August 3, 2001
Mr. Xxxxxxx Xxxxxxxx
President/CEO
xxxxxxxx.xxx, Inc.
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
RE: Acquisition of Certain xxxxxxxx.xxx Assets
Dear Xxxx:
This Letter Agreement is to express ProQuest's offer to acquire certain assets
of xxxxxxxx.xxx, Inc. (the "booktech Assets") from xxxxxxxx.xxx, Inc. under the
conditions set forth below.
1. booktech Assets
The booktech Assets shall consist of:
a the list of xxxxxxxx.xxx customers from of December 31, 2000 to
present;
b all master coursepacks in whatever format (digital, paper, etc.);
c all orders for coursepacks that are in the possession of xxxxxxxx.xxx;
d all orders for coursepacks from customers from the date of acceptance
of this Letter Agreement forward;
e the use of office space, utilities, equipment, supplies and other
materials necessary to transfer coursepacks and orders to ProQuest so
long as booktech remains in the facilities;
f assistance and cooperation in the use of certain named xxxxxxxx.xxx
employees to support and transfer such coursepacks and orders as
consultants;
g the proprietary data of xxxxxxxx.xxx with respect to the customers,
content and products of the coursepack business as it currently
conducted by xxxxxxxx.xxx; and
h any other tangible or intangible asset necessary to conduct the
coursepack business of xxxxxxxx.xxx on a going-forward basis that is
discovered in due diligence.
2. Liabilities Assumed by ProQuest
a ProQuest shall assume no liabilities of xxxxxxxx.xxx, Inc. arising
before or after the Closing date. ProQuest's only liabilities will be
those which it incurs after Closing with respect to use of the
booktech Assets.
b ProQuest will not credit nor assume any liability for returns of
products produced and shipped by xxxxxxxx.xxx on its own behalf prior
to Closing.
3. Obligations of ProQuest
a ProQuest, at their option, will hire selected xxxxxxxx.xxx employees
as consultants for their services described in section 1(f) above; and
Mr. Xxxxxxx Xxxxxxxx
August 3, 2001
Page 2 of 3
b ProQuest will pay all costs related to the cost of producing and
shipping coursepacks.
4. Purchase Price
The Purchase Price shall consist of:
a A total cash payment of $400,000; $100,000, paid by wire, the
next business day after signing of this Letter Agreement and
$300,000 payable upon full compliance with Paragraph 5,
Conditions for Closing. Booktech will pay $50,000 of its accounts
to Harvard Business Publications within two weeks of acceptance
of this Letter Agreement.
b $0.30 per Dollar of net revenue recognized by ProQuest (based on
shipment of products and net of returns) from the xxxxxxxx.xxx
Assets through 12/31/01. Paid weekly from the date of this Letter
Agreement and credited against the cash payment above through the
Closing Date. If this transaction does not close, any amounts
paid hereunder are non-refundable.
c The maximum Purchase Price to be paid by ProQuest is $700,000.
5. Conditions for Closing
a Execution (signing by both parties) of a definitive agreement upon
completion of due diligence by ProQuest. Due diligence will be
completed by August 15th.
b Closing must occur on or before 10/01/01 or this transaction
terminates and each party assumes its own costs. Upon termination
ProQuest will return to xxxxxxxx.xxx all booktech Assets in its
possession and xxxxxxxx.xxx will retain all payments made to it by
ProQuest prior to termination.
c Xxxxxxxx.xxx, Inc. must obtain shareholder consent to the consummation
of this transition.
d Booktech has complied with its obligation to pay Harvard Business
Publishing pursuant to paragraph 4(a) above.
e Xxxxx must consent to the transaction and waive any conditions of
default in writing.
f An opinion letter from xxxxxxxx.xxx's counsel must be delivered that
expresses its view with respect to (1) the validity of this
transaction under the laws of Massachusetts and the laws of the state
of incorporation of xxxxxxxx.xxx, inc. (if different), (ii) the
validity of this transaction under xxxxxxxx.xxx's by-laws and (iii)
that the use of the funds by xxxxxxxx.xxx paid by ProQuest are within
the authority of the officers and shareholders of xxxxxxxx.xxx.
6. Conduct of Business
a From the date of acceptance of this Letter Agreement by xxxxxxxx.xxx
through Closing or termination, ProQuest shall undertake use of the
booktech Assets to perform all of the coursepack business related to
the booktech Assets. Xxxxxxxx.xxx shall immediately cease use of the
booktech Assets unless at the direction and for the benefit of
ProQuest.
b At ProQuest's direction, xxxxxxxx.xxx will assure re-direction of
telephone calls, email and Website traffic related to the booktech
Assets to sites designated by ProQuest.
Mr. Xxxxxxx Xxxxxxxx
August 3, 2001
Page 3 of 3
7. Due Diligence
a xxxxxxxx.xxx will cooperate with ProQuest and make relevant records
and people available to answer questions regarding the booktech Assets
prior to Closing.
8. Broker Fees
a ProQuest will pay 1/2 of the fee of Xxxx Xxxxxx up to a maximum of
$20,000 at the Closing.
This Letter Agreement is intended to create an offer capable of acceptance.
Completion of the transaction is expressly conditioned upon completion of due
diligence by ProQuest, the completion of definitive agreements and satisfaction
of the Closing conditions set forth above.
If this offer is acceptable to xxxxxxxx.xxx, please sign and fax and mail a
signed copy to me. I look forward to your response.
Regards,
Xxxxx X. Xxxxxxxxx
Senior VP, Business Development & General Counsel
Bell & Xxxxxx Information and Learning Company
c: Xxx Xxxxxxxx
ACCEPTED by xxxxxxxx.xxx, Inc.
_______________________________
Xxxxxxx Xxxxxxxx, President/CEO
Date __________________________
