EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of March 14, 2003, by and
between Active IQ Technologies, Inc., a Minnesota corporation (the "SELLER"),
and Stellent, Inc., a Minnesota corporation (the "BUYER").
RECITALS
A. Seller is engaged in the business of distributing enterprise content
management software solutions to customers on a hosted basis (the "HOSTED
BUSINESS");
B. Through Red Wing Business Systems, Inc. and Champion Business
Systems, Inc., wholly owned subsidiaries of Seller, Seller is also engaged in
the business of developing, integrating and supporting the accounting and
financial software needs of small to medium sized business (the "RED WING
BUSINESS").
C. Seller has entered into an asset purchase agreement dated February
17, 2003 pursuant to which it has agreed to sell all of the assets related to
the Red Wing Business to Red Wing Software, Inc. (the "RED WING PURCHASER" and
such agreement, the "RED WING AGREEMENT").
D. Seller desires to sell and Buyer desires to purchase certain of the
assets of Seller used in the Hosted Business on the terms and subject to the
conditions and exceptions of this Agreement.
TERMS AND CONDITIONS
In consideration of the foregoing recitals and of the mutual covenants
and conditions contained herein, the parties hereby agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Generally. On the terms and subject to the conditions of
this Agreement, Seller agrees to sell, transfer, assign, convey and
deliver to Buyer, and Buyer agrees to purchase from Seller, on and as
of the Closing Date (as defined in SECTION 4), all right, title and
interest in and to all of the Purchased Assets (as hereinafter
defined), wherever located and whether or not reflected in its books
and records, but expressly excluding the Excluded Assets (as defined in
SECTION 1.2). Subject to such express exclusion, the "PURCHASED ASSETS"
means all assets used in connection with the Hosted Business, including
without limitation, all of the following property, assets and rights:
(a) All machinery, equipment, office equipment,
telephone equipment, accessories, packing materials, product
literature, supplies and other miscellaneous tangible personal
property used in the Hosted Business, as listed on SCHEDULE
1.1(a), together with the off the shelf software listed on
SCHEDULE 1.1(a)(i) (collectively, the "EQUIPMENT");
(b) All rights of Seller under any warranty or
guarantee by any manufacturer, supplier or other transferor of
any of the Purchased Assets;
(c) All rights of Seller under purchase orders
related to the Hosted Business issued by it in the ordinary
course of operating the Hosted Business ("PURCHASE ORDERS");
(d) All rights of Seller under the contracts of
Seller identified on SCHEDULE 1.1(d) to provide service or
maintenance relating to Purchased Assets (the "SERVICE
CONTRACTS"), to resell third party software (the "RESELLER
AGREEMENTS") and for other agreements related to the Hosted
Business and identified on SCHEDULE 1.1(d) (collectively, the
"CONTRACTS");
(e) All of Seller's rights, title and interests in
and to the Copyrights, Patents, Trademarks, Trade Secrets
(each as hereinafter defined), and any other intellectual
property relating to or used in the Hosted Business
(collectively, the "INTELLECTUAL PROPERTY").
The Intellectual Property includes, without limitation, all
Intellectual Property listed on SCHEDULE 1.1(e) and all of Seller's
right, title and interest in and to (i) all versions (whether or not
released) of the object code, source code and scripts for the software
listed on SCHEDULE 1.1(e)(i) and any related software or firmware,
prebuilt solutions, or scripts conceived, created, reduced to practice,
developed or under development by or on behalf of Seller, together with
all documentation related thereto (collectively, the "PROPRIETARY
SOFTWARE PRODUCTS"), together with all third-party computer software
and firmware incorporated therein or necessary for the development,
operation, maintenance or support thereof and all documentation related
thereto (collectively, and together with the Proprietary Software
Products, the "SOFTWARE"); (ii) all names and slogans, variations or
components of and logos associated with such names and slogans,
together with the goodwill associated therewith, and the URLs and
domain names related to the Hosted Business; (iii) the product
literature related to the Hosted Business; (iv) all other intellectual
property and intellectual property rights as are necessary or useful
for the ownership of the Software and the conduct of the Hosted
Business as currently conducted; and (v) all licenses and sublicenses
granted and obtained with regard thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions.
As used in this Agreement, the following terms have the
following meanings:
"COPYRIGHTS" means all computer code or programs,
whether in the source code or object code version (together
with and including any algorithm, flowchart, schematic,
diagram, header file, library, object, specification,
annotation, or other documentation related thereto, and
together with and including any prebuilt solutions and
scripts), artwork, illustrations, graphics, icons, audio
works, video clips, audio-visual works, photographs,
descriptive or other text, data, databases, research, reports,
analyses, forecasts, and business plans, all other works of
authorship and any other works recognized as copyrightable
subject matter under the laws of any country or political
subdivision thereof or any bilateral or international
convention or treaty, together with all worldwide
copyrights therein (and all applications, rights to make
applications, registrations, recordations, renewals,
extensions, reversions or restorations thereof and therefor).
"PATENTS" means all inventions, improvements,
innovations, ideas, concepts, designs, processes, methods and
techniques and know-how (whether patentable, patented, reduced
to practice or not), and all other subject matter recognized
as patentable under the laws of any country, or any political
subdivision thereof, or under any bilateral or international
treaty or convention, together with all patent rights granted
therein (or applications therefor) and all reissues,
reexaminations and extensions thereof, and all divisionals,
substitutions, renewals, continuations and
continuations-in-part, thereof.
"TRADEMARKS" means all trademarks, trade names,
service marks, slogans, logos, trade dress, internet domain
names, other electronic communications identifications and
other sources of business identification recognized in any
country, or any political subdivision thereof or under any
bilateral or international treaty or convention (whether
registered or unregistered), together with all related
contract rights and all registrations, recordings and renewals
thereof (and all applications in connection therewith) and
together with the goodwill associated therewith; and
"TRADE SECRETS" means all confidential information or
other items recognized as "trade secrets" under the laws of
any country, or any political subdivision thereof, or under
any international convention or treaty.
(f) All prepaid expenses, advance payments, deposits
and claims for refund, credit, causes of action, choses in
action, rights of recovery, rights of set off, and rights of
recoupment relating to the Hosted Business;
(g) All claims and rights of Seller under insurance
policies in respect of any Purchased Assets and the Assumed
Liabilities (as defined in SECTION 3), and all causes of
action, judgments, claims and demands relating to any
Purchased Assets and the Assumed Liabilities;
(h) All sales records, ledgers, files,
correspondence, documents, drawings, specifications, charts,
plans, purchase records, customer lists, sales lead databases,
supplier lists, advertising and promotional materials,
production records, business plans, covenants not to compete,
studies, reports, marketing materials, data and other records
of Seller relating to the Hosted Business or developed by
Seller for exclusive use in the Hosted Business; all records
regarding the Occupational Safety and Health Act and other
governmental examinations and clearances related to the Hosted
Business; provided, however, that Seller may make and retain
copies of any records transferred to Buyer;
(i) All amounts earned for services performed after
the last day of the month of the Closing Date under ongoing
contracts assigned to Buyer with customers of the Hosted
Business; and
(j) All other goodwill and other general intangibles
relating to the Hosted Business.
Except as hereinafter specifically provided, the Purchased
Assets will be transferred by Seller to Buyer in accordance with this
Agreement free and clear of all liens, security interests or
encumbrances, other than (i) liens for taxes not yet due and payable
and (ii) other liens, charges or encumbrances incidental to the conduct
of the Hosted Business in the ordinary course or the ownership of the
Purchased Assets that were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and that do
not in the aggregate materially detract from the value of the Purchased
Assets or materially impair or interfere with the use thereof in the
operation of the Hosted Business (collectively, the "PERMITTED
ENCUMBRANCES"). For the avoidance of doubt, no lien, charge or
encumbrance of (i) B&L Financial, Inc., (ii) Security State Bank or
(iii) Xxxxxxx X. Xxxxxxx or Xxxx X. Xxxxxxx constitutes a "Permitted
Encumbrance."
