ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), is dated as of March 23, 2001
("Effective Date"), by and among Open Market, Inc., a Delaware corporation, with
offices at 0 Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000, ("Open Market"), Folio
Corporation, a Utah corporation and wholly owned subsidiary of Open Market, with
offices at 0 Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000 ("Folio") (Open Market and Folio
collectively referred to as "Seller"), and NextPage Operating Company, L.C., a
Utah limited liability company, with offices at 0000 Xxxx Xxxxxxxxx Xxxx Xxx,
Xxxx, XX 00000 ("Buyer").
WHEREAS, Seller is the owner of certain software products identified on
SCHEDULE 1.1 attached hereto (the "Folio Products"), and the business associated
therewith (the "Business"), including any accompanying Copyrights (as defined
below), Technical Information (as defined below), Trade Rights (as defined
below), Inventions (as defined below), Domain Names (as defined below) and any
other intellectual property rights therein (collectively, the "Intellectual
Property").
WHEREAS, Seller and Buyer entered into an Amended and Restated Master
Software License and Distribution Agreement, dated as of September 30, 1999, in
respect of the Folio Products ("License Agreement").
WHEREAS, in the first quarter of 2001, Buyer prepaid $1.1 million to
Seller in satisfaction of its quarterly fee obligation pursuant to Section 9.1
of the License Agreement.
WHEREAS, Buyer desires to purchase the Folio Products, the Business and
the Intellectual Property and Seller desires to sell and transfer the Folio
Products, the Business and the Intellectual Property to Buyer, upon the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
SECTION 1.1 DESCRIPTION OF ASSETS TO BE ACQUIRED. Upon the terms and
subject to the conditions set forth in this Agreement, as of the Effective Date,
Seller hereby conveys, sells, transfers, assigns and delivers to Buyer, and
Buyer hereby purchases from Seller, all of Seller's right, title and interest
that Seller may own, or in which Seller may claim rights, to and in the assets
comprising the Folio Products, the Business and the Intellectual Property
(together with the right to xxx and collect damages or other amounts in respect
of any past, present or future infringement or breach of such rights),
including, but not limited to, the following:
(a) COPYRIGHTS. All of Seller's worldwide rights and interests
existing on the Effective Date in and to all works or authorship and copyrights
that relate to the Folio Products or the Business or that are otherwise required
for or incident to the Business, and all registrations, applications for
registration and licenses therefor, together with all ancillary rights thereto,
including, but not limited to, the registered copyrights listed on SCHEDULE
1.1(a) (collectively, the "Copyrights");
(b) TECHNICAL INFORMATION. All of Seller's worldwide rights
and interests existing on the Effective Date in and to all (i) computer source
code (human readable format) and object code (machine readable format),
including without limitation all paper, optical and magnetic media embodying (1)
the Folio Products (in source code and object code formats), and (2) all prior
versions of the Folio Products (in source code and object code formats) whether
or not licensed to customers; (ii) specifications directly relating to or used
in connection with the Folio Products; (iii) engineering, programming, service
and maintenance notes and logs directly relating to or used in connection with
the Folio Products; (iv) technical, operating and service and maintenance
manuals and data directly relating to or used in connection with the Folio
Products; (v) user documentation, including help files, directly relating to or
used in connection with the Folio Products; (vi) training materials directly
relating to or used in connection with the Folio Products; and (vii) other data,
information and know-how that is necessary and desirable to design, manufacture,
assemble, service, maintain, install, operate, use or test the Folio Products
and all other trade secrets and know-how which directly relate to or are used in
connection with the Folio Products or the Business or are otherwise required for
or incident to the performance of the Business, together with all ancillary
rights thereto (collectively, the "Technical Information"); provided that, for
purposes of clarification, Seller's obligation to furnish the materials
referenced in Section 1.1(b)(2)(i) through 1.1(b)(2)(vii) shall be to the extent
reasonably practicable under the circumstances;
(c) TRADE RIGHTS. All of Seller's worldwide rights and
interests existing on the Effective Date in and to all trademarks, common law
trademarks, trade names, service marks, common law service marks, service names,
slogans, logos, designs and any abbreviations or variations thereof, and all
registrations, applications for registration and licenses therefor, together
with the goodwill of the Business associated with such names and marks and all
ancillary rights thereto, listed on SCHEDULE 1.1(c) (collectively, the "Trade
Rights");
(d) DOMAIN NAMES. All of Seller's worldwide rights and
interests existing on the Effective Date in and to all internet domain names,
and all registrations, applications for registration and other licenses in
connection therewith, listed on SCHEDULE 1.1(d) (the "Domain Names");
(e) INVENTIONS. All of Seller's worldwide rights and interests
existing on the Effective Date in and to all non-patented inventions directly
related to the Folio Products, together with all ancillary rights thereto (the
"Inventions");
(f) CONTRACTS. All claims and rights of Seller in respect of
the Folio Products, the Business and the Intellectual Property existing on the
Effective Date under contracts with licensors (to the extent such contractual
rights and obligations with any third party software providers are assignable,
subject to Seller's obligations set forth in Section 3.2 below), licensees,
distributors, dealers, sales representatives and other independent sales
persons, except to the extent such contracts shall have been previously assigned
to Buyer pursuant to the License Agreement, including, but not limited to, the
contracts listed on SCHEDULE 1.1(f), and the contracts with "Folio Customers"
and "Folio Distributors", as those terms are defined in the License Agreement
(collectively, the "Contracts"); provided that nothing in this Agreement shall
be construed as an attempt or agreement to assign any Contracts that are not
assignable without the consent of the other party thereto, unless such consent
shall have been given, and subject to Seller's obligations pursuant to Section
3.2 below;
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(g) GOODWILL. All goodwill of the Folio Products, Trade Rights
and the Business; and
(h) OTHER ASSETS. Any and all other rights, titles, interests,
privileges and appurtenances of Seller of any nature that (1) are required by or
used in connection with the conduct of the Business and (2)(i) were licensed to
Buyer pursuant to the License Agreement and (ii) directly relate to the Folio
Products.
