SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
_______________________
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
April 30, 1996
DATE OF REPORT (Date of earliest event reported)
ACXIOM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-13163 71-0581897
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
P.O. Box 2000
301 Industrial Boulevard
Conway, Arkansas 72033-2000
(Address of principal executive offices)
(Zip Code)
(501) 336-1000
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets.
On April 30, 1996, pursuant to the terms of an
Asset Purchase Agreement dated April 1, 1996 (the
"Agreement"), Registrant acquired substantially all of the
assets and assumed certain liabilities of Direct Media/DMI,
Inc. ("DMI") for Twenty-Five Million Dollars ($25,000,000).
The purchase price is payable in three years and may, at
DMI's option, be paid in 1,000,000 shares of the
Registrant's stock in lieu of cash.
DMI, with headquarters in Greenwich, Connecticut,
is the U.S. market leader in the mailing list industry. DMI
provides list brokerage, management and consulting services
to business-to-business and consumer list owners and
mailers. The assets acquired under the Agreement consist of
cash, accounts receivable, property and equipment as well as
the assumption of related accounts payable and other current
liabilities used in the business of DMI. Registrant intends
to utilize the acquired assets in the same manner in which
they were utilized by DMI.
In connection with the acquisition of assets,
Registrant has assumed a fifteen year lease agreement for
the DMI headquarters facilities with SPD Associates. The
lease will expire on November 25, 2000, unless extended by
the parties.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired. It
is not practicable to include the financial statements of
DMI as required by Rule 3-05(b) of Regulation S-X at this
time. Registrant intends to file such information as soon
as practicable, but no later than July 15, 1996.
(b) Pro Forma Financial Statements. It is not
practicable to include the pro forma financial information
as required by Article 11 of Regulation S-X. Registrant
intends to file such information as soon as practicable, but
no later than July 15, 1996.
(c) Exhibits
2 Asset Purchase Agreement dated April 1,
1996. Registrant agrees to furnish
supplementally to the Securities and
Exchange Commission a copy of the
exhibits to the Asset Purchase
Agreement upon request.
99.1 Financial Statements of Direct Media/DMI, Inc.
(to be filed by amendment).
99.2 Pro Forma Financial Information (to be
filed by amendment).
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
ACXIOM CORPORATION
(Registrant)
/s/ Catherine L. Hughes
By: -------------------------
Catherine L. Hughes
Secretary and General
Counsel
Date: May 14, 1996
EXHIBIT INDEX
Exhibits to Form 8-K
Number in
Exhibit Table Exhibit
------------- -------
2 Asset Purchase Agreement dated April 1,
1996. Registrant agrees to furnish
supplementally to the Securities and
Exchange Commission a copy of the
exhibits to the Asset Purchase
Agreement upon request.
99.1 Financial Statements of Direct Media/DMI, Inc.
(to be filed by amendment).
99.2 Pro Forma Financial Information (to be
filed by amendment).
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is
dated as of the 1st day of April, 1996, by and between
Acxiom Corporation, a Delaware corporation having its
principal place of business at 301 Industrial
Boulevard, P.O. Box 2000, Conway, Arkansas 72033-2000
(the "Purchaser"); and Direct Media/DMI, Inc., a New
York corporation having its principal place of business
at 200 Pemberwick Road, Greenwich, Connecticut 06830
(the "Seller" or the "Company").
WITNESSETH:
WHEREAS, the Seller is engaged in the business of
managing and brokering mailing lists for customers
engaged in direct marketing in the United States,
Canada and the United Kingdom and various other
jurisdictions and territories (hereinafter referred to
as the "Purchased Business"); and
WHEREAS, the Seller desires to transfer, convey
and assign, and the Purchaser desires to purchase and
acquire, substantially all of the assets, properties
and rights of the Seller in and to the Purchased
Business.
NOW, THEREFORE, in consideration of the premises
and the mutual covenants hereinafter set forth and
other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, and subject to
and on the terms and conditions herein set forth, the
parties hereto agree as follows:
1. Transfer of Assets
(a) Subject to the satisfaction or waiver of the
conditions to Closing (defined in Section 4 hereof) set
forth in Section 8 hereof, on the Closing Date (defined
in Section 4 hereof) the Seller shall transfer, convey
and assign the Assets to the Purchaser as of the
Effective Date (defined in Section 4 hereof). The term
"Assets" shall mean all of the right, title and
interest of the Seller in and to the assets, properties
and rights of the Seller relating to the Purchased
Business, of every nature, kind and description,
wherever located, tangible and intangible, real,
personal and mixed, except for the Excluded Assets (as
defined below) as the same shall exist on the Closing
Date, including, without limitation, the following:
(i) the Purchased Business as a going concern; (ii) the
good will associated with the Purchased Business; (iii)
all machinery, equipment, inventories, work-in-
progress, raw materials, supplies and other items of
personal property owned or leased by the Seller, as set
forth on Schedule 5(j); (iv) the Intellectual Property
Rights (as defined in Section 5(k) hereof); (v)
Seller s cash on hand in those bank accounts listed in
Schedule 1(a)-1 attached hereto, plus all of Seller s
cash received on or after the Effective Date (whether
or not held in such bank accounts) and not diminished
in the ordinary course; (vi) all causes of action,
judgments, claims and demands of the Seller of every
kind or nature; (vii) all accounts receivable of the
Seller, including, but not limited to, all accounts
receivable arising from goods shipped or services
rendered prior to the Closing Date notwithstanding that
invoices relating thereto have not yet been issued;
(viii) all rights of the Seller relating to, or arising
out of, or under, express or implied warranties from
suppliers of the Seller with respect to the Assets
being transferred to the Purchaser; (ix) all books and
records of the Seller, including, but not limited to,
correspondence, employment records, production records,
accounting records, property records, mailing lists,
customer and vendor lists and other records and files
of, or relating to, the Purchased Business and the
Assets being sold to the Purchaser (provided, that
Seller may retain one copy of any such books and
records); (x) all leases, contracts, licenses, purchase
orders, sales orders, commitments and other agreements
to which the Seller is a party or in which the Seller
has rights (including, without limitation, under the
License Agreement and Service Agreement in respect of
Direct Media Canada Inc.); and (xi) all of the capital
stock of Direct Media/DMI Ltd. beneficially owned by
the Seller.
(b) Anything contained in Section 1(a) hereof to
the contrary notwithstanding, from and after the
Closing, Seller shall retain all of its right, title
and interest in and to, and there shall be excluded
from the sale, conveyance, assignment and transfer to
the Purchaser hereunder, and the Assets shall not
include the following (collectively, the "Excluded
Assets"): (i) the Purchase Price (as defined below);
(ii) any rights of the Seller under this Agreement
(including without limitation the right to
indemnification under Section 12 hereof), or any
interests which the Seller may have or acquire under
this Agreement and (iii) the items set forth on
Schedule 1(b) hereto.
(c) The transfer of the Assets and assumption of
liabilities as herein contemplated shall be effected by
such bills of sale, assumption agreements,
endorsements, assignments, drafts, checks, deeds and
other instruments of transfer, conveyance and
assignment as shall be necessary or appropriate to
transfer, convey and assign the Assets and Assumed
Obligations to the Purchaser on the Closing Date as
contemplated by this Agreement and as set forth on
Exhibit A, and as shall be reasonably requested and
prepared by the Purchaser.
(d) The Seller shall, at and after the Closing
Date, execute and deliver such further instruments of
transfer and conveyance and do all such further acts as
may be reasonably requested by the Purchaser to
transfer, convey, assign and deliver to the Purchaser,
or to aid and assist the Purchaser in reducing to
possession, any and all of the Assets, or to convey to
the Purchaser the interests in the Assets being
conveyed in accordance with the terms of this
Agreement; provided, that Seller shall not be required
to incur any costs in respect of such acts (including,
without limitation, costs relating to the preparation,
filing, and legal fees in connection therewith).
(e) Effective upon the Closing Date, the Seller
hereby irrevocably constitutes and appoints the
Purchaser, its successors and permitted assigns, the
true and lawful attorney of the Seller, in the name of
the Purchaser, on behalf of and for the benefit and at
the expense of the Purchaser, to collect all accounts
receivable and any other items constituting Assets with
full indemnification to Seller for any and all Losses
(as defined in Section 12 hereof) which may be incurred
by any Seller Indemnitee (as defined in Section 2
hereof) arising out of or relating to any acts
undertaken in accordance with this Section, to endorse,
without recourse, checks, notes and other instruments
in the name of the Seller, to institute and prosecute
all proceedings which the Purchaser may reasonably deem
proper in order to collect, assert or enforce any
claim, right or title of any kind in or to such
accounts receivable and any other Assets, to defend and
compromise any and all actions, suits or proceedings in
respect of any of the Assets, and to do all such other
acts in relation thereto as the Purchaser may
reasonably deem advisable. The Seller agrees that, to
the extent permitted by applicable law, the foregoing
powers shall be irrevocable by the Seller directly or
indirectly by the dissolution or liquidation of the
Seller or in any manner or for any reason. The parties
agree that the Purchaser shall retain for its own
account any amounts duly collected pursuant to the
foregoing powers in respect of accounts receivable, and
the Seller shall promptly transfer and deliver to the
Purchaser any cash or other property received by the
Seller in respect of any such accounts receivable or
otherwise relating to the Assets. The Seller agrees
that the foregoing powers include the right of the
Purchaser to send a notice to all accounts receivable
debtors of Seller whose accounts receivables are Assets
hereunder in the joint names of the Seller and the
Purchaser, informing such accounts receivable debtors
of the transfer of the accounts receivable and the
Assets, and instructing such accounts receivable
debtors to pay directly to the Purchaser all amounts
owed to the Seller; provided, however, that the
Purchaser shall not be entitled to indemnification
hereunder (including, without limitation, as a result
of any purported breach of Section 7(c)) in respect of
any loss or impairment of relationship resulting from
such actions.
(f) Anything contained in this Agreement to the
contrary notwithstanding, this Agreement shall not
constitute an agreement or an attempted agreement to
transfer, sublease or assign any contract, license,
lease, commitment, sales order, purchase order or other
agreement, or any claim or right or any benefit arising
thereunder or resulting therefrom to the extent any
such attempted transfer, sublease or assignment
thereof, without the consent of any other party
thereto, would constitute a breach thereof or in any
way affect the rights of the Purchaser thereunder. All
contracts, licenses, leases, commitments, sales orders,
purchase orders or other agreements which require the
consent of the other party thereto in order to effect a
transfer, assignment or sublease from the Seller to the
Purchaser are set forth in Schedule 5(g) hereto. If
any such consent is not obtained, the Seller shall
cooperate with the Purchaser for the account and at the
expense of the Purchaser, in any arrangement reasonably
necessary or desirable to provide for the Purchaser the
benefits under any such agreement, including, without
limitation, enforcement for the benefit of the
Purchaser of any and all rights of the Seller against
the other party thereto arising out of the breach,
termination or cancellation of such agreement by such
other party or otherwise, which does not result from
the attempted assignment thereof. The Purchaser shall
assume and perform all obligations and liabilities and
pay all expenses related to the use of any Asset for
which such consent is not obtained, as provided and
limited in Section 2(a)(iii) below, which shall include
providing insurance to the extent of Purchaser s
insurable interest and naming Seller as an additional
insured.