1.2 Excluded Assets. Except for the property, assets and
rights specifically described in SECTION 1.1 of this Agreement as
included in the Purchased Assets, all of Seller's other property,
assets and rights are excluded from sale to Buyer (the "EXCLUDED
ASSETS"), including, but not limited to:
(a) Cash and cash equivalents;
(b) All securities owned by Seller;
(c) All rights of Seller under any claims, deposits,
prepayments, refunds, causes of action, choses in action,
rights of recovery, rights of set off and rights of recoupment
(including any such items relating to the payment of taxes)
not directly relating to the Purchased Assets, including
without limitation, any federal or state income tax refund;
(d) All accounts, notes or other receivables due to
Seller;
(e) All amounts earned for services performed,
whether billed or unbilled, through the month of the Closing
Date under ongoing contracts with customers of the Hosted
Business;
(f) The corporate charter, qualifications to conduct
business as a foreign corporation, arrangements with
registered agents relating to foreign qualifications, taxpayer
and other identification numbers, general ledgers, tax
returns, seals, minute books, stock transfer books and similar
documents of Seller relating to the organization, maintenance
and existence of Seller as a corporation (provided that Buyer
shall have access thereto to the extent reasonably necessary
for the operation of the Hosted Business and the preparation
of tax returns and financial statements of Buyer following the
Closing Date);
(g) Any of the rights of Seller under this Agreement
or any other agreement between Seller and Buyer entered into
on or after the date of this Agreement in accordance with the
terms hereof; and
(h) All of Seller's rights under the Red Wing
Agreement and all of the assets relating to or used in
connection with the Red Wing Business or which are subject to
the Red Wing Agreement.
2. PURCHASE CONSIDERATION.
2.1 Generally. The aggregate consideration to be paid for the
Purchased Assets shall be an amount equal to the sum of $650,000 (the
"PURCHASE PRICE").
2.2 Payment of Purchase Price. At the Closing, against
delivery to the Buyer of appropriate instruments of transfer,
conveyance and assignment with respect to the Purchased Assets, the
Buyer shall pay the Purchase Price by delivering a check made payable
to Seller.
2.3 Allocation of Purchase Price. Buyer and Seller shall agree
on the manner in which the Purchase Price (and other capitalizable
costs of the transactions contemplated by this Agreement) shall be
allocated to the Purchased Assets (the "PURCHASE PRICE ALLOCATION").
Neither Seller nor Buyer will take a position inconsistent with the
Purchase Price Allocation for all federal, state, local and foreign tax
purposes for any tax years or periods, including the determination of
taxable gain or loss on the sale of the Purchased Assets.
3. ASSUMPTION OF LIABILITIES. Except as hereinafter specifically
provided, Buyer shall not assume any liabilities or obligations of Seller and
Seller shall be solely liable for all liabilities and obligations arising from
or in connection with ownership of the Purchased Assets or operation of the
Hosted Business prior to the Closing Date, whether or not reflected in its books
and records. Subject to the conditions of this Agreement, on the Closing Date,
Buyer shall assume only the following liabilities and obligations of Seller
(collectively, the "ASSUMED LIABILITIES"):
(i) Obligations of Seller arising under the Service
Contracts;
(ii) Obligations of Seller under the Purchase Orders;
(iii) Obligations of Seller arising from and after the
Closing Date under the Contracts; and
(iv) Warranty obligations of Seller related to or arising
from the Hosted Business.
4. CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place at the offices of Xxxxxx Xxxxxxx
Xxxxxx & Brand, LLP, 3300 Xxxxx Fargo Center, 00 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, at 2:00 p.m. on March 14, 2003 or such time as
Buyer and Seller may mutually agree (the "CLOSING DATE"). At the Closing (a)
Buyer shall (i) deliver to Seller the Purchase Price, together with the amounts
contemplated by SECTION 10.2 hereof, in immediately available funds (ii) deliver
to Seller the various certificates, instruments and documents referred to in
SECTION 9, (iii) deliver to Seller the Assignment and Assumption Agreement in
the form of Exhibit A hereto (the "ASSIGNMENT AND ASSUMPTION AGREEMENT") and
such other assumptions as Seller may reasonably request to evidence the
assumption by Buyer of the Assumed Liabilities, and (iv) deliver to Seller the
Termination Agreement in substantially the form attached as Exhibit B hereto,
and (b) Seller shall (i) deliver to Buyer the Assignment and Assumption
Agreement and such bills of sale, assignments and other documents of transfer
reasonably required to transfer to Buyer the interest of Seller in the Purchased
Assets, (ii) deliver to Buyer the various certificates, instruments and
documents referred to in SECTION 8, and (iii) deliver to Buyer the Termination
Agreement.
5. LABOR AND EMPLOYMENT MATTERS. Immediately following the Closing,
Buyer shall offer employment, contingent on the Closing and effective as of the
Closing Date, to each person who is employed by the Seller in the conduct of the
Hosted Business and who is listed on SCHEDULE 5 (the "HIRED EMPLOYEES") on terms
and conditions established by the Buyer, provided that each such person shall be
hired and employed for a minimum of sixty (60) days following the Closing Date
at a salary at least equal to the individual's salary in effect as of February
1, 2003, as listed on SCHEDULE 5, unless otherwise agreed by such individual. In
the event Buyer terminates the employment of any of the Hired Employees within
one (1) year from the Closing Date, Buyer agrees to pay to such employees a
severance equal to one (1) month's salary. On the Closing Date, or as soon as
practicable thereafter, but in no event later than the earlier of the date
required by applicable law or the date that would otherwise have been the next
regularly scheduled payday for each such person, Seller shall pay each such
person all accrued wages, salary, commission, bonus, accrued vacation and other
required employee compensation payments for all periods through the Closing
Date.
6. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents
and warrants to Buyer that, except as provided herein:
6.1 Corporate Organization-Seller. Seller is a corporation
duly organized and validly existing, is in good standing under the laws
of the State of Minnesota, and has the power and authority to execute
and deliver this Agreement, to consummate the transactions contemplated
hereby and to own its properties and carry on its business as now being
conducted. True and correct copies of the Articles of Incorporation, as
amended to date, and Bylaws of Seller have been made available to
Buyer.
6.2 Qualification to do Business. Seller is duly qualified to
do business and is in good standing under the laws of the State of
Minnesota. The conduct of the Hosted Business as currently conducted by
Seller does not require Seller to be qualified to do business in any
jurisdictions other than the State of Minnesota.
6.3 Corporate Power. Seller has the power to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby.
6.4 Corporate Authority. All actions on the part of the Seller
necessary for the authorization, execution and delivery of this
Agreement, the Assignment and Assumption Agreement, and the other
agreements, documents and instruments contemplated hereby
(collectively, the "TRANSACTION AGREEMENTS"), and the consummation of
the transactions contemplated thereby, have been taken prior to the
date hereof. The Transaction Agreements are, or when delivered will be,
legal, valid and binding obligations of Seller, enforceable in
accordance
with their respective terms except that the enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to or affecting
creditors' rights generally or (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding at law or in equity) (collectively, the "ENFORCEMENT
EXCEPTIONS").
