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EXHIBIT 10.3
AGREEMENT
AGREEMENT ("Agreement") dated as of February 21, 1997 among High Text
Interactive, Inc., a California corporation ("Seller"); and Xxxxx Xxxxx, Xxxxx
Xxxxx and Xxxx Xxxxx ("Purchasers").
Recitals:
A. Seller is engaged in the business of developing, marketing and
distributing educational multimedia software and CD-ROM programs (the
"Multimedia Operations") and in the business of book publishing (the "Book
Publishing Operations"). Certain of the assets owned by Seller and used in
connection with the Multimedia Operations and the Book Publishing Operations
were acquired by Seller pursuant to an Agreement and Plan of Reorganization
dated December 31, 1995 (the "Prior Agreement") among Seller (under its former
name CD-Soft Press Corporation), Purchasers and High Text Publications, Inc., a
California corporation then owned by Purchasers("HPI").
B. Pursuant to Section 2.1.4 of the Prior Agreement, Seller agreed to
make certain payments to HPI as the purchase price for the Book Publishing
Operations (the "Section 2.1.4 Payments"), the first such payment to be made on
or before March 31, 1997. By virtue of the liquidation and dissolution of HPI,
Purchasers are now entitled to receive the Section 2.1.4 Payments.
C. Purchasers have offered to purchase from Seller, and Seller has
agreed to sell to Purchasers, the Book Publishing Operations on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the agreements herein set forth, the
parties agree as follows:
1. Purchase and Sale. Subject to the terms and conditions of this
Agreement, on the Closing Date (as hereafter defined) but effective as of the
Effective Date (as hereafter defined), Seller agrees to sell to Purchasers,
and Purchasers agree to purchase from Seller, all of the following assets,
rights and properties of Seller relating to the Book Publishing Operations
(collectively, the "Transferred Assets"):
(a) all inventory of Seller relating to the Book Publishing Operations
existing as of the Effective Date, wherever located (the "Inventory");
(b) the furniture, equipment, computers and associated peripheral
equipment owned by Seller and used exclusively in connection with the Book
Publishing Operations which is identified on Schedule 1(b) attached hereto (the
"Equipment");
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(c) the accounts receivable listed on Schedule 1(c) which are marked
"BK" (the "Accounts Receivable");
(d) all right and interest of Seller under the contracts and permits
relating to the Book Publishing Operations described on Schedule 1(d) attached
hereto (the "Contract Rights");
(e) the advances and prepaids to book authors described on Schedule
1(e) attached hereto;
(f) all of Seller's right, title and interest in and to all books and
other publications described on Schedule 1(f) attached hereto, together with
all work-in-process for uncompleted publications and all copyrights and other
proprietary rights relating thereto;
(g) all customer, prospect and vendor lists and databases relating
exclusively to the Book Publishing Operations;
(h) all price lists, product brochures and related sales or marketing
materials used exclusively in the Book Publishing Operations;
(i) all records relating exclusively to the Book Publishing
Operations;
(j) the exclusive right and license to use the name "HighText
Publications" for a period of 3 years after the Effective Date; and
(k) that portion of Seller's present web site (the "Web Site")
relating to the Book Publishing Operations, together with the exclusive right
and license to use of the Internet Domain Name "xxx.xxxxxxxx-xxxxxxxxxxxx.xxx"
for a period of 3 years after the Effective Date.
2. Excluded Assets. Expressly excluded from the Purchased Assets are:
(a) all insurance policies, and rights to premium refunds thereunder,
maintained by Seller in connection with the Book Publishing Operations; (b)
Seller's corporate minute and stock books; (c) the name "High Text
Interactive"; (d) that portion of the Web Site relating to the Multimedia
Operations, including the Internet Domain Name "xxx.xxxxxxxx-xxxxxxxxxxx.xxx";
and (f) all other assets not specifically included and enumerated among the
Transferred Assets.