2. Assumption of Liabilities
(a) On the Closing Date, simultaneously with the
transfer, conveyance and assignment by the Seller to
the Purchaser of the Assets, the Purchaser shall assume
and shall pay or cause to be paid, satisfied or
otherwise discharged when due, subject to the
limitations contained in this Section 2, and shall
indemnify and hold the Seller and its affiliates, as
such term is defined in Rule 405 promulgated under the
Securities Act of 1933, as amended (the "Securities
Act") and their respective officers, directors,
employees and agents (collectively, the "Seller
Indemnitees") harmless from and against, all debts,
liabilities and obligations whatsoever other than the
Special Liabilities (as defined below in Section 2(c))
that are related to the Purchased Business or the
Assets, whether arising before or after the Closing and
whether known or unknown, fixed or contingent (the
"Assumed Obligations") (other than as specifically
limited by Section 2(c) hereof), and including, without
limitation, the following: (i) the liabilities as
reflected on the financial statements and the books and
records of the Seller as of the Effective Date,
incurred in the ordinary course of business, but
excluding (A) mortgage indebtedness relating to any
realty which is an Excluded Asset, and (B) the Special
Liabilities set forth on Schedule 2(a)-1 attached
hereto, which shall not be assumed by Purchaser; (ii)
all current liabilities incurred by the Seller during
the period between the Effective Date and the Closing
Date that have not been paid prior to the Closing Date,
and that were incurred in the ordinary course of
business and not incurred in contravention of Section
7(b)(viii) hereof; (iii) any liability or obligation of
the Seller, relating to any lease, contract or other
agreement assumed by the Purchaser as set forth on
Schedule 2(a)-2 attached hereto; (iv) all liabilities
and obligations arising out of or relating to sales
taxes and all other taxes any kind or nature whatsoever
(whether arising prior to or after the Effective Date),
including, without limitation, any obligation or
liability for such taxes that arise as a result of or
are related to the transactions contemplated by this
Agreement, other than as expressly listed in Section
2(c)(i) hereof; (v) all employee benefit, compensation
and severance liabilities and other similar liabilities
associated with the Transferred Employees (as defined
in Section 7(k)), in accordance with Section 7(k); (vi)
the severance liability, if any, of any employee whose
employment is deemed to be terminated by operation of
law as a result of the transaction contemplated herein;
(vii) except for those liabilities listed on Schedule
2(a)-1, all liabilities under the Employee Plans (as
defined in Section 5(s) hereof). Notwithstanding the
foregoing, as to any Asset for which any consent
required for transfer hereunder has not been obtained,
the Purchaser shall assume any liability, obligation,
claim, lien, encumbrance, default, condition or state
of facts related to such Asset, and shall pay any
monthly rental, any other sum due or expense related to
such Asset for only so long as the Purchaser has
possession or the right to enjoy the benefits of such
Asset, and such assumption and obligation to make
payments shall cease upon a repossession of such Asset
by the lender or lessor thereof as a result of a
declared event of default under the applicable lease,
lending or other documents which default does not,
directly or indirectly, result from the failure of the
Purchaser to make payments thereunder or other actions
or inactions of the Purchaser subsequent to the
Closing. From the Effective Date until the Closing
Date, the Seller shall pay all liabilities in the
normal course of business consistent with past
practice.
(b) The Purchaser shall, at any time and from time
to time after the Closing Date, execute and deliver
such further instruments of assumption and do all such
further acts as may be reasonably requested by the
Seller to implement and evidence the assumption of each
such liability and obligation. Nothing contained in
this Section 2 shall require the Purchaser to pay,
perform, or discharge any of the Assumed Obligations so
long as the Purchaser shall in good faith contest or
cause to be contested the amount or validity thereof,
and the Seller shall cooperate with the Purchaser, at
the Purchaser s expense, in so contesting such claims,
provided that as between Purchaser and Seller such
contested obligations shall be the liability of
Purchaser only and, provided, further, that the
Purchaser shall fully indemnify the Seller Indemnitees
for any Losses suffered or arising out of any failure
by the Purchaser to timely pay, perform or discharge
the Assumed Obligations. Assumption by the Purchaser
of the Assumed Obligations shall in no way expand the
rights or remedies of third parties against the
Purchaser as compared to the rights and remedies which
such parties would have had against the Seller had
this Agreement not been consummated.
(c) The Purchaser does not, and shall not, assume
any of the following liabilities or obligations of the
Seller (the "Special Liabilities"), provided, however,
that the Purchaser shall pay, perform or discharge the
Special Liabilities on the Seller s behalf and at the
Seller s request, provided that the Purchase
Consideration shall be reduced by the amount of any
such payments, with interest thereon to be calculated
at six percent (6%) per annum from the date of payment:
(i) liabilities or obligations for Federal, state and
local corporate income taxes, franchise taxes or other
similar taxes which relate to periods ending on or
prior to the Effective Date and not expressly assumed
pursuant to Section 2(a) hereto; (ii) liabilities and
obligations which may arise by reason of, or with
respect to, the dissolution or liquidation of the
Seller (except to the extent such liabilities or
obligations arise, directly or indirectly, as a result
of, or are related to, Losses for which the Purchaser
has an indemnification obligation under this
Agreement); (iii) any mortgage indebtedness relating to
any of the Seller s realty which is not an Asset; (iv)
the contingent liability relating to the claims set
forth in Schedule 2(a)-1, to the extent not covered by
the Seller s insurance; (v) liability for proceedings
of a kind required to be disclosed pursuant to Section
5(n) which are not disclosed, but only to the extent
the Purchaser is entitled to indemnification hereunder
in respect thereof; (vi) the transaction costs and
expenses incurred by the Seller in connection with the
negotiation and, to the extent such expenses are to be
borne by the Seller under this Agreement, the
performance of this Agreement, including but not
limited to legal and accounting fees, and any amounts
paid to dissenting shareholders of the Seller; (vii)
liabilities or obligations incurred by the Seller after
the Closing Date; (viii) liabilities or obligations of
the Seller which violate any representation, warranty,
covenant or agreement of the Seller contained herein or
made in connection herewith, to the extent the
Purchaser is entitled to indemnification therefor under
Section 12(b) of this Agreement; (ix) liabilities
incurred prior to the Effective Date under the Employee
Retirement Income Security Act of 1974, as amended, and
the Multi-Employer Pension Plan Amendments Act of 1980,
including any withdrawal liability as defined
thereunder, to the extent the Purchaser is entitled to
indemnification therefor under Section 12(b) of this
Agreement; and (x) liability for any material
undisclosed liabilities, to the extent the Purchaser is
entitled to indemnification therefor under Section
12(b) of this Agreement.
3. Purchase Consideration; Payment
(a) In consideration of the transfer, conveyance
and assignment of the Assets, and in addition to the
assumption of the Assumed Obligations as provided for
in Section 2(a) hereof, the Purchaser shall deliver to
the Seller a Convertible Promissory Note in the form of
Exhibit B attached hereto (the "Promissory Note") which
shall be in the principal amount of $25,000,000.00 (the
"Purchase Price"), shall bear interest as set forth
therein and shall be convertible into shares of the
Purchaser s common stock, $.10 par value ("Acxiom
Stock"), on the terms set forth therein. The aggregate
consideration payable to the Seller on payment in full
or conversion of the Promissory Note is referred to as
the "Purchase Consideration." The Seller and any
holders of the Acxiom Stock upon transfer by the Seller
will have registration rights with respect to the
Acxiom Stock as set forth in a Registration Rights
Agreement in a form mutually acceptable to the parties,
which shall provide that the Purchaser shall file a
registration statement with respect to the Acxiom Stock
promptly after the Third Anniversary (as hereinafter
defined). The Purchaser covenants and agrees that at
the election of the Seller made before or after the
Closing and at the Seller s expense, the Purchaser
shall use its best efforts to obtain, for the Seller s
benefit, a letter of credit to secure the Purchaser s
obligations under the Promissory Note, which letter of
credit (i) shall be in an amount of $25,000,000.00 or
such lesser amount as the Seller shall elect, (ii)
shall be irrevocable until sixty (60) days after the
Third Anniversary, (iii) shall be cancellable in whole
or in part by the Seller at the end of any calendar
quarter between the Closing Date and the Third
Anniversary, and (iv) shall cost the Seller no more
than one percent (1%) per annum on the face amount
thereof.
(b) In the event the Closing occurs on or before
April 30, 1996, the number of shares of Acxiom Stock to
be delivered pursuant to the Promissory Note shall be
1,000,000, which has been calculated by dividing
$25,000,000.00 by $25.00. In the event the Closing
occurs after April 30, 1996, the number of shares of
Acxiom Stock to be delivered pursuant to the Promissory
Note shall be calculated by dividing $25,000,000.00 by
the average closing sales price of the Acxiom Stock for
the ten (10) trading days prior to the Closing Date,
provided, however that the number of shares shall in no
event exceed 1,000,000.
(c) The Purchase Consideration shall be reduced
by (i) the amount of the appraised value of the real
estate ("Real Estate") located at 200 Pemberwick Road,
Greenwich, Connecticut, based upon the average of three
(3) appraisals (one by an appraiser to be selected by
the Seller, one by an appraiser to be selected by the
Purchaser, and one by an appraiser to be selected by
the other two appraisers) to be obtained within thirty
(30) days of the third anniversary of the Closing Date
(the "Third Anniversary"), less any mortgage debt
outstanding thereon (provided that such indebtedness
has not been increased, either through accretion of
interest or refinancing, prior to the Third
Anniversary), in the event that the Purchaser has not
been able to obtain good and marketable title, free and
clear of any and all encumbrances (other than the
mortgage debt referred to below and other than
customary exceptions to title), to the Real Estate, in
exchange for the Purchaser s assumption of any mortgage
debt outstanding thereon (provided that such
indebtedness has not been increased, either through
accretion of interest or refinancing, prior to the
Third Anniversary), on or before the Third Anniversary;
(ii) the amounts, if any, of any payments made by the
Purchaser for Special Liabilities as set forth in
Section 2(c) above; (iii) any Losses (as defined in
Section 12 below) resulting from any breach or failure
of observance or performance of any representation,
warranty, covenant, agreement or commitment made by the
Seller pursuant to this Agreement for which the
Purchaser is entitled to indemnification pursuant to
Section 12 below; and (iv) any loans made by the
Purchaser to the Seller, and/or any amounts paid by the
Purchaser pursuant to any guaranty agreements pursuant
to which the Purchaser has guaranteed any loan payments
by the Seller.
