DATED 31 DECEMBER 2004
----------------------
--------------------------------------------
AGREEMENT
for the sale and purchase
of certain assets of Medialink UK Limited
forming part of the Delahaye Business
--------------------------------------------
DATED 31 December 2004
PARTIES
(1) Medialink UK Limited ("THE SELLER") registered in England with number
03970925 whose registered office is at 0 Xxxxxxx Xxxxxx, Xxxxxx X0X
0XX]; and
(2) Romeike Limited ("THE BUYER"), registered in England with number
02255420 whose registered office is at Xxxxxxx Xxxxx, 000/000 Xxxxx
Xxxxx, Xxxxxx, X00 0XX;
RECITALS
(A) Medialink Worldwide Incorporated, the ultimate holding company of
Seller, has pursuant to an Asset Purchase Agreement between Medialink
Worldwide Incorporated and Bacon's Information Inc., a company
affiliated to Buyer (the "Framework Agreement"), agreed to sell the
Delahaye Business as operated in the United States to Bacon's
Information Inc. and/or its nominee;
(B) The Business is operated by Seller in the United Kingdom under the
Delahaye name, and as contemplated by the Framework Agreement, Seller
has agreed to sell all of its assets, rights and interests in the
Business as a going concern to the Buyer upon the terms and subject to
the conditions hereinafter appearing.
OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 Unless otherwise set forth in this Agreement, capitalised terms used
herein and not otherwise defined herein are used herein as defined in,
or as described in specified sections of, the Framework Agreement,
except that for purposes of such definitions and descriptions, the term
"Seller" shall be "Seller" as defined in this Agreement, and the term
"US Delahaye Business" shall be the "Business" as defined in this
Agreement. References to Schedules in Article I of the Framework
Agreement shall be replaced by references to Schedule 1 of this
Agreement.
"ASSUMED CONTRACTS" means the Purchase and Sale Orders and the Rights
under Confidentiality Agreements and Warranties (as described in
Sections 1.1(f) and 1.1(g), respectively, of the Framework Agreement)
and the Assigned Contracts.
"BUSINESS" means the means the media evaluation and content analysis
and market research services conducted by Seller in the United Kingdom
under the Delahaye tradename;
"BUSINESS DAY" means a day (not being a Saturday or Sunday) on which
banks generally are open for business in London;
"BUSINESS NAME" means Delahaye;
"CLOSING" means completion of the obligations of the parties pursuant
to clause 5;
"CLOSING DATE" means the date hereof;
"CONSIDERATION" means the consideration for the sale of the Acquired
Assets set forth in clause 3;
"THE DIRECTIVE" means Directive 2001/23/EC;
"EFFECTIVE TIME" means 11:59 PM (London, England, time) on the Closing
Date.
"EMPLOYEES" means those officers and employees of the Seller who are at
Closing employed in the Business and whose names are set out in
Schedule 2;
"FIXED ASSETS" means all machinery and equipment and other tangible
personal property and fixtures owned and exclusively used by the Seller
in the conduct of the Business, including but not limited to computer
hardware and other media monitoring and office equipment, office
furniture and other furnishings all as located at the Property (but
excluding landlords fixtures and fittings) as set out in Schedule 1;
"GOODWILL" means the goodwill custom and connections of the Business
together with the exclusive right for the Buyer to represent and hold
itself out as carrying on the Business in succession to the Seller
together with (insofar as the Seller can grant the same) the exclusive
right for the Buyer (together with its Affiliates as contemplated under
the Framework Agreement) To use the Business Name and any name similar
thereto, capable of being or intended or likely to be confused
therewith or suggesting any connection with the Business;
"INVENTORY" means all inventories of supplies exclusively relating to
the Business (collectively "Inventory" or "Inventories"), including but
not limited to all Inventories located at the Property.
"PROPERTY" means 1st Floor Offices, Citybank House, 00/00 Xxxxxx
Xxxxxx, Xxxxxx XX0.
"THE REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981 (as amended);
"SELLER'S GROUP" means Seller and any Affiliates of Seller;
"TAX AUTHORITY" means any taxing or other authority (whether within or
outside the United Kingdom) competent to impose any liability for any
tax, duties, imports, levies, rates or similar charges;
"TENANCY" means the tenancy of the Property to be granted by the Seller
to the Buyer at Closing;
"VAT" means Value Added Tax;
"VATA 1994" means the Value Added Tax Xxx 0000; and
"VAT RECORDS" means the records relating to the Business required to be
preserved after Closing by virtue of the provisions of paragraph 6 of
Schedule 11 of VATA 1994.
1.2 The ejusdem generis rule of construction shall not apply to this
Agreement and accordingly general words shall not be given a
restrictive meaning by reason of their being preceded or followed by
words indicating a particular class or examples of acts matters or
things.
1.3 Words importing the singular shall include the plural and vice versa
and words importing any gender shall include all other genders and
references to persons shall include corporations and unincorporated
associations.
1.4 References in this Agreement to any Agreed Draft document or any
document in Agreed Form are references to the document described in the
form of the draft agreed between the parties and initialled by them.
1.5 References in this Agreement to statutory provisions shall be construed
as references to those provisions as respectively amended consolidated
extended or re-enacted from time to time and shall include the
corresponding provisions of any earlier legislation (whether repealed
or not) and any orders regulations instruments or other subordinate
legislation made from time to time under the statute concerned.
1.6 References to this Agreement shall include the Schedules hereto which
shall form part hereof and shall have the same force and effect as if
expressly set out in the body of this Agreement.
1.7 The clause headings in this Agreement are for convenience only and
shall not affect the interpretation hereof.
1.8 References in this Agreement to any gender shall where appropriate
include references to any other gender and references to the singular
shall include references to the plural and vice versa.
2. SALE AND PURCHASE
2.1 The Seller shall sell with full title guarantee and the Buyer shall
purchase the Business for the Consideration as at and with effect from
the Closing Date and at the Effective Time free from all liens,
charges, equities and encumbrances (whether known about or not) as a
going concern together with all assets, rights and interests used,
owned, leased or otherwise held by or for the benefit of Seller
exclusively in the operation of or otherwise exclusively relating to
the Business, including:
(A) the Inventory;
(B) the Fixed Assets;
(C) the Assigned Accounts Receivable;
(D) the Intellectual Property Rights;
(E) the Prepaid Expenses and Deposits (as described in Section
1.1(e) of the Framework Agreement);
(F) the Permits;
(G) the Customer List (as described in Section 1.1(i) of the
Framework Agreement);
(H) the Catalogs and Advertising Materials (as described in
Section 1.1(k) of the Framework Agreement);
(I) the Business Records (as described in Section 1.1(l) of the
Framework Agreement);
(J) the Goodwill;
(K) to the extent to which such contracts are capable of transfer
and/or assignment but subject to the terms of clause 7 the
benefit (subject to the burden) of the Assumed Contracts;
(L) all other rights and assets of whatsoever nature which
exclusively relate to or are owned used in or enjoyed by the
Seller exclusively in relation to the Business;
PROVIDED ALWAYS THAT the Retained Assets shall be excluded from this
sale and purchase.
2.2 Nothing herein shall require the Buyer to complete the purchase of any
of the Acquired Assets unless the sale and purchase of all of them is
completed at the same time.
3. CONSIDERATION
3.1 By way of consideration for the purchase of the Acquired Assets the
Buyer shall:
(A) pay to the Seller in cash an amount equal to the aggregate of
US$1,650,000;
(B) subject to the terms of this Agreement and the Framework
Agreement, assume at the Closing and thereafter pay, perform
and satisfy as and when due the Assumed Liabilities.
3.2 The consideration payable by the Buyer for the Acquired Assets shall be
apportioned as set out in Schedule 3.2.
3.3 The Consideration shall be subject to adjustment pursuant to the
provisions of Section 3.1 of the Framework Agreement.
4. VALUE ADDED TAX
4.1 All amounts payable by the Buyer to the Seller under this Agreement are
expressed exclusive of VAT. Subject to clause 4.2, if any such payment
constitutes the whole or any part of the consideration for a taxable
supply (whether or not that supply is taxable pursuant to the exercise
of an option or the making of any election) by the Seller to the Buyer,
the amount of that payment, at the request of the Seller shall, subject
to the Seller issuing a valid VAT invoice for such amount, be increased
by an amount equal to the rate of VAT chargeable in respect of such
supply multiplied by the amount that would have been payable in the
absence of such request of the Seller.
