Exhibit 10.1


 


ASSET PURCHASE AGREEMENT


 


THIS
ASSET PURCHASE AGREEMENT (this “Agreement”) is made this
           day of February,
2004, by and among BEYOND THE WALL, INC., a
Delaware corporation (the “Seller”), YOUTHSTREAM
MEDIA NETWORKS, INC., a Delaware corporation (the “Parent”), CLIVE
CORPORATION, INC., a Pennsylvania corporation (“Clive”) (the
“Buyer”).


 


RECITALS:


 


A.                                   The
Seller is engaged in the business of (a) selling posters and other products (i)
at sales events at junior and four-year college campuses, high schools and
other locations, (ii) at retail stores and (iii) over the Internet and other
mediums, and (b) selling and custom framing of wall posters (i) at the
wholesale level to other retailers and (ii) at the retail level (the
“Business”).


 


B.                                     The
Seller owns or leases the assets used in the conduct of the Business,
including, without limitation, inventory, equipment, contract rights,
intellectual property, customer and supplier lists and records.


 


C.                                     The
Seller desires to sell and the Buyer desires to purchase certain assets of the
Business and assume certain liabilities of the Business in accordance with the
terms and conditions of this Agreement.


 


NOW,
THEREFORE, in consideration of the payments herein provided
for and the covenants herein contained, the parties hereby agree as follows.


 


ARTICLE 1

SALE AND PURCHASE OF ASSETS


 


1.1                                 Transferred
Assets.  On the terms and subject to
the conditions of this Agreement, and for the consideration set forth in
Article 3 (“Purchase Price”), the Seller shall on the Closing Date (as defined
below), sell, transfer and convey to the Buyer, free and clear of any and all
liens, claims, pledges, encumbrances, mortgages, security interests and charges
of any kind (collectively, “Liens”), other than the Assumed Liabilities (as
defined below), the Excluded Assets and any Liens created pursuant to this
Agreement and the Agreement of Sale and Assignment Agreement (see Section
1.1(j)), all of the Seller’s right, title and interest in and to the following
assets (collectively, the “Assets”):


 


(a)                                  Inventory.  All of the Business’ inventory as of the
Closing Date, whether in the Seller’s possession, in transit to or from the
Seller or held by any third party (the “Inventory”);


 


(b)                                 Contracts.  The following contracts and agreements:


 


(i)                                     All
contracts and agreements (verbal or written) with colleges, universities, high
schools and similar institutions which are in force as of the


 

















 


Closing Date as identified on Schedule
1.1(b)(i), attached hereto (the “Customer Contracts”); and


 


(ii)                                  Those
contracts and agreements which are identified on Schedule 1.1(b)(ii),
attached hereto which the Buyer agrees to assume (the “Miscellaneous
Contracts”).


 


(c)                                  Leases.  The leasehold interests in seventeen (17)
leases for retail space identified on Schedule 1.1(c), attached hereto,
including the security deposits thereunder (the “Assigned Leases”);


 


(d)                                 Tangible Property.  All tangible personal property, including
all computers, related equipment and all fixtures and leasehold improvements located
within the retail space contemplated by the Assigned Leases (the “Tangible
Property”);


 


(e)                                  Intangible
Property.  All intangible property,
including all internet sites, domain names, telephone and fax numbers, computer
software, trademarks and trade names;


 


(f)                                    Prepaid Items
and Deposits.  All prepaid items of
the Seller, including without limitation prepaid rentals, insurance, taxes and
deposits relating to the Business and Seller’s operations, as identified on Schedule
1.1(f);


 


(g)                                 Accounts Receivable.  All accounts receivable of the Seller,
including without limitation all trade account receivables arising from sales
of inventory and services in the ordinary course of business;


 


(h)                                 “Trent Graphics”
and “Beyond the Wall”.  All of
Seller’s right, title and interest in and to the names “Trent Graphics” and
“Beyond the Wall” and any derivatives thereof employed in the Business and all
goodwill associated therewith;


 


(i)                                     Lists and
Records.  All of the Seller’s books
and records, customer and supplier lists, sales, cost and shipping records,
research and development reports and records, production reports and records,
service and warranty records, equipment logs, operating guides and manuals,
advertising materials, promotional materials, studies, reports, correspondence
and other lists and documents (other than the corporate minute books, stock
books and stock transfer ledgers), of the Seller primarily or exclusively
related to the Assets or the Business; and


 


(j)                                     Cash and Cash
Equivalents.  All cash, restricted
cash, cash equivalents and deposits in transit.


 


1.2                                 Excluded
Assets.  There shall be excluded
from the assets of the Seller to be transferred to the Buyer hereunder the
following (the “Excluded Assets”):


 


(a)                                  all of the Seller’s
leasehold interests not assigned to the Buyer at the Closing (collectively, the
“Unassigned Leases”); and


 


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(b)                                 the Real Property
which is being sold by Seller to 1903 West Main Street Realty Management, LLC,
a Pennsylvania limited liability company (“1903 LLC”) pursuant to a separate
agreement substantially contemporaneous with the Closing under this Agreement.


 


ARTICLE 2

LIABILITIES


 


2.1                                 Assumption
of Liabilities.  Upon the transfer
of the Assets in accordance with this Agreement, the Buyer shall assume and
agree to pay, discharge or perform, as appropriate, all of Seller’s obligations
and liabilities as shown in the Financial Statements, including but not limited
to those under the Assigned Leases, Customer Contracts, and accepted
Miscellaneous Contracts, plus (a) all costs and expenses incurred or to be
incurred by Seller in complying with Section 4.10 and Article 16 of this
Agreement and (b) all costs, expenses and liabilities incurred in the ordinary
course of Seller’s business from September 30, 2003 to and including the
Closing Date (the “Assumed Liabilities”). 
Notwithstanding the foregoing, Seller will pay for all professional fees
and costs to prepare and file the tax returns and reports referred to in
Section 4.10, but Buyer will pay all filing fees and costs, taxes, interest and
penalties in connection therewith.


 


2.2                                 Retained
Liabilities.  The Assumed
Liabilities do not include the following: (a) Old Trade Payables set forth on
Schedule 2.2(a), and (b) Accrued Lease Termination Costs, as set forth on
Schedule 2.2(b) (collectively, the “Retained Liabilities”), which shall be
retained by Seller, and paid, discharged and/or otherwise satisfied by Seller,
at Seller’s option, without liability to the Buyer.


 


ARTICLE 3
PURCHASE PRICE


 


3.1                                 Purchase
Price.  The aggregate purchase price
for the Assets (other than the Real Property) shall be One Million Two Hundred
Fifty Thousand Dollars and 00/100 ($1,250,000.00) (the “Purchase Price”) and
the assumption by the Buyer of the Assumed Liabilities.


 


3.2                                 Payment
at Closing.  At the Closing, the
Buyer shall pay the Purchase Price to the Seller (a) One Hundred Fifty Thousand
Dollars ($150,000.00) in immediately available funds; and (b) the balance of
One Million One Hundred Thousand Dollars ($1,100,000.00) by way of a secured,
subordinated promissory note (the “Note”) in the same form as that which is
attached hereto as Exhibit “A”.  
The security for the Note shall be provided for more fully in a security
agreement (the “Security Agreement”), the form of which is attached hereto as Exhibit
“B,” and a Mortgage against the Real Property, in form reasonably
acceptable to the Seller.  So long as
Buyer is not in default under the Note, Seller agrees to subordinate the Note
to any secured debt incurred by Buyer, provided that the proceeds of such debt
were or are used to finance Buyer’s purchase of the Assets and the Real Estate
from Seller or are used to fund the operations of the Business acquired from
Seller, the terms and conditions of the subordinated debt is commercially
reasonable, and the maximum amount of subordinated debt does not exceed Seven
Hundred Thousand Dollars ($700,000.00) in principal amount.


 


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3.3                                 Allocation
of the Purchase Price.  The Buyer
and the Seller shall agree upon an allocation of the Purchase Price to the
Assets prior to the Closing which allocation shall be set forth on Schedule
3.3.


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF

THE SELLER AND THE PARENT


 


As of the date hereof,
the Seller and, where specifically named, the Parent, make the following
representations and warranties to the Buyer.


