SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
June 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _______
Commission file number 000-22849
Visual Data Corporation
-----------------------
(Exact name of small business issuer as specified in its charter)
Florida
-------
(State or other jurisdiction of incorporation or organization)
65-0420146
----------
(IRS Employer Identification No.)
1291 SW 29 Avenue, Pompano Beach, Florida 33069
-----------------------------------------------
(Address of principal executive offices)
954-917-6655
------------
(Issuer's telephone number)
--------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes (x) No ( )
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. As of October 12, 1998 the
registrant had issued and outstanding 3,732,100 shares of common stock.
Transitional Small Business Disclosure Format (check one);
Yes ( ) No (x)
<PAGE>
The Registrant hereby amends the items of its Quarterly Report on Form
10-QSB for the quarter ended June 30, 1998 as set forth below:
PART II
Item 2. Changes in Securities.
In November 1997 the Company acquired certain assets of Armigeron
Information Services, Inc., including web servers with supporting network
infrastructure, and context sensitive web technology which allows for highly
complex interactive web site development, in exchange for 25,000 shares of the
Company's restricted Common Stock in a private transaction exempt from
registration under the Securities Act of 1933 (the "Securities Act") pursuant to
Section 4(2) of the Securities Act. The purchaser was a sophisticated investor,
had such knowledge and experience in financial and business matters that it was
capable of evaluating the merits and risks of the prospective investment, and
had access to or was provided with relevant financial and other information
relating to the Company.
In May 1998 the Company completed the sale of 150 shares of the
Company's Series A Convertible Preferred Stock (the "Series A Preferred") at a
purchase price of $5,000 per share to two institutional investors, Themis
Partners, L.P. and Heracles Fund, in a private transaction exempt from
registration under the Securities Act pursuant to Section 4(2) of the Securities
Act. The two institutional investors were accredited investors, had such
knowledge and experience in financial and business matters that they were
capable of evaluating the merits and risks of the prospective investments, and
had access to or were provided with relevant financial and other information
relating to the Company.
The buyers have agreed to purchase an additional 150 shares of Series A
Preferred subject to certain conditions contained in the Securities Purchase
Agreement between the Company and such buyers, a copy of which was filed as an
exhibit to the Report on Form 8-K as filed by the Company with the Securities
and Exchange Commission (the "Commission") on May 19, 1998. The initial purchase
resulted in gross proceeds to the Company of $750,000. The Series A Preferred
Stock bears interest at 5% per annum, payable upon conversion of the preferred
shares and is payable in kind at the Company's option. At October 19, 1998 the
Series A Preferred is convertible into the Company's Common Stock at a price
equal to the lesser of (i) $2.9046, subject to adjustment, or (ii) a floating
conversion price determined by multiplying a Conversion Percentage in effect as
of such date by the market price for the Company's Common Stock. The base
Conversion Percentage, which is subject to additional adjustment as set forth
below, shall be 84.62% for the first 180 days from the closing and 79.62% for
any day thereafter. The market price for the Company's Common Stock shall be the
average of the three lowest closing bid prices for such Common Stock during the
20 consecutive trading days immediately preceding such date. The fixed
conversion price and Conversion Percentages are subject to additional adjustment
as hereinafter set forth.
1
<PAGE>
Following the initial closing date, the buyers shall be obligated to
purchase and the Company will be obligated to sell an additional 150 shares of
Series A Preferred under the same terms and conditions as the initial shares so
issued, provided a series of conditions have been met including, but not limited
to, (i) the Company shall have attained shareholder approval permitting issuance
of the shares of Common Stock underlying the Series A Preferred in accordance
with applicable law, which such approval was obtained on September 4, 1998 (ii)
the Company's registration statement relating to the Common Stock issuable upon
conversion of the Series A Preferred has been declared effective by the
Commission, (iii) there has been no change in the listing of the Company's
Common Stock on The Nasdaq SmallCap Market or threat thereof, (iv) the closing
bid price of the Company's Common Stock is greater that $2.50 per share on the
day immediately preceding the notification of such closing, and (v) there has
not been a materially adverse change in the business or financial condition or
results of operations of the Company.
Under the terms of the Securities Purchase Agreement, the Company was
obligated to prepare and file a registration statement providing for the resale
of the shares of Common Stock issuable upon conversion of the Series A Preferred
by August 15, 1998 if the Company chose to file a Form S-3 registration
statement (the Company filed such registration statement on Form S-3, file
number 333-62071, on August 21, 1998) and to use its best efforts to have such
registration declared effective by September 30, 1998 (provided that if the
Commission reviews the registration statement on Form S-3 and in connection with
such review requests the audited financial statements of the Company's year
ending September 30, 1998, in order to declare such registration effective, the
deadline shall be extended to October 30, 1998). Such registration statement was
not filed by August 15, 1998 nor was it declared effective as of September 30,
1998; accordingly, both the base fixed Conversion Percentage and the base
variable Conversion Percentage were reduced to the percentages hereinabove set
forth and each of the fixed conversion price and base Conversion Percentages
will be further reduced by an additional .06 percent for each calendar day
thereafter until such registration statement has been declared effective.
Also in May 1998, the Company acquired certain assets of Digital
Criteria Technologies Inc., a Florida corporation, in exchange for 140,000
shares of restricted Common Stock of the Company and warrants to purchase an
additional 70,000 shares of Common Stock, all as more fully set forth in the
Report on Form 8-K as filed by the Company with the Commission on June 3, 1998.
The transaction was a private transaction exempt from registration under the
Securities Act pursuant to Section 4(2) of the Securities Act. The purchaser was
an accredited investor, had such knowledge and experience in financial and
business matters that it was capable of evaluating the merits and risks of the
prospective investment, and had access to or was provided with relevant
financial and other information relating to the Company. The warrants are
exercisable at a price of $3.18 per share until April 7, 2002. The Company has
granted holders of the shares of Common Stock and the shares of Common Stock
underlying the warrants with piggyback registration rights, provided, however,
the Company has agreed to file registration for such securities no later that
one year from April 1998.