All of the assets, properties, rights and business to be conveyed, sold,
transferred, assigned and delivered to Buyer pursuant to this Section 1.1 are
hereinafter collectively referred to as the "Assets". Notwithstanding the
foregoing, and except as to the specific assets identified on SCHEDULES 1.1,
1.1(a), 1.1(c), 1.1(d), 1.1(f) hereto and Rampage/NXT3 technology, which is an
Asset hereunder, Seller is only transferring those assets that were licensed to
Buyer pursuant to the License Agreement.
SECTION 1.2 MORAL RIGHTS. To the extent allowed by law, the
Intellectual Property shall include all rights of paternity, integrity,
disclosure and withdrawal and any other rights that may be known as or referred
to as "moral rights", "artist's rights", "droit moral", or the like in and to
the Folio Products (collectively, "Moral Rights"). To the extent that Seller
retains any such Moral Rights under applicable law, Seller hereby waives and
provides any necessary waivers of such Moral Rights and consents and provides
all necessary consents to any action with respect to such Moral Rights by or
authorized by Buyer. Seller agrees that Seller will confirm any such waivers and
consents from time-to-time as reasonably requested by Buyer.
SECTION 1.3 ASSUMPTION OF CERTAIN OBLIGATIONS. Buyer shall, pursuant to
this Agreement, assume only those obligations and liabilities, associated with
the Assets, that (a) are specifically identified on SCHEDULE 1.3 hereto or (b)
Buyer has itself created or assumed prior to the Effective Date ("Assumed
Obligations"). Buyer shall have no responsibility, liability or obligation
arising out of this Agreement, including, without limitation, obligations or
liabilities arising out of conduct or omissions in respect of the Folio
Products, the Intellectual Property, the Business, the Contracts or other Assets
occurring prior to the effective date of the License Agreement, whether matured
or unmatured, liquidated or unliquidated, fixed or contingent, or known or
unknown, unless it (i) is identified on SCHEDULE 1.3 or (ii) was created or
assumed by Buyer prior to the Effective Date.
SECTION 1.4 INSTRUMENTS OF TRANSFER. The sale, assignment, transfer,
conveyance and delivery of the Assets shall be made by such bills of sale,
trademark assignments, copyright assignments and other recordable instruments of
assignment, transfer and conveyance as Buyer shall reasonably request. Seller
shall assist Buyer in every proper way to evidence, record and perfect the
assignments described in Sections 1.1 and 1.2 above and Section 3.6 below and to
perfect, obtain, maintain, enforce and defend the rights assigned. At any time
and from time to time after the execution of this Agreement, at Buyer's request,
Seller promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take such other action, as Buyer
may reasonably request to more effectively transfer, convey and assign to Buyer,
and to confirm Buyer's title to, all of the Assets, to put Buyer in actual
possession and operating control thereof, to assist Buyer in exercising all
rights with respect thereto and to carry out the purpose and intent of this
Agreement. If Buyer is unable after reasonable efforts and within a reasonable
period of time to secure Seller's signature to any document to which Buyer is
entitled under this Section 1.4 for any reason whatsoever, Seller
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hereby irrevocably designates and appoints Buyer and its duly authorized
officers and agents, as its agents and attorneys-in-fact with full power of
substitution to act for and on Seller's behalf and instead of Seller, to
execute and file any such document or documents and to do all other lawfully
permitted acts to further the purposes of the foregoing with the same legal
force and effect as if executed by Seller.
SECTION 1.5 PURCHASE PRICE. The purchase price ("Purchase Price") for
the Assets shall be Five Million Five Hundred Thousand Dollars ($5,500,000.00).
The Purchase Price and the Assumed Obligations shall be the only consideration
required of Buyer with respect to the subject matter of this Agreement. Upon the
terms and subject to the conditions contained in this Agreement, in
consideration for the Assets and in full payment therefor, on the Effective Date
Buyer will pay, or cause to be paid, the entire Purchase Price by wire transfer
to an account designated by Seller.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS OF BUYER. Except as otherwise set forth in
SCHEDULE 2.1 hereto and as otherwise provided in Section 2.3, Buyer hereby
represents to Seller that:
(a) ORGANIZATION. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
Utah.