4. Closing; Effective Date
The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place on
April 30, 1996, or on such other date as may be agreed
to by the Purchaser and the Seller (the "Closing
Date"), but in no event later than five (5) days from
the satisfaction or waiver of the last to be satisfied
or waived of the conditions set forth in Section 8.
The transactions contemplated by this Agreement shall
be effective as of April 1, 1996 (the "Effective
Date"), notwithstanding that the Closing Date is
subsequent to the Effective Date. The parties hereto
acknowledge that the terms of this Agreement reflect
their understanding and agreement as of the Effective
Date and intend that such terms be effective as of such
date. Furthermore, the parties hereto intend that for
all purposes, including for tax and accounting
purposes, the Purchaser be considered to have purchased
the Assets and the Purchased Business with effect on
the Effective Date, and that the Seller s continued
possession of the Assets after the Effective Date and
its conduct of the operations of the Purchased Business
thereafter, provided that same is conducted in
accordance with this Agreement, is to be considered as
having been performed as an agent or nominee for the
Purchaser and all of the economic benefit or loss
associated with the ownership of the Assets or conduct
of the operations of the Purchased Business after that
date be for Purchaser s account.
5. Representations and Warranties of the Seller
As used herein the term "to the actual knowledge
of the Seller" shall mean, with respect to any
statement herein, to the best of the knowledge,
information and belief of the Seller. The Seller
represents and warrants to the Purchaser as of the date
of execution hereof ("Execution Date"), as follows:
(a) The Seller is a corporation duly organized,
validly existing and in good standing under the laws of
the State of New York and has the requisite power and
authority to own, lease and operate the Assets owned,
leased or operated by it and to operate the Purchased
Business as currently operated by it. Complete and
correct certified copies of the Certificate of
Incorporation of the Seller, and all amendments
thereto, certified by the Secretary of State of the
State of New York have been made available to the
Purchaser. Complete and correct copies of the Bylaws
of the Seller and all amendments thereto, certified by
the corporate secretary of the Seller have been made
available to the Purchaser. Except as set forth in
Schedule 5(a)-1 hereto, the Seller is duly qualified to
do business and is in good standing as a foreign
corporation in all jurisdictions (each such
jurisdiction is set forth in Schedule 5(a)-1 hereto) in
which such qualification is required because of the
character of the Assets owned, leased or operated by it
or by virtue of the conduct of the Purchased Business.
Except as set forth in Schedule 5(a)-2 hereto, the
Seller does not own any capital stock, warrants, notes,
debentures, bonds, script, rights, options or calls
("Securities"), or any written obligations or written
instruments evidencing the rights to purchase or effect
a conversion into any Securities, or any direct or
indirect equity or ownership interest in any other
corporation, business, trust, firm, association,
partnership, joint venture, entity or organization
("Entity"). Except as set forth in Schedule 5(a)-3, the
Company does not have any subsidiaries.
(b) The Seller has the requisite power and
authority to enter into this Agreement and to perform
its obligations hereunder. The execution and delivery
of this Agreement and the performance by the Seller of
its obligations hereunder have been duly and validly
authorized by all necessary corporate action of the
Seller, and no additional corporate authorization or
consent is required in connection with the execution,
delivery and performance by Seller of this Agreement.
Except as set forth in the Schedules hereto, the
execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby,
by the Seller, (i) do not and will not conflict with,
or violate any provision of the Seller s Certificate of
Incorporation or Bylaws; (ii) subject to obtaining the
consents referred to in Sections 5(c) and 5(g), do not
and will not conflict with, or result in any breach of,
any term, condition or provision of, or constitute a
default under, or give rise to any right of
termination, modification, cancellation or acceleration
under (whether after the giving of notice or lapse of
time or both), any contract, mortgage, lien, lease,
agreement, indenture, license, franchise, instrument,
order, judgment or decree to which Seller is a party or
which is binding upon the Seller; (iii) subject to
obtaining the consents referred to in Sections 5(c) and
5(g) will not, to the actual knowledge of the Seller
result in a violation of any statute, law, rule or
regulation applicable to the Seller; and (iv) will not
result in the creation or imposition of any lien,
charge, pledge, assessment, security interest or any
encumbrance (collectively, a "Lien") upon any of the
Assets, other than, in the cases of clauses (ii), (iii)
and (iv), any conflicts, breaches, terminations,
defaults, cancellations, accelerations, losses,
violations or Liens which, individually or in the
aggregate, do not have a material adverse effect on the
business, assets, liabilities, results of operations or
financial condition of the Seller and its subsidiaries,
taken as a whole (a "Material Adverse Effect"), or
materially delay Seller s ability to perform its
obligations hereunder. This Agreement constitutes a
valid and legally binding obligation of the Seller
enforceable against the Seller in accordance with its
terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors
rights and to general equity principles.
(c) Except as set forth in Schedule 5(a)-1 hereto
and other than filings required in connection with the
maintenance of qualification to do business in other
jurisdictions, and real property transfer and gains tax
filings for New York City and New York State, no
approval, waiver, consent or authorization of, or
filing with, any governmental or quasi-governmental
agency, commission, board, bureau or instrumentality
(collectively, a "Governmental Authority") is required
by the Seller in connection with the execution,
delivery and performance of this Agreement by the
Seller, except where the failure of Seller to obtain
such consent, approval, waiver or authorization, or to
make such filing, would not materially adversely affect
Purchaser s ability to conduct the Purchased Business
substantially as heretofore conducted or materially
impair or delay the ability of Seller to effect the
Closing.
(d) Attached hereto as Schedule 5(d) are the
financial statements, together with the notes thereto,
of the Seller as of September 2, 1995 ("Financial
Statements"), which have been audited by Price
Waterhouse L.L.P., independent certified public
accountants. The Seller has no liability or obligation
(whether accrued, absolute or contingent) that would be
required to be reserved against or disclosed in
financial statements prepared in accordance with
generally accepted accounting principles, except for
(a) liabilities and obligations set forth or referred
to in the Financial Statements; (b) liabilities and
obligations which were incurred after the date of the
Financial Statements in the ordinary course of
business, which shall be deemed to include the
liabilities and obligations arising under the
agreements listed on any Schedule to this Agreement;
(c) liabilities and obligations disclosed in Schedule
5(d); and (d) liabilities and obligations which would
not, in the aggregate, have a Material Adverse Effect.
The Seller has good and, in the case of owned real
property, marketable title to, or a valid leasehold
interest in, all of the material Assets reflected on
the Financial Statements, free and clear of any Lien,
conditional sale or other agreement, lease or right of
any sort except (i) as does not have a Material Adverse
Effect; (ii) as shown on or reserved against in the
Financial Statements; (iii) as shown on the Schedule
5(d) hereto; (iv) Liens (a) for current taxes and
assessments not yet due and payable or due but not yet
delinquent or being contested in good faith, or (b)
imposed by applicable laws such as, for example,
carriers , warehousemen s and mechanics liens and the
like arising in the ordinary course of business and
which do not individually or in the aggregate have a
Material Adverse Effect; (v) with respect to real
property, (A) easements, quasi-easements, licenses,
covenants, rights-of-way, and other similar
restrictions, including, without limitation, any other
agreements, conditions or restrictions which would be
shown by a current title report or other similar report
or listing, (B) any condition that may be shown by a
current survey or physical inspection, and (C) zoning,
building and other similar restrictions (all items
included in (i) through (v) are referred to
collectively herein as the "Permitted Encumbrances").
The Assets include all assets and properties (real,
personal and mixed, tangible and intangible) and all
rights necessary to permit the Purchaser to carry on
the Purchased Business of the Seller substantially as
presently conducted by the Seller.
(e) Except as set forth in Schedule 5(e) hereto
and to the extent arising out of or relating to the
transactions contemplated by this Agreement, since the
date of the Financial Statements, (1) there have been
no adverse changes in the condition (financial or
otherwise), assets, liabilities, earnings, properties
or business of the Seller that would constitute a
Material Adverse Effect, other than changes resulting
from general economic or industry-wide conditions; and
(2) the Seller has not: (i) authorized, issued, sold
or converted any of its capital stock, or entered into
any agreement with respect thereto; (ii) incurred any
damage, destruction or similar loss, whether or not
covered by insurance, that has had a Material Adverse
Effect; (iii) other than in the ordinary course of
business, sold, assigned, transferred or otherwise
disposed of any of its material tangible or intangible
Assets or Intellectual Property Rights; (iv) other than
in the ordinary course of business, mortgaged, pledged,
granted or suffered to exist any Lien on any material
Asset; (v) other than in the ordinary course of
business, waived any rights of material value or
canceled, discharged, satisfied or paid any material
debt, claim, lien, encumbrance, liability or
obligation, whether absolute, accrued, contingent or
otherwise and whether due or to become due; (vi)
incurred any material obligation or liability (absolute
or contingent, liquidated or unliquidated, choate or
inchoate), except current obligations and liabilities
incurred in the ordinary course of business; (vii)
other than in the ordinary course of business, leased
or effected any transfer of any material Asset; (viii)
other than in the ordinary course of business and
consistent with past practices, entered into, made any
amendment of, or terminated any material lease,
contract, license or other material agreement to which
the Seller is a party; (ix) amended its Certificate of
Incorporation or the Bylaws; (x) effected any change in
the accounting practices or procedures of the Seller;
(xi) paid, loaned or advanced any amount to, or sold,
transferred or leased any material Assets (real,
personal or mixed, tangible or intangible) to, or
entered into any agreement, arrangement or transaction
of any nature with, any stockholder, officer or
director of the Seller or any business or Entity in
which any stockholder, officer or director of the
Seller or any "affiliate" or "associate" (as such terms
are defined in Rule 405 promulgated under the
Securities Act)of any such person has any direct or
indirect interest, except for regular compensation paid
to any affiliates who are also employees of the Seller
and other than in the ordinary course of business or as
required by any contract or agreement of the Seller;
(xii) increased the compensation payable to any of the
Seller s directors, officers or employees or became
obligated to increase any such compensation, except in
accordance with the Seller s customary practices
(including normal periodic performance reviews and
related compensation and benefit increases) or as
required by any contract or agreement of the Seller; or
(xiii) entered into any other material transaction
other than in the ordinary course of business and
consistent with past practices, or changed in any
material way the business policies or practices of the
Seller.