2
<PAGE>
On July 27, 1998, the Company completed the acquisition of 8,563,417
shares of the common stock, or approximately 51%, of EDnet, Inc., a Colorado
corporation ("EDnet"), all as more fully set forth in the Report on Form 8-K as
filed by the Company with the Commission on August 11, 1998. The transaction was
a private transaction exempt from registration under the Securities Act pursuant
to Section 4(2) of the Securities Act. The purchaser was an accredited investor,
had such knowledge and experience in financial and business matters that it was
capable of evaluating the merits and risks of the prospective investment, and
had access to or was provided with relevant financial and other information
relating to the Company. The purchase price for the EDnet shares was
approximately $0.1635 per share and the consideration tendered by the Company
consisted of (a) cash in the amount of $698,004.32; (b) five year warrants to
purchase 50,000 shares of the Company's restricted Common Stock, valued at $2.74
per warrant; (c) 75,000 shares of the Company's restricted Common Stock valued
at $3.75 per share; and (d) a secured promissory note of the Company in the
aggregate principal amount of $283,745.68. The note is secured by a mortgage on
the Company's principal executive offices. In addition, the Company received
options to acquire at an exercise price of $.10 per share, the number of shares
actually purchased upon exercise of each option, warrant and other convertible
security of EDnet outstanding at the date of closing. Based upon the number of
convertible securities outstanding, the Company has the right to purchase up to
an aggregate of 6,542,722 shares of EDnet's common stock. The Company's right to
exercise the options shall accrue on the date of exercise of the corresponding
outstanding option and shall expire on the first anniversary of the exercise
date of each such outstanding option.
On August 11, 1998 the Company completed the sale of 150 shares of the
Company's Series A-1 Convertible Preferred Stock (the "Series A-1 Preferred"),
resulting in gross proceeds to the Company of $750,000, all as more fully set
forth in the Company's Report on Form 8-K as filed by the Company with the
Commission on August 21, 1998. The shares of Series A-1 Preferred were purchased
by WEC Investors IV, LLC, an institutional investor, in a private transaction
exempt from registration under the Securities Act pursuant to Section 4(2) of
the Securities Act. The institutional investor was an accredited investor, had
such knowledge and experience in financial and business matters that it was
capable of evaluating the merits and risks of the prospective investment, and
had access to or was provided with relevant financial and other information
relating to the Company.
The designations, rights and preferences of the Series A-1 Preferred,
including the base fixed conversion price, base fixed Conversion Percentage and
base variable Conversion Percentage (including the applicable additional
reductions) and registration rights are substantially similar to those of the
Series A Preferred, although the purchaser of the Series A-1 Preferred is not
the same as the purchasers of the Series A Preferred and, to the knowledge of
the Company, there if no affiliation between such purchasers. The purchaser of
the Series A-1 Preferred has no obligation or right to purchase any additional
shares of such security from the Company. In no event shall any holder of Series
A-1 Preferred be entitled to convert shares in excess of the number of shares of
Series A-1
3
<PAGE>
Preferred which, upon conversion, would cause the aggregate number of shares of
Common Stock beneficially owned by such holder and its affiliates to exceed
4.99% of the outstanding shares of Common Stock following such conversion.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
No. Description
10(i) Agreement dated March 9, 1998 by and between Interval
International, Inc. and CondoView Corporation.
10(ii) Agreement dated March 30, 1998 by and between Video News Wire
Corporation and P.R. Newswire, Inc.
4
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Visual Data Corporation,
a Florida corporation
Date: October 15, 1998 By: /s/ Randy S. Selman
-------------------
Randy S. Selman,
President, Chief Executive Officer
and Acting Chief Financial Officer
5
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 9th day
of March, 1998 (the "Effective Date") by and between CondoView Corporation, a
Florida corporation ("CVC"), and Interval International, Inc., a Florida
corporation ("II"). II and CVC are sometimes hereinafter individually referred
to as a "Party", and collectively referred to as the "Parties".
RECITALS
A. CVC, a wholly owned subsidiary of Visual Data Corporation ("VDC"),
produces and markets the CondoView(TM) Library (the "CVC Library") containing
short, concise visual brochures ("Vignettes") depicting the specific
characteristics and amenities of vacation ownership resorts in full-motion
visual form (collectively the "CVC Business").
B. II is a provider of vacation ownership/time share exchange for
developers ("Developers") of vacation ownership/time share resorts (individually
the "Property" and collectively the "Properties").
C. Each Party wishes to engage the other Party to perform certain
services for the other Party and each Party wishes to be engaged to provide such
services for the other Party, pursuant to the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements contained herein, the Parties mutually agree as follows:
1. Recitals. The recitals set forth above are true, correct and are
incorporated herein by reference.
2. Engagement.
a. CVC hereby engages II to perform the services set forth herein,
pursuant to the terms and conditions of this Agreement, and II hereby accepts
such engagement.
b. II hereby engages CVC to perform the services set forth herein,
pursuant to the terms and conditions of this Agreement, CVC hereby accepts such
engagement.
3. Services to be Provided by II.
a. II shall make its marketing and sales staff available for training
by CVC to market and promote the CVC Library to Developers and Properties for
inclusion in the CVC Library and as contemplated by this Agreement.
b. II shall use reasonable efforts to market, endorse, and promote the
CVC Library to
<PAGE>
Developers and Properties, including, without limitation, sending letters that
market the CVC Business and CVC Library to Developers, in order to determine the
level of interest of Developers.
c. II shall use reasonable efforts to obtain "Initial Contracts", as
hereinafter defined, and to obtain deposits from Developers and Properties in
connection with such Initial Contract(s) in order that CVC shall create a
Vignette to be included in the CVC Library for each Property and/or Developer
that is the subject matter of an Initial Contract. The Initial Contracts shall
be substantially in the form and based substantially upon the terms and
conditions described on Exhibit A attached hereto and incorporated herein, and
the pricing for such Initial Contracts shall be in accordance with the pricing
schedule described on Exhibit B attached hereto and incorporated herein. CVC
further agrees that such terms, conditions, and pricing shall at all times be
reasonably consistent with or better than the terms, conditions and pricing
provided to other entities entering into similar agreements with CVC.
d. Within ninety (90) days from the Effective Date, II will use
reasonable efforts to assist CVC in obtaining "Test Group Initial Contracts", as
hereinafter defined, for between six (6) and ten (10) Properties (the "Test
Group Properties") as part of CVC's initial test, which initial test period
shall be six (6) months from the date that all of the Vignettes of the Test
Group Properties are available to travel agencies (the "Test Group Period"), to
participate in CVC's media/marketing program, pursuant to the terms and
conditions set forth in Exhibit A and Exhibit B attached hereto.
e. II shall use reasonable efforts to assist CVC in obtaining "Renewal
Contracts", as hereinafter defined, and in obtaining deposits from Developers
and/or Properties in connection with such Renewal Contract for each Property
that is the subject matter of an Initial Contract obtained through II's efforts.
f. II will provide advertising and editorial support in selected issues
of II's publications, including without limitation, Vacation Industry Review,
with quarter page or larger advertisements promoting the CVC Business with II.