4.2 The Seller and the Buyer consider that the sale of the Business by the
Seller to the Buyer is one to which the provisions of paragraph 5 of
the Value Added Tax (Special Provisions) Order 1995 ("PARAGRAPH 5")
applies and agree that clause 4.1 will not apply to any sale to which
Paragraph 5 applies or any payments to be made by the Buyer to the
Seller in respect of such sale.
4.3 If the sale of the Acquired Assets pursuant to this Agreement is a
taxable supply for VAT purposes, the Buyer shall pay, within five
Business Days of demand by the Seller accompanied by the relevant VAT
invoice, an amount equal to the VAT chargeable in respect of the
Acquired Assets and shall return any VAT Records delivered to the Buyer
by the Seller pursuant to clause 4.7.
4.4 The Seller hereby warrants and undertakes that:
(A) the Business is capable of separate operation;
(B) the Acquired Assets are legally and beneficially owned by the
Seller, are used for the purposes of the Business and are the
Seller's business assets;
(C) the Seller is a taxable person for the purposes of VAT;
(D) the VAT Records have been correctly maintained as required by
law;
(E) there has been no significant break in the normal trading
pattern of the Business.
4.5 The Buyer hereby warrants that:
(A) the Buyer is, or shall become before or immediately after
Closing, a taxable person;
(B) the Acquired Assets are to be used by the Buyer in carrying on
the same kind of business as the Business, whether or not as
part of any existing business carried on by the Buyer; and
(C) there are no arrangements in existence for the transfer of the
legal or the beneficial interest in the assets by the Buyer.
4.6 If the Buyer makes any payment or any increased payment in respect of
VAT under this clause 4 and it subsequently transpires that the amount
of the VAT chargeable is less than the amount paid or increased amount
paid by the Buyer or that the transaction in respect of which the
payment was made or increased payment was made and which was regarded
to be a supply or deemed supply for VAT purposes is not such a supply,
the Seller shall pay the Buyer, within five Business Days after receipt
of any relevant ruling from HM Customs & Excise, an amount equal to the
difference between the payment or the increased payment made by the
Buyer and the correct amount of VAT chargeable (if any) in respect of
the supply, transaction or event in question.
4.7 The Seller shall make a request as soon as it is reasonably practicable
and in any event within ten Business Days after Closing for a direction
from the Commissioners that the VAT Records shall continue to be
preserved by the Seller. If the Commissioners decline to issue the
direction within thirty Business Days after Closing, the Seller shall,
on the earlier of five Business Days of the receipt of the
Commissioners' written notification to that effect or thirty-five
Business Days after Closing, deliver the VAT Records to the Buyer. The
Seller undertakes to maintain and preserve the VAT Records as the Buyer
is or would be required to maintain and preserve them by law for the
period between Closing and the delivery thereof to the Buyer or the
issue of the direction sought (as they case may be).
5. CLOSING
5.1 Subject as hereinafter provided Closing shall take place on the Closing
Date and at the Effective Time at such place as the parties shall
agree. The Closing will take place simultaneously with the Closing
under the Framework Agreement.
5.2 On the Closing the Seller shall deliver to the Buyer (or to such person
as the Buyer may nominate):
(A) the Tenancy in the Agreed Form duly executed by the Seller;
(B) such other duly executed documents in the Agreed Form as are
required by the Buyer to complete the sale and purchase of the
other Acquired Assets and to vest title thereto in the Buyer;
(C) the Customer List, the Catalogues and Advertising Materials
and the Business Records;
(D) all other property hereby agreed to be sold which is capable
of transfer by delivery (which delivery shall, unless
otherwise agreed, take place at the Property); and
(E) a certified copy of the minutes of the meeting of the
directors of the Seller authorising the execution by the
Seller of this Agreement.
5.3 Subject to the Seller complying with its obligations as aforesaid, the
Buyer shall on Closing:
(A) deliver to the Seller (or such person as the Seller shall
nominate) counterparts of the documents referred to at clause
5.2(A) and (B) duly executed by the Buyer;
(B) pay the sum specified in clause 3.1(A) by delivery by the
Buyer under the Framework Agreement to the Seller under the
Framework Agreement of a bank or cashier's check; and
(C) deliver a certified copy of the minutes of the meeting of the
directors of the Buyer authorising the execution by the Buyer
of this Agreement.
5.4 The Buyer shall not be obliged to complete the purchase of any of the
Acquired Assets unless all of the actions referred to in clause 5.2 are
completed in accordance with that clause provided that the Buyer may at
its discretion (and without prejudice to any claim for breach of this
Agreement and without waiving any of its rights) proceed to Closing so
far as practicable even though all of the requirements of this clause 5
have not been complied with.
5.5 The property and (subject to the terms of this Agreement) the risk in
the Acquired Assets shall pass to the Buyer on Closing or in the case
of the title or beneficial interest in any Acquired Asset capable of
passing by delivery on actual delivery thereof and (save where the
Buyer has before Closing notified the Seller that it requires delivery
of any Acquired Assets to take place at the venue at which Closing
takes place) any Acquired Assets at the Property shall be deemed to
have been delivered on Closing.
5.6 The Seller shall (and shall procure that all other necessary parties
shall) on and at all times after Closing execute and do all such deeds,
documents, acts and things as the Buyer shall reasonably require for
assuring to and vesting in the Buyer or its nominees the full legal and
beneficial ownership of the Acquired Assets and giving the Buyer or its
nominees the full benefit of this Agreement.
6. APPORTIONMENTS
6.1 Save the Assumed Liabilities, which shall be liabilities of the Buyer,
all rents, rates and other periodic outgoings in respect of the
Business and all wages, salaries and other periodic outgoings in
respect of the Employees including accrued holiday remuneration and
bonuses (deferred or otherwise) and other periodic outgoings in respect
of the Acquired Assets and the Assumed Contracts (including, but
without limitation, rebates and discounts falling due after the Closing
Date to customers of the Business in respect of the supply of goods or
services by the Seller to customers on or before the Closing Date for
periods of time on or before the Closing Date shall be borne by the
Seller and for periods of time after the Closing Date shall be borne by
the Buyer and all periodic payments receivable in respect of the
foregoing for periods of time on or before the Closing Date shall
belong to and be payable to the Seller and for periods of time after
the Closing Date shall belong to and be payable to the Buyer. Such
outgoings payable and payments receivable in respect of periods
starting on or before the Closing Date and ending after it shall be
apportioned accordingly, provided that any such outgoings or payments
receivable which are referable to the extent of the use of any asset or
right shall as far as practicable be apportioned according to the
extent of such use.
6.2 Where any amounts fall to be apportioned under this Agreement the
Seller or the Buyer (as the case may be) shall provide the other with
full details of the apportionments together with supporting vouchers or
similar documentation and in the absence of dispute the appropriate
payment shall be made by the relevant party within seven days of
demand. The amount so agreed or determined shall be paid within seven
days of such agreement. Any amount payable under this clause shall
carry interest from the date seven days after the date of demand or, if
the amount of any demand is disputed, from the date seven days after
such dispute is resolved, until the date of actual payment at a rate
equal to 3 per cent per annum above the base rate for the time being of
Barclays Bank plc.
6.3 Each of the Seller and the Buyer shall keep accounting records
sufficient to enable verification of the apportionments and shall allow
the other of them, its auditors or other duly authorised
representatives and any Independent Accountants access to such
accounting records at any time during normal business hours on
reasonable notice to examine and take copies, notes or extracts from
such records for the purpose of such verification.
7. ASSUMED CONTRACTS
7.1 The Buyer shall assume and perform all of the obligations of the Seller
under the Assumed Contracts to be performed (in accordance with the
terms of such Assumed Contracts) after Closing.