3. Assumption of Liabilities. As of the Effective Date, Purchasers shall
assume and agree to discharge and perform when due all liabilities, commitments
and obligations of the Book Publishing Operations (whether accrued or
unaccrued, due or to become due, contractual or noncontractual) (collectively,
the "Assumed Liabilities"), including, without limitation, the following
obligations and liabilities: (a) all accounts
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payable of Seller relating exclusively to the Book Publishing Operations and
existing as of the Effective Date, including, without limitation, the accounts
payable listed on Schedule 3 attached hereto which are marked "BK" (the
"Accounts Payable"); (b) all sales, use and other taxes payable relating
exclusively to the Book Publishing Operations (other than as set forth in
Section 4 below); and (c) all obligations and liabilities of Seller under the
Contract Rights.
4. Excluded Liabilities. Notwithstanding the provisions of Section 3,
Purchasers shall not and do not assume any of the following liabilities or
obligations of Seller (the "Excluded Liabilities"): (a) liabilities and
obligations of Seller for any federal, state or local tax imposed on, or
measured by, net income, regardless of the period of time to which
attributable; (b) liabilities and obligations of Seller for sales tax payable
in respect of the sale of the Transferred Assets to Purchasers hereunder; (c)
royalties due to authors for the month of January, 1997 up to an aggregate
amount of $5,000; and (d) the liabilities and obligations, if any, described
on Schedule 4 attached hereto.
5. Time and Place of Closing. The closing ("Closing") of the purchase
and sale hereunder shall take place at the offices of Seller on the date
hereof. The Closing shall be effective as of the close of business on January
31, 1997 (the "Effective Date").
6. Purchase Price. The purchase price ("Purchase Price") of the
Transferred Assets shall be an amount equal to the Section 2.1.4 Payments plus
the assumption by Purchasers of the Assumed Liabilities.
7. Manner of Payment of Purchase Price. The Purchase Price shall be paid
and deemed satisfied by the cancellation of Seller's obligations to make the
Section 2.1.4 Payments under the Prior Agreement and by Purchasers' assumption
of the Assumed Liabilities. Upon the consummation of the transaction
contemplated by this Agreement, all obligations of Seller to make the Section
2.1.4 Payments shall be deemed satisfied and discharged.
8. Representations and Warranties. The Transferred Assets are being sold
to Purchasers by Seller on an "as-is", "where is" basis and Seller makes no
representations and warranties to Purchasers with respect to the Transferred
Assets except as follows:
(a) Seller is a corporation validly existing and in good standing
under the laws of the State of California.
(b) The execution, delivery and performance of this Agreement by
Seller have been duly authorized by all necessary corporate action, do not
require the
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approval or consent of any governmental authority or any other person, do not
and will not conflict with or result in a default under any provision of law or
of the articles of incorporation or by-laws of Seller or of any agreement or
court order binding on or applicable to Seller of any of the Transferred
Assets and do not and will not result in the creation of any lien on any of the
Transferred Assets. This Agreement constitutes the valid and binding agreement
of Seller enforceable in accordance with its terms.
(c) Seller has, and on the Closing Date will convey to Purchasers,
good title to the Transferred Assets free and clear of all liens, claims or
encumbrances.
9. Purchasers' Representations and Warranties. Purchasers represents and
warrants to Seller as follows:
(a) The execution, delivery and performance of this Agreement by
Purchasers do not require the approval or consent of any governmental authority
or any other person and do not and will not conflict with or result in a
default under any provision of law or of any agreement or court order binding
on or applicable to Purchasers.
(b) This Agreement constitutes the valid and binding agreement of
Purchasers enforceable in accordance with its terms.
10. Closing.
(a) Deliveries by Seller. At the Closing, Seller shall deliver to
Purchasers physical possession of all tangible Transferred Assets and shall
deliver or cause to be delivered to Purchasers the following:
(i) a xxxx of sale, executed by Seller, conveying all of the
Inventory and Equipment;
(ii) an assignment (the "Assignment"), executed by Seller,
assigning to Purchasers all of the Transferred Assets other than the
Inventory and Equipment, together with the original instruments, if
any, representing, evidencing or constituting such Transferred Assets;
(iii) a certified copy of resolutions of the Board of Directors
and stockholders of Seller authorizing the execution, delivery and
performance of this Agreement.
(b) Deliveries by Purchasers. At the Closing, Purchasers shall
deliver or cause to be delivered to Seller the following:
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(i) an acceptance of the Assignment and an assumption of the
Assumed Liabilities;
(ii) a resignation, executed by Xxxx Xxxxx and Xxxxx Xxxxx,
resigning from their position as officers of Seller; and
(iii) a resale certificate with respect to the Inventory.