 


4.1                                 Organization,
Existence and Standing 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 and has full
corporate power and authority to own or lease the Assets owned or leased by it,
to carry on the Business as it is now conducted by it and to consummate the
transactions contemplated by this Agreement. 
The Seller is duly qualified to do business in all of the jurisdictions
in which the nature of the Assets owned or leased by it, or the conduct of the
Business conducted by it, requires it to be so qualified.


 


4.2                                 Organization,
Existence and Standing of Parent. 
The Parent is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation.


 


4.3                                 Corporate
Authority.  The entering into and
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and thereby (a) will have been duly and
validly authorized by any required corporate action of the Seller and the
Parent, and (b) will constitute the legal, valid, and binding obligation of the
Seller and the Parent, enforceable against it in accordance with their
respective terms.


 


4.4                                 Financial
Statements.  Copies of the Seller’s
unaudited financial statements as of and for the fiscal year ended September
30, 2003 and any amendments thereto (the “Financial Statements”) have been
delivered to the Buyer and are attached hereto as Schedule 4.4.  The Financial Statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis and fairly and accurately present the financial position of
the Company as of the dates indicated and the results of the operations
indicated.


 


4.5                                 Inventory.  The Inventory included in the Financial
Statements consists only of products of a quality and quantity usable and
saleable in the ordinary course of business. 
The Seller is not in possession of any Inventory not owned by the
Seller, including goods already sold.


 


4.6                                 Title
to the Assets.  Except as set forth
on Schedule 4.6, the Seller has good and marketable title, free and
clear of any Liens, to all of the Assets, other than leased Tangible Property
Assets and other than liens, if any, created pursuant to the Security Agreement
referred to in the Management Agreement, all of which will be paid by Seller in
the ordinary course of business.


 


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4.7                                 Condition
of Tangible Property.  The Tangible
Property is in such condition and repair, reasonable wear and tear excepted, as
is suitable (measured by industry standards) for the purposes for which it
is  presently used in the Business.


 


4.8                                 Contracts.


 


(a)                                  The Seller has
delivered to the Buyer or the Buyer has had access to accurate and complete
copies of all of the Customer Contracts and accepted Miscellaneous Contracts.  All of the Customer Contracts and accepted
Miscellaneous Contracts are in full force and effect and are valid, binding and
enforceable in accordance with their terms. 
Buyer acknowledges that many if not all of the Customer Contracts are
short term agreements and expire around the end of September of each year, and
must be renewed by mutual agreement of the parties.  Except as disclosed on Schedule 4.8(a), the Seller has in
all material respects performed and is performing all obligations required to
be performed by it under the Customer Contracts and the accepted Miscellaneous
Contracts, and the Seller is not in default (with or without notice, the
passage of time, or both) of any material obligations under any of the Customer
Contracts or the accepted Miscellaneous Contracts.  Except as disclosed on Schedule 4.8(a), the Seller has not
received any written notice of default under any of the Customer Contracts or
the accepted Miscellaneous Contracts, nor to Seller’s knowledge, has any event
occurred which with notice or lapse of time or both would constitute a default
by the Seller thereunder.


 


(b)                                 Except as disclosed on
the Schedule 4.8 (b) , the Seller has not received any written or verbal
notice of intent to terminate any Customer Contract or any accepted
Miscellaneous Contract.


 


4.9                                 Leases.  All improvements used by the Seller on the
real properties which are subject to the Leases are, to the Seller’s knowledge:
(a) in accordance with all applicable laws, ordinances, regulations, rules and
orders (collectively, “Laws”), including, but not limited to, those applicable
to zoning, environment and the establishment and maintenance of working
conditions for labor, and (b) in reasonable condition of maintenance and
repair, and are adequate, sufficient and suitable for their present uses and
purposes.


 


4.10                           Tax Matters.  The Seller has filed or will file all tax
returns and tax reports required to be filed by it with respect to the Business
or the Assets, including, without limitation, those returns and reports
pertaining to federal, state, provincial, local, foreign or other income taxes,
gross receipt taxes, ad valorem taxes, transfer taxes, excise taxes, sales and
use taxes, payroll taxes, withholding taxes, occupation taxes, property taxes
and franchise taxes. All such tax returns and tax reports are or will be
correct and complete, and all taxes, interest and penalties shown or claimed to
be due thereon have been paid or will be paid when due, subject to the
provisions of Section 11.1 hereof. 
There are no Liens for taxes on the Assets or with respect to the
Business.


 


4.11                           Environmental Matters.  Except as set forth on Schedule 4.11:


 


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(a)                                  The Seller is not
subject to any unsatisfied judgment, decree or order relating to
(i) compliance with any applicable federal, state or local environmental
Laws (collectively, the “Environmental Laws”) related to the Business or the
Assets, (ii) the cleanup of regulated substances under any applicable Environmental
Laws related to the Business or the Assets; or (iii) compliance with any
permits required by Environmental Laws for the Seller to conduct the Business,
as the Business is conducted on the Closing Date, or operate the Assets, as the
Assets are operated as of the Closing Date;


 


(b)                                 There are no pending
or, to the Seller’s knowledge, threatened suits, proceedings or claims by any
third parties for damages, contribution, indemnification, costs or injunctive
relief arising out of the presence of any regulated substances caused by the
Seller in its operations;


 


(c)                                  To Seller’s
knowledge, no spill, discharge, deposit, emission or other release or threat of
release of any regulated substances caused by the Seller in its operations has
occurred in violation of Environmental Laws; and


 


(d)                                 To Seller’s knowledge,
the sale, transfer or exchange of the Business and the Assets will not trigger
or has not triggered any obligation under any applicable Environmental Laws to
make a filing, provide a notice, provide other disclosure or take any other
action, or in the event that any such transaction-triggered obligation does
arise or has arisen under any Environmental Laws, all such actions required
thereby will have been taken, in compliance with applicable Environmental Laws,
as of the Closing Date.


 


4.12                           No
Breach of Contract, No Violations of Law, No Prior Approval.


 


(a)                                  Neither the execution
and delivery of this Agreement nor compliance with its terms and provisions
will conflict with, result in the breach or violation of, or constitute a
default (with or without notice or lapse of time or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation
under, any of the terms, conditions or provisions of (i) the Seller’s
Certificate of Incorporation or Bylaws (or comparable charter documents); (ii)
any Customer Contract, accepted Miscellaneous Contract or Assigned Lease except
as identified on Schedule 4.12(a); or (iii) to Seller’s knowledge, any
Laws applicable to the Seller or any of the Assets.  Except as identified on Schedule 4.12(a), neither the
execution and delivery of this Agreement nor compliance with its terms and
provisions will result in the creation or imposition of any Lien upon the
Business or any of the Assets.


 


(b)                                 To Seller’s knowledge,
other than those filings, permits, and other consents identified on Schedule
4.12(b), no filing with, or permit or consent of, any governmental
authority or any other third party is required for the consummation by the
Seller of the transactions contemplated by this Agreement.


 


4.13                           Litigation.  Except as set forth on Schedule 4.13,
there is no pending or, to the Seller’s knowledge, threatened claim,
litigation, proceeding or order of any court or governmental agency or
arbitrator or governmental investigation relating to the Business or any of the
Assets.


 


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4.14                           Finders,
Brokers and Investment Bankers.  No
finder, broker or investment banker acting or who has acted on behalf of the
Seller in connection with the transactions contemplated by this Agreement is
entitled to receive any commission or finder’s fee in connection with such
transactions, and no other person or entity is entitled to receive any
commission or finder’s fee from the Seller in connection with such
transactions.


 


4.15                           No
Material Adverse Change.  Except as
disclosed on Schedule, 4.15 and except as may be known to or done by
Vango Management, LLC, its managers, members, employees or agents
(collectively, “Vango”) in connection with Vango’s management and operation of
Seller’s Business; since September 30, 2003, Seller has conducted its Business
in the ordinary course and there has not occurred:


 


(a)                                  any material
uninsured damage to, destruction or loss of any Asset;


 


(b)                                 any material
revaluation by the Seller of any of the Assets, including, without limitation,
writing down the value of Inventory;


 


(c)                                  any sale or transfer
of a material amount of the Assets, other than sales of inventory in the
ordinary course of business.


 


(d)                                 any license, transfer,
pledge, mortgage or other disposition of, or granting of a Lien on, any Asset
material to the operation of the Business, except in the ordinary course of
business or except as may be discharged prior to the Closing;


 


(e)                                  any change in compensation
payable to any employee other than in the ordinary course of business;


 


(f)                                    any change in the
accounting methods, practices or policies used by the Seller, except as
required by applicable accounting authorities;


 


 (g)                              any
settlement or compromise of any material litigation or governmental
investigation involving the Business or any Asset; or


 


(h)                                 any agreement,
commitment or understanding, whether in writing or otherwise, for the Seller to
take any of the actions specified in items (d), (e), (f) or (h) above.