7.2 In so far as the benefit (subject to the burden as hereinafter
provided) of any of the Assumed Contracts cannot be transferred by the
Seller to the Buyer on Closing without the agreement or consent of a
third party or a governmental or other authority:
(A) the Seller shall use its reasonable endeavours (with the
co-operation of the Buyer) to procure that such Assumed
Contracts and ancillary rights are novated or assigned as soon
as possible;
(B) unless and until any such Assumed Contracts are novated or
assigned;
(1) the Seller shall hold the benefit of such Assumed
Contracts upon trust for the Buyer absolutely and
shall either account to the Buyer immediately or pay
to the credit of a specially designated trust bank
account maintained separately from all other accounts
of the Seller and account to the Buyer for any sums
or other benefits received by the Seller in relation
thereto as soon as reasonably practicable after
receipt;
(2) the Buyer shall have the right and the Seller shall
at the election of the Buyer permit the Buyer to
perform, in place of the Seller, any such Assumed
Contract as sub-contractor, agent, licensee or
sub-licensee (as appropriate) of the Seller to the
extent that such performance may be permitted by any
such Assumed Contract; and
(3) unless and until any such Assumed Contracts shall be
novated or assigned, the Seller shall (so far as it
lawfully may so do and provided it is reasonable so
to do) act under the direction of the Buyer in all
matters relating to such orders and contracts for so
long as the Seller is required and authorised so to
do by the Buyer and shall not without the Buyer's
express prior written consent make or effect any
compromise, release or waiver or settlement of or
otherwise take any action in relation to any such
Assumed Contracts or any other rights arising under
the same.
(C) In any case where the consent of a third party is required in
connection with the novation or assignment of an Assumed
Contract and such consent is not forthcoming or is refused,
the Seller shall use its reasonable endeavours to make such
arrangements as may be acceptable to the Buyer for assuring to
the Buyer the benefit of such Assumed Contracts, it being
understood, however, that Seller shall not be required to pay
any fees or other sums of money to obtain such Consents,
except any such fees and other sums of money as shall have
become due and payable prior to the Closing Date.
8. RETAINED LIABILITIES
8.1 Except as expressly stated in this Agreement, nothing:
(A) shall require the Buyer to perform any obligation relating to
the Business or the Acquired Assets which was due to have been
performed or which should have been performed by the Seller
before Closing, except for the Assumed Liabilities;
(B) shall impose on the Buyer any liability for or in respect of
any product or service delivered or performed by or on behalf
of the Seller before Closing whether in the course of the
Business or otherwise, except for the Assumed Liabilities;
(C) shall impose on the Buyer any liability for any losses or
claims or expenses arising by reason of a breach by the Seller
of its obligations under or contemplated by this Agreement;
(D) shall impose on the Buyer any liability for or in respect of
any of any of the Retained Liabilities and/or any of the
Retained Assets.
8.2 The Seller undertakes with the Buyer fully to discharge the Retained
Liabilities (as and when the same fall due and in a manner which will
not be detrimental to the Business or the Goodwill) and fully to
indemnify and hold indemnified the Buyer against any and all losses,
costs, claims, actions, proceeding and other liability which the Buyer
may suffer or incur by reason of any or all of the matters referred to
in clause 8.1 and/or breach by the Seller of its obligations under or
contemplated by this clause.
8.3 The Seller shall supply to the Buyer promptly after request such
information as the Buyer shall from time to time require in relation to
the discharge of the Seller's obligations under or contemplated by this
clause and shall not in the discharge of such obligations take any
steps which might reasonably be expected to damage in any material
respect the continuing commercial interests of the Buyer.
9. WARRANTIES
9.1 Subject only to those exceptions and qualifications listed and
described on the Schedules attached to this Agreement, Seller hereby
represents and warrants to Buyer that unless otherwise indicated, as of
the Closing Date:
(A) ORGANISATION AND STANDING; POWER AND AUTHORITY. Seller is a
corporation duly organised and validly existing under the laws
of England and has full corporate power and authority to
operate the Business, to own or lease the Acquired Assets, to
carry on the Business as it is now being conducted, and to
enter into and perform this Agreement and the transactions and
other agreements and instruments contemplated by this
Agreement. Seller is the only business enterprise, firm or
corporation through which the Business is conducted in the
United Kingdom, or which owns, leases or uses assets related
to the Business in the United Kingdom. The Seller does not
have in relation to the Business, any branch, agency, place of
business or permanent establishment outside the United
Kingdom. This Agreement and each of the other agreements and
instruments executed and delivered, or to be executed and
delivered, in connection with this Agreement (collectively,
"Transaction Documents") by Seller have been (or, upon
execution thereof, will be) duly executed and delivered by,
and constitute (or, upon execution thereof, will constitute)
the valid and binding obligations of, Seller, enforceable in
accordance with their respective terms. This Agreement and the
transactions and other agreements and instruments contemplated
hereby have been duly approved by the board of directors of
Seller.
(B) CONFLICTS AND DEFAULTS. Except as set forth on Schedule
9.1(B), neither the execution and delivery of this Agreement
and the other Transaction Documents by Seller nor the
performance by Seller of the transactions contemplated hereby
or thereby will (i) violate, conflict with, or constitute a
default under any provision of Seller's memorandum and
articles of association or any provisions of, or result in the
acceleration of any obligation under, any contract, sales
commitment, license, purchase order, security agreement,
mortgage, note, deed, lien, lease, or other instrument or
agreement (including but not limited to the Contracts), or any
Law (as hereinafter defined), relating to the Business or any
of the Acquired Assets or by which Seller or any of the
Acquired Assets are bound, (ii) result in the creation or
imposition of any Lien or other claim in favour of any third
Person against any of the Acquired Assets, (iii) constitute an
event that, after notice or passage of time or both, would
result in any such violation, conflict, default (except
defaults that would not individually or in the aggregate have
a material adverse effect), acceleration, or creation or
imposition of any Lien or other claim or (iv) constitute an
event that, after notice or passage of time or both, would
create, or cause to be exercisable or enforceable, any option,
agreement or right of any kind to purchase any of the Acquired
Assets. Except as set forth on Schedule 1, no Consent will be
required to be obtained or satisfied for the continued
performance by Buyer following the Closing of any Assigned
Contract.
(C) ACQUIRED ASSETS ; TITLE TO ACQUIRED ASSETS. Except for general
corporate assets of Seller pertaining to Seller's business as
a whole or as set forth on Schedule 9.1(C), the Acquired
Assets are the only assets, properties, rights and interests
used by Seller in connection with the Business and constitute
all of the assets, properties, rights and interests necessary
to conduct the Business in the United Kingdom in substantially
the same manner as conducted by Seller prior to the Closing
Date. Except as set forth on Schedule 9.1(C), none of fixed
assets included in the Acquired Assets have any defects or are
in need of maintenance or repair, except for ordinary wear and
tear and ordinary, routine maintenance and repairs that are
not material in nature or cost. Seller has good, marketable
and exclusive title to, and the valid and enforceable power
and unqualified right to use and transfer to Buyer, each of
the Acquired Assets, whether located at Seller's facilities or
at the facilities of Seller's customers or suppliers, and the
Acquired Assets are free and clear of all Liens and other
claims of any nature and kind whatsoever, except Permitted
Liens. The consummation of the transactions contemplated by
this Agreement will not adversely affect such title or rights
or any terms of the applicable agreements creating, evidencing
or granting such title or rights. Except as set forth on
Schedule 9.1(C), none of the Acquired Assets are subject to or
held under any lease, mortgage, security agreement,
conditional sales contract or other title retention agreement
or are other than in the sole possession and under the sole
control of Seller. Seller has the right under validly existing
leases to use and occupy or otherwise possess and control all
properties and assets leased by it and included in the
Acquired Assets. The delivery to Buyer of the instruments of
transfer contemplated by this Agreement will vest in Buyer
good, marketable and exclusive title to (or, in the case of
Acquired Assets not owned by Seller, the full right to use and
possess) the Acquired Assets, free and clear of all Liens and
other claims of any nature and kind whatsoever, except for (i)
current real or personal property Taxes (as hereinafter
defined) or other governmental charges or levies that are
Liens but are not yet due and payable, (ii) Liens securing
rent payments and other obligations under leases pursuant to
which Acquired Assets are leased by Seller from a third-party
vendor or other lessor, provided that Seller is not delinquent
or otherwise in default with respect to such payment or other
obligations, and (iii) Liens arising or deposits made in the
ordinary course of business pursuant to workers' compensation,
unemployment insurance, social security and other similar Laws
(the Liens described in clauses (i) through (iii) of this
clause being referred to as "Permitted Liens").