11. Additional Agreements.
(a) Accounts Receivable. Seller agrees to remit to Purchasers,
promptly upon receipt but in any event within five business days after receipt,
any checks or other proceeds received by Seller in payment of any Account
Receivable.
(b) Access to Records. Purchasers shall permit Seller to have access
to such books and records constituting part of the Transferred Assets as may be
necessary for Seller in the operation of its Multimedia Operations subsequent
to the Closing Date.
(c) Employee. Seller shall terminate the employment of Xxxxxxxx Xxxxx
as an employee of Seller effective as of the Closing Date.
(d) Use of Name HighText. The Transferred Assets include the
exclusive right and license to use the name "HighText Publications" for a period
of 3 years after the Effective Date but solely in connection with the Book
Publishing Operations being purchased hereunder and Purchasers agree not to
expand the use of the name "HighText Publications" to areas not related to or
incidental to the Book Publishing Operations.
(e) Web Site. The Transferred Assets include the exclusive right and
license to use of the Internet Domain Name "xxxxxxxx-xxxxxxxxxxxx.xxx" and that
portion of the Web Site relating solely to the Book Publishing Operations.
Seller agrees to deliver to Purchasers on the Closing Date a copy of all source
codes and documentation relating to the Web Site. As soon as practicable after
the Closing Date, Purchasers shall remove the information concerning the
Multimedia Operations from its copy of the Web Site and Seller shall remove the
information concerning the Book Publishing Operations from the Web Site. Each
party shall provide a hypertext link to each other's site for not less than 6
months after the Effective Date.
(f) Databases. It is understood by the parties that the databases
referred to in Section 1(g) of this Agreement contain the databases of the Book
Publishing Operations. All such data shall be removed from Seller's databases
and Seller shall cease use of such data from and after the Closing Date.
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(g) Agreement to Provide Consulting Services. Purchasers, and each
of them, agree to provide Seller with consulting services at such times and at
such places as may be mutually agreed between such Purchaser and Seller. Seller
shall pay for such consulting services rendered at the rate of $100.00 per hour.
12. Indemnification.
(a) Seller agrees to indemnify, defend and hold Purchasers harmless
from and against any liability, loss, cost, damage or expense, including
reasonable attorneys' fees (collectively, "Claims"), incurred or sustained by
Purchasers as a result of or arising out of: (i) any false representation or
warranty made herein by Seller; (ii) the failure of Seller to comply with any
of the covenants of this Agreement to be performed by Seller; (iii) the failure
of Seller to discharge when due the Excluded Liabilities.
(b) Purchasers agree to indemnify, defend and hold Seller harmless
from and against any and all Claims incurred or sustained by Seller as a result
of or arising out of any false representation or warranty made herein by
Purchasers or arising out of the failure of Purchasers to comply with any of
the covenants of this Agreement to be performed by Purchasers or arising out of
the failure of Purchasers to cause to be performed when due any of the Assumed
Liabilities or arising out of the conduct of the Book Publishing Operations
by Purchasers subsequent to the Closing Date.
(c) If any party ("Indemnitee") has reasonable cause to believe it
has grounds for indemnification pursuant to this Section 12, it shall promptly
deliver a notice of Claim to the other party ("Indemnitor"), setting forth with
reasonable particularity the grounds of such Claim. If there is asserted any
Claim by a person not a party to this Agreement that in the judgment of
Indemnitee should be taken into account in determining the liability, if any,
of Indemnitor under this Section 18, then, as a condition precedent to the
assertion by Indemnitee against Indemnitor of any such Claim, Indemnitee shall
give notice of such Claim to Indemnitor within 30 business days of Indemnitee's
receipt of notice thereof and Indemnitor shall have the right, at Indemnitor's
expense, to participate in the defense of such Claim or, at Indemnitor's
option, to assume the entire defense of or settle such Claim. Indemnitee shall
cooperate with Indemnitor in the defense of any Claim assumed by Indemnitor.
