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Exhibit 10.10
SOFTWARE PURCHASE AGREEMENT
This Software Purchase Agreement (this "AGREEMENT") is made and entered
into as of June 23, 1998, by and between Learning Company Properties, Inc. (the
"BUYER") and Princeton Review Publishing, L.L.C. (the "SELLER").
Preliminary Statement
The Buyer desires to purchase, and the Seller desires to sell, certain
of the assets of the Seller, for the consideration set forth below, subject to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Sale and Delivery of the Assets.
1.1 Assets to be Purchased.
(a) Subject to and upon the terms and conditions of this Agreement, at
the closing of the transactions contemplated by this Agreement (the "CLOSING"),
the Seller shall sell, transfer, convey, assign, and deliver, and the Buyer
shall purchase from the Seller, the following properties, assets and other
claims, rights and interests of the Seller used in or related to the business of
Seller's Interactive Software Division (the "DIVISION") that may include:
(i) all machine-readable object code and human-readable source
code, whether in printed form or on magnetic media and whether in English or in
any other language, relating to the one or more software programs listed on
Schedule 1.1(a)(i) (including the Windows, Macintosh and all other versions
thereof), and all related documentation, diagrams, flow charts, schematics and
notes relating to such object code and source code (collectively, the "SOFTWARE
PROGRAMS");
(ii) all books and records of accounts, correspondence,
production records, technical, accounting, manufacturing and procedural manuals,
customer lists, customer registration files and databases, all studies, reports
or summaries, sell sheets, demos, golden masters, film and artwork for
packaging, translation kits, and localized versions relating to the Software
Programs, and any confidential information which has been reduced to writing
relating to the Software Programs;
(iii) all of the Seller's right, title and interest in and to,
including the right to enforce, the intellectual property rights in any United
States and foreign patents, patent applications, and any derivation thereof;
copyrights and copyright registrations for the Software
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Programs (collectively, the "INTANGIBLE PROPERTY");
(iv) all executory contracts and agreement listed on Schedule
1.1.(a)(iv) attached hereto (including, without, limitation, employment
agreements and arrangements for those employees listed on Schedule 1.1(a)(iv)
(the "ASSUMED AGREEMENTS");
(v) the equipment identified on Schedule 1.1 (a)(v) attached
hereto (the "EQUIPMENT").
(b) The Software Programs, Intangible Property and other properties,
assets and business of the Division described in paragraph (a) above shall be
referred to collectively as the "ASSETS."
1.2 Liabilities.
(a) On the terms and subject to the conditions set forth herein, Buyer
shall assume and satisfy, pay or perform when due in accordance with the terms
thereof, the following obligations and liabilities (collectively, the
"LIABILITIES"):
(i) all employee obligations relating to the Employees listed
on Schedule 1.1(a)(iv) arising on or after the Closing Date (other than any
severance obligations arising as a result of this Agreement which shall be the
responsibility of Seller).
(b) Except as set forth in Sections 1.1(a)(iv) and 1.2(a) above, the
Buyer shall assume no liabilities, obligations or agreements of the Seller
whatsoever and the Seller shall remain responsible for, and shall indemnify the
Buyer against, all such liabilities, obligations and agreements, as set forth in
Section 5 hereof.
1.3 Excluded Assets. Notwithstanding anything in Section 1.1 to
the contrary, the Assets shall not include the assets identified on Schedule 1.3
attached hereto (the "EXCLUDED ASSETS").
1.4 Further Assurances. At any time and from time to time after
the Closing, at the Buyer's request and without further consideration, the
Seller promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and confirmation, and take such other action; as the
Buyer may reasonably request to more effectively transfer, convey and assign to
the Buyer, and to confirm the Buyer's title to, all of the Assets, to put the
Buyer in actual possession and operating control thereof, to assist the Buyer in
exercising all rights with respect thereto and to carry out the purpose and
intent of this Agreement.
