Asset Purchase and Sale Agreement - Mosby Inc. and ADAM Software Inc.
ASSET PURCHASE AND SALE AGREEMENT
AGREEMENT made as of the 16th day of October, 1997, by and between
MOSBY, INC., a Missouri corporation, having its principal place of business at
11830 Westline Industrial Drive, St. Louis, MO 63146 (hereinafter referred to as
"Mosby"), and A.D.A.M. SOFTWARE, INC., a Georgia corporation, having its
principal place of business at 1600 Riveredge Parkway, Atlanta, Georgia 30328
(hereinafter referred to as ("Buyer").
WHEREAS, Buyer desires to purchase, and Mosby desires to sell, all of
Mosby's rights, title and interest in the products as set forth on Schedule A
attached hereto and made a part hereof (the "Products").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. Sale of Assets.
1.1 Assets Sold. Mosby hereby sells, assigns and transfers to Buyer,
and Buyer hereby purchases and acquires from Mosby the following (all of which
are collectively referred to as the "Assets"):
(a) all worldwide rights, title and interest of Mosby in and
to the Products including, but not limited to the source codes, scripts, HTML
versions and all of the text contained in the Products, the literary content
thereof, and Mosby's copyright ownership therein;
(b) all inventory of the Products owned by Mosby or any
subsidiary or division of Mosby, any gold masters related to the Products, any
public relations and marketing items, if any, related to the Products, and any
artwork, subject to any third party agreements and restrictions, related to the
Products, (hereinafter referred to as the "Inventory");
(c) all of Mosby's right, title and interest in and to the
trademark ILIAD (the "Trademarks"),
(d) all of the goodwill of Mosby relating exclusively to the
Products.
1.2 Returns. Buyer shall be solely liable for any amounts that may be
payable or credited to customers for any returns of the Products made after the
date hereof.
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1.3 Assumption of Liabilities. As of the date of this Agreement, Buyer
hereby assumes and agrees to discharge the liabilities and obligations of Mosby
to the extent relating to the periods after the date of this Agreement as and
when the same shall become due under (i) the agreement dated April 30, 1997 and
all subsequent amendments, with the University of Utah relating to ILIAD; (ii)
the AMI-Japan distribution agreement dated April 17, 1996; and (iii) the
licensing agreement dated July 8, 1997 between Orbis Broadcast Group and Mosby.
The liabilities assumsed by Buyer pursuant to this Agreement are hereinafter
sometimes collectively referred to as the "Assumed Liabilities."
1.4 Non-Assignability. Any other provision of this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any right or interest of Mosby if an attempted assignment thereof,
without a consent required or necessary for such assignment, would constitute a
breach thereof or in any way adversely affect the rights of Buyer or Mosby
thereunder. If such consent is not obtained or if an attempted assignment would
be ineffective or would adversely affect any of Mosby's rights thereunder so
that Buyer would not in fact receive all such rights, Mosby and Buyer will
cooperate with each other in any commercially reasonable arrangement to provide
for Buyer the benefits thereof; provided however, that Mosby shall not be
required to accept any arrangement which would impose any cost, expense or
liability on Mosby.
1.5 Acknowledgment. Mosby acknowledges that as between Mosby and Buyer,
Buyer owns the trademarks to the names Physicians Home Assistant and
Pediatricians Home Assistant (the "Buyer's Marks") and that Mosby has no rights,
titles or interests in the Buyer's Marks.
2. Delivery of Instruments and Payment.
Simultaneously with the execution and delivery by Mosby of this
Agreement to Buyer:
(a) Mosby shall execute and deliver to Buyer a Bill of Sale,
and Assignment of Copyrights, and an Assignment of Trademarks in form and
substance reasonably satisfactory to Buyer; and
(b) Buyer shall make the payment required by Section 3.2.
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3. Purchase Price.
3.1 Purchase Price. The purchase price for the Assets shall be FIFTY
THOUSAND DOLLARS ($50,000) (the "Purchase Price") and the assumption of the
Assumed Liabilities (collectively, the "Total Purchase Price").
3.2 Terms of Payment. Upon execution of this Agreement by the parties,
Buyer shall pay Mosby the Cash Purchase Price, as defined below, and Buyer
expressly agrees to assume and agrees to discharge the Assumed Liabilities.
