Exhibit 10.56
ASSET PURCHASE
AGREEMENT
This Asset Purchase Agreement
(“Agreement”) is entered into on this 26
th day of November, 2008 (“Closing
Date”) by and between New Horizons Computer Learning
Centers, Inc., a California corporation (“Buyer”)
on the one hand, and Technology Training & Services
Corporation, a California corporation (“Seller), Phyllis
Scott, an individual, and Clay Scott, an individual (collectively
“Shareholders”) on the other hand. Buyer,
Shareholders and Seller are hereinafter sometimes individually
referred to as a “Party” or collectively as the
“Parties”.
WHEREAS, Seller wishes to sell to
Buyer substantially all of Seller’s assets related to its
business of providing Online IT training and consulting services
for government and industry worldwide (the “Business”),
which shall consist of the assets set forth on
Exhibit “A” (the “Assets”);
and
WHEREAS, Buyer desires to acquire
the Assets from Seller; and
WHEREAS, concurrent with the
transaction described in this Agreement, Buyer desires to procure a
perpetual license from Terillian, an Oklahoma C Corporation
an affiliate of Seller (“Terillian”), and a license to
use certain technology known as “Lab on Demand”
(“LOD License”), the terms of which shall be
established as a condition precedent to the consummation of the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the
covenants and agreements contained herein, the Parties agree as
follows:
1.
Purchase of Assets; Excluded
Assets; Closing Date :
(a)
Pursuant to the terms and subject to
the conditions set forth in this Agreement, Seller hereby agrees to
sell, grant, transfer, convey, assign and deliver the Assets to
Buyer as of the close of business on Friday, November 30, 2008
(the “Acquisition Date”), which may be extended as
forth in Section 4(i) below and subject to fulfillment of
each of the conditions set forth in Section 4 below. The
Assets shall include, without limitation, all currently developed
virtual labs and associated intellectual property to continue the
development thereof, all computer hardware and software associated
with the Business, and all other assets which are more particularly
set forth on Exhibit “A”.
(b)
The Parties acknowledge and agree
that, other than as otherwise expressly stated in this Agreement,
no other assets, personal or real property of Seller is included in
this transaction.
2.
Consideration
: In consideration for the
transfer of the Assets, Buyer shall remit to Seller the
following:
(a)
$581,000 on the Closing Date in the
form of a $550,000 wire transfer to a bank account designated by
Seller in writing to Buyer, and the payment of $31,000 for
November payroll included in the December 6
th payroll paid directly by New
Horizons;
(b)
$100,000 per month on the 15
th day of each month for the five
(5) month period commencing December 15, 2008 and ending
April 15, 2009;
(c)
an earn-out payment, payable
annually each year commencing December 31, 2009 and ending
December 31, 2013, equal to fifty percent (50%) of the
cumulative net income of the Business as determined using U.S.
Generally Accepted Accounting Principles (“GAAP”)
consistently applied, from the Acquisition Date through that
calendar year end, less all earn-out payments made to Seller
previously, (each an “Earn-out Payment” and
collectively the “Earn-out Payments”). For
purposes of determining Net Income of the Business, it is
stipulated and agreed that all virtual lab development costs will
be treated as a current period expense, and income taxes shall be
deducted at a 30% rate. Moreover, no Earn-out Payment shall
be due until Buyer’s external auditors have approved the
financial statements of the Business for each such year that an
Earn-out Payment is otherwise due. Buyer shall remit $500,000
to Seller as an advance payment against future Earn-out Payments
(the “Advance Earn-out Payment”), which Advance
Earn-out Payment shall be payable March 31, 2009.
3.
Taxes
: Seller shall be solely
responsible for the payment of any and all taxes, excise and other
governmental charges or fees, if any, which are payable in
connection with the purchase of the Assets.
4.
Conditions Precedent to
Closing; Covenants; Extension of Closing Date
:
(a)
On the Closing Date, Seller shall
cause any UCC filings to be terminated or otherwise released such
that the Assets are unencumbered.
(b)
On the Closing Date, Buyer shall
have entered into a service agreement with TulsaConnect for data
hosting services of Seller’s hosted servers and associated
equipment at TulsaConnect’s data center in Tulsa,
Oklahoma,
