Exhibit 10.3
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT, dated this 30th day of June,
1999, is made by and between BUYER and SELLER.
W I T N E S S E T H:
WHEREAS, Seller is the owner of the Business operating under the Trade
Name; and
WHEREAS, Seller desires to sell, and Buyer, in reliance upon the
representations and warranties set forth herein, desires to buy, certain assets
used in connection with the operation of the Business, and the Business itself
as a going concern.
NOW, THEREFORE, in consideration of the promises set forth herein, and
for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, Buyer and Seller agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATIONS.
SECTION 1.1 DEFINITIONS. The following terms (whether or not underscored) when
used in this Agreement, including its preamble and recitals, shall, except where
the context otherwise requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"ACCOUNTS RECEIVABLE" shall mean any of Seller's (i) right to payment
for goods sold, leased or licensed, or for services rendered, in connection with
the Business, whether or not earned by performance, (ii) notes receivable,
bonds, and any other receivables and evidence of indebtedness from the Business,
and (iii) Seller's right to payment of any nature whatsoever from the Business.
"AGREEMENT" shall mean this Asset Purchase and Sale Agreement.
"ASSIGNMENT AGREEMENT" shall mean the Assignment Agreement between
Buyer and Seller, dated as of the Closing Date, whereby Seller assigns to Buyer,
free and clear of all Encumbrances, each of Seller's right, title and interest
in and to those Purchased Assets which are capable of transfer by assignment.
The Assignment Agreement shall be in the form attached hereto as EXHIBIT A.
"ASSIGNMENT OF LEASE" shall mean the Assignment of Lease Agreement
between Buyer and Seller, dated as of the Closing Date, whereby Seller assigns
to Buyer, free and clear of all Encumbrances, each of Seller's right, title and
interest in and to Seller's leases with individual pharmacies in connection with
the Business. The Assignment of Lease shall be in the form attached hereto as
EXHIBIT B.
"ASSUMED LIABILITIES" shall mean those accounts payable of Seller
arising out of the Business, not to exceed Four Hundred Thousand Dollars
($400,000), a list of which will be attached hereto as SCHEDULE 1 at Closing.
Buyer will negotiate payment terms for the Assumed Liabilities prior to Closing.
The Assumed Liabilities can be paid within six (6) to nine (9) months from the
Closing Date. The Assumed Liabilities will also include the remaining regularly
scheduled payments on the Diversified Leasing Agreement dated January 14, 1999,
such payments not to exceed Ninety Thousand Dollars ($90,000).
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"XXXX OF SALE" shall mean the Xxxx of Sale of Seller to Buyer, dated as
of the Closing Date, whereby Seller transfers to Buyer, free and clear of all
Encumbrances, each of the Purchased Assets which are capable of transfer by xxxx
of sale. The Xxxx of Sale shall be in the form attached hereto as EXHIBIT C.
"BOOKS" shall mean all of Seller's manuals and other materials (in any
form or medium), advertising material, catalogues, price lists, correspondence,
mailing lists, lists of customers, distribution lists, sales and promotional
materials and records, purchasing materials, all accounting and business
records, including, without limitation, all accounts receivable and accounts
payable detail, all information concerning payments of accounts payable, all
fixed assets lists (including locations), in each case in connection with the
Business.
"BUSINESS" shall mean Seller's Neighborhood Pharmacy TV Network
business, including the XXXX-xxxxxx.xxx web site and NPTV Fax News, each as a
going concern.
"BUYER" shall mean [RMS HEALTH NETWORK, INC., a Delaware corporation].
"BUYER'S ADDRESS" shall mean 000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xx.
Xxxxxxxxxx, XX 00000, Telecopy Number 000-000-0000.
"CLOSING" shall mean the closing on the Closing Date of the
transactions contemplated by this Agreement.
"CLOSING DATE" shall mean June 30th, 1999, or such other date mutually
agreeable to the parties hereto.
"CONSENT" shall mean any consent, approval, order or authorization of,
or any declaration, filing or registration with, or any application or report
to, or any waiver by, or any other action (whether similar or dissimilar to any
of the foregoing) of, by or with, any person, which is necessary in order to
take a specified action or actions, in a specified manner and/or to achieve a
specific result.
"CONTRACT" shall mean all of Seller's written or oral contracts,
agreements, orders or commitments of any nature whatsoever, including, without
limitation, any sales orders, purchase orders, leases, subleases, license
agreements, sublicense agreements, loan agreements, security agreements,
guarantees, management contracts, employment agreements, consulting agreements,
partnership agreements, buy-sell agreements, options, warrants, subscriptions,
calls or puts in connection with the Business, including without limitation, the
agreements listed on the attached SCHEDULE 2.