4. Additional Covenants and Agreements of the Parties.
4.1 Use of Mosby's Name and Logo. Mosby grants Buyer the right to leave
Mosby's name and logo on the existing Inventory being purchased from Mosby
hereunder in the form it appears on the date hereof. However, Buyer agrees to
remove Mosby's name and logo from all future printings of the Products.
4.2 Delivery of Inventory. Mosby shall promptly ship the Inventory
located in the United States to Buyer's warehouse in Georgia. The Inventory is
being sold F.O.B. Mosby's warehouse in Linn, Missouri.
4.3 Current and New Orders. As soon as practicable after the execution
of this Agreement, Mosby shall provide Buyer with a list of any orders of the
Products that have not been shipped for fulfillment by the Buyer (the
"Unfulfilled Orders"). Buyer shall notify Mosby within five (5) business days
from the date of receipt of the Unfulfilled Orders of any orders that it is
unwilling to fill along with the reason for its refusal to fulfill such orders.
Buyer covenants to review each order in good faith and will only reject an
Unfulfilled Order if the material terms are unreasonable. For a period of sixty
(60) days after the execution date of this Agreement, any orders that Mosby may
receive for any of the Products shall be promptly forwarded to Buyer to the
attention of: President and Chief Executive Officer.
4.4 Licensing Fees. In consideration for the Buyer's agreement to
assume the duties and obligations contained in the Orbis Broadcast Group
agreement, which expires June 30, 1998, Buyer may deduct from the Purchase Price
Ten Thousand Dollars ($10,000) for a cash amount due to Mosby of Forty Thousand
Dollars ($40,000) (the "Cash Purchase Price"). The Ten Thousand Dollar
($10,000) reduction of the Purchase Price represents a portion of the prepaid
licensing fee Mosby received from the Orbis Broadcast Group.
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4.5 AMI Claims. Mosby grants Buyer any and all rights it currently has
or may have against AMI and NFT under the Agreement dated December 30, 1996
pursuant to which Buyer acquired the Products from AMI and NFT. Mosby agrees to
assist Buyer at Buyer's expense in pursuing any claim against AMI and NFT and
Buyer agrees to indemnify Mosby for any liability out of the claim against AMI
and NFT.
4.6 Consulting. Mosby agrees that for a period of two (2) weeks after
execution of this Agreement, it will, where possible, make the appropriate
personnel available on a timely basis to the Buyer for any reasonable requests
as necessary to understand, maintain and support the Products. Buyer shall be
responsible for costs and expenses, if any, that may be associated with such
consulting services.
5. Representations and Warranties of Mosby.
Buyer hereby expressly acknowledges that the Assets are being sold,
transferred and assigned by Mosby to Buyer, and that Buyer is accepting the
purchase, transfer and assignment of the Assets, and each of them, from Mosby
AS-IS AND WITH ALL FAULTS, AND WITHOUT ANY REPRESENTATIONS AND WARRANTIES OF ANY
NATURE WHATSOEVER, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
Buyer further acknowledges that it is aware that Mosby is currently
engaged in litigation with respect to the HOUSECALL trademark and Mosby's right
to the use and registration of such trademarks, and that as of the date hereof,
Mosby will cease to prosecute all such litigation. It is expressly understood
that Buyer assumes no liability with respect to the HOUSECALL trademark
litigation, except that Buyer shall be responsible for any future use of such
trademark.
Mosby represents and warrants to Buyer that Mosby is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Missouri and has the full corporate power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by Buyer has been duly authorized by all necessary
corporate action of Buyer, and this Agreement constitutes the valid and binding
obligations of the Buyer, enforceable in accordance with its terms.
Mosby states that to its knowledge, without performing any due
diligence, the only agreements that affect the right of ownership and use of the
Products are: (i) a licensing agreement to Medical Housecall and Pediatric
Housecall by and between Buyer and Mosby; (ii) a licensing agreement dated April
30, 1987 and all subsequent amendments with the University of Utah; (iii) a
distribution agreement by and between
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AMI-Japan relating to the distribution of Housecall in Japan; (iv) a licensing
agreement dated July 8, 1997 between Orbis Broadcast Group and Mosby; and (v)
such customary permission agreements with third party rights holders and other
third party agreements entered into in the normal course of its business, a
sample of which is attached hereto as Schedule B.