 


4.16                           Governmental
Permits and Licenses; Compliance with Laws.  To Seller’s knowledge, the Seller has all of the permits and
other consents required to own the Assets and to carry on the Business as
presently conducted, and, assuming proper action by the other party thereto or
by the issuer thereof, all such permits and other consents are valid and in
effect, and to Seller’s knowledge, neither the ownership of the Assets by the
Seller, nor the operation of the Business by the Seller as it is presently
conducted, violates any applicable law, rule or regulation.


 


4.17                           Insurance.  The Seller has adequately insured all of the
Assets against loss or damage resulting from fire or other risks insured
against by extended coverage and public liability insurance of a kind and in an
amount customarily obtained by similar businesses.


 


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4.18                           Employees;
Labor Relations.


 


(a)                                  Schedule 4.18(a)
sets forth, as of the date hereof, the names of all persons employed by the
Seller in the conduct of the Business (the “Seller Employees”).


 


(b)                                 With respect to the
Business, the Seller has not received any written notice of any unfair labor
practice complaints or any other action, suit, complaint, charge, arbitration, inquiry,
proceeding or investigation pending before the National Labor Relations Board
or any other agency having jurisdiction thereof and, to the Seller’s knowledge,
no such complaint has been threatened. 
The Seller has not received any written notice of any activities or
proceedings of any labor union (or representatives thereof) to organize any non
union Seller Employees, or of any strikes, slowdowns, work stoppages, lockouts
or threats thereof, by or with respect to any Seller Employees of the Seller and,
to the Seller’s knowledge, within the twelve (12) months prior to the date of
this Agreement, no such activities or proceedings are or were underway nor has
the Seller been the subject of any strikes, slowdowns, work stoppages, lockouts
or threats thereof.  With respect to the
Seller Employees, except as set forth on the Schedule 4.18(b), there are
no unsatisfied claims, grievances, arbitration proceedings, workers’
compensation proceedings.  The Seller is
not a party to or otherwise bound by, any consent decree with, or citation by,
any government agency relating to any Seller Employee or employment practices,
wages, hours, and terms and conditions of employment with respect to the
Business.


 


4.19                           Employee
Benefits


 


(a)                                  With
respect to the Seller, Schedule 4.19(a) lists all employee bonus,
retirement, pension, profit sharing, stock option, stock appreciation, stock
purchase, incentive, deferred compensation, hospitalization, medical, dental,
vision, life and other health and disability, severance and termination plans,
programs, arrangements, policies or practices providing for remuneration or
benefits (collectively, “Employee Benefit Plans”).


 


(b)                                 Each
Employee Benefit Plan has been maintained in all material respects in
accordance with its terms and with the requirements prescribed by applicable
Laws, including but not limited to Employee Retirement Income Security Act of
1974 (“ERISA”) and the Internal Revenue Code.


 


(c)                                  Except
as set forth on Schedule 4.19(c), with respect to the Seller’s
Employees, there are no pending material claims, actions, suits, arbitrations
or other proceedings (other than routine claims for benefits), and to the
Seller’s knowledge, there are no threatened claims, actions, suits,
arbitration, or other proceedings (other than routine claims for benefits)
against any Employee Benefit Plan.


 


(d)                                 To
Seller’s knowledge, all contributions required to be made to an Employee
Benefit Plan by law or by any Employee Benefit Plan document or contractual
undertaking, and all premiums due or payable with respect to any insurance
policy funding any Employee Benefit Plan for the time period through the date
hereof, have


 


8

















 


been timely made or paid in full, or to the extent not required to be
made or paid on or before the date hereof, have been reflected on the Financial
Statements.  No liability under Title IV
of ERISA or Section 302 of ERISA has been incurred by the Seller or any ERISA
affiliate that has not been satisfied in full, and no condition exists that
presents a material risk to the Seller or any ERISA affiliate of incurring any
such liability.


 


(e)                                  No
pension plan of Seller is a “multiemployer pension plan” within the meaning of
Section 3(37) of ERISA and the Seller does not have any liability under ERISA
for any complete or partial withdrawal from any such multiemployer plan.


 


4.20                           Liabilities.  Except as set forth and reserved for in the
Financial Statements or as set forth on Schedule 4.20, the Seller has
not received written notice of any outstanding claim, liability or
indebtedness, absolute or contingent, or obligations of any nature, whether
accrued, absolute, contingent, or otherwise, or to Seller’s knowledge,
threatened, whether due or to become due, with respect to the Business, other
than (a) liabilities incurred in the ordinary course and conduct of the
Business since September 30, 2003 which do not involve borrowings, and (b)
claims, liabilities or indebtedness of the type not required to be included in
the Financial Statements or notes thereto in accordance with generally accepted
accounting principles, but in no event in excess of $25,000.


 


4.21                           Intangible
Property.  Schedule 4.21
contains a complete list of the trademarks, trade names, copyrights and logos
used by the Seller.  To Seller’s
knowledge, the Seller is not infringing upon any trademark, trade name,
copyright or other rights of any third party; no proceedings are pending or
threatened; and no claim has been received by the Seller alleging any such
violation.  To the Seller’s knowledge,
there is no violation by others of any right of the Company with respect to any
trademark, trade name or copyright, but neither Seller nor Parent make any
representation or warranty as to Seller’s right to use any of the trademarks,
trade names, copyrights or logos used in its Business


 


4.22                           Books
and Records.  The Seller has
maintained the Business’ books and records in accordance with prudent business
practices and all books and records of the Business accurately reflect the
Business’ activities and operations.


 


4.23                           No
Misrepresentation.  No
representation or warranty by the Seller and/or the Parent in this Agreement
(including Schedules and Exhibits) contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained in this Agreement not misleading. Provided, however, that to the
extent any of the representations or warranties set forth above are known to
Vango to be incorrect or inaccurate, then Buyer shall not be entitled to rely
upon any such representation or warranty.


 


ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE BUYER


 


The Buyer makes the following representations and warranties to the
Seller:


 


5.1                                 Organization,
Existence and Standing of the Buyer. 
The Buyer is a limited liability company duly organized and validly
existing under the laws of the jurisdiction of its


 


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organization and
has full corporate power and authority to own or lease its assets, to carry on
its business as it is now conducted and to consummate the transactions
contemplated by this Agreement.


 


5.2                                 Authority.  The entering into and the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby (a) have been duly and validly authorized by
requisite corporate or other required action of the Buyer, and (b) constitutes
the legal, valid, and binding obligation of the Buyer, enforceable against it
in accordance with their respective terms.


 


5.3                                 Authority.
 The entering into and the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby (a) have been duly and validly authorized by
requisite corporate or other required action of the Buyer, and (b) constitutes
the legal, valid, and binding obligation of the Buyer, enforceable against
Buyer in accordance with the terms hereof.


 


5.4                                 No
Breach of Contract, No Violations of Law, No Prior Approval.


 


(a)                                  Neither the execution
and delivery of this Agreement nor compliance with its terms and provisions
will conflict with, result in the breach or violation of, or constitute a
default (with or without notice or lapse of time or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation
under, any of the terms, conditions, or provisions of (i) the Buyer’s
Certificate of Organization, Articles of Incorporation or Bylaws; (ii) any
agreement or instrument to which the Buyer is a party or by which the Buyer is
bound; or (iii) any Laws applicable to the Buyer.


 


(b)                                 No filing with, or
permit or other consent of, any governmental authority or any other third party
is required for the consummation by the Buyer of the transactions contemplated
by this Agreement.


 


5.5                                 Litigation.  There is no pending, or to the Buyer’s
knowledge, threatened claim, litigation, proceeding or order of any court or
governmental authority or arbitrator or governmental investigation relating to
the Buyer, its business or its assets which, if adversely determined, would,
individually or in the aggregate, reasonably be expected to materially impair,
hinder or otherwise materially and adversely affect the ability of the Buyer to
effect the Closing, or to perform any of its material obligations under this
Agreement.


