EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of the 31 day
of August, 2006, by and among DIALOG GROUP, INC., a Delaware corporation
("Dialog Group"), and its wholly-owned subsidiaries, HEALTHCARE DIALOG, INC., a
Delaware corporation ("Healthcare Dialog"), and DATA DIALOG, INC., a Delaware
corporation ("Data Dialog"; together with Dialog Group and Healthcare Dialog,
the "Seller" and each a "Seller Entity"), all with a principal business address
at 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and DIALOG
MARKETING SERVICES, INC., a Delaware corporation, with a principal business
address at 0 Xxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000-0000, or its designee
("Purchaser"). Seller and Purchaser are collectively referred to herein as the
"Parties" and individually as a "Party."
W I T N E S S E T H:
WHEREAS, Seller provides the following services through the identified
entities (collectively such services constitute the "Business"):
Dialog Group, Inc.: is a communications and data services company which
provides technology and database solutions which enable marketers to effectively
advertise, generate leads and manage customers;
Healthcare Dialog: provides agency, communication and marketing services
to the pharmaceutical industry;
Data Dialog: provides consumer and business data to a variety of resellers
and end users; and
WHEREAS, Purchaser, by itself and its affiliates, provides [sales force
automation and sample accountability software, sample fulfillment, list
services, direct marketing support and other services primarily to the
pharmaceutical industry]; and
WHEREAS, Seller wishes to sell, and Purchaser wishes to purchase,
substantially all of the assets of Seller on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the Parties hereto agree as follows:
1. Incorporation by Reference. The recitals set forth above are
incorporated herein by reference.
2. Assets and Consideration.
(i) At the Closing (defined below), Seller shall sell, assign
and transfer to Purchaser, and Purchaser shall purchase and acquire, the Assets
(defined below). The aggregate purchase price for the Assets shall be the sum of
ONE MILLION NINE HUNDRED THOUSAND AND 00/100 ($1,900,000.00) DOLLARS ("Purchase
Price"), payable by Attorney Trust Check or wire transfer of immediately
available funds.
(b) The assets being sold shall consist of the following items, all
of which are owned by Seller (collectively the following constitute the
"Assets"):
(i) All furniture, fixtures and equipment listed on Exhibit
2(b)(ii) attached hereto;
(ii) All general intangibles (including without limitation
contracts with clients, customers and vendors; client, customer, and vendor
databases and lists; customer billing information; employee data and
information; and all other books and records);
(iii) All incomplete orders and work in process identified on
Schedule 2(b)(iii) attached hereto, which list shall be updated as of the
Closing Date (the "Work in Process");
(iv) Seller's telephone and facsimile numbers used in
connection with the Business (the "Numbers"). The Seller agrees to assign to the
Purchaser all of its rights to the use of the Numbers and shall cooperate with
the Purchaser to have the Numbers assigned to the Purchaser by the telephone
company;
(v) All of Seller's intellectual property including without
limitation patents, trademarks, copyrights, service marks and trade names
identified on Schedule 5(f)(i) attached hereto;
(vi) Seller's website(s) and software which powers such
website(s), and all internet U.R.L.'s, all of which are set forth on Schedule
2(b)(vi);
(vii) the right to use the names "Dialog Group," "Healthcare
Dialog," "Data Dialog," and "xxxxxxxxxxxxxxx.xxx";
(viii) the lease for Seller's leasehold office space in New
York, New York, and, at Purchaser's option, the lease for Seller's leasehold
office space in Sunrise, Florida (together the "Leases"); and
(ix) the Restrictive Covenant set forth in Section 15 below.
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(c) Excluded Assets. Unless specifically identified herein, all
other assets, liabilities, debts or obligations belonging to Seller (including
without limitation cash on hand, accounts receivable, accounts payable, and
liabilities, including Accrued Benefits as defined in Section 5(v) below, to
employees for accrued vacations and sick days) are excluded from the sale herein
(the "Excluded Assets"). Purchaser does not assume or agree to pay, satisfy,
discharge or perform, and shall not be deemed by virtue of the execution and
delivery of this Agreement, or of any instrument, paper or document delivered by
it pursuant to this Agreement, or as a result of the consummation of the
transactions contemplated by this Agreement, to have assumed, or to have agreed
to pay, satisfy, discharge or perform, any liability, obligation or indebtedness
of Seller (whether absolute, accrued, or contingent, whether filed or asserted
prior to or after the closing and whether arising out of or in any way connected
with the Assets or the Business of Seller or otherwise) all of which Seller
agrees to pay, satisfy, discharge and perform and with respect to which Seller
shall fully indemnify and hold Purchaser harmless.
(d) Allocation. The Purchase Price shall be allocated for tax
purposes in the manner set forth on Schedule 2(d). Each Party agrees to file
with the Internal Revenue Service all applicable forms reflecting such
allocation.
3. Closing. The transactions contemplated by this Agreement shall be
consummated at a closing (the "Closing") on the third business day after the
sale is approved by the Seller's shareholders (the "Closing Date") or sooner if
mutually agreed upon by the Parties. The Closing shall be held at the offices of
Cole, Schotz, Meisel, Xxxxxx & Xxxxxxx, P.A., or at such other place or in such
other manner as may be mutually agreed upon by the Parties. If (i) a Closing
hereunder does not occur because of Seller's breach hereunder, or (ii) Seller
accepts another offer for the stock or assets of the Business after the
execution of this Agreement by the Parties, Seller shall pay to Purchaser the
sum of $150,000.00 in cash as liquidated damages, in lieu of any other damages
at law or in equity which Purchaser may have against Seller, within 30 days of
acceptance of such offer.