(b) AUTHORIZATION. This Agreement constitutes a valid and
binding obligation of Buyer, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, moratorium, reorganization and
other laws affecting creditors' rights and remedies generally. Without limiting
the generality of the foregoing, the board of directors of Buyer has duly
authorized the execution, delivery and performance of this Agreement by Buyer.
(c) COMPLIANCE WITH OTHER INSTRUMENTS. Buyer's execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the compliance with the terms hereof and thereof by it do not
conflict with or result in a breach of any terms of, or constitute a default
under, its Certificate of Incorporation or Bylaws, or any material agreement,
obligation or instrument to which it is a party or by which it is bound.
(d) LITIGATION. To the best knowledge of Buyer, there is no
claim, litigation, investigation, inquiry, action, suit or proceeding,
administrative or judicial, pending or threatened against Buyer, at law or in
equity, before any federal, state or local court or regulatory agency, or other
governmental authority, which might have a material adverse effect on Buyer's
ability to perform any of its obligations under this Agreement.
(e) KNOWLEDGE ABOUT SELLER'S REPRESENTATIONS. Buyer is not
aware of any claims, liabilities or other obligations that have been incurred as
a result of Buyer's use of the Folio Products pursuant to the License Agreement
that would cause any of Seller's representations set forth in Section 2.2 to be
untrue or inaccurate in any material respect.
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SECTION 2.2 REPRESENTATIONS OF SELLER. Except as otherwise set forth in
SCHEDULE 2.2 hereto and as otherwise provided in Section 2.3, Seller hereby
represents and warrants to Buyer that:
(a) AUTHORIZATION OF SELLER. This Agreement constitutes a
valid and binding obligation of Seller, enforceable in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, moratorium,
reorganization and other laws affecting creditors' rights and remedies
generally. Without limiting the generality of the foregoing, the board of
directors of Seller has duly authorized the execution, delivery, and performance
of this Agreement by Seller.
(b) UNDISCLOSED LIABILITIES. Except as set forth in SCHEDULE
2.2(b), there are no debts, liabilities or obligations with respect to the Folio
Products, the Intellectual Property or the Business or to which any of the
Assets are subject, liquidated, unliquidated, accrued, absolute, contingent or
otherwise, which have arisen or may arise from Seller's conduct or omissions in
respect of the Folio Products, the Intellectual Property, the Business or the
Assets.
(c) TAXES. All taxes, including, without limitation, income,
property, sales, use, franchise, added value, withholding, and social security
taxes, imposed by the United States, any state, municipality, other local
government or other subdivision or instrumentality of the United States, or any
foreign country or any state or other government thereof, or any other taxing
authority, that are due or payable by Seller, or have arisen or may arise from
the conduct or omissions of Seller, with respect to the Folio Products, the
Intellectual Property or the Business, and all interest and penalties thereon,
whether disputed or not, and that would result in the imposition of a lien,
claim or encumbrance on any of the Assets or against Buyer, other than taxes
that are not yet due and payable or which may arise as a result of the
transactions contemplated hereby, have been paid in full, all tax returns
required to be filed in connection therewith have been accurately prepared and
duly and timely filed, and all deposits required by law to be made by Seller
with respect to employees' withholding taxes have been duly made. Seller
acknowledges that it has relied on its own tax advisors for the advice regarding
the tax consequences of the transactions contemplated by this Agreement and has
not received tax advice with respect thereto from Buyer or any of its officers,
employees or agents.
(d) COMPLIANCE WITH LAW. Seller has complied and is in
compliance with all applicable federal, state, foreign and local laws, statutes,
licensing requirements, rules and regulations, and judicial or administrative
decisions applicable to the Folio Products, the Intellectual Property or the
Business, including, without limitation, all environmental and export control
laws. To the best knowledge of Seller, there is no order issued, investigation
or proceeding pending or threatened, or notice served with respect to any
violation of any law, ordinance, order, writ, decree, rule or regulation issued
by any federal, state, local or foreign court or governmental agency or
instrumentality applicable to the Business.
(e) INTELLECTUAL PROPERTY. Except as disclosed in SCHEDULE
2.2(e), Seller is the sole and exclusive owner of or is licensed or otherwise
has the full right to use and convey the Intellectual Property and no
governmental registration of any of the Intellectual Property has lapsed,
expired or been cancelled, abandoned, opposed or the subject of a reexamination
request. SCHEDULE 1.1(a) is a true and complete list of all of Seller's
registered Copyrights. SCHEDULE 1.1(c) is a true and complete list of all of
Seller's registrations and pending registration
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applications of the Trade Rights. SCHEDULE 1.1(d) is a true and complete list
of all of Seller's Domain Names. To the best knowledge of Seller, no patents,
patent applications or inventions of Seller not transferred or licensed
hereunder are required for use in connection with the Folio Products, the
Intellectual Property, the Business or the Assets. SCHEDULE 1.1(f) and the
agreements listed in Section 6.1(m) of the License Agreement set forth all
material Contracts under which others are licensed or authorized to use
Intellectual Property by Seller as of the Effective Date of the License
Agreement, and, except as set forth on SCHEDULE 1.1(f), Seller has not
entered into any additional material agreements or contracts in respect of
the Folio Products since the effective date of the License Agreement.