II shall further promote the CVC Business and CVC Library through II's sales and
marketing personnel and at Info Exchanges, which are regional meetings held by
II for Developers, and through other mutually agreed upon materials and
meetings. Additionally, in the event II develops a future website targeted
towards Developers, II agrees to promote CVC Business on such website.
g. When used in this Agreement, the following terms shall have the
meanings set forth in this Section 3h or as otherwise set forth in this
Agreement.
(1) "Initial Contract" means a written agreement between one
Property, on the one hand, and CVC, on the other hand, that is obtained
through introductions made by II and which Property shall not have
previously contracted with CVC; provided that if a written agreement
includes more than one Property, that written agreement shall
constitute such number of Initial Contracts as shall be equal to the
number of Properties contained in such agreement.
(2) "Renewal Contract" or "Renewals" means a renewal of an
Initial Contract or a Test Group Initial Contract."
<PAGE>
(3) "Test Group Initial Contract" means a written agreement
between a Test Group Property, on the one hand, and CVC, on the other
hand, that is obtained through introductions made by II and which
Property has not previously contracted with CVC; provided that if a
written agreement includes more than one Property, that written
agreement shall constitute such number of Test Group Initial Contracts
as shall be equal to the number of Test Group Properties contained in
such agreement."
4. Services to be Provided by CVC. CVC agrees to provide the following services
to II:
a. Upon execution of an Initial Contract, CVC shall undertake the video
taping and production of a digitized video Vignette of a Property, which
Vignette shall include a narrative with music, at a cost to each Property to be
quoted as set forth on Exhibit B.
b. CVC shall offer additional services to Properties and Developers
including, among others, creation of a longer video for marketing or promotional
purposes for such Property(ies) or Developer(s), or creation of a compilation
video for multi-site Developer(s), which costs and expenses shall be defined at
such time as the duties and obligations of each Party shall be determined and
mutually agreed upon.
c. CVC shall include the Vignettes described in Section 4a on CVC's
file server and at CVC's website (the "CVC Website") which shall be linked to
the homepage(s) of a Property's website ("Property Website"), provided one
exists, as well as the appropriate Interval International Resort Directory
listing page and other mutually agreed upon links. CVC further agrees to promote
the Vignettes and related offers from participating CVC Properties through CVC's
strategic alliance websites. CVC agrees to provide a list of the current CVC
strategic alliance websites at any time upon II's request, and to make deletions
thereto as reasonably requested by II. II's failure to request deletions within
thirty (30) days of its receipt of such a list may be relied upon by CVC as II's
approval of such list.
d. CVC shall provide II with a monthly tracking report itemizing resort
bookings with regard to participating CVC Properties that are booked by travel
agencies using the Global Distribution System ("GDS") which CVC will arrange for
contractually through a third party service provider, which service provider
shall be managed by CVC (a list of such CVC Properties shall be provided by CVC
to II, and which list shall be updated as additional Properties are added to the
list of CVC Properties). Information such as passenger name, arrival and
departure date, and the rate charged will be provided. CVC further agrees to
provide CVC Properties with such monthly tracking reports (specifically relating
only to a particular Property's bookings), only upon II's written approval and
request.
e. CVC will use reasonable efforts to create a mechanism whereby
consumers shall be able to directly book accommodations on the Internet. Until
such a mechanism is available, CVC agrees to develop and maintain appropriate
Internet cross-links to enable consumers to contact participating CVC travel
agencies via the Internet in order to book accommodations.
<PAGE>
f. CVC shall customize a laser disc of the Test Group Properties, to be
made available to its participating travel agencies, which will also include
certain location attractions available to CVC from its attractions library at
the time of printing.
g. CVC shall make available any portion of videotape or film or any
other media prepared by CVC that has been fixed in a tangible medium of
expression by CVC in connection with Properties who contract with CVC (the "CVC
Content") for multi-media purposes, subject to the terms and conditions set
forth in this Agreement.
h. CVC will make translations from U.S. English into other languages
and include applicable distribution to international travel agencies and the
Internet as these translations become available, at additional costs and
expenses to the Property as set forth on Exhibit C.
i. CVC may, from time to time, at its sole discretion, provide the
opportunity for a Property to distribute news of special pricing promotions by
means of CVC's distribution channels.
j. CVC shall permit II, as well as the Properties and/or Developers who
enter into Initial Contracts and/or Renewal Contracts with CVC, to use the
Vignettes for any and all marketing/promotional purposes so long as the CVC
"bug" (burned in logo) remains visible to the naked eye at all times, and the
provisions of Section 8 herein shall be in full force and effect. II shall have
the right to terminate this Agreement upon written notice to CVC during the
thirty (30) day period following II's receipt of a copy of the CVC "bug" in the
event II does not approve of the form and/or size of such "bug".
k. CVC shall make reasonable efforts to produce a marketing Vignette
which shall include the Vignettes of the Test Group Properties to be used by
both CVC and II to help promote and market the CVC Business, as well as for use
at trade shows including, among others, the ARDA shows.
l. CVC shall provide to each Property a booking mechanism that will
ensure the smooth flow of processing contracted reservations, via a third party
who shall be managed by CVC. CVC will be responsible for monitoring and
overseeing all linkages to the GDS for each Property under contract. CVC
acknowledges that Carlson Companies, Inc. ("Carlson") is a financial investor in
II. Accordingly, CVC agrees to use reasonable efforts to work with II and
Carlson to create any enhancements and operational interfaces which may be
needed to promote the Properties to Carlson-owned and/or franchised travel
agencies in a manner that is more user-friendly and appealing to such agencies,
upon mutually agreeable terms and conditions.
m. Upon II's request, CVC agrees to offer its expertise to II by
consulting with II regarding multimedia technologies, DVD, CD-ROM, Interactive
Kiosks, and related matters, under mutually agreeable terms and conditions.
n. CVC agrees that all commission rates initially established by CVC to
be paid by Developers or Properties to CVC and/or participating travel agencies,
shall be mutually agreed upon with II. Thereafter, CVC shall have the right to
make reasonable adjustments to such initial rates upon thirty (30) days written
notice to II.