4. Deliveries.
(a) By Seller. At the Closing, Seller shall deliver or cause to be
delivered to Purchaser:
(i) an executed xxxx of sale for the Assets in the form
attached hereto as Exhibit 4(a)(i), including the unearned portion of deposits
and funds received for the uncompleted portion of the Work in Process;
(ii) an executed assignment of all of the Assets which are not
personal property or which otherwise require an assignment, in the form attached
hereto as Exhibit 4(a)(ii);
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(iii) a Certificate of Good Standing for each Seller Entity
from its state of incorporation and each state in which it conducts business as
a foreign entity, dated not more than thirty (30) days prior to the Closing
Date;
(iv) a Written Consent of the directors and shareholders of
each Seller Entity dated as of the Closing Date authorizing the execution,
delivery and consummation of this Agreement and the transactions contemplated
hereby;
(v) a copy of the fully executed assignment from each Seller
Entity to Purchaser of all intellectual property owned by each Seller Entity,
the form of which is attached hereto as Exhibit 4(a)(v) (the "Assignment of
Marks");
(vi) a certificate executed by the Secretary President of each
Seller Entity, with incumbency, certifying and attaching: (i) true and complete
copies of resolutions adopted by the Board of Directors and the shareholders,
and confirming that such resolutions have not been amended or modified in any
respect and remain in full force and effect as of the date thereof; and (ii)
true and complete copies of each Seller Entity's organizational documents;
(vii) a bring-down certificate from Seller confirming that all
representations and warranties of Seller contained herein are true as of the
Closing Date;
(viii) employment agreements for Xxxxx XxXxxxxxxxx ("X.
XxXxxxxxxxx"), Xxxxxxx XxXxxxxxxxx, Xx. ("X. XxXxxxxxxxx") and Xxxxx Xxxxxxxxxx
(collectively the "Executives") in the form attached hereto as Exhibit 4(a)(vii)
signed by each of them (the "Employment Agreements");
(ix) a legal opinion of Seller' counsel in form and substance
as set forth in Exhibit 4(a)(ix);
(x) a Shareholders Agreement for Purchaser in the form
attached hereto as Exhibit 4(a)(x) (the "Shareholders Agreement") signed by the
Executives;
(xi) with respect to the Leases, an Assignment and Assumption
of Leases;
(xii) an updated version of Exhibit 5(v); and
(xiii) such other documents as may be specified in this
Agreement or any exhibit or schedule hereto, or which may otherwise be
reasonably required by Purchaser to effectuate the transactions contemplated by
this Agreement.
(b) By Purchaser. At the Closing, Purchaser shall deliver or cause
to be delivered to Seller:
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(i) the Purchase Price;
(ii) the Employment Agreements signed by the Purchaser;
(iii) the Shareholders Agreement signed by the Purchaser; and
(iv) such other documents as may be specified in this
Agreement or any exhibit or schedule hereto, or which may otherwise be
reasonably required by Seller to effectuate the transactions contemplated by
this Agreement.
5. Representations and Warranties by Seller. As an inducement to enter
into this Agreement, Seller hereby represent and warrant to Purchaser that the
following are true and shall remain true as of the Closing Date:
(a) Corporate Organization and Authority. Each Seller Entity is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware. Each Seller Entity has full corporate power and
authority to conduct its business as now conducted, own its assets and enter
into and perform its obligations under this Agreement. Seller's execution,
delivery and performance of this Agreement and the sale to Purchaser of the
Assets herein have been duly authorized by all requisite corporate action on the
part of Seller.
(b) Absence of Conflicts and Consent Requirements. Seller's
execution and delivery of this Agreement and performance of its obligations
hereunder, including the sale of the Assets, will not conflict with, violate or
result in any default under Seller's Articles of Incorporation or Bylaws or any
mortgage, indenture, agreement, instrument or other contract to which Seller is
a party or by which Seller or its property is bound except for its loan and
collateral agreements with Commodore Factors Corp., nor will they violate any
judgment, order, decree, law, statute, regulation or other judicial or
governmental restriction to which Seller is subject. Seller's execution and
delivery of this Agreement and performance of its obligations hereunder,
including the sale of the Assets, will not require the consent of, or any prior
filing with or notice to, any governmental authority or other third party.
(c) Valid and Binding Obligations. This Agreement constitutes the
valid and legally binding obligation of Seller, enforceable in accordance with
its terms subject only to the effect of bankruptcy, insolvency, reorganization,
moratorium, and other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and the award by courts of
money damages rather than specific performance of contractual provisions
involving matters other than the payment of money.
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(d) Litigation. Except as set forth on Schedule 5(d) attached
hereto, Seller is not a party to any pending suits, actions, or litigation, or
any bankruptcy, insolvency, administrative, arbitration, or other similar
proceedings or investigation, whether before any court or any federal, state,
municipal, or other governmental department, commission, board, bureau, agency
or instrumentality, nor does Seller know of any threatened proceeding or
litigation against it. In addition, Seller has taken no acts, or withheld from
taking any acts, likely to result in any such proceeding or litigation against
Seller.
(e) Bankruptcy. Except as set forth on Schedule 5(e) attached
hereto, Seller has not: (i) filed any petition in bankruptcy, (ii) made any
assignment for the benefit of creditors, (iii) been adjudicated insolvent or
bankrupt, or (iv) had filed against it an involuntary petition in bankruptcy.