1.5 Purchase Price.
(a) The purchase price for the Assets and the initial license fee under
the License Agreement between the parties of even date herewith (the "LICENSE
AGREEMENT") shall be equal to the sum of (i) Five Million One Hundred Thousand
Dollars ($5,100,000) in cash. The
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Purchase Price shall be payable by check or wire transfer at the Closing.
(b) The Purchase Price shall be allocated among the Assets and the
License Agreement as set forth in Schedule 1.5(b) attached hereto. Such
allocation shall be binding on the parties and the parties shall file their
respective tax returns in accordance with such allocation and shall not take any
position or action inconsistent with such allocation.
1.6 The Closing. The Closing shall take place at the offices of
Buyer on June 22, 1998 or at such other place, time or date (in person or by
fax) as may be mutually agreed upon by the parties hereto. The transfer of the
Assets by the Seller to the Buyer shall be deemed to occur at 1:30 p.m., Boston
time, on the date of the Closing (the "CLOSING DATE"). Neither Buyer nor Seller
shall make an initial public announcement of said asset transfer or the License
Agreement until the other party approves in writing the timing and text of such
announcement.
2. Representations and Warranties of the Seller.
The Seller represents and warrants to the Buyer as follows:
2.1 Organization. The Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
its organization, and has all requisite power and authority (company and other)
to own its properties, to carry on its business as now being conducted, to
execute and deliver this Agreement and the agreements contemplated herein, and
to consummate the transactions contemplated hereby.
2.2 Authorization.
(a) The execution and delivery of this Agreement by the Seller, and the
agreements provided for herein, and the consummation by the Seller of all
transactions contemplated hereby, have been duly authorized by all requisite
company and member action. This Agreement and all such other agreements and
obligations entered into and undertaken in connection with the transactions
contemplated hereby to which the Seller is a party constitute the valid and
legally binding obligations of the Seller, enforceable against the Seller in
accordance with their respective terms. The execution, delivery and performance
by the Seller of this Agreement and the agreements provided for herein, and the
consummation by the Seller of the transactions contemplated hereby and thereby,
will not, with or without the giving of notice or the passage of time or both,
(a) violate the provisions of any law, rule or regulation applicable to the
Seller; (b) violate the provisions of the Certificate of Formation or By-laws of
the Seller; (c) violate any judgment, decree, order or award of any court,
governmental body or arbitrator; or (d) conflict with or result in the breach or
termination of any term or provision of, or constitute a default under, or cause
any acceleration under, or cause the creation of any lien, charge or encumbrance
upon the properties or assets of the Seller pursuant to, any indenture,
mortgage, deed of trust or other instrument or agreement to which the Seller is
a party or by which the Seller or any of its properties is or may be bound
except that Seller may obtain some consents of contributors after the date
hereof as set forth herein.
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(b) Schedule 2.2 attached hereto sets forth a true, correct and
complete list of (i) all contracts which relate to the Software Programs in
excess of $2,500, (ii) all consents and approvals of third parties that are
required in connection with the consummation by the Seller of the transactions
contemplated by this Agreement (it being understood that Buyer shall not assume
any liabilities from and after the Closing under any agreements to which Seller
is a party other than those agreements listed on Schedule 1.1(a)(iv)). Seller
shall provide a summary of all royalties, advances against royalties and other
fees or amounts owed to third parties relating to the Software Programs within
thirty (30) days of the Closing Date.
2.3 Ownership of the Assets. Schedule 2.3 attached hereto sets
forth a true, correct and complete list of all claims, liabilities, liens,
pledges, charges, encumbrances and equities of any kind affecting the Assets
(collectively, the "ENCUMBRANCES"). The Seller is, and at the Closing will be,
the true and lawful owner of the Assets, and will have the right to sell and
transfer to the Buyer good, clear, record and marketable title to the Assets,
free and clear of all Encumbrances of any kind. The delivery to the Buyer of the
instruments of transfer of ownership contemplated by this Agreement will vest
good and marketable title to the Assets in the Buyer, free and clear of all
liens, mortgages, pledges, security interests, restrictions, prior assignments,
encumbrances and claims of any kind or nature whatsoever other than any
disclosed Encumbrances.