6.5 Conflicting Agreements, Governmental Consents. The
execution and delivery by Seller of the Transaction Agreements, the consummation
of the transactions contemplated thereby, and the performance or observance by
the Seller of any of the terms or conditions thereof will not (a) conflict with,
or result in a breach or violation of the terms or conditions of, or constitute
a default under, or result in the creation of any lien on any of the Purchased
Assets pursuant to, the Articles of Incorporation or Bylaws of Seller, any award
of any arbitrator, or any indenture, contract or agreement (including any
agreement with security holders), instrument, order, judgment, decree, statute,
law, rule or regulation to which Seller or the Purchased Assets is subject,
including any agreement with B&L Financial, Inc. or Xxxxxxx X. Xxxxxxx or Xxxx
X. Xxxxxxx or (b) require any filing or registration with, or any consent or
approval of, any federal, state or local governmental agency or authority.
6.6 Actions, Suits, Proceedings. There are no requests,
notices, investigations, claims, demands, actions, suits or other legal or
administrative proceedings pending or, to the knowledge of Seller, threatened
against Seller or any of their property in any court or before any federal,
state, municipal or other governmental agency that, (a) if decided adversely to
Seller, would have a material adverse effect upon the Hosted Business or
Purchased Assets, (b) seek to restrain or prohibit the transactions contemplated
by this Agreement or obtain any damages in connection therewith, or (c) in any
way call into question the validity of the Transaction Agreements; nor is Seller
in default with respect to any order of any court or governmental agency entered
against it in respect of the Hosted Business or Purchased Assets.
6.7 No Material Violations. Seller is not in material
violation of any applicable law, rule or regulation relating to the Hosted
Business or any of the Purchased Assets. Seller has not received any
communications containing any requests, notices, investigations, claims,
demands, actions, administrative proceedings, hearings or other governmental
claims or proceedings against Seller alleging or investigating the existence of
any such violation.
6.8 Customers and Suppliers. SCHEDULE 6.8 lists all customers
and material suppliers of Seller relating to the Hosted Business, referencing
the Contracts with each such customer or supplier or, if such agreement is oral,
in each case setting forth the material terms of the purchase or supply
agreements with such customer or supplier including the effective date, term,
price and quantity terms of such agreements.
6.9 Employee Plans. Set forth on SCHEDULE 6.9 is a list of all
pension, profit sharing, retirement, stock purchase, stock option, bonus,
incentive compensation and deferred compensation plans, all life, health,
dental, accident or disability plans, workers' compensation and other insurance
plans, all severance or separation plans, and any other employee benefit plans,
practices, policies or arrangements of any kind, whether written or oral, that
are maintained by Seller for the benefit of (or under which Seller has any
obligations, whether absolute or contingent,
to) any of Seller's employees (including former employees) engaged in the
operation of the Hosted Business, including but not limited to any "employee
benefit plan" that is subject to the Employee Retirement Income Security Act of
1974 ("ERISA") (individually a "PLAN" and collectively the "PLANS"). Seller has
made available to Buyer true and correct copies of each of the Plans and of any
related trust agreements, insurance contracts or other related agreements.
Seller has also made available to Buyer, with respect to each of the Plans, the
most recent summary plan description, if any. Each of the Plans complies in all
material respects with ERISA, the Internal Revenue Code of 1986, as amended (the
"CODE"), and all other statutes, rules and regulations, agreements and
instruments by which it is governed, and no event has occurred that could result
in the imposition of an excise tax, penalty or other liability on Seller, a Plan
or any fiduciary with respect to a Plan. All applicable ERISA requirements as to
the filing of reports, documents and notices regarding the Plans with the
Department of Labor, the Internal Revenue Service and the Pension Benefit
Guaranty Corporation, and the furnishing of such documents to participants and
beneficiaries on or prior to the date hereof, have been complied with in all
material respects. There are no actions, suits, investigations, or proceedings
pending or, to the knowledge of Seller, threatened against the Plans or any
fiduciaries thereof respecting their duties to the Plans or the assets or any
trust under any of the Plans. At no time during the 72-month period preceding
the Closing Date have the Seller or any entity aggregated with the Seller under
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA maintained
or contributed to any plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA, or any plan that is a defined benefit pension plan subject
to Title IV of ERISA.
Buyer will not have any liability (whether actual, potential
or contingent) on or after the Closing Date with respect to any Plan. Buyer also
will not have any such liability on or after the Closing Date with respect to
any plan, program or arrangement (i) that is not a Plan, (ii) that is or was
maintained or contributed to by Seller or by any entity that is or was at any
time in the past aggregated with Seller under Code Section 414, and (iii) that
would be a Plan if it covered any employee engaged in the operation of the
Hosted Business.
6.10 Labor Matters. There are no existing labor disputes or
disturbances involving the Hosted Business that have a material adverse effect
on the Hosted Business or the future prospects of the Hosted Business or the
Purchased Assets. Except with respect to Xxxx X. Xxxxxxx, there are no existing
employment agreements or collective bargaining agreements between Seller and any
of the Hired Employees or any collective bargaining unit representing any such
employees, and no such agreements are currently in the process of being
negotiated. No petition has been filed or is pending with the National Labor
Relations Board by any labor organization or any group of employees for an
election or certification regarding the representation of any of the Hired
Employees by a labor organization. There is no present solicitation or campaign
by any labor organization or employee for the representation of Seller's
employees and the Hired Employees by a labor organization.
6.11 Title to Personal Property. Seller has good title to or a
valid leasehold in all personal property included in the Purchased Assets, free
and clear of all mortgages, liens, pledges, charges and encumbrances, other than
Permitted Encumbrances. For the avoidance of doubt, neither (i) B&L Financial,
Inc., (ii) Security State Bank or (iii) Xxxxxxx X. Xxxxxxx or Xxxx X. Xxxxxxx
have any lien or other claim on any of the Purchased Assets.
6.12 Condition of Purchased Assets. All of the tangible
Purchased Assets necessary for the conduct of the Hosted Business are free from
defects, have been maintained in accordance with normal industry practice, and
are in good operating condition and repair (subject to normal wear and tear).
6.13 Contracts. SCHEDULE 1.1(d) sets forth correctly all
contracts, indentures, guarantees, leases, commitments or other agreements
related to the Hosted Business to which Seller is a party or by which either is
bound except Purchase Orders. Seller and, to the knowledge of Seller, each other
party thereto have substantially performed all obligations required to be
performed by it to date, and are not in default in any material respect, under
any of the instruments or agreements described above. Except for those
instruments and agreements that by their terms may be terminated by third
parties with a notice period of two months or less, as to which no
representation with regard to assignment is made, and except for those
instruments and agreements set forth on SCHEDULE 6.13 (the "UNASSIGNABLE
AGREEMENTS"), the instruments and agreements described above that are to be
assigned to Buyer hereunder are each in full force and effect and are assignable
to Buyer without the consent of third parties, and Seller has not waived or
assigned to any other person any of its rights thereunder. Seller has delivered
to Buyer true and correct copies of all such contracts, indentures, guaranties,
leases, commitments and other agreements.
6.14 Intellectual Property Rights.
(a) SCHEDULE 6.14(a) sets forth a complete and
accurate list of (i) all filed patent applications and patents
issued with respect to the Intellectual Property, and all
reissues, reexaminations and extensions thereof, and all
divisionals, substitutions, renewals, continuations and
continuations-in-part thereof; (ii) all filed trademark,
service xxxx, and trade name applications and all registered
trademarks and service marks, all reserved trade names, and
all registered Internet domain names included in the
Intellectual Property, and all extensions and renewals
thereof; and (iii) all registered copyright applications and
registered copyrights in the Intellectual Property, together
with all renewals, extensions, reversions or restorations
thereof and therefor (collectively, the "REGISTERED
INTELLECTUAL Property"). All of Seller's rights, such as they
are, in such Registered Intellectual Property are in full
force and effect and will not expire or require renewal until
the respective dates (if any) set forth on SCHEDULE 6.14(a).