SCHEDULE 1.1(f) sets forth all material Contracts under which Seller is
licensed or authorized to use Intellectual Property by others, except for
standard, commercially available computer software programs. The execution
and delivery of this Agreement will convey to and vest in Buyer good and
marketable title to the Intellectual Property free and clear of any liens,
claims, security interests or encumbrances or otherwise provide Buyer with
unrestricted right to use and exploit the Intellectual Property, except as is
subject to licenses by third parties to Seller. Except as disclosed on
SCHEDULE 2.2(e):
(i) To the best knowledge of Seller, there have been
no claims or litigation, and there is no basis for any claim,
challenging the scope, validity or enforceability of any of the
Intellectual Property;
(ii) To the best knowledge of Seller, there are no
instances where it has been held, claimed or alleged, whether directly
or indirectly, and there is no basis upon which a claim may be made,
that any Intellectual Property infringes or may infringe upon or is in
violation of any of the intellectual property rights of a third party,
or that any activity of a third party infringes or may infringe upon or
is in violation of any of the Intellectual Property, provided that the
foregoing excludes any such claims arising from (A) modification of any
Folio Product other than by or at the direction of Seller to the extent
the claim arises from such modification, or (B) use of any Folio
Product in combination with equipment, software or other materials not
developed, supplied or authorized by Seller, to the extent such claim
arises from such combination and not the applicable Folio Product
itself;
(iii) To the best knowledge of Seller, there have
been no claims or litigation asserted, pending or threatened by any
third party challenging or questioning the validity or effectiveness of
any Contract pertaining to the Intellectual Property or asserting the
misuse thereof, and no valid basis exists for any such claim; and
(iv) To the best knowledge of Seller, all of the
Contracts referred to in SCHEDULE 1.1(f) that are in the name of Seller
as of the Effective Date (and have not been previously properly
assigned to Buyer) are in full force and effect and constitute legal,
valid and binding obligations of the respective parties thereto. There
currently are not any defaults thereunder by Seller or, to the best
knowledge of Seller, by any other party, and no event has occurred
which (whether with or without notice, lapse of time, or the happening
or occurrence of any other event) would constitute a default thereunder
by Seller or, to the best knowledge of Seller, by any other party.
Subject to Section 2.2(h) below, the validity and effectiveness of all
such Contracts, and the current terms thereof will not be adversely
affected by the transactions contemplated by this Agreement.
Seller has taken reasonable measures to protect the Intellectual Property from
use by any other
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person or entity, including, without limitation, reasonable measures to
ensure the secrecy of Technical Information and written agreements with all
employees with respect to confidentiality and rights to, inventions,
copyrights and Moral Rights.
(f) LITIGATION. To the best knowledge of Seller, there is no
claim, litigation, action, suit or proceeding, administrative or judicial,
pending or threatened against Seller involving any of the Assets, at law or in
equity, before any federal, state, local or foreign court or regulatory agency,
or other governmental or arbitral authority, including, without limitation, any
unfair labor practice or grievance proceedings or otherwise, which could have a
material adverse effect on (i) the consummation of the transactions contemplated
by this Agreement or (ii) any of the Assets. To the best of Seller's knowledge,
there is no basis or alleged basis upon which such claim, litigation, action,
suit or proceeding could be brought or initiated.
(g) NO CONFLICT OR DEFAULT. Neither the execution and delivery
of this Agreement, nor compliance with the terms and provisions hereof,
including, without limitation, the consummation of the transactions contemplated
hereby, will violate any statute, regulation or ordinance of any governmental
authority, or conflict with or result in the breach of any agreement, deed,
Contract, mortgage, indenture, writ, order, decree, legal obligation or
instrument to which Seller is a party or by which it or any of the Assets are or
may be bound, or constitute a default (or an event which, with the lapse of time
or the giving of notice, or both, would constitute a default) thereunder, or
result in the creation or imposition of any lien, charge or encumbrance, or
restriction of any nature whatsoever with respect to any of the Assets, or give
to others any interest or rights, including rights of termination, acceleration
or cancellation in or with respect to any of the Assets.
(h) THIRD PARTY CONSENTS. Except as set forth on SCHEDULE
2.2(h), no consent, approval or authorization of any third party on the part of
Seller is required in connection with the transfer to Buyer of the rights of
Seller under any of the Contracts or in connection with the consummation of the
transactions contemplated hereunder.
(i) COMPLETE COPIES OF MATERIALS. Seller has delivered or made
available to Buyer and its counsel true and complete copies of each document
which has been requested by Buyer, including, without limitation, the Contracts
set forth on SCHEDULE 1.1(f).
