable by wire transfer to an account
designated by Seller (the "CASH COMPONENT"); and
(ii) $2,500,000 principal amount of Preferred Units of
Buyer, as more particularly set forth in the Limited
Liability Company Agreement of Buyer, dated as of
March 28, 2000.
The parties understand that Media's Capital Account (as
defined in the Limited Liability Company Agreement of
Buyer, dated as of March 28, 2000) will be determined
to be zero on the date hereof.
(b) As soon as reasonably practicable after the date of this
Agreement, Seller will deliver to Buyer the following: (i)
assignments of any copyrights related to the Business in form
for recording in the United States Copyright Office; (ii)
assignments of any trademarks or patents related to the
Business in form for recording in the United States Patent and
Trademark Office; (iii) a bill of sale
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executed by Seller, in form satisfactory to Buyer; (iv) such
duly executed, good and sufficient instruments of conveyance,
transfer and assignment, other than a bill of sale, as will be
reasonably required by Buyer and its counsel and as will be
necessary to convey to Buyer all of Seller's rights, title and
interests in and to the Assets (the "OTHER INSTRUMENTS"), if
any; and (v) all other documents, instruments and writings
necessary to consummate the transaction contemplated hereby or
expressly required to be delivered by Seller in accordance
with this Agreement.
(c) As a condition to Seller entering into this Agreement, Buyer
will deliver to Seller and the following: (i) the Cash
Component, by wire transfer; (ii) a copy of the Limited
Liability Company Agreement of Buyer, dated as of March 28,
2000; (iii) a bill of sale executed by Buyer; and (iv) all
other documents, instruments and writings (including, if
necessary, the Other Instruments) necessary to consummate the
transactions contemplated hereby or expressly required to be
delivered by Buyer in accordance with this Agreement.
(d) For purposes of determining Buyer's Tax basis in the Assets
and gain or loss recognized by Seller with respect to the sale
of the Assets to Buyer, Buyer and Seller will allocate the
Consideration among the Assets according to the fair market
value thereof and in accordance with Section 1060 of the Code
and as otherwise agreed upon by the parties promptly after the
execution of this Agreement. The parties will file all Tax
returns and related forms (including, without limitation, Form
8594) in accordance with the provisions of this Section 2(d)
and will not make any inconsistent written statement or take
any inconsistent position on any Tax returns, in any refund
claim, or during the course of any IRS or other tax audit.
Each party will notify the other party if it receives notice
that the IRS proposes any allocation that is different from
the allocation agreed upon under this Section 2(d).
(e) On and after the date of this Agreement, Seller will
discontinue all use of the names "The Daily Deal" and
"Corporate Control Alert" for any services or products.
3. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants
to Buyer as follows:
(a) Each Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware
and has all requisite corporate power to own, lease and
operate all of the property owned, leased or operated by it in
connection with the conduct of the Business and to carry on
the operations of the Business as now being conducted.
(b) Each Seller is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the property
owned, lease or operated by it in connection with the conduct
of the Business or the nature of the business
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conducted by it relating to the Business makes such licensing
or qualification necessary.
(c) Each Seller has all requisite power and authority to execute
and deliver this Agreement and those other agreements and
instruments required to be executed or delivered under this
Agreement, and to perform its obligations hereunder, and this
Agreement has been duly executed and delivered by each Seller
and constitutes, assuming due authorization, execution and
delivery of this Agreement by Buyer, and any other agreements
to be executed and delivered by Buyer pursuant hereto, when
fully executed and delivered, will constitute, a valid and
binding obligation of each Seller enforceable against it in
accordance with their terms, except to the extent that
enforcement thereof may be subject to (x) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and similar laws now or hereafter affecting
creditors' rights generally and (y) general principles of
equity (regardless of whether enforceability is considered in
a proceeding at law or in equity).
(d) Neither the execution and delivery by each Seller of this
Agreement nor the performance by each Seller of its
obligations hereunder will (i) conflict with or result in any
breach of any provision of the Certificate of Incorporation or
Bylaws of any Seller; (ii) result in (with or without the
giving of notice or lapse of time or both) a material
violation or breach of, or constitute a default or give rise
to any right of termination, cancellation or acceleration
under any of the terms, conditions or provisions of any
Indebtedness, license, lease or Contract or similar instrument
or obligation to which any Seller, or by which any of the
Assets, may be bound; or (iii) violate any order, injunction,
decree, statute, rule or regulation of any federal, state,
local or foreign governmental entity or municipality or
subdivision thereof or court, tribunal, commission, board,
bureau, agency or legislative, executive, governmental or
regulatory authority or agency (a "GOVERNMENTAL AUTHORITY") to
which any Seller or the Business is subject.