(D) CONTRACTS. Schedule 9.1(D) contains a complete list or
description of (i) each Contract that relates to the Business
or any of the Acquired Assets or Assumed Liabilities and (1)
involves future payments in excess of US$25,000 in the
aggregate or will remain in effect for a period of more than
90 days after the date of this Agreement and cannot be
cancelled by Seller at any time without further payment or
penalty, (2) is a loan or credit agreement, guaranty,
indenture, mortgage, pledge, security agreement or other
instrument or agreement evidencing indebtedness of Seller or
dependent on the guarantee or security of any person, (3) is a
conditional sale or other title retention agreement, equipment
obligation or lease purchase agreement involving future
payments in excess of US$25,000 in the aggregate, (4) is
currently in effect between Seller and any director, officer,
employee or consultant (or any group thereof) of or to Seller,
or (5) is terminable in the event of any change in the
underlying ownership or control of the Business or as a result
of any of the provisions of this Agreement or any of the
Transaction Documents or likely to be materially affected by
such change, (ii) each Contract between Seller and any
salesman, sales representative or selling agent or pursuant to
which Seller sells services of the Business, (iii) each
Contract that is a noncompetition, restrictive covenant or
other agreement that restricts Seller or any other Person from
conducting the Business anywhere in the world, (iv) each
Contract that is otherwise material to the financial
condition, results of operations, properties, assets,
liabilities or business of the Business, and (v) any power of
attorney given by Seller to any Person that relates directly
or indirectly in any way whatsoever to the Business or any of
the Acquired Assets or Assumed Liabilities. Seller has
performed all material obligations required to be performed by
it to date under the Contracts, and neither Seller nor, to
Seller's knowledge, any other party to any Contract has
breached or improperly terminated any Contract or is in
default in any material respect under any Contract, and to
Seller's knowledge there exists no condition or event that,
after notice or passage of time or both, would constitute any
such breach, termination or default. All Contracts with
Governmental Authorities have been performed in compliance in
all material respects with all Laws applicable to contracting
with such Governmental Authorities. Each of the Contracts is a
legal, binding and enforceable obligation of or against Seller
and, to Seller's knowledge, is a legal, binding and
enforceable obligation of or against the other party or
parties thereto. Except as set forth on Schedule 9.1(D),
Seller has no outstanding Contracts relating to the Business
that are not cancellable by it on notice of 30 days or less
without liability, penalty or premium. To Seller's knowledge,
Seller enjoys good working relationships under all of the
Contracts relating to the Business.
(E) LIABILITIES. Seller has no material liabilities or obligations
of any nature whatsoever, whether absolute, accrued,
contingent or otherwise, related to or connected with the
Business or any of the Acquired Assets, including but not
limited to liabilities for Taxes, forward or long-term
commitments outside the ordinary and normal course of
business, or unrealised or anticipated losses from write-downs
or write-offs of assets (including inventories and accounts
receivable), except for those (i) expressly reflected or
reserved for on the Pre-Closing Balance Sheet, (ii) incurred
or accrued since the Pre-Closing Balance Sheet Date (including
liabilities and obligations incurred or accrued under
operating leases, which are not reflected on the Pre-Closing
Balance Sheet) in the ordinary and normal course of business
of the Business in transactions that are consistent with the
representations, warranties, covenants and agreements
contained in this Agreement or (iii) set forth on Schedule
9.1(E). To Seller's knowledge, there exists no event or
circumstance that, after notice or passage of time or both, is
reasonably likely to create any other material obligations or
liabilities of Seller relating to the Business.
(F) ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE. All Assigned
Accounts Receivable represent sales actually made in the
ordinary and normal course of business. To Seller's knowledge,
there are no counterclaims or setoffs against (or any basis
therefor), or any other matter or condition likely to
interfere with full and timely collection of, any Assigned
Accounts Receivable. Schedule 9.1(F) hereto sets forth an aged
listing by customer of the accounts receivable of the Business
that were outstanding as of the Pre-Closing Balance Sheet
Date. Seller has not experienced or suffered undue delay in
its payment of its accounts payable and other monetary
liabilities and obligations.
(G) INVENTORIES. All Inventories are of a quality and quantity
usable in the ordinary and normal course of business, and
there are no material quantities of damaged or obsolete items
or items of below standard quality included therein. The value
at which the Inventory is carried on the Pre-Closing Balance
Sheet is at cost and reflects write-offs or write-downs for
damaged or obsolete items, or items of below standard quality,
in accordance with Seller's historical inventory policy and
practices, a complete and accurate description of which is
included in the description of the Accounting Practices set
forth in Schedule 9.1(e) of the Framework Agreement. None of
the Inventory is excessive in kind or amount in light of the
ordinary and normal course of conduct and reasonably
anticipated needs of the Business.
(H) CUSTOMERS AND SUPPLIERS. Seller is not involved in any
material dispute with any of the customers or suppliers of the
Business. The Combined Delahaye Business has not had any
customer who accounted for more than ten percent of the sales
of the Combined Delahaye Business during the twelve-month
period ended September 30, 2004, or any supplier from whom it
purchased more than five percent of the goods or services
purchased by the Combined Delahaye Business during the
twelve-month period ended September 30, 2004. All business
placed by any and all directors, officers and employees of
Seller with respect to the Business has been placed in the
name of Seller and all amounts paid for services of the
Business or otherwise with respect to the Business have been
paid to and are the property of Seller.
(I) LITIGATION. Seller is not subject to any order of, or written
agreement or memorandum of understanding with, any
Governmental Authority, and there is no litigation, action,
claim, suit, arbitration or other administrative, criminal, or
other proceeding pending or, to Seller's knowledge, threatened
against or adversely or otherwise affecting Seller, the
Business, any of the Acquired Assets or any of the
transactions contemplated by this Agreement, including but not
limited to claims for antitrust, price discrimination, unfair
competition or other liability or obligation relating to any
of the services of the Business, whether sold by Seller or any
of its Affiliates. Set forth on Schedule 9.1(I) is a
description of (i) all litigation, actions, claims, suits and
other proceedings asserted, brought or, to Seller's knowledge,
threatened against Seller or any of its Affiliates in respect
of the Business during the two-year period preceding the
Closing Date, including a description of the outcome or
present status thereof and (ii) all judgments, orders,
decrees, writs or injunctions entered into by or against
Seller or any of its Affiliates with respect to the Business
and currently in effect.
(J) LEGAL COMPLIANCE. The Business has been conducted, the
Acquired Assets have been maintained and Seller is currently
in compliance in all material respects with all applicable
statutes, codes, ordinances, rules, regulations, judgments,
orders, decrees, writs, injunctions and other laws of any
Governmental Authority (collectively, "Laws"), including but
not limited to all Laws relating to antitrust, consumer
protection, civil rights, equal opportunity, pensions and
medical and other welfare benefits, except where the failure
to comply with such laws would not have a material adverse
effect on the Business or the Acquired Assets. Seller is not
in default under, and no event has occurred that, with notice
or the passage of time or both, could result in default under,
the terms of any judgment, order, decree, writ or injunction
of any court or Governmental Authority relating to the
Business.
(K) INTELLECTUAL PROPERTY. Schedule 1 sets forth a complete and
correct list (with an indication of the record owner and
identifying number) of all material Intellectual Property
Rights that are directly or indirectly owned or otherwise
controlled by Seller or any of its Affiliates and are or have
been used exclusively in the conduct of or otherwise relate
exclusively to the Business (other than off-the-shelf and
click-through licences of software), and Schedule 9.1(K) sets
forth a description of all litigation, actions, claims, suits
and other proceedings pending or, to Seller's knowledge,
threatened against Seller within the two years preceding the
Closing Date, including a description of the outcome or
present status thereof, relating to any Intellectual Property
Rights that are or have been used in the conduct of or
otherwise relate to the Business. Except as set forth on
Schedule 9.1(K), Seller is the sole owner and has the
exclusive right to use, free and clear of any restriction,
payment or encumbrance, all Intellectual Property Rights that
are or have been used in the conduct of or otherwise relate to
the Business (other than off-the-shelf and click-through
licences of software). No claim or demand of any Person has
been made that challenges, and there are no proceedings
pending or, to Seller's knowledge, threatened that challenge,
the rights of Seller in respect of any of the Intellectual
Property Rights that are or have been used in the conduct of
or otherwise relate to the Business. No Intellectual Property
Rights that are or have been used in the conduct of or
otherwise relate to the Business (other than off-the-shelf and
click-through licences of software)are subject to any
outstanding order, ruling, stipulation, judgment or decree by
or with any Governmental Authority or infringes or, to
Seller's knowledge, is being infringed by others or is used by
others, regardless of whether such use constitutes
infringement. All of the Intellectual Property Rights set
forth on Schedule 1 that are directly or indirectly owned or
otherwise controlled by an Affiliate of Seller have been duly
and effectively transferred to Seller.
