Exhibit 10.26
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (the "Agreement") made as of this 6th day of
February, 2002, among Sonic Foundry Media Services, Inc., a Maryland corporation
("Buyer"), and a wholly owned subsidiary of Sonic Foundry, Inc., a Maryland
corporation ("Parent"), Digital Savant, Inc., a California corporation
("Seller") and Xxxx Xxxxxx, ("Xxxxxx"), an adult resident of California. Parent
joins in this Agreement solely as to Sections 2.2(b), 4.1, 4.2, 4.3, 4.4, 4.6
and 5.2 and Xxxxxx joins in this Agreement solely as to Sections 3, 6.4 and 7.
R E C I T A L S:
A. Seller is engaged, among other things, in the business of
developing, marketing and licensing its proprietary digital asset management
software and services known generally as Media Taxi(TM) (the "Business").
B. Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, the Business and substantially all of Seller's assets related to the
Business.
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Purchase and Sale of Assets.
1.1 Assets to be Transferred by Seller. Subject to the terms and
conditions of this Agreement, at the Closing (as defined in Section 6), Seller
shall sell, convey, transfer, assign and deliver to Buyer, and Buyer shall
purchase and accept, certain assets, properties and business of Seller used or
held by it in the conduct of, or in connection with, the Business, whether
tangible or intangible and wherever located (but excluding the Excluded Assets,
as defined below) (the "Purchased Assets"). The Purchased Assets consist of the
following assets:
(a) Intentionally Deleted;
(b) Trade Rights. All of Seller's interest in any Trade Rights
related to the Business. As used herein, the term "Trade Rights" shall mean
and include: (i) all trademark rights, business identifiers, logos, trade
dress, service marks, trade names, domain names, email names, domain name
registrations and brand names (including without limitation, all rights in
"Media Taxi"); (ii) all copyrights and all other rights associated
therewith and the underlying works of authorship; (iii) all patents and all
proprietary rights associated therewith; (iv) all contracts or agreement
granting any right, title, license or privilege with respect to the
intellectual property rights of any third party or Seller; (v) all
inventions, know-how, discoveries, improvements, designs, trade secrets,
shop and royalty rights, employee covenants and agreements respecting
intellectual property and non-competition and all other types of
intellectual property; (vi) all registrations of any of the foregoing, all
applications therefor, all goodwill associated with any of the foregoing,
and all claims for infringement or breach thereof; and (vii) plans,
drawings, schematics and all computer source code, object code, programs
and other software of Seller, including all machine readable code, printed
listings of code, documentation and related property and information of
Seller related to the Business. The Trade Rights include, but are not
limited to, the items listed on Schedule 1.1(b) attached hereto;
(c) Contracts. Seller's contracts, contractual rights, licenses,
and other agreements existing as of the Closing Date, all as related to the
Business, as described on Schedule 1.1(c) attached hereto (collectively,
the "Assumed Contracts");
(d) Advertising; Website. All of Seller's sales, advertising and
promotional materials, and similar materials related to the Business, and
all rights of Seller in and to Seller's worldwide web home page(s) and
addresses, world wide web advertisements and all electronic mail accounts,
all related to the Business;
(e) Records. All of Seller's books, records, files, papers and
other information and records relating to the Business, except for those
listed below as Excluded Assets;
(f) Goodwill. All of Seller's goodwill related to the Business;
and
(g) Customer Lists/Prospective Customer Lists. All of Seller's
customer and prospective customer lists and contact information, including
email lists, solely as related to the Business.
(h) Warner Brothers Cash and Receivable. The WBITD Asset
(defined in Section 1.2(b).
(i) Other. All causes of action, choses in action and rights of
recovery with respect to any of the foregoing.
1.2 Excluded Assets. Seller shall not sell to Buyer, and Buyer shall
not purchase from Seller, the following assets of Seller (collectively the
"Excluded Assets"):
(a) Digital Savant Trade Rights. Seller's rights in the
registered trademarks for "Digital Savant", Digital Savant logo and "It
Works"; provided, however, that neither Seller, nor any of its officers,
directors, shareholders or other agents shall use, or license such Digital
Savant Trade Rights in any manner that would be reasonably deemed
competitive with the Business;
(b) Cash and Receivables. All cash, cash items, marketable
securities, certificates of deposit and other investments of Seller, and
all accounts and notes receivable of Seller; provided, however, Seller
shall assign and remit to Buyer, and Buyer shall take, as a Purchased
Asset, all accounts receivable that relate to all non-hosting revenue
related to Warner Brothers International Television Distribution and
arising after January 8, 2002 and all associated cash. (the "WBITD Asset").
(c) Corporate Records. Any corporate franchise, articles of
incorporation, corporate seal, stock books, minute books and other
corporate records having exclusively to do with Seller's corporate
organization and capitalization; provided, however, that Buyer or its
designated agents shall have reasonable access to such books and records
and may make copies thereof and/or excerpts therefrom;
(d) Tax Returns. Seller's tax returns and records; provided,
however, that Buyer and its designated agents shall have reasonable access
to such records and may make copies thereof and/or excerpts therefrom from
time to time; and
-2-
(e) Tax Refunds. Seller's income tax refunds, including those
arising from amended income tax returns of Seller.
1.3 Assumption of Liabilities. Subject to the terms and conditions of
this Agreement, on the Closing Date, Buyer shall assume and agree to perform and
discharge the following specific debts, liabilities and obligations of Seller
(collectively, the "Assumed Liabilities"):
(a) all liabilities and obligations arising or accruing with
respect to periods after the Closing Date under or pursuant to the Assumed
Contracts.
1.4 Liabilities Not to be Assumed. Except as and to the extent
specifically set forth in Section 1.3, Buyer is not assuming any debts,
liabilities or obligations of Seller.
1.5 Assets Not Assignable.
(a) If any interest in any of the Purchased Assets is not capable
of being assigned without the consent of a third person or if such
assignment would constitute a breach under any agreement related to any
Purchased Asset, or a violation of any law or is not immediately
practicable, this Agreement shall not constitute an assignment of such
interest ("Restricted Interests"). To the extent not a violation of the
agreement related to a Restricted Interest, the entire beneficial interest
in any Purchased Assets subject to a restriction as described above, and
any other interests in such Purchased Assets which are transferable
notwithstanding such restriction, shall be transferred (net of expenses
incurred by Seller in connection with a Restricted Interest) from Seller to
Buyer as provided in this Section 1.5.
(b) Anything in this Agreement to the contrary notwithstanding,
Seller shall not be obligated to transfer to Buyer any Restricted Interests
without Buyer or Seller first having obtained all consents and
authorizations necessary for such transfers. In consultation with each
other as to the practicalities of proposed actions, Seller and Buyer shall
use all reasonable efforts to assist each other in obtaining such consents
and authorizations and to resolve any impracticalities of assignment
referred to in Section 1.5(a) hereof.
(c) If the consents and authorizations referred to in Section
1.5(a) hereof are not obtained by Buyer or Seller, or until the
impracticalities of transfer referred to therein are resolved, Seller shall
use all reasonable efforts to (i) provide to Buyer, at Buyer's request, the
benefits of any Restricted Interests (net of expenses incurred by Seller in
connection with such Restricted Interests), (ii) cooperate in reasonable
and lawful arrangements designed to provide such benefits to Buyer, and
(iii) enforce, at Buyer's request and for Buyer's account, any rights of
Seller and Shareholders arising from any Restricted Interests (including
the right to elect to terminate in accordance with the terms thereof upon
request from Buyer).
2. Purchase Price and Payment.
2.1 Purchase Price. The purchase price for the Purchased Assets (the
"Purchase Price") shall be the sum of (a) One Hundred Thousand Dollars
($100,000) (the "Cash"); (b) 221,000 shares of Parent common stock (the
"Stock"); and (c) the Assumed Liabilities.
2.2 Payment of Purchase Price. The Purchase Price shall be paid to
Seller as set forth in this Section 2.2.
-3-
(a) Cash At Closing. On the Closing Date, Buyer shall pay to
Seller the Cash, by certified or cashier's check or by wire transfer to an
account as directed by Seller.
(b) Stock. On the Closing Date, Parent shall issue the Stock,
fully paid, non-assessable and unencumbered (except set forth herein), to
Seller. On the Closing Date, Buyer shall deliver to Seller a certificate
representing the shares of Stock. The Seller has been informed that, unless
there is an exemption from applicable securities laws, before Buyer
delivers any shares of Stock to Seller, Seller may be required to execute
and deliver to Buyer a shareholder sophistication certification to the
extent such certification is reasonably necessary to comply with applicable
securities laws.
2.3 Allocation. The Purchase Price shall be allocated among the
Purchased Assets in the manner specified in Schedule 2.3 attached hereto, which
Schedule shall be completed before or on the Closing Date. The parties
anticipate that the purchase price allocation shall be divided among
intellectual property and good will. None of the parties shall take a position
for income tax reporting purposes that is inconsistent with such allocation. The
parties shall cooperate in the filing of an Internal Revenue Service Form 8594
that is consistent with the allocation set forth in Schedule 2.3.
