DATABASE PURCHASE AGREEMENT BY AND AMONG MEDIA DIRECT, INC., OPTIONS ACQUISITION SUB, INC. AND DATED AS OF FEBRUARY 4, 2011
EXHIBIT 10.23
BY AND AMONG
MEDIA DIRECT, INC.,
OPTIONS ACQUISITION SUB, INC.
AND
1 TOUCH MARKETING, LLC
DATED AS OF FEBRUARY 4, 2011
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This DATABASE PURCHASE AGREEMENT (“Agreement”), is entered into on this 4th day of February, 2011 by and among Options Acquisition Sub, Inc., a Delaware corporation and 1 Touch Marketing, LLC, a Florida limited liability company (collectively, the "Seller"), and Media Direct, Inc., a Florida corporation ("Buyer").
ARTICLE I
"AFFILIATE" means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person.
"BUSINESS" has the meaning specified in the Recitals.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required by law to close in New York City.
"BUYER" has the meaning specified in the introductory paragraph of this Agreement.
"CLOSING" has the meaning specified in Section 2.1 (a).
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"GOVERNMENTAL OR REGULATORY BODY" means any government or political subdivision thereof, whether federal, state, county, local or foreign, or any agency, authority or instrumentality of any such government or political subdivision.
"INDEMNIFIED PARTY" has the meaning specified in Section 5.2.
"INDEMNIFYING PARTY" has the meaning specified in Section 5.2.
"LIEN" means any lien, pledge, hypothecation, mortgage, security interest, claim, lease, charge, option, right of first refusal, easement, servitude, transfer restriction under any stockholder or similar agreement, encumbrance or any other restriction or limitation whatsoever.
"MATERIAL ADVERSE EFFECT" means any change or changes or effect or effects that individually or in the aggregate are or is reasonably expected to be materially adverse to (a) the Purchased Assets, operations, income or conditions (financial or otherwise) of the Business or the transactions contemplated by this Agreement, (b) the ability of the Seller to perform its obligations under this Agreement or (c) the business of Buyer following the Closing.
"PERSON" means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental or Regulatory Body or other entity.
"PURCHASE PRICE" has the meaning specified in Section 1.5.
“REVENUE” means proceeds which have been collected less commissions paid.
"SELLER" has the meaning specified in the introductory paragraph of this Agreement.
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ARTICLE II
(b) At the Closing, the Seller shall execute and deliver or cause to be executed and delivered to the Buyer, all documents and instruments necessary to transfer to the Buyer, all of the right, title and interest of the Seller in and to the Purchased Assets.
(c) At the Closing, the Buyer shall deliver the Purchase Price to Seller by wire transfer of immediately available funds.
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ARTICLE III
The Seller represents and warrants to the Buyer as follows:
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3.7 NO MATERIAL ADVERSE CHANGE. Since December 31, 2010 there has been no material adverse change in the Business, operations or financial condition of the Seller, or in the assets, liabilities, net worth or properties of the Seller, and the Seller knows of no such change that is threatened, nor has there been any damage, destruction or loss which could have a Material Adverse Effect, whether or not covered by insurance.
(a) Seller is in material compliance with, and Seller has not violated any applicable law, rule or regulation of any federal, state, local or foreign government or agency thereof. No notice, claim, charge, complaint, action, suit, proceeding, investigation or hearing has been received by Seller or filed, commenced or threatened against Seller, alleging a violation of or liability or potential responsibility under any such law, rule or regulation which has not heretofore been duly cured and for which there is no remaining liability.
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(b) Seller is not in receipt of notice of, or subject to, any adverse inspection, finding of deficiency, finding of non-compliance, investigation, penalty, fine, sanction, assessment, request for corrective or remedial action or other compliance or enforcement action.
(a) The aggregate value of the Seller, as a going concern, exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of the Seller;
(b) The aggregate value of all liabilities of the Seller is less than the aggregate value of all assets (including goodwill and other intangible assets) at a fair valuation of the Seller;
(c) The Seller does not have an unreasonably small capital with which to conduct their business operations as heretofore conducted;
(d) No final judgments against the Seller, in actions for money damages with respect to pending or threatened litigation could reasonably be expected to be rendered at a time when, and in an amount such that, the Seller will be unable to satisfy any such judgments promptly in accordance with their terms (taking into account the maximum reasonable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be rendered) and the cash available to the Seller, after taking into account all other anticipated uses of the cash of the Seller (including the payments on or in respect of debt), is anticipated to be sufficient to pay all such judgments promptly in accordance with their terms.
