SECOND AMENDMENT TO THE MASTER TRANSACTION AGREEMENT
Exhibit 10.24
SECOND AMENDMENT
TO THE
MASTER TRANSACTION AGREEMENT
THIS SECOND AMENDMENT to the Master Transaction Agreement dated July 8,
1999, as amended (the "Agreement") by and among Infonautics, Inc. ("INFO"),
Infonautics Corporation ("INFO Corporation"), Xxxx & Xxxxxx Company ("BHW") and
Xxxx & Xxxxxx Information and Learning Company ("BHIL") is made and entered into
this 15th day of December, 1999, by and among INFO, INFO Corporation, BHW, BHIL
and BHIL/INFO/XXXX.XXX, LLC, a Delaware limited liability company ("EDCO").
WHEREAS, INFO, INFO Corporation, BHW and BHIL have agreed to amend
certain terms of the Agreement;
WHERAS, EDCO desires to be bound by and receive certain benefits under
certain terms of the Agreement;
NOW, THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, INFO, INFO Corporation, BHW, BHIL and EDCO agree as
follows:
1. EDCO. EDCO shall be:
(a) entitled to the benefits of and to enforce the obligations
of INFO, BHW and BHIL under Section 9.2 of the Agreement;
(b) entitled to the rights and subject to the obligations of
EDCO pursuant to Section 9.4 of the Agreement; and
(c) subject to EDCO's obligations pursuant to Sections 6.2, 6.6,
7.2, 7.6, 9.5.1, 9.5.2 and 9.6 of the Agreement.
2. AMENDMENT TO GLOSSARY. Annex A, Glossary of Terms, to the
Agreement, is hereby amended and restated in its entirety as set
forth on Exhibit A attached hereto.
3. NO OTHER AMENDMENT; CONFIRMATION. Except as expressly amended,
modified and supplemented hereby, the provisions of the Agreement
are and shall remain in full force and effect.
4. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal substantive Law of the state of
Delaware, without giving effect to conflict of Laws rules.
6. CAPITALIZED TERMS. All capitalized terms not defined herein shall
have the meaning ascribed to them in the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INFONAUTICS, INC.
By: /s/ Xxxxx Xxx Xxxxx Xxxxxx
Its: CEO
INFONAUTICS CORPORATION
By: /s/ Xxxxx Xxx Xxxxx Xxxxxx
Its: CEO
XXXX & XXXXXX COMPANY
By: /s/ Xxxx X. Xxxxxxxx
Its: General Counsel
XXXX & XXXXXX INFORMATION AND
LEARNING COMAPNY
By: /s/ D.A. Mater
Its: Authorized Agent
BHIL/INFO/XXXX.XXX, LLC
By: /s/ Xxxx X. Xxxxx, Xx.
Its: President & CEO
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ANNEX A
GLOSSARY OF TERMS
Affiliate: Affiliate of any Person shall mean
any Person which, directly or
indirectly, controls, is controlled
by or is under common control with
such Person (excluding any trustee
under, or any committee with
responsibility for administering,
any ERISA Plan).
Agreement: The Master Transaction Agreement by
and among BHW, BHIL, INFO and INFO
Corporation dated July 8, 1999,
including the Annexes, Schedules and
Attachments thereto.
Alternative Proposal: Any proposal for an Alternative
Transaction.
Alternative Transaction: As defined in Section 5.8.1 of the
Master Transaction Agreement.
BHIL: Xxxx & Xxxxxx Information and
Learning Company, a Delaware
corporation and wholly-owned
subsidiary of BHW.
BHIL Capitalization Agreement: The Xxxx of Sale, Assignment and
Assumption and Indemnity Agreement
to be entered into by and between
BHIL and EDCO in the form attached
to the Master Transaction Agreement
as Exhibit C.
BHIL Content License: License between BHIL and EDCO
containing the terms set forth on
Exhibit F to the Master Transaction
Agreement.
BHIL Contributed Business: Accounts receivable, customer
contracts, customer data bases,
sales orders, trade payables, vendor
records, obligations to customers,
employee records and other assets
and liabilities of BHIL which relate
exclusively to or arise from sales
to the K-12 Segment and shall
include all assets, contracts,
obligations and liabilities listed
on Schedules BHW1, BHW2 and BHW3.
BHIL K-12 Products: ProQuest On-line information system
and CDROM databases as well as the
tape product currently sold by BHIL
to the K-12 Segment and new products
and product enhancements of the K-12
Products.