<PAGE>
5. Consideration.
a. As the sole consideration for the services to be provided by and the
obligations of II to CVC, II shall receive such commission as is set forth on
Exhibit B of this Agreement.
b. All commissions due to II pursuant to this Agreement shall be paid
by CVC within thirty (30) days after receipt of funds by CVC. All commission on
installment sales shall be paid in corresponding installments. In connection
therewith, CVC shall furnish II with a full, complete and accurate accounting
showing dollar amounts received in connection with the Initial Contracts (or
Renewals) and such accounting shall also include detailed information sufficient
for II to reasonably determine the status of all contracts and payments made on
each of the Initial Contracts and Renewals obtained by II on behalf of CVC.
c. CVC and II agree that commencing on the Effective Date and
continuing until June 1, 1999, CVC shall not: (i) enter into any agreement or
arrangement with, or perform services for or on behalf of, any time share or
vacation ownership exchange company or program, or any entities related thereto,
including, but not limited to, Resort Condominiums International, Inc. (RCI) and
Cendant Corporation; or (ii) provide similar services, as set forth herein, to
time share/vacation ownership resort developers and/or Home Owner's Associations
(HOA) who use RCI as an exchange service and do not also have an existing
relationship with II. CVC and II further agree that during the remaining term of
this Agreement following June 1, 1999 (including any renewals hereof), CVC shall
continue to be bound by the prohibitions set forth in clause (i) of the
preceding sentence, but shall no longer be bound by clause (ii), and thus shall
then be entitled to contract with or provide similar services for time
share/vacation ownership resort developers and HOAs who solely use RCI as their
exchange service. CVC and II further agree that during the term of this
Agreement (including renewals hereof), II shall not enter into any agreement or
arrangement with any other business that produces and markets a library
containing short, concise visual brochures depicting the specific
characteristics and amenities of vacation ownership resorts in full-motion
visual form. CVC acknowledges and agrees that any agreement or arrangement
between II and Carlson and/or its affiliates relating to any promotional
activities through Carlson's intranet and/or Carlson's window/channel
technology, shall not be prohibited by the preceding sentence or any other
provision in this Agreement. Each party acknowledges that a violation of the
provisions of this Section 5c may result in irreparable harm to the business of
the other party for which money damages alone would not be adequate
compensation. Accordingly, in addition to any other legal remedies which may be
available, each party agrees that the other party shall be entitled to
injunctive or other equitable relief to prevent the violating party from
committing any violation of this Section 5c.
d. At the end of the Test Group Period, II and CVC shall evaluate the
success of the CVC services and if deemed to be successful by II and CVC, then
II shall promote and market the CVC Business with and to Developers and
Properties.
6. The CVC Business. The Parties to this Agreement specifically agree that the
CVC Business as defined in Recital A of this Agreement, is the only business of
CVC and any additional products or services that may be developed, created,
produced, marketed or distributed, including
<PAGE>
without limitation, any additional libraries or content, by Visual Data
Corporation ("VDC"), the parent company of CVC, or any affiliates of VDC, shall
not be deemed to be a part or portion of the CVC Business or an asset or assets
of CVC or in any other manner be related to CVC.
7. Intellectual Property.
a. II shall not assert any right, title or interest in or to CVC
Content, the CVC Library or any Vignettes contained therein. II acknowledges and
agrees that CVC has reserved all right, title and interest in and to the
copyright, the right to apply for copyright registration, and any extensions and
renewals, in all publication, reproduction, broadcast or other derivative rights
of each Vignette and the CVC Library including, but not limited to merchandising
rights, use of title rights, publication rights, and foreign edition rights.
Except as specifically set forth in this Agreement there is no other grant of
license to II by CVC in connection with any Vignette or the CVC Library.
b. At all times, CVC shall own all rights, title and interest in and to
the mark CondoView(TM) (the "Mark") and shall undertake such actions and execute
such documents to ensure its proprietary ownership interest thereto. CVC
similarly acknowledges II's ownership of all right, title and interest in and to
the marks "Interval", "Interval International", "Interval Travel" and any
similar marks, and acknowledges that II shall also undertake such actions and
execute such documents to ensure its propriety ownership interest thereto. Each
Party agrees not to use the other Party's marks without the other Party's prior
written approval, and upon receipt of such approval, to use such marks in
conformance with such requirements as may be established by the other party from
time to time.
8. Grant of Non-Exclusive License.
a. During the Term (and any renewals thereof) as set forth in Section
10 of this Agreement, CVC hereby agrees to grant to II, a limited,
non-exclusive, personal right and license to use the CVC Mark, CVC Library, and
CVC Content and any related rights and privileges provided under the trademark,
copyright, trade secret and other laws of the United States, the individual
states thereof, and jurisdictions foreign thereto, and the goodwill associated
therewith solely in connection with its marketing and promotional materials and
activities, and II accepts such grant. During the Term (and any renewals
thereof) as set forth in Section 10 of this Agreement, II hereby agrees to grant
to CVC, a limited, non-exclusive personal right and license to use II's marks
solely in connection with its provision of services under this Agreement, and
only upon II's prior written approval in each instance (in conformance with the
requirements of Section 7b above).
b. The above grant of license notwithstanding, all modifications,
improvements, derivative works or otherwise created in connection with any CVC
property by any Party, and specifically including the CVC Marks, the CVC
Content, the Vignettes and the CVC Library, that is the subject of a grant of
such licenses shall be the property of CVC.
c. II or any of its affiliates or subsidiaries is specifically
prohibited from ever using any CVC Content, directly or indirectly, in
connection with any type of competing library depicting the specific
characteristics and amenities of resorts available for time share in full-motion
visual form
<PAGE>
or in connection with any competitors of CVC.
9. Term.
a. Initial Term. Except as otherwise provided herein, this Agreement
shall commence on the Effective Date and continue for a period of two (2) years
thereafter. The previous sentence notwithstanding, during the month of June,
1999 only, either party may terminate this Agreement upon ten (10) days written
notice. Thereafter, the Term shall automatically be renewed for additional one
(1) year periods upon the mutual consent of the Parties.
10. Termination.
a. Immediate Termination. This Agreement may be terminated immediately
upon written notice by either Party upon the occurrence of any of the following
events:
(1) Any assignment of this Agreement by either Party in
violation of Section 13 herein;
(2) Commencement of voluntary proceedings by the
non-terminating Party or of any involuntary proceedings against the
non-terminating Party under any provision of any Federal or State act
relating to bankruptcy or insolvency;
(3) Any legal or equitable proceeding against the
non-terminating Party, resulting in a judgment or decree, if the sale
of all or substantially all of the non-terminating Party's assets are
contemplated or threatened as a result of such judgment or decree.
b. Termination After Failure to Cure Breach. If either Party commits a
material breach of any of the provisions of this Agreement, the non-breaching
Party may terminate the Agreement at any time, if after providing written notice
to the breaching Party of the alleged breach or failure, the breach or failure
remains uncured for a period of thirty (30) days after receipt of such notice.
c. Authority after Termination. After termination of this Agreement, II
shall have no further express authorization or consent from CVC to use its
Library or any CVC Content in any manner whatsoever.