2.4 Litigation and Claim. Except as disclosed on Schedule 2.4
attached hereto, the Seller is not a party to, or to the Seller's best knowledge
threatened with, and none of the Assets are subject to, any litigation, suit,
action, investigation, proceeding or controversy before any court,
administrative agency or other governmental authority relating to or affecting
the Assets. The Seller is not in violation of or in default with respect to any
judgment, order, writ, injunction, decree or rule of any court, administrative
agency or governmental authority or any regulation of any administrative agency
or governmental authority relating to the Assets.
2.5 Intangible Property.
(a) Schedule 2.5 attached hereto sets forth a true, correct and
complete list and, where appropriate, a description of, all pending or
registered copyrights in the Software Programs.
(b) Except for material licensed to Seller under the Assumed Agreements
and the Excluded Assets, and other matters expressly disclosed herein and in the
schedules hereto, the Seller is the sole and exclusive owner of the Software
Programs and the Intangible Property and all designs, permits, labels and
packages used on or in connection therewith, and no third party has, or has
asserted, any rights to the Software Programs or the Intangible Property. The
Intangible Property owned by the Seller with the Excluded Assets is sufficient
to conduct the Seller's business as it relates to the Assets as presently
conducted. The Software Programs and the Intangible Property do not infringe on
any patent, copyright or other proprietary right of any third party. The Seller
has no disputes with or claims against any third party for infringement by such
third party of any Intangible Property of the Seller included in the Assets. The
Seller has taken all steps reasonably necessary to protect its right, title and
interest in and to the Intangible Property, except that the Seller has not filed
registrations for all copyrightable material.
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2.6 Regulatory Approvals. All consents, approvals, authorizations
and other requirements prescribed by any law, rule or regulation which must be
obtained or satisfied by the Seller and which are necessary for the execution
and delivery by the Seller of this Agreement and the documents to be executed
and delivered by the Seller in connection herewith have been obtained and
satisfied.
2.7 Disclosure. No representation or warranty by the Seller in
this Agreement or in any Exhibit hereto, or in any list, statement, document or
information set forth in or attached to any Schedule delivered or to be
delivered pursuant to this Agreement, contains or will contain any untrue
statement of a material fact known by Seller on the Closing Date or omits or
will omit any material fact known by Seller on the Closing Date necessary in
order to make the statements contained therein not misleading.
3. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller as follows:
3.1 Organization. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
corporation, and has the requisite power and authority (corporate and other) to
own its properties and to carry on its business as now being conducted.
3.2 Authorization. The Buyer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement by the Buyer, and the agreements provided for herein, and the
consummation by the Buyer of all transactions contemplated hereby, have been
duly authorized by all requisite corporate action. This Agreement and all such
other agreements and written obligations entered into and undertaken in
connection with the transactions contemplated hereby constitute the valid and
legally binding obligations of the Buyer, enforceable against the Buyer in
accordance with their respective terms. The execution, delivery and performance
of this Agreement and the agreements provided for herein, and the consummation
by the Buyer of the transactions contemplated hereby and thereby, will not, with
or without the giving of notice or the passage of time or both, (a) violate the
provisions of any law, rule or regulation applicable to such party; (b) violate
the provisions of the Certificate of Incorporation or By-laws of Buyer, (c)
violate any judgment, decree, order or award of any court, governmental body or
arbitrator, or (d) conflict with or result in the breach or termination of any
term or provision of, or constitute a default under, or cause any acceleration
under, or cause the creation of any lien, charge or encumbrance upon the
properties or assets of the Buyer pursuant to, any indenture, mortgage, deed of
trust or other agreement or instrument to which it or its properties is a party
or by which the Buyer is or may be bound.