(L) PERMITS. Schedule 9.1(L) contains a true, correct and complete
list of all Permits issued to Seller that are currently used
by Seller in connection with the Business. Seller has, and is
in compliance in all material respects with, all Permits that
are necessary or required for the operation of the Business as
it is currently being operated, and all such Permits are in
full force and effect.
(M) EMPLOYEE RELATIONS; COLLECTIVE BARGAINING AGREEMENTS. There
are no material controversies, including strikes, slowdowns,
disputes or work stoppages, pending or, to Seller's knowledge,
threatened that involve the Employees and/or the Business.
Seller has complied and is complying in all material respects
with all Laws relating to the employment of labour, including
but not limited to any provision thereof relating to wages,
hours, collective bargaining, employee health, safety and
welfare, discrimination and the payment of social security and
similar Taxes with respect to the Employees. Seller has not
experienced any labour difficulties with respect to the
employees employed in connection with the Business, including
but not limited to strikes, slowdowns or work stoppages,
within the two-year period preceding the Closing Date. Seller
is not a party to any collective bargaining or union contract
and, to Seller's knowledge, there exists no current union
organisational effort with respect to any of Seller's
employees employed in connection with the Business.
(N) EMPLOYEES AND EMPLOYEE PLANS. Schedule 9.1(N) contains a true,
correct and complete list of (i) all Employees, including a
description of their respective job titles and
responsibilities and annual compensation (including salaries,
bonuses, consulting or directors' fees and incentive or
deferred compensation) and (ii) all Employee Plans and
Employment Contracts. Neither Seller nor any officer,
director, shareholder, employee or agent of Seller has taken
any action directly or indirectly to obligate Seller to
institute any Employee Plan applicable to employees of the
Business other than those Employee Plans set forth in Schedule
9.1(N) or to amend any such Employee Plan. No Employee is
employed on terms that such Employee is entitled to more than
three months notice of termination of employment or pay in
lieu of such notice. No Employee is under notice of dismissal
or has indicated any opposition to Buyer buying the Business
or that such Employee objects to being employed by Buyer or
its Affiliates. No amount due to or in respect of any Employee
is in arrears and unpaid other than salary for the month in
which Closing takes place. In the six months preceding the
date of this Agreement, no change has been made in the
emoluments or other terms and conditions of any Employee, and
no such change, and no negotiation or request for such a
change, is due or expected within six months from the date of
this Agreement. No person's services are provided to the
Seller by means of a contract for services or any consultancy
arrangement. There are no agreements or other arrangements
(whether or not legally binding) between Seller and any trade
union or other body representing employees.
(O) PENSIONS. Save for the stakeholder scheme known as the
Medialink Group Personal Pension Scheme (the "Pension
Scheme"), Seller is neither a party to nor participates in nor
contributes to any scheme, agreement or arrangement (whether
legally enforceable or not) for the provision of any pension,
retirement, death, incapacity, sickness, disability, accident
or other like benefits (including the payment after leaving
employment of the Seller of medical expenses) for any Employee
or for the widow, widower, child or dependant of any Employee.
Seller has not given any undertaking or assurance (whether
legally enforceable or not) as to the continuance,
introduction, improvement or increase of any benefit of a kind
described in this clause or as to the rights of any person to
receive such benefits., or (ii) is paying or has in the last
two years paid any such benefit, to (in either case) any
Employee or any widow, widower, child or dependant of any UK
Employee. Seller has complied with its obligations under
section 3 of the Welfare Reform and Pensions Xxx 0000 to
facilitate access to a stakeholder pension scheme and has
nominated the Pension Scheme. In the 6 years before the date
of this Agreement neither Seller nor any of its Affiliates
has, in relation to the Employees, been involved in any
transaction to which the Regulations apply other than
transactions where (i) the transferor did not have an
occupational pension scheme; (ii) the transferee mirrored the
exact terms of benefits and contributions of the transferor's
occupational pension scheme; or (iii) the only benefits
provided by the transferor's occupational pension scheme were
old age, invalidity and survivors benefits. The Pension Scheme
is approved under Chapter IV of Part XIV of the Income and
Corporation Taxes Act 1988 and is recognised as a stakeholder
pension scheme by the Occupational Pensions Regulatory
Authority. Every person who has at any time been entitled to
join or apply to join the Pension Scheme has been invited to
do so as of the date on which such person became so entitled
having been informed in writing of his rights in this regard,
and no person has been excluded from membership of the Pension
Scheme or from any benefits thereunder in contravention of any
UK or European Community legislation or any other applicable
legislation. Seller does not contribute to the Pension Scheme
for the benefit of any of the Employees and no such
contribution by the Seller for any Employee is agreed or
proposed or advised or envisaged. All contributions due from
members of the Pension Scheme have been duly paid when due and
Seller is not required to bear any fees, charges or expenses
as an employer under the Pension Scheme in relation to it.
(P) DATA PROTECTION. Seller has fully and properly complied with
all the requirements of the Data Protection Xxx 0000 in
relation all information relating to identified or
identifiable individuals which is held or processed by Seller
in either electronic or hard copy formats ("Personal Data").
Seller has made and maintains valid and comprehensive
notification with the Information Commissioner's office in
relation to the Personal Data. Seller has all the necessary
consents from individuals to enable it to process the Personal
Data for any of the purposes for which it processes the
Personal Data and to transfer the Acquired Assets to the Buyer
as contemplated by this Agreement. Seller has taken steps to
ensure that any individuals or companies processing the
Personal Data on behalf of Seller take all necessary steps to
enable Seller to fully and properly comply with the
requirements of the Data Protection Xxx 0000.
(Q) CHANGES IN CIRCUMSTANCES. Except as otherwise set forth in
Schedule 9.1(Q), since the Pre-Closing Balance Sheet Date,
Seller has not (i) sold, transferred or otherwise disposed of
any properties or assets used in connection with the conduct
of or otherwise related to the Business other than in the
ordinary and normal course of business and consistent with
past practice, (ii) pledged or subjected to any Lien (except a
Permitted Lien) any of the Acquired Assets, (iii) conducted
the Business other than in the ordinary and normal course,
(iv) except for customary salary increases in the ordinary and
normal course of business consistent with past practice,
granted any salary increase or bonus or permitted any advance
to any employee of the Business, instituted or granted any
general salary increase to the employees or any group of
employees of the Business or entered into any new, or altered
or amended any existing, Employee Plan or Employment Contract,
(v) paid any liability or obligation (fixed or contingent)
relating to the Business other than in the ordinary and normal
course of business, discharged or satisfied any Lien on any of
the Acquired Assets other than in the ordinary and normal
course of business, or settled any claim, liability or suit
pending or threatened against the Business or any of the
Acquired Assets, (vi) modified, amended, cancelled or
terminated any Contracts under circumstances that could
materially and adversely affect the financial condition,
results of operations, properties, assets, liabilities or
business of Seller or the Business, (vii) written down the
value of any inventory, or written off as uncollectible all or
any portion of any accounts receivable, of the Business,
(viii) cancelled, factored or sold any book or other debts or
claims, or waived any rights, with respect to the Business or
any of the Acquired Assets or Assumed Liabilities, (ix) paid,
incurred or accrued any management or similar fees with
respect to the Business, (x) suffered any change in the
financial condition, results of operations, properties,
assets, liabilities or business of Seller or the Business,
except for ordinary and normal changes in the ordinary and
normal course of business that have not individually or in the
aggregate been materially adverse, (xi) made any material
change in any of its accounting policies or practices, or
(xii) agreed or obligated itself to do anything identified in
clauses (i) through (xi) of this clause 9.1(Q).