11. Indemnification.
a. Each Party shall indemnify and hold harmless the other Party from
and against any and all claims, liabilities, demands, judgments, damages, suits,
losses, penalties, expenses, and costs of any kind or nature whatsoever,
including, but not limited to, reasonable attorneys' fees, arising directly or
indirectly out of or in connection with: (a) a breach of this Agreement by such
Party and/or its officers, directors, representatives, employees or agents: or
(b) the negligence or intentional misconduct of such Party and/or its officers,
directors, representatives, employees or agents.
<PAGE>
b. In addition to the provisions set forth in Section 11.a above, CVC
shall indemnify and hold harmless II from and against and shall be responsible
or liable for, any claims, liabilities, damages, losses, costs and attorneys'
fees, including, but not limited to, any indirect, special, incidental,
consequential or punitive losses or damages of any kind, including lost profits,
with respect to any and all content of the Vignettes including that such CVC
Content is in compliance with applicable laws, rules and regulations.
c. The provisions of this Section 11 shall survive the expiration or
termination of this Agreement.
12. Relationship of the Parties. The relationship of CVC to II shall be that of
independent Parties to this Agreement. Nothing in this Agreement shall be
construed to place the Parties in the relationship of partners, joint venturers
or agents, and neither II nor CVC shall have the power to obligate or bind each
other in any manner whatsoever.
13. Assignment. This Agreement shall be binding upon the Parties hereto, their
heirs, legal representatives, successors and assigns. This Agreement shall not
be assignable by the either Party without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed.
14. Miscellaneous Provisions. Any notice required or permitted to be given under
the terms of this Agreement shall be sufficient if in writing and if sent
postage prepaid by registered or certified mail, return receipt requested; by
overnight delivery; or by courier; addressed as set forth in the introductory
paragraph. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute but one
agreement. The captions contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit, extend or prescribe the scope
of this Agreement or the intent of any of the provisions hereof. This Agreement
constitutes the entire understanding between the Parties and supersedes and
cancels any and all previous agreements and understandings between the Parties
pertaining to the subject matter of this Agreement, with the exception of a
Confidentiality Agreement dated March 31, 1997, between II and VDC, which shall
remain in full force and effect and shall continue to bind II, VDC and CVC. This
Agreement may be amended, modified, superseded or canceled, and any of its
terms, covenants, representations, warranties or conditions may be waived, only
in writing signed by duly authorized representatives of both Parties. The
previous sentence notwithstanding, the Parties specifically acknowledge that
neither Party has had any obligation(s), arrangements, agreements, contracts, or
otherwise, whether oral, written, express or implied, to one another prior to
the execution of this Agreement with the exception of the aforementioned
Confidentiality Agreement. The waiver of a breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any other breach
of the same or any other term or condition. The invalidity or unenforceability,
in whole or in part, of any covenant, promise or undertaking, or any section,
subsection, paragraph, sentence, clause, phrase or word or of any provision of
this Agreement shall not affect the validity or enforceability of the remaining
portions thereof. This Agreement shall become valid when executed and accepted
by both Parties. The Parties agree that this Agreement shall be deemed
negotiated, made and entered into in the State of Florida and shall be governed
and construed under and in accordance with the laws of the State of
<PAGE>
Florida. The Parties agree that this Agreement shall be governed by the laws of
the State of Florida, without giving effect to any conflict of laws principles.
Venue for any such action, will be Miami-Dade County, Florida. This Agreement
shall be construed within the fair meaning of each of its terms and not against
the Party drafting the document.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set
forth in the first paragraph of this Agreement.
Witness: CONDOVIEW CORPORATION,
a Florida corporation
- ------------------------------
By: /Eric M. Jacobs/
--------------------------
Name: _______________________
Its: ________________________
Witness: II International, Inc.,
a Florida corporation
By: /Stephen G. Magrill/
--------------------------
Name: _______________________
Its: ________________________
- ------------------------------
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and is effective as
of the 30th day of March, 1998, by and between Video News Wire Corporation, a
Florida corporation ("Video News") and P.R. Newswire, Inc., a Delaware
corporation ("PR Newswire" and Video News sometimes individually referred to as
"Party" and collectively as "Parties").
RECITALS
A. Video News produces, develops, markets, stores and maintains
full-motion digitized video clips ("Video News Wires" or "VNWs") of an
entity's written press releases, as well as corporate identity and
other market materials.
B. PR Newswire operates a specialized news and information service,
processing and transmitting press releases and other information over
electronic communications systems to news media and others throughout
the United States and overseas and services investor relations, public
relations and other communications professionals (the "Clients").
C. PR Newswire wishes to engage Video News to perform certain services
which include, among other things, the production of VNWs for certain
Clients and Video News wishes to be engaged by PR Newswire to provide
such services, pursuant to the terms and conditions set forth in this
Agreement.
NOW THEREFORE, in consideration of the promises and mutual
covenants and agreements contained herein, the Parties mutually agree as
follows:
1. Recitals. The recitals set forth above are true, correct
and are herein incorporated by reference.
2. Engagement. PR Newswire hereby engages Video News to
perform the services pursuant to the terms and conditions set forth herein and
Video News hereby accepts such engagement.
3. Services to be Provided by Video News ("Video News
Service"). Video News shall use its reasonable best efforts to:
1
<PAGE>
a. create specific outline and format requirements for
production of VNWs for Clients;
b. obtain copies of the final press announcement from PR
Newswire that will be the subject matter of a VNW for a Client;
c. obtain from a Client contracting for a VNW all required
components necessary for the production of that VNW;
d. manage the production process of a VNW for a Client;
e. videotape and produce a VNW using professional talent and
in a format which is of broadcast quality;
f. meet required production schedules, as mutually agreed upon
between Video News and a Client;
g. digitize and store all VNWs at a protected location on the
Internet for Client review and approval;
h. store each VNW for a period of time as agreed upon in
writing between Video News and a Client, at the Video News Wire
Internet site for dissemination by PR Newswire's website and other
hyperlinks;
i. provide access to each VNW and emergency technical support
to Clients twenty-four (24) hours a day, seven days a week, and provide
standard technical support, as required to meet Clients' reasonable
standards; and
j. maintain client satisfaction by using reasonable efforts to
investigate and implement the latest technologies, such as satellite
delivery systems, to acquire video footage from around the world.
