ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT dated as of July 18, 1996 by and among
MEDIALINK PR DATA CORPORATION, a Delaware corporation with offices at 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Purchaser"), VIDEO BROADCASTING CORPORATION,
a Delaware corporation with offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Medialink"), PR DATA SYSTEMS, INC., a Connecticut corporation with
offices at 00 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 ("Seller"), XXXX
XXXXXXXXXX, an individual residing at 000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000 ("JS"), XXXXXXX XXXXXXXXXXX, an individual residing at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 ("WW") and XXXXX XXXXXXXXXX, an individual residing
at 000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 ("NS" and, collectively with
JS and WW, referred to herein as the "Shareholders").
W I T N E S S E T H:
WHEREAS, Medialink owns all of the issued and outstanding shares of capital
stock of Purchaser; and
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
purchase all of Seller's tangible and intangible assets.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
Section 1. Definitions. For purposes of this Agreement, the words and terms
listed below shall have the following meanings:
(a) "Business" means the business of Seller as conducted by Seller
immediately prior to the date hereof;
(b) "Closing" means the events which take place on the Closing Date
for the purpose of consummating this Agreement.
(c) "Closing Date" means July 18, 1996, or such other date as the
parties shall mutually agree upon.
(d) "Environmental Laws" means all laws, regulations, rules and
ordinances of any relevant State or any political subdivision thereof and the
United States of America respecting the environment, including without
limitation the Resource Conservation and Recovery Act (42 U.S.C. ss.6901 et.
seq.), and the Comprehensive Environmental Responsibility Compensation and
Liability Act, as amended (42 U.S.C. ss.9601 et. seq.).
(e) "Facility" means the offices of Seller located at 00 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000.
(f) "Fair Market Value" means (i) if the Common Stock, as defined
herein, is publicly traded, the average of the closing bid and asked quotations
per share as furnished by the National Association of Securities Dealers, Inc.
through NASDAQ, the OTC Bulletin Board or similar organization for the ten (10)
trading days immediately preceding the date of determination, or if the Common
Stock is not publicly traded, the Fair Market Value of the Common Stock shall be
deemed to be $6.00 per share.
(g) "Hazardous Substances" means any pollutants and dangerous
substances including without limitation radon and any hazardous waste or
hazardous substances as defined in any of the Environmental Laws.
(h) "Non-Compete Agreements" means those three non- compete
agreements, dated of even date herewith, by and between Purchaser and each of
JS, NS and WW.
(i) "Transaction Documents" means the Employment Agreements and the
Non-Compete Agreements, as such terms are defined herein.
ARTICLE II
Section 2. Purchase and Sale. Seller hereby agrees to sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser hereby agrees to
purchase and accept from Seller, on the Closing Date all of the assets of Seller
(the "Assets"), free and clear of all liens and encumbrances, including but not
limited to those Assets listed as follows:
(a) All machinery and equipment, as more specifically described in
Schedule 2(a) attached hereto;
(b) All accounts receivable of Seller as set forth on Schedule 2(b)
attached hereto and all accounts receivable of Seller as of the Closing Date as
set forth on Schedule 2(b) updated as of the Closing Date;
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(c) All inventory, as more specifically described in Schedule 2(c)
attached hereto;
(d) All Intellectual Property (as defined in Section 5.8) used in or
held for use in the Business;
(e) All books (excluding minute book, stock books and stock record
books and stock ledgers), papers, records, files, including without limitation,
all correspondence, customer lists, credit and sales reports, data processing
records, documents and records relating to the Assets;
(f) All leasehold improvements, as more specifically described in
Schedule 2(f) attached hereto;
(g) All rights of the Seller and Shareholders under property,
equipment and other leases of the Business, as more specifically described in
Schedule 2(g) attached hereto; and
(h) All advertising, brochures, catalogs and promotional materials;
and
(i) All rights to the name "PR Data".
It is hereby expressly understood and agreed that the foregoing Assets are
to be transferred and conveyed to Purchaser as above specified, by good and
sufficient xxxx of sale, and other documents of transfer, as provided in Section
12 hereof, free and clear of all liens, charges, encumbrances, debts,
liabilities and obligations whatsoever, except obligations which are expressly
assumed by Purchaser hereunder.
ARTICLE III
Section 3. Assumption of Liabilities; Assumption and Payment of Certain
Obligations.
3.1. Assumption of Liabilities by Purchaser. Purchaser will, on behalf of
Seller, prepare an unaudited balance sheet and income statement of Seller for
the period April 1, 1996 through the Closing Date (the "Closing Date Stub
Financials") in accordance with generally accepted accounting principles,
subject to the absence of notes that would customarily be included in a
financial statement prepared in accordance with generally accepted accounting
principles. Purchaser shall assume, pay, perform and discharge, and, as the case
may be, take subject to, the obligations and liabilities of Seller as
specifically set forth in the Closing Date Stub Financials; provided, however,
that Purchaser shall not be responsible in any manner whatsoever for (i)
obligations and liabilities of Seller which exceed the assets of Seller
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by $372,000; (ii) obligations and liabilities of Seller related in any manner
whatsoever to a breach by Seller or the Shareholders of any of their
representations and warranties set forth herein; (iii) any and all taxes
assessed on either Seller or the Shareholders relating to the transactions
contemplated hereby; or (iv) any and all legal, accounting and other
professional fees of the professionals representing Seller and the Shareholders
in the transactions contemplated hereby. Seller expressly acknowledges and
agrees that in the event any receivables listed in the Closing Date Stub
Financials are not collected within 90 days of the Closing Date, such
receivables shall not be deemed an asset of Seller for the purposes of this
Agreement.
3.2. Assumption and Payment of Certain Obligations.
(a) Small Business Administration Loan. Seller is presently indebted
to the U.S. Small Business Administration and Lafayette Bank & Trust Co. in the
original principal amount of $200,000 plus interest, as evidenced by a
promissory note (the "SBA Loan"), a copy of which is attached hereto as Schedule
3.2(a). Purchaser shall pay the $84,979.98 balance of the SBA Loan in full at
the Closing.
(b) Indebtedness of Seller to WW. Seller is presently indebted to WW
in the principal amount of $330,000 (the "WW Indebtedness"). Purchaser agrees to
assume the WW Indebtedness and shall execute a non-negotiable subordinated
promissory note in a principal amount equal to the WW Indebtedness between
Purchaser, as maker, and WW, as payee (the "New WW Note"). In the event the WW
Indebtedness is evidenced by a promissory note, such note shall be cancelled at
Closing. The New WW Note will bear interest at eight (8%) percent per annum and
be amortized by quarterly payments of $15,506.59 each over a seven (7) year
period, commencing three months from the date hereof. The form of the New WW
Note is attached hereto as Exhibit A.