3.3 Regulatory Approvals. All consents, approvals, authorizations
and other requirements prescribed by any law, rule or regulation which must be
obtained or satisfied by the Buyer and TLC and which are necessary for the
consummation of the transactions contemplated
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by this Agreement have been obtained and satisfied.
4. Deliveries at the Closing.
4.1 Closing Deliveries.
(a) The Buyer shall receive at the Closing each of the following
documents:
(i) the consents and approvals to the assignments of the
Assumed Agreements identified on Schedule 2.2(ii), in form satisfactory to the
Buyer;
(ii) a License Agreement by and between Buyer and Seller
relating to the license of certain content and trademarks contained in or used
in connection with the Software Programs;
(iii) a xxxx of sale to the Assets;
(iv) all technical data, product literature and other
documentation relating to the Seller's business as it relates to the Assets, all
in form and substance satisfactory to the Buyer;
(v) such contracts, files and other data and documents
pertaining to the Assets as the Buyer may reasonably request; and
(vi) a certificate of the Secretary of the Seller attesting to
the incumbency of the Seller's officers, respectively, and the authenticity of
the resolutions authorizing the transactions contemplated by the Agreement.
(b) The Seller shall receive at the Closing such documents, instruments
or certificates as the Seller may reasonably request.
5. Indemnification.
5.1 Seller's Indemnification. The Seller hereby indemnifies and
holds harmless the Buyer against all claims, damages, losses, liabilities, costs
and expenses (including, without limitation, settlement costs and any legal,
accounting or other expenses for investigating or defending any actions or
threatened actions) reasonably incurred (the "DAMAGES") by the Buyer in
connection with each and all of the following:
(a) Any breach by the Seller of any representation or warranty in this
Agreement;
(b) Any breach of any covenant, agreement or obligation of the Seller
contained in this Agreement or any other agreement, instrument or document
contemplated by this Agreement;
(c) Any liabilities or obligations of the Seller pertaining to the
Assets that arise from
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or relate to events that occurred on or before the Closing Date and are not
disclosed herein;
(d) Any intellectual property or other proprietary claim relating to
Software Programs manufactured or sold by the Seller on or before the Closing
Date other than a claim for which Mindscape, Inc. would be responsible under the
Exclusive Product Distribution and Publishing Agreement between Mindscape, Inc.
and TPRP; and
(e) Any tax liabilities or obligations of the Seller.
5.2 Buyer's Indemnification. The Buyer hereby indemnifies and
holds harmless the Seller against all Damages incurred by the Seller in
connection with each and all of the following:
(a) Any breach by the Buyer or its affiliate Mindscape, Inc.
("MINDSCAPE") of any representation or warranty in this Agreement; and
(b) Any breach of any covenant, agreement or obligation of the Buyer
and/or Mindscape contained in this Agreement or any other agreement, instrument
or document contemplated by this Agreement.
5.3 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder the Buyer (the "INDEMNIFIED PARTY"), shall promptly
notify the Seller (the "INDEMNIFYING PARTY") of the claim and, when known, the
facts constituting the basis for such claim. In the event of any such claim for
indemnification hereunder resulting from or in connection with any claim or
legal proceedings by a third-party, the notice to the Indemnifying Party shall
specify, if known, the amount or an estimate of the amount of the liability
arising therefrom. The Indemnified Party shall not settle or compromise any
claim by a third party for which it is entitled to indemnification hereunder
without the prior written consent of the Indemnifying Party, which shall not be
unreasonably withheld, unless suit shall have been instituted against it and the
Indemnifying Party shall not have taken control of such suit after notification
thereof as provided in Section 5.4 of this Agreement.