3. Representations and Warranties of Seller and Xxxxxx. Seller and Xxxxxx
jointly and severally represent and warrant to Buyer as follows:
3.1 Corporate. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California with all
requisite power and authority to own and lease its properties and to operate its
business as and where it is now being conducted and to enter into this Agreement
and perform the transactions contemplated hereby, including without limitation,
full legal right, power and authority to transfer the Purchased Assets to Buyer.
3.2 Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Seller pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by Seller's Board of Directors and shareholders. No
other corporate act or proceeding on the part of Seller is necessary to
authorize this Agreement or the other documents and instruments to be executed
and delivered by Seller pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by Seller pursuant hereto will constitute, valid and binding agreements of
Seller enforceable in accordance with their respective terms.
3.3 No Violation. Neither the execution and delivery of this Agreement
or the other documents and instruments to be executed and delivered by Seller
pursuant hereto, nor the consummation by such parties of the transactions
contemplated hereby and thereby, will: (a) to Seller's or Xxxxxx'x knowledge,
violate any statute or law, or any rule of any governmental authority; (b)
Claims to Seller's or Xxxxxx'x knowledge, require any authorization, exemption
by or notice to any court or governmental agency; or (c) violate or constitute a
default under, or will result in the termination of, or accelerate the
performance required by, or result in the creation of any security interest or
encumbrance upon any of Seller's assets, any term or provision of Seller's
Articles of Incorporation or Bylaws or of any contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character to
which Seller is a party or by which Seller or any of its assets or properties
may be bound or affected.
3.4 Claims. To Seller's and Xxxxxx'x knowledge after due inquiry, and
except for the Nadar Group claims and the claims by Warner Bros. asserted in the
action between Seller and the Nadar
-4-
Group, there is no litigation, action, claim, suit or investigation pending or
threatened against Seller or any of the Purchased Assets, including without
limitation any patent, copyright or trademark infringement claim.
3.5 No Default. Seller is not in default under any lease, contract or
commitment, nor has any event or omission occurred which through the passage of
time or the giving of notice, or both, would constitute a default thereunder or
cause the acceleration of any of Seller's obligations or result in the creation
of any lien on any of the assets owned, used or occupied by Seller. To Seller's
and Xxxxxx'x best knowledge, no third party is in default under any lease,
contract or commitment to which Seller is a party, nor has any event or omission
occurred which, through the passage of time or the giving of notice, or both,
would constitute a default thereunder or give rise to an automatic termination,
or the right of discretionary termination, thereof.
3.6 Financial Statements. Seller has previously provided Buyer with
copies of its unaudited financial statements consisting of balance sheets of
Seller as of December 31, 2001 and 2000 and the related statements of income for
the twelve-month periods then ended (the December 31, 2001 financial statements,
the "Recent Financial Statements"). All of such financial statements (including
all notes and schedules contained therein or annexed thereto) are true, complete
and accurate, have been prepared in a consistent manner, but not in accordance
with generally accepted accounting principles, have been prepared in accordance
with the books and records of Seller, and fairly present the assets, liabilities
and financial position, and the results of operations of Seller as of the dates
and for the years and periods indicated. Since the date of the Recent Financial
Statements, there has been no material adverse change in the financial
condition, assets, liabilities, business, prospects or operations of Seller.
3.7 Compliance with Laws.
(a) Compliance. Except for allegations related to the Nadar Group
claims, which Seller disputes (except for the allegation that Nadar's final
paycheck was not paid when due), Seller believes it is in compliance with
all applicable federal, state, local and foreign laws, ordinances, orders,
rules and regulations, including laws relating to employees, employee
benefits, employment practices, hazardous substances and the environment.
Seller has not received any notice of any violation or alleged violation of
any federal, state, local or foreign laws, ordinances, orders, rules or
regulations.
(b) Licenses and Permits. Seller has all licenses and permits
required for the conduct of the Business (as presently conducted by
Seller).
3.8 Title to Purchased Assets. Except for any liens created by an
capital equipment leases listed in the Assumed Contracts, Seller has good and
marketable title to the Purchased Assets and the Purchased Assets shall be free
and clear of all liens, claims, security interest and other encumbrances as of
the Closing Date.
3.9 Intellectual Property Warranty. Seller is the exclusive owner of
the intellectual property included in the Purchased Assets, free and clear of
all claims, liens, and encumbrances. Neither Xxxxxx nor any other employee or
former employee of Seller owns, directly or indirectly, in whole or in part, any
patents or applications therefor, trademarks, trade names, copyrights, trade
secrets, works-in-process, or inventions which Seller is using or intends to
use, or the use of which is necessary for the conduct of, or would compete with,
the Business. None of the Purchased Assets infringe any patent, trademark, trade
secret rights, copyrights or other intellectual property rights of any third
party. Neither
-5-
Seller nor Xxxxxx has any knowledge of any facts or alleged claims that should
reasonably lead them to believe that any part of the Purchased Assets infringes
any intellectual property rights of any third party.
3.10 Contracts and Commitments. Seller is not in default under any of
the Assumed Contracts, nor to Seller's or Xxxxxx'x knowledge, has any event
occurred which through the passage of time or the giving of notice, or both,
would constitute a default thereunder or cause the acceleration of any of
Seller's obligations or result in the creation of any lien, encumbrance or
restriction on any of the Purchased Assets. To Seller's and Xxxxxx'x knowledge,
no third party is in default under any of the Assumed Contracts. Notwithstanding
the foregoing representations in this Section 3.10, Seller advises Buyer that in
the action between Seller and the Nadar Group, Warner Bros. has asserted that it
has rights to the Media Taxi software, solely as incorporated into the
customized Media Taxi application developed by Seller for Warner Bros., and
those claims are broader than what Seller believes those rights to be. Seller
does not know, and makes no representation as to, the effect of such claim
should Warner Bros. prevail on such claim in said action.
3.11 Brokers and Finders. Neither Seller nor Xxxxxx has retained,
employed or used any broker or finder in connection with this Agreement or the
negotiation thereof; nor have they agreed to allow any such party to share or
participate in any way in the payment of any commission or finder's fee in
connection therewith.
3.12 Tax Matters. (i) Seller has filed all Tax Returns (as defined
below) that it was required to file through calendar year 2000; (ii) all such
Tax Returns were correct and complete in all material respects, except to the
extent amended returns have been or may be filed; (iii) all Taxes (as defined
below) due and owing by Seller, whether or not shown on any Tax Return, have
been paid; (iv) Seller is not currently the beneficiary of any extension of time
within which to file any Tax Return; (v) no claim has ever been made by an
authority in a jurisdiction where Seller does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction; (vi) there are no liens,
security interests or other encumbrances on any of Seller's assets that arose in
connection with any failure (or alleged failure) to pay any Tax; and (vii)
Seller has withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party. As used herein, "Tax"
means any federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, capital
stock, franchise, income, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, alternative or estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not. As
used herein, "Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
3.13 Disclosure. No representation or warranty by Seller or Xxxxxx in
this Agreement, nor any statement, certificate, schedule, document or exhibit
hereto furnished or to be furnished by or on behalf of Seller or Xxxxxx pursuant
to this Agreement or in connection with transactions contemplated hereby,
contains or shall contain any materially untrue statement of material fact or
omits or shall omit a material fact necessary to make the statements contained
therein not misleading.
3.14 Guarantees. Seller has not guaranteed the payment or performance
of any person, firm or corporation, agreed to indemnify any person or act as a
surety, or otherwise agreed to be contingently or secondarily liable for the
obligations of any person.
-6-
3.15 Labor and Employment Issues. Seller is in compliance with all
applicable statutes, laws, ordinances, rules or regulations ("Laws") respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and is not and has not, engaged in any unfair labor practice;
(b) except for claims by or on behalf of Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxxx Xxxx
and Xxxx Xxxxxxxx (collectively, the "Nadar Group"), there is no unfair labor
practice charge or complaint against Seller pending or threatened; (c) no
grievance respecting employment and employment practices which might have a
material adverse effect on Seller is pending and no such claim therefor exists;
and (f) there are no administrative charges or court complaints against Seller
concerning alleged employment discrimination or other employment related matters
pending or threatened before the U.S. Equal Employment Opportunity Commission or
any other federal or state government entity, which, individually or in the
aggregate, are reasonably likely to have a material adverse effect on Seller.
3.16 Restricted Securities. Seller and Xxxxxx understand that at
Closing, and until any applicable registration statement is declared effective
by the SEC, the Stock will not be registered under the Securities Act of 1933,
or under any state securities laws, and is being offered and sold in reliance
upon federal and state exemptions for transactions not involving a public
offering.
4. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:
4.1 Existence. Parent and Buyer are corporations duly organized,
validly existing and in good standing under the laws of the State of Maryland
with all requisite power and authority to enter into this Agreement and perform
the transactions contemplated hereby, including without limitation full legal
right, power and authority to purchase and accept the Purchased Assets from
Seller.