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BHIL Noncompetition Agreement: Noncompetiton Agreement attached to
the Agreement as Exhibit L.
BHIL Restricted Activities: The Distribution, whether alone or
with the cooperation or support or
through a third Person, of products
or services which are delivered
either electronically or in machine
readable format to the K-12 Segment.
BHIL Services Agreement: BHIL Services Agreement between BHIL
and EDCO containing the terms set
forth on Exhibit D to the Master
Transaction Agreement and the BHIL
Non-Technical Support Services
Agreement between BHIL and EDCO
containing the terms set forth on
Exhibit D-2 to the Master
Transaction Agreement.
BHW: Xxxx & Xxxxxx Company, a Delaware
corporation.
BHW Related Agreements: The BHIL Capitalization Agreement
and any other agreement to which
BHW or BHIL is a party as
contemplated by the Master
Transaction Agreement.
BHW Representatives: BHW, its accountants, counsel,
financial advisors and other
representatives.
Business Day: Any day excluding Saturday, Sunday
and any other day which banks in
Chicago are permitted or authorized
to close.
Call Option: BHW's right to purchase INFO's
equity position in EDCO pursuant
to Section 10.1 of the Master
Transaction Agreement.
Capitalization Agreements: The BHW Capitalization Agreement and
the INFO Capitalization Agreement.
Change of Control: "Change of Control" shall mean with
respect to a party the occurrence of
any of the following events:
(i) an acquisition (whether directly
from such party or otherwise) of any
voting securities of such party by
any Person immediately after which
such Person has or would have
Beneficial Ownership (within the
meaning of Rule 13d-3 promulgated
under the Exchange Act) of fifty
percent (50%) or more of the
combined voting power of such
party's then outstanding Voting
Securities;
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(ii) the consummation of, or
agreement to consummate:
(A) a merger,
consolidation, share
exchange or reorganization
of such party in which the
stockholders of such party,
as a group, cease to hold a
majority equity interest in
the surviving entity;
(B) a liquidation or
dissolution of or
appointment of a receiver,
rehabilitator, conservator
or similar person for, such
party; or
(C) the sale or other
disposition of all or
substantially all of the
assets of such party to any
Person (other than a
transfer to a subsidiary);
or
(iii) any other change in "control"
(as defined in Rule 405 promulgated
pursuant to the Securities Act) of
such Party.
Classmate: BHIL's proprietary software which is
marketed under the name "ProQuest
Classmate", including any successor
or modified products thereto.
Closing: The contribution of assets to, and
the assumption of liabilities by
EDCO and the issuance of the stock
to INFO and BHW contemplated by the
Master Transaction Agreement.
Closing Date: The fifth Business Day following the
satisfaction or waiver of all
conditions to the obligations of the
Parties contemplated by the Master
Transaction Agreement.
Contract: Any contract, agreement, instrument,
lease, license, guarantee or other
evidence of an obligation of any
Person.
Contributed Assets: Those assets listed on Schedules
BHW1, BHW2, INFO1 and INFO2 to the
Agreement.
Contributed Businesses: The BHIL Contributed Business and
the INFO Contributed Business.
Damages: Actual, out-of-pocket losses, fines
and other damages (excluding
incidental and consequential
damages) together with related costs
and expenses (including court costs,
reasonable attorneys' fees and
expenses, including those
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related to investigation and expert
assistance, and amounts paid in
settlement).
Distribution: The marketing, promotion, sale,
license, distribution, lease,
transfer, electronic transmission or
other distribution, directly or
indirectly, of a product or service
and the subscription rights thereto
(and when used as a verb, such as
Distribute the act of doing any of
the foregoing).
EDCO: BHW/INFO/XXXX.xxx, LLC, a Delaware
limited liability company.
EDCO Business: The business, operations and
activities incident to the
development and operation of an
internet portal for the EDCO
Segment, including the acquisition
and development of research and
reference tools and services and
curricular and extracurricular
materials and the Distribution
thereof, either electronically or in
machine readable format, on a
worldwide basis to the EDCO Segment
as contemplated by the Master
Transaction Agreement and the
Related Agreements.
EDCO Noncompetition Agreements: Noncompetition Agreement from EDCO
to each of BHIL and INFO containing
the terms set forth on Exhibit L to
the Master Transaction Agreement.