5.4 Defense by Indemnifying Party. In connection with any claim
giving rise to indemnity hereunder resulting from or arising out of any claim or
legal proceeding by a person who is not a party to this Agreement, the
Indemnifying Party at its sole cost and expense may, upon written notice to the
Indemnified Party; assume and control the defense of any such claim or legal
proceeding if it acknowledges to the Indemnified Party in writing its
obligations to indemnify the Indemnified Party with respect to all elements of
such claim. The Indemnified Party shall be entitled to participate in (but not
control) the defense of any such action, with its counsel and at its own
expense. If the Indemnifying Party does not assume the defense of any such claim
or litigation resulting therefrom within 30 days after the date such claim is
made, (a) the Indemnified Party may defend against such claim or litigation, in
such manner as it may deem appropriate, including, but not limited to, settling
such claim or litigation, after giving notice of the same to the Indemnifying
Party, on such terms as the Indemnified Party may deem appropriate, and (b) the
Indemnifying Party shall be entitled to participate in (but not control) the
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defense of such action, with its counsel and at its own expense. If the
Indemnifying Party thereafter seeks to question the manner in which the
Indemnified Party defended such third party claim or the amount or nature of any
such settlement, the Indemnifying Party shall have the burden to prove by a
preponderance of the evidence that the Indemnified Party did not defend or
settle such third party claim in a reasonably prudent manner.
5.5 Payment of Indemnification Obligation. The Seller hereby
agrees that any claim for indemnification by the Buyer under this Section 5 or
under any other provision of this Agreement may, at the Buyer's option, be set
off against any of the Buyer's obligations to make payments to the Seller under
this Agreement, if any.
5.6 Survival of Representations; Claims for Indemnification. All
representations and warranties made by the parties herein or in any instrument
or document furnished in connection herewith shall survive the Closing and any
investigation at any time made by or on behalf of the parties hereto. All such
representations and warranties shall expire on the second anniversary of the
Closing Date, except for claims, if any, asserted in writing prior to such
second anniversary, which shall survive until finally resolved and satisfied in
full. All claims and actions for indemnity pursuant to this Section 5 shall be
asserted or maintained in writing by a party hereto on or prior to the
expiration of such two year period.
5.7 Threshold. Neither party shall be required to make any
indemnification payment pursuant to this Section 5 until such time as the total
amount of all indemnifiable Damages that have been directly suffered or incurred
by such party exceeds US $25,000 (the "BASKET AMOUNT"), and after a party
seeking indemnification hereunder has incurred the Basket Amount of
indemnifiable Damages, such party may recover indemnifiable Damages in excess of
the Basket Amount.
6. Post-Closing Agreements.
6.1 Proprietary Information.
(a) From and after the Closing Date, the Seller shall hold in
confidence, and use its best efforts to have all of its officers, directors and
personnel hold in confidence, all knowledge and information of a secret or
confidential nature with respect to the business of the Seller as it relates to
the Assets and shall not disclose, publish or make use of the same without the
consent of the Buyer, except to the extent that such information shall have
become public knowledge other than by breach of this Agreement by the Seller.
(b) The Seller agrees that the remedy at law for any breach of this
Section 6.1 would be inadequate and that the Buyer shall be entitled to
injunctive relief in addition to any other remedy it may have upon breach of any
provision of this Section 6.1.
6.2 Sharing of Data and Software and Intangible Property.
(a) The Buyer shall have the right for a period of two (2) years
following the Closing
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Date to have reasonable access to those books, records and accounts, including
financial and tax information, correspondence, production records, employment
records and other records which are retained by the Seller pursuant to the terms
of this Agreement to the extent that any of the foregoing relates to the Assets
of the Seller transferred to the Buyer hereunder or is otherwise needed by the
Buyer in order to comply with its obligations under applicable securities, tax,
employment or other laws and regulations.
(b) The Seller and the Buyer agree that from and after the Closing Date
they shall cooperate fully with each other to facilitate the transfer of the
Assets from the Seller to the Buyer and the operation thereof by the Buyer.