All statements and representations made by Seller in any
pending Intellectual Property applications, filings or
registrations relating to the Hosted Business or Seller were
true in all material respects as of the time they were made
and remain true as of the date of this Agreement. Seller has
delivered to Buyer true and complete copies of all copyright
registrations, trademark registrations, patents, and any
applications therefor, or filings related thereto, made by or
on behalf of Seller relating in any way to the Intellectual
Property or the Hosted Business.
(b) The documentation and the source code with its
embedded commentary, descriptions and indicated authorships,
the specifications and the other informational materials that
describe the operation, functions and technical
characteristics applicable to the Proprietary Software
Products include sufficient documentation in the form of
manufacturing and engineering plans, blueprints, designs,
process instructions, formulae, quality assurance protocols
and procedures and the like and are complete in all material
respects, have
been faithfully and accurately compiled in accordance with
standards generally practiced by companies whose principal
business is creation or development of software and are
sufficient to permit persons who are reasonably skilled and
proficient in the design, manufacture and sale of software
products as now being produced to continue the same in the
ordinary course of business and to support and maintain the
products and services and enforce their rights to control or
prevent use of such Proprietary Software Products by others.
The Proprietary Software Products under development by Seller
are being developed in accordance with standards generally
practiced by companies whose principal business is creation or
development of software.
(c) SCHEDULE 1.1(e) is an accurate and complete list
of Intellectual Property included in the Purchased Assets and
represents all intellectual property and intellectual property
rights as are necessary or useful for the ownership of the
Software and the conduct of the Hosted Business as currently
conducted.
(d) SCHEDULE 6.14(d) is a complete and accurate list
of each item of Intellectual Property included in the
Purchased Assets that any third party owns and that Seller has
the right to use pursuant to a license, sublicense, or other
agreement, including off-the-shelf software, together with a
list of such agreements. Except for the Unassignable Reseller
Agreements set forth on SCHEDULE 6.13, each agreement
specified on SCHEDULE 6.14(d) is legal, valid, binding,
enforceable, and in full force and effect, and Seller is not
in breach, and no circumstances or grounds exist that would
give rise to a claim of breach or right of rescission,
termination, revision or amendment of any of such agreements,
including, without limitation, the signing of this Agreement
or the Closing. Seller has sole, exclusive, valid and
unencumbered title to rights granted in the agreements listed
on SCHEDULE 6.14(d) and has not granted any liens, mortgages,
encumbrances, licenses or other rights thereon or therein
except as disclosed on SCHEDULE 6.14(d). Except as disclosed
on SCHEDULE 6.14(d), Seller is not obligated to pay royalties,
fees, or other payments to any owner of, applicant for,
licensor of, or other claimant to any of the Intellectual
Property included in the Purchased Assets.
(e) Except for the Intellectual Property listed on
SCHEDULE 6.14(d), Seller owns sole, exclusive, valid, clear
and unencumbered title to all Intellectual Property included
in the Purchased Assets, and has not granted any liens,
mortgages, encumbrances, licenses or other rights thereon or
therein.
(f) Except as disclosed on SCHEDULE 6.14(d), Seller
has not sold, assigned, conveyed or otherwise transferred, by
oral or written agreement, expressly or impliedly, any rights,
title or interest in or to the Intellectual Property. Seller
has delivered to Buyer a true and complete copy of each
agreement disclosed on SCHEDULE 6.14(d), including, without
limitation, all amendments, waivers or other changes thereto.
(g) Except for the Unassignable Reseller Agreements,
Seller has full right, power and authority to sell, transfer,
assign, convey and deliver to Buyer all of the Intellectual
Property included in the Purchased Assets. Except for the
Unassignable Reseller Agreements, if the consent of any third
party is required before Seller may rightfully transfer or
assign its rights in any Intellectual Property owned by a
third party, Seller has obtained such written consent and has
delivered a true and complete copy of the document evidencing
such
consent to Buyer. Except as set forth on SCHEDULE 6.14(g), the
Intellectual Property does not infringe any Patents,
Copyrights, Trademarks or Trade Secrets or other proprietary
rights of any third party. No consents, rights or licenses are
required from any third party to exercise any rights with
respect to the Intellectual Property, except as disclosed on
SCHEDULE 6.14(d). Seller is not infringing upon, and has not
in the past infringed upon, any known right or claimed right
of any person or entity under or with respect to any
Intellectual Property included in the Purchased Assets (nor
has Seller received written notice with respect to any of the
foregoing). In connection with the operation of the Hosted
Business, Seller is not unlawfully using and has not
unlawfully used any confidential information, trade secrets or
proprietary information of others.
(h) Seller has not received any communications
alleging any interference, opposition, cancellation,
reexamination or other contest, proceeding, action, suit,
hearing, investigation, charge, complaint, demand, notice,
claim, dispute nor any claim of infringement, misappropriation
or other violation by Seller of any intellectual property or
other proprietary rights of any other individual or entity
relating to the Purchased Assets or the Hosted Business
pending or, to the knowledge of Seller, threatened against
Seller. Seller is not currently evaluating any intellectual
property of another person or entity (and have not conducted
any such evaluations in the past five years) to determine
whether a license thereof is necessary or desirable with
respect to the Hosted Business or whether such intellectual
property may otherwise have a material adverse effect on the
Hosted Business or Purchased Assets. No governmental agency or
authority has disputed Seller's right to obtain or continue
registration of any Intellectual Property of Seller included
in the Purchased Assets where Seller has applied for such
registration, except where such dispute has been resolved in
favor of issuing or continuing such registration. Except as
set forth on SCHEDULE 6.14(h), Seller has no reason to believe
that (i) any of the Intellectual Property included in the
Purchased Assets and owned or used by Seller in the Hosted
Business is invalid or unenforceable (whether due to the
existence of prior art, inequitable conduct such as patent
fraud or misuse, prior use or creation, abandonment or
otherwise), or (ii) any pending applications of Seller for
patents or for registration of other Intellectual Property
included in the Purchased Assets will be denied or will be
materially restricted or conditioned, or any prior art or
other information or circumstance exists which would cause
such denial, restriction or condition. All payments to
governmental agencies required to maintain the effectiveness
of any patents or any Registered Intellectual Property
included in the Purchased Assets have been timely paid.
(i) Seller has no agreement to indemnify any
individual or entity against any charge of infringement of any
Intellectual Property included in the Purchased Assets, other
than indemnification provisions normal and usual for Seller's
industry contained in Purchase Orders or Contracts arising in
the ordinary course of business.
(j) Employees and consultants of Seller have
performed all computer programming with respect to the
Intellectual Property included in the Purchased Assets and
employees and consultants of Seller have authored all user
documentation. Each individual and entity, including each
employee, agent, consultant, and contractor, who has
contributed to or participated in any way in the conception,
creation, reduction to practice and/or development of the
Intellectual Property included in the Purchased Assets was at
the time of such contribution or participation (i) a party to
and bound by a valid, enforceable, duly executed agreement
with Seller containing appropriate confidentiality provisions,
standard "work-made-for-hire"
provisions, in accordance with applicable law, and a valid
written assignment in favor of Seller as assignee that has
conveyed to Seller all right, title and interest in and to all
worldwide intellectual rights in the Copyrights, Patents,
Trademarks, Trade Secrets and other intellectual property
created, conceived, reduced to practice and/or developed by
such individual or entity in connection with the Software or
the Hosted Business, including, without limitation, all
worldwide copyrights and patent rights therein and thereto; or
(ii) a genuine employee (and not a subcontractor) of an entity
described in subsection (i) of this sentence bound by a valid,
enforceable, duly executed agreement with such entity
containing appropriate confidentiality provisions, standard
"work-made-for-hire" provisions, in accordance with applicable
law, and a valid written assignment in favor of such entity
(for the benefit of Seller) or in favor of Seller directly, as
assignee, that has conveyed to Seller all rights, title and
interests in and to all worldwide intellectual rights in the
Copyrights, Patents, Trademarks, Trade Secrets and other
intellectual property created, conceived, reduced to practice
and/or developed by such individual in connection with the
Software or the Hosted Business, including, without
limitation, all worldwide copyrights and patent rights therein
and thereto. Except as set forth on SCHEDULE 6.14(j), no
subcontractors of any person or entity have contributed to or
participated in the conception, creation, reduction to
practice and/or development of the Intellectual Property
included in the Purchased Assets. SCHEDULE 6.14(j) sets forth
the names and addresses of all entities and persons who have
performed work for Seller related to the Intellectual Property
and/or the Hosted Business, a description of the work
performed by each such person, and the dates on, or time
period(s) during, which each such person performed such work.