(c) Certain Other Obligations. Purchaser shall assume the liabilities
relating to the Assets, including any contracts assigned as part of the Assets,
incurred in the ordinary course of business consistent with past practice, and
obligations under the equipment leases described in Schedule 2(g) accruing after
the Closing.
ARTICLE IV
Section 4. Purchase Price.
4.1. Payment Terms. In reliance upon the representations and warranties of
Seller contained herein, and subject to the terms and conditions of this
Agreement, Purchaser hereby agrees to purchase the Assets for the aggregate
purchase price below (the "Purchase Price").
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(a) One Hundred Twenty Thousand ($120,000) Dollars (the "Cash"),
payable on the Closing Date by wire transfer or certified funds;
(b) Twenty Thousand (20,000) shares (the "Shares") of the common
stock, par value $.01 ("Common Stock") of Medialink. In order to secure the
indemnity and set off obligations of each Shareholder pursuant to Sections 10
and 11 hereof, each Shareholder hereby further agrees that on the Closing Date
he shall deliver to the Escrow Agent (as defined in Section 11.2 hereof) the
Shares which shall be held by the Escrow Agent pursuant to the terms of an
escrow agreement (the "Escrow Agreement") in the form attached hereto as Exhibit
B.
4.2. Allocation of Purchase Price. The Purchase Price described in Section
4.1 hereof will be allocated as set forth in Schedule 4.2. Seller and Purchaser
each represent, warrant and agree that the allocation set forth in Schedule 4.2
was determined through arm's length negotiation. The Shareholders and Purchaser
agree that (i) the Shares which shall be delivered by Purchaser to the Escrow
Agent are subject to various restrictions under the Escrow Agreement and
therefore they have agreed to have the valuation of such Shares set forth on
Schedule 4.2, which valuation was determined through arm's length negotiation.
Seller and Purchaser each agree that it will adopt and utilize the amounts
allocated to each asset or class of assets set forth in Schedule 4.2 for
purposes of all federal, state and other income tax returns filed by each of
them, file all such documents and statements required by Section 1060 of the
Internal Revenue Code of 1986 (the "Code") reflecting the allocations set forth
in Schedule 4.2 and that each of them will not voluntarily take any position
inconsistent therewith upon examination of any such tax return, in any refund
claim, in any litigation or otherwise with respect to such income tax returns.
Seller and Purchaser each agree to provide the other with a copy of the
allocation schedule which they file in connection with Section 1060 of the Code
unless such schedule contains information unrelated to the transaction
contemplated by this Agreement. In such event, Seller or Purchaser, as the case
may be, shall provide the other with a statement from its accountants confirming
that such filing has been made in accordance with this Schedule 4.2.
4.3. Reliance on the Non-Compete Agreements. JS, NS and WW hereby
acknowledge that Purchaser would not have entered into this Agreement but for
the execution by them of the Non-Compete Agreements in the form attached hereto
as Exhibits C-1, C-2 and C-3. JS, NS and WW are the principal and majority
shareholders and executive officers of Seller and Purchaser will be irreparably
harmed if JS, NS and/or WW do not abide by the terms of the Non-Compete
Agreements. Pursuant to his Non-Compete Agreement, WW will receive a non-compete
fee of $205,000 and pursuant to their Non-Compete Agreements, JS and NS will
each receive a non-compete fee of $102,500. The terms of the Non-Compete
Agreements are incorporated herein by reference and made a part hereof.
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ARTICLE V
Section 5. Representations and Warranties by Seller and the Shareholders.
Seller and the Shareholders jointly and severally represent and warrant to
Purchaser and Medialink as set forth below:
5.1. Organization, Existence and Authority of Seller. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Connecticut and has and will have at the time of Closing all
corporate power to execute, deliver and perform this Agreement and the other
agreements and instruments to be executed and delivered by Seller and the
Shareholders pursuant hereto and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement by Seller and
the Shareholders does not, and the consummation of the transactions contemplated
hereby will not, violate any provisions of Seller's Certificate of Incorporation
or By-Laws or of any law or regulation applicable to Seller or the Shareholders
or of any agreement, mortgage, license, lease, arrangement, instrument, order,
arbitration award, judgment or decree to which Seller or the Shareholders is a
party or by which Seller or the Shareholders is bound or result in the creation
of any Lien (as hereinafter defined), on the Assets.
5.2. Power and Authority. On or prior to the Closing Date all corporate
acts and other proceedings required to be taken by or on the part of Seller to
authorize it to carry out this Agreement and such other agreements and
instruments and the transactions contemplated hereby and thereby will have been
duly and properly taken. This Agreement has been duly executed and delivered by
Seller and the Shareholders and constitutes, and such other agreements and
instruments when duly executed and delivered by Seller and the Shareholders will
constitute, legal, valid and binding obligations enforceable in accordance with
their respective terms. The execution, delivery and performance by Seller and
the Shareholders of this Agreement and such other agreements and instruments and
the consummation of the transactions contemplated hereby and thereby will not
violate, conflict with or result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or result in the creation of a Lien on the Assets of Seller under any agreement
by which any of the Assets, may be bound or affected.
5.3. Consents. No consent, filing or approval of any federal, state or
local governmental agency or department or any other person not a party to this
Agreement is required or necessary in connection with the execution, delivery
and performance under this Agreement or to consummate the transactions
contemplated hereby.
5.4. Title. Except as provided in Schedule 5.4 hereof (all of which Liens
will be released and discharged on the Closing Date) Seller now is, and on the
Closing Date will be, the owner of the Assets free and clear of all liens,
encumbrances, claims, security interests, charges and restrictions on the right
to transfer, of any kind whatsoever ("Liens"). The machinery and equipment
described in
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Schedule 2(a) will be transferred to Purchaser on the Closing Date in good
working order.
5.5. Compliance with Agreements. Set forth on Schedule 5.5 is a complete
and accurate list of all contracts and other agreements, oral and written, to
which Seller is a party. Seller and the Shareholders do not know of any fact,
circumstance, or condition amounting to a default under any of such contracts or
other agreements. All such contracts and other agreements will be in full force
and effect at the time of Closing, unless by their terms they expire prior
thereto. Other than such enumerated contracts and other agreements, Seller has
no other presently existing contract or agreement, oral or written, relating to
the Assets.