"CONTRACT RIGHT" shall mean any right, power or remedy under any
Contract, including, without limitation, any right to receive goods or services
or otherwise derive benefit from the payment, satisfaction or performance of
another party's Obligations, and right to demand that another party accept goods
or services or take any other action, and any right to pursue or exercise any
remedy or option.
"CREDITS" shall mean all of Seller's credits, prepaid expenses,
deferred charges, advance payments, security deposits and prepaid items in
connection with the Business.
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"ENCUMBRANCE" shall mean any lien, security interest, pledge, mortgage,
easement, leasehold, assessment, covenant, restriction, reservation, conditional
sale, prior assignment, or any other encumbrance, claim, burden or charge of any
nature whatsoever.
"EQUIPMENT" shall mean any of the equipment owned and used by Seller
(not including equipment owned by any NCPA Member) in connection with the
Business, including, without limitation, all televisions, software, computer
equipment, satellite dishes, satellite receivers, speakers, mounts, cabling and
related equipment.
"GOODWILL" shall mean Seller's goodwill associated with the Business.
"INTANGIBLES" shall mean the Tradename, the programming (including
continuing education materials, other content contained in the programming and
the Beta masters containing the programming) used in connection with the
Business, Seller's web site known as ANPTV Xxxxxx.xxx, all licensing agreements
related to the Intangibles and all other Intangibles related to the Business.
"LICENSE AGREEMENT" shall mean the License Agreement to be entered into
between Buyer and Seller on the Closing Date substantially in the form attached
hereto as EXHIBIT D.
"JUDGMENT" shall mean any order, writ, injunction, fine, citation,
award, decree, or any other judgment of any nature whatsoever of any foreign,
federal, state or local court, any governmental, administrative or regulatory
authority, or any arbitration tribunal.
"LAW" shall mean any provision of any law, statute, ordinance,
constitution, charter, treaty, rule or regulation of any foreign, federal, state
or local governmental, administrative or regulatory authority.
"NCPA" shall mean the National Community Pharmacists Association, a
Virginia non-profit trade association, and its affiliates.
"NCPA MEMBER" shall mean independent and other community pharmacies
throughout the United States that are members of NCPA.
"OBLIGATION" shall mean any debt, liability or obligation of any nature
whatsoever, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained,
known, unknown, including all obligations arising under executory contracts and
all obligations to pay Taxes.
"PERSON" shall mean any individual, sole proprietorship, joint venture,
partnership, corporation, association, cooperation, trust, estate, government
(or any branch, sub or agency thereof), governmental, administrative or
regulatory authority, or any other entity of any nature whatsoever.
"PROCEEDING" shall mean any demand, claim, suit, action, litigation,
bankruptcy, investigation, arbitration, administrative hearing, or any other
proceeding of any nature whatsoever.
"PURCHASED ASSETS" shall mean the Accounts Receivable, the Books, the
Business, the Contracts, Contract Rights, the Credits, the Equipment, the
Goodwill and the Intangibles.
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"PURCHASE PRICE" shall mean the amount set for in Article 3 hereof.
"SELLER" shall mean the NPTV LLC.
"SELLER'S ADDRESS" shall mean 000 Xxxxxxxxxxxx Xxxx, Xxxxxxxxxx, XX
00000, Telecopy Number 000-000-0000.
"TAX" shall mean (a) any foreign, federal, state or local income,
profits, gross receipts, franchise, sales, use, occupancy, general property,
real property, personal property, intangible property, transfer, fuel, excise,
accumulated earnings, personal holding company, unemployment compensation,
social security, withholding taxes, payroll taxes, or any other tax of any
nature whatsoever, (b) any foreign, federal, state or local organization fee,
qualification fee, annual report fee, filing fee, occupation fee, assessment,
rent, or any other fee or charge of any nature whatsoever, or (c) any
deficiency, interest or penalty imposed with respect to any of the foregoing.
"TRADENAME" shall mean the tradenames "Neighborhood Pharmacy TV
Network" and "ANPTV" used by Seller in connection with the Business.
"TRANSACTION DOCUMENTS" shall mean this Agreement, the License, the
Assignment Agreement, the Xxxx of Sale, the Assignment of Lease and all other
documents, exhibits or schedules delivered in connection with the transaction
contemplated by this Agreement.