(f) Title to Assets.
(i) Intellectual Property. All patents, patent applications,
trademarks, trademark applications, service marks, service xxxx applications,
copyrights, copyright applications, design rights, trade names, assumed names,
trade secrets, licenses, computer software, computer source code, and internet
domain names owned or utilized by Seller in connection with the Business
(collectively the foregoing constitute the "Intellectual Property") are set
forth on Schedule 5(f)(i) and are valid and have been duly registered or filed
with all appropriate governmental authorities and constitute all of the
Intellectual Property which is necessary for the operation of the Business;
there is no objection to or pending challenge to the validity of any of such
Intellectual Property; and there are no grounds for any objection or challenge.
In connection with the Business, each patent, patent application, patent
license, trademark, trademark application, trademark license, service xxxx,
service xxxx application, service xxxx license, design right, copyright,
copyright application, or copyright license and computer software and computer
source code owned or held by Seller and all trade secrets used by Seller consist
of original material or property developed by Seller or was lawfully acquired by
Seller from the proper and lawful owner thereof. Each of such items has been
maintained so as to preserve the value thereof from the date of creation or
acquisition thereof.
(ii) Rights. Seller owns and has the right to use the
Intellectual Property in connection with the Business as conducted. The use of
the Intellectual Property by Seller in the Business as conducted does not
violate or infringe the rights of any other person, nor is Seller a party to any
agreement with any other person or entity with respect to the use of the
Intellectual Property.
(iii) Title to Assets. Except as set forth on Schedule
5(f)(iii) attached hereto, Seller has good and marketable title to the Assets
conveyed herein, free and clear of all liens, security interests, licenses and
encumbrances once they are released from the lien of Commodore Factors Corp.,
has the right to convey the Assets to the Purchaser, and at the Closing shall
have conveyed to Purchaser good and marketable title to the Assets free and
clear of all liens, security interests, licenses and encumbrances.
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(g) Compliance with Law. Seller is in compliance with all applicable
laws (including duties imposed by common law), rules, regulations, orders,
ordinances, judgments and decrees of all governmental authorities (federal,
state, local and foreign), and all requirements imposed under building, zoning,
occupational safety and health, pension, environmental control, toxic waste,
equal opportunity or similar laws, rules, regulations and ordinances applicable
to or otherwise concerning the Business, and the assets, products and employees
of Seller.
(h) Hazardous Substances. Seller has not caused or permitted the
Assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer, produce, leak or process Hazardous Substances or
other dangerous or toxic substances or solid waste (and Seller has no knowledge
that the Assets have been so used), except in compliance with all applicable
federal, state and local laws or regulations, and has not caused or permitted
and there has not been a release, spill or discharge (as such terms are defined
in applicable federal, state and local laws) of any Hazardous Substances on or
off-site of Seller's plant, including any site to which Seller has sent
materials for disposal. "Hazardous Substances" for purposes of this Agreement
shall mean any material or substance which is defined, regulated or classified
under applicable federal, state or local law as a hazardous or toxic substance
or which presents a risk to human health or the environment.
(i) Financial Statements. All tax returns, balance sheets,
statements of income, cash flow and retained earnings and all other financial
statements of Seller which have been provided to Purchaser (the "Financial
Statement") are: (i) accurate, correct and complete, (ii) prepared in accordance
with the books of account and records of Seller, (iii) fair presentations of the
financial condition and the results of operations of Seller as of the dates and
for the periods indicated, and (iv) prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered thereby.
(j) Compliance with Laws. Seller has complied and is currently in
compliance with all laws, regulations, rules, orders, permits, judgments,
decrees and other requirements and policies imposed by any governmental
authority applicable to the Business and the Seller. Seller has not received any
notice or citation for noncompliance with any of the foregoing, and there exists
no condition, situation or circumstance, nor has there existed such a condition,
situation or circumstance, which, after notice or lapse of time, or both, would
constitute noncompliance with or give rise to future liability with regard to
any of the foregoing. Seller has all licenses, permits, approvals, or
qualifications from any governmental authority necessary for the conduct of its
Business and all such items are in full force and effect.
(k) Actions by Seller . Seller has taken no actions to bind or
obligate Seller outside the ordinary course of Seller's business, and has not
caused any liability (whether asserted or unasserted, direct or indirect,
absolute or contingent, liquidated or unliquidated, accrued or unaccrued, and
due or to become due) to exist or accrue against Seller or its assets, except
for liabilities incurred in the ordinary course of the Seller's business.
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(l) Default. Except as specified on Schedule 5(l), Seller is not in
default of any of its material obligations, contracts or commitments in any
respect, or in breach of any negative or affirmative covenant placed on it by
its creditors and Seller has not been notified of any such defaults or breaches.
(m) Taxes.
(i) Seller has filed or will file when due, or with
appropriate extension date(s), all federal, state, city and local Tax Returns
(as hereinafter defined) which it is required to file. Schedule 5(m) lists each
jurisdiction in which Seller is required to file Tax Returns or pay Taxes. All
Tax Returns filed or to be filed by Seller are or will be true, correct and
complete. Except as shown on Schedule 5(m), Seller has paid or will pay all
taxes, assessments and penalties shown due thereon. There are no known disputes
as to taxes payable by Seller which might affect the Business or the rights of
Purchaser.