(f) Except as set forth on Schedule 5(f) hereto
or as would not have a Material Adverse Effect, as of
the Execution Date, the Seller has either filed or
requested extensions to file all foreign, Federal,
state, county or local income, excise, sales, property,
withholding, Social Security, franchise, bulk sales,
license, information return or other tax return or
report (collectively, "Returns") required to be filed
by Seller as of the Execution Date. Seller has filed
or will timely file all Returns required by applicable
law to be filed by it after the date hereof and prior
to the Closing Date, except for Returns relating to
bulk transfer laws and related taxes, the compliance
by the Seller therewith in connection with the
transactions contemplated hereby being hereby expressly
waived by the Purchaser, and except where the failure
to so file does not and would not have a Material
Adverse Effect. Except as set forth on Schedule 5(f)
hereto or as would not have a Material Adverse Effect,
as of the Execution Date, except where a request for
extension has been filed or where Seller is contesting
such taxes in good faith, Seller has paid all
applicable taxes due and payable on or before the
Execution Date in respect of the Returns required to
have been filed by the Seller and has not been notified
in writing or otherwise of the commencement of any
audit by any taxing authority. Except as set forth in
the Schedules hereto, as would not have a Material
Adverse Effect, where Seller is contesting such payment
in good faith or for which a request for an extension
has been made, the Seller has paid to the proper
authorities all customs duties and similar or related
charges required to be paid by it with respect to the
importation of goods into the United States. The
representations and warranties set forth in this
Section 5(f) shall survive until the expiration of the
applicable statutes of limitations.
(g) Schedule 5(g) hereto is a complete and
correct list of all written contracts, agreements and
commitments (complete and correct copies of each of
which written agreements have been heretofore been made
available to the Purchaser) and all oral contracts,
agreements and commitments (except for those which were
made in the ordinary course of business and which do
not have a Material Adverse Effect upon the Purchased
Business) which obligate the Seller to pay in excess of
$100,000 per year, to which the Seller is a party and
which are material to the conduct of the Purchased
Business (collectively, the "Material Contracts").
Except as set forth in Schedule 5(g), each of the
written Material Contracts is a valid obligation of the
Seller, enforceable against Seller in accordance with
its terms, except as the enforceability of such
Material Contract may be limited by, or subject to, any
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors rights
generally, and to general principles of equity, and the
Seller is not (with or without lapse of time or the
giving of notice or both) in material breach of or
default thereunder, except for such breaches and
defaults which, individually or in the aggregate, would
not have a Material Adverse Effect. Except as noted in
Schedule 5(g), all written Material Contracts listed
therein are assignable by the Seller to the Purchaser
without the consent of any other entity or person.
(h) Except as set forth in Schedule 5(h) hereto,
the accounts receivable relating to the Purchased
Business and reflected on the Financial Statements
constitute, to the knowledge of the Seller, bona fide
receivables and arose in the ordinary course of
business, and the Seller has used commercially
reasonable efforts consistent with its past practice as
to such receivables to collect on such receivables in
the ordinary course of business. Reserves and
allowances reflected in the Financial Statements and
relating to accounts receivable have been established
on the basis of historical experience.
(i) Schedule 5(i) hereto sets forth a complete
and correct list of all material real property owned or
leased in whole or in part by the Seller. Schedule
5(i) also lists all guarantees of any leases for real
property given by the Seller for any other person or
Entity. Complete and correct copies of all such leases
and guarantees of leases have been heretofore made
available to the Purchaser. Except as set forth in
Schedule 5(i), all of the leases listed in Schedule
5(i) are valid and binding obligations of the Seller,
in full force and effect, and except as are being
contested or as would not have a Material Adverse
Effect, each rental and the other payments due of
Seller thereunder have been made, and Seller is not in
material breach thereof. Except as set forth on
Schedule 5(i) or as would not have Material Adverse
Effect, the Seller has received no written notice of a
Governmental Authority that an improvement, fixture or
equipment installed by Seller in or on any such
premises and properties, or that the occupation or
leasehold with respect thereto by Seller, is in
violation of any zoning, building, safety, health or
environmental law, except as would not result in a
Material Adverse Effect.
(j) Schedule 5(j) hereto is a complete and
correct list of (i) all material tangible personal
property owned by the Seller for use in the Purchased
Business and (ii) all material personal property used
by the Seller in the Purchased Business which is owned
by a third party and leased to, or otherwise used by,
the Seller, together with the name of the Lessor
thereof, including, without limitation, leases or other
agreements relating to the use or operation of any
machinery, motor vehicles, office furniture or fixtures
owned by any third party (complete and correct copies
of which leases or other agreements in the Seller s
possession have been heretofore been made available to
the Purchaser). Seller is not in material default of
any such lease or agreement and such leases and
agreements constitute legal, valid and binding
obligations of Seller. Seller has received no written
notice under any such lease or other agreement of any
material default thereunder.
(k) Schedule 5(k) contains a complete and
accurate list or description of all (a) trademarks,
trade names, service marks, and all registrations and
applications therefor, (b) registered copyrights and
applications therefor and (c) patents and patent
applications, presently owned or used by the Seller in
the conduct of the Purchased Business. The foregoing
items, along with all other copyrights, trade dress,
logos, inventions, discoveries, processes,
improvements, trade secrets, and confidential and
proprietary information and software programs and
computer operating systems used or held by the Seller,
and the Seller s rights under any license or other
agreement relating to such intellectual property
(whether as licensee or licensor thereunder), are
referred to in this Agreement collectively as the "In-
tellectual Property Rights." Except as indicated on
Schedule 5(k), (x) the Seller (or, in the case of
certain of the Intellectual Property Rights owned or
used in the United Kingdom, Direct Media/DMI Ltd.) owns
or has the right to use all Intellectual Property
Rights, except where the failure to own or have such
right to use would not, in the aggregate, have a
Material Adverse Effect, and the Intellectual Property
Rights comprise all of the intellectual property rights
necessary for the conduct of the Purchased Business in
all material respects in the same manner as the
Purchased Business has been conducted prior to the
Execution Date; (y) to the knowledge of the Seller, the
Seller has not received any written notice of a claim
or demand of any person or entity relating to the
rights of the Seller in respect of the Intellectual
Property Rights; and (z) to the knowledge of the
Seller, the Seller is not infringing upon any
intellectual property rights of a third party.
(l) Schedule 5(l) hereto is a complete and
correct list setting forth the names and locations of
all (i) banks at which the Seller has an account or
safe deposit box, and (ii) Seller credit cards.
(m) Except as set forth in Schedule 5(m) hereto,
to the actual knowledge of Seller, no action, suit,
claim, arbitration, governmental investigation or
proceeding, is pending or to the actual knowledge of
the Seller without investigation, threatened, at law or
in equity, before or by any court or Governmental
Authority of competent jurisdiction against the Seller
or any of the Assets, in which an unfavorable judgment,
decree or order would reasonably be expected to
restrain, prohibit, invalidate, set aside, rescind,
prevent or make unlawful this Agreement or the carrying
out of this Agreement or the transactions contemplated
hereby. To the knowledge of Seller, there are no
unsatisfied orders, writs or decrees against Seller
that have been issued by any court or Governmental
Authority, the failure of which to satisfy would have a
Material Adverse Effect.
(n) Except as set forth in Schedule 5(n) hereto,
the Seller has all permits, licenses, orders and
approvals of all Governmental Authorities required for
it to conduct the Purchased Business as presently
conducted and, except as set forth in Schedule 5(n), to
the knowledge of Seller, the Seller is in material
compliance with all laws, rules and regulations
applicable to the Purchased Business including, without
limitation, laws, rules and regulations respecting
occupational safety, environmental protection and
employment practices, except where the failure to
obtain such permits, licenses, orders and approvals or
be in compliance with such laws does not have a
Material Adverse Effect.
(o) Except as set forth in Schedule 5(o) hereto,
the Seller has not been found by any court or
Governmental Authority of competent jurisdiction to
have committed any act of sexual, religious, age or
racial discrimination, any act of sexual harassment, or
any other similar act which violates any Federal, state
or local law or regulation, and to the knowledge of the
Seller there is not currently pending in any court, or
to the knowledge of Seller, threatened, any such claim
with respect to any of the foregoing, which, if
adversely determined would have a Material Adverse
Effect or which would materially impair the Seller s
ability to close hereunder.
(p) Except as set forth in Schedule 5(p) hereto,
(i) the Seller is not delinquent in a material amount
in accordance with normal Seller payment practices in
payments to any of its directors, officers or employees
for any wages, salaries, commissions, bonuses or other
direct compensation for any services performed by them
to the date hereof or amounts required to be reimbursed
to such employees; (ii) there is no unfair labor
practice complaint against the Seller pending before
the National Labor Relations Board or any comparable
state or local agency which, if adversely determined
would have a Material Adverse Effect or which would
materially impair the Seller s ability to close
hereunder.
(q) The Seller has delivered to the Purchaser a
complete and correct list of the names and current
annual salary, bonus, commission and perquisite
arrangements for each director, officer and employee
of the Seller. Except as set forth in Schedule 5(q),
no current or former director, officer or employee of
the Seller or any relative, associate or agent of such
director, officer or employee is a party to any
contract for employment under which such person is a
party to any material non-arms-length transaction with
the Seller, including for the furnishing of services
by, or rental of real or personal property from or to,
or requiring payments to, any such director, officer,
employee, relative, associate or agent. Complete and
correct copies of any such contracts have been
heretofore made available to the Purchaser.
(r) Schedule 5(r) hereto is a complete and
correct list of the names and addresses of the twenty
(20) largest customers of the Seller during the fiscal
year ending December 31, 1995 ("Calendar 1995"), and
the ten (10) largest suppliers of the Seller during
Calendar 1995, and the total sales to, or purchases
from, such customers or suppliers made by the Seller
during Calendar 1995, together with the name of the
salesperson assigned to such customers. No supplier or
customer of the Seller representing in excess of two
percent (2%) of the Seller s purchases or sales during
Calendar 1995 has advised the Seller that it intends to
terminate, discontinue or substantially modify or
reduce its business with the Seller by reason of the
transactions contemplated by this Agreement.