SECTION 1.2 INTERPRETATION. Each definition of an agreement in this Article
shall, unless otherwise specified, include such agreement as modified, amended,
restated or supplemented from time to time and, except where the context
otherwise requires, the singular shall include the plural and vice versa. Except
where otherwise specifically restricted, references to a party to this Agreement
or any Transaction Documents include that party and its successors and assigns.
SECTION 1.3 ACCOUNTING TERMS. All references in this Agreement to generally
accepted accounting principles shall be to such principles as in effect from
time to time in the United States of America. All accounting terms used herein
without definition shall be used as defined under such generally accepted
accounting principles.
SECTION 1.4 CROSS REFERENCES. Unless otherwise specified, references in the
Transaction Documents to any Article or Section are references to such Article
or Section of such Transaction Documents and, unless otherwise specified,
references in any Article, Section or definition to any clause are references to
such clause of such Article, Section or definition.
SECTION 1.5 RECITALS, ETC. The foregoing recitals are true and correct and,
together with the exhibits and schedules referred to hereafter, are hereby
incorporated into this Agreement by this reference.
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ARTICLE 2
TRANSFER OF ASSETS AND OTHER BENEFITS AND
ASSUMPTION OF LIABILITIES
SECTION 2.1 PURCHASE AND SALE. Subject to the terms and conditions hereof,
Seller shall sell, transfer, convey and assign, and Buyer shall buy, on the
Closing Date, free and clear of all Encumbrances, the Purchased Assets.
SECTION 2.2 OTHER BENEFITS. In addition to selling the Purchased Assets to
Buyer, Seller agrees to do or cause the following to be done in connection with
this transaction:
2.3 LICENSE AGREEMENT. Seller agree to execute, deliver and
perform its obligations under the License Agreement.
SECTION 2.4 ASSUMPTION OF DEBTS, LIABILITIES AND OBLIGATIONS. Buyer will assume
and undertake to perform and pay all of the Assumed Liabilities. Buyer's
obligations under this Section shall survive the Closing.
SECTION 2.5 EMPLOYEES. Buyer shall have no obligation to continue the employment
of any of the Business's employees. Seller agrees to be responsible for all
obligations and expenses to all of the Business's employees through the Closing
Date, including, without limitation, any termination expenses. Buyer may elect
to hire some of the existing employees of the Business. Seller shall assist
Buyer in identifying which employees to hire and shall permit Buyer to interview
the employees of the Business for such purpose.
ARTICLE 3
CONSIDERATION
SECTION 3.1 PURCHASE PRICE. The Purchase Price shall be paid by Buyer to Seller
in the following manner:
3.1.1 CASH. On the Closing Date, Buyer shall pay to Seller One
Hundred Thousand Dollars ($100,000) in cash, certified check drawn on a
bank doing business in the county where Buyer's office is located or by
wiring immediately available funds to the bank account designated by
Seller in a written notice delivered to Buyer at least five (5) days
prior to Closing; and
3.1.2 ADDITIONAL AMOUNTS. Buyer will determine and pay to
Seller the following amounts (the "ADDITIONAL AMOUNT"), as reduced as
set forth in this subsection:
3.1.2.1 DETERMINATION. On each anniversary of the
Closing Date, Buyer shall determine the number of
Subscriptions, New Subscriptions, Subscription Payment and New
Subscription Payment (each as hereinafter defined) for the
twelve (12) month period just ended.
3.1.2.2 CERTAIN DEFINED TERMS. As used herein, the
following terms will have the following meanings:
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"EQUIPMENT SUBSIDIES" shall mean,
for each determination date and for any
period of time, that portion of the
subsidies, rebates and other incentives
which (i) Buyer makes available to any NPTV
Member to encourage such member to subscribe
to the services provided by Buyer; and (ii)
which were amortized by Buyer during such
period of time; and
"NEW SUBSCRIPTIONS" shall mean, on
each determination date, the difference (but
not less than zero) between (a) the number
of Subscriptions on such determination date,
and (b) the number of Subscriptions on the
immediately prior determination date (or, in
connection with the first determination
date, the number of Subscriptions on the
Closing Date which, for the purposes of this
definition, shall be deemed to be 650); and
"NET REVENUES" shall mean, (a) for
each determination date and for any length
of time occurring during the first
twenty-four (24) months following the
Closing Date, sixty-five percent (65%) of
the difference of (i) the gross revenues of
the Business which have actually been
received in cash by Buyer, and (ii) all of
Buyer's operating expenses and Equipment
Subsidies; and (b) for each determination
date and for any length of time occurring
after the first twenty-four (24) months
following the Closing Date, the difference
of (i) the gross revenues of the Business
which have actually been received in cash by
Buyer, and (ii) all of Buyer's operating
expenses and Equipment Subsidies; and
"NEW SUBSCRIPTION PAYMENT" [*]; and
"NPTV MEMBERS" shall mean, on any
determination date, the sum of (a) NCPA
Members' stores that are subscribers to the
services provided by the Business, and (b)
all other pharmacy stores that have become
subscribers to the services provided by the
Business through NCPA's assistance; and
"SUBSCRIPTIONS" shall mean, on any
determination date, the number of NPTV
Members that currently are and have been
subscribers to the services provided by the
Business for a minimum of six (6) months;
and
"SUBSCRIPTION PAYMENT" [*].