(ii) All Taxes, if any, payable by Seller or relating to or
chargeable against its assets, revenues or income through the date hereof were
fully paid by such date or provided for by adequate reserves on Seller's
financial statements, and all similar items due through the Closing Date will
have been fully paid by that date or provided for by adequate reserves on
Seller's financial statements.
(iii) For purposes of this Agreement, the following terms have
the following meanings: "Tax" (and, with correlative meaning, "Taxes" and
"Taxable") means (A) any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax, custom, duty or other
tax government fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any federal or state government entity (a "Tax Authority")
responsible for the imposition of any such tax (domestic or foreign), (B) any
liability for the payment of any amounts of the type described in (A) as a
result of being a member of an affiliated, consolidated, combined or unitary
group for any Taxable period, and (C) any liability for the payment of any
amounts of the type described in (A) or (B) as a result of any express or
implied obligation to indemnify any other person. As used herein, "Tax Return"
shall mean any return, statement, report or form (including, without limitation)
estimated Tax returns and reports, withholding Tax returns and reports and
information reports and returns required to be filed with respect to Taxes.
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(n) Contracts. Except for the agreements identified on Schedule 5(n)
hereto, Seller is not subject to any contracts, commitments, service or other
agreements with any of its vendors or clients.
(o) Material Adverse Changes. Since the latest Financial Statements,
except as set forth on Schedule 5(o) attached hereto, Seller has not incurred
any material liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise), except in the ordinary course of business consistent
with past practice; made any material capital expenditure or commitment
therefor; suffered any material adverse change in the business, results of
operations, or financial condition of Seller; increased its long-term
indebtedness; entered into any material contracts, except as may be set forth in
Schedule 5(n); or otherwise conducted its business or entered into any
transaction, except in the usual and ordinary manner and in the ordinary course
of business consistent with past practice.
(p) Brokers and Advisors. Seller has not taken any action which
would give rise to a valid claim against any party hereto for a brokerage
commission, finder's fee, counseling or advisory fee, or like payment.
(q) Expertise. Each Seller Entity and their respective directors,
officers and its professional employees have expertise in the businesses
identified in the recitals to this Agreement.
(r) Absence of Certain Conditions. There has been no material
adverse effect and there is no condition, development or contingency of any kind
existing or in prospect which, so far as reasonably can be foreseen at this
time, may result in any material adverse effect to the Business.
(s) Insurance. Set forth on Schedule 5(s), attached hereto is a
complete list of insurance policies which Seller maintains with respect to its
business, properties or employees and all such policies are in full force and
effect.
(t) Employee Benefit Plans. Set forth on Schedule 5(t) attached
hereto is an accurate and complete list of all "employee benefit plans," within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder ("ERISA") ("Employee
Benefit Plans"). Each Employee Benefit Plan (including any related trust)
complies in form with the requirements of all applicable laws, including,
without limitation, ERISA and the Internal Revenue Code, and has at all times
been maintained and operated in compliance with its terms and the requirements
of all applicable laws, including, without limitation, ERISA and the Internal
Revenue Code. Seller has never maintained or contributed to, or had any
obligation to contribute to (or borne any liability with respect to) any
"multiple employer plan" (within the meaning of the Internal Revenue Code or
ERISA) or any "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA).
Seller does not have any unfunded liabilities pursuant to any Employee Benefit
Plan that is not intended to be qualified under Section 401(a) of the Internal
Revenue Code. There are no actions, suits, claims or disputes pending, or, to
the best knowledge of Seller, threatened, anticipated or expected to be asserted
against or with respect to any Employee Benefit Plan or the assets of any such
plan (other than routine claims for benefits and appeals of denied routine
claims). No civil or criminal action brought pursuant to the provisions of Title
I, Subtitle B, Part 5 of ERISA is pending, threatened, anticipated, or expected
to be asserted against Seller or any fiduciary of any Employee Benefit Plan, in
any case with respect to any Employee Benefit Plan. No Employee Benefit Plan or
any fiduciary thereof has been the direct or indirect subject of an audit,
investigation or examination by any governmental or quasi-governmental agency.
Full payment has been timely made of all amounts which Seller is required, under
applicable law or under any Employee Benefit Plan or any agreement relating to
any Employee Benefit Plan to which Seller is a party, to have paid as
contributions or premiums thereto as of the last day of the most recent fiscal
year of such Employee Benefit Plan ended prior to the date hereof.
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(u) Leased Real Property and Equipment. Seller owns no real
property. Schedule 5(u) contains a list of all real property and equipment
leased to or by Seller or in which Seller has any interest. True and complete
copies of all such leases have been furnished to Purchaser. All such leased real
property is held subject to written leases or other written agreements which are
valid and effective in accordance with their respective terms, and, except as
shown on Schedule 5(u), there are no existing defaults or events of default, or
events which with notice or lapse of time or both would constitute defaults,
thereunder on the part of Seller or any other party thereto. The sale of the
Assets and the consummation of the transactions contemplated by this Agreement
will in no way affect the continuation, validity and effectiveness of any such
lease or require the consent of any third party under any such lease.
(v) Employees. Exhibit 5(v) attached hereto is a complete list of
the current employees of Seller setting forth the salary, benefits and job
description for each employee (collectively, the "Employees"). Such schedule
also shows, as to each Employee, any unused vacation, sick or other days for
which such Employee is permitted to be absent from work with pay. Except as
shown on Exhibit 5(v), Seller has no express or implied obligations or
commitments to any Employee and no express or implied obligations to increase
the salary or benefits of any Employee or to pay any bonus to any Employee.