4.2 Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by Buyer's and Parent's Board of Directors. No other
act or proceeding on the part of Buyer and Parent is necessary to authorize this
Agreement or the other documents and instruments to be executed and delivered by
Buyer pursuant hereto, or the consummation of the transactions contemplated
hereby and thereby. This Agreement constitutes, and when executed and delivered,
the other documents and instruments to be executed by Buyer pursuant hereto will
constitute, valid and binding agreements of Buyer, enforceable in accordance
with their respective terms.
4.3 No Violation. Neither the execution and delivery of this Agreement
or the other documents and instruments to be executed and delivered by Buyer and
Parent pursuant hereto, nor the consummation by Buyer of the transactions
contemplated hereby and thereby, will: (a) violate any statute or law or any
rule, of any governmental authority; (b) require any authorization, notice to
any court or governmental agency; or (c) violate or constitute a default under
any term or provision of Buyer's or Parent's Certificate of Incorporation or
Bylaws or of any contract, commitment, understanding, arrangement, agreement or
restriction of any kind or character to which Buyer or Parent is a party or
which Buyer's or Parent's assets or properties may be bound or affected.
4.4 SEC Filings. Buyer has made available to Seller all forms, reports
and other documents required to be filed by Parent with the Securities and
Exchange Commission (the "SEC") since January 1, 1998 (the year in which the
Parent first had to file with the SEC). All such required forms, reports and
other documents (including those that Parent may file after the date hereof
until the Closing) are referred to herein as the "Parent SEC Reports." The
Parent SEC Reports (i) were or will be filed on a timely basis, (ii) were or
will be prepared in compliance in all material respects with the
-7-
applicable requirements of the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Parent SEC Reports, and (iii) did not or will not at the time they were or are
filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Parent SEC Reports or necessary in
order to make the statements in such Parent SEC Reports, in the light of the
circumstances under which they were made, not misleading.
4.5 Brokers and Finders. Buyer has not retained, employed or used any
broker or finder in connection with this Agreement or the negotiation thereof;
nor has it agreed to share or participate in any way in the payment of any
commission or finder's fee to such a party.
4.6 Litigation; No Reliance on Projections. There is no pending
litigation against Buyer or Parent that would materially effect either Buyer's
or Parent's obligations (or the performance of such obligations) hereunder;
moreover, Buyer acknowledges that it has not relied on any forward looking
financial projections (as distinguished from records of actual past financial
activity of Seller) related to the Business and that Seller has not made any
representations or guarantees about existing customers of the Business remaining
customers after the Closing.
5. Conduct of Business Pending Closing. From and after the date of this
Agreement and until the Closing:
5.1 Full Access. Buyer and its authorized agents shall have reasonable
access during normal business hours to all properties, books, records, contracts
and documents of Seller pertaining to the Business, the Purchased Assets, and
Seller shall furnish or cause to be furnished to Buyer and its authorized agents
all information with respect to the Business and the Purchased Assets as Buyer
or its authorized representatives and agents may reasonably request. Seller
shall have reasonable access to those records of Buyer reasonably related to
Seller's evaluation of this transaction, and shall further have the cooperation
of Buyer's senior executives in answering Seller's questions about Buyer and
Parent.
5.2 Carry on Regular Course. Except as otherwise set forth in this
Agreement, Seller shall carry on the Business, and Parent and Buyer shall carry
on their respective businesses, substantially in the manner as heretofore
conducted and shall not enter into any transaction outside the ordinary course
of business.
5.3 Preservation of Business. From the date hereof until the Closing
Date, Seller shall carry on the Business diligently and shall use all reasonable
efforts to keep Seller's business organization intact, including its present
relationships with employees and customers and others having business relations
with it.
5.4 Exclusive Dealing. Neither Seller nor any of its agents or
representatives will take, directly or indirectly, any action to initiate,
continue, assist, solicit, receive, negotiate, encourage or accept any offer or
inquiry from any person (a) to engage in any Business Combination (as defined
below), (b) to reach any agreement or understanding for, or otherwise attempt to
consummate, any Business Combination, or (c) to furnish or cause to be furnished
any information with respect to Seller or its assets to any person (other than
as contemplated in this Agreement) who Seller knows or believes to be in the
process of considering any Business Combination. For purposes hereof, "Business
Combination" means any merger, consolidation or combination to which Seller is a
party, any sale, dividend, split or other disposition of capital stock or other
equity interest of Seller or any sale or other disposition of all or
substantially all of Seller's assets. The obligation of Seller under this
Section shall terminate if the Closing does not occur on or before March 18,
2002.
-8-
5.5 Supplemental Disclosure. On the Closing Date, Seller shall inform
Buyer in writing of all information, events or actions which, if this Agreement
were signed on the Closing Date, would be required to be disclosed in the
exhibits hereto in order to make Seller's representations and warranties
contained herein true and correct.
5.6 No Material Contracts. No contract or commitment will be entered
into, and no purchase of supplies and no sale of goods or services (real,
personal, or mixed, tangible or intangible) will be made, by or on behalf of
Seller, except contracts, commitments, purchases or sales which are in the
ordinary course of business and consistent with past practice, are not material
to Seller (individually or in the aggregate).
6. Closing.
6.1 Closing Date. The closing of this transaction (the "Closing")
shall take place at the offices of Sonic Foundry, Inc., 0000 Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxx 00000, at 11:30 a.m. on the 28th day of January, 2002, or at
such other date or time as the parties may agree upon, but in any event not
later than March 18, 2002 (the "Closing Date"). If the Closing does not occur on
or before March 18, 2002 for any reason other than Seller's affirmative decision
(evidenced by written notice to Buyer) to terminate this Agreement, and neither
party has yet terminated the Agreement pursuant to Section 10 of this Agreement,
Buyer shall pay to Seller the sum of Fifteen Thousand Dollars ($15,000);
provided such amount shall be credited towards the Purchase Price (if the
Closing does subsequently occur). In no event however, shall Buyer be obligated
to pay Seller more than Fifteen Thousand Dollars ($15,000) total for not closing
by March 18, 2002 and/or terminating the Agreement under Section 10.
6.2 Conditions Precedent to Obligations of Seller. Each and every
obligation of Seller under this Agreement to be performed at the Closing shall
be subject to the fulfillment by Buyer, prior to or at the Closing, of each of
the following conditions unless waived in writing by Seller:
(a) Each representation and warranty made by Buyer in this
Agreement or any Exhibit hereto shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though each
such representation and warranty has been made or given as of the Closing
Date;
(b) Buyer shall have performed and complied in all material
respects with all of its obligations under this Agreement that are to be
performed or complied with by it prior to or at the Closing Date;
(c) Buyer shall have executed and delivered to Seller each of the
documents described in Section 6.5;
(d) No investigation, suit, action or other proceeding shall be
threatened or pending before any court or governmental agency in which it
is sought to restrain, prohibit or obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
6.3 Conditions Precedent to Obligations of Buyer. Each and every
obligation of Buyer under this Agreement to be performed at the Closing shall be
subject to the fulfillment by Seller and/or Xxxxxx, prior to or at the Closing,
of each of the following conditions unless waived in writing by Buyer:
-9-
(a) Buyer completing, to its reasonable satisfaction, its due
diligence investigation of Seller; provided, however, such investigation
must be completed no later than March 9, 2002;
(b) Each representation and warranty made by Seller and/or Xxxxxx
in this Agreement or any Exhibit hereto shall be true and correct in all
material respects on and as of the Closing Date with the same effect as
though each such representation and warranty had been made or given as of
the Closing Date;
(c) Seller shall have performed and complied in all material
respects with all of its obligations under this Agreement that are to be
performed or complied with by it before or at the Closing Date;
(d) Seller and Xxxxxx shall have executed and delivered to Buyer
each of the documents described in Section 6.4;
(e) The parties shall have obtained all necessary consents and
licenses with respect to the transaction contemplated hereby, including,
without limitation, the transfer of the Purchased Assets, to Buyer, the
absence of which would have a material adverse effect on Buyer's rights
under this Agreement, or which would constitute a breach pursuant to the
provisions of, or which would result in the termination or loss of any
material right associated with or under any Assumed Contract or without
which Buyer would be precluded or materially impeded from conducting the
business or obtaining the benefit of the Purchased Assets; the only
exception to the requirement set forth in this subparagraph (e) being the
hosting contract with WBIT.
(f) From the date of this Agreement until the Closing Date, there
shall have occurred no material adverse change in the Business, the
Purchased Assets or the Business' financial condition or prospects from
that disclosed to Buyer in this Agreement;
(g) No investigation, suit, action or other proceeding shall be
threatened or pending before any court or governmental agency in which it
is sought to restrain, prohibit or obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby; and
(h) Except as otherwise provided in this Agreement, including
without limitation, liens and encumbrances described in the Assumed
Contracts, Seller shall have removed any liens or other encumbrances on the
Purchased Assets and provided sufficient proof, reasonably acceptable to
Buyer, that all such liens or other encumbrances are removed at or before
the Closing.