(j) KNOWLEDGE ABOUT SELLER'S REPRESENTATIONS. Except as
disclosed herein, Seller is not aware of any claims, liabilities, other
obligations, facts, circumstances, acts or omissions that would cause any of
Seller's representations set forth in this Section 2.2 to be untrue or
inaccurate in any material respect.
(k) BROKER'S FEES. Seller has no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Buyer could become liable
or obligated.
(l) NO THIRD PARTY OPTIONS. There are no existing agreements,
options, commitments or rights with, of or to any person to acquire any of
Seller's assets, properties or rights included in the Assets, except in favor of
Buyer as set forth in the License Agreement.
(m) FAIR VALUE. Seller's Board of Directors, by unanimous
written consent, determined that entering into this Agreement and consummating
the transactions contemplated hereby is in the best interests of Seller and the
stockholders of Seller based upon its evaluation of a number of factors,
including its determination that the Purchase Price and Assumed
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Obligations represent fair and reasonable consideration for the Assets.
Seller has not entered into this Agreement, or made any transfer or incurred
any obligations hereunder or in connection herewith, with the actual intent
to disturb, hinder, delay or defraud either present or future creditors or
other persons.
(n) FINANCIAL INFORMATION. The balance sheet of Seller as
reflected in Seller's Form 10Q as filed with the Securities and Exchange
Commission on November 14, 2000, for the quarter ending September 30, 2000, and
the unaudited balance sheet, dated as of December 31, 2000, which was attached
to Seller's February 12, 2001 press release, which balance sheet is attached
hereto as SCHEDULE 2.2(n), are true and correct as of such respective dates, and
there have been no material adverse changes since the dates of such documents.
As of the Effective Date, Seller continues to pay its debts as such debts become
due and has not admitted its inability to pay its debts as they become due. The
Board of Directors of Seller has not adopted any resolution or otherwise
authorized any action to approve the commencement of any voluntary case under
the U.S. Bankruptcy Code, to consent to the appointment of or taking possession
by a receiver, trustee or custodian, or to make an assignment for the benefit of
creditors.
SECTION 2.3 ADDITIONAL EXCEPTIONS.
(A) NO IMPLIED WARRANTIES. Except as expressly provided
herein, neither party makes, and each party hereby disclaims, all other
warranties, express or implied, including without limitation all warranties of
merchantability or fitness for a particular purpose.
(B) BUYER'S CONDUCT. Seller's representations pursuant to
Section 2.2, specifically exclude any claims, liabilities or other obligations
that may have arisen or may arise as a result of Buyer's conduct or omissions in
connection with the License Agreement, unless Seller shall have been made aware
of such claims, liabilities or obligations prior to the Effective Date.
ARTICLE III
COVENANTS
SECTION 3.1 ACCESS TO INFORMATION. For a period of seven (7) years (or
such longer period as may be required by law or as may be reasonably requested
by Buyer as a result of audits, tax contests or pending disputes) from the
Effective Date (a) Seller shall not dispose of or destroy any of its business
records or files to the extent related primarily to the Folio Products, the
Intellectual Property or the Business without first offering to turn over
possession thereof to Buyer, by written notice at least sixty (60) days prior to
the proposed date of such disposition or destruction; (b) Seller shall allow
Buyer and its representatives access to such records and files, during normal
working hours at its principal place of business or at any location where such
records or files are stored; and (c) Buyer shall have the right, at its own
expense, to make copies of any such records and files; provided, however, that
any such access or copying shall be had and done in such a manner so as not to
unreasonably interfere with the normal conduct of Seller's business. For a
period of seven (7) years (or such longer period as may be required by law or as
may be reasonably requested by Seller as a result of audits, tax contests, or
pending disputes) from the Effective Date (i) Buyer shall not dispose of or
destroy any of its business
8
records or files to the extent related primarily to the Business as conducted
prior to the Effective Date without first offering to turn over possession
thereof to Seller, by written notice at least sixty (60) days prior to the
proposed date of such disposition or destruction; (ii) Buyer shall allow
Seller and its representatives access to such records and files, during
normal working hours at its principal place of business or at any location
where such records or files are stored; and (iii) Seller shall have the
right, at its own expense, to make copies of any such records and files;
provided, however, that any such access or copying shall be had and done in
such a manner so as not to unreasonably interfere with the normal conduct of
Buyer's business.
SECTION 3.2 CONSENTS. Seller shall promptly apply for or otherwise seek
and use its best efforts to obtain all consents and approvals required to be
obtained by it for the transactions contemplated hereby.
SECTION 3.3 BEST EFFORTS. If applicable, each of Buyer and Seller shall
use best efforts to effectuate the transactions contemplated hereby.
SECTION 3.4 EXPENSES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, including fees of
any finders or brokers or investment bankers, attorneys and accountants retained
by such party, shall be paid by the party incurring such expense. Buyer will pay
all sales and transfer taxes associated with this Agreement and the transactions
contemplated hereby.
SECTION 3.5 COVENANTS AGAINST DISCLOSURE.