3.1.2.3 NEW SUBSCRIPTION PAYMENT. Buyer shall pay to
Seller forty-five (45%) of the New Subscription Payment (the
"ASSET PURCHASE NEW SUBSCRIPTION PAYMENT") for the previous
twelve (12) month period just ending in twelve (12) equal
installments due on the first day of each month beginning on
the month succeeding the date such payment was determined.
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[*] Confidential treatment has been requested with respect to certain
information contained in this document. Confidential portions have been
omitted from the public filing and have been filed separately with the
Securities and Exchange Commission.
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3.1.2.4 SUBSCRIPTIONS. Buyer shall pay to Seller of
forty-five (45%) the Subscription Payment (the "ASSET
PURCHASE SUBSCRIPTION PAYMENT") for the previous twelve (12)
month period just ending in twelve (12) equal instalments due
on the first day of each month beginning on the month
succeeding the date such payment was determined.
3.1.2.5 SETOFF AGAINST ADDITIONAL AMOUNT. Buyer is
permitted to setoff against and reduce any amounts Buyer owes
to Seller for Additional Amounts hereunder by the amount of
the Assumed Liabilities paid by Buyer. In addition, Buyer may
setoff against and reduce any amounts owed by Buyer to Seller
for Additional Amounts hereunder by any amount owed by Seller
and/or NCPA pursuant to Section 9.2 hereunder.
3.1.2.6 SURVIVAL. Buyer's obligations under this
subsection shall survive the Closing.
SECTION 3.2 ADJUSTMENT OF PURCHASE PRICE. The Purchase Price shall be adjusted
as set forth below:
3.2.1 ADDITIONAL AMOUNTS. During the first twenty-four (24)
months following the Closing Date, to the extent Net Revenues are
insufficient on any payment date to pay Additional Amounts after the
payment of the License Fee (as defined in the License Agreement), the
failure to pay such Additional Amounts when due will not be deemed a
default under this Agreement and the obligation to pay such Additional
Amounts will accumulate and be paid (which payment may occur at any
time including any time after the first twenty-four (24) months
following the Closing Date but shall be made within five (5) years of
the Closing Date) from future Net Revenues. This provision shall
survive the Closing.
3.2.2 LICENSE AGREEMENT. Seller's obligation to pay Additional
Amounts hereunder shall terminate upon the expiration or earlier
termination of the License Agreement. Buyer shall have no obligation to
pay Additional Amounts during any period of time during which Seller is
in default of any of its obligations under the License Agreement.
SECTION 3.3 PURCHASE PRICE ALLOCATION. The Purchase Price shall be allocated
among the Purchased Assets in accordance with the allocation schedule to be
prepared by Buyer on an Internal Revenue Form 8594. The parties will each report
the federal, state and local and other Tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation schedules.
ARTICLE 4
CLOSING AND PRE-CLOSING ITEMS
SECTION 4.1 CLOSING DATE. The Closing shall take place at the offices of Xxxxx
Xxxxx, P.A., 000 XX 0xx Xxxxxx, 00xx Xxxxx, Xx. Xxxxxxxxxx, XX 00000, on the
Closing Date at 2:30 p.m. prevailing local time or at such location, on such
other date, and at such other time as Buyer and Seller mutually agree in
writing.
SECTION 4.2 DUE DILIGENCE INVESTIGATION. Seller agrees to provide Buyer with
complete access to the Purchased Assets prior to the Closing Date for the
purpose of performing a due diligence investigation of the Business and for the
purpose of determining the accuracy of the representations and
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warranties set forth herein and to enable both parties to comply with their
agreements herein. Seller shall make available for consultation with Buyer, the
employees of Seller involved in operation of the Business and Seller's other
officers with knowledge of the Business. Additionally, Seller agrees to cause
Seller's outside accountants to be available to discuss the financial records,
results and prospects of the Business. Buyer agrees to supply Seller with bank
references upon Seller's request.