5.6. Taxes. Seller has timely paid, or will timely pay on or before
Closing, all federal, state and municipal income, manufacturer's excise, federal
and state withholding, FICA, FUTA, state unemployment taxes, state and municipal
sales and use taxes, license fees and other taxes, fees, or charges levied or
imposed upon Seller as the result of its ownership of the Assets ("Taxes") that
are payable prior to the Closing Date. Seller is not delinquent in the payment
of any tax, assessment or governmental charge or in the filing of any tax return
in any case where such delinquency could result in a penalty and no deficiencies
for any tax, assessment or governmental charge have been claimed, proposed or
assessed against Seller. Seller has not filed or waived any extensions of time
for any returns, has not incurred any tax liability, including interest,
penalties or assessments which may result in the imposition of any lien, charge,
security interest or any other encumbrance on the Assets and Seller and the
Shareholders have no reason to believe that any taxing authority will assess any
additional tax, fines, penalties or other charges. There are no outstanding
fines, liens or disputes between Seller and any taxing authority which relate to
the Assets.
5.7. Litigation, Proceedings and Disputes. Except as set forth in Schedule
5.7, there are no suits, actions, administrative, arbitration or other
proceedings, (including proceedings concerning product liability, municipal or
other governmental laws or regulations, labor disputes or grievances or union
recognition) or governmental investigations by any Federal, state, or local
agency or prosecutor's office or of any other kind pending or threatened against
or affecting Seller or the Assets. Except as set forth in Schedule 5.7, there
are no unsatisfied judgments, orders, stipulations, injunctions, decrees or
awards (whether by a court, administrative agency, arbitration, grievance
procedure) against Seller relating to such Assets. Seller and the Shareholders
agree to cause any matter set forth in Schedule 5.7 to be satisfied at or prior
to the Closing Date.
5.8. Business Rights. Seller owns free and clear of any rights or claims of
others, the name "PR Data", the right to use the names in its databases,
processes, trademarks, trade names, trade secrets, patents, copyrights, service
marks, rights and all technical know-how accruing to the benefit of Seller
related to the Assets ("Intellectual Property"), without any conflict or
infringement with the right of
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others, including officers, directors or employees of Seller and Seller has not
received or been threatened with notice of any outstanding claim or assertion
that any of the Assets now materially infringe or conflict with the rights of
others. Seller will transfer to Purchaser, on and as of the Closing Date, sole
and full ownership of all of Seller's Intellectual Property, including Seller's
technology and know-how as related to the machinery and equipment described in
Schedule 2(a).
5.9. Employees. Subject to the exceptions set forth in the following
sentence, Schedule 5.9 hereto lists all employees and consultants of the Seller
and indicates their salaries, fees, commissions and most recent bonuses, if any,
their rights to future bonuses (or deferred portions of prior bonuses), if any,
vacation, severance, insurance and other benefits and their respective job
titles, dates of hire and social security numbers. Except as disclosed on
Schedule 5.9, there are no written or oral commitments by Seller to any of its
employees relating to employment, compensation, wages, bonuses, raises,
vacations, severance pay, benefits or similar matters. Seller will pay, through
the Closing Date, all salary, wages, bonuses, severance, commissions, accrued
vacation and sick days. Purchaser agrees that it shall employ substantially all
of the employees of Seller after Closing, provided that to the extent Purchaser
does not continue the employment of certain employees of the Seller, Purchaser
shall pay within a reasonable time after Closing, the severance benefits, if
any, to such employees, other than those severance benefits disclosed on
Schedule 5.9, all of which are the sole responsibility of Seller. Seller has
paid all unemployment insurance payments due and payable through the Closing
Date and does not have a negative account balance with any unemployment taxing
authority. Except as disclosed in Schedule 5.9, there are no union plans or
collective bargaining agreements.
5.10. Employee Plans.
(a) For purposes of this Agreement, the term "Employee Plan" means
each employee benefit plan as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and each other bonus,
incentive compensation, deferred compensation, severance or similar plan, policy
or payroll practice providing compensation or employee benefits maintained by
Seller or to which Seller is a participating employer or is obligated to
contribute or has any legally enforceable liability and under which any person
presently employed by Seller as an employee or consultant (an "Employee") or
formerly employed by Seller or its predecessors as an employee or consultant (a
"Former Employee") participates or has accrued any rights or under which Seller
is liable in respect of an Employee or Former Employee. The terms "Employee" and
"Former Employees, will include, where applicable, the beneficiaries, spouses
and dependents of an Employee or Former Employee. Schedule 5.10 lists or
describes all Employee Plans of Seller. Each Employee Plan has been maintained
in all respects in accordance with its terms and with applicable law. Except as
set forth on Schedule 5.10, each Employee Plan (including the related trust)
which is intended to qualify under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), or comparable foreign law,
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does so qualify and is exempt from taxation pursuant to Section 501(a) of the
Code. None of the Employee Plans listed on Schedule 5.10 are Multi-employer
Plans (as defined within the meaning of Section 3(37) of ERISA) and Seller has
no liability under or with respect to, and does not contribute to, any
Multi-employer Plan.
(b) As of the Closing Date, Seller will have made or will make full
payment by direct contributions of all amounts which Seller is required to make
under the terms of each Employee Plan in respect of periods ending on or prior
to the Closing Date.
(c) There is no accumulated funding deficiency (as defined in Section
412 of the Code), waived funding deficiency (as defined in Section 412 of the
Code), or failure to make any payment on or before a required installment due
date (as defined in Section 412(m) of the Code) with respect to any defined
benefit plan (as defined in Section 3(35) of ERISA) maintained by Seller or any
member of the controlled group (within the meaning of Sections 414(b), (c), (m),
(n) and (o) of the Code ("Controlled Group") of which Seller is a member, that
is or could after the Closing Date become a liability of Purchaser.
(d) Neither Seller nor any member of Seller's Controlled Group has
incurred or reasonably expects to incur any liability under Title IV of ERISA
(or comparable foreign law) arising in connection with the termination of, or
withdrawal from, any plan covered or previously covered by Title IV of ERISA (or
comparable foreign law) that is or could become a liability of Purchaser after
the Closing Date.
(e) No event has occurred that could subject Seller or Purchaser to an
excise tax under Section 4975 of the Code or a civil penalty under Section
502(i) of ERISA or any comparable section under any foreign law.
(f) There exists no condition or set of circumstances which could
result in the imposition of any liability under ERISA (including, without
limitation, Title I or Title IV thereof), the Code or other applicable law with
respect to the Employee Plans. From and after the Closing, Seller and the
Shareholders shall, subject to Section 10 hereof, indemnify and hold Purchaser
harmless from, all liabilities and obligations arising at any time with respect
to Employees or Former Employees of Seller under Employee Plans (and all related
reporting requirements), and any other employee benefits mandated by law,
regardless of the applicable funding arrangements, attributable to periods of
employment by Seller of its employees prior to the Closing Date.
5.11. Compliance with Laws. Seller has not received any notice, and in the
event it has received a notice, has satisfied the deficiencies set forth in such
notice, alleging that it is in violation of any applicable federal, state, local
or foreign law, regulation or order or any other requirement of any
governmental, regulatory or administrative agency or authority or court or other
tribunal relating to them ("Laws"). Except as set forth in Schedule 5.11, Seller
is not now charged with,
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nor to the knowledge of Seller, is Seller now under investigation with respect
to, any material possible violation of any Law and Seller has filed all reports
required to be filed with any governmental authority and taken all other actions
required by any Law.