(a) SELLER'S OBLIGATIONS. Seller shall not (i) disclose to any
person, association, firm, corporation or other entity (other than Buyer or
those designated in writing by Buyer) in any manner, directly or indirectly, any
confidential information or data relevant to: (1) the operation of the Business,
whether of a technical or commercial nature, or (2) the Assets or (ii) use, or
permit or assist, by acquiescence or otherwise, any person, association, firm,
corporation or other entity (other than Buyer) to use, directly or indirectly,
any such information or data in any manner, excepting only use of such
information or data as is at the time generally known to the public and which
did not become generally known through any breach of any provision of this
Section by Seller. Seller shall take reasonable precautions to keep such
information confidential.
(b) CONFIDENTIALITY. In addition to Seller's obligations
pursuant to Section 3.5(a), all information which shall have been furnished
by Buyer or Seller (each a "Disclosing Party") to the other party (each a
"Receiving Party") in connection with the transactions contemplated hereby,
including the terms of this Agreement, shall not be disclosed to any person
other than their respective employees, directors, attorneys, accountants or
financial advisors or other than as contemplated herein. Subject to Seller's
obligations pursuant to Section 3.5(a), which are not limited hereby, a
Receiving Party's obligations hereunder shall not apply to any portion of a
Disclosing Party's proprietary information: (i) which was rightfully known to
the Receiving Party or which was rightfully in the Receiving Party's
possession prior to its receipt from the Disclosing Party, except to the
extent the Receiving Party received such proprietary information subject to
the confidentiality provisions contained in Section 12 of the License
Agreement; (ii) which becomes publicly available or a matter of public
knowledge subsequent to the execution of this Agreement through no breach of
this Agreement or the License Agreement by the Receiving Party; (iii) which
is lawfully received by the Receiving Party from a third party who is or was
not bound in any confidential relationship with the Disclosing Party; or (iv)
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disclosure of which is necessary to comply with law or the valid order or
requirement of a governmental agency or court of competent jurisdiction, but
only if the Receiving Party first notifies the Disclosing Party of the order and
permits the Disclosing Party to seek an appropriate protective order or
injunction. The foregoing obligations, solely as applicable to Buyer, shall not
apply to the Assets following the Effective Date, and Buyer's use and disclosure
of the Assets shall not be restricted hereby or by any other nondisclosure
obligation between Buyer and Seller.
(c) PUBLIC ANNOUNCEMENTS. Except as required by applicable
law, regulation or stock exchange rules (subject to the prior review (but not
consent) of the other party with respect to any public announcement required by
such law, regulation or rule), neither party shall make any public announcement
regarding this Agreement or the transactions contemplated hereby prior to the
Effective Date without the prior written consent of the other party.
SECTION 3.6 INTELLECTUAL PROPERTY COVENANTS. Except as provided in
Section 3.7 below, immediately following the Effective Date, Seller will
discontinue all further use of the Intellectual Property including the Folio
Products as listed on SCHEDULE 1.1 (except use pursuant to a valid license
agreement), or any portion or subpart of the foregoing, on Seller's own behalf.
Within five (5) days following the Effective Date, Seller will deliver to Buyer
or, at Buyer's request, destroy or permanently erase, all magnetic, optical,
paper and any other media on which the Intellectual Property is embodied. Seller
agrees that it will either prior to the Effective Date, or as promptly as
practicable after Effective Date, submit the necessary documentation required to
assign the Intellectual Property assigned hereunder, including, without
limitation, filing with Network Solutions, Inc., or such other appropriate
domain name registration authority, the documents required to transfer to Buyer
the Domain Names, and filing with the appropriate government or other authority
the documents required to document and perfect the transfer to Buyer the
ownership of the Intellectual Property assigned hereunder. Buyer agrees to
cooperate with Seller with respect to such filings.
SECTION 3.7 TRADEMARK LICENSE. Notwithstanding Section 3.6 above, Buyer
hereby grants to Seller a non-exclusive, non-transferable, non-sublicensable,
worldwide, royalty-free right and license to use the "FOLIO" trademark for a
period of six (6) months following the Effective Date ("License Period"), solely
for the purpose of informing third parties of its former name and business.
Seller shall in no way imply or suggest through use of the "FOLIO" trademark
that it has any continuing interest in or license to the Assets, and shall
direct all inquiries or requests in respect of the Assets to Buyer. Seller's use
of the "FOLIO" trademark, and the goodwill associated therewith, shall inure to
the benefit of Buyer, and Seller shall acquire no right, title or interest
therein. Upon the expiration of the License Period, Seller shall make no further
use of the "FOLIO" trademark, including, without limitation, any use as a
corporate or trade name.
SECTION 3.8 DELIVERY OF FOLIO PRODUCTS. The parties hereto acknowledge
that Seller has previously delivered to Buyer (a) Seller's entire inventory of
copies of the Folio Products in object code form, (b) a master copy of the Folio
Products, in both source and object code form suitable for copying, and (c) all
system and user documentation relating to the Folio Products.