4. Services to be Provided by PR Newswire. PR Newswire shall
use its reasonable best efforts to:
2
<PAGE>
a. create marketing collaterals for the VNWs in collaboration
with Video News.
b. promote the Video News Service to all PR Newswire sales and
marketing personnel, in order that they promote and market same to
Clients;
c. provide materials to PR Newswire domestic and international
sales staff, in existing and future bureau locations, to market and
sell the Video News Service to Clients;
d. develop and maintain Client relationships for the VNWs;
e. present and market the Video News Service to PR Newswire's
Clients through any or all of PR Newswire's offices and sales
representatives nationwide.
f. develop an incentive plan for PR Newswire sales personnel
marketing and selling VNWs to increase sales performance (the amount
and terms of which shall be in PR Newswire's sole discretion, but shall
not impact the pricing of the Video News Service paid to Video News, as
described in Section 7 and Exhibit A of this Agreement);
g. invoice and collect all revenues generated in connection
with the VNWs;
h. remit payments due to Video News hereunder for all sales
and storage of VNWs to Video News on a monthly basis, as described in
this Agreement;
i. prepare all contracts and other documents between each
Client and PR Newswire on substantially the form approved by PR
Newswire and Video News, or, in the case of material deviations from
the approved form, subject to final approval by Video News, which
approval shall not be unreasonably withheld;
j. advise Video News on suggested product enhancements and
further product development recommendations;
3
<PAGE>
k. provide assistance in determining volume forecasts to Video
News.
5. Duties and Obligations of a Client. As set forth in a
definitive agreement between PR Newswire and each Client who will contract for a
VNW, each Client shall be responsible to:
a. provide timely submittal of approved copy to Video News for
all requested VNWs;
b. provide timely approval of the final form of VNW;
c. provide photographs, video clips and/or logos, when
appropriate, for inclusion in the VNW (subject to such Client retaining
ownership thereof);
d. provide advance notices, when appropriate, for on-location
video acquisitions.
6. Grant of License to the VNWs. Video News grants to PR
Newswire and each Client contracting for a VNW a right and license (the
"License") to (i) broadcast each VNW via the Internet at the Video News or PR
Newswire website pursuant to the terms and conditions set forth in this
Agreement and in each agreement with a Client relating to VNWs and (ii) use a
VNW in connection with marketing, public relations or otherwise, as more fully
set forth in each agreement with a Client relating to VNWs. It is contemplated
that agreements with Clients will provide (x) that at such time as Video News
shall have received all fees due in connection with the applicable VNW, the
applicable Client shall be granted a fully paid up License for the life of
copyright to broadcast each VNW via the Internet at the Video News, PR Newswire
or Client website, and (y) that the Client shall not be permitted, either during
or following expiration of the Term of this Agreement, to store the VNW on the
server of any third party other than through Video News, or, during the Term of
this Agreement, or thereafter if and only if a Post-Term Purchase (as defined in
Section 10d) shall occur, PR Newswire. Video News and PR Newswire will work
together in good faith to develop and, from time to time, modify a form of
agreement with Clients appropriately delineating the rights of the Clients, PR
Newswire and Video News in the VNWs in order to facilitate the marketing of the
VNWs and other services contemplated by this Agreement.
7. Pricing of Services Related to the VNWs. The prices of the
Video News Services to be charged to PR Newswire by Video News in connection
with the production and storage of VNWs are as set forth on Exhibit "A", as the
same may be modified from time to time by Video News, upon not less than one
hundred five (105) days prior written notice to PR
4
<PAGE>
Newswire; provided, however, that no price increase initiated during the initial
term or any renewal term of this Agreement shall be effective prior to
commencement of the next renewal term of this Agreement. PR Newswire shall, in
its discretion, determine the price of VNWs to Clients.
8. Payment for Services. Within thirty (30) days following
each month and within thirty (30) days from the date of termination of this
Agreement, PR Newswire shall pay to Video News, in U.S. Dollars, the amounts due
to Video News for the previous month. For purposes of this Agreement, payments
due to Video News by PR Newswire shall accrue at the time when Video News has
delivered the applicable completed VNW or otherwise completed the contracted
work.
9. Ownership of VNWs.
a. PR Newswire acknowledges that the VNWs are
original works of authorship, fixed in tangible form, and Video News
owns the VNW and all other unedited footage (that was videotaped by
Video News) and reserves all right, title and interest in and to the
copyright, the right to apply for copyright registration, broadcast or
other derivative rights of the VNW. It is agreed that nothing contained
in this Agreement shall be construed as an assignment or grant of any
right, title or interest in or to any VNWs, it being understood that
all rights relating thereto are reserved by Video News, except for the
license hereunder to PR Newswire of the right to use and utilize each
VNW as specifically and expressly provided in this Agreement and except
for the rights to be specifically granted to each Client pursuant to
the applicable Agreements between PR Newswire and the Clients. PR
Newswire's use of the VNWs shall inure to the benefit of Video News and
PR Newswire shall not at any time acquire any rights in any of the VNWs
by virtue of any use PR Newswire may make of such VNWs, and which shall
specifically include any proprietary rights originated, conceived,
created or developed by PR Newswire or with the assistance of others,
as a result of the VNWs. Upon Video News' request, PR Newswire shall
execute the document or documents necessary to evidence such ownership
interest of Video News in any rights or title set forth in this Section
9.
b. Sections 6 and 9a notwithstanding, Video News
neither asserts nor claims any right to the content contained in the
VNWs and shall not use any VNW in any manner other than as contemplated
by this Agreement or by agreements with Clients, without the prior
written consent of PR Newswire, which, subject to the terms of the
applicable Client agreement, shall not be unreasonably withheld.
10. Term and Termination.
a. Subject to the provisions of Section 10b, the
initial term of this Agreement shall be for eighteen (18) months. This
Agreement shall be automatically
5
<PAGE>
renewed for successive additional one (1) year periods, unless a
terminating party provides the non-terminating party not less than
ninety (90) days prior written notice of its intent to terminate this
Agreement prior to the expiration of any term or renewal thereof. For
purposes of this Agreement "Term" includes the initial term and any
renewals thereof.
b. This Agreement and the Term may be terminated as
follows:
(1) By the unaffected Party without
liability at any time upon seven (7) days prior written notice upon the
happening of any of the following events:
(a) A Party ceases to function as a
going concern or to conduct its operation in the normal course of business,
(b) A Party becomes involved in
financial difficulties resulting in the appointment of a receiver or trustee,
establishment of a moratorium for the payment of indebtedness, a petition in
bankruptcy or an assignment on behalf of a Party's creditors, or
(2) If any Party commits a material breach
of any provisions of this Agreement, a non-breaching Party may terminate the
Agreement at any time, if after providing written notice to the breaching Party
of the alleged breach or failure, the breach or failure remains uncured for a
period of thirty (30) business days after receipt of such notice; provided,
however, that a Party shall not be entitled to more than one cure period for the
same or similar categories of breaches during the initial or any renewal Term of
this Agreement. Subject to Section 14 hereof, failure by Video News to (x) meet
production schedules, or (y) provide access to each VNW and emergency technical
support to Clients twenty four (24) hours a day, seven days a week and provide
standard technical support, as required, to meet Clients' reasonable standards,
shall be deemed to be material breaches of this Agreement; provided, however,
that the sole remedy for such deemed breaches shall be termination of this
Agreement in accordance with this paragraph 10.
c. Promptly after completion of the first 120 days of
the Term, the Parties shall agree in writing on minimum volume levels
which PR Newswire will use its reasonable best efforts to achieve.