6.4 Items to be Delivered by Seller and/or Xxxxxx. At the Closing,
Seller and/or Xxxxxx shall deliver to Buyer the following documents, all duly
executed by Seller or Xxxxxx, as the case may be:
(a) The Xxxx of Sale Agreement in the form attached hereto as
Exhibit A, and such other instruments of sale, conveyance, transfer or
assignment as may be reasonably requested by Buyer to carry out the
purposes of this Agreement;
(b) A Confidentiality Agreement in the form attached hereto as
Exhibit B;
-10-
(c) The Stock Restriction and Registration Agreement in the form
attached hereto as Exhibit C;
(d) Copyright, trademark and domain name assignments for the
Trade Rights;
(e) Amend Xxxxxx'x Employment Agreement[s] with Seller to remove
all restrictions on Xxxxxx'x ability to work for Buyer or Parent;
(f) A certificate signed by the President of Seller that each of
the representations and warranties made by Seller in this Agreement is true
and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any changes permitted by
the terms of this Agreement or consented to in writing by Buyer), and that
Seller has performed and complied with all of Seller's obligations under
this Agreement which are to be performed or complied with by it on or prior
to the Closing Date;
(g) A copy of Seller's articles of incorporation, certified by
the California Secretary of State;
(h) Certified resolutions of Seller's Board of Directors and
shareholders approving this Agreement and the consummation of the
transactions contemplated by this Agreement;
(i) One or more assignment documents transferring to Buyer all of
Seller's rights and interests under the Assumed Contracts; including,
without limitation, the Warner Brothers International Television
Distribution agreement;
(j) One or more payoff letters from Seller's lenders, with
respect to any debts or liens or other encumbrances on the Purchased Assets
that are to be removed at or before the Closing, if applicable; and
(k) All other documents, instruments or writings required to be
delivered to Buyer at or prior to the Closing pursuant to this Agreement,
and such other certificates of authority and documents as Buyer may
reasonably request.
6.5 Items to be Delivered by Buyer. At the Closing, Buyer shall
deliver to Seller the following documents, all duly executed by Buyer:
(a) An Assumption Agreement, in the form attached hereto as
Exhibit E, evidencing the Buyer's assumption of the Assumed Liabilities;
(b) The Cash as described in Section 2.2(a) hereof;
(c) The Stock as described in Section 2.2(b) hereof;
(d) The Confidentiality Agreement;
(e) The Stock Restriction and Registration Agreement;
(f) Certified resolutions of Buyer's and Parent's Board of
Directors approving this Agreement and the consummation of the transactions
contemplated by this Agreement; and
-11-
(g) A certificate signed by the President of Buyer that each of
the representations and warranties made by Buyer in this Agreement is true
and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given on and as of the Closing Date (except for any changes permitted by
the terms of this Agreement or consented to in writing by Seller), and that
Buyer has performed and complied with all of Buyer's obligations under this
Agreement which are to be performed or complied with by it on or prior to
the Closing Date.
7. Post Closing Covenants.
7.1 Seller's and Xxxxxx'x Covenants.
(a) Debt Repayment. Seller shall use the Purchase Price to
satisfy all of its creditors and employees (past and present), except for
repayment of any deferred salary owing to Xxxxxx which shall be repaid only
once Seller has reduced all other of its obligations by 50% or more (as
measured by, and existing on, the Closing Date), and then only on a pro
rata basis with all of Seller's other creditors.
(b) Intentionally Deleted.
(c) Future Applications. Neither Company nor Xxxxxx (except as
Buyer's employee and for Buyer), shall, at any time following Closing and
for so long as Buyer continues the Business, but not more than a period of
two (2) years, develop applications that compete with the Purchased Assets,
including without limitation, Media Taxi; subject to California law
restrictions on non competition clauses.
(d) Unemployment Compensation. Seller shall, upon the request of
Buyer, cooperate with Buyer in any efforts by Buyer to obtain the transfer
of Seller's portion of the California unemployment compensation fund[s], to
the extent permitted by applicable Law. In connection therewith, Seller
will execute such documents as Buyer may reasonably request in order to
effectuate such transfer.
7.2 Buyer's Covenants. Buyer shall employ Xxxxxx beginning Monday,
February 11, 2002, on the terms set forth in his employment letter, a draft of
which he has received. The Buyer shall register the Sonic Foundry stock pursuant
to the terms of the Stock Restriction and Registration Agreement.
8. Survival of Representations, Warranties and Covenants. The
representations, warranties, obligations and covenants of each party contained
in this Agreement or in any document referred to herein or delivered at the
Closing shall survive the Closing for a period of two years.
9. Indemnification.
9.1 Seller's Indemnity. Seller shall indemnify, defend and hold Buyer
harmless at any time and from time to time against any and all of Buyer's
losses, liabilities, costs, claims, actions, damages and expenses, including,
without limitation, reasonable attorneys' fees and disbursements (collectively
"Damages"), resulting from, arising out of, or incurred with respect to:
-12-
(a) the material falsity or material breach of any
representation, warranty, covenant or agreement of Seller or Xxxxxx in this
Agreement or in any document or instrument referred to in this Agreement or
delivered by Seller or Xxxxxx at the Closing;
(b) the ownership and conduct of the Business at any time before
the Closing Date;
(c) any claim, including without limitation, claims by the Nadar
Group, or anyone of them, and any other employment or labor related claims,
made by any party other than Buyer, or suit or other proceeding commenced
by any such party alleging facts that, if true, would entitle Buyer to
indemnification pursuant to this Section 9.
9.2 Buyer's Indemnity. Buyer shall indemnify, defend and hold Seller
harmless at any time and from time to time against any and all of Seller's
Damages resulting from, arising out of or incurred with respect to:
(a) the material falsity or material breach of any
representation, warranty, covenant or agreement of Buyer in this Agreement
or in any document or instrument referred to in this Agreement or delivered
by Buyer at the Closing;
(b) the ownership and conduct of the Business at any time after
the Closing Date, but not including Damages caused by Xxxxxx intentionally
or maliciously (i.e. for example, and not by limitation, what Seller
alleges Xx. Xxxxx did to Seller in the Fall of 2001);
(c) any claim made by any party other than Seller or suit or
proceeding commenced by any such party alleging facts that, if true, would
entitle Seller to indemnification pursuant to this Section 9; and
(d) any of the Assumed Liabilities.
9.3 Procedure for Asserting Indemnification.
(a) The party seeking indemnification (the "Indemnitee") shall
give the party from whom he or it is seeking indemnification (the
"Indemnitor") written notice of any matter with respect to which he or it
seeks to be indemnified (the "Claim") within a reasonable time after
Indemnitee has knowledge of acts forming a sufficient basis for the Claim,
but in any event at least thirty (30) days prior to commencing any action.
Such notice shall state the nature of the Claim and, if known, the
approximate amount of the loss, cost or expense. Indemnitor shall have the
right to contest any Claim by a third party by notifying Indemnitee of an
election to exercise such right within thirty (30) days after Indemnitor
shall be notified of such Claim.
(b) Except for the Claim of a third party as to which Indemnitor
has timely notified Indemnitee that he or it will contest, unless
Indemnitor objects to the determination or computation of the total amount
of the indemnification shown in the written notice specified in Subsection
9.3(a), such amount shall be promptly paid to Indemnitee. If Indemnitor
objects to such determination or computation, each party will have all
remedies available at law or in equity.
-13-
9.4 Limitations on Indemnification.
(a) Seller's indemnification obligation shall not extend to any
claim made by Warner Brothers International Television Distribution
("WBITD"), or any of its affiliates or corporate parents, that pursuant to
the 1999 Website Development and Hosting Agreement by and among Seller and
WBITD, that WBTID or its affiliates or corporate parents may use, extend,
modify, or exploit the Media Taxi software solely for any internal purpose
(as opposed to any purpose whereby WBTID, its affiliates or corporate
parents, or such corporate parents' affiliates, purport to sublicense or
otherwise provide, on a commercial or non-commercial basis, the software to
parties other than WBITD, or any of its affiliates, its corporate parents
or such corporate parents' affiliates).
(b) Except in the case of actual and intentional fraud by Seller
or Xxxxxx, in no event shall Seller's indemnification obligation under this
Agreement exceed an amount equal to 110,500 shares of Sonic Foundry stock
times the per share closing price of Sonic Foundry common stock on the day
of Closing. In lieu of recovering such indemnification amounts from Seller,
Buyer shall first offset any amounts Seller owes Buyer against any Sonic
Foundry shares still then restricted under the Stock Registration and
Restriction Agreement, and any remaining amount shall be payable by Seller
pursuant to this Agreement, subject to the overall limitation of 110,500
shares times the closing price of Sonic Foundry stock on the day of
Closing.