(e) The Seller has not incurred, do not intend to incur, and believe that it will not incur, liabilities beyond its ability to pay such liabilities as such liabilities become absolute and mature.
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ARTICLE IV
The Buyer represents and warrants to the Seller as follows:
the valid and binding obligation of the Buyer enforceable against it in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other laws (whether statutory, regulatory or decisional), now or hereafter in effect, relating to or affecting the rights of creditors generally or by equitable principles (regardless of whether considered in a proceeding at law or in equity).
the performance by the Buyer of the transactions contemplated herein will violate or conflict with (a) any of the provisions of its Articles of Incorporation or By-Laws or other organizational documents of Buyer; or (b) result in the acceleration of, or entitle any party to accelerate the maturity or the cancellation of the performance of any obligation under, or result in the creation or imposition of any Lien or constitute a default (or an event which might, with the passage of time or the giving of notice, or both, constitute a default) under any material contract to which Buyer is a party, other than (1) such contract violations, accelerations, cancellations, defaults or Liens as do not individually or in the aggregate have a material adverse effect on Buyer (2) any order, judgment, regulation or ruling of any Governmental or Regulatory Body to which the Buyer is a party or by which any of its property or assets may be bound or affected or with any
provision of any law, rule, regulation, order, judgment, or ruling of any Governmental or Regulatory Body applicable to the Buyer other than such violations or conflicts as do not individually or in the aggregate have a material adverse effect on Buyer.
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ARTICLE V
(b) The Buyer agrees to indemnify, defend and hold harmless the Seller and its respective directors, officers, employees, shareholders, and counsel and any Affiliates of the foregoing, and their successors and assigns from and against any and all Losses suffered or incurred by them which, directly or indirectly, arise out of, result from or relate to (i) any inaccuracy in or any breach of any representation or warranty of the Buyer contained in Article IV, or (ii) any breach of any covenant or agreement of the Buyer contained in this Agreement or in any other document contemplated by this Agreement.
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(a) In the event that any claim or demand for which an Indemnifying Party would be liable to an Indemnified Party hereunder is asserted against or sought to be collected from such Indemnified Party by a third party, said Indemnified Party shall with reasonable promptness notify in writing the Indemnifying Party of such claim or demand, specifying the nature of the specific basis for such claim or demand, and the amount or the estimated amount thereof to the extent then feasible (which estimate shall not be conclusive of the final amount of such claim and demand; any such notice, together with any notice given pursuant to Section 5.3(b) hereof, collectively being the "Claim Notice"); provided, however, that any failure to give such Claim Notice will not be deemed a waiver of any rights of the Indemnified Party except to the extent the rights of the Indemnifying Party are actually prejudiced or harmed. The Indemnifying Party, upon request of the Indemnified Party, shall retain counsel (who shall be reasonably acceptable to the Indemnified Party) to represent the Indemnified Party, and shall pay the fees and disbursements of such counsel with regard thereto, provided, further, that any Indemnified Party is hereby authorized prior to the date on which it receives written notice from the Indemnifying Party designating such counsel, to retain counsel, whose reasonable fees and expenses shall be at the expense of the Indemnifying Party, to file any motion, answer or other pleading and take such other action which it reasonably shall deem necessary to protect its interests or those of the Indemnifying Party until the date on which the Indemnified Party receives such notice from the Indemnifying Party. After the Indemnifying Party shall retain such counsel, the Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties of any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and counsel to the Indemnified Party has advised it that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Indemnifying Party shall not, in connection with any proceedings or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one such firm for the Indemnified Party (except to the extent the Indemnified Party retained counsel to protect its (or the Indemnifying Party's) rights prior to the selection of counsel by the Indemnifying Party). The Indemnified Party agrees to cooperate with the Indemnifying Party and its counsel in contesting any claim or demand which the Indemnifying Party defends. No claim or demand may be settled by an Indemnifying Party or, where permitted pursuant to this Agreement, by an Indemnified Party without the consent of the Indemnified Party in the first case or the consent of the Indemnifying Party in the second case, which consent shall not be unreasonably withheld, unless such settlement shall be accompanied by a complete release of the Indemnified Party in the first case or the Indemnifying Party in the second case.
(b) In the event any Indemnified Party shall have a claim against any Indemnifying Party hereunder which does not involve a claim or demand being asserted against or sought to be collected from it by a third party, the Indemnified Party shall send a Claim Notice with respect to such claim to the Indemnifying Party. If the Indemnifying Party does not dispute such claim, the amount of such claim shall be paid to the Indemnified Party within thirty (30) days of receipt of the Claim Notice.