SECTION 3.9 COVENANT NOT TO XXX. Seller hereby covenants and agrees not
to assert against Buyer, or its successors or assigns, or its licensees, end
users, customers, resellers or distributors ( collectively, "Buyer Parties"),
any claims for infringement of any Seller patent or patent rights by Buyer or
any Buyer Parties, solely to the extent necessary to allow Buyer and
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Buyer Parties to fully exercise, exploit or use the Folio Products, the
Intellectual Property or the Assets, or otherwise engage in the Business, as
such Folio Products, Assets and Business exist as of the Effective Date. If a
license of any such patent or patent right is required, the parties will work
together to either (a) transfer such rights to Buyer for no additional
consideration or (b) develop an appropriate nonexclusive, worldwide,
royalty-free, fully paid-up license to such patents or patent rights as may
be necessary to allow Buyer to fully exercise, exploit or use the Folio
Products, the Intellectual Property or the Assets, or otherwise engage in the
Business.
SECTION 3.10 OEM RELATIONSHIP. Each party will consider in good faith
the possibility of entering into an arrangement pursuant to which Seller would
be allowed to market and license to third parties Buyer's NXT3 product, and
Buyer would be allowed to market and license to third parties certain of
Seller's products. Nothing contained herein shall obligate either party to enter
into any agreement with the other party in respect of any such arrangements.
SECTION 3.11 TERMINATION OF LICENSE AGREEMENT. The parties mutually
agree to amend and partially terminate by mutual written agreement the License
Agreement, effective as of the Effective Date, subject to the survival of any
applicable provisions set forth therein. No further amounts shall be payable by
Buyer to Seller pursuant to the License Agreement following the Effective Date.
ARTICLE IV
SURVIVAL & INDEMNIFICATION
SECTION 4.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties of each party set forth in this Agreement shall
be deemed to have been made by such party at and as of the Effective Date. The
obligation of indemnity provided herein with respect to all of Buyer's
representations and warranties set forth in Section 2.1 and such representations
and warranties shall terminate three (3) years after the Effective Date. The
obligations of indemnity provided herein with respect to the representations and
warranties of Seller set forth in Section 2.2 and such representations and
warranties shall terminate three (3) years after the Effective Date. The
obligations in Sections 1.2, 1.4, 3.1 (for the period stated therein), 3.2, 3.3,
3.5(b), 3.5(c), 3.6, 3.7 (for the period stated therein), 4.1 and 5 shall
survive after the Effective Date for a period of three (3) years, with the
exception of the obligations under Section 3.1, which shall survive for a period
of seven (7) years subsequent to the Effective Date and under Section 3.7, which
shall survive for a period of six (6) months subsequent to the Effective Date.
Sections 3.5(a) and 3.9 shall survive after the Effective Date for an unlimited
period of time.
SECTION 4.2 INDEMNIFICATION.
(a) INDEMNIFICATION BY BUYER. Buyer hereby agrees to indemnify
and hold harmless Seller from and against any and all losses, liabilities,
damages, demands, claims, suits, actions, judgments or causes of action,
assessments, costs and expenses, including, without limitation, interest,
penalties, attorneys' fees, any and all expenses incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting to, imposed
upon, or incurred or suffered by Seller, directly or indirectly, as a result of
or arising from (i) any inaccuracy in or breach or nonfulfillment of any of the
representations, warranties, covenants or agreements made by Buyer in this
Agreement or any facts or circumstances constituting such an inaccuracy, breach
or
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nonfulfillment or (ii) any Assumed Obligations ("Buyer Claims").
(b) INDEMNIFICATION BY SELLER. Seller hereby agrees to
indemnify and hold harmless Buyer against any and all Damages asserted against,
resulting to, imposed upon, or incurred or suffered by Buyer, directly or
indirectly, including without limitation as a result of any shareholder
derivative suit to which Seller is a party, as a result of or arising from any
of the following ("Seller Claims" and together with Buyer Claims, the "Claims"):
(i) Any inaccuracy in or breach or nonfulfillment of any
of the representations, warranties, covenants or agreements made by Seller in
this Agreement or any facts or circumstances constituting such an inaccuracy,
breach or nonfulfillment; or
(ii) Any liability of Seller imposed or attempted to be
imposed upon Buyer as transferee of the Assets, except to the extent such
liability is expressly assumed by Buyer pursuant to Section 1.3; or
(iii) Any claim by creditors of Seller against Buyer
arising out of or based upon the failure of a party hereto to comply with
applicable state bulk sales or bulk transfer laws.
SECTION 4.3 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO THIRD-PARTY
CLAIMS. Either party's obligation to indemnify the other under this Article IV
for any Claims is conditioned on the party seeking such indemnification (the
"Indemnified Party") promptly notifying the party against whom such
indemnification is sought (the "Party"), permitting the Indemnifying Party to
control the defense and settlement of the Claim, and providing to the
Indemnifying Party, at its expense, reasonable assistance in defending and
settling the Claim. Notwithstanding anything in this Section to the contrary, if
there is a reasonable probability that a Claim may materially and adversely
affect the Indemnified Party, other than as a result of money damages or other
money payments, the Indemnified Party shall have the right to participate in
such defense, compromise or settlement and the Indemnifying Party shall not,
without the Indemnified Party's written consent (which consent shall not be
unreasonably withheld), settle or compromise any Claim or consent to entry of
any judgment in respect thereof unless such settlement, compromise or consent
includes as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party a release from all liability in respect of
such Claim.