10. Termination. This Agreement may be terminated at any time prior to the
Closing Date, by written notice by the terminating party to the other party as
follows: (a) by Buyer, if it is not satisfied, for any reason or no reason, with
the results of its due diligence investigation; (b) by Seller, if it is not
reasonably satisfied by the results of its due diligence investigation of Buyer;
or (c) by Seller, if Seller's Board of Director's or shareholder's approval of
the Agreement shall not have been obtained. Provided, however, that if Buyer
terminates this Agreement it shall pay to Seller Fifteen Thousand Dollars
($15,000) within twenty (20) days of such notice or by March 18, 2002, whichever
is earlier. Provided, further, that if Buyer provides written notice to Seller
it is satisfied with the results of its due diligence investigation, Seller's
right of termination under (b) above terminates immediately as of the date Buyer
sends such notice.
11. Miscellaneous.
11.1 Expenses Incident to Transaction. Each party shall pay its own
expenses and costs relating to the negotiation, execution and performance of
this Agreement.
11.2 Governing Law. This Agreement shall be construed and interpreted
according to the internal laws and decisions of the State of Wisconsin.
11.3 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to be duly given when personally delivered, sent by
telecopier, facsimile transmission or other electronic means of transmitting
written documents, or when mailed, certified mail, with postage prepaid and
(a) If to Buyer, to
Sonic Foundry Media Services, Inc.
0000 Xxxxxxx Xxxxxx
-00-
Xxxxxxx, Xxxxxxxxx 00000
Attn: General Manager
Fax: 000.000.0000
with a copy to
Sonic Foundry, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
Fax: 000.000.0000
(or at such other address or with a copy to such
other person or address as may have been designated
from time to time by notice in writing); or
(b) If to Seller to
Xxxx Xxxxxx
0000 Xxxxxx Xxx
Xxx Xxxxxxx, XX 00000
with a copy to
Attorney Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, P.C.
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Fax: 000.000.0000
(or at such other address or with a copy to such
other person or address as may have been designated
from time to time by notice in writing).
11.4 Entire Agreement. This instrument replaces all prior Agreements
among Seller and Buyer and embodies the entire agreement among the parties
hereto with respect to the subject matter hereof, and supersedes any and all
prior agreements, discussions and warranties.
11.5 Modification; Waiver. No modification or waiver of any provisions
of this Agreement or consent to any departure therefrom shall be effective
unless in writing and signed by the party against whom it is sought to be
enforced.
11.6 Assignment; Binding Nature. Except as specifically set forth
herein, this Agreement shall not be assignable by any party without the express
written consent of the other parties, which consent shall not be unreasonably
withheld; provided, however, that Buyer may assign all or any part of its rights
under this Agreement to an entity that is majority owned and controlled by Buyer
or to Parent. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns.
-15-
11.7 Further Assurance. After the Closing Date, Seller will execute
and deliver such further instruments of conveyance and transfer and take such
other action as Buyer may reasonably request to convey and transfer effectively
to Buyer any of the Purchased Assets, and will assist Buyer in the collection or
reduction to possession of any such Purchased Assets.
11.8 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, provided that all
such counterparts, in the aggregate, shall contain the signatures of all parties
hereto.
11.9 Third-Party Beneficiaries. No third-party beneficiary rights
shall be implied from anything contained in this Agreement.
11.10 Arbitration. All controversies, claims and disputes arising
under or relating to this Agreement, or the construction, interpretation,
breach, termination, or enforceability hereof, whether such dispute is based
upon statute, tort, contract, common law or otherwise, and whether such dispute
existed prior to or arises after the date of this Agreement, shall be resolved
first by not less than two (2) full days of mediation with a single mediator
mutually agreeable by the parties, and if the parties do not reach full
agreement (evidenced by a written agreement signed by the parties) within said
time, then by binding arbitration. If the parties are unable to agree on the
mediator within fifteen (15) business days after one party gives notice to the
other that a dispute exists, or if the parties are unable to agree on the
arbitrator within fifteen (15) business days after the termination of the
mediation, then the mediator or arbitrator, as applicable, shall be chosen by
the American Arbitration Association. The mediation and arbitration shall be
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association to the extent that a particular matter is not covered by
the provisions of this Arbitration Clause. The costs of the mediation and
arbitration proceeding shall be borne equally by the parties and each party
shall bear the expense of its own counsel and experts.
Any issue as to whether or the extent to which a dispute is subject to
arbitration, including but not limited to the validity or enforceability of this
Agreement to arbitrate, the applicability of any statute of limitations or other
defense relating to the timeliness of the assertion of any claim or any matter
relating to the arbitrability of such claim, shall be decided by the arbitrator.
In order to achieve the purposes of alternative dispute resolution to save time
and expense, if the matter goes to arbitration, the parties shall not have the
right to conduct discovery, but shall instead provide all evidence at in person
hearings conducted by the arbitrator.
The arbitration proceeding shall commence with a preliminary hearing before the
arbitrator for the purpose of making opening statements to educate the
arbitrator about the parties' respective positions in the dispute. Such
preliminary hearing shall begin not later than ten calendar days following the
selection of the arbitrator.
The arbitrator shall render a written, reasoned decision. The arbitrator shall
be bound by the laws of the State of Wisconsin, and shall have the authority to
award any remedy or remedies which the arbitrator deems appropriate, within the
bounds of such governing law; provided, however, that any award of injunctive
relief or punitive damages shall be subject to judicial review at the election
the party against whom such relief is granted.
-16-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused it to be duly executed, as of the date first set forth
above.
BUYER: SELLER:
SONIC FOUNDRY MEDIA SERVICES, INC. DIGITAL SAVANT, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxx
--------------------------------- ----------------------------------
Xxxxxxx X. Xxxxx, Vice President Xxxx Xxxxxx, President
Solely as to Sections 2.2(b), 4.1, Solely as to Sections 3, 6.4 and 7:
4.2, 4.3, 4.4, 4.6 and 5.2:
SONIC FOUNDRY, INC.
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxx Xxxxxx
--------------------------------- -----------------------------------
Xxxxxxx X. Xxxxx, Chief Financial Xxxx Xxxxxx, individually
Officer
-17-
Schedule 1.1(b)
Trade Rights
SOFTWARE
--------
Media Taxi: All copies of source code, object code, back ups,
documentation, specifications, proposals, flow charts,
html/xml code, templates, database architecture and
design, non-client owned databases, betas, discs, cd roms,
print outs.
Fox Flash: All copies of source code, object code, back ups,
documentation, specifications, proposals, flow charts,
html/xml code, templates, database architecture and
design, non-client owned databases, betas, discs, cd roms,
print outs.(The parties acknowledge that Fox TV, not
Seller, owns the rights in the name "Fox Flash.")
Source Safe: All copies of documentation, back ups.
Office Software/OS All copies of documentation, back ups.
TRADEMARKS/TRADENAMES
---------------------
Media Taxi
Digital News
COPYRIGHTS
----------
Media Taxi (TXu-929-218) in all of its existing versions and forms, regardless
of name (i.e. Fox Flash, Digital News and any other name.)
DOMAIN NAMES
------------
xxxxxxxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxxxx.xxx
xxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
xxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxxx.xxx
xxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxxxxx.xxx
xxxxxx.xxx
xxxxxxxxx.xxx
Schedule 1.1(c)
Assumed Contracts
CUSTOMER CONTRACTS
--------------------------------------------------------------------------------------------------------------------
Client Name Contact Contract Terms
--------------------------------------------------------------------------------------------------------------------
Fox Domestic TV Xxxxxxx Xxxxxxx Hosting:
00000 X. Xxxx $.50 per MB per month up to 3GB.
Xxxx. 000/0000 $.35 per MB per month up to 3GB-10GB
Xxx Xxxxxxx, XX 00000
xxxxxxxx@xxx.xxx
----------------
(000) 000-0000 Verbal agreement
--------------
--------------------------------------------------------------------------------------------------------------------
Warner Bros. Intl TV Xxxx Xxxxxxxxx $.50 per MB per month up to 3GB.
0000 X. Xxxxxxx, 0xx xxxxx #0000 $.35 per MB per month up to 3GB-10GB
Xxxxxxx, XX 00000-0000 $.25 per MB per month 10GB or more
(000) 000-0000
--------------
xxxx.xxxxxxxxx@xxxxxxxxxx.xxx 1999 Contract for Phase I
- Front-end Redesign not covered
under 1999 contract
- Rights Catalog Reporting not
covered under 1999 contract
- SPEC document not covered under
1999 contract; language on Invoice
--------------------------------------------------------------------------------------------------------------------
Fox Latin America - TV, Xxxxx Xxxxxxx $.50 per MB per month up to 3GB.
Kids (Spanish & Portuguese) 00000 Xxxxxxxxxxx Xxx. $.35 per MB per month up to 3GB-10GB
Xxx Xxxxxxx, XX 00000
(000) 000-0000
--------------
xxxxxx@xxx.xxx Verbal agreement
--------------
--------------------------------------------------------------------------------------------------------------------
Fox Latin America - Sports Xxxxxxx Xxxxxx $.50 per MB per month up to 3GB.