 


5.6                                 Finders,
Brokers and Investment Bankers.  No
finder, broker or investment banker acting or who has acted on behalf of the
Buyer in connection with the transactions contemplated by this Agreement is
entitled to receive any commission or finder’s fee in connection with such
transactions, and to the Buyer’s knowledge, no other person is entitled to
receive any commission or finder’s fee from the Buyer in connection with such
transactions.


 


5.7                                 No
Misrepresentation.  No
representation or warranty by the Buyer in this Agreement (including Schedules
and Exhibits) contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained in this
Agreement not misleading.


 


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ARTICLE 6

COVENANTS OF THE SELLER


 


The Seller covenants and
agrees with the Buyer as follows:


 


6.1                                 Conduct
of Business Prior to the Closing Date. 
From and after the date hereof until the Closing Date or earlier
termination of this Agreement, Seller shall:


 


(a)                                  Carry
on the Business in substantially the same manner as it has heretofore been
conducted;


 


(b)                                 Maintain
and keep the Assets in as reasonable condition and repair, reasonable wear and
tear excepted, as the condition and repair the Assets are in as of the date
hereof;


 


(c)                                  Not
sell, lease, pledge, mortgage or otherwise dispose of or encumber any of the
Assets except for the sale, lease, pledge, mortgage or disposal or encumbrance
of any of the Assets, including Inventory, in the ordinary course of business
which would not, individually or in the aggregate, be material to the operation
of the Business.


 


(d)                                 Perform
all of its obligations under the Customer Contracts, the accepted Miscellaneous
Contracts and Assigned Leases;


 


(e)                                  Not (i) enter into
any contract outside the ordinary course of business, (ii) modify or
change any material contract, (iii) cancel any debts or waive any claims or
rights where such cancellation or waiver would reasonably be expected to have a
material adverse effect, or (iv) make any loan to, or enter into any
business transaction, agreement, arrangement or understanding of any other
nature with, any employee of the Business or any officer or director of the
Seller, the Parent or any affiliate or associate of any such officer or
director;


 


(f)                                    Not
(i) grant any increases in wages, salaries or benefits of any of the Seller
Employees except increases in the ordinary course of business in accordance
with the Seller’s existing policies, (ii) enter into any employment agreements
with respect to any employees of the Business, (iii) pay or agree to pay any
pension, retirement allowance or other employee benefit not required by any
existing plan, agreement or arrangement to any officer or employee of the
Business, whether past or present, or (iv) with respect to the Seller’s
Employees, commit to any additional pension, profit-sharing, bonus, incentive,
deferred compensation, group insurance, severance pay, retirement or other
employee benefit plan, agreement or arrangement, or to any employment or
consulting agreement with or for the benefit of any Seller Employee, or to
terminate or amend any of such plans or any of such agreements in existence on
the date of this Agreement;


 


(g)                                 Not
take any action that would prevent the transfer of the Assets to the Buyer at
the Closing, pursuant to the terms of this Agreement, free and clear of all
Liens;


 


11

















 


(h)                                 Maintain
its books, accounts and records with respect to the Business and the Assets in
the usual, regular and ordinary manner, and comply with all Laws;


 


(i)                                     Keep
and maintain all permits in full force and effect, continue their business
pursuant to such permits and take all steps necessary to meet requirements on
pending applications for permits;


 


(j)                                     Continue
to operate and maintain the Business and the Assets in accordance with
applicable Laws; and


 


(k)                                  Use
commercially reasonable efforts consistent with sound business judgment to
preserve intact its present business and organization, to retain the services
of its present employees, to preserve its relationships with its customers,
suppliers and others having business relationships with it.


 


Buyer acknowledge that Seller
has engaged the services of Vango to manage and operate Seller’s Business.


 


6.2                                 Access
by the Buyer to Properties and Records; Furnishing Information.  Following the date hereof, the Seller will
make available to the Buyer and its representatives, from time to time as the
Buyer may reasonably request, copies of all records, documentation and other
data retained by the Seller, consistent with the Seller’s document retention
policies and past practice, relating to the Business, the Assets and the
Assumed Liabilities as may be reasonably required to enable the Buyer to defend
against or assert claims related to or arising from ownership of the Assets,
the assumption of the Assumed Liabilities and to handle tax and financial
audits involving the Business and otherwise cooperate and assist, to the extent
reasonably requested by the Buyer, with Buyer’s investigation of the
properties, assets and financial condition related to the Seller and involving
the Business; provided, however, that the Buyer agrees to hold such records in
confidence, except to the extent required to defend or assert such claims and
to handle such audits, and to return the same to the Seller promptly upon the
conclusion of their use by the Buyer for the purposes herein specified.


 


6.3                                 Third-Party
Consents.  Following the date
hereof, the Seller shall use commercially reasonable efforts to obtain as
expeditiously as possible all consents required to consummate the transactions
contemplated under this Agreement, including those required by the Assigned
Leases, the accepted Miscellaneous Contracts and the Customer Contracts.
Neither Seller nor Parent guarantee that all such consents may be obtained.


 


6.4                                 Transfer
of Warranties.  In the event that
any of the Assets are under any warranty or vendor’s indemnification agreement
from the manufacturer or the original seller thereof, the Buyer may be entitled
to the benefit of the warranty or vendor’s indemnification agreement to the
extent that the warranty or vendor’s indemnification agreement is available to
the transferee, and the Seller shall, at Buyer’s expense, execute such
instruments as may be required to transfer the warranty to the Buyer.


 


12

















 


6.5                                 Negotiations
with Third Parties.  From the date
hereof through the Closing Date or earlier termination of this Agreement,
neither the Seller nor any of its respective officers, directors, agents or
employees will initiate or solicit proposals or conduct negotiations for the
sale, transfer or other disposition of the Business or any of the Assets with
any prospective purchasers other than the Buyer.


 


6.6                                 Insurance.  The Seller shall maintain in full force and
effect all policies of insurance in effect in connection with the Assets and
the Business on the date of this Agreement.


 


ARTICLE
7

CONDITIONS TO OBLIGATIONS OF THE BUYER


 


The
obligations of the Buyer under this Agreement are subject to the satisfaction
at or prior to the Closing Date of the following conditions, any of which may
be waived in whole or in part by the Buyer in its sole discretion by delivery
of a written notice to that effect to the Seller, which shall constitute a
release by the Buyer with respect to such condition.


 


7.1                                 Assigned
Leases; Estoppel Certificates.  As
of the Closing Date, the Seller shall have obtained a fully executed Estoppel
Certificate for each Assigned Lease listed on Schedule 7.1, attached
hereto.  Each Estoppel Certificate shall
be in a form reasonably satisfactory to the Buyer and shall provide that (i)
the subject Lease is in full force and effect, (ii) all rent is current, and
(iii) there are no other outstanding, past due obligations owed by the
Seller.  Seller will use its best
efforts to obtain the Estoppel Certificates, but does not guarantee that they
will be obtained. The failure to obtain one or more of such Estoppel Certificates
shall not be a breach by Seller, but may be a condition precedent to Buyer’s
obligations at the Closing.


 


7.2                                 Corporate Approvals.  As
of the Closing Date, the Seller and Parent shall have secured all
authorizations made necessary by applicable corporate Laws and the Seller’s and
Parent’s organizational documents (the “Corporate Approvals”).


 


7.3                                 Non-Competition Agreements.  As
of the Closing Date, the Seller, the Parent and each of the Seller’s senior
management team listed on Schedule 7.3 shall enter into three (3) year
non-competition agreements, all of which shall be in the form attached as Exhibit
“C” (the “Non-Competition Agreements”).


 


7.4                                 No
Litigation.  At the Closing Date, no
litigation, proceeding, investigation, or inquiry shall be pending or to
Seller’s knowledge, threatened before any court or other governmental authority
to enjoin or prevent the consummation of the transactions contemplated by this
Agreement, or involving any of the Assets.


 


7.5                                 No
Casualty.  Prior to the Closing Date,
there shall not have occurred any single uninsured casualty in or to any of the
Assets as a result of which the monetary amount of damage or destruction totals
$50,000 or a lesser amount if such damage or destruction has or would
reasonably be expected to have a material adverse effect, unless the Seller
agrees to replace the damaged or destroyed Assets (at no cost to the Buyer) or
unless the parties mutually agree to an adjustment in the Purchase Price.


 


13

















 


7.6                                 Truth
of Representations and Warranties. 
The representations and warranties of the Seller and the Parent
contained herein shall be true and correct in all material respects at and as
of the Closing as if made as of the Closing. 
The Seller and the Parent shall furnish the Buyer with appropriate
officers’ certificates, dated the Closing Date, to that effect.