(c) This section 6.2 shall not in any way (i) limit Seller's
responsibility to deliver electronic and hard copies of, and back-up
documentation for, all source code included in the Assets, as well as the Tester
and Apply Source Code (hereinafter defined), or (ii) restrict in any way
Seller's rights to use the Assets. The Seller hereby licenses to the Buyer, for
use only with the Content under the License Agreement and in accordance with the
terms of the License Agreement, the Source Code for the Seller's Tester and
Apply products (the "TESTER AND APPLY SOURCE CODE") to the extent that such
source code is also used in the Assets.
6.3 List and Delivery of the Assumed Agreements. Within five (5) days
of the Closing Date, Seller shall deliver to Buyer a complete list, which to the
best of Seller's knowledge after due inquiry, shall contain all of the Assumed
Agreements. If after such date, Buyer or Seller discovers one or more additional
agreements which should have been included on such list, Seller shall provide
Buyer with an updated list and a copy of such agreements.
7. Transfer and Sales Tax.
Notwithstanding any provisions of law imposing the burden of such taxes
on the Seller or the Buyer, as the case may be, the Seller shall be responsible
for and shall pay (a) all sales, use and transfer taxes, and (b) all
governmental charges, if any, upon the sale or transfer of any of the Assets
hereunder.
8. Brokers.
8.1 For the Seller. The Seller represents and warrants that it has
not engaged any broker or finder or incurred any liability for brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement. The Seller agrees to indemnify and hold harmless the Buyer
against any claims or liabilities asserted against it by any person acting or
claiming to act as a broker or finder on behalf of the Seller.
8.2 For the Buyer. The Buyer agrees to pay all fees, expenses and
compensation owed to any person, firm or corporation who has acted in the
capacity of broker or finder on its behalf in connection with the transactions
contemplated by this Agreement. The Buyer agrees to indemnify and hold harmless
the Seller against any claims or liabilities asserted against it by any person
acting or claiming to act as a broker or finder on behalf of the Buyer.
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9. Termination of Mindscape Agreement. Buyer, Seller and Mindscape, agree
that, effective as of the Closing Date, that certain Exclusive Product and
Publishing Agreement by and between Seller and Mindscape dated December 15,1997
(the "MINDSCAPE AGREEMENT") is terminated. Notwithstanding such termination, the
following obligations set forth in the Mindscape Agreement shall survive: (i)
the confidentiality provisions; (ii) the representations, warranties, and
covenants and indemnification provisions; and (iii) Mindscape's obligations to
pay Seller royalties through the Closing Date.
10. Miscellaneous.
10.1 Notices
Any notices or other communications required or permitted hereunder
shall be sufficiently given if delivered personally or sent by telex, federal
express, registered or certified mail, postage prepaid, addressed as follows or
to such other address of which the parties may have given notice:
If to Seller: If to Buyer:
Attention: R. Xxxxx Xxxxxx
Attention: Xxxx Xxxxxxx Executive Vice President and
Chief Operating Officer Chief Financial Officer
The Princeton Review Learning Company Properties Inc.
Publishing, L.L.C. c/o The Learning Company, Inc.
0000 Xxxxxxxx Xxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Copy of Notices to: Copy of Notices to:
Akabas & Xxxxx Legal Department
000 Xxxxxxx Xxx., 00xx Floor c/o The Learning Company, Inc.
Attn: Xxxx X. Xxxxxx, Esq. Xxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxxx, XX 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Unless otherwise specified herein, such notices or other communications
shall be deemed received (a) on the date delivered, if delivered personally; or
(b) three business days after being sent, if sent by registered or certified
mail.
10.2 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that the
Buyer and the Seller may not assign their
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respective obligations hereunder without the prior written consent of the other
party; provided, however, that the Buyer or Seller may assign this Agreement,
and its rights and obligations hereunder, to a subsidiary or affiliate, or upon
the merger of the party or the sale of all or substantially all of its business,
all without the consent of the other party, upon providing notice to such other
party. Any assignment in contravention of this provision shall be void.