(North and South) 0000 X. Xxxxxxxxx Xxxx $.35 per MB per month up to 3GB-10GB
0xx xxxxx, Xxx 000
Xxx Xxxxxxx, XX 00000
(000) 000-0000 Verbal agreement
xxxxxxx@xxxxxxxxxxxxx.xxx
-------------------------
--------------------------------------------------------------------------------------------------------------------
USA Films Xxxxxxx Xxxxxxxxx $1,500 per month license
0000 Xxxxxxxx Xxxx. Xxxxx X
Xxxxxxx Xxxxx, XX 00000 Monthly license plus hosting:
(000) 000-0000 $.50 per MB per month up to 3GB.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
xxxxxxxx.xxxxxxxxx@xxxxxxxx.xxx' $.35 per MB per month up to 3GB-10GB
$.25 per MB per month 10GB or more
Verbal agreement
--------------------------------------------------------------------------------------------------------------------
New Line Cinema Xxxxxx Xxxxxxxx Failure to pay hosting and development fees
000 Xxxxx Xxxxxxxxx Xxxx. - terminated by DS for failure to Pay
Xxx Xxxxxxx, XX 00000
(000) 000-0000
Xxxxxx@xxxxxxxx.xxx
--------------------------------------------------------------------------------------------------------------------
Fox Home Entertainment Xxxxxxx Xxxx New Home Video system built by Bakersman
2121 Ave. of the Stars, 25th Floor included Ad-Pub system
Xxx Xxxxxxx, XX 00000
(000) 000-0000
xxxxxxxxx@xxx.xxx'
--------------------------------------------------------------------------------------------------------------------
EQUIPMENT LEASES
----------------
Lessor Equipment Type Lease No.
Xxxxxxxxx Capital Group Computer 776300
Xxxxxxxxx Capital Group Computer 769170
Xxxxxxxxx Capital Group Computer 786943
GE Capital Colonial Pacific Computer 341826001
Dell Computer Laptop 15399305**
**Only being assumed if Xxxxx returns the Laptop by Closing.
Alchemy Communications NOC Agreement
------------------------------------
Schedule 2.3
Purchase Price Allocation
CLASS OF ASSETS AGREED VALUE
--------------- ------------
Exhibit A
---------
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS, that Digital Savant, Inc., a
California corporation ("Seller"), pursuant to that certain Asset Purchase
Agreement dated February 6, 2002 (the "Agreement") among Seller, Sonic Foundry
Media Services, Inc., a Maryland corporation ("Buyer") and a wholly-owned
subsidiary of Sonic Foundry, Inc., a Maryland corporation, has bargained and
sold, and by these presents does grant, bargain, sell, assign, convey, transfer,
set over and deliver to Buyer, its successors and assigns, all of the Purchased
Assets (as such term is defined in the Agreement).
TO HAVE AND TO HOLD all of the Purchased Assets hereby
conveyed unto Buyer, its successors and assigns, to and for its own use and
benefit forever.
Seller hereby irrevocably constitutes and appoints Buyer, its
successors and assigns, the true and lawful attorney of Seller, with full power
of substitution, and gives and grants to Buyer, its successors and assigns, full
power and authority in the name of Seller, at any time and from time to time, to
demand, xxx for, recover, receive, compound, acquit, release and discharge any
and all rights, demands, monies, claims and choses in action of every kind and
description, arising out of, incident to, or in connection with, the Purchased
Assets, or any of them, and upon the same or any part thereof to make
acquittance or other discharge with respect thereto, and generally from time to
time to make, execute, do and perform such further acts and things concerning
the subject matter of this paragraph with like power and as fully as Seller
could do or might have done, hereby ratifying and confirming all and whatever
Buyer, its successors and assigns shall lawfully do or cause to be done.
Seller hereby further undertakes that it will execute in
accordance with the provisions of the Agreement such additional documents and
take such further actions as may be reasonably required in order to confirm and
further effectuate the sale and assignment of the Purchased Assets to Buyer.
This instrument shall be binding upon Seller, its successors
and assigns, and shall inure to the benefit of Buyer and its successors and
assigns.
IN WITNESS WHEREOF, Seller has caused this instrument to be
duly executed as of this ___ day of _________________, 2002.
DIGITAL SAVANT, INC.
By: _________________________________
Xxxx Xxxxxx, President
STATE OF CALIFORNIA )
) ss.
COUNTY OF __________ )
Personally came before me this _____ day of February, 2002 the
above named XXXX XXXXXX the President of Digital Savant, Inc., and to me known
to be the person who executed the foregoing instrument and acknowledges the
same.
______________________________________________
*_____________________________________________
Notary Public, _________ County, California [NOTARIAL SEAL]
My Commission: _____________________
-2-
Exhibit B
EMPLOYEE CONFIDENTIALITY, INVENTION ASSIGNMENT AND NON-
SOLICITATION AGREEMENT
THIS AGREEMENT made as of the ___ day of February
2002 and immediately effective by and between SONIC FOUNDRY, INC., and SONIC
FOUNDRY MEDIA SERVICES, INC., (collectively, "Sonic Foundry") and the Employee
whose name and signature appears below ("Employee").
WHEREAS, Sonic Foundry and Employee desire to enter
into this Agreement, ("Agreement") which will set forth the terms and conditions
of Employee's use of confidential information obtained during the course of
employment with Sonic Foundry, assignment of inventions and solicitation of
employees and clients.
NOW THEREFORE, in consideration of the premises to
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sonic Foundry and Employee agree as
follows:
1. Obligation of Confidentiality. Employee understands that in the course of
-----------------------------
his/her employment with Sonic Foundry, he/she shall or may be making use of,
acquiring, or adding to confidential information of a special and unique nature
and value relating to such matters as Sonic Foundry's trade secrets, systems,
inventions, programs (including, without limitation, Sonic Foundry's computer
software programs), procedures, manuals, confidential reports and
communications, and lists of customers and clients. Employee also understands
that any information, data and materials received by Sonic Foundry from
third-parties in confidence (or subject to nondisclosure or similar covenants),
including but not limited to customers, prospective customers, joint ventures,
parties to cooperative agreements or partners, shall be deemed to be and shall
be confidential information. Employee hereby confirms that he/she has not and
shall not, except with the express, prior written consent of Sonic Foundry, or
except if he/she is acting as an employee of Sonic Foundry solely for the
benefit of Sonic Foundry in connection with Sonic Foundry's business and in
accordance with Sonic Foundry's business practices and employee policies, at any
time during or for one (1) year following the termination of his/her employment
by Sonic Foundry for any reason, directly or indirectly, disclose, divulge,
reveal, report, publish, transfer or use, for any purpose whatsoever, any of
such information which is within the definition of Protected Information,
hereinafter defined, which has been obtained by or disclosed to him or her as a
result of his/her employment by Sonic Foundry. Further, Employee agrees to be
bound by all nondisclosure or similar covenants between Sonic Foundry and any
third-party, and of which, Employee is, or reasonably should be, aware.
2. Scope of Protected Information. Employee further understands that all of
------------------------------
the following information and materials are "Protected Information" belonging to
Sonic Foundry and shall be kept strictly confidential, even if not physically
marked as such:
a. Applications, operating system, database, communication and other
computer software, whether now or hereafter existing, developed by,
or on Sonic Foundry's behalf, for use on any operating system, all
modifications, enhancements and versions and all options available
with respect thereto, and all future products developed or derived
therefrom;
b. Source and object codes, flowcharts, algorithms, coding sheets,
routines, sub-routines, compilers, assemblers, design concepts, and
related documentation and manuals;
c. Products, inventions, production processes, marketing techniques and
arrangements, mailing lists, purchasing information, pricing
policies, quoting procedures, financial information, customer and
prospect names and requirements, employee, customer supplier and
distributor data, and other materials and information relating to
Sonic Foundry's business and activities and the manner in which Sonic
Foundry does business;
d. Research and development of proprietary products related to video
imaging, transfer of film-originated NTSC to PAL or SECAM, PAL to
NTSC or SECAM or SECAM to NTSC or PAL (as such terms are known in the
television and film imaging industries), media conversion, encoding
and transfer;
e. Proprietary discoveries, concepts and ideas including, without
limitation, the nature and results of research and development
activities, processes formulas, inventions, computer-related
equipment or technology, techniques, "know-how", designs, drawings,
and specifications;
Sonic Foundry Employee Confidentiality, Invention, Solicit Agreement - ABC
f. Any other materials or information related to the business or
activities of Sonic Foundry that are not generally known to others
engaged in similar businesses or activities;
g. All ideas which are derived from or relate to Employee's access to or
knowledge of any of the above enumerated materials and information;
and
h. All information, data and materials received by Sonic Foundry from
third-parties in confidence (or subject to nondisclosure or similar
covenants), including, but not limited to, information, data and
materials received by Sonic Foundry from customers, prospective
customers, joint ventures, parties to cooperative agreements or
partners.