 


7.7                                 Performance
by the Seller.  All of the covenants
and agreements required by this Agreement to have been performed and complied
with by the Seller and the Parent shall have been performed and complied with
by the Seller and the Parent in all material respects prior to or on the
Closing Date.  The Seller and the Parent
shall have delivered to the Buyer appropriate officers’ certificates to that
effect dated the Closing Date.


 


7.8                                 No
Material Adverse Change.  There
shall have not been any adverse change in the financial condition or property
of the Business as such is currently conducted, the effect of which is
materially adverse to the value of the Assets taken as a whole or materially
adverse to the Business, the condition (financial or otherwise) or results of
operations of the Business, in each case taken as a whole.


 


7.9                                 Other
Deliverables.  The Seller shall have
delivered to the Buyer those items set forth in Section 9.3 hereof, duly
executed by the Seller.


 


ARTICLE 8

CONDITIONS TO OBLIGATIONS OF THE SELLER


 


The
obligations of the Seller under this Agreement are subject to the satisfaction
at or prior to the Closing Date of the following conditions, any of which may
be waived in whole or in part by the Seller in its sole discretion by delivery
of a written notice to that effect to the Buyer, which shall constitute a
release by the Seller with respect to such condition.


 


8.1                                 No
Litigation.  At the Closing Date, no
litigation, proceeding, investigation, or inquiry shall be pending or
threatened to enjoin or prevent the consummation of the transactions
contemplated by this Agreement.


 


8.2                                 Truth
of Representations and Warranties. 
The representations and warranties of the Buyer, contained herein, shall
be true and correct in all material respects at and as of the Closing as if
made as of the Closing. Each Buyer shall have delivered to the Seller an
appropriate officer’s certificate to that effect dated the Closing Date.


 


8.3                                 Performance
by the Buyer.  All of the covenants
and agreements required by this Agreement to have been performed and complied
with by the Buyer shall have been performed and complied with by the Buyer in
all material respects prior to or on the Closing Date.  The Buyer shall have delivered to the Seller
an appropriate officer’s certificate to that effect dated the Closing Date.


 


8.4                                 Corporate
Approvals.  As of the Closing Date,
Parent and Seller shall have secured all of the Corporate Approvals.


 


14

















 


8.5                                 Legal
Opinion of Delaware Counsel.  Seller
and Parent shall have received an unqualified opinion from Delaware counsel
selected and paid for by Parent, to the effect that the sale of all or
substantially all of the assets of Seller to Buyer as contemplated by this
Agreement, does not require the approval of Parent’s shareholders, which
opinion shall be reasonably acceptable to Parent’s Board of Directors. The
condition set forth in this Section 8.5 can only be waived in a separate
writing signed by Buyer and Parent.


 


8.6                                 Other
Deliverables.  The Buyer shall have
delivered to the Seller those items set forth in Section 9.2 hereof, duly
executed by the Buyer.


 


ARTICLE 9

CLOSING


 


9.1                                 The
Closing Date.  The Closing shall
take place at the offices of  Hourigan,
Kluger & Quinn, P.C., 600 Third Avenue, Kingston, PA 18704, at 5:00 p.m.,
on or before February 29, 2004, or at such other place, date and time as the
parties may agree upon in writing.  Such
date is herein called the “Closing Date.”   
If all of the conditions specified in Articles 7 and 8 shall have been
fulfilled or waived in writing by the Buyer or by the Seller, as the case may
be, on or by the Closing Date, then, on the Closing Date, the Buyer and the
Seller shall make the deliveries set forth in Sections 9.2 and 9.3,
respectively.


 


9.2                                 Deliveries
by the Buyer.  Subject to the terms
and conditions of this Agreement, at the Closing, the Buyer shall deliver or
cause to be delivered to the Seller or Parent, if so indicated:


 


(a)                                  the sum of One
Hundred Fifty Thousand Dollars ($150,000.00) in immediately available funds;


 


(b)                                 to Parent, the amount,
in immediately available funds, of any advances or loans made by Parent to
Seller on or after November 30, 2003 to and including the Closing Date, unless
otherwise separately agreed in writing between Parent, Seller and Buyer.


 


(c)                                  the executed Note and
the Security Agreement;


 


(d)                                 a fully executed
Assignment and Assumption Agreement in the form set forth on Exhibit “D”,
attached hereto;


 


(e)                                  fully executed
assignments of leases (the “Assignments of Leases”) in the form set forth on Exhibit
“E”, attached hereto, for each of the Assigned Leases.


 


(f)                                    the Non-Competition
Agreements;


 


(g)                                 resolutions of the
Board of Directors of the Buyer, certified by an officer  of the Buyer, authorizing the execution of
this Agreement and the transactions contemplated hereby and thereby;


 


15

















 


(h)                                 the certificates referred
to in Sections 8.2 and 8.3;


 


(i)                                     a certificate
dated within thirty (30) days prior to the Closing Date from the Secretary of
State of the state of organization of Buyer, certifying that the Buyer is
validly existing and in good standing under the laws of said state;


 


(j)                                     a fully executed
Agreement of Sale and Assignment with respect to the Real Property; and


 


(k)                                  a fully executed
Mortgage against the Real Property, as partial security for the Note.


 


9.3                                 Deliveries by the
Seller.  Subject to the terms and
conditions of this Agreement, at the Closing, the Seller shall deliver or cause
to be delivered to the Buyer:


 


(a)                                  a fully executed
general assignment and bill of sale in the form set forth as Exhibit “F”;


 


(b)                                 a fully executed
Assignment and Assumption Agreement;


 


(c)                                  the
Assignments of Leases;


 


(d)                                 fully
executed Estoppel Certificates as required by Section 7.


 


(e)                                  fully
executed Non-Competition Agreements;


 


 (f)                                 resolutions
of the Board of Directors of the Seller, certified by an officer of the Seller,
authorizing the execution of this Agreement and the transactions contemplated
hereby and thereby;


 


(g)                                 resolutions
of the Board of Directors of the Parent, certified by an officer of the Parent,
authorizing the execution of this Agreement and the transactions contemplated
hereby and thereby;


 


(h)                                 the
certificates referred to in Section 7.6 and 7.7;


 


(i)                                     a
certificate dated within thirty (30) days prior to the Closing Date from the
Secretary of State of the State of Delaware certifying that Seller is validly
existing and in good standing under the laws of the State of Delaware;


 


(j)                                     the
Security Agreement; and


 


(k)                                  a
fully executed Agreement of Sale and Assignment with respect to the Real
Property.


 


9.4                                 Rights
to Possession.  The Buyer’s right to
possession of the Assets shall commence at the close of business on the Closing
Date, and the Buyer shall take possession of the Assets at the places they are
located on the Closing Date.


 


16

















 


ARTICLE 10

CERTAIN OTHER TRANSACTIONS


 


10.1                           Reimbursement
to Buyer of Legal Fees, Costs and Expenses.  In the event the transactions contemplated by this Agreement do
not close, the failure to close is not due to any material breach on the part
of Buyer, and all conditions precedent to the obligations of Seller to close
have been satisfied or waived (provided that the conditions set forth in
Section 8.5 must be satisfied and cannot be waived except in a separate writing
signed by Parent and Buyer), Parent and Seller agree to pay to Buyer all of its
documented reasonable legal and other costs and expenses incurred in connection
with the transactions contemplated by this Agreement, not to exceed Twenty-five
thousand dollars ($25,000) in the aggregate.


 


10.2                           Indemnification
from Prior Legal Fees and Costs. 
Subject to the Closing, Buyer and Daniel Sirolly, jointly and severally,
agree to defend, indemnify and hold Seller and Parent, and each of them, and
each of their respective shareholders, directors, officers, agents, attorneys and
representatives, free and harmless from any and all claims, suits, damages,
liabilities, losses, costs and expenses (including attorneys’ fees), arising
out of or related in any manner whatsoever to all prior efforts (“Prior
Efforts”) of the Sirolly Brothers (defined below), jointly or severally, to
acquire the Assets and/or the Real Property of Seller. As used herein, the term
“Sirolly Brothers” shall mean Charles Sirolly, Daniel Sirolly, Thomas Sirolly
and/or William Sirolly and/or any entity involved in the Prior Efforts to
acquire such Assets and/or Real Property of Seller.