(s) Schedule 5(s) hereto sets forth a complete
and correct list of all pension, profit-sharing, bonus,
and other employee benefit or compensation plans
("Employee Plans") maintained by the Seller. The
Seller is in material compliance with such Employee
Plans, except as would not have a Material Adverse
Effect and except to the extent described in Schedule
5(s). Without limiting the generality of the
foregoing, except as would not have a Material Adverse
Effect, the Seller has received no written notification
to the effect that the Seller is engaged in any
transaction in violation of Section 406(a) or 406(b) of
ERISA (for which no exemption exists under ERISA or
under applicable sections of the Internal Revenue
Code). The Seller has not received any written
notification to the effect that an accumulated funding
deficiency has occurred with respect to the Employee
Plans. True and complete copies of each Employee Plan,
related trust agreements or annuity contracts (or any
other funding instruments), the most recent
determination letter issued by the Internal Revenue
Service with respect to each Employee Plan intended to
qualify under Section 3(3) of ERISA, annual reports on
Form 5500 Series for the most recent plan year and
actuarial reports prepared for the most recent plan
year of each Employee Plan which is a defined benefit
pension plan have been made available to the Purchaser.
(t) Schedule 5(t) hereto is a complete and
correct list of all country club and other memberships
owned or paid for, or the dues for which are borne, by
the Seller which individually obligates the Seller to
expend in excess of $2,500 annually.
(u) The Purchaser acknowledges that the Seller
makes no representation or warranty, express or
implied, in connection with this Agreement or the
consummation of the transactions contemplated hereby
except as expressly set forth in this Section 5.
6. Representations and Warranties of the
Purchaser
The Purchaser hereby represents and warrants to
the Seller as follows:
(a) The Purchaser is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware and has the requisite
power and authority to own, lease and operate its
properties and carry on its business as and in the
places where such properties are now owned, leased or
operated or such business is currently being conducted.
Except as does not have a material adverse effect on
the business, assets, liabilities, results of
operations or financial condition of the Purchaser and
its subsidiaries, taken as a whole (a "Purchaser
Material Adverse Effect"), the Purchaser is duly
qualified to do business and is in good standing as a
foreign corporation in all jurisdictions in which such
qualification is required.
(b) The Purchaser has the requisite power and
authority to enter into this Agreement, the Promissory
Note and the Registration Rights Agreement and to
assume and perform its obligations hereunder and
thereunder. The execution and delivery of this
Agreement and the performance by the Purchaser of its
obligations hereunder and under the Promissory Note and
the Registration Rights Agreement have been duly
authorized by all necessary corporate action of the
Purchaser, and no additional corporate authorization or
consent is required in connection with the execution,
delivery and performance by the Purchaser in accordance
herewith or therewith.
(c) No further approval, consent or authorization
of, or filing with, any Governmental Authority is
required by the Purchaser in connection with the
execution, delivery and performance of this Agreement,
the Promissory Note and the Registration Rights
Agreement by the Purchaser, except for the filings and
registrations contemplated under the Registration
Rights Agreement.
(d) The execution and delivery of this Agreement,
the Promissory Note and the Registration Rights
Agreement, the consummation of the transactions
contemplated hereby and thereby, and the fulfillment of
the terms, conditions or provisions hereof and thereof
(i) do not and will not conflict with, or violate any
provision of the Certificate of Incorporation or Bylaws
of the Purchaser; (ii) do not and will not conflict
with, or result in any breach of, any condition or
provision of, or constitute a default under, or give
rise to any right of termination, cancellation or
acceleration under (whether after the giving of notice
or lapse of time or both) any contract, mortgage, lien,
lease, agreement, indenture, license, franchise,
instrument, order, judgment or decree to which the
Purchaser is a party or which is binding upon the
Purchaser; (iii) will not to the knowledge of the
Purchaser be in violation of any statute, rule or
regulation applicable to the Purchaser; and (iv) will
not result in the creation or imposition of any Lien
upon the assets or business of the Purchaser, other
than in the cases of (ii), (iii) and (iv) as would not
have a Purchaser Material Adverse Effect or materially
delay the Purchaser s ability to perform its
obligations hereunder.
(e) This Agreement constitutes, and at the
Closing Date the Promissory Note and the Registration
Rights Agreement will constitute valid and legally
binding obligations of the Purchaser enforceable
against the Purchaser in accordance with their
respective terms, subject in each case to bankruptcy,
insolvency, reorganization, moratorium and similar laws
of general applicability relating to or affecting
creditors rights and to general equity principals.
(f) The Purchaser has, and will at all times
have, adequate financing to pay the Purchase
Consideration in full and to otherwise satisfy its
obligations under this Agreement, the Promissory Note
and the Registration Rights Agreement.
(g) The authorized capital stock of the Purchaser
consists of 60,000,000 shares of Acxiom stock and
1,000,000 shares of preferred stock, $1.00 par value
("Preferred Stock"). As of March 31, 1996 there were
23,685,124 shares of Acxiom Stock and no shares of the
Preferred Stock issued and outstanding. All such
issued and outstanding shares of Acxiom Stock are duly
authorized, validly issued, fully paid, nonassessable
and free of preemptive rights. Other than as (i)
called for under the Purchaser s employee benefit
plans, (ii) disclosed by Purchaser s SEC Documents (as
defined below), (iii) called for by that certain
Acquisition Agreement and Plan of Merger by and between
the Purchaser and Pro CD, Inc. dated as of April 9,
1996, and (iv) contemplated by this Agreement, there
are not at the date of this Agreement any existing
options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements or commitments
which obligate Purchaser or any of its subsidiaries to
issue, transfer or sell any shares of capital stock of
Purchaser or any of its subsidiaries.
(h) Except as disclosed in the SEC Documents (as
defined below), there are no actions, suits or
proceedings pending against Purchaser or its
subsidiaries or, to the actual knowledge of Purchaser,
threatened against Purchaser or its subsidiaries, at
law or in equity, or before or by any court or
Governmental Authority of competent jurisdiction, that
would have a Purchaser Material Adverse Effect or
materially delay or impair the ability of the Purchaser
to perform its obligations hereunder.
(i) The issuance and delivery by Purchaser of the
Acxiom Stock in connection with this Agreement, the
Promissory Note and the Registration Rights Agreement
has been duly and validly authorized by all necessary
corporate action on the part of the Purchaser; the
Purchaser has reserved for issuance sufficient shares
of Acxiom Stock to perform its obligations in
accordance with this Agreement, the Registration Rights
Agreement and the Promissory Note; and when issued in
accordance with the terms of this Agreement, the
Promissory Note and the Registration Rights Agreement,
will be validly issued, fully paid and nonassessable,
and free and clear of all Liens.
(j) The Purchaser has filed all reports required
to be filed by it under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including
pursuant to Section 13(a) or 15(d) thereof, for the two
(2) years preceding the date hereof (the foregoing
materials being collectively referred to herein as the
"SEC Documents") on a timely basis, or has received a
valid extension of such time of filing. As of their
respective dates, the SEC Documents complied in all
material respects with the requirements of the
Securities Act and the Exchange Act and the rules and
regulations of the Securities and Exchange Commission
(the "Commission") promulgated thereunder, and none of
the SEC Documents, when filed, contained any untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading. The financial statements of the
Purchaser included in the SEC Documents comply as to
form in all material respects with applicable
accounting requirements and the published rules and
regulations of the Commission with respect thereto.
Such financial statements have been prepared in
accordance with generally accepted accounting
principles applied on a consistent basis during the
periods involved, except as may be otherwise indicated
in such financial statements or the notes thereto and
fairly present in all material respects the financial
position of the Purchaser as of and for the dates
thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of
unaudited statements, to normal year-end audit
adjustments. The Purchaser has no liability or
obligation (whether accrued, absolute or contingent)
that would be required to be reserved against or
disclosed in financial statements prepared in
accordance with generally accepted accounting
principles, except for (a) liabilities and obligations
set forth in the SEC Documents, (b) liabilities and
obligations which were incurred after the date of the
Purchaser s last filed Quarterly Report on Form 10-Q in
the ordinary course of business, and (c) liabilities
and obligations which would not, in the aggregate, have
a Purchaser Material Adverse Effect. Since the date of
the financial statements included in the Purchaser s
last filed Quarterly Report on Form 10-Q, there has
been no event, occurrence or development that has had a
Purchaser Material Adverse Effect which is not
disclosed in the SEC Documents.
7. Other Agreements of the Parties
The Seller and the Buyer covenant and agree
as follows:
(a) Between the Execution Date and the Closing
Date, the Seller shall give the Purchaser and its
authorized representatives full access, during regular
business hours and upon reasonable notice, to any and
all of its premises, properties, contracts, books and
records and will cause its officers and employees to
make available to the Purchaser and its authorized
representatives any and all data and information
pertaining to the Purchased Business and Assets as the
Purchaser or its authorized representatives shall from
time to time reasonably request. Unless and until the
transactions contemplated herein has been consummated,
the Purchaser shall hold in confidence and shall cause
its representatives, employees and agents to hold in
confidence all information obtained pursuant to this
Agreement or as a result of its due diligence
investigation hereunder and, if such acquisition is not
consummated, the Purchaser shall promptly return to the
Seller all documents and other materials received by it
hereunder. The obligation of confidentiality set forth
in this Section shall survive Closing or any
termination of this Agreement or other failure to close
hereunder. Such obligation of confidentiality shall
not extend to any information which is shown to have
been (i) previously known to the Purchaser, but only to
the extent Purchaser was not at such time bound by any
agreement of confidentiality, (ii) generally known to
others engaged in the trade or business of the Seller
other than by reason of any default with respect to
confidentiality under this Agreement or any other
agreement to which the Seller is a party and as to
which information Purchaser was, or is not at such
time, bound by any agreement of confidentiality, (iii)
part of public knowledge or literature, or (iv)
lawfully received by the Purchaser from a third party
(not including the Seller) not bound by any fiduciary
duty or agreement of confidentiality as to such
information. The furnishing of any information to the
Purchaser, or any investigation made by the Purchaser
or its authorized representatives, shall not affect or
otherwise diminish or obviate the representations and
warranties made by the Seller in this Agreement and the
Purchaser s right to rely thereon; provided, however,
that any knowledge that the Purchaser has or acquires
as a result of such investigations as to the failure of
any of the representations or warranties of the Seller
set forth herein to be true and correct in all material
respects shall be communicated promptly to the Seller.
Each party recognizes that any violation of this
confidentiality provision would cause the Seller
irreparable harm and agrees that the Seller shall be
entitled, in addition to any other right or remedy it
may have, at law or in equity, to an injunction without
the posting of any bond or other security enjoining the
Purchaser or any of its representatives, agents or
employees, officers and directors from any violation or
potential violation of this Section. If the Closing
occurs, the Purchaser covenants and agrees that it
shall preserve and keep the records of the Seller
delivered to it hereunder for a period of six (6) years
from the Closing Date and shall make such records
available to the Seller or its authorized
representatives as reasonably required by the Seller
and at Seller s expense in connection with any legal
proceedings against, or governmental investigations of,
the Seller or in connection with any tax examination of
the Seller.
