Asset Purchase and Sale Agreement

ASSET PURCHASE AND SALE AGREEMENT


AGREEMENT made as of the 16th day of October, 1997, by and between MOSBY, INC., a Missouri corporation, having its principal place of business at 11830 Westline Industrial Drive, St. Louis, MO 63146 (hereinafter referred to as "Mosby"), and A.D.A.M. SOFTWARE, INC., a Georgia corporation, having its principal place of business at 1600 Riveredge Parkway, Atlanta, Georgia 30328 (hereinafter referred to as ("Buyer").


WHEREAS, Buyer desires to purchase, and Mosby desires to sell, all of Mosby's rights, title and interest in the products as set forth on Schedule A attached hereto and made a part hereof (the "Products").


NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:


1. Sale of Assets.


1.1 Assets Sold. Mosby hereby sells, assigns and transfers to Buyer, and Buyer hereby purchases and acquires from Mosby the following (all of which are collectively referred to as the "Assets"):


(a) all worldwide rights, title and interest of Mosby in and to the Products including, but not limited to the source codes, scripts, HTML versions and all of the text contained in the Products, the literary content thereof, and Mosby's copyright ownership therein;


(b) all inventory of the Products owned by Mosby or any subsidiary or division of Mosby, any gold masters related to the Products, any public relations and marketing items, if any, related to the Products, and any artwork, subject to any third party agreements and restrictions, related to the Products, (hereinafter referred to as the "Inventory");


(c) all of Mosby's right, title and interest in and to the trademark ILIAD (the "Trademarks"),


(d) all of the goodwill of Mosby relating exclusively to the Products.


1.2 Returns. Buyer shall be solely liable for any amounts that may be payable or credited to customers for any returns of the Products made after the date hereof.


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1.3 Assumption of Liabilities. As of the date of this Agreement, Buyer hereby assumes and agrees to discharge the liabilities and obligations of Mosby to the extent relating to the periods after the date of this Agreement as and when the same shall become due under (i) the agreement dated April 30, 1997 and all subsequent amendments, with the University of Utah relating to ILIAD; (ii) the AMI-Japan distribution agreement dated April 17, 1996; and (iii) the licensing agreement dated July 8, 1997 between Orbis Broadcast Group and Mosby. The liabilities assumsed by Buyer pursuant to this Agreement are hereinafter sometimes collectively referred to as the "Assumed Liabilities."


1.4 Non-Assignability. Any other provision of this Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any right or interest of Mosby if an attempted assignment thereof, without a consent required or necessary for such assignment, would constitute a breach thereof or in any way adversely affect the rights of Buyer or Mosby thereunder. If such consent is not obtained or if an attempted assignment would be ineffective or would adversely affect any of Mosby's rights thereunder so that Buyer would not in fact receive all such rights, Mosby and Buyer will cooperate with each other in any commercially reasonable arrangement to provide for Buyer the benefits thereof; provided however, that Mosby shall not be required to accept any arrangement which would impose any cost, expense or liability on Mosby.


1.5 Acknowledgment. Mosby acknowledges that as between Mosby and Buyer, Buyer owns the trademarks to the names Physicians Home Assistant and Pediatricians Home Assistant (the "Buyer's Marks") and that Mosby has no rights, titles or interests in the Buyer's Marks.


2. Delivery of Instruments and Payment.


Simultaneously with the execution and delivery by Mosby of this Agreement to Buyer:


(a) Mosby shall execute and deliver to Buyer a Bill of Sale, and Assignment of Copyrights, and an Assignment of Trademarks in form and substance reasonably satisfactory to Buyer; and


(b) Buyer shall make the payment required by Section 3.2.


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3. Purchase Price.


3.1 Purchase Price. The purchase price for the Assets shall be FIFTY THOUSAND DOLLARS ($50,000) (the "Purchase Price") and the assumption of the Assumed Liabilities (collectively, the "Total Purchase Price").


3.2 Terms of Payment. Upon execution of this Agreement by the parties, Buyer shall pay Mosby the Cash Purchase Price, as defined below, and Buyer expressly agrees to assume and agrees to discharge the Assumed Liabilities.


4. Additional Covenants and Agreements of the Parties.


4.1 Use of Mosby's Name and Logo. Mosby grants Buyer the right to leave Mosby's name and logo on the existing Inventory being purchased from Mosby hereunder in the form it appears on the date hereof. However, Buyer agrees to remove Mosby's name and logo from all future printings of the Products.


4.2 Delivery of Inventory. Mosby shall promptly ship the Inventory located in the United States to Buyer's warehouse in Georgia. The Inventory is being sold F.O.B. Mosby's warehouse in Linn, Missouri.


4.3 Current and New Orders. As soon as practicable after the execution of this Agreement, Mosby shall provide Buyer with a list of any orders of the Products that have not been shipped for fulfillment by the Buyer (the "Unfulfilled Orders"). Buyer shall notify Mosby within five (5) business days from the date of receipt of the Unfulfilled Orders of any orders that it is unwilling to fill along with the reason for its refusal to fulfill such orders. Buyer covenants to review each order in good faith and will only reject an Unfulfilled Order if the material terms are unreasonable. For a period of sixty (60) days after the execution date of this Agreement, any orders that Mosby may receive for any of the Products shall be promptly forwarded to Buyer to the attention of: President and Chief Executive Officer.


4.4 Licensing Fees. In consideration for the Buyer's agreement to assume the duties and obligations contained in the Orbis Broadcast Group agreement, which expires June 30, 1998, Buyer may deduct from the Purchase Price Ten Thousand Dollars ($10,000) for a cash amount due to Mosby of Forty Thousand Dollars ($40,000) (the "Cash Purchase Price"). The Ten Thousand Dollar ($10,000) reduction of the Purchase Price represents a portion of the prepaid licensing fee Mosby received from the Orbis Broadcast Group.


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4.5 AMI Claims. Mosby grants Buyer any and all rights it currently has or may have against AMI and NFT under the Agreement dated December 30, 1996 pursuant to which Buyer acquired the Products from AMI and NFT. Mosby agrees to assist Buyer at Buyer's expense in pursuing any claim against AMI and NFT and Buyer agrees to indemnify Mosby for any liability out of the claim against AMI and NFT.


4.6 Consulting. Mosby agrees that for a period of two (2) weeks after execution of this Agreement, it will, where possible, make the appropriate personnel available on a timely basis to the Buyer for any reasonable requests as necessary to understand, maintain and support the Products. Buyer shall be responsible for costs and expenses, if any, that may be associated with such consulting services.


5. Representations and Warranties of Mosby.


Buyer hereby expressly acknowledges that the Assets are being sold, transferred and assigned by Mosby to Buyer, and that Buyer is accepting the purchase, transfer and assignment of the Assets, and each of them, from Mosby AS-IS AND WITH ALL FAULTS, AND WITHOUT ANY REPRESENTATIONS AND WARRANTIES OF ANY NATURE WHATSOEVER, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.


Buyer further acknowledges that it is aware that Mosby is currently engaged in litigation with respect to the HOUSECALL trademark and Mosby's right to the use and registration of such trademarks, and that as of the date hereof, Mosby will cease to prosecute all such litigation. It is expressly understood that Buyer assumes no liability with respect to the HOUSECALL trademark litigation, except that Buyer shall be responsible for any future use of such trademark.


Mosby represents and warrants to Buyer that Mosby is a corporation duly organized, validly existing and in good standing under the laws of the State of Missouri and has the full corporate power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly a ...