Subject to Section 14 hereof, failure by PR Newswire to meet such
volume levels mutually agreed in writing shall be deemed to be a
material breach of this Agreement; provided, however, that the sole
remedy for such deemed breach shall be termination of this Agreement in
accordance with this paragraph 10.
6
<PAGE>
d. Subject to written commitments with Clients in
substantially the form approved by Video News, and the next sentence of
this Section 10c, after termination of this Agreement, PR Newswire
shall have no further express authorization or consent from Video News
to use any VNW in any manner whatsoever. Notwithstanding the foregoing,
at PR Newswire's request, Video News will negotiate in good faith with
PR Newswire to extend to PR Newswire, following expiration or
termination of this Agreement, a perpetual license to broadcast each
VNW completed prior to expiration or termination of this Agreement via
the Internet on commercially reasonable terms and conditions (a "Post
Term Purchase").
11. Exclusivity and Nondisclosure of Information.
a. Exclusivity. During the Term of this Agreement (i)
PR Newswire shall use Video News as its exclusive vendor for the
production of VNWs of written Client press releases (including video
taping of footage solely for use in such VNWs) and for the internet
storage and the internet distribution of VNWs of Clients' written press
releases, and (ii) Video News shall not produce VNWs of any entity's
written press releases or provide internet storage and/or internet
distribution of VNWs of written press releases for any entity other
than PR Newswire or Clients of PR Newswire pursuant to this Agreement.
During the Term, PR Newswire shall recommend to its Clients Video News
as its preferred vendor for other services contemplated here by, such
as corporate video profiling, "About the Client" videos and on location
video taping for meetings, conferences and new product introduction;
provided, however, that it is understood and agreed that the
relationship between Video News and PR Newswire is non-exclusive in
respect of (and that PR Newswire shall have the right to deal with
third parties in respect of) multimedia content, multimedia
presentations and all services contemplated by this Agreement other
than the production, internet storage and internet distribution of VNWs
of written press releases as set forth in this Section 11a. Nothing
herein shall restrict Clients from providing footage or other content
(including, without limitation, any video or multimedia presentation)
not taped or produced by Video News for inclusion in VNWs hereunder,
and in such event, PR Newswire and Video News will have the capability
to link to the applicable site and Video News shall not acquire any
ownership interest in any such Client-provided footage or other
content.
b. Nondisclosure of Information.
(1) Each Party acknowledges that the other
Party's trade secrets, private or secret processes, methods and ideas, as they
exist from time to time, customer lists and information concerning the other
Party's products, services, training methods, development, technical
information, marketing activities and procedures, credit and financial data
concerning each Party's clients (for the purposes of this Section 11b only,
"Proprietary Information") are valuable, special and unique assets of a Party,
access to and knowledge of
7
<PAGE>
which are essential to the performance of each Party. In light of the highly
competitive nature of the industry in which a Party's business is conducted,
each Party agrees that all Proprietary Information, heretofore or in the future
obtained by each Party as a result of a Party's association with the other Party
shall be considered confidential. Without limiting the generality of the
foregoing, Video News acknowledges and agrees that Client press releases, prior
to the applicable Client's release thereof, are confidential and constitute
"inside information" under applicable securities laws, and Video News shall
maintain the confidentiality thereof in accordance with applicable securities
laws, until 15 minutes after the applicable Client's public release thereof.
(2) In recognition of this fact, each Party
agrees that it will never use or disclose any such Proprietary Information for a
Party's own purposes or for the benefit of any person or other entity or
organization (except as contemplated by this Agreement) or unless a Party is
legally required to disclose such Proprietary Information. Documents prepared by
each Party or that come into a Party's possession during a Party's association
with the disclosing Party are and remain the property of the disclosing Party,
and upon the termination of this Agreement, such documents shall be returned to
the other Party at their respective principal place of business as herein noted.
(3) This Agreement shall not preclude either
Party from making disclosures of proprietary matters to any Client; provided,
however, that any such matters disclosed or delivered to the Client shall be
appropriately marked with restrictive legends in accordance with applicable
federal or state regulations. It is further understood that each Party, upon
notifying the other Party, may disclose to any of its parent companies or
subsidiaries in connection with the efforts contemplated by this Agreement, any
matter made available by the disclosing Party under this Agreement, provided
that each parent company or subsidiary, prior to such disclosure, agree in
writing to be bound by the provisions of this Section 11 and such Party shall
cause any parent company or subsidiary to comply with the provisions of this
Section 11.
(4) Upon termination of this Agreement, each
Party shall, within thirty (30) days of termination, if requested, return all
writings that reflect or embody the Proprietary Information.
(5) The obligations with respect to use,
disclosure, and access to the Proprietary Information of each Party set forth in
this Agreement are not applicable to the following:
(a) Information that was or is
lawfully made available to the public without restriction by the disclosing
Party or lawfully by a third party; or
8
<PAGE>
(b) Information that was lawfully
previously known to the receiving Party independent of any disclosure by
disclosing Party or its Clients.
Each Party agrees to keep confidential all terms and conditions of this
Agreement; provided, however, such obligation shall not apply to information
which (1) is required by law to be disclosed, or (2) is disclosed in any action
between the Parties hereto.
c. Nonsolicitation. Each Party agrees that during the
Term and for a period of one year thereafter, it shall not, for itself,
or on behalf of any other person, or by action in concert with any
other person, solicit, induce or encourage any employee of the other
Party or any of their respective affiliates to terminate his or her
employment with such Party or such affiliate. Video News acknowledges
that PR Newswire's Client list is Proprietary Information. Without
limiting the generality of Section 11b hereof, and in addition to any
obligations Video News may have under applicable law, Video News agrees
that during the Term and, if Video News is the Party electing not to
renew the Term, for a period of six months following expiration of the
Term, Video News shall not, for itself or on behalf of any other
person, or by action in concert with any other person, solicit, induce
or encourage any PR Newswire Client to discontinue, terminate, cancel
or refrain from entering into any agreement, contract or other
arrangement or relationship with PR Newswire or sell or attempt to sell
VNWs to any PR Newswire Client. For the avoidance of doubt, if PR
Newswire is the Party electing not to renew the Term, the obligations
of Video News set forth in the preceding sentence shall terminate upon
expiration of the Term.
d. Remedies. Each Party acknowledges and agrees that
the non-breaching Party's remedy at law for a breach or threatened
breach of any of the provisions of this Section 11 would be inadequate
and the breach shall be per se deemed as causing irreparable harm to
the non-breaching Party. In recognition of this fact, in the event of a
breach by a Party of any of the provisions of this Section 11 the
breaching Party agrees that, in addition to any remedy at law available
to the non-breaching Party, including, but not limited to monetary
damages, the non-breaching Party, without posting any bond, shall be
entitled to obtain, and the breaching Party agrees not to oppose the
non-breaching Party's request for equitable relief in the form of
specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be
available to the non-breaching Party.