EDCO Restricted Activities: The Distribution, whether alone or
with the cooperation or support or
through a third Person, of products
or services which are either:
(i) Distributed to the Post
Secondary Education Segment, or
(ii) targeted primarily for
Distribution to the Post Secondary
Education Segment.
EDCO Segment: The K-12 Segment and Public Library
Segment.
EDCO Services Agreement: Services Agreement between EDCO and
INFO containing the terms set forth
on Exhibit E to the Master
Transaction Agreement.
Electric Library Technology: INFO's proprietary software and
content Distributed under the
trademark "Electric Library",
including any successor or modified
products thereto.
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End-Users: Customers that are actual users of
the products, both Individuals and
corporations that are not schools,
libraries or other institutions in
the EDCO Segment or resellers.
Exchange Act: The Securities Exchange Act of 1934
as amended.
Excluded BHIL Products: BHIL's Digital Vault products,
Post Secondary Education Segment
and corporate market databases,
i.e., all versions of ABI/INFORM,
Periodical Abstracts, Newspaper
Abstracts, Newsstand and Business
Dateline and Product Course
Packs, Case Studies and Academic
Edition as well as any successor
or modified products and all
products and content of
Chadwyck-Healey Limited or
Chadwyck-Healey Holdings, Inc. or
any of their Affiliates not
offered by BHIL to the K-12
Segment as of the date of the
Master Transaction Agreement;
provided, however, that BHIL will
not modify or create derivatives
of such products specifically for
the K-12 Segment.
Excluded Segments: All customers for information
products or services not included
in the EDCO Segment, including
without limitation corporate, "at
home" customers for business
materials and Post Secondary
Education Segment.
Fully Loaded Cost: All elements of cost, including
allocable share of interest,
depreciation, amortization and
corporate overhead.
GAAP: Generally accepted accounting
principles.
Glossary: This Glossary of Terms incorporated
by reference as Annex A to the
Master Transaction Agreement and
each of the Related Agreements.
Xxxx-Xxxxx-Xxxxxx Act: Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as
amended, and the applicable rules
and regulations thereunder.
Individual: Persons who are natural persons in
their capacity as retail customers
and who are not commercial resellers
or Persons who are institutions,
schools, libraries or educational or
cultural organizations, institutions
or service providers.
INFO: Infonautics, Inc., a Pennsylvania
corporation.
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INFO Capitalization Agreement: The Xxxx of Sale, Assignment and
Assumption and Indemnity Agreement
to be entered into by and between
EDCO and INFO in the form attached
to the Master Transaction Agreement
as Exhibit C.
INFO Contributed Business: All accounts receivable, customer
contracts, customer data bases,
domain names, trade names and trade
marks (i.e., Electric Library,
Xxxxxxxxxxxxx.xxx) and intellectual
property, software, hardware,
patents, processes and know-how,
employee records, sales orders,
supplies, inventories, fixed assets,
software development processes,
Electric Library Technology,
training procedures, vendor records,
prepaid amounts, service contracts,
and any other rights or
arrangements, and normal trade
payables and customer obligations,
including deferred revenues which
relate exclusively to or arise from
the Electric Library Technology (but
excluding the deferred revenues,
customer contracts and customer
obligations directly related to the
INFO End-User Business) and shall
include all assets, contracts,
obligations and liabilities listed
on Schedules INFO1, INFO2 and INFO3.
INFO Corporation: Infonautics Corporation, a
Pennsylvania corporation and a
wholly-owned subsidiary of INFO.
INFO/EDCO Remarketing and
License Agreement: Remarketing and License Agreement to
be entered into between INFO and
EDCO containing the terms set forth
on Exhibit G to the Master
Transaction Agreement.
INFO End-User Business: The Distribution of Electric Library
Technology to End-Users in the
Excluded Segments excluding the Post
Secondary Education Segment.
INFO Noncompetition Agreement: Noncompetition Agreement attached to
the Agreement as Exhibit K.
INFO Online Publishing Business: Accounts receivable, customer
contracts, customer data bases,
sales orders, trade payables, vendor
records, obligations to customers,
employee records and other assets
and liabilities of INFO which relate
to or arise from INFO's Online
Publishing Business and shall
include all assets, contracts,
obligations and liabilities listed
on Attachments 1 and 2 to Exhibit J.
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INFO Related Agreements: The INFO Capitalization Agreement
and any other agreement to which it
is a party as contemplated by the
Master Transaction Agreement.