(e) Each Seller owns the Assets and has and will deliver to Buyer,
good, valid and marketable title to, all of the Assets, in
each case, free and clear of all mortgages, pledges, security
interests, liens (including tax liens), charges, options or
other encumbrances of any nature whatsoever (collectively,
"LIENS").
(f) Schedule 3(f) contains a complete and accurate list of all of
the Intellectual Property Rights of each Seller.
(g) Schedule 3(g) contains a complete and accurate list of all the
Contracts to which Seller is party that provides for aggregate
payment to or by Seller of $5,000 or more.
4. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants
to as follows:
(a) Buyer is a limited liability company duly organized, validly
existing and in good standing under the laws of the state of
Delaware.
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(b) Buyer has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered
by Buyer and constitutes, assuming due authorization,
execution and delivery of this Agreement by Seller and any
other agreements to be executed by Seller pursuant hereto,
when fully executed and delivered, will constitute a valid and
binding obligation of Buyer, enforceable against Buyer in
accordance with their terms, except to the extent that
enforcement thereof may be subject to (x) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and similar laws now or hereafter affecting the
enforcement of creditors' rights generally and (y) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(c) Neither the execution and delivery by Buyer of this nor the
performance by Buyer of its obligations hereunder will (i)
conflict with or result in any breach of any provision of the
Certificate of Formation or Limited Liability Company
Agreement of Buyer or (ii) violate any order, injunction,
decree, statute, rule or regulation of any Governmental
Authority to which Buyer is subject.
5. INDEMNIFICATION.
(a) The representations and warranties of the parties contained
herein or in any signed writing delivered in connection with
this Agreement will survive for a period of 3 years after the
execution of this Agreement.
(b) Seller will indemnify Buyer and its employees, officers,
directors, agents and representatives, in their capacities as
such, and the successors, heirs and personal representatives
of any of them (collectively, the "BUYER INDEMNIFIED PARTIES")
against and hold them harmless from any and all damage, loss,
liability and expense (including, without limitation,
reasonable expenses of investigation and attorneys' fees and
expenses) (collectively "LOSS") incurred or suffered by any
Buyer Indemnified Party arising out of or relating to (i) any
breach of any representation, warranty, covenant or other
agreement of Seller contained herein, (ii) any Retained
Liabilities, (iii) any Retained Taxes or (iv) any alleged,
claimed or established negligence or breach of Seller (or any
of its affiliates or predecessors or any of the respective
officers, directors, agents, consultants or employees of
Seller or any of its affiliates or predecessors) with respect
to the performance by such parties of services, Contracts,
agreements, policies or similar undertakings on or prior to
the execution of this Agreement.
(c) Buyer will indemnify Seller and its employees, officers,
directors, agents and representatives, in their respective
capacities as such, and the successors, heirs and personal
representatives of any of them (collectively, the "SELLER
INDEMNIFIED PARTIES") against and hold them harmless from any
and all Loss incurred or suffered by any Seller Indemnified
Party arising out of or relating to (i) any breach of any
representation, warranty, covenant or other agreement of Buyer
contained herein or (ii) any Assumed Liabilities.