SECTION 4.3 OPERATION OF BUSINESS PRIOR TO CLOSING. Between the date hereof and
the Closing Date, Seller shall continue to operate the Business in a manner
consistent with prior practice and will maintain the goodwill of its employees,
suppliers, vendors, customers and other persons with whom it has commercial
dealings. Seller shall deliver to Buyer within ten (10) days following the end
of each month, internally prepared financial statements and balance sheets of
the Business for such calendar month and internally prepared accounts receivable
and accounts payable details in connection with the Business updated as of the
end of such calendar month.
SECTION 4.4 MARKETING EFFORTS PRIOR TO CLOSING. During the period between the
date hereof and Closing, Seller and Buyer acknowledge the importance and
necessity of marketing the Business in order to more fully facilitate Closing.
Accordingly, Seller authorizes Buyer to conduct sales and marketing efforts with
Seller's members in an effort to increase Subscriptions and to increase
advertising and sponsorship of the Business, each as Buyer deems necessary or
desirable. Such efforts may include, without limitation, solicitation of
Seller's members, subscription equipment subsidies, participation in trade show
booths and program solicitations, pilot programming and magazine and newspaper
advertising and editorial coverage. Seller will cooperate and assist Buyer in
all sales and marketing efforts.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER AND NCPA
Seller and NCPA represent and warrant to Buyer that the following are
true and correct on the date hereof and will be true and correct at the time of
the Closing:
SECTION 5.1 LEGAL CAPACITY. Seller is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Virginia. Seller has all necessary legal power and authority to execute, deliver
and perform its obligations under the Transaction Documents, and such execution,
delivery and performance have been duly authorized by all necessary action by
Seller. The Transaction Documents required to be executed by Seller have been or
will be on the Closing Date duly executed and delivered by the duly authorized
officer, employee or agent of Seller and constitute the valid and legally
binding obligations of Seller enforceable in accordance with their terms, except
as limited by bankruptcy, reorganization or similar laws affecting creditors'
rights generally. Seller has all requisite power to own, lease and operate its
properties and to carry on the Business as now being conducted.
SELLER 5.2 NO CONFLICTS. Neither the execution and delivery of the Transaction
Documents to which it is a party, the consummation of the transactions
contemplated thereby nor the fulfillment of or compliance with the terms and
provisions thereof conflict with, result in a material default under or breach
of or grounds for termination of, any material agreement or License to which
Seller is a party or by which Seller may be bound, result in the creation of any
Encumbrance upon the Purchased Assets or result in the violation by Seller of
any provision of Law applicable to Seller or to which Seller or the Purchased
Assets may be subject.
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SECTION 5.3 BROKERS AND FINDERS. Seller has not had any contact with any Person
who allegedly could claim a broker's or finder's fees with respect to the sale
of the Purchased Assets pursuant to the Transaction Documents and the other
transactions contemplated thereby other than Seller's obligations to Press
Xxxxxxxx, which obligations will be paid solely by NCPA.
SECTION 5.4 FULL DISCLOSURE. None of the representations or warranties made by
Seller orally or in this Agreement or in any other Transaction Document, and
none of the statements, documents or other information pertaining to this
transaction made or given by Seller or its officers, directors or employees to
Buyer, its agents or representatives, whether made orally or in writing,
contains any untrue statement of a material fact, or omit any material fact, the
omission of which is misleading, including, without limitation, any information
contained in any balance sheets, financial statements or other financial
information given by Seller to Buyer.
SECTION 5.5 FINANCIAL STATEMENTS. Except for the liabilities reflected, reserved
or otherwise disclosed in the balance sheet of the Business given by Seller to
Buyer, dated as of March 31, 1999 and the Accounts Receivables and Accounts
Payable details given by Seller to Buyer dated as of March 31, 1999, Seller has
no material liabilities, whether absolute or contingent, in connection with the
Business. Since the date of the last monthly income statement of the Business
given by Seller to Buyer, there have been no changes in (a) the financial
position of Seller, (b) the industry in which Seller competes or in which the
Purchased Assets has been or will be used, (c) the Purchased Assets, or (d) in
any other matter which, in each case or in combination, could have a Material
Adverse Effect. The books of account and other financial records of Seller have
been kept accurately and in the ordinary course of business in accordance with
GAAP, and the transactions entered therein represent bona fide transactions.