Notwithstanding the foregoing, Protected Information shall not include such
information as the Employee can prove (i) was in the public domain, being
publicly and openly known, prior to the date hereof, or, subsequent to such
date, became part of the public domain, being publicly and openly known, through
lawful and proper means, (ii) was independently developed or acquired by the
Employee without reliance in any way on other protected information of Sonic
Foundry or any customer or (iii) was approved by Sonic Foundry for use and
disclosure by the Employee without restriction.
3. Ownership of Inventions; Copyrights.
------------------------------------
(a) The Employee acknowledges that he or she is performing work for
Sonic Foundry at Sonic Foundry's request and expense. Without further
compensation, the Employee hereby agrees promptly to disclose to Sonic Foundry,
and the Employee hereby assigns and agrees to assign to Sonic Foundry or its
designee, the Employee's entire right, title, and interest in and to all
Inventions (as defined below) relating to Sonic Foundry's business that the
Employee has conceived or made, or conceives or makes, during the course of his
employment by Sonic Foundry. Any Invention relating to Sonic Foundry's business
that is disclosed by the Employee within one (1) year following the termination
of his/her employment with Sonic Foundry shall also be Sonic Foundry's property,
unless the Employee proves through clear and convincing evidence that the
Invention was conceived following the termination of the Employee's employment.
Any copyright works relating to Sonic Foundry's business created by the Employee
during the term of his or her employment shall be considered works made for hire
and the initial ownership therein shall be in Sonic Foundry. To the extent such
works are not covered by the definition of a "work made for hire" under the
Copyright Act, such that Employee would be regarded as the copyright author and
owner, Employee hereby assigns and agrees to assign to Sonic Foundry, and Sonic
Foundry accepts and agrees to accept, Employee's entire right, title, and
interest in and to such works for all media now known or later developed. When
requested by Sonic Foundry, whether during or after his or her employment, the
Employee shall execute patent and copyright applications and other instruments
as considered necessary by Sonic Foundry to apply for and obtain patents or
copyrights in the United States and foreign countries that cover such
Inventions. The Employee shall make assignments and execute any other
instruments necessary to convey to Sonic Foundry the ownership and exclusive
rights in such Inventions, copyright works, patent applications and patents.
Sonic Foundry shall bear all out-of-pocket expenses connected with such patents,
patent applications, copyright applications and maintenance of patent
protection. If the Employee does not so execute the requested documents promptly
after Sonic Foundry's requests therefor, the Employee hereby appoints Sonic
Foundry as the Employee's attorney in fact for the limited purpose of executing
such documents.
"Invention" means any inventions, improvements, discoveries,
computer programs, know-how or ideas (whether or not patentable or subject to
copyright protection) of the Employee that are included in any of the following
classes: those for which any equipment, supplies, facilities or trade secret
information of Sonic Foundry were used; those which were developed in any part
on Sonic Foundry's time; or those that (i) relate to Sonic Foundry's actual
research or development, and (ii) result from work performed by the Employee for
Sonic Foundry.
Notwithstanding the foregoing, no rights are hereby conveyed
in products, designs, ideas or inventions, if any, (i) made by the Employee
prior to the Employee's employment with Sonic Foundry which are identified in a
sheet attached to and made a part of this Agreement, if any (which attachment
contains no confidential information) or (ii) to which Sonic Foundry enjoys no
claim under California Labor Code Section 2870.
2
(b) The Employee represents that his or her performance of all the
terms of this Agreement and as an employee of Sonic Foundry does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him or her in confidence or in trust prior to his
or her employment with Sonic Foundry, and the Employee will not disclose to
Sonic Foundry, or induce Sonic Foundry to use, any confidential or proprietary
information or material belonging to any previous employer or other third party.
The Employee will not enter into any agreement, either written or oral, in
conflict with this Agreement.
(c) This Agreement does not apply to any product, design, idea or
invention that qualifies fully under the provisions of Section 2870 of the
California Labor Code or any successor version thereof. Sonic Foundry shall have
no right to any product, design, idea or invention or to claim that the Employee
shall have any obligation to assign to Sonic Foundry any product, design, idea
or invention that the Employee develops or developed entirely on the Employee's
own time without using Sonic Foundry's equipment, supplies, facilities, or trade
secret information; provided, however, that the foregoing limitation shall not
apply to Invention(s) that either (a) relate at the time of conception or
reduction to practice of the product, design, idea or invention to Sonic
Foundry's business, or Sonic Foundry's actual research or development or (b)
result from work performed by the Employee for Sonic Foundry. Section 2870
provides as follows:
"(a) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of its or his rights in
an invention to its or his employer shall not apply to an invention that the
employee developed entirely on its or his own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to
practice of the invention to the employer's business or actual or demonstrably
anticipated research or development of the employer; or
(2) Result from any work performed by the employee for
the employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is against
the public policy of this state and is unenforceable."
(d) The Employee agrees to disclose all product, design, idea or
invention made by the Employee and that Employee reasonably believes to be
covered by this Agreement, to Sonic Foundry in confidence in order to permit a
determination as to whether or not the product, design, idea or invention should
be the property of Sonic Foundry.
4. Non-Solicitation.
----------------
(a) Employee agrees that during the term of his/her employment with Sonic
Foundry, and for a period of one (1) year from the voluntary or involuntary
termination of employment with Sonic Foundry for any reason whatsoever, Employee
shall not, either personally or in conjunction with others, induce any existing
customer of Sonic Foundry to cease doing business in whole with Sonic Foundry.
(b) Employee agrees that during the term of his/her employment with Sonic
Foundry, and for a period of one (1) year from the voluntary or involuntary
termination of employment with Sonic Foundry for any reason whatsoever, Employee
shall not, either personally or in conjunction with others either (a) solicit,
interfere with, or endeavor to cause any employee of Sonic Foundry to leave such
employment or (b) otherwise induce or attempt to induce any such Employee to
terminate employment with Sonic Foundry.
5. Return of Materials. At Sonic Foundry's request, or, in the absence of such
-------------------
a request, upon termination of Employee's employment with Sonic Foundry,
Employee agrees to turn over to Sonic Foundry all notes, data tapes, lists,
reference items, sketches, drawings, memoranda, records, and other materials in
any way relating to any financial data, Protected Information and Inventions,
and other documents that are in his/her possession or control belonging to Sonic
Foundry.
3
6. Employment Termination. Nothing in this Agreement shall be interpreted to
----------------------
impair Employee's right or the right of the Company to terminate the employment
relationship.
7. Relief; Forum. Employee understands that a breach of this Agreement
-------------
including, but not limited to, unauthorized copying, assignment, transfer or
distribution of Protected Information and Inventions will result in irreparable
or immeasurable damage to Sonic Foundry and that Sonic Foundry is authorized to
seek injunctive relief against Employee. Employee also agrees that the Federal
District Court for the Western District of Wisconsin located in Madison,
Wisconsin, is an appropriate, but not exclusive, forum for resolution of any
dispute arising from this Agreement, including issuance of an injunction.
Employee understands that this provision regarding the issuance of an injunction
does not limit any remedies at law or equity otherwise available to Sonic
Foundry.
8 No Other Agreements; Merger. No oral arrangements have been made between the
---------------------------
parties hereto and this Agreement may be amended only in writing signed by both
parties. This Agreement replaces any and all previous agreements relating to the
same or similar subject matter.
9. Successors and Assigns. The rights and obligations of Sonic Foundry under
----------------------
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of Sonic Foundry. Sonic Foundry shall have the right to
assign its rights hereunder to any successor in interest. Employee may not
assign his/her obligations under this Agreement.
10. Severability. If a court of competent jurisdiction shall declare any
------------
provision of this Agreement invalid or unenforceable, the remainder of this
Agreement shall not be affected thereby and shall continue in full force and
effect.
11. Choice of Law. This Agreement shall be construed in accordance with the
-------------
internal laws of the State of California.
12. Nothing in this Agreement or elsewhere is intended to, and shall not
be interpreted to, restrict in any way Employee's ability to work in any field
following the termination (whether by Employer or Employee) of Employee's
employment with Sonic Foundry, including, without limitation, as a systems
integration consultant both within and outside the media asset management
field,; provided, however, that Employee shall not, whether in such consultancy
position or otherwise, disclose or use Protected Information in violation of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the day and year first above written.
EMPLOYEE: SONIC FOUNDRY MEDIA SERVICES, INC.
Sign:____________________________ By: _______________________
Print Name: Xxxx Xxxxxx Print Name:
SONIC FOUNDRY, INC.
By:_______________________
Print Name:
4
Exhibit C
-------
STOCK RESTRICTION AND REGISTRATION AGREEMENT
--------------------------------------------
THIS STOCK RESTRICTION AND REGISTRATION AGREEMENT (the "Agreement")
dated as of February ____, 2002, is by and among Sonic Foundry, Inc., a Maryland
corporation ("Parent") and Digital Savant, Inc., a California corporation (the
"Seller").