 


ARTICLE 11

SALES AND TRANSFER TAXES


 


11.1                           Sales
and Transfer Taxes.  The Buyer shall
be responsible for and shall pay all sales, use, transfer (or stamp duty) and
documentary taxes and recording and filing fees, if any, including, without
limitation, all state or county sales taxes and any other charges applicable to
the transfer of the Assets and the assumption of the Assumed Liabilities
provided for by this Agreement.


 


ARTICLE 12

SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND

AGREEMENTS


 


12.1                           Survival
of Representatives and Warranties. 
The representations, warranties, covenants and agreements contained in
this Agreement shall survive the Closing only for the applicable period set
forth in this Article 12. All of the representations and warranties of the
Seller and the Buyer contained in this Agreement and all unasserted claims and
causes of action with respect thereto shall terminate two (2) years from the
Closing Date, except that (i) the representations and warranties in Section
4.10 (Tax Matters) and Section 4.11 (Environmental Matters) shall terminate
three (3) years from the Closing Date and (ii) the representations and
warranties in Section 4.1 (Organization, Existence and Standing of the Seller),
Section 4.2 (Corporate Authority), Section 4.6 (Title to the Assets), Section
5.1 (Organization, Existence and Standing of the Buyer), and Section 5.2
(Corporate Authority) shall survive the Closing Date indefinitely.


 


17

















 


12.2                           Survival
of Covenants and Agreements.  The
covenants and agreements contained in this Agreement having specific time
periods of applicability shall survive the Closing Date for the periods set
forth therein.


 


12.3                           Notice
of Claim.  In the event notice of
any claim for indemnification is given (as provided for in Article 13
(Indemnification)) within the applicable survival period and not resolved
within such period, the representations, warranties, covenants and agreements
that are the subject of such indemnification claim shall survive until such
time as such claim or claims are finally resolved but only with respect to the
specific unresolved claim or claims made within the applicable survival period.


 


ARTICLE 13

INDEMNIFICATION


 


13.1                           Indemnification
of the Buyer.  Subject to Article 12
(Survival of Representations, Warranties, Covenants and Agreements), the Seller
and the Parent agree to indemnify the Buyer, 
against any and all claims, demands or suits (by any person, including
any governmental authority) losses, cost, liabilities or expenses, paid or
incurred, whether or not relating to, resulting from or arising out of any
third party claim, including the costs and expenses of any and all actions, suits,
proceedings, demands, assessments, judgments, settlements, and compromises
relating thereto and reasonable attorney’s fees in connection therewith
(collectively, “Indemnified Losses”) incurred by the Buyer by reason of (a) any
breach of any representation, warranty, covenant or agreement of the Seller or
the Parent set forth in this Agreement or in any certificate furnished by the
Seller or the Parent pursuant to this Agreement, (b) the assertion against the
Buyer of any of the Retained Liabilities or (c) any liability arising from the
Seller’s operations of the Business and Assets prior to the Closing Date, other
than the Assumed Liabilities.  Provided,
however, that Parent will only be liable under this Section 13.1 with respect
to representations, warranties or covenants given or made by it.


 


13.2                           Indemnification
of the Seller.  Subject to Article
12 (Survival of Representations, Warranties, Covenants and Agreements), the
Buyer agrees to indemnify the Seller against any Indemnified Losses incurred by
the Seller by reason of (a) any breach of any representation, warranty,
covenant or agreement of the Buyer set forth in this Agreement, or in any
certificate or other closing document furnished by the Buyer pursuant to this
Agreement; (b) the assertion against the Seller of any of the Assumed
Liabilities; or the operation of the Business by the Buyer after the Closing.


 


13.3                           Procedures
for Claims.  Any Indemnified Party
shall provide written notice (the “Claim Notice”) of any Indemnified Losses to
the party from which it seeks indemnification (the “Indemnifying Party”) within
fifteen (15) days of such party becoming aware of the existence of such
Indemnified Losses stating the amount claimed to be due and payable or an
estimate of the claim if contingent or unliquidated, the basis of the claim and
the provision or provisions of this Agreement under which such claim is
asserted.  Within fifteen (15) calendar
days after receipt of the Claim Notice, the Indemnifying Party shall by written
notice (the “Response Notice”) to the Indemnified Party either (a) concede
liability in whole as to the amount claimed in such notice, (b) deny liability
in whole as to such amount, or (c) concede liability in part and deny liability
in part.  If the parties are not able to
resolve any dispute over a claim brought under this Article 13


 


18

















 


within fifteen
(15) days after the receipt of a Response Notice denying liability in whole or
in part, the Parties shall submit the dispute to a state or federal court (in
accordance with Section 19.11 below).


 


13.4                           Third-Party
Claims.


 


(a)                                  An Indemnifying Party
shall have the right, exercisable by written notice to the Indemnified Party
within fifteen (15) days of receipt of written notice from the Indemnified
Party of the commencement of or assertion of any lawsuit filed or instituted
against the Indemnified Party by a third party asserting any claim for which
the Indemnifying Party may be responsible under this Agreement (each, a “Third
Party Claim”), to assume and conduct the defense of each Third Party Claim with
counsel selected by the Indemnifying Party and reasonably acceptable to the
Indemnified Party; provided, however, that such Third Party Claim involves (and
continues to involve) solely monetary damages (the “Litigation Condition”).


 


(b)                                 If the Indemnifying
Party does not assume the defense of such Third Party Claim in accordance with
this Section 13.4, the Indemnified Party may continue to defend the Third Party
Claim.  If the Indemnifying Party has
assumed the defense of a Third Party Claim as provided in this Section 13.4,
the Indemnifying Party shall not be liable for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof;
provided, however, that if (i) the Litigation Condition ceases to be met, or
(ii) the Indemnifying Party fails to take reasonable steps necessary to defend
diligently such Third Party Claim within fifteen (15) calendar days (or such
shorter period as may be required to defend diligently such Third Party Claim)
after receiving timely written notice from the Indemnified Party that the
Indemnified Party believes the Indemnifying Party has failed to take such
steps, the Indemnified Party may assume its own defense, and the Indemnifying
Party shall be liable for all reasonable costs or expenses paid or incurred in
connection therewith.


 


(c)                                  Without the
Indemnified Party’s prior written consent, which consent will not be
unreasonably withheld, the Indemnifying Party shall not consent to a settlement
of, or the entry of any judgment arising from, any Third Party Claim.  If the Indemnifying Party does not assume
the defense of any such Third Party Claim or litigation resulting from such claim
in accordance with the terms of this Section 13.4, the Indemnified Party may
defend against such claim or litigation in such manner as it may deem
appropriate, including settling such claim or litigation, after giving notice
of the same to the Indemnifying Party, on such terms as the Indemnified Party
may deem appropriate.  If the
Indemnifying Party seeks to question the manner in which the Indemnified Party
defended such Third Party Claim or litigation resulting from such claim or the
amount of or nature of any such settlement, the Indemnifying Party shall have
the burden to prove  that the
Indemnified Party did not defend such claim in a reasonably prudent manner.


 


13.5                           Payment
of Amounts.  Subject to the
limitations and requirements set forth in Section 13.6 below, if any amount is
determined to be due and owing to a party as a result of any occurrence which
gives rise to indemnification obligations under this Article 13, such
amount shall be paid by the Indemnifying Party to the Indemnified Party in
immediately available funds;


 


19

















 


provided, however,
that in the event it is determined that the Seller or the Parent owe the Buyer
any sums under this Article 13 and such amount is not promptly paid, the Buyer
may exercise its right to offset under the Note.


 


13.6                           Limitation
on Indemnification.  The Buyer shall
not be entitled to indemnification as set forth in this Article 13 until the
aggregate amount of its Indemnified Losses exceeds Fifty Thousand and 00/100
Dollars ($50,000.00) (the “Basket Amount”), at which time, the Buyer shall be
entitled to indemnification for all Indemnified Losses including the Basket
Amount. Any indemnification with respect to the Real Property is not included
in this Agreement and shall be solely as provided in the separate Agreement of
Sale and Assignment of Real Property.