5.12. Obligation to Update Schedules. Seller shall promptly disclose to
Purchaser any information contained in its representations and warranties or
Schedules which, because of an event occurring after the date hereof, is
materially incomplete or is no longer materially correct as of all times after
the date hereof until the Closing Date or any material adverse development
affecting the results of operations of the Business; provided, however, that
none of such disclosures shall be deemed to modify, amend or supplement the
representations and warranties of Seller or the Schedules attached hereto unless
Purchaser shall have consented thereto in writing.
5.13. Facility.
(a) The Facility is presently leased to Seller.
(b) The Facility is in material compliance with all, and is not in
violation of any, applicable Federal, state or local statute, ordinance, order,
requirement, law, rule or regulation (including without limitation any
applicable covenant, condition, restrictions or easement), nor has any notice of
violation of any applicable Federal, state or local statute, law, ordinance,
rule, regulation, order or requirement, or of any covenant, condition,
restriction or easement affecting the Facility been given to Seller by any
governmental authority or by any person entitled to enforce same.
(c) The Facility is not subject to zoning, use or building code
restrictions which prohibits, and, no state of facts relating to the actions or
inaction of Seller exists which prevents, the continued effective leasing or use
of such Facility property for the Business consistent with the manner in which
the Seller has conducted its Business.
(d) No permit, approval, certificate or consent of any governmental
authority or public or private utility is required by Purchaser to occupy and
utilize the Facility as presently utilized by Seller consistent with the past
conduct of the business.
5.14. Customers and Suppliers. Set forth on Schedule 5.14 is an accurate
list of each customer and of each supplier which was responsible for,
respectively, at least 5% of the gross revenues or 5% of the gross purchases of
the Seller during the calendar years ended December 31, 1995 and 1994.
5.15. Environmental Matters. Except as set forth on Schedule 5.15, Seller
and the Shareholders have not and have no knowledge that there has been
generated, stored, treated, discharged, handled, refined, spilled,
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released or disposed any Hazardous Substances in violation of any applicable law
or regulation at or on the Facility. Except as set forth on Schedule 5.15, to
Seller's and the Shareholders' knowledge, no underground storage tanks exist or
have existed at the Facility. Seller and the Shareholders have no knowledge of
any Hazardous Substances on or in the Facility in violation of any applicable
law or regulation and has received no notice, nor is it on notice of, any claim,
investigation, litigation or administrative proceeding, actual or threatened, or
any order, writ or judgment that relates to any discharge, spill, handling,
refining, release, emission, leaching or disposal of pollutants of any kind
(including any Hazardous Substances) at the Facility.
5.16. Financial Information. Seller has delivered to Purchaser unaudited
balance sheets of Seller as at December 31, 1994 and 1995 and the related income
statements and statements of stockholders' equity and cash flows for the years
then ended and unaudited balance sheets of Seller for the three month period
ended March 31, 1996 and the related income statements of stockholders' equity
and cash flows for such three month period (collectively, "Financial Data"). The
Financial Data has been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
("GAAP"), presents fairly in all material respects and was prepared from the
books and records of Seller, and, except as set forth on Schedule 5.16, fairly
presents in all material respects the assets and liabilities of the Seller at
the dates specified and the results of operations, stockholders' equity and cash
flows for the years then ended. The Financial Data accurately reflect and
record, in all material respects, insofar as required in accordance with GAAP,
all of the assets used in or held for use in the Business, all transactions
between Seller and any affiliates and related parties and all expenses of or
relating to the Business, whether incurred or paid by the Seller or any of its
affiliates or related parties. The unaudited balance sheets of Seller for the
three month period ended March 31, 1996 and the related income statements of
stockholders' equity and cash flows for such three month period are subject to
the absence of notes that would customarily be included in a financial statement
prepared in accordance with GAAP. Seller has also delivered to Purchaser
accurate financial information regarding the period from April 1, 1996 through
the Closing Date in order to enable Seller to prepare the Closing Date Stub
Financials and Seller expressly acknowledges the accuracy of, and accepts as
valid and binding, the Closing Date Stub Financials. Notwithstanding anything to
the contrary set forth herein, in the event any receivables listed in the
Closing Date Stub Financials are not collected within 90 days of the Closing
Date, such receivables shall not be deemed an asset of Seller for the purposes
of this Agreement.
5.17. Financial Condition. Since March 31, 1996 and through the Closing
Date:
(a) There has been and will be no material adverse change in the
financial condition, intangibles, results of operations, Business, properties,
Assets or liabilities of the Seller.
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(b) The operations and Business of the Seller have been and will be
conducted only in the ordinary course.
(c) There has been and will be no accepted purchase order or
quotation, arrangement or understanding for future sale of the products or
services of the Seller which is not in the ordinary course of business and
consistent with past practices.
(d) Seller has not suffered and will not suffer an extraordinary loss
(whether or not covered by insurance) or waived any right of substantial value.
(e) There is no fact known to Seller or the Shareholders which
materially adversely affects the financial condition, results of operations,
Business, properties, Assets or liabilities of the Seller other than as set
forth in this Agreement.
5.18. Non-Distributive Intent. The Shareholders are acquiring the Shares to
be issued and delivered hereunder for their own account (and not for the account
of others) for investment and not with a view to the distribution thereof. The
Shareholders will not sell or otherwise dispose of the Shares (whether pursuant
to a liquidating dividend or otherwise) without registration under the
Securities Act of 1933 or an exemption therefrom, and the certificate or
certificates representing the Shares may contain a legend to the foregoing
effect. The Shareholders understand that they may not sell or otherwise dispose
of the Shares in the absence of either a registration statement under the
Securities Act of 1933 or an exemption from the registration provisions of the
Securities Act of 1933.
5.19. Representations and Warranties. Neither the representations and
warranties of Seller and the Shareholders contained (i) herein nor (ii) in any
certificate, Exhibit, Schedule or other writing required by the terms hereof to
be delivered by Seller contain any untrue statements of a material fact or taken
together omit to state a material fact necessary in order to make the statements
herein and therein not misleading in light of the circumstances in which made.