Seller has delivered to Buyer a true and complete copy of each
agreement under which each such person performed work for
Seller related to the Intellectual Property and/or the Hosted
Business.
(k) Except as disclosed on SCHEDULE 6.14(k), no
Intellectual Property of Seller included in the Purchased
Assets has been escrowed or stored, or is required to be
escrowed or stored, on behalf of or for the benefit of any
person or entity. No person or entity other than Seller and
its employees and consultants who have a "need to know" in
connection with the performance of their duties to Seller has
access or rights to the source code of the Software.
(l) Seller has used and is using commercially
reasonable methods to protect Seller's intellectual property
rights. To the knowledge of Seller, in no instance has the
eligibility of the Intellectual Property for protection under
applicable copyright or trademark law been forfeited to the
public domain by omission of any required xxxx, notice or any
other actions. Seller has promulgated and used commercially
reasonable efforts to enforce a commercially reasonable trade
secrets protection program. Without limiting the foregoing,
Seller has taken all commercially reasonable precautions to
protect the source code and documentation relating to the
Proprietary Software Products from disclosure except to
employees and consultants of Seller who had "a need to know"
the contents thereof in connection with the performance of
their duties to Seller and who had been instructed (in the
case of third parties, pursuant to a duly executed
confidentiality agreement) to maintain the confidentiality of
the Proprietary Software Products.
6.15 Warranties. SCHEDULE 6.15 lists all agreements of Seller
that contain written product warranties issued or made by Seller in
connection with the license of any product or the
rendition of any service relating to the Purchased Assets. Seller has
made no oral warranties to any of Seller's customers or potential
customers of the Hosted Business. Seller has no knowledge of any
existing or threatened material claim, or any facts upon which a
material claim could be based, against Seller for software or other
products that are defective, defectively designed or otherwise fails to
satisfy the terms of any product warranty. No material warranty or
other claims of a similar nature have been made against Seller related
to the Purchased Assets.
6.16 Licenses and Permits. There are no permits granted to or
by Seller in connection with the operation of the Hosted Business.
SCHEDULE 6.16 describes all material licenses granted to Seller in
connection with the operation of the Hosted Business by any federal,
state, provincial or local government or an agency thereof. Seller has
all material licenses and permits required by law or otherwise
necessary for the proper operation of the Hosted Business. All licenses
and permits granted to Seller are in full force and effect, and no
action to terminate, withdraw, not renew or materially limit or
otherwise change any such license or permit is pending or has been
threatened by any governmental agency or other party. The consummation
of the transactions contemplated by this Agreement will not violate the
provisions of, or require Buyer to reapply for, any such license or
permit. Seller has delivered to Buyer true and correct copies of all
such licenses and permits.
6.17 Taxes. Seller has filed all federal, state and local tax
returns required to be filed by it, and has paid all federal, state and
local income, profits, franchise, sales, use, property, excise,
payroll, and other taxes and assessments (including interest and
penalties) to the extent that such have become due. No claims for
additional taxes have been asserted against Seller and no audits are
pending with respect to any tax liabilities of Seller.
6.18 Capital Projects. No construction or other capital
projects are in progress, have been contracted for or, to the knowledge
of Seller, are required by applicable law or regulation in connection
with the operation of the Hosted Business.
6.19 Sufficiency of Purchased Assets. The Purchased Assets
constitute, and on the Closing Date will constitute, all of the assets
or property necessary for the operation of the Hosted Business as it is
currently conducted.
6.20 Trade Allowance. Seller does not have in effect any trade
allowance, billback, rebate, discount or similar program with its
customers. No supplier of Seller has in effect, or has had in effect,
and Seller has received no payments under, any trade allowance,
billback, rebate, discount or similar program pursuant to which Seller
has any actual or contingent right to receive payment.
6.21 Brokers and Finders. Seller has not has retained or
engaged any broker, finder or other financial intermediary in
connection with the transaction contemplated by this Agreement.
6.22 Full Disclosure. No representation or warranty by Seller
contained in this Article 6 contains any untrue statement of material
fact, or omits any material fact necessary to make the representations
or warranties contained herein not misleading.
7. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to Seller as follows:
7.1 Corporate Organization. Buyer is a corporation duly
organized and validly existing, is in good standing under the laws of
the State of Minnesota and each has the corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. True and correct copies of the
Articles of Incorporation (as amended to date) and Bylaws of Buyer have
been made available to Seller.
7.2 Conflicting Agreements, Governmental Consents. The
execution and delivery by Buyer of the Transaction Agreements to be
executed by it, the consummation of the transactions contemplated
thereby and the performance or observance by Buyer of any of the terms
or conditions thereof will not (a) conflict with, or result in a breach
or violation of the terms or conditions of, or constitute a default
under, its Articles of Incorporation or Bylaws, any award of any
arbitrator, or any indenture, contract or agreement (including any
agreement with shareholders), instrument, order, judgment, decree,
statute, law, rule or regulation to which either Buyer is subject, or
(b) require any filing or registration with, or any consent or approval
of, any federal, state or local governmental agency or authority.
7.3 Corporate Power. Buyer has the corporate power to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby.
7.4 Corporate Authority. All corporate action on the part of
Buyer necessary for the authorization, execution and delivery of the
Transaction Agreements, and the consummation of the transactions
contemplated thereby, have been taken prior to the date hereof. The
Transaction Agreements are, or when delivered will be, legal, valid and
binding obligations of Buyer, enforceable in accordance with their
respective terms except that the enforcement thereof may be limited by
the Enforcement Exceptions.
7.5 Brokers and Finders. Buyer has not retained any broker,
finder or other financial intermediary in connection with the
transactions contemplated by this Agreement.
7.6 Full Disclosure. No representation or warranty by Buyer
contained in this Article 7 contains any untrue statement of material
fact, or omits any material fact necessary to make the representations
or warranties contained herein not misleading.
8. CONDITIONS TO OBLIGATION OF BUYER TO CLOSE. The obligation of Buyer
to effect the closing of the transactions contemplated by this Agreement is
subject to the satisfaction or written waiver prior to or at the Closing of the
following conditions:
8.1 Representations and Warranties. The representations and
warranties of Seller contained in this Agreement shall be true and
correct in all material respects on the Closing Date, as if made on the
Closing Date.
8.2 Observance and Performance. Seller shall have observed and
performed in all material respects all covenants and agreements
required by this Agreement to be observed or performed by Seller on or
prior to or at the Closing Date.
8.3 Intentionally omitted.
8.4 Verification of Operating Results. Buyer shall have been
afforded the opportunity to review the invoices, purchase documents
relating to the cost of goods sold, production expenses and sales
expenses of Seller related to the Hosted Business in order to determine
the results of operations of the Hosted Business, and shall have
concluded that such results of operations are consistent in all
material respects with the results of operations for such periods
heretofore disclosed by Seller to Buyer.
8.5 Searches. Buyer shall have received, as of a date no more
than five (5) days prior to the Closing Date, Uniform Commercial Code
Searches against Seller from the Secretary of State of Minnesota and
from such other states and/or counties as Buyer shall reasonably
request, together with tax lien and judgment searches, in each case
certified by a reporting service satisfactory to Buyer. Seller shall
have obtained valid releases or terminations of any and all liens,
security interests and encumbrances against the Assets other than
Permitted Encumbrances and shall have delivered to Buyer evidence of
such releases or terminations satisfactory to Buyer.