12. Indemnification.
a. PR Newswire shall indemnify and hold Video News
harmless from and against, and shall be responsible or liable for, any
claims, liabilities, damages, losses and costs (including reasonable
attorneys' fees), arising out of any breach by PR Newswire of this
Agreement.
9
<PAGE>
b. Video News shall indemnify and hold PR Newswire
harmless from and against, and shall be responsible or liable for, any
claims, liabilities, damages, losses and costs (including reasonable
attorneys' fees), arising out of any breach by Video News of this
Agreement.
c. NEITHER PARTY HEREUNDER SHALL BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE LOSSES OR
DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO LOST PROFITS.
13. Relationship of the Parties. The relationship of the
Parties hereto shall be that of independent parties to this Agreement. Nothing
in this Agreement shall be construed to place the parties in the relationship of
partners, joint venturers or agents, and no Party shall have the power to
obligate or bind any other Party in any manner whatsoever nor shall any Party
have or be deemed to have any fiduciary obligations to any other Party.
14. Force Majeure. If a Party is prevented from performing any
of its obligations set forth in this Agreement by reason of an act of God,
strike, labor dispute, injunctions, judgments, adverse claims, fire, flood,
embargo, delay in transportation, public disaster or any other cause or reason
beyond the control of a Party, as the case may be, such condition shall be
deemed a valid excuse for failure on its part to perform or for delay in the
performance of such obligations.
15. Miscellaneous Provisions.
a. Notices. Any notice required or permitted to be
given under the terms of this Agreement shall be sufficient if in
writing and if sent postage prepaid by registered or certified mail,
return receipt requested; by overnight delivery; by courier; or by
confirmed telecopy, addressed as follows:
PR Newswire: 810 Seventh Avenue
New York, New York
Attention: Ira Krawitz
Video News: Video News Wire Corporation
1291 S.W. 29th Avenue
Pompano Beach, Florida 33069
Attention: Randy S. Selman
10
<PAGE>
b. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but
all of which shall constitute but one agreement.
c. Binding Effect/Assignment. This Agreement shall
not be assignable by any other Party without the prior written consent
of the other Party, except to an affiliate, successor by merger or
acquiror of all or substantially all of the assets of PR Newswire;
provided that in the event that this Agreement shall be assigned, the
assignor shall remain liable hereunder and any assignee shall be
obligated to the terms and conditions set forth in this Agreement and
any agreement or assignment to the contrary shall be null and void,
unless agreed to, in writing, by the non-assigning Party to this
Agreement and the assignee.
d. Survival. The provisions of Section 11b, c and d
shall survive the expiration or termination of this Agreement.
e. Completeness and Modification. This Agreement
constitutes the entire understanding between the parties and supersedes
and cancels any and all previous agreements and understandings between
the Parties pertaining to the subject matter of this Agreement. This
Agreement may be amended, modified, superseded or canceled, and any of
its terms, covenants, representations, warranties or conditions may be
waived, only in writing signed by duly authorized representatives of
both Parties.
f. Waiver. The waiver of a breach of any term or
condition of this Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or condition.
g. Severability. The invalidity or unenforceability,
in whole or in part, of any covenant, promise or undertaking, or any
section, subsection, paragraph, sentence, clause, phrase or word or of
any provision of this Agreement shall not affect the validity or
enforceability of the remaining portions hereof.
h. Choice of Law; Venue. This Agreement shall become
valid when executed by both Parties. The Parties agree that this
Agreement shall be deemed made and entered into in the State of New
York and shall be governed and construed under and in accordance with
the laws of the State of New York and applicable Federal Statutes,
without giving effect to any conflicts of law principles. In the event
of any action brought to interpret or enforce this Agreement, (x) such
action shall be brought only in Broward County, Florida, if PR Newswire
is the plaintiff, and (y) such action shall be brought only in New York
County, New York, if Video News is the plaintiff. THE PARTIES STIPULATE
AND AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL.
11
<PAGE>
i. Construction. This Agreement shall be construed
within the fair meaning of each of its terms and not against the Party
drafting the document.
j. First Refusal. "Change of Control" means (i) the
issuance or transfer (in a single transaction or a series of related
transactions) of 25% or more of the outstanding capital stock of Video
News entitled to vote for the election of directors to a person or
persons who are not shareholders of Video News on the date hereof, (ii)
the sale of all or substantially all of the assets of Video News (in a
single transaction or a series of related transactions) to a person or
persons who are not affiliates of Video News on the date hereof, or
(iii) the merger or consolidation of Video News with a person that is
not an affiliate of Video News on the date hereof. If, at any time
during the Term, Video News desires to enter into any transaction which
would constitute a Change of Control, Video News shall first offer to
enter into the Change of Control transaction with PR Newswire, and
shall enter into exclusive, good faith negotiations with PR Newswire
for such transaction for a period of 60 days from the date of receipt
in writing of such offer to enter into the Change of Control
Transaction. If PR Newswire and Video News are unable to agree on the
terms for a Change of Control transaction within 60 days after
commencement of good faith negotiations, Video News may enter into
negotiations with third parties regarding such transaction. Video News
shall give PR Newswire prompt written notice of the terms of any third
party offer to engage in a Change of Control transaction on terms that
are more favorable to Video News than the last terms offered by PR
Newswire, Video News shall have the right to accept such third party's
offer. If a third party offers to engage in the Change of Control
transaction or to purchase the assets on terms that are not more
favorable to Video News than the last terms offered by PR Newswire, PR
Newswire shall have the right to engage in the applicable transaction
on the terms of such third party's offer; provided that such right
shall be exercised by written notice from PR Newswire to Video News,
given within 15 business days after receipt by PR Newswire of a copy of
such third party offer.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date set forth in the first paragraph of this Agreement.
VIDEO NEWS WIRE CORPORATION
By: _______________________________
Name: ______________________________
Its: _______________________________
PR NEWSWIRE, INC.
By: _______________________________
Name: ______________________________
Its: _______________________________
12