(b) From the Execution Date until the Closing
Date, except as otherwise consented to or approved in
writing by the Purchaser or as contemplated by this
Agreement or pursuant to the terms of an agreement
disclosed in a Schedule hereto, the Seller shall not:
(i) other than in the ordinary course of
business, sell, assign or transfer any of its material
tangible Assets or Intellectual Property Rights;
(ii) other than in the ordinary course of
business, mortgage, pledge or otherwise encumber the
Assets in an amount exceeding $100,000;
(iii) other than in the ordinary course of
business, waive any rights of material value relating
to the Purchased Business;
(iv) enter into or terminate any material
lease or to make any material changes in any lease
listed in Schedules 5(g) or 5(j) hereto, other than in
the ordinary course of business;
(v) except in the ordinary course of
business, transfer, sell or otherwise convey any of the
material Assets;
(vi) effect any material change in the
accounting practices or procedures of the Seller,
except as required by law or generally accepted
accounting practices;
(vii) increase the compensation payable to
any of its directors, officers or employees or become
obligated to increase any such compensation except in
the ordinary course of business in accordance with its
customary practices (including normal periodic
performance reviews and related compensation and
benefit increases) or as required by any contract or
agreement of the Seller; or
(viii) enter into any other transaction
other than in the ordinary course of business.
(c) The Seller shall, from the Execution Date to
the Closing Date, operate the Purchased Business only
in the ordinary course and in material compliance with
all material laws and regulations applicable to the
Purchased Business, and, consistent with such
operation, shall use commercially reasonable efforts to
maintain and preserve the Assets and its properties and
to preserve intact its present business organization,
the relationships with its suppliers, customers,
employees, consultants, landlords and others having
business relationships with the Seller.
(d) The Seller will maintain in full force and
effect up to the Closing all insurance policies (or
substantially equivalent insurance policies) relating
to the Purchased Business so long as such insurance is
available at commercially reasonable rates. From and
after the Closing, the Purchaser shall name the Seller
as an additional insured party on its liability
policies relating to the Purchased Business.
(e) Between the Execution Date and the Closing
Date, upon its obtaining knowledge of the above, each
party shall give the other prompt notice of any (i)
event or occurrence which, in the case of the Seller,
has a Material Adverse Effect or, in the case of the
Purchaser, has a Purchaser Material Adverse Effect, or
results in a material breach in any representation or
warranty of the Seller or the Purchaser, as the case
may be, hereunder, (ii) material complaints,
investigations or proceedings or hearings of any
Governmental Authority with respect to this Agreement
or the Registration Rights Agreement, and (iii)
institution of litigation questioning the validity of
or seeking to enjoin the consummation of this Agreement
or the Registration Rights Agreement.
(f) Subject to the terms and conditions set forth
in this Agreement, between the Execution Date and the
Closing Date, the Seller and the Purchaser shall use
commercially reasonable efforts to take, or cause to be
taken, all actions and do or cause to be done all
things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement.
(g) From the Execution Date until the earlier to
occur of (i) the termination of this Agreement pursuant
to Section 10 and (ii) the Closing Date, the Seller
shall not solicit the sale or other disposition of or
enter into any agreement, arrangement or understanding
to sell or dispose of all or substantially all of the
Assets or its equity securities; provided, however,
that nothing herein contained shall prohibit or
otherwise interfere with the performance by the board
of directors of the Seller of their fiduciary
obligations under applicable law.
(h) Neither party shall issue any press release
or otherwise make any public statement with respect to
this Agreement or the transactions contemplated herein
without the prior written consent of the other party
(which consent shall not be unreasonably withheld),
other than the press release issued March 14, 1996 and
except as may be required by applicable law or stock
exchange regulation (provided that such required
statements are provided to the other party in advance
with an opportunity to comment thereon).
(i) A compensation committee ("Compensation
Committee") shall be established by the Purchaser prior
to the Closing Date for the purpose of administering
the Management Bonus Plan and the Key Employee Bonus
Plan, each as described below. The Compensation
Committee shall be comprised of three (3)
representatives from each of the Seller and the
Purchaser (initially, Dave Florence, Robert Foehl and
Max Bartko; and Rodger Kline, Steve Brighton and Robert
Bloom). The Compensation Committee shall determine the
compensation levels for all participants in the
Management Bonus Plan and the Key Employee Bonus Plan
after the Effective Date. The Compensation Committee
shall adopt a "Management Bonus Plan" as set forth in
Schedule 7(i)-1 and a "Key Employee Bonus Plan" as set
forth in Schedule 7(i)-2. The Management Bonus Plan and
the Key Employee Bonus Plan shall set forth in detail
the formulas to be used for the funding of each plan
and for determining each current and future
participant s allocation thereunder. It is intended
that all shares of Acxiom Stock granted under the Key
Employee Bonus Plan will be freely tradeable upon
vesting, without restrictions under any applicable
securities laws.
(j) The Seller shall deliver to the Purchaser a
proposed budget for the Purchased Business for the
fiscal year beginning April 1, 1996 and ending March
31, 1997, and the Purchaser and the Seller shall
prepare a proposed budget for the five-year period
beginning April 1, 1996 and ending March 31, 2001, in
the forms set forth in Schedules 7(j)-1 and 7(j)-2
hereto, respectively.
(k) (i) As of the Closing Date, all employees
of the Seller shall become employees of the Purchaser
(hereinafter referred to as the "Transferred
Employees"). As of the Closing Date, the Purchaser
shall assume all obligations of the Seller with respect
to Transferred Employees.
(ii) The Purchaser shall assume the
obligations of the Seller under the Employee Plans
unless otherwise noted on Schedule 2(a)-1. Effective
as of the Closing Date, the Purchaser shall be
substituted for the Seller as the sponsoring employer
of the Employee Plans. Notwithstanding the foregoing,
if the current carriers and administrators of the
Employee Plans with whom the Seller has contracted do
not consent to the substitution of the Purchaser for
the Seller under any such contracts, then the Purchaser
shall make alternative arrangements. On and after the
Effective Date the Purchaser shall comply fully with
the continuation of coverage requirements of Part 6 of
Title 1 of ERISA, including the obligations of the
Seller.
(iii) Except as contemplated by and subject
to Section 7(i), nothing in this Section 7(k) shall
limit or restrict the Purchaser from amending or
modifying the terms of employment of any Transferred
Employee on or after the Closing Date, nor shall
anything contained in this Agreement confer on any
Transferred Employee any right to be continued in the
employ of the Purchaser. Except as expressly set forth
in this Section 7(k), the Purchaser shall have the
right after the Closing Date to take any action with
respect to any of the Employee Plans that Purchaser
determines appropriate including, without limitation,
the amendment or termination of any Employee Plan.
Nothing in this Agreement shall be deemed to create any
rights in any third parties including, without
limitation, any third party beneficiary rights, in any
Transferred Employee, any beneficiary or dependent
thereof, with respect to the compensation, terms and
conditions of employment and benefits which may be
provided to Transferred Employees from time to time by
the Purchaser.
(iv) Purchaser shall indemnify and hold
harmless the Seller Indemnitees from and against any
and all losses arising after the Effective Date out of
or in connection with the liabilities and obligations
with respect to Transferred Employees and with respect
to the Employee Plans.
(v) The Seller and the Purchaser shall each
provide the other with the reasonable time of its
personnel managers or other appropriate employees as
may be necessary for the appropriate administration by
each of any and all matters relating to the Employee
Plans contemplated under this Agreement.
(vi) The parties shall cooperate with one
another and use their best efforts to dissolve the
Seller s defined contribution profit sharing plan (the
"Profit Sharing Plan") in accordance with and pursuant
to the terms thereof and applicable law as soon as
practicable after the Closing Date.
(l) The Purchaser hereby indemnifies and agrees
to hold the Seller Indemnitees (which for purposes of
this Section shall include the shareholders of the
Seller) harmless from and against and agrees to pay or
cause to be paid to the Seller Indemnitees any amounts
for which any of them may be held liable on account of
federal or state income tax liability (including
interest and penalties) attributable to the business
operations of the Seller for the period between the
Effective Date and the Closing Date, but exclusive of
any income or gain recognized by the Seller from the
sale of the Assets pursuant to this Agreement. For
purposes of the calculation of the amount of any such
indemnity payment it shall be assumed that the Seller
Indemnities are subject to Federal income tax rate of
39.6% on the net income attributable to the operations
of the Purchased Business and are entitled to fully
utilize the deductions and tax credits attributable to
the operations of the Purchased Business for the same
period. Notwithstanding the assumption of such Federal
income tax rate, the Seller Indemnitees shall be
entitled to a payment of an additional amount for
increased Federal tax liability as a consequence of
deductions disallowed pursuant to Section 68 of the
Internal Revenue Code of 1986, as amended, that would
not have been disallowed if the Seller Indemnitees'
income as reported on their tax returns was reduced by
the amount of net taxable income attributable to the
1996 operations of the Purchased Business prior to the
Closing Date. No additional amount shall be payable to
the Seller Indemnitees on account of any effect of the
income attributable to the operations of the Purchased
Business on the tax bracket of the Seller Indemnitees
or on any alternative minimum tax liability of the
Seller Indemnitees. The Purchaser is hereby granted
full power and authority to take all action with
respect to proceedings relating to the tax treatment on
the Seller s Returns of items of income, deduction or
credit attributable to the operations of the Purchased
Business for 1996, including the right to be present at
any meeting with any tax authority pertaining to any
audit, examination, protest or settlement and to
settle, compromise and dispose of such proceedings to
the extent relating to items covered by this indemnity
in the name of the Seller Indemnitees. Furthermore,
the Purchaser hereby indemnifies and agrees to hold the
Seller Indemnitees harmless from and against and agrees
to pay or cause to be paid to the Seller Indemnitees
amounts for which the Seller Indemnitees are liable on
account of the failure of the Purchaser to properly
report or pay state sales tax liability in connection
with the transactions contemplated herein as set forth
herein. The indemnity amounts payable to the Seller
Indemnitees under this Section 7(l) shall be computed
on an "after-tax" basis, so that any such indemnity
payment shall be in an amount which, when reduced by
the net increase in the Federal, state and local income
tax liability of the Seller Indemnitees as a result of
the receipt of such payment shall equal the amount of
the tax in respect of which such indemnity is payable.