10.3 Entire Agreement: Amendment: Attachments.
(a) This Agreement, all Schedules and Exhibits hereto, and all
agreements and instruments to be delivered by the parties pursuant hereto
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior oral and written
and all contemporaneous oral negotiations, commitments and understandings
between such parties. The Buyer and the Seller, by the consent of their
respective Boards of Directors, or officers authorized by such Boards, may amend
or modify this Agreement, in such manner as may be agreed upon, by a written
instrument executed by the Buyer and the Seller.
(b) If the provisions of any Schedule or Exhibit to this Agreement are
inconsistent with the provisions of this Agreement, the provision of the
Agreement shall prevail. The Exhibits and Schedules attached hereto or to be
attached hereafter are hereby incorporated as integral parts of this Agreement.
10.4 Expenses.
Except as otherwise expressly provided herein, the Buyer and the Seller
shall each pay their own expenses in connection with this Agreement and the
transactions contemplated hereby.
10.5 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
10.6 Section Headings.
The section headings are for the convenience of the parties and in no
way alter, modify, amend, limit, or restrict the contractual obligations of the
patties.
10.7 Severability.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
10.8 Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be
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deemed to be an original, but all of which shall be one and the same document.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
signed under seal as of the date first set forth above.
Learning Company Properties Inc. Princeton Review Publishing, L.L.C.
By: /s/ R. Xxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
--------------------------------- --------------------------------
R. Xxxxx Xxxxxx Name: Xxxx Xxxxxxx
Executive Vice President and CFO Title: Chief Operating Officer
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Schedule 1.1(a)(i)
Software Programs
Currently shipping versions of:
(a) Inside the SAT & ACT '98
(b) Inside the SAT & ACT '98 Deluxe
(c) Inside the GRE
(d) Algebra Smart
(e) Science Smart
(f) Word Smart
(g) College Advisor '97
(h) Inside the GMAT
(i) Inside the LSAT
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Schedule 1.1(a)(iv)
Assumed Agreements
B115 Xxxxxxxx Xxxxx Development of Inside the SAT (work for hire)
B115 Xxxxxxxx Xxxxx Development of Inside the GRE (work for hire)
B115 Xxxxxxxx Xxxxx Development of Algebra Smart (work for hire)
C026 GT Interactive Software Non-exclusive distribution of software
C065 Micro Central, Inc. Non-exclusive distribution of software
(unsigned, undated)
C072 Student Services, Inc. Promotion of fastWEB on Princeton Review
CD-Roms SS adapts college scholarship data
for College Advisor Term runs until June 17,
1999 on automatic renewal
C077 Point Group Corp. Non-exclusive distribution of software No
term specified
C083 Media Safari Non-exclusive distribution license: Inside
the SAT, College Advisor
Terminates: earlier of 2 years after release
of Programs plus 180-day sell-off
C084 Hewlett Packard Non-exclusive licensing and distribution of
College Advisor
C093 Xxxxxx Micro Non-exclusive distribution of software
Automatically renewed until 11/25/98 (need
to terminate prior to next automatic
renewal)
C094 IBM Non-exclusive licensing and distribution of
Inside the SAT and Algebra Smart
Terminates 6/30/98, unless renewed
Business Week Joint marketing of GMAT products, including
promotional screens on GMAT software
Random House, Inc. Book/Disk publishing agreements
Employees
Xxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxxxx
16
Xx Xxxxxxx
Xxxx Xxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx
17
Schedule 1.1(a)(v)
Equipment
All equipment used exclusively by the employees whose employment terms are
assumed by TLC for at least 90 days.