 


ARTICLE
14

TERMINATION


 


14.1                           Grounds.  Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned under any of the following circumstances:


 


(a)                                  At
any time (by written notice delivered to the other party) prior to the Closing:


 


(i)                                     By
the Buyer if the conditions set forth in Article 7 of this Agreement have
become incapable of fulfillment on or before the Closing Date;


 


(ii)                                  By
the Seller if the conditions set forth in Article 8 of this Agreement have
become incapable of fulfillment on or before the Closing Date;


 


(iii)                               By
the Seller or the Buyer if the Closing has not occurred on or prior to the
Closing Date, unless the absence of such occurrence shall be due to the delay
or failure of the party seeking to terminate this Agreement (or its
subsidiaries or affiliates) to perform in all material respects each of its
obligations under this Agreement required to be performed by it at or prior to
the Closing.


 


(iv)                              By
either the Buyer or the Seller, if a court of competent jurisdiction or
governmental authority shall have issued an order, decree or ruling or taken
any other action, in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and through no
failure, delay or fault of or breach by the terminating party, and such order,
decree, ruling or other action shall have become final and nonappealable.


 


(b)                                 At
any time by the mutual written consent of both the Buyer and the Seller.


 


14.2                           Effect.


 


(a)                                  If
any of the conditions to the obligations of the Buyer in Article 7 or of
the Seller in Article 8 have not been satisfied on or prior to the Closing
Date, the Buyer


 


20

















 


or the Seller,
as the case may be, shall have the right either (i) to terminate this Agreement
pursuant to, and with liability allocated as set forth in this Article 14, or
(ii) to waive and release their respective conditions and to proceed with the
Closing and the consummation of the transactions contemplated by this Agreement
without liability or further obligation with respect to the nonfulfillment of
such condition, provided, however, that the provisions of Section 8.5 may only
be waived by a separate written agreement signed by the Seller and Buyer.


 


(b)                                 In
the event that this Agreement is terminated as permitted by Section 14.1, all
obligations of the Seller and the Buyer hereunder shall terminate without
liability or further obligations; except for the obligations, terms and
conditions of Section 10.1.


 


(c)                                  Notwithstanding
the foregoing, any confidentiality agreement entered into by the parties, and
any other agreements between the parties that do not expressly provide for
their termination, shall survive the termination of this Agreement.


 


ARTICLE 15

EXPENSES


 


Subject to Article 11
(Sales and Transfer Taxes), whether or not the transactions contemplated hereby
are consummated, each of the Parties will, except in the case of any breach of
the terms and provisions of this Agreement for which either the Buyer or the
Seller, as the case may be, may be entitled to indemnification under Article 13
(Indemnification) hereof, pay its respective expenses, income and other taxes
and costs (including, without limitation, the commissions, fees, disbursements
and expenses of its investment bankers, attorneys, accountants and consultants)
incurred by it in negotiating, preparing, closing and carrying out this Agreement
and the transactions contemplated hereby and thereby.


 


ARTICLE
16

TAX CLEARANCE CERTIFICATES


 


Simultaneous with the
Seller’s filing of its final tax returns in all states where it conducts
business, the Seller shall deliver fully-completed applications for tax
clearance certificates (the  “Tax
Clearance Certificates”) to all applicable state taxing authorities.  Notwithstanding the above, in no event shall
such tax clearance applications be filed with the applicable state taxing
authorities later than September 30, 2004. 
Thereafter, the Seller shall secure all of the Tax Clearance
Certificates as promptly as possible and provide the Buyer with copies of each.


 


ARTICLE 17


MAINTENANCE OF BOOKS AND RECORDS


 


Subsequent to the closing, Buyer will, for a
period of seven (7) years, maintain all books and records delivered or turned
over to Buyer, in connection with the transactions contemplated by this
agreement. Seller, and its representatives shall have access to such books and
records (including the right to copy and make extracts) upon reasonable notice
to Buyer, during business hours, in connection with, among other things, tax
return preparation, filings and audits. Buyer


 


21

















 


shall
reasonably cooperate with Seller and assist Seller with regard to Seller’s
endeavors under this Article 17.


 


ARTICLE 18


EMPLOYEES


 


The Buyer
shall have the right, but is not obligated to offer employment to some, or all
of the Seller’s Employees upon such terms and conditions acceptable to the
Buyer in its sole discretion.  Provided,
however, that the Buyer shall be responsible for complying with the federal
Worker Adjustment and Retraining Notification Act (“WARN Act”), and similar
state laws, if applicable, and shall indemnify and hold the Seller and Parent
free and harmless from any and all claims, suits, proceedings, damages,
liabilities, losses, costs and expenses (including reasonable attorneys’ fees)
in connection therewith.


 


ARTICLE 19


MISCELLANEOUS


 


19.1                           Notices.  Any notice, request, instruction, consent or
other document to be given hereunder by either party hereto to the other party
shall be in writing and delivered (a) personally, (b) by telecopy or
(c) by a nationally recognized overnight carrier, or (d) by registered
or certified mail, return receipt requested, postage prepaid, as follows:


 


	
  If to the
  Buyer:

  	
   

  	
  Clive
  Corporation, Inc.

  
	
   

  	
   

  	
  1903 West
  Main Street

  
	
   

  	
   

  	
  Stroudsburg,
  PA 18360

  
	
   

  	
   

  	
  Attn:  President

  
	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
  Hoegen,
  Hoegen & Kelley, LLP

  
	
   

  	
   

  	
  152 South
  Franklin Street

  
	
   

  	
   

  	
  P. O. Box
  346

  
	
   

  	
   

  	
  Wilkes-Barre,
  PA 18703-0346

  
	
   

  	
   

  	
   

  
	
  If to the
  Seller:

  	
   

  	
  Beyond the
  Wall, Inc.

  
	
   

  	
   

  	
  c/o YouthStream Media Networks, Inc.

  
	
   

  	
   

  	
  244 Madison Avenue, PMB #358,

  
	
   

  	
   

  	
  New York, New York 10016

  
	
   

  	
   

  	
  Attn:  President

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Ronald J. Grant, Esquire

  
	
   

  	
   

  	
  Tilles, Webb, Kulla & Grant, ALC

  
	
   

  	
   

  	
  433 North Camden Drive, Suite 1010

  
	
   

  	
   

  	
  Beverly
  Hills, CA  90210

  
	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
  Joseph E.
  Kluger, Esquire

  
	
   

  	
   

  	
  Hourigan,
  Kluger & Quinn, P.C.

  
	
   

  	
   

  	
  600 Third
  Avenue

  
	
   

  	
   

  	
  Kingston, PA
  18704

  



 


22

















 


or at such
other address for a party as shall be specified in writing by that party.  Notices shall be deemed received the same
day (when delivered personally or by telecopy with receipt confirmation), the
next business day (when delivered by overnight carrier) or five (5) days after
mailing (when sent by registered or certified mail).


 


19.2                           Waiver;
Remedies Cumulative.  The rights and remedies of the
parties to this Agreement are cumulative and not alternative.  Neither any failure nor any delay by any
party in exercising any right, power or privilege under this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege.  Any
of the terms or conditions of this Agreement may be waived in writing at any
time by the party which is entitled to the benefits thereof.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of such provision at any
time in the future or a waiver of any other provision hereof.


 


19.3                           Captions.  The captions set forth in this Agreement are
for convenience only and shall not be considered as part of this Agreement, nor
affect in any way the meaning of the terms and provisions hereof.


 


19.4                           Successors
and Assigns.  The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto; provided, however,
that this Agreement may not be assigned by any party without the express
written consent of the other party hereto.


 


19.5                           Enforceability.  If any provision of this Agreement as
applied to any party or to any circumstance shall be adjudged by a court to be
invalid or unenforceable, the same shall in no way affect any other provision
of this Agreement, the application of such provision in any other
circumstances, or the validity or enforceability of this Agreement.  The parties intend this Agreement to be
enforced as written.  If any such
provision, or part thereof, however, is held to be unenforceable because of the
duration thereof or the area covered thereby, the Seller and the Buyer agree
that the court making such determination shall have the power to reduce the
duration and/or area of such provision, and/or to delete the specific words or
phrases, and in its amended form such provision shall then be enforceable and
shall be enforced.  If any provision of
this Agreement shall otherwise finally be determined to be unlawful, then such
provision shall be deemed to be severed from this Agreement and every other
provision of this Agreement shall remain in full force and effect.


 


19.6                           Counterparts.  This Agreement may be executed in more than
one counterpart, each of which shall for all purposes be deemed to be an
original and all of which shall constitute one and the same agreement.  A signature to this Agreement delivered by
telecopy or other artificial means shall be deemed valid.