ARTICLE VI
Section 6. Representations and Warranties by Medialink and Purchaser. Each
of Medialink and Purchaser represents and warrants to Seller and the
Shareholders as set forth below:
6.1. Organization, Existence and Authority of Medialink and Purchaser. Each
of Medialink and Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has and will have
at the time of Closing, all corporate power to execute, deliver and perform
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this Agreement and the other agreements and instruments to be executed and
delivered by each of Medialink and Purchaser pursuant hereto and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement by each of Medialink and Purchaser does not, and the consummation
of the transactions contemplated hereby will not, violate any provision of
Medialink's or Purchaser's certificate of incorporation or by-laws or of any law
or regulation applicable to Medialink or Purchaser or of any agreement,
mortgage, license, lease, arrangement, instrument, order, arbitration award,
judgment or decree to which Medialink or Purchaser is a party or by which
Medialink or Purchaser is bound.
6.2. Power and Authority. On or prior to the Closing Date all corporate
acts and other proceedings required to be taken by or on the part of each of
Medialink and Purchaser to authorize them to carry out this Agreement and such
other agreements and instruments and the transactions contemplated hereby and
thereby will have been duly and properly taken. This Agreement has been duly
executed and delivered by each of Medialink and Purchaser and constitutes, and
such other agreements and instruments when duly executed and delivered by each
of Medialink and Purchaser will constitute, legal, valid and binding obligations
enforceable in accordance with their respective terms. The execution, delivery
and performance by each of Medialink and Purchaser of this Agreement and such
other agreements and instruments and its consummation of the transactions
contemplated hereby and thereby will not violate, conflict with or result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or result in the creation of a lien
or encumbrance under any agreement by which Medialink or Purchaser may be bound
or affected.
6.3. Consents. No consent, filing or approval of any federal, state or
local governmental agency or department or any other person not a party to this
Agreement is required or necessary in connection with the execution, delivery
and performance under this Agreement or to consummate the transactions
contemplated hereby.
6.4. Financial Information. Medialink has delivered to Seller unaudited
balance sheets of Medialink as at December 31, 1994 and 1995 and the related
income statements and statements of stockholders' equity and cash flows for the
years then ended and unaudited balance sheets of Medialink for the three month
period ended March 31, 1996 and the related income statements of stockholders'
equity and cash flows for such three month period (collectively, "Medialink
Financial Data"). The Medialink Financial Data has been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved ("GAAP"), presents fairly in all material respects and was
prepared from the books and records of Medialink, and, except as set forth on
Schedule 6.4, fairly presents in all material respects the assets and
liabilities of Medialink at the dates specified and the results of operations,
stockholders' equity and cash flows for the years then ended. The Medialink
Financial Data accurately reflect and record, in all material respects, insofar
as required in accordance with GAAP, all of the assets used in or
13
held for use in the business of Medialink, all transactions between Medialink
and any affiliates and related parties and all expenses of or relating to the
business of Medialink, whether incurred or paid by Medialink or any of its
affiliates or related parties.
6.5. Financial Condition. Since March 31, 1996 and through the Closing
Date:
(a) There has been and will be no material adverse change in the
financial condition, intangibles, results of operations, business, properties,
assets or liabilities of Medialink.
(b) The operations and business of Medialink have been and will be
conducted only in the ordinary course.
(c) There is no fact known to Medialink which materially adversely
affects the financial condition, results of operations, business, properties,
assets or liabilities of Medialink other than as set forth in this Agreement.
6.6. Representations and Warranties. Neither the representations and
warranties of Medialink or Purchaser contained (i) herein nor (ii) in any
certificate, Exhibit, Schedule or other writing required by the terms hereof to
be delivered by Medialink or Purchaser (and so delivered) contained any untrue
statement of a material fact or taken together omit to state a material fact
necessary in order to make the statements herein and therein not misleading in
light of the circumstances in which made.
ARTICLE VII
Section 7. Additional Covenants and Agreements.
7.1. Access. Prior to the Closing, Seller will provide Purchaser with
copies of all documents which are reasonably necessary to facilitate the
transaction contemplated by this Agreement. Purchaser shall hold the information
set forth in such documents in confidence, provided that such information has
not previously been in the public domain. Prior to the Closing, Seller will, at
its expense, afford the officers, employees, attorneys, agents, accountants and
other representatives of the Purchaser free and full access to the records of
Seller which are related to the Assets and/or which aid Purchaser in responding
to governmental inquiries, will permit them to make extracts from and copies of
such records, and will from time to time furnish the Purchaser with such
additional information as the Purchaser from time to time may reasonably
request. Seller agrees to store such records after Closing, at its expense, for
the applicable statute of limitations period and to apprise Purchaser of the
location of such storage facility.
14
7.2. Conduct of Business Pending the Closing. Since March 31, 1996 and
through the Closing Date, Seller has conducted the Business only in the ordinary
course and has:
(a) preserved intact the Assets and its current business operations
and properties;
(b) taken no action or failed to take such action the consequence of
which will cause a breach of or default in any contract, agreement, commitment
or obligation to which it is a party or by which it may be bound;
(c) kept at all times full and complete books and records, consistent
with past practices for the Seller; and
(d) paid its accounts payable in the ordinary course.
7.3. Compliance. Seller and Purchaser will use their best efforts to comply
with any and all requirements imposed by applicable federal, state and local law
which are necessary to authorize and validate the sale, transfer and assignment
of the Assets to be transferred and assigned to Purchaser, and otherwise to
effectuate the purposes of this Agreement.
7.4. Employment Agreements. On the Closing Date, Purchaser will enter into
one (1) year employment agreements (the "Employment Agreements") with WW, JS and
NS with annual salaries of $47,000, $35,500 and $67,500, respectively. A form of
the Employment Agreements is attached hereto as Xxxxxxxx X-0, X-0 and D-3.
7.5. Lease. Seller is presently a tenant at the Facility pursuant to a
lease dated September 30, 1991, between Seller, as tenant, and Oakwood Avenue
Partners, an affiliate of Seller, as landlord. The term of such lease expires on
September 30, 1996. Seller shall cause Oakwood Avenue Partners to terminate such
lease effective as of the Closing Date and to enter into a lease (the "Lease")
with Purchaser for a five (5) year term commencing on the Closing Date. A form
of the Lease is attached hereto as Exhibit E.
7.6. Corporate Name. At or prior to Closing, Seller shall file a
certificate of amendment to its certificate of incorporation whereby it shall
change its name to a name that is not similar in any way to PR Data Systems or
any derivative thereof.
7.7. Address. At or prior to Closing, Seller shall change its office
address.
7.8. Medialink Guarantee. On the Closing Date Medialink will deliver to
Seller a guarantee (the "Guarantee") in the form attached hereto as
15
Exhibit G, pursuant to which Medialink guarantees the performance of Purchaser
under the Transaction Documents, the New WW Note and the Lease.
ARTICLE VIII
Section 8. Bulk Sales. The parties agree that compliance with the bulk
sales laws of the State of Connecticut is waived and Seller and Shareholders
hereby jointly and severally indemnify, subject to the provisions of Section 10,
and hold Purchaser harmless from any and all Indemnified Amounts, as defined
herein, arising from any creditor claims as a result of such bulk transfer which
were not disclosed pursuant to any Schedule or Exhibit to this Agreement.
