Exhibit 10.12
ASSET PURCHASE
AGREEMENT
This asset purchase agreement (this
“Agreement”) is dated March 14, 2005 and is between
VIVID LEARNING SYSTEMS, Inc., a Delaware corporation
(“Vivid”), and TRUEACTIVE SOFTWARE, Inc., a Washington
corporation (“TrueActive”).
WHEREAS, the respective Boards of Directors
and/or Executive Management Committees of Vivid and TrueActive have
determined that the purchase of the assets of TrueActive by Vivid
pursuant to the terms and conditions of this Agreement is
advisable, fair, and in the best interests of both Vivid and
TrueActive and their respective shareholders;
NOW, THEREFORE, in consideration of the
representations, warranties, covenants, and agreements contained
herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, agree as follows:
ARTICLE
I
THE
PURCHASE
Section 1.1
The Purchase
. This Agreement pertains to the purchase of
specific assets of TrueActive; it does not constitute a purchase of
the TrueActive corporate entity nor of the shares of TrueActive.
Upon the terms and subject to the conditions of this Agreement, at
the “Effective Time” as defined in Section 1.2, Vivid
shall have lawful, valid, and indefeasible title to all of the
assets of TrueActive delineated in Exhibit A , as well as
full rights to the names “WinWhatWhere”,
“TrueActive”, and all derivatives thereof.
Within forty-five (45) days from the date of
Closing, the original owner/shareholders of TrueActive shall
provide evidence to Vivid’s General Counsel that they are
conducting business under a new name. The purpose of the new entity
will be to receive any amortized purchase payments, such as royalty
and note payments, owed by Vivid to TrueActive. In recognition of
this, the parties agree that payables and receivables shall be
posted through the closing date. Vivid shall be responsible for
collecting the Interactive, Inc. receivable. All other receivables
shall remain payable to TrueActive. Vivid shall not be responsible
for satisfying any payables, except Vivid shall assume
responsibility for future Internet services (hosting and access)
required to support the sales of TrueActive/Vivid
products.
Section 1.2 Effective Time of the
Purchase . The Purchase shall become effective upon the
time of closing.
Section 1.3
Closing
. The closing of the transactions contemplated by
this Agreement shall take place March 14, 2005 at 1:30 p.m. local
time, at the corporate offices of Vivid located at 723 The Parkway,
Richland, Washington. At that time, Vivid shall deliver all funds
and documents required by this Agreement and TrueActive shall
deliver a bill of sale for the assets.
ARTICLE
II
CONSIDERATION
Section 2.1
Consideration
. In exchange for the assets sold by True Active
to Vivid and for certain promises as noted in Section 2.2, Vivid
shall issue to TrueActive:
|
a)
|
A check in the
amount of One Hundred Twenty Thousand Dollars
($120,000.00).
|
|
b)
|
A one (1) year
promissory note with principal due and owing of One Hundred Twenty
Thousand Dollars ($120,000.00), payable in monthly installments on
the first day of each month, beginning May 1st,
2005.
|
|
c)
|
Vivid warrants,
carrying a four (4) year expiration date from date of issue,
representing a total of Eighty Thousand (80,000) shares of Vivid
Common Stock with an exercise price of One Dollar ($1.00) per share
and a two (2) year vesting schedule, wherein one-eighth (1/8) shall
vest at the end of each quarter. Said warrants shall be distributed
as follows: Thirty-nine Thousand One Hundred Eleven (39,111) to
Richard E. Eaton; Forty Thousand Seven Hundred Eight (40,708) to M.
Susan Mikels; and One Hundred Eighty-one (181) to Theresa
Sullivan-Seidl. Such shares as may be issued pursuant to such
exercise will, upon issuance, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof.
|
|
d)
|
An employment
agreement with Richard E. Eaton to include terms as delineated in
the form of Exhibit B .
|
|
e)
|
A royalty of
eight percent (8%) - based on “net sale amount,”
defined as gross sale amount less credit card fees, shipping and
handling, applicable taxes, returns, reseller commissions, and
discounts - will be paid by Vivid to the corporate entity that is
the successor to TrueActive for all sales of: i) the existing
TrueActive Monitor product, as well as any developments thereto not
yet released; ii) products (un-enhanced) sold as “computer
monitoring” programs under the name
“WinWhatWhere”; and, iii) products under the name
“TrueActive” for a period of three (3) years from
Closing. Royalties will be calculated according to calendar
quarters ending in March, June, September and December and, where
applicable, royalty checks will be mailed within the first ten
working days of the end of each quarter.
|
|
f)
|
A royalty of
four percent (4%) - based on “net sale amount,” defined
as gross sale amount less credit card fees, shipping and handling,
applicable taxes, returns, reseller commissions and discounts -
will be paid by Vivid to the corporate entity that is the successor
to TrueActive for all sales of the Vivid branded or
“sub-branded” product(s) based on the existing
TrueActive products that include a refined dashboard and additional
Vivid-funded enhancements to the program for three (3) years after
the official launch of the program. Royalties will be managed as
noted in Section 2.1(e).
|
|
g)
|
Royalties will
not be due to TrueActive for sales of products other than those
delineated above. It is acknowledged by the parties that a portion
of the afore-noted consideration is designated specifically as the
consideration in exchange for the covenant not to compete and
client lists.
|
|
h)
|
Any and all
taxes incurred as a result of this Agreement shall be the
responsibility of the party incurring said taxes.
|
Section 2.2
Covenant Not To
Compete . TrueActive agrees that from and after closing,
a) the corporate officers of TrueActive will be reasonably
available to assist with the transition; and, b) will not, without
Vivid’s prior written consent, directly or indirectly invest
or engage in any business that is competitive with the Vivid
business lines, nor accept employment or render services to a
competitor as a director, officer, agent, employee, or consultant
for a period of two (2) years. This non-compete covenant shall be
binding on the officers, directors, and shareholders of
TrueActive.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES
Section 3.1
Representations and
Warranties of Vivid . Vivid hereby represents and warrants to
TrueActive that:
3.1.1
Organization; Corporate Power
and Authority . Vivid is a corporation duly and validly
organized and existing under the laws of the State of Delaware.