8.6 Condition of Purchased Assets. The Purchased Assets shall
be functional for their intended purpose in all material respects on
the Closing Date.
8.7 Consents of Third Parties; Termination of Unassignable
Agreements. Buyer shall have received duly executed copies of any
consents necessary to permit the assignment of the contracts, leases,
commitments and agreements set forth on SCHEDULE 6.13, except for the
Unassignable Agreements. Seller shall have delivered termination
notices for all of the Unassignable Agreements.
8.8 Notices. Seller shall have made all filings and
registrations with all federal, state and local governmental agencies
or authorities required to be made by Seller in connection with the
execution and delivery hereof and the consummation of the transactions
contemplated hereby.
8.9 Regulatory Approvals. Buyer shall have received all
authorizations, consents and approvals of governments and governmental
agencies required in connection with the transactions contemplated by
this Agreement.
8.10 Secretary's Certificate. Seller shall have delivered to
Buyer copies of all necessary corporate resolutions authorizing the
execution, delivery and performance by Seller of this Agreement, the
other Transaction Agreements and the transactions contemplated hereby
and thereby, certified to be true, correct, complete, unchanged and in
full force and effect on the Closing Date by the Secretary or an
Assistant Secretary of Seller, accompanied by such other certifications
by such Secretaries as are requested by Buyer, in a form acceptable to
Buyer.
8.11 Copies of Documents. Buyer shall have received accurate
and complete copies of all documents and instruments listed in any of
the schedules or exhibits to this Agreement (and of any amendments,
waivers or similar supplementary materials related thereto).
8.12 Legal Opinion. Buyer shall have received an opinion,
dated as of the Closing Date, in form and substance acceptable to
Buyer, from Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP, counsel to Seller.
8.13 No Legal Actions. No court or governmental authority of
competent jurisdiction shall have issued an order restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement, and no person, firm, corporation or
governmental agency shall have instituted an action or proceeding which
shall not have been previously dismissed seeking to restrain, enjoin or
prohibit the consummation of the transactions contemplated by this
Agreement.
8.14 Closing Documents. Buyer shall have received such bills
of sale, assignments and other documents of transfer, in a form
acceptable to Buyer, reasonably required to transfer to Buyer the
interests of Seller in the Purchased Assets consistent with the terms
of this Agreement.
8.15 Proceedings and Documents. All corporate and other
proceedings and actions taken in connection with the transactions
contemplated hereby and all certificates, opinions, agreements,
instruments and documents mentioned herein or incident to any such
transaction shall be reasonably satisfactory in form and substance to
Buyer and its counsel.
9. CONDITIONS TO OBLIGATION OF SELLER TO CLOSE. The obligation of
Seller to effect the transactions contemplated by this Agreement is subject to
the satisfaction or written waiver prior to or at the Closing of the following
conditions:
9.1 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true and
correct in all material respects on the Closing Date, as if made on the
Closing Date.
9.2 Observance and Performance. Buyer shall have observed and
performed in all material respects all covenants and agreements
required by this Agreement to be observed or performed by Buyer on or
prior to or at the Closing Date.
9.3 Intentionally omitted.
9.4 Secretary's Certificate. Buyer shall have delivered to
Seller copies of all necessary corporate resolutions of Buyer
authorizing the execution, delivery and performance by Buyer of this
Agreement, the other Transaction Agreements and the transactions
contemplated hereby and thereby, certified to be true, correct,
complete, unchanged and in full force and effect on the Closing Date by
the Secretary or Assistant Secretary of Buyer accompanied by such other
certifications by such Secretary as are requested by Seller, in a form
acceptable to Seller.
9.7 Notices. Buyer shall have made all filings and
registrations with all federal, state and local governmental agencies
or authorities required to be made by Buyer in connection with the
execution and delivery hereof and consummation of the transactions
contemplated hereby.
9.8 Regulatory Approvals. Buyer shall have received all
authorizations, consents and approvals of governments and governmental
agencies required in connection with the purchase and sale contemplated
by this Agreement.
9.9 Legal Opinion. Seller shall have received an opinion,
dated as of the Closing date, in form and substance acceptable to
Seller, from Faegre & Xxxxxx LLP, counsel to Buyer.
9.10 No Legal Actions. No court or governmental authority of
competent jurisdiction shall have issued an order restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement, and no person, firm, corporation or
governmental agency shall have instituted an action or proceeding which
shall not have been previously dismissed seeking to restrain, enjoin or
prohibit the consummation of the transactions contemplated by this
Agreement.
10. OTHER COVENANTS.
10.1 Termination of License Agreement. Buyer and Seller have
entered into that certain (a) Application Service Provider Software
License Agreement dated December 28, 2001, (b) Software License
Agreement dated April 8, 2002, and (c) Affiliate Agreement dated
December 28, 2000 (collectively, the "LICENSE Agreements"). At the
Closing, the parties shall execute and deliver a Termination and
Release Agreement relating to the License Agreements in substantially
the form attached hereto as EXHIBIT B (the "TERMINATION AGREEMENT"),
which shall provide for the termination of the License Agreements and
the mutual release of the parties for all claims arising under or
relating thereto.
10.2 Payment of Seller Expenses. At or prior to the Closing,
Buyer agrees to reimburse Seller for the expenses of Seller incurred in
connection with the transactions contemplated hereby, not to exceed
$150,000 in the aggregate, including the fees of Xxxxxx Xxxxxxx Xxxxxx
& Brand, LLP, not to exceed $25,000.
10.3 Termination of Unassignable Agreements. Buyer will take
all actions necessary to terminate the Unassignable Agreements.
10.4 ERISA Matters. Seller will satisfy all obligations under
Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA, or
any comparable law, relating to the continuation of health or other
coverage to any employee or former employee of Seller (or any dependent
or former dependent of such an employee or former employee) with
respect to any qualifying event that occurred on or prior to the
Closing Date (including any qualifying event that occurs on the Closing
Date as a result of the consummation of the transactions contemplated
by this Agreement), or that may occur after the Closing Date with
respect to any employee benefit plan maintained by Seller after the
Closing Date.
10.5 Termination of UCC Financing Statements. Within 20 days
of the Closing Date, Seller will (a) take all actions necessary to
terminate (i) UCC-1 Financing Statement File No. 2301692 in favor of
B&L Financial, Inc. filed with the State of Minnesota on February 22,
2001 listing Seller as the debtor, (ii) UCC-1 Financing Statement File
No. 2294123 in favor of Xxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxx filed
with the State of Minnesota on January 24, 2001 listing Seller as the
debtor, and (iii) UCC-1 Financing Statement File No. 1148311 in favor
of Xxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxx filed with the County
Recorder of Hennepin County, Minnesota on January 24, 2001 listing
Seller as the debtor and (b) provide Buyer with evidence from the
Secretary of State of the State of Minnesota and the County Recorder of
Hennepin County, Minnesota that such UCC-1 Financing Statements have
been terminated.
