ASSET PURCHASE AGREEMENT
Exhibit
10.12
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 000 Xxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxx. At that time, Vivid shall
deliver all funds and documents required by this Agreement and TrueActive
shall
deliver a xxxx of sale for the assets.
1
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 Xxxxxxx X. Xxxxx;
Forty Thousand Seven Hundred Eight (40,708) to M. Xxxxx Xxxxxx;
and
One Hundred Eighty-one (181) to Xxxxxxx Xxxxxxxx-Xxxxx. 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 Xxxxxxx X. Xxxxx 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.
2
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
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 securities
laws.
If Vivid so requires, no assignment shall be effective unless TrueActive
and/or
its shareholders deliver an opinion of counsel to Vivid, which opinion must
be
satisfactory to Vivid in all respects, to the effect that such transfer will
not
violate the securities laws.
Section
4.2 Registration
Rights.
In the
event Vivid shall undertake to provide registration rights to its shareholders
in general, TrueActive and its shareholders shall have the right to participate
in such registration rights upon the terms and conditions applicable to all
holders of warrants. The parties acknowledge that the recently completed
registration does not invoke the application of this right nor does the
registration of the Vivid Stock Option Plan.
Section
4.3 Shareholder
Information.
So long
as TrueActive and its shareholders own the Vivid warrants, TrueActive and
it
shareholders will be provided with a copy of any information which Vivid
sends
to its shareholders in general.
4
ARTICLE
V
TERMINATION
OF AGREEMENT
This
Agreement may be terminated at any time before the Closing by mutual consent
of
the parties and in no other manner.
ARTICLE
VI
INDEMNIFICATION
Section
6.1 Indemnification
of TrueActive.
Without
in any way limiting or diminishing the warranties, representations, or
agreements herein contained or the rights or remedies available to any party
for
a breach by one of the other parties, Vivid agrees to indemnify, defend,
and
hold harmless TrueActive and its designees, successors, and assigns from
and
against all losses, judgments, liabilities, claims, damages, or expenses
(including reasonable attorney fees) of every kind, nature, and description
in
existence before or on the Closing, whether known or unknown, absolute or
contingent, joint or several, either arising out of any failure of any
representation or warranty of Vivid contained in this Agreement to have been
correct and materially complete when made or arising out of or relating to
the
breach of any covenant or agreement of Vivid contained in this
Agreement.
Section
6.2 Indemnification
of Vivid.
Without
in any way limiting or diminishing the warranties, representations, or
agreements herein contained or the rights or remedies available to any party
for
a breach by one of the other parties, TrueActive agrees to indemnify, defend,
and hold harmless Vivid and its designees, successors, parent company, and
assigns from and against all losses, judgments, liabilities, claims, damages,
or
expenses (including reasonable attorney fees) of every kind, nature, and
description in existence before or on the closing, whether known or unknown,
absolute or contingent, joint or several, either arising out of any failure
of
any representation or warranty of TrueActive contained in this Agreement
to have
been correct and materially complete when made or arising out of or relating
to
the breach of any covenant or agreement of TrueActive contained in this
Agreement.
ARTICLE
VII
MISCELLANEOUS
PROVISIONS
Section
7.1 Confidentiality.
Each of
the parties will treat and hold all of the confidential information of the
other
exchanged as a result of the due diligence and the transactions contemplated
by
this Agreement to the highest level of care and confidence. No information
of
another party shall be released without the prior written approval of said
party; provided, however, the parties may disclose such information as is
necessary to comply with any information or disclosure requirements of any
governmental agency. In such event, the party to whom the information belongs
shall be immediately notified by the party from whom the information has
been
requested.
Section
7.2 Amendment.
This
Agreement constitutes the entire agreement of the parties and may not be
modified or amended except by a writing signed by all the parties.
Section
7.3 Notices.
All
notices, requests, demands, or other communications which are required or
may be
given pursuant to the terms of this Agreement shall be in writing and shall
be
deemed to have been duly given: (I) on the date of delivery if personally
delivered by hand, (ii) upon the third day after such notice is
(a) deposited in the United States mail, if mailed by registered or
certified mail, postage prepaid, return receipt requested, or (b) sent
by a
nationally recognized overnight express courier, or (iii) by facsimile
upon
written confirmation (other than the automatic confirmation that is received
from the recipient's facsimile machine) of receipt by the recipient of such
notice:
5
|
If
to Vivid:
|
Vivid Learning Systems, Inc. | |
| 000 Xxx Xxxxxxx | ||
| Xxxxxxxx, XX 00000 | ||
| Attention: Xxxxxx Xxxxxx | ||
| Telephone No.: 509/ 000-0000 | ||
| Facsimile No.: 509/ 943-5528 | ||
|
If
to TrueActive:
|
TrueActive Software, Inc. | |
| Xxxx Xxxxxx Xxx 0000 | ||
| Xxxxxxxxx, XX 00000 | ||
| Attention: Xxxxx Xxxxxx | ||
| Telephone No.: 509/ 000-0000 | ||
| Facsimile No.: 510/ 991-8955 |
Section
7.4 Survival
of Representations.