Vivid has full power, legal capacity, and authority to carry on its
business as it is now conducted, to own, lease, and operate its
assets and properties, and to enter into, perform, and comply with
this Agreement.
3.1.2
Authorization;
Enforceability; No Conflict . The
execution, delivery, and performance of this Agreement by Vivid
have been duly authorized by all necessary corporate action. This
Agreement constitutes the valid and binding obligation of Vivid,
enforceable in accordance with its terms except as limited by
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium, and similar laws affecting creditors generally and by
the availability of equitable remedies. The execution, delivery,
and performance of this Agreement will not, or at Closing shall
not, conflict with, or result in the breach or termination of, or
constitute a default under, the articles of incorporation or bylaws
of Vivid or any agreement, commitment, or instrument, judgment, or
decree to which Vivid is a party or by which Vivid or its
properties are bound.
3.1.3
Disclosure
. To the best knowledge of Vivid, neither this
Agreement nor any other instrument/document delivered to TrueActive
pursuant to this Agreement contains any untrue statement of any
material fact or omits to state any material fact required to be
stated or necessary in order to make the statements contained
herein or therein not misleading.
3.1.4
Finances
. Vivid represents that it is
financially capable of completing the purchase of
TrueActive’s business assets and fully understands its
financial obligations under this Agreement.
Section 3.2
Representations and
Warranties of TrueActive . TrueActive hereby represents and warrants to
Vivid that:
3.2.1
Organization; Corporate Power
and Authority . TrueActive is a corporation duly and validly
organized and existing under the laws of the State of Washington.
TrueActive has full power, legal capacity, and authority to carry
on its business as it is now conducted, to own, lease, and operate
its assets and properties, and to enter into, perform, and comply
with this Agreement.
3.2.2
Authorization; Enforceability; No Conflict .
The execution, delivery, and performance of this Agreement by
TrueActive has been duly authorized by all necessary corporate
action. This Agreement constitutes the valid and binding obligation
of TrueActive, enforceable in accordance with its terms except as
limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium, and similar laws affecting creditors
generally and by the availability of equitable remedies. The
execution, delivery, and performance of this Agreement will not, or
at Closing shall not, conflict with, or result in the breach or
termination of, or constitute a default under, the articles of
incorporation or bylaws of TrueActive or any agreement, commitment,
or instrument, judgment or decree to which TrueActive is a party or
by which TrueActive or the properties of TrueActive are
bound.
3.2.3
Liabilities . TrueActive has no liabilities or
obligations of any nature or kind, whether absolute or contingent,
known or unknown, accrued or unaccrued, due or to become due
related to the assets being purchased by Vivid.
3.2.4
Disclosure
. To the best knowledge of TrueActive, neither
this Agreement nor any other instrument/document delivered to Vivid
pursuant to this Agreement contains any untrue statement of any
material fact or omits to state any material fact required to be
stated or necessary in order to make the statements contained
herein or therein not misleading.
3.2.5
Title to
Assets . TrueActive is the record and beneficial owner of
the assets to be purchased by Vivid from TrueActive, free and clear
of any security interest, claim, lien, pledge, encumbrance, or
restriction whatsoever in law or in equity, and TrueActive’s
delivery and/or granting of access to Vivid on closing of this
Agreement will convey to Vivid lawful, valid, and indefeasible
title thereto, free and clear of any security interest, claim,
lien, pledge, encumbrance, or restriction unless listed on
Exhibit A .
Section 3.3
No Further Representations or
Warranties . The
parties hereto acknowledge that due diligence has occurred. As a
result, each party is adequately informed about the other’s
past, current, and planned business activities and strategies.
Accordingly, the representations and warranties contained in
Sections 3.1 and 3.2 of this Agreement are exclusive, and no
further representations or warranties shall be deemed to have been
made by either party pursuant to this Agreement.
ARTICLE
IV
SECURITIES LAW MATTERS AND
REGISTRATION RIGHTS
Section 4.1 Shares for Investment .
TrueActive covenants and agrees that the Vivid warrants to be
issued under this Agreement will be held for investment and not
with a view to distribute all or any part thereof in any
transaction which would constitute a “distribution”
within the meaning of the Securities Act of 1933 (hereinafter
“Securities Act”). TrueActive and/or its shareholders
will not, directly or indirectly, offer, transfer, sell, assign,
pledge, hypothecate, or otherwise dispose of any of the Vivid
warrants except in compliance with the Securities Act. TrueActive
and its shareholders agree that no transfer or assignment of any
Vivid warrants shall be effective if the assignment would violate
the provisions of the sec
|