11. INDEMNIFICATION.
11.1 Indemnification of Buyer. Seller and its successors and
assigns agree to indemnify and hold harmless Buyer, its Affiliates (as
defined in Rule 12b-2 promulgated under the Securities Exchange Act of
1934, as amended) and their respective shareholders, directors,
officers, employees and agents thereof (collectively, the "BUYER
INDEMNITEES" and individually a "BUYER INDEMNITEE") against and with
respect to:
(a) Any and all losses, injuries, damages,
deficiencies, liabilities, costs, penalties, interest,
expenses and obligations, net of any offsetting gains, cost
savings or recoveries directly related thereto (collectively,
"LOSSES") directly or indirectly resulting or arising from the
operation of the Hosted Business and/or the ownership of the
Purchased Assets or from incidents or occurrences relating to
the Hosted Business or the Purchased Assets, prior to the
Closing, except for Losses relating to or resulting from the
Assumed Liabilities;
(b) Without limiting the generality of the foregoing,
any and all Losses directly or indirectly resulting or arising
from claims under any Plans, including without limitation,
claims by any participant therein or dependent of such
participant and claims by any governmental agency with respect
thereto;
(c) Any and all Losses directly or indirectly
resulting or arising from any misrepresentation or breach of
warranty on the part of the Seller, under this Agreement, the
other Transaction Agreements or any certificate, document,
agreement or instrument delivered pursuant hereto or thereto;
(d) Any and all Losses directly or indirectly
resulting or arising from any non-fulfillment of any covenant
or agreement on the part of the Seller under this Agreement,
the Transaction Agreements or any certificate, document,
agreement or instrument delivered pursuant hereto or thereto;
(e) Except as provided in SECTION 10.2, any and all
Losses directly or indirectly resulting or arising from the
termination of the employment of any employee of the Seller
related in any way to this Agreement, the Transaction
Agreements or the transactions contemplated thereby; and
(f) Any and all Losses directly or indirectly
resulting or arising from that certain Employment Agreement
dated as of November 25, 2002 between Seller and Xxxx X.
Xxxxxxx, the termination of Xx. Xxxxxxx'x employment with
Seller or any other obligation of Seller to Xx. Xxxxxxx; and
(g) Any and all demands, claims, actions, suits,
proceedings, assessments, judgments, costs and reasonable
legal and other expenses incident to the foregoing.
The indemnification obligations of Seller or their successors and
assigns hereunder relate to indemnification for all Losses of a Buyer
Indemnitee, regardless of whether such Loss arises from a third-party claim
against such Buyer Indemnitee or otherwise.
Notwithstanding anything to the contrary provided elsewhere in this
Agreement:
(i) The Seller or its successors and assigns will be
liable to Buyer Indemnitees for amounts payable under
this SECTION 11.1 (other than claims based on (A)
fraud or intentional misrepresentations by Seller,
(B) a breach of Sections 6.11 and 10.5 by Seller or
(C) Losses relating to Section 11.1(f), as to which
no deductible shall apply) only to the extent such
amounts in the aggregate exceed $15,000 and in no
event shall Seller or its successors and assigns be
liable to Buyer Indemnitees under this SECTION 11.1
(other than claims based on (A) fraud or intentional
misrepresentations by Seller, (B) a breach of
Sections 6.11 and 10.5 by Seller or (C) Losses
relating to Section 11.1(f), as to which no
limitation shall apply) for amounts which exceed in
the aggregate the Purchase Price;
(ii) The obligations of Seller and its successors and
assigns under this Agreement to indemnify Buyer
Indemnitees shall be of no force with respect to
claims under this SECTION 11.1 as to which a Buyer
Indemnitee has not given the Company written notice
describing the basis for such claim in reasonable
detail within twelve (12) months after the Closing
Date.
11.2 Indemnification of Seller by Buyer. Buyer hereby agrees
to indemnify and hold harmless Seller and its successors and assigns
and all Affiliates of Seller and its shareholders, directors, officers,
employees and agents thereof (collectively, the "SELLER INDEMNITEES"
and individually, a "SELLER INDEMNITEE") against and with respect to:
(a) Any and all Losses directly or indirectly
resulting or arising from the operation of the Hosted Business
and/or the ownership of the Purchased Assets, the Assumed
Liabilities, the Hired Employees (only with respect to
services provided by such employees following the Closing) or
from incidents or occurrences relating to such business,
assets, liabilities or employees subsequent to the Closing,
except to the extent the Seller is obligated to indemnify
Buyer therefor.
(b) Any and all Losses directly or indirectly
resulting or arising from any misrepresentation or breach of
warranty on the part of Buyer under this Agreement, the other
Transaction Agreements, or any certificate, document,
agreement, or instrument delivered pursuant hereto or thereto;
(c) Any and all Losses directly or indirectly
resulting or arising from any non-fulfillment of any covenant
or agreement on the part of Buyer under this Agreement, the
other Transaction Agreements or any certificate, document,
agreement, or instrument delivered pursuant hereto or thereto;
(d) Any and all demands, claims, actions, suits,
proceedings, assessments, judgments, costs and reasonable
legal and other expenses incident to the foregoing.
The indemnification obligations of Buyer hereunder relate to
indemnification for all Losses of a Seller Indemnitee, regardless of whether
such Loss arises from a third-party claim against such Seller Indemnitee or
otherwise.
Notwithstanding anything to the contrary provided elsewhere in this
Agreement:
(i) Buyer shall be liable to the Seller Indemnitees for
amounts payable under this SECTION 11.2 (other than
claims based on fraud or intentional
misrepresentations by Buyer, as to which no
deductible shall apply) only to the extent such
amounts in the aggregate exceed $15,000 and in no
event shall Buyer be jointly liable to the Seller
Indemnitees under this SECTION 11.2 (other than
claims based on fraud or intentional
misrepresentations by Buyer, as to which no
limitation shall apply) for amounts which exceed in
the aggregate the Purchase Price;
(ii) The obligations of Buyer under this Agreement to
indemnify the Seller Indemnitees shall be of no force
or effect with respect to claims under this SECTION
11.2 as to which a Seller Indemnitee has not given
Buyer written notice describing the basis for such
claim in reasonable detail within twelve (12) months
after the Closing Date.
11.3 Investigation Not a Defense. No investigation by Buyer or
its accountants, attorneys, financial advisors or personnel prior to,
pursuant to or after the date of this Agreement shall diminish or
obviate any of the representations, warranties, covenants or agreements
of the Seller contained in this Agreement or any other Transaction
Agreements. No investigation by Seller or their accountants, attorneys,
financial advisors or personnel prior to, pursuant to or after the date
of this Agreement shall diminish or obviate any of the representations,
warranties, covenants or agreements of the Buyer contained in this
Agreement or any other Transaction Agreements.
11.4 Procedure for Indemnification. If a third-party claim is
made against a Seller Indemnitee or a Buyer Indemnitee, and if such
indemnitee believes that such claim could give rise to a right of
indemnification, then such Seller Indemnitee or Buyer Indemnitee (an
"INDEMNITEE") shall give written notice to the party obligated to
provide indemnification hereunder (an "INDEMNIFYING PARTY") of such
claim as soon as reasonably practicable after such Indemnitee has
received notice thereof (provided that failure to give timely notice
shall not limit the indemnification obligations of the Indemnifying
Party hereunder except to the extent that the delay in giving, or
failure to give, such notice has a material adverse effect upon the
ability of the Indemnifying Party to defend against the claim). The
Indemnifying Party shall defend such claim, at the Indemnifying Party's
own expense and with counsel selected by the Indemnifying Party and
reasonably satisfactory to such Indemnitee, provided that an Indemnitee
shall at all times also have the right to fully participate in the
defense at its own expense (and may retain its own counsel at the
expense of the Indemnifying Party if it shall determine that
representation of it and the Indemnifying Party by the same counsel
would present a conflict). If the Indemnifying Party shall fail to
defend such claim within 10 days after notice thereof shall have been
given by an Indemnitee to the Indemnifying Party or if the Indemnifying
Party shall not diligently pursue such a defense, such Indemnitee shall
have the right, but not the obligation, to undertake the defense of,
and to compromise or settle (exercising reasonable business judgment),
the claim on behalf, for the account, and at the risk and expense
(including without limitation the payment of the reasonable attorneys'
fees of such Indemnitee regardless of whether the Indemnitee prevails
against the third party claim) of the Indemnifying Party. If the
Indemnifying Party assumes the defense of such claim, the obligation of
the Indemnifying Party hereunder as to such claim shall include taking
all steps necessary in the defense or settlement of such claim.