Other than as set forth on Exhibit 5(v), Seller has no written or oral
employment agreement or dispute with any Employee or former Employee.
(w) Disclosure. Seller has not omitted to state to Purchaser any
material fact relating to this Agreement or the Business which is necessary in
order to make the information given by or on behalf of either Seller to
Purchaser or its representatives at or prior to Closing not misleading or which
if disclosed would reasonably affect the decision of a person considering the
transaction contemplated by this Agreement.
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6. Purchaser's Representations and Warranties. Purchaser hereby represents
and warrants to Seller as follows:
(a) Organization; Authority. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Purchaser has the full right, power and authority, to execute and
deliver this Agreement and to carry out the transactions contemplated hereby and
thereby. All corporate and other acts or proceedings required to be taken by it
to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby and thereby, have been duly and properly taken.
(b) Execution. This Agreement has been duly executed and delivered
by, and constitutes a valid and binding obligation of Purchaser, enforceable
against it in accordance with its terms subject only to the effect of
bankruptcy, insolvency, reorganization, moratorium, and other similar laws
relating to or affecting creditors' rights generally and court decisions with
respect thereto, and the award by courts of money damages rather than specific
performance of contractual provisions involving matters other than the payment
of money.
(c) Litigation. Purchaser is not a party to any pending suits,
actions, or litigation, or any bankruptcy, insolvency, administrative,
arbitration, or other similar proceedings or investigation, whether before any
court or any federal, state, municipal, or other governmental department,
commission, board, bureau, agency or instrumentality, nor does Purchaser know of
any threatened proceeding or litigation against Purchaser. No judgments or liens
currently exist against Purchaser which would affect Purchaser's ability to
consummate the transactions contemplated by this Agreement.
7. Covenants and Agreements.
(a) Access to Information. Commencing on the date hereof and
continuing for a period of thirty (30) days (the "Due Diligence Period"),
Purchaser and its counsel, accountants, agents and advisors shall have access,
upon reasonable notice and during normal business hours, to review all records,
files, permits, instruments, documents, contracts, financial condition and
prospects of Seller including, without limitation any of the foregoing which
have been delivered to Purchaser prior to the date of this Agreement and, upon
reasonable notice, shall be furnished copies of all relevant documents, records
and other information related to the Business, financial condition and prospects
of Seller. Purchaser and its counsel, accountants, agents and advisors shall
have the right upon reasonable notice to inspect and audit all relevant books
and records of Seller during the Due Diligence Period.
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(b) Conduct of Business in Normal Course. Seller covenants and
agrees, from and after the date of this Agreement and until the Closing Date, to
use reasonable efforts consistent with good business judgment: to keep Seller's
present business organization intact; to keep available the services of its
present employees; to preserve its present relationships with entities or
persons having business dealings with it; generally to operate the Business in
the ordinary and regular course consistent with its prior practices; to maintain
its books and records in accordance with good business practice, on a basis
consistent with prior practice; and to maintain all certificates and permits
necessary for the conduct of its business as currently conducted.
(c) Consent. Each of the Parties hereto will use its commercially
reasonable good efforts and shall fully cooperate with each other Party to make
promptly all registrations, filings and applications, give all notices and
obtain all consents, permits, orders, qualifications and waivers necessary for
the consummation of the transactions contemplated hereby or that hereafter may
be necessary to effectuate the transfer, assignment or renewal of any contract,
license, approval or authorization.
(d) Notification of Certain Matters. Each Party hereto agrees to
give prompt notice to the other of (i) the occurrence, or failure to occur, of
any event which occurrence or failure to occur would be likely to cause any of
its representations or warranties contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing Date, (ii) any material failure on its part to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of or the failure to deliver any
notice pursuant to this Section 7(d) shall not limit or otherwise affect the
remedies available hereunder to the Party receiving such notice, or (iii) the
discovery in the course of due diligence of any inaccuracy in any representation
or other provision of this Agreement.
(e) No Conflicts. Seller represents, covenants and warrants that
after the date hereof it shall not enter into any agreement of any kind which
conflicts with, violates or which, given the passage of time, would conflict
with or violate the terms of this Agreement.
8. Conditions Precedent to Seller's Obligation to Close. The obligation of
Seller to sell the Assets pursuant to this Agreement is subject to the
satisfaction, at or before the Closing, of the conditions set out below:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Purchaser shall be true and correct as of the date when made
and as of Closing Date as though made at that time.
(b) Performance by Purchaser. Purchaser shall have performed,
satisfied and complied with all covenants, agreements and conditions required by
this Agreement and Seller shall have received certificates attesting thereto
from Purchaser.
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(c) Employment and Shareholders' Agreements. The Purchaser shall
have executed the Executives' Employment Agreements and the Shareholders'
Agreement.
(d) Governmental Authorizations; Consents. If required, Purchaser
shall have obtained all governmental authorizations and consents required for
the consummation of the transactions contemplated under this Agreement.
9. Conditions Precedent to Purchaser's Obligations to Close. The
obligation of Purchaser to purchase the Assets is subject to the satisfaction,
at or before the Closing, of the conditions set out below:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Seller shall be true and correct as of the date when made and
as of Closing Date as though made at that time.
(b) Performance by Seller. Seller shall have performed, satisfied
and complied with all covenants, agreements and conditions required by this
Agreement and Purchaser shall have received certificates attesting thereto from
Seller.