ARTICLE IX
Section 9. Closing.
9.1. Location of The Closing. The Closing shall be held at the offices of
Tashlik, Xxxxxxxx & Xxxxxxx P.C., 000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxx Xxxx
00000.
9.2. Documents to be Delivered by Seller and the Shareholders. On the
Closing Date, Seller and the Shareholders shall deliver to Purchaser:
(a) the Employment Agreements executed by WW, JS and NS;
(b) the Lease executed by Oakwood Avenue Partners;
(c) the Non-Compete Agreements executed by WW JS and NS;
(d) the Escrow Agreement executed by WW, JS and NS;
(e) A certificate of the Secretary of Seller as to the resolutions
duly adopted by the Board of Directors of Seller authorizing the execution,
delivery and performance of this Agreement by Seller; the incumbency and
signatures of officers of Seller; and a certificate stating that the resolutions
authorizing the execution, delivery and performance of this Agreement are in
full force and effect;
(f) A Xxxx of Sale;
16
(g) An opinion of counsel for Seller, reasonably satisfactory to
Purchaser's counsel, dated as of the Closing Date;
(h) A cross receipt evidencing receipt by Seller of the Purchase
Price;
(i) Cancellation of the note, if any, which evidences the WW
Indebtedness; and
(j) Any other document or instrument of conveyance and transfer
necessary to implement and consummate this Agreement or any other documents
which may be reasonably requested by Purchaser to consummate the transactions
contemplated herein.
9.3. Documents to be Delivered by Purchaser and Medialink. On the Closing
Date, Medialink and Purchaser shall deliver to the Seller or the applicable
Shareholders, as the case may be:
(a) The Cash to Seller and stock certificates representing the Shares,
which, for convenience, will be registered in the names of the Shareholders in
recognition of the Seller's plan to dissolve following the Closing and
distribute the Shares to the Shareholders, subject to their obligation to
deliver the Shares to the Escrow Agent;
(b) Executed original New WW Note;
(c) Executed original Non-Compete Agreements;
(d) Executed original Employment Agreements;
(e) Executed Lease;
(f) The opinion of counsel for Medialink and Purchaser, reasonably
satisfactory to Seller's counsel, dated as of the Closing Date;
(g) The Guarantee of Medialink;
(h) The resolutions duly adopted by the Boards of Directors of
Purchaser and Medialink authorizing the execution, delivery and performance of
this Agreement by Purchaser and Medialink, certified by the Secretary of
Purchaser and Medialink; a certificate of the Secretaries of Purchaser and
Medialink as to the incumbency and signatures of officers of Purchaser and
Medialink; and a certificate stating that the resolutions authorizing the
execution, delivery and performance of this Agreement are in full force and
effect;
17
(i) A cross receipt evidencing delivery of the Assets to Purchaser;
and
(j) Any other documents which may be reasonably required to consummate
the transactions contemplated herein or any other documents reasonably requested
by Seller in connection with the transactions contemplated herein.
Unless otherwise provided in this Agreement, all documents and
instruments delivered shall be dated the Closing Date and shall be reasonably
satisfactory as to form and content to each party and its respective counsel.
ARTICLE X
Section 10. Indemnification; Survival.
10.1. Survival; Remedy for Breach. The representations and warranties of
the parties hereto contained herein or in any certificate, Schedule or other
writing attached hereto, or required by the terms hereof to be delivered (and so
delivered), by parties as communicated as of the Closing Date shall survive the
Closing Date for a period of two (2) years, except as to tax matters as set
forth in Section 5.6, litigation matters as set froth in Section 5.7,
environmental matters as set forth in Section 5.15 and pension matters as set
forth in Section 5.10, all of which shall survive for a period equal to the
applicable statute of limitations. Notwithstanding the preceding sentence, the
right to indemnity with respect to any representation or warranty in respect of
which indemnity may be sought under Section 10 hereof shall survive the time at
which it would otherwise terminate if notice of the inaccuracy or breach
thereof, which shall include with reasonable specificity the elements of such
claim, shall have been given to the party against whom such indemnity may be
sought prior to such time.
10.2. Indemnification by Seller and the Shareholders.
(a) Seller and the Shareholders hereby jointly and severally indemnify
Purchaser and Medialink and their respective officers, directors, controlling
persons (if any), employees, attorneys, agents and stockholders (the
"Indemnitees") against and agree to hold each of them harmless from any and all
damage, loss, liability, expense (including, without limitation, reasonable
out-of-pocket expense of investigation and attorneys' fees and expenses in
connection with any action, suit or proceeding brought by, against or involving
any Indemnitee) and cost (collectively, "Indemnified Amounts") incurred or
suffered by any Indemnitee arising out of (i) any misrepresentation or breach of
warranty, covenant or agreement made or to be performed by Seller or the
Shareholders pursuant to this Agreement; and (ii) the failure of Seller to
comply with the Bulk Sales Laws. The agreements and indemnities
18
of Seller and the Shareholders contained herein shall be cumulative, except that
the Indemnitees shall not recover more than once for the same Indemnified
Amount.
(b) The Indemnitees each agree to give notice to Seller and the
Shareholders promptly, but in no event later than sixty (60) days after receipt,
after learning of the assertion of any claim, or the commencement of any suit,
action or proceeding, in respect of which indemnity may be sought hereunder.
(c) Seller and the Shareholders shall not be liable under this Section
10.2 for any settlement effected without their consent of any claim, litigation
or proceeding in respect of which indemnity may be sought hereunder, which
consent may not be unreasonably withheld.
(d) The amount required to be paid to an Indemnitee by Seller and the
Shareholders for any Indemnified Amounts hereunder shall be the amount which,
after taking into account the effect of federal, state and local tax laws,
places the Indemnitee in the same position as if the matter giving rise to the
indemnification had not occurred and such payment had not been received. Subject
to the right of set-off set forth in Section 11 hereof, which may be made at any
time, such amounts shall be paid not later than fifteen (15) days after receipt
by Seller and the Shareholders of written notice from the Indemnitee stating
that such Indemnified Amounts are due and payable and the amount thereof and of
the related indemnity payment; provided, however, that any disputed amounts
shall be due and payable within thirty (30) days after such amounts are finally
determined by mutual agreement or a court of competent jurisdiction to be owing
by Seller or the Shareholders to the Indemnitees.