The indemnity provided for in this Section 7(l) shall
be in addition to any rights Seller Indemnitees might
have to indemnification under Section 12 hereof and any
other rights that the Seller Indemnitees may have under
applicable law with respect to the subject matter of
this Section.
(m) After the Closing Date, the Purchaser and the
Seller shall make available to the other, as reasonably
requested, and to any taxing authority, all
information, records or documents relating to tax
liabilities or potential tax liabilities of the Seller
and shall preserve all such information, records and
documents until the expiration of any applicable
statute of limitations or extensions thereof.
(n) Except for payment of the Seller s income
taxes arising as a result hereof, the Purchaser shall
pay or otherwise discharge all sales taxes, bulk sales
taxes, transfer taxes, compensating use taxes and other
taxes of any kind whatsoever arising out of the sale of
the Assets and shall furnish to the Seller evidence of
such payment and all correspondence in connection
therewith with all applicable taxing authorities. To
the extent the Purchaser claims an exemption from sales
tax on the basis of a purchase for resale, the
Purchaser shall furnish the Seller a resale certificate
therefor upon request.
(o) The Purchaser agrees that it will make loans
to the shareholders of the Seller to the extent
requested and necessary to enable such shareholders to
pay any Federal, state or local taxes in respect of
original issue discount that may be recognized and
allocated to such shareholders on account of the
Promissory Note. The parties agree that any such loans
shall be repaid by such shareholders, with interest at
a rate of six percent (6%) per annum, as follows: (i)
shareholders who are Transferred Employees shall repay
such loans out of amounts payable to them on account of
their participation in the Key Employee Bonus Plan or
Management Bonus Plan, or, if no amounts are payable to
such shareholders under either such plan, out of their
pro rata share of the Purchase Consideration, at the
time the Purchase Consideration is payable hereunder;
and (ii) shareholders who are not Transferred Employees
shall repay such loans out of their pro rata share of
the Purchase Consideration or out of such other
consideration which they are to receive in respect of
their Shares, at the time the Purchase Consideration or
such other consideration is payable to such
shareholders by the Seller.
(p) The Purchaser shall enter into employment
arrangements with Dave Florence, Robert Foehl and Max
Bartko, on the terms set forth in Schedule 7(p) hereto
(collectively, the "Employee Arrangements").
(q) After the Closing, the Seller shall use
commercially reasonable efforts to cause the SPD
Partnership to transfer good and marketable title to
the Real Estate, free and clear of any and all
encumbrances (other than the existing mortgage and
customary exceptions to title), to the Purchaser in
exchange for the Purchaser s assumption of any mortgage
debt outstanding thereon (provided that such
indebtedness has not been increased, either through
accretion of interest or refinancing, prior to the
Third Anniversary).
(r) The Seller will furnish updated Schedules to
the Purchaser no later than three (3) business days
prior to the Closing Date. No such disclosure shall
limit or affect any right of the Purchaser to decline
to consummate the Closing hereunder if such updated
Schedules disclose that the representations or
warranties of the Seller contained in this Agreement
(by reference to the Schedules on the Execution Date)
are not true and correct in all material respects at
and as of the Closing Date; provided, that if the
Closing shall occur, the Purchaser shall be deemed to
have waived any right to indemnification with respect
to the incorrect information disclosed in the Schedules
provided on or before the Execution Date to the extent
corrected in such updated Schedules.
(s) Each party shall give the other party prompt
notice of any change in any of the information
contained in its representations and warranties
hereunder, the Schedules and Exhibits hereto or the
documents furnished in connection herewith which occurs
prior to the Closing.
8. Conditions of Closing
(a) The respective obligation of each of the
parties to close hereunder shall be subject to the
fulfillment and satisfaction, prior to or at the
Closing, of each of the following conditions or the
written waiver thereof by the party against whom such
waiver is sought to be enforced:
(i) This Agreement and the transactions
contemplated herein shall have been approved in the
manner required by applicable law and the Certificate
of Incorporation and bylaws of the Seller by the
holders of the issued and outstanding shares of Common
Stock of the Seller entitled to vote thereon (the
"Stockholder Approval").
(ii) All required consents, authorizations,
waivers and approvals of Governmental Authorities
sufficient to enable the Purchaser to conduct the
Purchased Business after the Closing Date in a manner
substantially similar as now conducted shall have been
obtained, except where the failure to have obtained any
such consents, authorizations, waivers or approvals
would not have a Material Adverse Effect following the
Effective Date.
(iii) None of the parties hereto shall be
subject to any order or injunction of a court of
competent jurisdiction which prohibits the consummation
of the transactions contemplated by this Agreement.
(iv) No statute, rule or regulation shall have
been enacted by any Governmental Authority which
prohibits the consummation of the transactions
contemplated herein or makes such consummation illegal.
(v) The period for perfecting stockholders
appraisal rights under Section 623 of the New York
Business Corporation Law in connection with the
transactions contemplated herein shall have expired and
the number of shares of the Seller s stock ("Shares")
held by shareholders of the Seller that have, as of the
Closing Date, perfected (and not withdrawn a demand
for) their appraisal rights with respect to Shares
owned by them as of the Closing Date shall not exceed
10% of all of the Shares outstanding as of such date.
(b) The obligation of the Purchaser to close
hereunder shall be subject to the fulfillment and
satisfaction, prior to or at the Closing, of each of
the following conditions or the written waiver thereof
by the Purchaser:
(i) The representations and warranties of the
Seller in this Agreement shall be true and correct in
all material respects as of the Closing Date (except
with respect to representations and warranties made as
of a specific date, which shall be true and correct as
of the date made), and the Purchaser shall have
received a certificate to that effect dated the Closing
Date and executed by the President or a Vice President
of the Seller.
(ii) Each of the agreements and covenants of
the Seller to be performed under this Agreement at or
prior to the Closing Date shall have been performed in
all material respects, and the Purchaser shall have
received a certificate to that effect dated the Closing
Date and executed by the President or a Vice President
of the Seller.
(iii) The consent required to assign to the
Purchaser the right, title and interest of the Seller
in and to the lease of the Seller relating to the
property located at 220 Grace Church Street, Port
Chester, New York ("Horton Street School Building")
shall have been obtained and delivered to the
Purchaser.
(iv) Subject to Section 1(f) hereof, the
Purchaser shall have received deeds, bills of sale,
endorsements, assignments, drafts, checks and other
documents of transfer, conveyance and assignment valid
to transfer all right, title and interest of the Seller
in and to the Assets to the Purchaser in the manner
contemplated herein, in form and substance reasonably
satisfactory to counsel to the Purchaser.
(v) The Purchaser shall have received a
copies of resolutions duly adopted by the boards of
directors and the stockholders of the Seller
authorizing and approving the sale of the Assets and
performance by the Seller of its obligations hereunder,
certified by the secretary or assistant secretary of
the Seller. The authority of all persons permitted to
draw on the Seller s bank accounts, charge on the
Seller s credit cards and have access to the Seller
safe deposit boxes shall have been canceled, all
effective as of the Closing Date.
(vi) The Purchaser shall have received an
opinion of the Seller s counsel, dated the Closing
Date, in a form mutually acceptable to the parties..
(vii) There shall have been no damage,
destruction or loss resulting in a Material Adverse
Effect.
(viii) No material adverse change shall have
occurred in the condition (financial or otherwise) of
the Purchased Business and Assets prior to the Closing
Date.
(c) The obligation of the Seller to close
hereunder shall be subject to the fulfillment and
satisfaction, prior to or at the Closing, of each of
the following conditions or the written waiver thereof
by the Seller:
(i) The representations and warranties of
the Purchaser in each of this Agreement and the
Registration Rights Agreement shall be true and correct
in all material respects on and as of the Closing Date
(except with respect to representations and warranties
made as of a specific date, which shall be true and
correct as of the date made), and the Seller shall have
received a certificate to that effect dated the Closing
Date and executed by the President, Chief Operating
Officer or a Vice President of the Purchaser.
(ii) Each of the agreements and covenants of
the Purchaser to be performed under this Agreement at
or prior to the Closing Date shall have been performed
in all material respects, and the Seller shall have
received a certificate to that effect dated the Closing
Date and executed by the President, Chief Operating
Officer or a Vice President of the Purchaser.
(iii) The Seller shall have received copies
of resolutions duly adopted by the board of directors
of the Purchaser authorizing and approving the
execution of this Agreement and all other agreements
contemplated hereby and thereby by the Purchaser and
the performance by the Purchaser of its obligations
hereunder, and thereunder, certified by the secretary
or an assistant secretary of the Purchaser.
(iv) The Seller shall have received the
opinion of the Purchaser s counsel, dated the Closing
Date, in a form mutually acceptable to the parties.
(v) The Purchaser shall have entered into
the Employee Arrangements.
(vi) The Registration Rights Agreement shall
have been executed.
(vii) The Seller shall have obtained amended
stock vesting agreements from all of the Seller s
shareholders holding restricted shares of the Seller s
stock.
(viii) The Seller shall transfer ownership
of the assets of Direct Media Canada Inc. and Direct
Media/DMI Ltd. to the Purchaser, and a License
Agreement and Service Agreement reasonably satisfactory
to the Purchaser shall have been executed between the
Seller and Direct Media Canada Inc. and assigned to the
Purchaser.
9. Further Covenants and Agreements of the
Parties.
The Seller hereby covenants and agrees that:
(a) In consideration of the Purchase Price, for a
period three (3) years after the Closing Date the
Seller (Direct Media/DMI, Inc.) shall not:
(i) directly or indirectly, engage in any
business that directly or indirectly competes with the
Purchased Business as conducted on the Closing Date or
engage in the United States, Canada or the U.K. in
substantially the same business as the Purchased
Business as conducted by the Seller immediately prior
to the Closing.
(ii) except with the Purchaser s written
consent for itself or on behalf of any other Entity
solicit any supplier, customer or employee of the
Purchaser for the purpose of diverting or taking away
such supplier, customer or employee of the Purchaser.
(b) The Seller agrees that the remedy at law for
any breach of the provisions of Section 10(a) will be
inadequate, and that the Purchaser shall be entitled to
injunctive relief to compel the Seller to perform or
refrain from action required or prohibited hereunder.
(c) For a period of six (6) years after the
Closing Date, at reasonable times and upon reasonable
notice, the Seller and its authorized representatives
shall have, and the Purchaser shall afford the Seller
and its authorized representatives, access to, and the
right to make copies of at the Seller s expense, the
books and records conveyed to the Purchaser hereunder,
and the right to consult with the Purchaser s lawyers
and accountants at the Seller s expense, and the
Purchaser and its authorized representatives shall
have, and the Seller shall afford the Purchaser and its
authorized representatives, equal access to any minute
books, stock books and similar corporate records
retained by the Seller in the manner described above.