13. Release. In consideration of the purchase and sale of the Transferred
Assets, Purchasers, on the one hand, and Seller, on the other hand, on behalf
of itself, himself or herself, any parent, affiliate, subsidiary or affiliate
corporation or partnership, and their respective officers, directors, partners,
trustees, personal representatives, successors and assigns, do hereby forever
release, discharge and acquit the other, and any parent, subsidiaries and
affiliate corporation and partnerships, and their respective
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officers, directors, partners, trustees, shareholders, agents, attorneys and
employees, and their respective heirs, legal representatives, succesors and
assigns, of and from any and all claims, demands, liabilities,
responsibilities, disputes, causes of action, whether at law or equity,
indebtedness and obligations of whatever kind or nature, whether known or
unknown, direct or indirect, new or existing, by reason of any matter, cause or
thing whatsoever arising arising out of or relating to the Prior Agreement or
to the employment by Seller of any Purchaser.
14. General and Miscellaneous.
(a) Further Assurances. Each of the parties shall execute such other
documents and take such other action as may be necessary or desirable to vest
ownership and possession of the Transferred Assets in Purchasers and to
otherwise carry out the terms of this Agreement.
(b) Notices. All notices provided for herein shall be in writing and
shall be deemed to have been given or made when served personally or five days
after being deposited in the United States mail, certified mail, return receipt
requested, postage prepaid, addressed to Purchasers or Seller at their
respective addresses set forth on the signature page hereto, or to such other
address as either party may designate by notice given in accordance with this
Section 14(b).
(c) No Brokers. Each of the parties represents that it has not
dealt with any broker or finder in connection with the transactions
contemplated by this Agreement and that no broker or other person is entitled
to a commission or finder's fee in connection with this transaction.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(e) Benefits. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
successors and assigns.
(f) Governing Law. This Agreement shall be governed by the laws of
the State of California.
(g) Entire Agreement; Amendment; Assignment. This Agreement
represents the entire agreement and understanding of the parties hereto and all
prior or concurrent agreements, understandings, representations and warranties,
whether written or oral, in regard to the subject matter hereof are merged
herein. This Agreement may be amended only by a writing signed by both of the
parties hereto.
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No party may assign this Agreement or any interest herein without the prior
written consent of the other party, which consent may be granted or withheld at
the absolute discretion of such other party. Notwithstanding the foregoing,
Purchasers may assign its rights under this Agreement to a corporation,
partnership or limited liability company wholly-owned by Purchasers; provided,
however, that Purchasers shall remain liable for all obligations of Purchasers
hereunder. Nothing in this Section 14(g) shall preclude in any way Purchasers,
or any assignee of Purchasers pursuant to the foregoing sentence, from selling,
transferring or otherwise disposing of the Transferred Assets after the Closing
Date.
(h) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision hereof.
(i) Expenses. Each of the parties shall pay all costs and expenses
incurred or to be incurred by it in negotiation and preparation of this
Agreement and in closing and carrying out the transactions contemplated by this
Agreement.
(j) No Waiver. The failure of any party to insist upon strict
compliance by the other party with any of the terms herein by any of the parties
hereto shall not be deemed to be a waiver of any future breach. No remedy made
available by any of the provisions of this Agreement is intended to be exclusive
of any other remedy and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity.
(k) Survival. All representations, warranties, covenants and
agreements herein shall survive the Closing of the transactions contemplated by
this Agreement.
(l) Bulk Sales Compliance. Each of the parties hereto waives
compliance with the laws of any jurisdiction relating to bulk transfers in
connection with the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first written above.
PURCHASERS: SELLER:
/s/ XXXXX X. XXXXX HIGHTEXT INTERACTIVE, INC.
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Xxxxx Xxxxx
Address: 000 Xxxxxx Xxxxx Xxxxx $76
Xxxxxx Xxxxx, XX 00000
By: /s/ XXXXXXX XXXXXXX
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Address: 000 Xxxxx Xxxx., Xxxxx 0000
Xxxxx Xxxx, XX 00000
/s/ XXXX X. XXXXX
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Xxxx Xxxxx
Address: 000 X. Xxxxxx Xxx. #000
Xxxxxx Xxxxx, XX 00000
/s/ XXXXX X. XXXXX
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Xxxxx Xxxxx
Address: 000 X. Xxxxxx Xxx. #000
Xxxxxx Xxxxx, XX 00000
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