(R) INSOLVENCY. No order has been made and no resolution has been
passed for the winding up of Seller or for a provisional
liquidator to be appointed in respect of Seller and no
petition has been presented and no meeting has been convened
for the purpose of winding up Seller. No administration order
has been made and no petition for such an order has been
presented in respect of Seller. No receiver (which expression
shall include an administrative receiver) has been appointed
in respect of Seller or of any assets of Seller (including
Acquired Assets). Seller is not insolvent, or unable to pay
its debts within the meaning of Section 123 of the Insolvency
Xxx 0000, or has stopped paying its debts as they fall due. No
voluntary arrangement has been proposed under section 1 of the
Insolvency Xxx 0000 in respect of Seller. No unsatisfied
judgement is outstanding against Seller.
(S) TAXES. Seller has prepared in good faith and duly filed or
caused to be duly filed all Tax returns and reports required
to be filed by it with any Governmental Authority. All Taxes
owed to any Governmental Authority by Seller for periods
covered by such returns and reports, and all assessments,
claims, costs, demands, expenses and judgements connected
therewith, have been paid in full. Seller is not a party to
any action or proceeding and, to Seller's knowledge, no such
action or proceeding is contemplated or threatened for the
assessment or collection of any Taxes, and no outstanding
~deficiency notices or reports have been received by Seller in
respect of any Tax. Any deficiency asserted by a Governmental
Authority as a result of its examination of income tax returns
filed by Seller has been paid or finally settled, and no issue
has been raised by a Governmental Authority in any such
examination that, by application of the same or similar
principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined.
There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any income tax
return for any period. For the purposes of this Agreement,
"Tax" or "Taxes" means all income (including gross and net
income), property (including real and personal property),
sales, use, ad valorem, value added tax, employment (including
PAYE and national insurance),, excise, franchise, gross
receipts, license, occupation, payroll, premium, profits
(including windfall profits), severance, stamp, transfer,
withholding and other taxes, customs duties and other fees,
charges or assessments of any kind whatsoever, including any
interest, penalties, additions to tax or other additional
amounts imposed by any taxing authority. Seller is not treated
as a member of a group of companies for the purposes of
Section 43 of VATA 1994. Seller has made, given, obtained and
kept full, complete, correct and up to date records, invoices
and other documents appropriate or required for the purposes
of VATA 1994 and is not in arrears with any payments or
returns due and has not been required by the Commissioners of
Customs & Excise to give security under paragraph 4 of
Schedule 11 VATA. The United Kingdom is the only country in
which any taxation authority seeks to charge tax on income
profits or gains of Seller in respect of the Business and
Seller has never paid tax on income profits or gains to any
taxation authority in any other country.
(T) SERVICE WARRANTIES. Seller does not make and has not made any
express representations or warranties in connection with the
services of the Business other than as contained in the
Contracts.
(U) INSURANCE. Schedule 9.1(U) contains a list of all insurance
policies (specifying the location, insured, insurer, type of
insurance, policy number and amount of coverage) maintained by
Seller and Seller for the Business or the Acquired Assets. All
such policies are in full force and effect, and all premiums
with respect thereto covering all periods up to and including
the Closing Date have been paid. Such policies (i) are
sufficient for compliance with all requirements of Laws
applicable to the Business or any of the Acquired Assets and
of all agreements to which Seller is a party and which relate
to the Business or any of the Acquired Assets and (ii) are
valid, outstanding and enforceable policies.
(V) ABSENCE OF CERTAIN COMMERCIAL PRACTICES. Neither Seller nor
any director, officer, employee or agent of Seller has given
or agreed to give any (i) gift or similar benefit of more than
nominal value to any customer, supplier, Governmental
Authority (including any governmental employee or official) or
any other Person who is or may be in a position to hinder or
assist Seller, the Business or the Person giving such gift or
benefit in connection with any actual or proposed transaction
relating to the Business, which gifts or similar benefits
would individually or in the aggregate subject Seller or any
director, officer, employee or agent of Seller to any fine,
penalty, cost or expense or to any criminal sanctions, (ii)
unlawful payments to any governmental employees or officials,
(iii) commercial bribes or kick-backs relating to the
Business, (iv) unlawful political contributions with respect
to the Business, or (v) receipts or disbursements in
connection with any unlawful boycott relating to the Business.
No such gift or benefit is required in connection with the
operation of the Business to avoid any penalty, fine, cost,
expense or material adverse change in the financial condition,
results of operations, properties, assets, liabilities or
business of Seller or the Business.
(W) BOOKS AND RECORDS. The books and records of Seller maintained
in connection with the Business (including but not limited to
(i) books and records relating to sales of services of the
Business, dealings with customers, customer lists, supplier
lists, invoices, inventories, personnel records and Taxes and
(ii) computer software and data in computer readable and human
readable form used to maintain such books and records,
including the media on which such software and data are stored
and all documentation relating thereto) accurately record all
transactions relating to the Business in all material respects
and have been maintained consistent with good business
practice.
(X) COPIES OF DOCUMENTS. All copies of all Contracts and other
documents delivered by Seller to Buyer in connection with this
Agreement are true, correct and complete and include all
modifications and amendments thereto.
(Y) INSIDER INTERESTS. No director, officer, employee or other
Affiliate of Seller has any claim or other right to, Lien on
or other material interest of any kind whatsoever in any of
the Acquired Assets or any other real or personal, tangible or
intangible property used in connection with the conduct of or
otherwise relating to the Business.
(Z) BROKERS, FINDERS AND AGENTS. Neither Seller nor any of its
Affiliates is directly or indirectly obligated to anyone
acting as a broker, finder or in any other similar capacity in
connection with this Agreement or the transactions
contemplated hereby, other than Xxxx Xxxxxxxxx.
9.2 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller that, as of the Closing Date:
(A) ORGANISATION AND STANDING; POWER AND AUTHORITY. Buyer is a
corporation duly organised and validly existing under the laws
of England and has full corporate power and authority to enter
into and perform this Agreement and the transactions and other
agreements and instruments contemplated by this Agreement.
This Agreement and each of the other Transaction Documents to
which Buyer is a party have been (or, upon execution thereof,
will be) duly executed and delivered by, and constitute (or,
upon execution thereof, will constitute) the valid and binding
obligations of Buyer, enforceable in accordance with their
respective terms. This Agreement and the transactions and
other agreements and instruments contemplated hereby have been
duly approved by the board of directors of Buyer.
(B) CONFLICTS AND DEFAULTS. Neither the execution and delivery of
this Agreement and other Transaction Documents by Buyer nor
the performance by Buyer of its obligations hereunder and
thereunder will (i) violate, conflict with, or constitute a
default under, any provision of Buyer's memorandum and
articles of association or any provisions of, or result in the
acceleration of any obligation under, any contract, sales
commitment, license, purchase order, security agreement,
mortgage, note, deed, lien, lease or other instrument or
agreement or any Law by which Buyer is bound or (ii)
constitute an event that, after notice or passage of time or
both, would result in any such violation, conflict, default
(except defaults that would not individually or in the
aggregate have a material adverse effect), acceleration, or
creation or imposition of Liens or other claims. No Consents
are required to be obtained by Buyer in connection with the
execution and performance of this Agreement by Buyer and the
consummation of the transactions contemplated by this
Agreement.
(C) LITIGATION. Buyer is not subject to any order of, or written
agreement or memorandum of understanding with, any
Governmental Authority, and there is no litigation, action,
claim, suit or other proceeding pending or, to Buyer's
knowledge, threatened against or adversely or otherwise
affecting Buyer with respect to any of the transactions
contemplated by this Agreement.
(D) BROKERS, FINDERS AND AGENTS. Neither Buyer nor any of its
Affiliates is directly or indirectly obligated to anyone as a
broker, finder or in any other similar capacity in connection
with this Agreement or the transactions contemplated hereby.
9.3 Subject to Section 9.4(a) of the Framework Agreement, as such clause
may be amended pursuant to clause 14 of this Agreement, the
representations and warranties made in this Agreement or in any other
Transaction Document shall survive the Closing.
10. COVENANTS TO PROTECT GOODWILL
10.1 For a period of three years following the Closing Date, Seller will not
(i) compete (as defined in clause 10.3) with Buyer in the Combined
Delahaye Business, as such business is being conducted immediately
prior to the Closing Date, or (ii) solicit any employee of Buyer, or
any former employee of Seller, then engaged in the conduct of the
Combined Delahaye Business to terminate his or her employment with
Buyer, provided that Seller will not be deemed to be in violation of
this clause (ii) as the result of general employment solicitations
through newspaper advertisements, internet postings and the like.