10.3. Indemnification by Medialink and Purchaser.
(a) Each of Medialink and Purchaser hereby indemnifies Seller and the
Shareholders against and agrees to hold them harmless from any and all damage,
loss, liability, expense (including, without limitation, reasonable
out-of-pocket expense of investigation and attorney fees and expenses in
connection with any action, suit or proceeding brought by or against Seller
and/or the Shareholders (collectively, "Indemnified Amounts") incurred or
suffered by Seller and/or the Shareholders arising out of any misrepresentation
or breach of warranty, covenant or agreement made or to be performed by
Medialink or Purchaser pursuant to this Agreement. The agreements and
indemnities of Medialink and Purchaser contained herein shall be cumulative,
except that Seller shall not recover more than once for the same Indemnified
Amount.
(b) Seller agrees to give notice to Medialink and Purchaser promptly,
but in no event later than sixty (60) days after receipt, after learning of the
assertion of any claim, or the commencement of any suit, action or proceeding,
in respect of which indemnity may be sought hereunder.
19
(c) Medialink and Purchaser shall not be liable under this Section
10.3 for any settlement effected without their consent of any claim, litigation
or proceeding in respect of which indemnity may be sought, which consent may not
be unreasonably withheld.
(d) The amount required to be paid to Seller by Medialink and
Purchaser for any Indemnified Amounts hereunder shall be the amount which, after
taking into account the effect of United States, state and local tax laws,
places Seller in the same position as if the matter giving rise to the
indemnification had not occurred and such payment had not been received. Such
amounts shall be paid not later than fifteen (15) days after receipt by
Medialink and Purchaser of written notice from Seller stating that such
Indemnified Amounts are due and payable and the amount thereof and of the
related indemnity payment; provided, however, that any disputed amounts shall be
due and payable within thirty (30) days after such amounts are finally
determined by mutual agreement or a court of competent jurisdiction to be owing
by Medialink and Purchaser to Seller.
10.4. Limitations on Indemnification.
(a) Notwithstanding anything to the contrary contained herein, neither
Seller and the Shareholders nor Medialink and Purchaser shall be entitled to any
recovery from the other with respect to any breach of warranty or representation
set forth herein or the indemnification provided for in Sections 10.2 or 10.3
hereof unless and until the aggregate amount of the applicable Indemnified
Amounts suffered, sustained or incurred by the asserting party, or to which such
party becomes subject, by reason of such breach or indemnity, shall exceed in
the aggregate Fifteen Thousand ($15,000) Dollars (the "Cushion Amount"). In the
event that the sum of the applicable Indemnified Amounts for which no
indemnification has been made hereunder (the "Aggregate Indemnified Amount")
shall exceed the Cushion Amount, the indemnification obligations imposed herein
shall apply to all amounts in excess of the Cushion Amount.
(b) Notwithstanding anything to the contrary contained herein, the
Cushion Amount set forth herein shall not apply in the event that the Seller,
the Shareholders, Medialink or Purchaser, as the case may be, fraudulently (i)
omitted a material fact or (ii) misrepresented or breached any representation or
warranty in this Agreement or in any agreement or schedule required to be
delivered by Seller, the Shareholders, Medialink or Purchaser, as the case may
be.
10.5. Conduct of Litigation. Each party indemnified under the provisions of
this Agreement, upon receipt of written notice of any claim or the service of a
summons or other initial legal process upon it in any action instituted against
it, in respect of the agreements contained in this Agreement, shall promptly
give written notice of such claim, or the commencement of such action, or threat
thereof, to the party from whom indemnity shall be sought hereunder. Each
indemnifying party shall be entitled at its own expense to participate in the
defense of such claim or action, or,
20
if it shall elect, to assume such defense, in which event such defense shall be
conducted by counsel chosen by such indemnifying party, unless the indemnified
party reasonably objects to the use of such counsel, in such event counsel may
be any counsel reasonably satisfactory to the indemnified party against whom
such claim is asserted or who shall be the defendant in such action, and such
indemnified party shall bear all fees and expenses of any additional counsel
retained by it or them; provided, however, that if the indemnified party
reasonably determines that there may be a conflict between the positions of the
indemnifying party and the indemnified party in conducting the defense of such
action or that there are legal defenses available to such indemnified party
different from or in addition to those available to the indemnifying party, then
counsel for the indemnified party shall be entitled, if the indemnified party so
elects, to conduct the defense to the extent reasonably determined by such
counsel to be necessary to protect the interests of the indemnified party, at
the expense of the indemnifying party. If the indemnifying party shall elect not
to assume the defense of such claim or action, such indemnifying party will
reimburse such indemnified party for the reasonable fees and expenses of any
counsel retained by it, and shall be bound by the results obtained by the
indemnified party; provided, however, that no such claim or action shall be
settled without the written consent of the indemnifying party.
ARTICLE XI
Section 11. Right of Set-Off.
11.1. Set-Off for Indemnified Amounts.
(a) Subject to the provisions of Section 11.2, Medialink and/or
Purchaser may at any time, set-off from the consideration, whether the Shares,
any stock options granted by Medialink to the Shareholders, as evidenced by
stock option agreements (the "Stock Option Agreements") or the non-compete
payments (the "Payment Amounts"), due and payable to Seller and/or any of the
Shareholders of Seller, any amount or amounts which Medialink and/or Purchaser,
in their sole and absolute discretion, shall determine may be necessary to
satisfy (i) any Indemnified Amount due to any Indemnitee or (ii) any
prospective, pending or threatened loss, liability, expense or cost which may
reasonably be expected to give rise to an indemnity obligation of Seller or any
of the Shareholders (collectively, a "Set-Off Amount"). Any Set-Off Amounts
shall be delivered and paid into an interest bearing escrow account to be
established pursuant to the terms of the Escrow Agreement. The terms of the
Escrow Agreement shall provide that Purchaser's counsel shall serve as escrow
agent thereunder (the "Escrow Agent").
(b) In addition to the right of set-off set forth in subsection (a)
above, Medialink and/or Purchaser may at any time direct the Escrow Agent to
retain from the Shares held by the Escrow Agent, any Shares or proceeds of the
sale of such Shares which Medialink and/or Purchaser in their sole and absolute
21
discretion shall determine may be necessary to satisfy any Indemnified Amount or
Set-Off Amount; such Set-Off Amount to be determined by Medialink and/or
Purchaser in their sole and absolute discretion, subject to the provisions of
the Escrow Agreement. Medialink and/or Purchaser shall exercise such right of
retention against all or a portion of the Shares by giving written notice of the
exercise of such right of retention to the Shareholders. Such Shares shall
remain in escrow and be designated set-off shares and shall only be released
from escrow upon the agreement of the parties hereto or by order of a court of
competent jurisdiction.