Mosby represents and warrants to Buyer that, except for the litigation
relating to the HOUSECALL trademark and Mosby's right to the use and
registration of such trademarks, to its knowledge, no litigation exists
regarding the Products.
6. Representations and Warranties of Buyer.
Buyer represents and warrants to Mosby that Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia and has the full corporate power and authority to enter into and perform
its obligations under this Agreement. The execution, delivery and performance of
this Agreement by Buyer has been duly authorized by all necessary corporate
action of Buyer, and this Agreement constitutes the valid and binding obligation
of the Buyer, enforceable in accordance with its terms.
7. Indemnification.
(a) Buyer shall defend, indemnify and hold harmless Mosby, promptly
upon demand at any time and from time to time, against any and all losses,
liabilities, claims, suits, actions, damages, and expenses including, without
limitation, reasonable attorneys fees and expenses (including without
limitation, reasonable attorneys' fees and expenses incurred by Mosby in
connection with any action, suit or proceeding between Mosby and Buyer for other
than a breach by Mosby of this Agreement) arising out of or relating to (i) the
sale, transfer and assignment of the Assets, or any of them, to Buyer by Mosby;
(ii) the production, reproduction, sale and distribution of the Products, or any
of them, or an, material comprising the Products by Buyer; (iii) any breach of
this Agreement by Buyer; and (iv) any use by Buyer of the Trademark listed on
Schedule A.
(b) Notwithstanding this Agreement, Buyer is not responsible for any of
the liabilities related to the agreement between Springer-Verlag New York, Inc.
and Applied Medical Informatics dated September 9, 1996 ("Springer-Verlag
Agreement") and shall not be required to defend, indemnify or hold Mosby
harmless from any action, suit or proceeding arising out of or relating to the
Springer-Verlag Agreement.
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8. Covenant Not To Sue.
Buyer further agrees never to sue Mosby, its parent, or any of its
affiliated companies or any of their respective employees, officers, or
directors, or participate in any lawsuit or otherwise file or pursue any claim
or initiate any proceeding of any sort on the basis of any claim of any type
whatsoever in any way, directly or indirectly, arising out of or related to this
Agreement, any of the instruments delivered by Mosby to Buyer in connection with
this Agreement, any of the transactions contemplated by this Agreement, the
Assets, the Trademarks, or the production, reproduction, sale or distribution of
the Products, provided however, that the foregoing covenant shall not apply in
the event that (i) Mosby infringes any copyright, patent or other intellectual
property rights applicable to the Products, (ii) Mosby fails to discharge any
liability retained by it pursuant to Section 1.3 of this Agreement, or (iii)
Mosby lacks the full corporate power and authority to enter into and perform its
obligations under this Agreement.
9. Survival.
The representations and warranties, indemnification and covenant not to
sue set forth in sections 6, 7, 8 and 9 of this Agreement shall survive this
Agreement.
10. General.
10.1 Notices. All notices and other communications to be given by
either party to this Agreement to the other party hereto shall be in writing,
and shall be given by personal delivery or by depositing such notice in the
United States mail, postage prepaid, certified mail, return receipt requested,
addressed as follows:
If to Mosby: Mosby, Inc.
11830 Westline Industrial Drive
St. Louis, MO 63146
Att: President
With a copy to: James Imbriaco, Associate General Counsel
The Times Mirror Company
2 Park Avenue
New York, NY 10016
If to Buyer: A.D.A.M. Software, Inc.
16 Riveredge Parkway
Suite 800
Atlanta, GA 30328
Att: President
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Any party to whom notices are to be sent pursuant to this Agreement may, from
time to time, change its address for future communications hereunder by giving
notice in the manner described herein to the other party hereto. Notices shall
be deemed given on the date delivered.
10.2 Entire Agreement. This Agreement, the Schedules, and the
instruments delivered by Mosby to Buyer referred to in Section 2(a), constitutes
the entire agreement between the parties hereto with respect to the transactions
contemplated hereunder and supersedes all prior agreements, understandings and
arrangements, oral or written, between the parties hereto with respect to the
transactions contemplated hereunder.