10.2 Seller will not engage in the activities described in this clause 10
during the three-year period specified in clause 10.1 anywhere in the
world.
10.3 Seller will be deemed to be competing with Buyer if, and only if,
Seller or the Seller under the Framework Agreement, or any other
Controlled Affiliate of the Seller under the Framework Agreement,
renders services of the type generally offered by the Combined Delahaye
Business immediately prior to the Closing Date in connection with
client assignments or projects of a type that would typically be
handled by the Combined Delahaye Business as conducted immediately
prior to the Closing Date, provided that, for these purposes, the
Combined Delahaye Business shall not in any case be deemed to include,
and the restrictions contained in this clause 10 shall not apply to,
(i) content creation, production, distribution and electronic broadcast
monitoring services, including but not limited to video news releases,
live event broadcasts (including satellite media tours,
videoconferences and webcasting), audio news releases and radio media
tours, in formats that are suitable for broadcast news media or on-line
media outlets, including but not limited to the News IQ and Teletrax
services currently offered or currently contemplated to be offered by
Seller, or (ii) the electronic distribution of news releases, media
advisories and press statements to the media and on-line services. In
addition, Seller shall not be deemed to be in violation of the
provisions of this clause 10 in the event that Seller shall acquire a
business enterprise that directly or indirectly engages in services
competitive with the Combined Delahaye Business, provided that (i) the
annual revenues generated from such competitive services constitute
less than 10 percent of such business enterprise's total annual
revenues and (ii) Seller disposes of such competing business enterprise
within 12 months following such acquisition, provided that Seller shall
not be obligated to dispose of any such competing business enterprise
acquired by Seller within 12 months prior to the expiration of the
three-year period referred to in clause 10.1.
10.4 Inasmuch as a breach of or failure to comply with this clause 10 will
cause serious and substantial damage to Buyer, Buyer shall be entitled
to an injunction against Seller restraining it from any such breach or
failure. All remedies expressly provided for herein are cumulative of
any and all other remedies now existing at law or in equity. In
addition to the remedies provided for herein, Buyer shall be entitled
to avail itself of all such other remedies as may now or hereafter
exist at law or in equity for compensation and for the specific
enforcement of the covenants contained herein. Resort to any remedy
provided for herein or provided for by law shall not preclude or bar
the concurrent or subsequent employment of any other appropriate remedy
or remedies or preclude the recovery by Buyer of monetary damages and
other compensation..
10.5 For the purposes of this clause 10, "Buyer" shall include Observer's
direct and indirect subsidiaries, as they may exist from time to time,
and any Person deriving title to substantially all the Acquired Assets
and goodwill of the Business from Buyer.
10.6 Each subclause of this clause 10 constitutes a separate and distinct
provision hereof. In the event that any provision of this clause 10
shall finally be judicially determined to be invalid, ineffective or
unenforceable, such determination shall apply only in the jurisdiction
in which such adjudication is made and every other provision of this
clause 10 shall remain in full force and effect. The invalid,
ineffective or unenforceable provision shall be deemed automatically
amended, without further action by the parties, to effect the original
purpose and intent of the invalid, ineffective or unenforceable
provision and to otherwise conform to the applicable Laws of such
jurisdiction, provided that such amendment shall apply only with
respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made.
11. EMPLOYEES
11.1 The parties acknowledge and agree that pursuant to the Regulations the
contracts of employment between the Seller and the Employees (save
insofar as such contracts relate to any occupational pension scheme)
will have effect after Closing as if originally made between the Buyer
and the Employees and all rights, powers, duties and liabilities of the
Seller thereunder (other than as provided in Regulation 7 of the
Regulations) shall be automatically transferred to the Buyer with
effect from Closing.
11.2 The parties acknowledge and agree that, save for the Employees, it is
not the intention of the parties that the contracts of employment of
any other employees of the Seller or any other member of the Seller's
Group shall be transferred to the Buyer as a result of the transactions
specified herein.
11.3 All the obligations of the Seller under or in connection with the
contracts of employment of the Employees arising in respect of any
event or period on or prior to the Closing Date shall be performed and
discharged by the Seller and the Seller shall indemnify the Buyer from
and against any and all actions, proceedings, costs, claims, expenses,
demands, damages, awards (whether of compensation or otherwise), fines,
penalties, judgements, order and liabilities whatsoever (including,
without limitation, national insurance and pension entitlements and any
liability to pay accrued holiday pay) which:
(A) relate to or arise out of or in connection with the employment
or dismissal of any of the Employees or any other employee by
the Seller or any other person or any act or omission by the
Seller or any other event occurring on or prior to the Closing
Date for which the Buyer is liable by reason of the operation
of the Regulations or the Directive or pursuant to clause
11.1; or
(B) (whether or not in respect of a period before or after the
Closing Date) relate to any contract of employment of any
employee of the Seller or any other person (other than any of
the Employees) in respect of which the Buyer is liable as a
result of the Regulations or the Directive or the termination
of any such contract (and in this connection the Buyer shall
terminate such contacts of employment promptly on becoming
aware of the same); or
(C) arise from any failure by the Seller to comply with its
obligations made or contemplated by the Regulations
save to the extent that such liability is specifically included in the
amount of any apportionments made pursuant to clause 6.
11.4 If for any reason the contracts of employment of all or any of the
Employees are not automatically transferred to the Buyer pursuant to
the Regulations or the Directive as a result of the transfer of the
Business, the Seller hereby covenants to indemnify and keep indemnified
the Buyer from and against any claim for redundancy payment, wrongful
dismissal or in respect of any unfair dismissal pursuant to the
Employment Rights Xxx 0000 or otherwise arising from the termination by
the Seller of the contracts of employment of any of the Employees.
11.5 If the contract of employment of any person other than an Employee is
deemed or claimed to take effect between the Buyer and such person as a
result of the Regulations and/or the Directive, the Buyer shall and may
at its absolute discretion serve notice of that fact or claim upon the
Seller within 14 Business Days of becoming aware of that fact or claim
and between 7 and 14 Business Days after such notice has been served on
the Seller, the Buyer may give notice to such person to immediately
terminate the employment of such person. In the event of such
termination, the indemnity given by the Seller pursuant to clause 11.4
shall apply to such termination as if such termination had been made by
Seller.
11.6 The Seller undertakes to authorise and hereby authorises each of the
Employees to disclose to the Buyer after Closing all information in his
possession relating to the Business notwithstanding any term of his
employment with the Seller (whether express or implied) which would
otherwise preclude him from so doing.
11.7 The Buyer hereby undertakes that it will provide the Seller with such
information at such time as will enable the Seller to perform any duty
imposed on it by the Regulations or the Directive to inform employee
representatives or trade union representatives of any matters relating
to the transactions specified herein.
The Buyer hereby undertakes to Seller fully to indemnify and keep
indemnified the Seller against all losses, damages, costs, actions,
awards, penalties, fines, proceedings, claims, demands, liabilities and
expenses (including without limitation legal and other professional
fees and expenses) which the Seller may suffer, sustain, incur, pay or
be put to by reason or on account of or arising from any act or
omission of the Buyer in relation to an Employee occurring on or after
Closing (including any liability for wrongful or unfair dismissal or
redundancy payments).
12. USE OF NAME.
For a period of 180 days following the Closing Date, Buyer shall have
the royalty-free right to use Seller's name in the following context in
connection with Buyer's operation of the Business: "Delahaye Romeike,
formerly Delahaye Medialink."
13. GROSSING-UP
13.1 If the Buyer makes a payment or suffers a loss ("THE LOSS") in respect
of which the Buyer is entitled to be indemnified or otherwise
compensated by any member of the Seller's Group under this Agreement or
under the Framework Agreement and payment so made by any member of the
Seller's Group ("THE PAYMENT") is subject to tax in the hands of the
Buyer or a withholding on account of tax, the Seller shall pay to the
Buyer such additional amount as ensures that the Buyer is left with the
same amount as it would have been entitled to receive in the absence of
any such tax liability or withholding PROVIDED THAT the Seller shall
not be under any obligation to make an increased payment under this
clause 13.1 to the extent the Loss is deductible in computing the
Buyer's tax liability in respect of the Payment.
