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EXHIBIT 99.1 ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

EXHIBIT 99.1 ASSET PURCHASE AGREEMENT | Document Parties: TRUEACTIVE SOFTWARE, Inc | VIVID LEARNING SYSTEMS, Inc You are currently viewing:
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TRUEACTIVE SOFTWARE, Inc | VIVID LEARNING SYSTEMS, Inc

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Title: EXHIBIT 99.1 ASSET PURCHASE AGREEMENT
Governing Law: Washington     Date: 3/16/2005

EXHIBIT 99.1 ASSET PURCHASE AGREEMENT, Parties: trueactive software  inc , vivid learning systems  inc
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EXHIBIT 99.1

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

<PAGE>

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.

<PAGE>

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


 
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