10. Termination
(a) This Agreement may be terminated and the
transaction may be abandoned at any time prior to the
Closing Date, before or after the Stockholder Approval,
by the mutual written consent of the Purchaser and the
Seller.
(b) This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by
either the Seller or the Purchaser if (i) the Closing
shall not have occurred on or before June 30, 1996, or
(ii) the transaction shall have been voted on by the
Seller s stockholders at a meeting duly convened
therefor or at any adjournment thereof and the votes
shall not have been sufficient to obtain a valid
Stockholder Approval, or (iii) a United States federal
or state court of competent jurisdiction or
Governmental Authority shall have issued an order,
decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become
final and non-appealable; and provided, in the case of
a termination pursuant to clause (i) above, that the
terminating party shall not have breached its
obligations under this Agreement in any manner that
shall have proximately contributed to the occurrence of
the failure referred to in said clause.
(c) In the event of a termination of this
Agreement pursuant to this Section 10, this Agreement
shall become void and of no further force and effect
and all obligations of the parties hereto shall
terminate except the obligations of the parties
pursuant to this Section 10(c) and except for the
provisions of Sections 7(a), 7(h), 15(a), 15(d), 15(e),
and 15(f).
11. Survival of Representations, Warranties,
Etc.
All of the representations, warranties, covenants and
agreements made by the parties to this Agreement shall
survive the Closing for a period of one (1) year
thereafter, except as otherwise expressly provided
herein.
12. Indemnification
(a) The Purchaser shall defend, indemnify and
hold harmless the Seller Indemnitees (as defined in
Section 2(a) above) and save the Seller Indemnitees
harmless from, against, for and in respect of, and
shall pay any damages, losses, liabilities, claims,
costs and expenses, including, without limitation,
reasonable attorneys fees ("Losses") caused by or
resulting or arising from or otherwise relating to (i)
any breach or violation or failure of observance or
performance of any representation, warranty, covenant,
agreement or commitment made by the Purchaser hereunder
(including under Section 13);(ii) the Purchaser s
failure to assume, perform and discharge any of the
Assumed Obligations, including, without limitation, any
Assumed Obligations being contested by Purchaser
pursuant to Section 2(b) hereof; and (iii) any claims
made against the Seller by the lessor of the Horton
Street School Building which arise out of the lease
agreement between the Seller and such lessor which is
assigned to the Purchaser.
(b) Subject to Section 12(d) hereof, the Seller
shall defend, indemnify and hold harmless the Purchaser
from, against, for and in respect of, and pay any
Losses caused by or resulting or arising from or
otherwise relating to (i) any Special Liability, and
(ii) any breach or failure of observance or performance
of any representation, warranty, covenant, agreement or
commitment made by the Seller hereunder (including
under Section 13).
(c) For purposes of this Section 12(a), the party
entitled to indemnification hereunder shall be known as
the "Indemnitee" and the party required to indemnify
hereunder shall be known as the "Indemnifying Party."
Any claim for indemnity under this Section 12 shall be
made by written notice from the Indemnitee to the
Indemnifying Party specifying in reasonable detail the
basis of the claim. Except as otherwise provided
herein, when an Indemnitee seeking indemnification
under this Section 12 receives notice of any claims
made by third parties ("Third Party Claims") which is
to be the basis for a claim for indemnification
hereunder, the Indemnitee shall promptly give written
notice thereof to the Indemnifying Party reasonably
indicating (to the extent known) the nature of such
claims and the basis thereof and attaching to such
notice a copy of the notice of the Third Party Claim.
Any failure by the Indemnitee to provide such notice
shall not affect the Indemnifying Party s obligations
hereunder, except to the extent of any liability caused
by such delay. Upon receipt of such notice from the
Indemnitee, the Indemnifying Party may, but shall not
be required to, assume the defense of any such Third
Party Claim, including its compromise or settlement,
and the Indemnifying Party shall pay all reasonable
costs and expenses thereof and shall be fully
responsible for the outcome thereof; provided, however,
that the Indemnifying Party may not settle or
compromise any Third Party Claim without the
Indemnitee s prior written consent (which consent shall
not be unreasonably withheld). The Indemnifying Party
shall give notice to the Indemnitee as to its intention
to assume the defense of any such Third Party Claim
within ten (10) business days after the date of receipt
of the Indemnitee s notice in respect of such Third
Party Claim. If an Indemnifying Party does not, within
ten (10) business days after the Indemnitee s notice is
given, give notice to the Indemnitee of its assumption
of the defense of the Third Party Claim, the
Indemnifying Party shall be deemed to have waived its
rights to control the defense thereof. If the
Indemnitee assumes the defense of any Third Party Claim
because of the failure of the Indemnifying Party to do
so in accordance with this Section 12(c), the
Indemnifying Party shall pay all reasonable costs and
expenses of such defense and shall be fully responsible
for the outcome thereof. However, the Indemnifying
Party shall have no liability with respect to any
compromise or settlement thereof effected without its
prior written consent (which consent shall not be
unreasonably withheld).
(d) Notwithstanding anything set forth in this
Section 12, the Seller shall not be liable to the
Purchaser to indemnify the Purchaser or its
shareholders or any other person or entity for any
breach or default by the Seller unless and until the
total dollar value of all Indemnifiable Losses suffered
by the Purchaser hereunder exceeds $50,000 and then
only for the value of in excess of $50,000 (the
"Indemnity Floor"), and the maximum amount of liability
of the Seller under this Section 12 shall be the
Purchase Price.
(e) Purchaser shall have the right to deduct the
amount of any indemnifiable claim, plus interest
calculated at a rate of six percent (6%) per annum,
from the Purchase Consideration, as set forth in the
Promissory Note.
13. Brokers
The Seller and the Purchaser covenant and
represent to each other that each had no dealings with
any broker or finder in connection with this Agreement
or the transactions contemplated hereby and that no
broker, finder or other person is entitled to receive
any broker s commission or finder s fee or similar
compensation in connection with any such transaction.
14. Post-Closing Operations
(a) The Seller acknowledges that the post-Closing
operations of DMI/U.K. may be under the auspices of the
Purchaser s U.K. subsidiary, Acxiom U.K. Ltd.
(b) The Purchaser shall provide the Transferred
Employees with information on a quarterly basis as to
the financial condition and the performance of the
Purchaser and the Purchased Business.
(c) It is the Purchaser s intention to operate the
Purchased Business as a separate subsidiary and/or
business unit for five (5) years after the Closing
Date. In the unlikely event of a sale or transfer of
the Purchased Business during such time, the Purchaser
agrees that it will ensure that any successor in
interest will assume all of the Purchaser s obligations
under this Agreement, including but not limited to its
obligations under the Management Bonus Plan and the Key
Employee Bonus Plan.
15. Miscellaneous
(a) This Agreement (including the Schedules and
Exhibits which are made a part hereof) constitutes the
entire agreement of the parties with respect to the
subject matter hereof and supersedes all other
understandings and agreements of the parties with
respect to the subject matter hereof. No change,
modification or amendment of, or addition to this
Agreement or any part thereof shall be valid unless in
writing and signed by or on behalf of each party
hereto.
(b) Any and all notices or other communication or
deliveries required or permitted to be given or made
shall be in writing and delivered personally, by
facsimile, or sent by certified or registered mail,
return receipt requested and postage prepaid or sent by
a nationally recognized overnight courier service, as
follows:
If to Purchaser:
Acxiom Corporation
301 Industrial Boulevard
P.O. Box 2000
Conway, AR 72033-2000
Attn: Charles D. Morgan, Jr.
Facsimile: (501) 336-3913
with a copy to:
Acxiom Legal Department
301 Industrial Boulevard
P.O. Box 2000
Conway, AR 72033-2000
Facsimile: (501) 336-3913
If to the Seller:
Direct Media/DMI, Inc.
200 Pemberwick Road
Greenwich, CT 06830
Attn: Robert Foehl
Facsimile: (203) 532-1656
with copies to:
Spencer L. Schneider, Esq.
145 Hudson Street
New York, New York 10013
Facsimile: (212) 431-7312
and
Robinson Silverman Pearce
Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, NY 10104
Attn: Kenneth L. Henderson, Esq.
Facsimile: (212) 541-4630
or at such other address as any party may specify by
notice given to such other party in accordance with
this Section 15(b). The date of giving of any such
notice shall be the date of hand delivery or facsimile
transmission, four (4) days after the date of the
posting of the mail, or the date after the date when
deposited with the overnight courier.
(c) No waiver of the provisions hereof shall be
effective unless in writing and signed by the party to
be charged with such waiver. No waiver shall be deemed
a continuing waiver or waiver in respect of any
subsequent breach or default, either of similar or
different nature, unless expressly so stated in
writing.
(d) This Agreement shall be construed (both as to
validity and performance) and enforced in accordance
with, and governed by, the laws of the State of
Arkansas, without giving effect to the principles of
conflicts of law. The parties hereto agree that any
suit or proceeding arising out of this Agreement or the
consummation of the transactions contemplated hereby
shall be brought only in a Federal or state court
located in Pulaski or Faulkner Counties, respectively;
provided, however, that neither party waives its right
to request the removal of such action or proceeding
from the State court to a Federal court in such
jurisdiction. The parties hereto each waive any claim
that such jurisdiction is not a convenient forum for
any such suit or proceeding and the defense of lack of
personal jurisdiction. Should any clause, section or
part of this Agreement be held or declared to be void
or illegal for any reason, all other clauses, sections
or parts of this Agreement which can be effected
without such illegal clause, section or part shall
nevertheless continue in full force and effect.
(e) Except as otherwise provided herein, the
Purchaser and the Seller shall each bear their own
expenses in connection with this transaction.
(f) This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their
respective successors and assigns; provided, however,
that no party may assign any of its rights or delegate
any of its duties under this Agreement without the
prior written consent of the other party hereto, which
consent is hereby given to any assignment to an
affiliate of the Purchaser. All of the understandings,
covenants, agreements and undertakings contained herein
are solely for the benefit of the signatories hereto
(except as otherwise specifically set forth herein) and
there are no other parties which are intended to be
benefited in any way by this Agreement.
(g) The headings or captions under sections of
this Agreement are for convenience and reference only
and do not in any way modify, interpret or construe the
intent of the parties or effect any of the provisions
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be signed as of the date and year
first above written.
ACXIOM CORPORATION
By: /s/ Charles D. Morgan, Jr.
-------------------------------
Charles D. Morgan, Jr.
President
DIRECT MEDIA/DMI, INC.
By: /s/ Robert Foehl
-------------------------------
Robert Foehl
President