WHEREAS, Parent and its wholly-owned subsidiary, Sonic Foundry Media
Services, Inc. ("Buyer") are parties, along with Seller, to an Asset Purchase
Agreement dated as of the date hereof (the "Purchase Agreement") pursuant to
which Buyer will acquire certain of the assets and assume certain of the
liabilities of the Seller; and
WHEREAS, the parties desire to provide for certain restrictions and
other matters relating to the Two Hundred Twenty One Thousand (221,000) shares
(the "Shares") of Parent's common stock ("Stock") to be issued to Seller as part
of the Purchase Price for the Business and Purchased Assets.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
---------
TERM OF AGREEMENT
-----------------
Term of Agreement. This Agreement and the rights and obligations of
-----------------
the parties under this Agreement, shall terminate on the earliest to occur of
the following: (a) one year following the Closing Date or (b) immediately before
the consummation of (i) the sale of all, or substantially all, of Parent's
assets or capital stock either through a direct sale or merger, consolidation,
reorganization or any other form of business combination or acquisition in which
Parent is the target of such acquisition; provided, however that Parent's
registration obligations under this Agreement shall be completed not later than
the closing date of the said event, or (ii) the sale of 50% or more of Parent's
capital stock pursuant to a "change in control" of Parent, provided, however,
that Parent's registration obligations under this Agreement shall be completed
not later than immediately before the closing date of the said event, and that
Seller shall at all times comply with all applicable requirements of federal and
state securities law, including Rule 144, with respect to the sale of the
Shares.
ARTICLE II
----------
LOCK-UP PROVISIONS
------------------
Section 2.1 Lock-up Provisions. Seller hereby agrees that, without the
------------------
prior written consent of Parent, it will not (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of or assign, directly or indirectly, any
Restricted Shares as described in Section 2.2 below or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Restricted Shares.
Section 2.2 Definition of Restricted Shares. Restricted Shares shall
-------------------------------
mean all Shares acquired by Seller at the Closing, provided, however, that the
amount of Shares deemed "Restricted Shares" shall decrease with time according
to the schedule set forth below:
-------------------------------------------------------------------
Time Period Amount of Restricted Shares
----------- ---------------------------
-------------------------------------------------------------------
Until 6 months following the 100% of the Shares acquired by
Closing Seller at the Closing shall be
deemed Restricted Shares.
-------------------------------------------------------------------
Beginning 6 months following the 50% of the Shares acquired by
Closing Seller at the Closing shall be
deemed Restricted Shares.
-------------------------------------------------------------------
Beginning 12 months following the 25% of the Shares acquired by
Closing Seller at the Closing shall be
deemed Restricted Shares.
-------------------------------------------------------------------
Beginning 18 months following the 0% of the Shares acquired by
Closing Seller at the Closing shall be
deemed Restricted Shares.
-------------------------------------------------------------------
ARTICLE III
-----------
REGISTRATION
------------
Section 3.1 Shelf Registration. Parent shall (i) file with the
------------------
Securities and Exchange Commission (the "SEC") a registration statement for the
Shares on Form S-3 (the "Shelf Registration") within One Hundred Twenty (120)
days of the date of Closing, (ii) use its best efforts to have such registration
statement declared effective with the SEC as soon as practicable, and (iii) use
its best efforts to maintain the effectiveness of the Registration Statement for
a period not less than two (2) years from the Closing. Should the Shelf
Registration not be declared effective or should its effectiveness lapse for any
reason during the period set forth above, Parent shall use its best efforts to
have the Shares registered on another registration statement as soon as
reasonably practicable.
Section 3.2 Survival of Restrictions. Notwithstanding any registration
------------------------
pursuant to Article IV hereof, the remaining provisions of this Agreement shall
survive the registration of the Shares, as set forth herein.
Section 3.3 Indemnification. Parent will indemnify and hold Seller
harmless to the maximum extent permitted by law from and against any loss,
claim, liability, damage or expense (including reasonable attorneys' fees)
resulting from a claim that the Shelf Registration, prospectus or amendment
thereof or supplement thereto, which includes the Shares, contains a material
misstatement or omission, unless such claim is based upon information provided
by Seller; and Seller will indemnify and hold harmless Parent, its directors,
officers and agents and each person, if any, who controls (within the meaning of
the Securities Act of 1933 or the Securities Exchange Act of 1934) Parent
against any loss,
2
claim, liability, damage or expense (including attorneys' fees) resulting from
any such claim relating to information provided by Seller.
Section 3.4 Assistance. Parent will take all commercially reasonable
----------
actions, not inconsistent with any applicable securities law, rule or
regulation, to allow Seller to dispose of some or all of the Shares that are no
longer Restricted Shares promptly upon such Shares no longer being Restricted
Shares.
ARTICLE IV
GENERAL PROVISIONS
------------------
Section 4.1 Specific Enforcement. Because the Shares cannot be readily
--------------------
purchased or sold in the open market, the parties hereby acknowledge and agree
that they may be irreparably damaged in the event that this Agreement is not
specifically enforced. Upon a breach or threatened breach of the terms,
covenants and/or conditions of this Agreement by any party, the other parties
shall, in addition to all other remedies, be entitled to a temporary or
permanent injunction, without showing any actual damage, and/or a decree for
specific performance, in accordance with the provisions hereof.
Section 4.2 Legend. All certificates evidencing the Shares subject to
------
this Agreement shall also bear a legend substantially as follows during the term
of this Agreement:
"The shares represented by this certificate are subject to
restrictions on transfer and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of except
in accordance with and subject to all the terms and conditions of a
certain Stock Restriction and Registration Agreement, a copy of
which the Company will furnish to the holder of this certificate
upon request and without charge."
Upon any Shares becoming non-Restricted Shares as described in this Agreement,
Parent shall exchange the applicable Certificates evidencing the Shares for
Certificates which do not contain the foregoing, or any similar, legend.
Section 4.3 Governing Law; Successors and Assigns. This Agreement
-------------------------------------
shall be construed in accordance with and governed by the laws of the State of
Wisconsin and shall be binding upon the heirs, personal successor, executors,
administrators, successors and assigns of the parties.
Section 4.4 Notices. Notices given hereunder shall be deemed to have
-------
been duly given (i) on the date of personal delivery or (ii) one business day
following delivery by express overnight courier service, to the party being
notified at its address set forth in the Purchase Agreement or such other
address as it may subsequently notify the other party in writing.
Section 4.5 Entire Agreement and Amendments. This Agreement
-------------------------------
constitutes the entire agreement of the parties with respect to the subject
matter hereof, and may not be modified, amended or terminated except by the
written consent of Parent and by Seller.
Section 4.6 Waivers. No waiver of any breach or default hereunder
-------
shall be considered valid unless in writing, and no such waiver shall be deemed
a waiver of any subsequent breach or default of the same or similar nature.
3
Section 4.7 Severability. If any provision of this Agreement shall be
------------
held to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other severable provision
of this Agreement, and this Agreement shall be carried out as if any such
illegal, invalid or unenforceable provision were not contained herein.
Section 4.8 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument.
Section 4.9 Termination. In the event that the Purchase Agreement is
-----------
terminated, this Agreement shall terminate and be of no further force or effect.
Section 4.10 Defined Terms. Capitalized terms that are not defined
-------------
herein shall have the same meaning ascribed to them in the Purchase Agreement.
Section 4.11 Attorneys' Fees. In the event of any legal proceeding
-----------------------------
between the parties arising out of, or in connection with, this Agreement, the
court shall determine which party is the prevailing party, and the prevailing
party shall be entitled to recover its reasonable attorneys' fees and costs in
such proceeding from the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first noted above.
SONIC FOUNDRY, INC. DIGITAL SAVANT, INC.
By:__________________________________________ By:___________________________
Xxxxxxx X. Xxxxx, Chief Financial Officer Xxxx Xxxxxx, President
4
Exhibit E
-------
ASSUMPTION AGREEMENT
The undersigned Sonic Foundry Media Services, Inc., ("Buyer") a
Maryland corporation and a wholly-owned subsidiary of Sonic Foundry, Inc.,
pursuant to that certain Asset Purchase Agreement dated February 6, 2002 (the
"Agreement") among Buyer and Digital Savant, Inc., a California corporation
("Seller"), hereby assumes and agrees (subject to the terms and conditions set
forth in the Agreement) to pay, perform and discharge, as and when due, all
those liabilities and obligations of Seller specified in Section 1.3 of the
Agreement, to the extent specified therein.
PROVIDED, HOWEVER, that the undersigned does not hereby assume any
debts, liabilities, obligations or contracts of Seller other than those
specifically referred to above.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be
duly executed as of the _____ day of February, 2002.
SONIC FOUNDRY MEDIA SERVICES, INC.
By:_______________________________
STATE OF WISCONSIN )
) ss.
COUNTY OF DANE )
Personally came before me this _____ day of __________________, 2002
the above named __________________, to me known to be the ________________ and
to me known to be the person who executed the foregoing instrument and
acknowledges the same.
_______________________________________________
* [NOTARIAL SEAL]
_______________________________________________
Notary Public, Dane County, Wisconsin
My Commission: ________________________________