 


19.7                           Governing
Law.  This Agreement shall in all
respects be interpreted, construed and governed by and in accordance with the
laws of the Commonwealth of Pennsylvania, without regard to principles of
conflict of laws.


 


19.8                           Time
of Essence.  Time shall be of the
essence with respect to this Agreement.


 


23

















 


19.9                           No
Strict Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction will
be applied against either party.


 


19.10                     Public
Announcements.  The Buyer and the
Seller shall agree on the terms of the press releases to be issued upon the
execution of this Agreement and shall consult with each other before issuing
any other press releases with respect to this Agreement and the transactions
contemplated hereby, including without limitation, any termination of this
Agreement for any reason.  Parent shall
not be subject to any limitations with regard to any filings or disclosure
which are necessary, to comply with federal and/or state laws or regulations.


 


19.11                     Exclusive
Jurisdiction and Consent to Service of Process.  The parties agree that any legal action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, shall be instituted in a federal or state court sitting in Monroe
County, Pennsylvania, which shall be the exclusive jurisdiction and venue of
said legal proceedings and each party hereto waives any objection which such
party may now or hereafter have to the laying of venue of any such action, suit
or proceeding, and irrevocably submits to the jurisdiction of any such court in
any such action, suit or proceeding. 
Any and all service of process and any other notice in any such action,
suit or proceeding shall be effective against such party when transmitted in
accordance with the notice provision herein. 
Nothing contained herein shall be deemed to affect the right of any
party hereto to serve process in any manner permitted by law.


 


19.12                     Miscellaneous.  As used in this Agreement, the Schedules and
the Exhibits and as required by the context: 
the singular and plural shall be deemed to include each other and each
gender, to include all genders; the terms herein, hereof, and hereunder or
other similar terms refer to this Agreement, in which they appear as a whole
and not only to the particular sentence, paragraph, subsection or section in
which any such term is used except as expressly more specifically limited; and
words and phrases defined in this Agreement have the same meaning in the
Schedules, Exhibits unless specifically provided to the contrary in any
thereof.


 


19.13                     Entire
Agreement; Amendment.  Except as set
forth herein, this Agreement, including all Schedules and Exhibits hereto
constitute the sole understanding of the parties with respect to the matters
contemplated hereby and thereby and supersedes and renders null and void all
other prior agreements and understandings between the parties with respect to
such matters.  No amendment,
modification or alteration of the terms or provisions of this Agreement,
including all Schedules and Exhibits hereto, shall be binding unless the same
shall be in writing and duly executed by the party against whom such would
apply.


 


19.14                     Knowledge
Defined.  Whenever the phrase to
Seller’s knowledge is used in this Agreement, or words of similar import, it
shall mean the actual knowledge of the following officers of Seller: Jonathan
Diamond or Robert Weingarten. Whenever the phrase to Vango’s knowledge, or
words of similar import, it shall mean the actual knowledge of Dan Sirolly or
Kevin Wright.


 


24

















 


19.15                     Legal Fees.   In the event legal action is instituted to
enforce or interpret the provisions of this Agreement, the prevailing party
shall be entitled to reasonable attorneys’ fees and all costs incurred.


 


IN
WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed and delivered by its duly authorized
representatives as of the date first written above.


 


	
  Beyond the Wall, Inc.

  	
  Clive Corporation, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  YouthStream Media Networks, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Daniel Sirolly, individually,
  as to

  
	
  Name:

  	
   

  	
   

  	
  Section 10.2

  
	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
											



 


25

















 


LIST OF
SCHEDULES AND EXHIBITS


 


	
  Schedule

  	
   

  	
  Subject
  Matter

  
	
   

  	
   

  	
   

  
	
  1.1(b)(i)

  	
   

  	
  List
  of Customer Contracts

  
	
   

  	
   

  	
   

  
	
  1.1(b)(ii)

  	
   

  	
  List
  of Miscellaneous Contracts

  
	
   

  	
   

  	
   

  
	
  1.1
  (c)

  	
   

  	
  Assigned
  Leases

  
	
   

  	
   

  	
   

  
	
  1.1(d)

  	
   

  	
  Prepaid
  Items and Deposits

  
	
   

  	
   

  	
   

  
	
  2.2(a)

  	
   

  	
  Old
  Trade Payables

  
	
   

  	
   

  	
   

  
	
  2.2(b)

  	
   

  	
  Accrued
  Lease Termination Costs

  
	
   

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Allocation
  of the Purchase Price

  
	
   

  	
   

  	
   

  
	
  4.4

  	
   

  	
  Unaudited
  Financial Statements of Seller, as of and for the fiscal year ended September
  30, 2003

  
	
   

  	
   

  	
   

  
	
  4.6

  	
   

  	
  Lien
  exceptions

  
	
   

  	
   

  	
   

  
	
  4.8(a)

  	
   

  	
  Exceptions
  to performance under the Customer Contracts and Accepted Miscellaneous
  Contacts, notices of default

  
	
   

  	
   

  	
   

  
	
  4.8(b)

  	
   

  	
  Written
  notices of Customer’s intent to terminate

  
	
   

  	
   

  	
   

  
	
  4.11

  	
   

  	
  Exceptions
  to Environmental Representations and Warranties

  
	
   

  	
   

  	
   

  
	
  4.12(a)

  	
   

  	
  Breach
  of Customer Contacts and Miscellaneous Contracts

  
	
   

  	
   

  	
   

  
	
  4.12(b)

  	
   

  	
  Filings,
  permits, and other consents of any governmental authority or any other third
  party required for the consummation by the Seller of the transactions
  contemplated by this Agreement

  
	
   

  	
   

  	
   

  
	
  4.13

  	
   

  	
  Pending or threatened
  litigation

  
	
   

  	
   

  	
   

  
	
  4.15

  	
   

  	
  Exceptions to No Material
  Adverse Change

  
	
   

  	
   

  	
   

  
	
  4.18(a)

  	
   

  	
  List of the names of all
  persons employed by Seller in the conduct of its Business, as of the date of
  this Agreement

  
	
   

  	
   

  	
   

  
	
  4.18(b)

  	
   

  	
  Unsatisfied claims,
  grievances, arbitration proceedings, workers’ compensation proceedings with
  respect to Seller Employees

  
	
   

  	
   

  	
   

  
	
  4.19(a)

  	
   

  	
  List of all employee bonus,
  retirement, pension, profit sharing, stock option, stock appreciation, stock
  purchase, incentive, deferred compensation, hospitalization, medical, dental,
  vision, life and other health and disability, severance and termination
  plans, programs, arrangements, policies or practices providing for
  remuneration or benefits

  
	
   

  	
   

  	
   

  
	
  4.19(c)

  	
   

  	
  List of pending
  or threatened material claims, actions, suits, arbitrations or other
  proceedings (other than routine claims for benefits) against any Employee
  Benefit Plan

  
	
   

  	
   

  	
   

  
	
  4.20

  	
   

  	
  Exceptions to
  Liabilities, claims, or indebtedness shown on Financial Statements

  



 


26

















 


	
  4.21

  	
   

  	
  List of
  trademarks, trade names, copyrights and logos used by Seller in the Business

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  See Schedule
  1.1(c)

  
	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Members of
  Management Team of Seller and Partner required to enter into Non-Competition
  Agreements

  



 


 


	
  Exhibits

  	
   

  	
  Subject
  Matter

  
	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Form of Secured
  Promissory Note

  
	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  Form of Security
  Agreement

  
	
   

  	
   

  	
   

  
	
  C

  	
   

  	
  Form of
  Non-Competition Agreement

  
	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  Form of
  Assignment and Assumption Agreement

  
	
   

  	
   

  	
   

  
	
  E

  	
   

  	
  Form of
  Assignment of Leases

  
	
   

  	
   

  	
   

  
	
  F

  	
   

  	
  Form of General
  Assignment and Bill of Sale

  



 


27

















 


EXHIBIT
“A”


 


SECURED
PROMISSORY NOTE


 

















 


EXHIBIT
“B”


 


SECURITY
AGREEMENT


 

















 


EXHIBIT
“C”


 


NON-COMPETITION
AGREEMENT


 

















 


EXHIBIT
“D”


 


ASSIGNMENT
AND ASSUMPTION AGREEMENT


 

















 


EXHIBIT
“E”


 


ASSIGNMENT
OF LEASE


 

















 


EXHIBIT
“F”


 


BILL
OF SALE