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(c) So long as any right to indemnification exists pursuant to this Article V, the affected parties each agree to retain all books, records, accounts, instruments and documents reasonably related to the Claim Notice. In each instance, the Indemnified Party shall have the right to be kept informed by the Indemnifying Party and its legal counsel with respect to all significant matters relating to any legal proceedings. Any information or documents made available to any party hereunder, which information is designated as confidential by the party providing such information and which is not otherwise generally available to the public, or which information is not otherwise lawfully obtained from third parties or not already within the knowledge of the party to whom the information is provided (unless otherwise covered by the confidentiality provisions of any other agreement among the parties hereto, or any of them), and except as may be required by applicable law or requested by third party lenders to such party, shall not be disclosed to any third Person (except for the representatives of the party being provided with the information, in which event the party being provided with the information shall request its representatives not to disclose any such information which it otherwise required hereunder to be kept confidential).
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ARTICLE VI
The obligation of Buyer to effect the transactions contemplated hereby shall be subject to the fulfillment at or prior to the Closing Date of the following conditions, any or all of which may be waived in whole or in part in writing by the Buyer:
ARTICLE VII
The obligation of Seller to effect the transactions contemplated hereby shall be subject to the fulfillment at or prior to the Closing Date of the following conditions, any or all of which may be waived in whole or in part in writing by the Seller:
7.2 Buyer shall pay Seller twenty percent (20%) of all Revenue generated from all (i) salesmen of the Seller who are hired by the Buyer and/or (ii) customers on the customer list acquired from Seller, except for those customers listed on Schedule 7.2, for a period of twelve (12) months from the Closing Date and ten percent (10%) of Revenue generated from such salesmen or customers for an additional twenty-four (24) months from March 1, 2011. All payments shall be payable to the Seller by the 15th day of the calendar month subsequent to the calendar month in which such Revenue is Earned. Revenue shall be considered earned when only when funds have been collected and the corresponding order therefore is shipped The parties acknowledge that total compensation to Seller shall not exceed: (a) one million five hundred thousand dollars ($1,500,000) during the first 12 months, (b) one million five hundred thousand dollars ($1,500,000) in the aggregate for the period from months thirteen through thirty-six and (c) three million dollars ($3,000,000) in the aggregate for the entire term which sum does not include the $175,000 initial payment.
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ARTICLE VIII
If to Seller, to:
Options Media Group Holdings Inc.
000 XX 00xx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx CEO
Facsimile:----------------
with a copy to:
Xxxxxx Xxxxxx LLP
3507 Kyoto Gardens Dr.
Xxxxx 000
Xxxx Xxxxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
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If to Buyer to:
Media Direct, Inc.
000 XX Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Facsimile: 954-337-0251
with a copy to:
The Law Office of Xxxxx X. Xxxxxxx XX, PA
0000 Xxxxxxxx Xxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
8.4 PUBLICITY. No publicity release or announcement concerning this Agreement or the transactions contemplated hereby shall be made without advance approval thereof by the Buyer.
8.7 MEDIATION AND ARBITRATION. All controversies, claims, disputes and matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by mediation and/or arbitration in accordance with this Section 8.7. The party who seeks resolution of a controversy, claim, dispute or other matter in question shall notify the other party in writing of the existence and subject matter hereof, and shall designate in such notices the names of three prospective mediators, each of whom shall be certified in the state of Florida. The recipient party shall select from such list one individual to act as a mediator in the dispute set forth by the notifying party. The parties agree to meet with said mediator within two weeks after the recipient party has received notice of the dispute and agree to utilize their best efforts and all expediency to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither party shall be bound by any recommendation of the mediator; however, any agreement reached during mediation shall be final and conclusive.
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If the dispute is not resolved by such mediation, it shall be decided by mandatory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Either party may apply to the American Arbitration Association for a determination of the dispute set forth in the notification thereof by the originating party. The parties agree that the arbitration shall take place in the State of Florida, and shall be governed by the laws of the State of Florida. The award entered or decision made by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Expense of mediation and/or arbitration shall be shared equally by both parties.
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date first above written.
MEDIA DIRECT, INC. | OPTIONS ACQUISITION SUB, INC. | |||
/s/
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/s/ Xxxxx Xxxxxxx
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By:
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By: Xxxxx Xxxxxxx
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Title:
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Title CEO
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1 TOUCH MARKETING, LLC | ||||
/s/ Xxxxx Xxxxxxx
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By: Xxxxx Xxxxxxx
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Title CEO
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