Such books of accounts and financial records fairly reflect Seller's income,
expenses, assets and liabilities.
SECTION 5.6 PROPERTY.
5.6.1 OWNERSHIP. Seller owns all of the personal property
included in the Purchased Assets, free and clear of any liens, pledges,
encumbrances, restrictions, Claims and rights of third parties, except
for that certain lease with Diversified Leasing, Inc. dated January 14,
1999. Providing for thirty-six (36) monthly payments of Two Thousand
Eight Hundred Sixty-Nine and 54/100 Dollars ($2,869.54).
5.6.2 CONTRACTS. Seller owns or has licenses pursuant to
license agreements to use all of the Intangibles Assets, such license
agreements may be assigned by Seller without obtaining consent of any
licensor under any such license agreement and any such license
agreement will remain in full force and effect following the Closing.
5.6.3 LEASES. All of the leases between Seller and the NPTV
Members listed on the attached SCHEDULE 3 are bona fide leases
representing obligations of the NPTV Members as set forth in each such
leases, such leases may be assigned by Seller without consent of such
NPTV Members and such leases will remain in full force and effect
following the Closing.
5.6.4 BACKLOG. NCPA will use its best efforts to ensure that
all of the NPTV Members set forth on the attached SCHEDULE 4 will
subscribe to the services provided by the Business upon such member's
receipt of the equipment necessary for such services to be provided.
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5.6.5 ALL NECESSARY. The Purchased Assets comprise all of the
property used in or required for the operation of the Business in the
manner and to the extent presently conducted. All of the Purchased
Assets are located at the leased properties described on the Assignment
of Leases.
5.6.6 MAINTENANCE. All personal property included in the
Purchased Assets were acquired and have been maintained in the ordinary
course of business, and, to the best of Seller's knowledge, are of good
and merchantable quality, consist of a quality, quantity and condition
reasonably usable, leasable or salable in the ordinary course of
business, and are not subject to any material write-down or write-off.
SECTION 5.7 LITIGATION.
5.7.1 LITIGATION. There are no legal actions, suits,
proceedings, strikes and labor disputes, administrative actions,
controversies or investigations pending against Seller or the Business
or, to the knowledge of Seller, threatened or contemplated against
Seller or the Business which may materially adversely affect the
Business, the Purchased Assets, this Agreement or the transactions
contemplated hereby.
5.7.2 JUDGMENTS. Neither Seller nor the Business is a party to
or subject to any judgment, order, ordinance, award, injunction or
decree which would (i) enjoin the transactions contemplated by this
Agreement or adversely affect the Purchased Assets or (ii) otherwise
materially adversely affect this Agreement or the transactions
contemplated hereby.
SECTION 5.8 TAXES.
5.8.1 RETURNS. Seller has duly filed, or caused to be filed,
all federal, state and local income, excise, sales, use and other tax
returns and reports required to have been filed by it. Seller has
timely paid or, where extensions have been obtained, have accrued all
taxes, interest and penalties due for the periods covered thereby. All
such reports are true and correct in all material respects.
5.8.2 AUDITS. There are no ongoing or potential examinations
or audits of the Business by the Internal Revenue Service or any state
or local taxing authority.
5.8.3 WAIVERS. There are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any federal
income tax return for any period with respect to the Business.
SECTION 5.9 ACCOUNTS RECEIVABLE. To the best of Seller's knowledge, all of the
Accounts Receivable reflected on the Business' balance sheet which was
previously delivered to Buyer are bona fide receivables representing obligations
for the face dollar amount thereof and have arisen in the regular course of
Seller's business. Such Accounts Receivable do not represent xxxx and hold
sales, consignment sales, guaranteed sales, or sale or return arrangements and
such Accounts Receivable are payable currently.
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SECTION 5.10 AUTHORIZATION, PERMITS AND COMPLIANCE WITH LAWS. To Seller's
knowledge, the Business holds all material certifications, permits, Licenses,
orders or approvals of any federal, state or local regulatory agency which are
required in order to permit Seller to continue to carry on the Business and use
its properties as it now does. Seller owns or has valid leases or licenses to
use all tangible properties necessary to operate the Business as it now does
without incurring any extraordinary expenditures for capital additions or
improvements. Seller does not know of any failure by the Business to comply with
any laws, orders or regulations of federal, state, local or foreign governments
applicable to the business, properties or assets of the Business.
SECTION 5.11 LOSS CONTRACTS. Seller is not a party to any material contract, bid
or offer to sell products or to provide services to third parties which is to be
performed at a price which would not result in a gross profit to the Business.