(c) Due Diligence. On or prior to the expiration of the Due
Diligence Period, Purchaser shall not have given written notice to Seller of its
decision to terminate this Agreement as a result of its dissatisfaction with the
due diligence which it conducted, received or reviewed with respect to Seller.
(d) Consents. Seller shall have obtained the consents set forth on
Schedule 9(d) attached hereto.
(e) Authorizations. Seller shall have obtained all authorizations,
permits, consents, licenses and approvals required by law, if any, for the
consummation of the transactions contemplated by this Agreement.
(f) Bulk Sale. Purchaser, at its option, may comply with the
provision of the New York Bulk Sales Act and Seller will fully cooperate with
Purchaser upon its election to so comply. Purchaser shall have obtained a
response to the Bulk Sale Notice from the New York State Department of Tax and
Finance either (i) confirming that Seller owes no taxes, or (ii) stating that an
identified portion of the Purchase Price must be held back at Closing and placed
into escrow with Purchaser's attorney until Seller files and pays outstanding
taxes and/or tax filings.
(g) Schedules. The Schedules to this Agreement prepared by Seller,
as the same shall be amended and supplemented, shall be in form and substance
satisfactory to Purchaser.
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(h) Receipt of Seller's Lender's Approval. Seller shall have
received written consent from its lender with respect to the sale of Assets and
a payoff letter indicating that the lender's blanket lien shall be terminated
upon receipt of a sum set forth in the payoff letter.
(i) {Intentionally Omitted}
(j) Absence of Litigation. There shall not have been issued and be
in effect any order of any court or tribunal of competent jurisdiction which (i)
prohibits or makes illegal the transactions contemplated hereunder or under this
Agreement, or (ii) would impose limitations on the ability of Purchaser to
effectively exercise full rights of ownership of the Assets as a result of the
transactions contemplated hereby or thereby.
(k) Execution of Employment Agreements. The Executives shall have
executed the Employment Agreements.
(l) Execution of Shareholders' Agreement. The Executives shall have
executed the Shareholders' Agreement.
(m) No Adverse Change. No material adverse change, in Purchaser's
sole opinion, shall have occurred with respect to Seller or the Business.
(n) Landlord Consent. The landlord of the Sunrise property shall
have consented in writing to the assignment of the Lease to Purchaser, if such
consent is required by that Lease.
(o) Proceedings Satisfactory. All proceedings, matters, documents
and instruments provided for herein, all transactions contemplated hereby and
thereby, and the Business and operations of Seller shall be reasonably
satisfactory in all material respects to Purchaser and its counsel.
10. Indemnification. Seller will reimburse, indemnify and hold harmless
Purchaser and its affiliates, parent, and subsidiaries, and its and their
officers, directors, shareholders, successors and assigns (an "Indemnified
Party") against and in respect of any and all claims (including those that if
successful would constitute an indemnifiable claim), damages, losses,
deficiencies, liabilities, remediation expenses, penalties, and any other costs
and expenses (whether direct, incidental or consequential), and including
reasonable legal fees and expenses incurred or suffered by any Indemnified
Party, whether or not involving a third party claim, that results from, relates
to or arises out of (i) any misrepresentation, breach of warranty or
representation, or nonfulfillment of any agreement or covenant on the part of
the Seller under this Agreement, or from any misrepresentation in or omission
from any certificate, schedule, statement, document or instrument furnished to
Purchaser pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement determined without regard to any knowledge or
materiality limitation; (ii) the operation or ownership of the Assets prior to
the Closing Date, (iii) any claims by Seller or its successors and assigns in
connection with Purchaser's use of the name "Dialog Marketing Services, Inc."
and (iv) the enforcement of this indemnification.
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11. Survival. All covenants and agreements contained in this Agreement or
any agreement or other document delivered pursuant hereto or thereto shall
survive the Closing and be enforceable until the covenant or agreement has been
fully performed. All representations and warranties contained in this Agreement
or in any agreement or other document delivered pursuant hereto or thereto shall
survive the Closing for a period of three (3) years. The representations and
warranties set forth in this Agreement or in any agreement or other document
delivered pursuant hereto or thereto shall not be affected by any investigation,
verification or examination by any party hereto or by anyone on behalf of any
such party.
12. Non-Disparagement. Seller represents, covenants and warrants that
after the date hereof it shall refrain from any and all actions, remarks and
comments which might tend to disparage Purchaser, its subsidiaries or
affiliates, or any of their respective officers, directors, members, managers,
shareholders, employees, agents, suppliers or customers.
13. Employees and Employee Benefits.
(a) Executives. Purchaser shall hire the Executives with titles,
positions, base pay, benefits and other terms and conditions of employment as
reflected in the Employment Agreements.
(b) Seller's Retained Employment Liabilities. Seller shall retain
responsibility for salary, wages, commissions, bonuses, sick and leave time,
benefits, related payroll taxes and all other liabilities for the Executives and
the Employees for all periods up to and including the Closing Date, and
thereafter for all Employees not hired by Purchaser. All accrued benefits which
are payable to the Employees but which remain unpaid immediately prior to the
Closing Date may be referred to as the "Accrued Benefits." After the Closing
Date, Purchaser shall have responsibility for salary, wages, commissions,
vacation, sick and leave time, benefits, related payroll taxes and all other
liabilities, except the Accrued Benefits, which accrue after the Closing Date
with respect to the Executives and any other Employees who are offered and who
accept employment with Purchaser.