13.2 Any additional payment due by the Seller to the Buyer under clause 13.1
shall be payable by the Seller on the later of:
(A) five Business Days before the last date on which the Buyer can
discharge the tax liability arising as a result of the Payment
without incurring a liability for penalties or interest
thereon;
(B) five Business Days after written demand has been made in
respect thereof by the Buyer.
13.3 If an increased amount is paid to the Buyer under clause 13.1 and the
Buyer later obtains a credit or deduction in respect of the Loss in
computing its tax liability the Buyer shall reimburse to the Seller
within five Business Day of utilising credit or deduction the lesser
of:
(A) the increased amount so paid; and
(B) the amount the Buyer saves in tax as a consequence of
utilising the credit or deduction.
14. INCORPORATION OF PROVISIONS OF FRAMEWORK AGREEMENT
14.1 The following provisions of the Framework Agreement, with such
modifications as are set forth in this clause 14, shall apply to this
Agreement as if such provisions of the Framework Agreement were set
forth herein. For purposes of such incorporation, unless otherwise
specified, references in provisions of the Framework Agreement to
"Seller" are to Seller as defined in this Agreement, references in
provisions of the Framework Agreement to "Buyer" are to Buyer as
defined in this Agreement, references in provisions of the Framework
Agreement to "Agreement" are to this Agreement and references in
provisions of the Framework Agreement to "US Delahaye Business" shall
be replaced by references to the "Business".
(A) Sections 6.1, 6.2, 6.3 and 6.4,
(B) Sections 7.1, 7.2, 7.3 and 7.4;
(C) Section 8.1;
(D) Section 8.5 (with references to "Assigned Accounts Receivable"
being Assigned Accounts Receivable under this Agreement) and
Section 8.6;
(E) Sections 9.3 and 9.5 (in each case, with respect to any
indemnity claim hereunder).
(F) Section 10.11(d).
14.2 All limitations on the liability of Seller under the Framework
Agreement shall have the effect of limiting the liability of Seller
under this Agreement. In particular the provisions of Section 9.4(c) of
the Framework Agreement set forth the total joint maximum liability of
Seller under this Agreement and Seller under the Framework Agreement.
15. ACTIONS AFTER CLOSING
15.1 Immediately after Closing notice of assignment in the Agreed Form of
each of the Assigned Accounts Receivable shall be sent by the Buyer to
each of the debtors.
15.2 If at any time after Closing the Seller receives any notices,
correspondence, information, orders or enquiries relating to the
BusinesS other than the Retained Assets and the Retained Liabilities,
it will forthwith deliver them to the Buyer and title in them shall
vest in the Buyer.
15.3 If at any time after Closing the Buyer receives any notices,
correspondence, information order or enquiries relating to any assets
or liabilities of the Seller other than the Acquired Assets and the
Assumed Liabilities or relating to any business of the Seller other
than the Business it will promptly deliver them to the Seller and title
in them shall vest in the Seller.
15.4 All monies or other items comprising part of the Acquired Assets which
are received by the Seller after Closing or for which the Seller is
obliged pursuant to any provision of this Agreement to account to the
Buyer will be paid or delivered to the Buyer forthwith upon receipt and
in any event pending payment any monies so received shall be held on
trust absolutely for the Buyer and separately from all other monies of
the Seller. In default of payment within seven days of receipt any such
monies shall carry interest calculated on a daily basis (as well after
as before judgment or liquidation) from the date of receipt by the
Seller until the date of actual payment to the Buyer at the rate of 3
per cent above the base rate from time to time of Barclays Bank plc.
16. COSTS
Each party hereto shall pay its own costs and expenses in relation to
the preparation and execution of this Agreement and all documents
ancillary hereto.
17. ANNOUNCEMENTS
Save as otherwise permitted under the Framework Agreement or required
by law, no public announcement shall be made by the Seller or the Buyer
in respect of the subject matter of this Agreement and whether before,
on or after Closing, except as may otherwise be agreed in writing by
the Seller and the Buyer.
18. ENFORCEABILITY AND SEVERABILITY
Each of the agreements, undertakings, covenants, warranties,
indemnities and other obligations of the parties entered into pursuant
hereto (including without limitation under clause 9) is considered
reasonable by the parties but in the event that any provision or part
thereof shall be held void or unenforceable or in conflict with the law
of any state or jurisdiction any provision or part so held void or
unenforceable or in conflict as aforesaid shall be severed from this
Agreement or other document in which it is contained or otherwise
modified to become valid and enforceable insofar as it relates to that
state or jurisdiction only and the enforceability and validity of any
other parts or provisions of this Agreement and such document shall not
be affected by such severance or modification.
19. ENTIRE AGREEMENT
19.1 This Agreement together with the Framework Agreement and all documents
in Agreed Form referred to herein and therein constitute the entire
agreement between the parties and supersede and replace any previous
agreement, understanding, undertaking, representation, statement,
warranty and arrangement of any nature whatsoever between the parties
relating to the subject matter of this Agreement or the said documents
in Agreed Form.
19.2 Nothing in this clause shall have the effect of limiting or excluding
any liability arising as a result of fraud.
20. SURVIVAL OF PROVISIONS
Notwithstanding Closing, the provisions of this Agreement shall, to the
extent that they remain to be performed or are capable of subsisting,
remain in full force and effect and shall be binding on, and
enforceable by, the parties or their respective successors.
21. GENERAL
21.1 This Agreement shall be binding on and shall inure to the benefit of
each party's successors and assigns of each of the parties hereto, but
no rights, obligations or liabilities hereunder shall be assignable by
any party without the prior written consent of the other party.
21.2 Notwithstanding clause 21.1 and save for an assignment by the Buyer of
its rights under this Agreement to any Affiliate, none of the parties
may assign or transfer any of its rights or benefits under this
Agreement without the prior written consent of the other party.
21.3 No failure or delay by the Buyer in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor
shall any single or partial exercise by the Buyer of any right, power
or privilege preclude any further exercise thereof or the exercise of
any other right, power or privilege.
21.4 The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.
21.5 No provision of this Agreement may be amended, modified, waived,
discharged or terminated, otherwise than by the express written
agreement of the parties hereto nor may any breach of any provision of
this Agreement be waived or discharged except with the express written
consent of the parties.
21.6 This Agreement may be executed in counterparts each of which shall
constitute an original but which together shall constitute but one and
the same document.
22. NOTICES
22.1 Any notice or other communication given or made under this Agreement
shall be in writing and may be delivered to the relevant party or sent
by first class prepaid letter, telex or facsimile transmission to the
address of that party specified in this Agreement or to that party's
telex or facsimile transmission number thereat or such other address or
number as may be notified hereunder by that party from time to time for
this purpose.
22.2 Each such notice or communication shall be deemed to have been given or
made and delivered, if by letter, 48 hours after posting, if by
delivery, when left at the relevant address and, if by telex or
facsimile transmission, on receipt by the party giving the notice or
communication of the recipient's confirmation of receipt answerback at
the end of transmission.
22.3 The Buyer shall at the same time as serving any notice on the Seller
serve a copy of such notice on the Seller's Guarantor.
23. GOVERNING LAW
This Agreement shall be governed by and construed in all respects in
accordance with English law and the parties hereby submit to the
non-exclusive jurisdiction of the English Courts as regards any claim
or matter arising in relation to this Agreement.
24. CONTRACTS (RIGHTS OF THIRD PARTIES) XXX 0000
24.1 The parties agree and acknowledge that except as expressly stated
otherwise with reference to this clause 24.1:
(A) Except for purposes of giving to Bacon's Information Inc. the
benefit of the Framework Agreement, nothing in this Agreement
is intended to benefit any person who is not a party to it (a
"NON-PARTY") and accordingly (except as so stated) no
Non-Party has any right under the Contracts (Rights of Third
Parties) Xxx 0000 to enforce any term of this Agreement; and
(B) no consent of any Non-Party shall be required for any
rescission of or amendment to this Agreement.
The provisions of clause 23.1 do not affect any right or remedy of a
third party which exists or is available otherwise than by operation of
the Contracts (Rights of Third Parties) Xxx 0000.
IN WITNESS whereof this Agreement has been duly executed the day and year first
above written.
SIGNED by )
on behalf of Medialink UK Limited in )
the presence of: )
SIGNED by )
on behalf of Romeike Limited )
in the presence of: )