10.3 Expenses. The parties hereto shall pay the fees and expenses of
their respective consultants, counsel, accountants and other experts, and all
other expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement.
10.4 Amendment and Waiver. The terms of this Agreement may not be
amended, modified or eliminated, and the observance or performance of any term,
covenant, condition or provision herein may not be waived except by the written
consent of the party charged with such amendment, modification or waiver. The
waiver by any party hereto of a breach of any term or provisions of this
Agreement shall not be construed as a waiver of any subsequent breach.
10.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
provided, however, that neither party shall have the right to assign its rights
or obligations hereunder or any interest herein without the prior written
consent of the other party, except that Mosby shall have the right to assign
this Agreement and its rights hereunder to a subsidiary or affiliate company of
Mosby provided that Mosby shall remain liable for all of its obligations
hereunder. Nothing contained in this Agreement, express or implied, is intended
to or shall confer on any person other than the parties hereto and their
respective successors or assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
10.6 Severability. If any provision of this Agreement is contrary to,
prohibited by or deemed invalid under applicable laws or regulations, such
provisions shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible. If any provision of this Agreement
is contrary to, prohibited by or deemed invalid under the laws and regulations
of one jurisdiction, said provision is not thereby rendered invalid in any other
jurisdiction.
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10.7 Counterparts. This Agreement may be executed in two or more
counterparts, or any number of duplicate originals, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
10.8 Headings. Section and paragraph headings contained in this
Agreement are for reference purposes only and shall not be deemed to be part of
this Agreement or to affect the meaning or interpretation of this Agreement.
10.9 Governing Law. This Agreement shall be governed by, construed and
interpreted according to the laws of the State of Missouri.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
A.D.A.M. SOFTWARE, INC. MOSBY, INC.
By: /s/ Robert S. Crames, Jr. By:/s/ James Imbriaco
--------------------------- ------------------------------
Name: Robert S. Crames, Jr. Name: James Imbriaco
Title: Chairman & CEO Title: Vice President & General
Counsel
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SCHEDULE A
TO ASSET PURCHASE AND SALE AGREEMENT
All versions of:
ILIAD
HOUSECALL
PEDIATRIC HOUSECALL
MEDICAL HOUSECALL
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BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS that MOSBY, INC., a Missouri corporation
(the "Seller") in consideration of the purchase price of Fifty Thousand Dollars
($50,000) hereby sells, assigns and transfers to A.D.A.M. SOFTWARE, INC., a
Georgia corporation (the "Buyer") all of its right, title and interest in and to
the Assets, as more particularly defined in that certain Asset Purchase and Sale
Agreement of even date between Seller and Buyer (the "Agreement").
TO HAVE AND TO HOLD THE SAME unto the Buyer and its successors and
assigns forever from the date hereof, upon and subject to the following terms
and conditions:
1. Buyer acknowledges its obligation for the payment of all taxes
arising out of this transaction and agrees to indemnify and hold Seller harmless
from any claim, demand or cause of action by any state or other governmental
entity for same.
2. THIS SALE OF THE ASSETS IS MADE AS IS AND WITH ALL FAULTS.
FURTHERMORE, BUYER ACKNOWLEDGES THAT THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED
(INCLUDING NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE),
MADE BY SELLER ACCOMPANYING THIS TRANSACTION.
3. Buyer assumes and discharges all liabilities and obligations
relating to the Assumed Liabilities as set forth in the Agreement as and when
the same shall become due.
IN WITNESS WHEREOF, the Seller has executed this Bill of Sale this 16th
day of October, 1997.
Seller:/s/ James Imbriaco
-------------------------
Agreed to and Accented by:
Buyer:/s/ Robert S. Crames, Jr.