15
(c) COBRA. Seller shall have the sole responsibility and obligation
for complying with the requirements of COBRA applicable to any termination of
employment or any other qualifying event within the meaning of COBRA which
occurred on or before the Closing Date with respect to the Executives or the
other Employees. Purchaser shall have the sole responsibility and obligation for
complying with the requirements of COBRA applicable to any termination of
employment or any other qualifying event within the meaning of COBRA which
occurs following the Closing Date with respect to the Executives or other
Employees who are offered and who accept employment with Purchaser.
(d) No Obligation to Offer Employment. Seller acknowledges and
agrees that Purchaser shall have no obligation to offer employment to Seller's
Employees, other than the Executives.
14. Confidentiality. The Parties acknowledge and agree that each Party may
become aware of certain trade secrets, plans, concepts, ideas, intellectual
property, and other information pertaining to the other Party's business which
is valuable, special and unique, as well as information pertaining to customers,
clients, vendors, markets, pricing policies, products, and technical processes
("Information"). Accordingly, each Party represents, covenants and warrants to
the other Party, after the date hereof, to: (a) treat all of the Information as
confidential; (b) not disclose the Information to any third party other than to
accounting, legal and bank professionals rendering professional services to such
Party; (c) not use the Information, directly or indirectly, except in connection
with the performance of its obligations under this Agreement; and (d) inform its
employees and agents having access to the Information of the restrictions on
disclosure and use of such Information and of the information contained in this
Agreement, and require such employees to abide by such restrictions.
Notwithstanding the foregoing, the obligations of the Parties under this Section
14 shall not extend to any Information: (i) which at the time of disclosure is
in, or thereafter becomes part of, the public domain by publication or
otherwise, except through a breach of this Agreement or any other
confidentiality undertaking; or (ii) which a Party receives from a third party,
provided that such information was not obtained by said third party under an
obligation of confidence. Upon demand of a Party or upon termination of this
Agreement for any reason, a Party shall deliver to the other Party all of the
Information subject to restrictions under this Section. The foregoing
restrictions shall not limit Purchaser from using the Assets after the Closing
in the operation of the Business or otherwise.
15. Restrictive Covenant.
(a) Non-Compete and No Poach. Seller covenants, warrants and agrees
that the Seller Entities shall not, directly or indirectly, whether for their
own benefit or for the benefit of any other person or entity, after the Closing
and for a period of three (3) years thereafter:
(i) {Intentionally Omitted};
(ii) employ, recruit or otherwise solicit, induce or influence
any person to leave employment with Purchaser or its subsidiaries or affiliates;
16
(iii) recruit, retain, hire or engage as an independent
contractor or consultant any person or entity who was an independent contractor
or consultant (or any employee of such independent contractor or consultant) to
Purchaser or it subsidiaries or affiliates; or
(iv) attempt any of the foregoing.
(b) Carveout. Notwithstanding the foregoing, the no poach
restrictions set forth in Section 15(a) shall not apply to employees or
independent contractors hired in response to advertisements placed in
newspapers, magazines and other recruitment media of general circulation.
16. Remedies. The Parties acknowledge and agree that, in the event of a
breach or threatened breach of Sections 14 or 15 of this Agreement (relating to
confidentiality and no poaching, respectively), Purchaser would be irreparably
damaged and monetary damages would not provide an adequate remedy. Accordingly,
each of the Parties agrees that, in addition to any and all other rights which
may be available, at law or in equity, Purchaser shall be entitled to injunctive
relief without posting bond and/or specifically to enforce the terms and
provisions hereof in any court of competent jurisdiction.
17. Confidentiality of Transaction. The existence and content of this
Agreement and the intention of the Parties to pursue this transaction are
confidential (the "Confidential Information"). The Parties represent and warrant
to each other that they shall not disclose any Confidential Information to any
third party, including but not limited to Seller's or Purchaser's respective
employees, agents, vendors, customers and clients (other than to their
respective legal and accounting professionals and bankers), without the express
written consent of all of such other parties, except (i) to comply with filing
requirements required of publicly-traded companies, and (ii) for the sake of
obtaining shareholder and director consent for the transactions contemplated
hereby.
18. No Shop. Seller covenants and agrees that after shareholder approval,
Seller shall not shop, sell or attempt to sell the Assets, other than in the
ordinary course of business, to any person or entity other than Purchaser.
19. Burden and Benefit; Assignment. This Agreement shall be binding upon,
and inure to the benefit of, the Parties hereto and there respective successors
and assigns. No Party shall assign any of its respective rights or obligations
hereunder without the prior written consent of the other Party.
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20. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if:
(a) personally delivered, (b) sent by certified mail, return receipt requested,
or (c) sent by reliable overnight courier (i.e., Federal Express) to the Party
at the addresses set forth on Page 1 of this Agreement (or such other addresses
that shall be given in writing by any Party to the other Party, with a copy of
such notice to the other Party). In addition, copies of such notices shall also
be sent to:
Purchaser's counsel: Xxxx Xxxxxx Xxxxxx Xxxxxx & Xxxxxxx, P.A.
Court Plaza North
00 Xxxx Xxxxxx, X.X. Xxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
Seller's counsel: Xxxx Xxxx Xxxxxx, Esq.
Suite 400E, 0000 Xxxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Fax: 000.000.0000
21. Waivers and Amendments. No delay by any Party in exercising any right
or remedy shall operate as a waiver of such right or remedy, and no waiver of
any right or remedy by any party shall operate to waive future compliance with
such right or future exercise of such remedy or affect any other right or
remedy. This Agreement may be amended, modified or supplemented only by a
written instrument executed by the Parties.
22. Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the Parties intend that there shall be added as part of this
Agreement a provision which is valid, enforceable and as similar as possible to
such invalid or unenforceable provision.
23. Titles and Headings. The Section headings contained in this Agreement
are solely for convenience of reference and shall not affect the meaning or
interpretation of this Agreement or of any term or provision hereof.
24. Counterpart Execution. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together, shall constitute one (1) and the same instrument. Facsimile signatures
shall be sufficient for the execution of this Agreement.
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25. Governing Law. This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of New Jersey without regard
to its conflict of law rules. The Parties hereto irrevocably consent to the
jurisdiction of the Superior Court located in the State of New Jersey, County of
Essex in connection with any action or proceeding arising out of or relating to
this Agreement, and agree that venue shall be proper in such court to the
exclusion of the courts in any other state or country. The Parties further agree
that such designated forum is proper and convenient.
26. Further Assurances and Inspection. Each Party agrees at any time or
times and from time to time, to make, execute and deliver any and all such other
and further instruments or documents and do any and all such acts and/or things
as the other Party shall reasonably require for the purpose of giving full force
and effect to this Agreement.
27. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the Parties with respect to the transactions contemplated
hereby and thereby supersedes all prior agreements, arrangements and
understandings.
28. Expenses. Each of the Parties hereto shall pay its own fees and
expenses in connection with this Agreement and the transactions contemplated
hereby (including the fees of any attorneys, accountants, or others engaged by
such Party and any state or federal taxes incurred as a result of this
Agreement) whether or not the transactions contemplated hereby are consummated.
29. No Announcements. Prior to the Closing Date, no announcements or
notices concerning the transactions contemplated by this Agreement shall be made
without the prior written approval of Purchaser.
30. Name Changes. Seller covenants that immediately after the Closing it
shall cause each Seller Entity other that Dialog Group, Inc. to file a
Certificate of Amendment in such entity's state of incorporation to change the
names to those identified on Schedule 30 attached hereto. Seller consents to the
Purchaser's use of the name "Dialog Marketing Services, Inc.".
31. Loan. At the Closing, Purchaser shall lend up to the sum of $235,000
to X. XxXxxxxxxxx and/or X. XxXxxxxxxxx to be used to satisfy certain debt which
was personally guaranteed or incurred in relation to the Business.
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32. Acknowledgment. SELLER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COLE,
SCHOTZ, MEISEL, XXXXXX & XXXXXXX, P.A. (THE "FIRM") THAT THE FIRM REPRESENTS THE
INTERESTS OF THE PURCHASER FOR PURPOSES OF THIS AGREEMENT AND ANY AND ALL OTHER
DOCUMENTS TO BE EXECUTED IN CONNECTION HEREWITH. SELLER ACKNOWLEDGES THAT IT HAS
BEEN ADVISED TO OBTAIN INDEPENDENT COUNSEL AND ADVICE WITH RESPECT TO THE TERMS
OF THIS AGREEMENT AND HAS HAD AMPLE OPPORTUNITY TO CONSULT WITH COUNSEL. THE
PARTIES HERETO AGREE THAT, BECAUSE THIS AGREEMENT HAS BEEN NEGOTIATED, NO RULE
OF INTERPRETATION OR CONSTRUCTION SHALL BE USED TO INTERPRET THIS AGREEMENT
AGAINST THE DRAFTER.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Parties hereto have executed this Asset Purchase
Agreement as of the date forth above.
Seller:
Attest: DIALOG GROUP, INC.
By: /s/ Xxxxx XxXxxxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxx XxXxxxxxxxx
Title: President
HEALTHCARE DIALOG, INC.
By: /s/ Xxxxx XxXxxxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxx XxXxxxxxxxx
Title: President
DATA DIALOG, INC.
By: /s/ Xxxxx XxXxxxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxx XxXxxxxxxxx
Title: President
Purchaser:
DIALOG MARKETING SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxxx Xxxxxxx
Title: President and
Chief Executive Officer
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Schedule 2(b)(ii)
Furniture, Fixtures and Equipment
Schedule 2(b)(iii)
Work in Process (to be updated as of the Closing Date)
Schedule 2(b)(vi)
Websites, Software and U.R.L.'s
Schedule 2(d)
Purchase Price Allocation
Exhibit 4(a)(i)
Xxxx of Sale
Exhibit 4(a)(ii)
Assignment Agreement
Exhibit 4(a)(v)
Assignment of Marks
Exhibit 4(a)(vii)
Employment Agreement
Exhibit 4(a)(x)
Shareholders Agreement
Schedule 5(d)
Litigation
Schedule 5(e)
Bankruptcy
22
Schedule 5(f)(i)
Intellectual Property
Schedule 5(f)(iii)
Exceptions to Clear Title to Assets
Schedule 5(l)
Defaults
Schedule 5(m)
Jurisdictions Where Seller Must File Tax Returns
and Unpaid Taxes
Schedule 5(n)
Contracts and Commitments
Schedule 5(o)
Material Adverse Changes
Schedule 5(s)
Insurance
Schedule 5(t)
ERISA
Schedule 5(u)
Leased Real Property and Equipment
and Lease Defaults
Exhibit 5(v)
Employees and Employment Information
Schedule 9(d)
Consents Required
23
Schedule 30
Name Changes
Healthcare Dialog:
---------------------------------
Data Dialog:
---------------------------------
24