18
Schedule 1.3
Excluded Assets
1. All assets of every kind of Seller's software division that are not
specifically described as included in Assets under Section 1.1,
including without limitation, as Excluded Assets; all versions of
Sellers Apply and Tester software programs, and all data files and
content apart from the software in all of Seller's software products.
2. Source code contained in Seller's Apply software program.
3. Source code contained is Seller's Tester software program.
4. All trademarks, service marks and trade dress related to or used in
connection with the Assets.
19
Schedule 1.5(b)
Allocation of Purchase Price
The Purchase Price for the Assets and an initial License Fee under the License
Agreement shall be allocated as set forth below. Any portion of the purchase
price allocated to the initial fee for the License Agreement under Section 1.5
shall not affect the rights and obligations under this Agreement or the License
Agreement, except as to accounting for the purchase price.
All Software Programs and other Intangible
Property (including in process research and
development) of the Division: $ 4,500,000.00
Customer Lists: $ 50,000.00
Property Rights/Trade Secrets: $ 200,000.00
Equipment: $ 50,000.00
Licenses: $ 300,000.00
$ 5,100,000.00
==============
20
Schedule 2.2
Agreements and Consents
(i) All contracts which relate to the Software Programs (Section 2.2(b)(i):
B093 Xxxxxxx Xxxxxxxx Development of Inside the LSAT (work for hire)
B094 Xxxxx Xxxxx & Xxx Xxxxx Development of Inside the GMAT (work for hire)
B115 Xxxxxxxx Xxxxx Development of Inside the SAT (work for hire)
B115 Xxxxxxxx Xxxxx Development of Inside the GRE (work for hire)
B115 Xxxxxxxx Xxxxx Development of Algebra Smart (work for hire)
C012 Interactive Factory Word Smart
C014 Lyriq International Development of software (the Broadway)
C023 Lyriq International Creation and marketing of software products
C032 Lyriq International Development of Software (the Madison - GRE prep)
C022 Scientia, Inc. Development of software (MCAT)
C030 Scientia, Inc. Distribution of MCAT review software
C026 GT Interactive Software Non-exclusive distribution of software
C065 Micro Central, Inc. Non-exclusive distribution of software (unsigned,
undated)
C072 Student Services, Inc. Promotion of fastWEB on Princeton Review CD-
21
Roms; SS adapts college scholarship data for College
Advisor, term runs until June 17, 1999 on automatic
renewal
C077 Point Group Corp. Non-exclusive distribution of software, No term
specified
C083 Media Safari Non-exclusive distribution license. Inside the
SAT, College Advisor
Terminates: earlier of 2 years after release of
Programs plus 180-day sell-off
C084 Hewlett Packard Non-exclusive licensing and distribution of College
Advisor
C093 Xxxxxx Micro Non-exclusive distribution of software Automatically
renewed until 11/25/98 (need to terminate prior to
next automatic renewal)
C094 IBM Non-exclusive licensing and distribution of Inside
the SAT and Algebra Smart, terminates 6/20/98,
unless renewed
Business Week Joint marketing of GMAT products
Random House, Inc. Publishing Agreements for Book/Disk Products
(ii) All consents and approvals of third parties (Section 2.2(b)(ii)):
Random House, Inc.
Princeton Review Management, L.L.C.
22
Schedule 2.3
Encumbrances
Agreements noted, to the extent breached, could result in claims on Assets.
23
Schedule 2.4
Litigation and Claims
TPRP has had an ongoing dispute and Lyriq International Corporation regarding
the correct amount of royalties accruing under various software development
agreements.
TPRP had a dispute with ZCI Publishing regarding an agreement that provided for
ZCI to perform work with a translation engine, which TPRP believes did not work.
An arbitration was commenced, and a verbal settlement was reached, however, the
settlement has not been consummated.
Notwithstanding any other provision in this Agreement, TPRP shall retain all
liability arising out of or relating to such claims.
24
Schedule 2.5
Intangible Property
1. Registered Copyrights:
NONE