SECTION 4.4 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO NON-THIRD
PARTY CLAIMS. In the event that the Indemnified Party asserts the existence of a
claim giving rise to Damages (but excluding claims resulting from the assertion
of liability by third parties), it shall give written notice to the Indemnifying
Party. Such written notice shall state that it is being given pursuant to this
Section 4.4, specify the nature and amount of the claim asserted and indicate
the date on which such assertion shall be deemed accepted and the amount of the
claim deemed a valid claim (such date to be established in accordance with the
next sentence). If the Indemnifying Party, within sixty (60) days after the
receipt of notice by the Indemnified Party, shall not give written notice to the
Indemnified Party announcing its intent to contest such assertion of the
Indemnified Party, such assertion shall be deemed accepted and the amount of
such claim shall be deemed a valid claim. In the event, however, that the
Indemnifying Party contests the assertion of a claim by giving such written
notice to the Indemnified Party within said period, then the parties shall act
in good faith to reach agreement regarding such claim.
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SECTION 4.5 LIMITATION OF INDEMNIFICATION OBLIGATION.
(a) UNDER NO CIRCUMSTANCES NOR UNDER ANY LEGAL THEORY, TORT,
CONTRACT OR OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OTHER
PERSON FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, EVEN IF
SUCH PARTY SHALL HAVE BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) Notwithstanding anything to the contrary in this
Agreement, (i) Seller's liability for claims by Buyer pursuant to the
indemnification provisions of this Article IV shall not exceed $5,500,000.00 in
the aggregate, and (ii) Buyer's liability for claims by Seller pursuant to the
indemnification provisions of this Article IV shall not exceed $1,000,000.00.
ARTICLE V
GENERAL PROVISIONS
SECTION 5.1 NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed given (a) on the same day if delivered
personally, (b) one business day after being sent via a reputable overnight
courier service, (c) three (3) business days after being mailed by registered or
certified mail (return receipt requested), or (d) on the same day if sent by
facsimile, confirmation received, to the parties at the following addresses and
facsimile numbers (or at such other address or number for a party as shall be
specified by like notice):
If to Buyer, to: with copy to:
NextPage, Inc. Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
0000 Xxxx Xxxxxxxxx Xxxx Xxx Xxxxxxxx & Xxxxxxxxx, XXX
Xxxx, XX 00000 000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: President Attention: Xxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000)-000-0000
If to Seller: with a copy to:
Open Market, Inc. Xxxxxx, Gesmer & Xxxxxxxxx
0 Xxxxxxx Xxxx 00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxx, XX 00000
Attention: General Counsel Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
SECTION 5.2 ENTIRE AGREEMENT. This Agreement and the schedules hereto,
and the documents referred to herein, embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and shall supersede all prior and contemporaneous agreements and understandings,
oral or written, relative to said subject matter.
SECTION 5.3 BINDING EFFECT; ASSIGNMENT. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon Seller, its successors and assigns, and Buyer and its successors
and assigns.
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SECTION 5.4 CAPTIONS. The Article and Section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof.
SECTION 5.5 AMENDMENT; WAIVER. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. Except to the extent that a party hereto may have otherwise
agreed in writing, no waiver by that party of any condition of this Agreement or
breach by the other party of any of its obligations or representations hereunder
or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the other party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
SECTION 5.6 ACKNOWLEDGEMENTS. Each party executing this Agreement
acknowledges that such party has read this Agreement thoroughly, and understands
the legal effect of each provision hereof, and that such party has executed this
Agreement freely and voluntarily, without duress or undue influence. Each party
acknowledges such party's right to make an independent determination of all
matters set forth herein, and such party's right to consult with an independent
attorney prior to executing this Agreement.
SECTION 5.7 CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
SECTION 5.8 COUNTERPARTS. This Agreement may be executed simultaneously
in multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
SECTION 5.9 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
modified or excluded from this Agreement to the minimum extent necessary so that
the balance of the Agreement shall remain in full force and effect and
enforceable. The parties also agree to use best efforts to amend the Agreement
so that its effect remains as close as possible to the original intent of the
parties.
SECTION 5.10 GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the Commonwealth of
Massachusetts, as applied to contracts entered into and to be performed solely
within the state, solely between residents of the state, and without regard to
the conflicts of laws provisions thereof. The prevailing party in such
arbitration or enforcement proceeding shall be awarded its costs thereof,
including reasonable attorneys' fees.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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- SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
BUYER:
NextPage Operating Company, L.C.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
SELLERS:
Open Market, Inc.
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
------------------------------------
Title: Chief Financial Officer
-----------------------------------
Folio Corporation
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
------------------------------------
Title: Vice President
-----------------------------------
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