----------------------------
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ASSIGNMENT OF TRADEMARKS
KNOW ALL BY THESE PRESENTS that MOSBY, INC., a Missouri corporation,
hereinafter "Assignor"), in exchange for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby sells, assigns
and transfers to A.D.A.M. SOFTWARE, INC., a Georgia corporation, (hereinafter
"Assignee"), its successors and assigns, all of Assignor's right, title and
interest in and to all trademarks, trademark registrations, trademark
applications and trademark interests of every kind and nature, and any and all
renewals and extensions thereof that may be secured under all laws now or
hereafter in force, together with the business and the goodwill of the business
symbolized by such trademarks, and any and all causes of action heretofore
accrued in the Assignor's favor for infringement of such trademarks, trademark
registrations and trademark interests, which are owned, possessed and controlled
by Assignor, including, without limitation, the trademarks listed on Schedule A
attached hereto and made a part hereof, throughout the United States, its
territories and possessions, and in all such other countries, if any, throughout
the world wherein Assignor owns, possesses or controls the rights herein being
transferred to Assignee, to the full extent of such rights.
IN WITNESS WHEREOF, the Assignor has caused this Assignment of
Trademarks to be signed in its cooperate name by its duly authorized officers
and its corporate seal to be hereunto affixed this 16th day of October, 1997.
MOSBY, INC.
By:/s/ James Imbriaco
----------------------------
Name:
Title: Vice President
STATE OF NEW YORK
ss.:
COUNTY OF NEW YORK
On the 16th day of October, 1997, before me personally appeared James
Imbriaco, to me known, who being duly sworn, did depose and say that he resides
at New Jersey, that he is the Vice President of Mosby, Inc., the corporation
described herein and which executed the above Assignment of Trademarks; and that
he signed his name thereto with full and unrestricted authority to do so.
/s/ Phyllis Bressler
---------------------
Notary Public
PHYLLIS BRESSLER
NOTARY PUBLIC, STATE OF NEW YORK
NO. 31-4711089
QUALIFIED IN NEW YORK COUNTY
TERM EXPIRED DECEMBER 31, 1998
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SCHEDULE A
Trademark Registration:
ILIAD
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ASSIGNMENT OF COPYRIGHTS
KNOW ALL BY THESE PRESENTS that MOSBY, INC., a Missouri corporation
(hereinafter "Assignor"), in exchange for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby sells, assigns
and transfers to A.D.A.M. SOFTWARE, INC., a Georgia corporation (hereinafter
"Assignee"), its successors and assigns, all of Assignor's right, title and
interest in and to all copyrights, copyright registrations and copyright
interests of every kind and nature, and any and all renewals and extensions
thereof that may be secured under all laws now or hereafter in force, and any
and all causes of action heretofore accrued in the Assignor's favor for
infringement of such copyrights, copyright registrations and copyright
interests, which are owned, possessed and controlled by Assignor, including,
without limitation, the copyrights listed on Schedule A attached hereto and made
a part hereof, throughout the United States, its territories and possessions,
and in all such other countries, if any, throughout the world wherein Assignor
owns, possesses or controls the rights herein being transferred to Assignee, to
the full extent of such rights.
IN WITNESS WHEREOF, the Assignor has caused this Assignment of
Copyrights to be signed in its corporate name by its duly authorized officers
and its corporate seal to be hereunto affixed this 16th day of October, 1997.
MOSBY, INC.
By: /s/ James Imbriaco
---------------------------------
Name:
Title: Vice President
STATE OF NEW YORK
ss.:
COUNTY OF NEW YORK
On the 16th day of October, 1997, before me personally appeared James
Imbriaco to me known, who being duly sworn, did depose and say that he resides
at New Jersey, that he is the Vice President of Mosby, Inc., the corporation
described herein and which executed the above Assignment of Copyrights; and that
he signed his name thereto with full and unrestricted authority to do so.
/s/ Phyllis Bressler
---------------------
Notary Public
PHYLLIS BRESSLER
NOTARY PUBLIC, STATE OF NEW YORK
NO. 31-4711089
QUALIFIED IN NEW YORK COUNTY
TERM EXPIRED DECEMBER 31, 1998
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SCHEDULE A
Copyright Registration:
ILIAD
Copyright Applications:
ILIAD Version 4.5
MEDICAL HOUSECALL version 1.0
MEDICAL HOUSECALL version 1.1
MEDICAL HOUSECALL version 1.5
PEDIATRIC HOUSECALL version 1.0