11.2. Directions on Payment of Indemnified Amounts. In the event Medialink
and/or Purchaser seeks to recover Indemnified Amounts or Set-Off Amounts from
time to time from Seller and/or the Shareholders, as the case may be, pursuant
to Sections 10 or 11, Medialink and/or Purchaser must, prior to any set-off for
payments from the Payment Amounts, first notify Seller and the Shareholders in
writing as to the reason for such set-off and then seek to set-off against the
Shares held under the Escrow Agreement so long as the Fair Market Value of the
Shares is in excess of the outstanding Indemnified Amounts sought; provided
however, that if the Indemnified Amounts are in excess of such Fair Market
Value, Medialink and/or Purchaser shall seek to recover against the Shares the
Indemnified Amounts, prior to any set-off, up to the amount of the Fair Market
Value of the Shares and any excess shall be recovered, by set-off or otherwise,
against the consideration due under the Employment Agreements, the Non-Compete
Agreements and/or the Stock Option Agreements. The Fair Market Value of the
Shares shall be determined as of the date of set-off. Nothing herein shall be
deemed to impair, diminish, or restrict Medalink's and/or Purchaser's
indemnification rights or set-off rights.
ARTICLE XII
Section 12. Miscellaneous.
12.1. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if sent by nationally recognized overnight
courier or by registered or certified mail, postage prepaid, addressed as
follows:
To Seller:
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
To Shareholders:
Xxxx Xxxxxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
00
Xxxxxxx Xxxxxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Xxxxx Xxxxxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Copy to:
Neville Xxxxxx Xxxxx & XxXxxx
Three Landmark Square
Stamford, Connecticut 06901
Attention: Xxxxxxx X. Xxxxxxx, Esq.
To Medialink:
Video Broadcasting Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. J. Xxxxxx XxXxxxxxx
To Purchaser:
Medialink PR Data Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. J. Xxxxxx XxXxxxxxx
Copy to:
Tashlik, Xxxxxxxx & Xxxxxxx P.C.
000 Xxxxxxxx Xxxx.
Xxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xx. Tashlik, Esq.
or such other addresses as shall be furnished by like notice by such party. Any
such notice or communication shall be effective two days after it is sent.
12.2. Brokers. Seller, Medialink and Purchaser each represents to the other
that it has not dealt with any broker for this transaction and has not employed
any investment banker, broker, finder or intermediary in connection with the
transactions contemplated hereby who might be entitled to a fee or any
commission upon consummation of the transactions contemplated hereby. Medialink,
Purchaser and Seller agree to indemnify and hold each other harmless from and
against any and all loss, damage, liability, cost or expense (including
attorneys' fees) suffered or incurred as a result of any breach of the foregoing
representations by the other party.
23
12.3. Expenses. All legal, accounting and other costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses.
12.4. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors. The
parties may not assign this Agreement.
12.5. Entire Agreement; Amendment. This Agreement embodies the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings with respect thereto. This
Agreement may be amended, and any provision hereof waived, but only in writing
signed by the party against whom such amendment or waiver is sought to be
enforced.
12.6. Counterparts. This Agreement may be executed in counterparts, all of
which shall together constitute one and the same instrument.
12.7. Agreement to Take Necessary and Desirable Actions. Seller, Medialink
and Purchaser each agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be reasonably necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.
12.8. Headings. The headings of Articles and Sections herein are inserted
for convenience of reference only and shall be ignored in the construction or
interpretation hereof.
12.9. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the State of New York applicable to contracts made and to be
performed therein without giving effect to the principles of conflict of laws
thereof. Except in respect of any action commenced by a third party in another
jurisdiction, the parties hereto agree that any legal suit, action, or
proceeding against them arising out of or relating to this Agreement shall be
brought exclusively in the United States Federal Courts or New York Supreme
Court, in the State of New York. The parties hereto hereby accept the
jurisdictions of such courts for the purpose of any such action or proceeding,
and agree that venue for any action or proceeding brought in the State of New
York shall lie in the Southern District of New York or Supreme Court, New York
County, as the case may be. Each of the parties hereto hereby irrevocably
consents to the service of process in any action or proceeding in such courts by
the mailing thereof by United States registered or certified mail postage
prepaid at its address set forth herein.
12.10. Consents. Seller, Medialink and Purchaser shall, on or prior to the
Closing Date, use their best efforts to obtain from each person, firm,
association, corporation and governmental authority all consents and approvals
which
24
are necessary to authorize and validate the sale, transfer and assignment of the
assets, property and contracts to be transferred and assigned to Purchaser, and
otherwise to effectuate the purposes of this Agreement; provided, however, that
any expense that may be incurred in obtaining consents to the assignment of any
agreements being assigned hereunder by Seller shall be the sole obligation of
Seller.
12.11. No Implied Waiver. No failure or delay on the part of the parties
hereto to exercise any right, power or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver; nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. All rights and remedies granted herein shall be in addition to other
rights and remedies to which the parties may be entitled at law or in equity.
12.12. No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed on behalf of each
of the parties hereto by their duly authorized officers as of the day and year
first above written.
SHAREHOLDERS:
Xxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxxxxx
PR DATA SYSTEMS, INC.
By: s/Xxxx Xxxxxxxxxx
_______________________________
President
MEDIALINK PR DATA CORPORATION
By: s/J. Xxxxxx XxXxxxxxx
_______________________________
Vice President
VIDEO BROADCASTING CORPORATION
By: s/J. Xxxxxx XxXxxxxxx
_______________________________
Executive Vice President
25
SCHEDULE 2(a)
Machinery and Equipment
SCHEDULE 2(b)
Accounts Receivable
SCHEDULE 2(c)
Inventory
SCHEDULE 2(d)
Patents, Trademarks, Trade Names, Service Marks and Copyrights
SCHEDULE 2(f)
Leasehold Improvements
SCHEDULE 2(g)
Property and Equipment Leases
SCHEDULE 3.2(a)
SBA Loan
SCHEDULE 4.2
Purchase Price Allocation
1. Non-Compete $410,000
2.
3.
SCHEDULE 5.4
Liens
SCHEDULE 5.5
Material Contracts
SCHEDULE 5.7
Litigation
SCHEDULE 5.9
Employees
SCHEDULE 5.10
Employee Plans
SCHEDULE 5.11
Compliance with Laws
SCHEDULE 5.14
Customers and Suppliers
SCHEDULE 5.15
Environmental Matters
SCHEDULE 5.16
Financial Statements
SCHEDULE 6.4
Medialink Financial Information
EXHIBIT A
New WW Note
EXHIBIT B
Escrow Agreement
EXHIBIT C-1
JS Non-Compete Agreement
EXHIBIT C-2
NS Non-Compete Agreement
EXHIBIT C-3
WW Non-Compete Agreement
EXHIBIT D-1
JS Employment Agreement
EXHIBIT D-2
NS Employment Agreement
EXHIBIT D-3
WW Employment Agreement
EXHIBIT E
Lease
EXHIBIT F
Medialink Guarantee