The Indemnifying Party shall not consent to the entry of any
judgment or settle or compromise any third-party demands, claims,
actions, suits or proceedings for which an Indemnitee has sought
indemnification from the Indemnifying Party unless it shall have given
such Indemnitee not less than 15 days prior written notice of the
proposed consent, settlement or compromise, and afforded such
Indemnitee an opportunity to consult with the Indemnifying Party
regarding the proposed consent, settlement or compromise, and shall not
consent to the entry of any judgment or enter into any settlement or
compromise without the approval of such Indemnitee. An Indemnitee shall
not unreasonably withhold or delay its approval of a proposed consent,
settlement or compromise. In determining whether to give its approval,
an Indemnitee may consider whether the proposed consent, settlement or
compromise includes as an unconditional term thereof the giving by the
claimant to such Indemnitee of a release from all liability in respect
of such claim except the liability satisfied by the Indemnifying Party.
12. MISCELLANEOUS.
12.1 Expenses. Except as set forth in SECTION 10.2 hereof,
each party shall pay all of the costs and expenses incurred by it in
negotiating and preparing this Agreement (and all other agreements,
certificates, instruments and documents executed in connection
herewith), in performing its obligations under this Agreement, and in
otherwise consummating the transactions contemplated by this Agreement,
including without limitation its attorneys' fees and accountants' fees.
12.2 Survival. All representations, warranties and covenants
of the parties contained in this Agreement will remain operative and in
full force and effect, regardless of any investigation made by or on
behalf of the parties to this Agreement, until twelve (12) months after
the Closing Date, whereupon such representations, warranties and
covenants will expire (except for covenants that by their terms survive
for a longer period); provided, however, that the foregoing shall not
bar the parties hereto, and their respective successors and assigns,
from asserting at any time thereafter any cause of action based on the
untruth or inaccuracy of any other representation or warranty made
herein or in any written statement, certificate or schedule furnished
hereunder with an intent to deceive or defraud or with reckless
disregard for the truth or accuracy thereof, and further provided that
any representation or warranty that would otherwise terminate on such
date will continue to survive with respect to a claim for indemnity
made under SECTIONS 11.1 or 11.2 on or prior to such dates, until such
claim has been satisfied or otherwise resolved.
12.3 Assignment. Any party hereto without the prior written
consent of the other party may not assign this Agreement. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto, their successors and permitted assigns, and no person,
firm or corporation other than the parties, their successors and
permitted assigns shall acquire or have any rights under or by virtue
of this Agreement.
12.4 Covenant of Further Assurances. From time to time after
the Closing, without further consideration, Seller will execute and
deliver such other instruments of transfer and take such other actions
as Buyer may reasonably require to transfer the Purchased Assets to,
and vest title of the Purchased Assets in, Buyer, and to put Buyer in
possession of the Purchased Assets. Without limiting the foregoing,
Seller shall execute and deliver such instruments and take such other
actions as Buyer may reasonably request in connection with Buyer's
efforts to obtain patent, copyright, trademark or other statutory
protection for any part of the Intellectual Property. In the event that
it shall be necessary for Seller to qualify to do business as a foreign
corporation in any state after the Closing in order for Buyer to
enforce any material claim, Seller shall so qualify promptly upon
written request of Buyer.
12.5 Bulk Transfer Law. Buyer and Seller each hereby waive
compliance by Seller with the provisions of the "bulk sales," "bulk
transfer" or similar laws of any state.
12.6 Public Announcement. From and after the date hereof, no
party to this Agreement shall release information to the public
concerning this Agreement or the transactions contemplated herein
without the prior written consent of the other party unless required by
law, judicial or administrative order, or rule or regulation of the SEC
or any applicable securities exchange and full opportunity for prior
consultation is afforded to the other party to the extent practicable.
12.7 Entire Agreement. This Agreement, including the exhibits
and schedules attached to this Agreement, and the other Transaction
Agreements constitute the entire agreement and understanding among
Seller and Buyer with respect to the sale and purchase of the Purchased
Assets and the other transactions contemplated by this Agreement. All
prior representations, understandings and agreements between the
parties with respect to the purchase and sale of the
Purchased Assets and the other transactions contemplated by this
Agreement are superseded by the terms of this Agreement.
12.8 Amendment and Waiver. Any provision of this Agreement may
be amended or waived only by a writing signed by the party against
which enforcement of the amendment or waiver is sought.
12.9 Choice of Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Minnesota,
without regards to the conflict of laws provisions thereof, as though
all acts and omissions related to this Agreement occurred in the State
of Minnesota.
12.10 Jurisdiction and Venue. Seller and Buyer irrevocably
consent to the exclusive jurisdiction of the state and federal courts
located in Hennepin County, Minnesota, in any actions arising out of or
relating to this Agreement, and waive any other venue to which either
party might be entitled by domicile or otherwise.
12.11 Severability. The provisions of this Agreement shall,
where possible, be interpreted so as to sustain their legality and
enforceability, and for that purpose the provisions of this Agreement
shall be read as if they cover only the specific situation to which
they are being applied. The invalidity or unenforceability of any
provision of this Agreement in a specific situation shall not affect
the validity or enforceability of that provision in other situations or
of other provisions of this Agreement.
12.12 Facsimile Signature and Counterparts. This Agreement may
be executed by facsimile signature and in counterparts, each of which
shall be considered an original.
12.13. Notices. All notices given pursuant to this Agreement
shall be in writing and shall be delivered by hand or sent by United
States registered mail, postage prepaid, addressed as follows (or to
another address or person as a party may specify on notice to the
other):
(i) If to Buyer:
Stellent, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Faegre and Xxxxxx LLP
2200 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to Seller:
Active IQ Technologies, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP
3300 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12.14 Parties In Interest. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their
successors and permitted assigns, and nothing in this Agreement,
expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature under or by reason of this Agreement;
provided, however, that the Hired Employees are intended third party
beneficiaries with respect to Buyer's agreements and obligations set
forth in Section 5 hereof.
12.15 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
12.16 Remedies. Except as otherwise provided in Section 10,
nothing contained herein is intended to or shall be construed so as to
limit the remedies which any party may have against the other in the
event of a breach by any party of any representation, warranty,
covenant or agreement made under or pursuant to this Agreement, it
being intended that any remedies shall be cumulative and not exclusive.
12.17 Knowledge of the Parties. Where any representation or
warranty contained in this Agreement is expressly qualified by
reference to the best knowledge or to the knowledge of any of the
parties hereto, each of the parties hereto acknowledges and confirms
that, as to the matters that are the subject of such representations
and warranties, such party has made all appropriate inquiries of
officers and appropriate additional executives of such party (and
inquiries of such other individuals as, based on the results of the
inquiries and knowledge of such party's officers and other appropriate
executives, a reasonable person would deem prudent) and, when the
results of such inquiries indicated it to be prudent, has reviewed all
appropriate books and records of such party, but the terms "knowledge"
and "best knowledge" shall not mean, require or imply that the
representing party has made any further investigation or inquiry.
Remainder of Page Left Intentionally Blank -- Signature Page to Follow
The parties have caused this Asset Purchase Agreement to be executed
and delivered by their duly authorized officers as of the date and year first
above written.
BUYER: STELLENT, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
SELLER: ACTIVE IQ TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Xxxx X. Xxxxxxx
President and Chief Executive
Officer
[Pursuant to Item 601(b)(2) of Regulation S-K, certain the foregoing exhibits
and schedules have been omitted from this agreement. The Registrant will furnish
a copy of any omitted schedule or exhibit to the Commission upon request.]