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(d) A Person seeking indemnification pursuant to Sections 5(b) and
5(c) (an "INDEMNIFIED PARTY") with respect to a claim, action
or proceeding by a Person who is not a Buyer Indemnified Party
or a Seller Indemnified Party will give prompt written notice
to the party from whom such indemnification is sought (the
"INDEMNIFYING PARTY") of the assertion of any claim, or the
commencement of any action or proceeding, in respect of which
indemnity may be sought hereunder; provided that the failure
to give such notice will not affect the Indemnified Party's
rights to indemnification hereunder, unless such failure would
prejudice in any material respect the Indemnifying Party's
ability to defend such claim, action or proceeding. The
Indemnifying Party will have the right to assume the defense
of any such action or proceeding at its expense, provided that
(x) in the reasonable judgment of the Indemnified Party, the
Indemnifying Party has adequate resources to undertake such
defense and satisfy any indemnifiable Loss arising from such
action or proceeding and (y) the selection of counsel is
approved by the Indemnified Party (which approval will not be
unreasonably withheld or delayed). If the Indemnified Party so
determines that the Indemnifying Party does not have adequate
resources, or the Indemnifying Party does not elect to assume
the defense of any such action or proceeding, or fails to make
such an election within 20 days after it receives such notice
pursuant to the first sentence of this Section 5(d), the
Indemnified Party may assume such defense at the expense of
the Indemnifying Party. The Indemnified Party will have the
right to participate in (but not control) the defense of an
action or proceeding defended by the Indemnifying Party
hereunder and to retain its own counsel in connection with
such action or proceeding, but the fees and expenses of such
counsel will be at the Indemnified Party's expense unless (i)
the Indemnifying Party and the Indemnified Party have mutually
agreed in writing to the retention of such counsel or (ii) the
named parties in any such action or proceeding (including
impleaded parties) include the Indemnifying Party and the
Indemnified Party, and representation of the Indemnifying
Party and the Indemnified Party by the same counsel would
create a conflict, provided that, unless otherwise agreed by
the Indemnifying Party, if the Indemnifying Party is obligated
to pay the fees and expenses of such counsel, the Indemnifying
Party will be obligated to pay only the fees and expenses
associated with one attorney or law firm, as applicable, for
the Indemnified Party. An Indemnifying Party will not be
liable under Sections 5(b) or 5(c) for any settlement effected
without its written consent, which consent will not be
unreasonably withheld or delayed, of any claim, action or
proceeding in respect of which indemnity may be sought
hereunder.
6. FURTHER ASSURANCES BY SELLER. Seller will execute such additional
documents as Buyer may reasonably request to vest or confirm the
vesting in Buyer of all of the Assets and title thereto.
7. AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by Seller and Buyer.
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8. FEES AND EXPENSES. All fees and expenses incurred in connection with
this Agreement and the transactions contemplated by this will be paid
by the party incurring such fees or expenses, whether or not the
transactions contemplated hereby are consummated.
9. SELLER'S KNOWLEDGE. All references to the "Seller's knowledge" or to
words of similar import will be deemed to be references to the actual
knowledge of one or more of the officers or directors of Seller.
10. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to
its conflict of law rules, principles or provisions of such state or of
any other state. The sole jurisdiction and venue for any litigation
arising out of this Agreement will be an appropriate federal or
district court located in the State of New York, and each party hereby
consents to such jurisdiction. Each party agrees not to raise and
waives any objection to or defense based on the venue of any such court
or forum non conveniens.
11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN
EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
12. SECTION HEADINGS. Section headings are for convenient reference only
and will not affect the meaning or have any bearing on the
interpretation of any provision of this Agreement.
13. ENTIRE AGREEMENT. This Agreement, together with any other documents
referred to herein or delivered pursuant hereto that form a part
hereof, constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, between the
parties or either of them with respect to the subject matter hereof.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of
which will constitute one and the same instrument.
15. EFFECTIVE TIME. Notwithstanding anything to the contrary contained in
this Agreement, this Agreement will be deemed to be effective for all
accounting, tax and other purposes as of 12:00 a.m. on April 1, 2000
(such date and time, the "EFFECTIVE TIME").
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 28th day of March, 2000.
AMERICAN LAWYER MEDIA, INC.
By:
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Name:
Title:
THE NEW YORK LAW PUBLISHING COMPANY
By:
--------------------------------------
Name:
Title:
NLP IP COMPANY
By:
--------------------------------------
Name:
Title:
TDD, L.L.C.
By:
--------------------------------------
Name:
Title:
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SCHEDULE 1(c)(i)
EXCLUDED ASSETS
1. Accounts receivable (including billed and unbilled) of Seller from the
conduct of the Business.
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SCHEDULE 1(c)(ii)(a)
RETAINED LIABILITIES
1. Accounts payable and accrued expenses arising prior to the Effective
Time.
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SCHEDULE 1(c)(ii)(b)
ASSUMED LIABILITIES
1. All liabilities arising at or after the Effective Time.
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SCHEDULE 3(f)
INTELLECTUAL PROPERTY RIGHTS
(a) Federal Trademark Registrations
Asset Purchase Agreement - TDD LLC, American Lawyer Media Inc, New York Law Publishing Co. and NLP IP Co.
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