INFO Representatives: INFO, its accountants, counsel,
financial advisors and other
representatives.
INFO Restricted Activities: The Distribution, whether alone or
with the cooperation or support or
through a third Person, of products
or services which are delivered
either electronically or in machine
readable format and which are
either:
(i) Distributed to the EDCO Segment
or Post Secondary Education Segment,
or
(ii) are targeted primarily for
Distribution to customers in the
EDCO Segment or Post Secondary
Education Segment.
K-12 Products: Products and services targeted
primarily for Distribution to the
K-12 Segment.
K-12 Segment: Customers who are:
(a) public or private preschool,
kindergarten, primary, middle or
secondary schools or home school
K-12 programs,
(b) teachers or administrators of
the K-12 institutions as set forth
in (a) above in their capacity as
such; and
(c) students or parents of students
of such K-12 institutions who are
targeted through such K-12
institutions for at home use.
Laws: Any federal, state, local or foreign
law, rule, regulation, judgment,
code, ruling, statute, order or
ordinance or other requirement.
Material Adverse Effect: A material adverse effect on the BHW
Contributed Business or the INFO
Contributed Business, as the case
may be, as conducted at Closing,
taken as a whole.
Net Revenue: Gross revenues from Distribution of
products or services less credits
for returns and allowances
calculated in accordance with GAAP.
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Noncompetition Agreement: Noncompetition Agreement attached to
the Agreement as Exhibit I.
Offer: Third-party offer to purchase the
INFO End-User Business which INFO
reasonably establishes is bona fide.
Online Publishing Business: The provision of publishing or
hosting services to a third Person
for such third Person's publication.
Online Publishing License
Agreement: Online Publishing License Agreement
in the form attached to the
Agreement as Exhibit J.
Original Notice: Notice of an Offer given by INFO to
EDCO.
Person: Any individual, partnership,
corporation, association, firm,
trust or any other entity, group or
organization as used in Sections
13(d) and 14(d) of the Exchange Act.
Post Secondary Education Segment: Public and private educational
institutions and programs suited for
students who have completed
secondary education or its
equivalent, including colleges,
universities, professional schools
and trade schools, and the students
of such public and private
educational institutions and
programs.
ProQuest: BHIL proprietary software
Distributed under the tradename
"ProQuest", including any successor
or modified products thereto.
Proxy Statement: INFO's proxy statement to be
prepared in accordance with Section
5.7 of the Agreement.
Public Library Segment: Customers for K-12 Products which
are publicly owned or governmentally
funded libraries.
Put Option: INFO's right to sell its Stock to
BHW pursuant to Section 10.2 of the
Agreement.
Related Agreements: The agreements contemplated by
Article II of the Master Transaction
Agreement and referenced as Exhibits
to the Master Transaction Agreement.
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Xxxxxxxxxxxxx.xxx: INFO's proprietary website
Distributed under the tradename
"Xxxxxxxxxxxxx.xxx, including any
successor or modified product
thereto."
SEC: Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as
amended.
Site Builder: BHIL's proprietary software
Distributed under the tradename
"Site Builder", including any
successor or modified products
thereto.
Sleuth technology: INFO's proprietary software
Distributed under the tradename
"Sleuth", including any successor or
modified product thereto.
Stock: The common stock (or equivalent
equity interest thereof) of EDCO.
Subsidiary: A corporation of which a Person
and/or their respective
Subsidiaries, as the case may be,
own directly or indirectly, such
number of shares as have more than
50% of the ordinary voting power for
the election of directors.
Transfer: Any:
(a) sale, assignment or transfer of
any right, title or interest in any
or all of a business and any assets
related thereto,
(b) pledge or hypothecation of any
right, title or interest in any or
all of a business or any assets
related thereto (other than a pledge
or hypothecation to a bank or
recognized financial institution,
provided the pledgee agrees in
writing at the time of any
foreclosure by such bank or
financial institution that the
business and its assets (in whole or
in part) shall continue to be
subject to the terms of the Master
Transaction Agreement as if such
bank or financial institution were
the original party to the Master
Transaction Agreement who made the
pledge); and
(c) any other direct or indirect,
voluntary or involuntary, sale,
assignment or transfer of the
business or any of its assets (in
whole or in part).
Transferee: The proposed purchaser of the INFO
End-User Business.
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Working Capital: The current assets less the current
liabilities of EDCO.
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