SECTION 5.12 CHANGE IN SERVICES, CUSTOMERS, ETC. Since January 1, 1999, there
has been no material change in the relationship between the Business and its
suppliers or customers, or in the service mix of the Business as compared with
the twelve months ended December 31, 1998, which would materially adversely
affect the Business. Seller has received no communication from any customer that
any such change is intended or contemplated which would have a material adverse
impact on the Business.
SECTION 5.13 ACCURACY OF REPRESENTATIONS. No representation or warranty made by
Seller orally, in this Agreement or in any Exhibit or Schedule hereto contains
any untrue statement of a material fact or omits to state any material fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading in any material respect.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents to Seller that:
SECTION 6.1 CORPORATE ORGANIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
SECTION 6.2 CORPORATE ORGANIZATION. Buyer has full legal right, power and
authority to enter into this Agreement and the Exhibits to which it is a party
and to consummate all of the transactions contemplated hereby.
SECTION 6.3 DUE EXECUTION. The execution, delivery and performance of the
Transaction Documents have been duly authorized by all necessary corporate
action on the part of Buyer. The Transaction Documents to which Buyer is a party
have been, or will be on the Closing Date, duly executed and delivered by Buyer
and constitute the valid and legally binding obligations of Buyer enforceable in
accordance with their terms, except as limited by bankruptcy, reorganization or
similar laws affecting creditors' rights generally.
SECTION 6.4 NO CONFLICT. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby nor the fulfillment
of or compliance with the terms and provisions hereof conflict with or result in
a default under or breach of or grounds for
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termination of, any material agreement or instrument or any license, permit or
other governmental authorization to which Buyer is a party or by which Buyer may
be bound, or result in the violation by Buyer of any law, regulation, or order
to which Buyer may be subject which would materially adversely affect the
transactions contemplated hereby.
SECTION 6.5 BROKERS AND FINDERS. Buyer has not had any contact with any person
who allegedly could Claim broker's or finder's fees concerning the purchase of
the Business or the Purchased Assets.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to satisfaction, prior to or concurrently with the performance
of such obligations, of the following conditions:
SECTION 7.1 PERFORMANCE OF AGREEMENT. Seller shall have performed and complied
with all its obligations under this Agreement which are to be performed or
complied with by it on or prior to the Closing Date and the representations and
warranties of Seller shall be true and correct as of the Closing Date.
SECTION 7.2 SELLER'S DOCUMENTS, ETC. Seller shall deliver, or cause to be
delivered, to Buyer, on the Closing Date, the following:
7.2.1 BOOKS AND RECORDS. All Books;
7.2.2 XXXX OF SALE; ASSIGNMENT AGREEMENT. An executed original
copy of the Xxxx of Sale and the Assignment Agreement;
7.2.3 ASSIGNMENT OF LEASES. An executed counterpart of the
Assignment of Lease;
7.2.4 LICENSE AGREEMENT. An executed counterpart of the
License Agreement; and
7.2.5 SECRETARY'S CERTIFICATE. A certificate from the duly
elected and incumbent Secretary each of Seller and NCPA, each such
certificate to be in the form attached hereto as EXHIBIT E, together
with all of the attachments listed thereon.
SECTION 7.3 OTHER CERTIFICATES, ETC. All other agreements, certificates,
instruments and documents reasonably requested by Buyer in order to fully
consummate the transaction contemplated hereby and carry out the purpose and
intent of this Agreement.
SECTION 7.4 WAIVER. Buyer shall have the right to waive in whole or in part any
one or more of the foregoing conditions and to proceed with the transactions
contemplated by this Agreement.
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ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
Each and every obligation of Seller to be performed on the Closing Date
shall be subject to the satisfaction, prior to or concurrently with the
performance of such obligation, of the following conditions:
SECTION 8.1 PERFORMANCE OF AGREEMENT. Buyer shall have performed and complied
with all of the obligations under this Agreement which are to be performed or
complied with by it on or prior to the Closing Date, and the representations of
Buyer shall be true and correct as of the Closing Date.
SECTION 8.2 BUYER'S DOCUMENTS, ETC. Buyer shall deliver, or cause to be
delivered, to Seller on the Closing Date the following:
8.2.1 ASSIGNMENT AGREEMENT. An executed counterpart of the
Assignment Agreement;
8.2.2 ASSIGNMENT OF LEASES. An executed counterpart of the
Assignment of Leases.
8.2.3 LICENSE. An executed counterpart of the License;
8.2.4 CASH. The cash payment referenced in Section 3.1.1; and
8.2.5 SECRETARY'S CERTIFICATE. A certificate from the duly
elected and incumbent Secretary of Seller in the form attached hereto
as EXHIBIT F, together with all of the attachments listed thereon.
SECTION 8.3 OTHER CERTIFICATES, ETC. All other agreements, certificates,
instruments and documents reasonably requested by Seller in order to fully
consummate the transaction contemplated hereby and carry out the purpose and
intent of this Agreement.
SECTION 8.4 WAIVER. Seller shall have the right to waive in whole or in part any
one or more of the foregoing conditions and to proceed with the transactions
contemplated by this Agreement.
ARTICLE 9
INDEMNIFICATION
SECTION 9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by any party hereto in this Agreement or pursuant hereto shall
survive the Closing hereunder.
SECTION 9.2 SELLER'S AND NCPA'S AGREEMENT TO INDEMNIFY. Seller and NCPA hereby
agree to jointly and severally indemnify, defend and hold Buyer harmless from
and against all demands, Claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including, without limitation,
interest, penalties and attorneys fees and expenses, asserted against, resulting
to, imposed upon or incurred by Buyer or the Business by reason of or resulting
from (i) a breach of any representation, warranty or agreement of Seller or NCPA
contained in or made pursuant to this Agreement and (ii) any action of Seller or
NCPA in connection with the Business prior to the Closing.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.1 TERMINATION. Either party may terminate this Agreement at its
option by providing written notice thereof to the other party if, through no
fault of such party, the Closing has not occurred on or before June 30, 1999.
SECTION 10.2 EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay the fees and
expenses of its respective counsel, accountants, other experts and all other
expenses incurred by such party incident to the negotiation, preparation and
execution of this Agreement or any transaction incident hereto contemplated
hereby.
SECTION 10.3 FURTHER ASSURANCES. At and after the Closing, Seller shall execute
and deliver such additional instruments and documents as Buyer may reasonably
request in order to carry into effect the transactions contemplated hereby.
SECTION 10.4 ENTIRE AGREEMENT. This Agreement, together with any other
agreements entered into contemporaneously herewith, constitutes and represents
the entire agreement between the parties hereto and supersedes any prior
understandings or agreements, written or verbal, between the parties hereto
respecting the subject matter herein. This Agreement may be amended,
supplemented, modified or discharged only upon an agreement in writing executed
by all of the parties hereto. This Agreement shall inure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
permitted assigns. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
SECTION 10.5 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given (a) three (3)
Business Days after deposit in the mail, designated as certified mail, return
receipt requested, postage-prepaid, or (b) one (1) Business Day after being
entrusted to a reputable commercial overnight delivery service for overnight
delivery, or (c) when sent by telex or telecopy on a Business Day with
confirmation of such transmission and such notice is followed up with notice
sent by certified mail or overnight courier as described above, in each case
addressed to the party to which such notice is directed at the following
address: if to Buyer, to Buyer at Buyer's Address; if to Seller, to Seller at
Seller's Address. Any party hereto may change the address to which notices shall
be directed under by giving ten (10) days written notice of such change to the
other party.
SECTION 10.6 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
construed in accordance with and governed by the internal laws of the State of
Florida without giving effect to its conflict of law principles. Each party
hereto irrevocably consents to personal jurisdiction and venue in the trial
courts of Broward County, Florida or the United States District Court for the
Southern District of Florida, Broward County Division over any suit, action or
proceeding arising out of or relating to this Agreement or any other Transaction
Document. Seller hereby agrees that service of the summons and complaint and all
other process which may be served in any such suit, action or proceeding may be
effected by mailing by registered mail a copy of such process to Seller at
Seller's Address, and that personal service of process shall not be required.
Nothing herein shall be construed to prohibit service of process by any other
method permitted by law, or the bringing of any suit, action or proceeding in
any
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other jurisdiction. Seller agrees that final judgment in such suit, action
or proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment or in any other manner provided by law.
SECTION 10.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same instrument.
[Signature page to follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed the day and year first above stated.
SELLER:
NPTV LLC
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Print Name: Xxxxxx X. Xxxxxxx
------------------------------
Title: Partner
-----------------------------------
NATIONAL COMMUNITY PHARMACISTS ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Print Name: Xxxxxx X. Xxxxxxx
------------------------------
Title: Exec. V.P.
-----------------------------------
BUYER:
RETAIL MEDIA SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Print Name: Xxxxx X. Xxxxx
------------------------------
Title: C.O.O
-----------------------------------
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