The
representations and warranties given under this Agreement shall be continuing
and survive the Closing of the transaction contemplated by this
Agreement.
Section
7.5 Interpretation.
The
headings contained in this Agreement are for reference purposes only and
shall
not in any way affect the meaning or interpretation of this Agreement. Whenever
the words “include”, “includes”, or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”.
Section
7.6 Miscellaneous.
This
Agreement (including the documents and instruments referred to herein):
(i) constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, among the parties,
or any
of them, with respect to the subject matter hereof; (ii) shall not
be
assigned by operation of law or otherwise without the prior written consent
of
the other parties hereto; and (iii) shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Washington, exclusive of the conflict of laws provisions thereof.
Section
7.7 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original, but all of which shall constitute one and the same
agreement.
Section
7.8 Parties
in Interest. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective permitted successors and assigns,
and
nothing in this Agreement, express or implied, is intended to confer upon
any
other person any rights or remedies of any nature whatsoever under or by
reason
of this Agreement. Specifically, in the event Vivid assigns this Agreement
and/or is not the surviving corporation in a merger, the new party in interest
shall honor the royalty payments delineated in Section 2.1.
Section
7.9 Severability.
Any
term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in
any
other jurisdiction. If any provision of this Agreement is so broad as to
be
unenforceable, the provision shall be interpreted to be only so broad as
is
enforceable.
6
Section
7.10 Arbitration.
In the
event any dispute arises from this Agreement, and the parties are unable
to
resolve such controversy, dispute or disagreement within thirty (30) days
after
notice thereof is first delivered, the parties agree to submit such to
arbitration in accordance with the rules of the American Arbitration Association
(“AAA”). However, the parties also agree that they are not required to use the
services of the AAA and may mutually agree to appoint an arbitrator to hear
any
dispute.
| (a) |
Any
arbitrator selected by mutual agreement of the parties shall be
experienced in the matter or action that is the subject of the
arbitration. The arbitrator so chosen shall be impartial and independent
of both parties.
|
| (b) |
If
the parties cannot agree to the mutual selection of an arbitrator
within
twenty (20) days after the end of such thirty-day period, then
any party
may in writing request the American Arbitration Association to
select an
appropriate arbitrator, and such arbitrator shall hear all arbitration
matters arising under this section.
|
| (c) |
Any
arbitration shall take place in Xxxxxx County, Washington. The
decision of
the arbitrator is binding and no suit at law or equity shall be
instituted
by either party to this agreement except to enforce the decision
of the
arbitrator. Any award rendered by the arbitrator shall be final
and
judgment may be entered on it in any court having jurisdiction.
|
Section
7.11 Attorney
Fees.
In the
event either party is required to employ an attorney to enforce rights
hereunder, including initiating arbitration to enforce the provisions of
this
Agreement, or for any cause arising out of this Agreement, the substantially
prevailing party in such action shall be entitled to reimbursement from the
other party for all of its court costs and reasonable attorneys’ fees.
IN
WITNESS WHEREOF, the parties are signing this Agreement on the date stated
in
the introductory clause.
By: /s/Xxxxx
X. Xxxxx
Xxxxx
X.
Xxxxx
Chief
Executive Officer
TRUEACTIVE
SOFTWARE, INC.
By: /s/Xxxxxxx
X. Xxxxx
Xxxxxxx
X. Xxxxx
President
7
EXHIBIT
A
TrueActive
Software Inc. List of Assets included in Sale to Vivid Learning Systems,
Inc.
| 1. |
Complete source code and supporting files for the latest version
of
TrueActive Monitor
|
Note:
TrueActive Monitor is currently sold in 3 license configurations: a 100-day
license, a standard single-user, non-expiring license, and a network starter
+
clients, non-expiring license. The configurations are set using a license
number. This source code is sold “as is.”
|
2.
|
Complete source code and supporting files for the last version
of
WinWhatWhere, a/k/a WinWhatWhere
Investigator
|
Note:
This
source code is sold “as is.”
|
3.
|
Copyright for WinWhatWhere dated 3/8/1993 issued to Basic Systems
Inc
(original name of TrueActive Software
Inc.)
|
| 4. |
Registered Trademarks
|
WinWhatWhere,
registered 6/11/02
WinWhatWhere
Investigator, registered 2/26/02
Note:
Section
8 of the Trademark Act requires the filing of an Affidavit of Continued Use
prior to the end of the sixth year following the date of
registration.
| 5. |
Unregistered Trademarks
|
TrueActive
TrueActive
Software
TrueActive
Monitor
| 6. |
Web site addresses xxx.xxxxxxxxxx.xxx
and xxx.xxxxxxxxxxxx.xxx
|
| 7. |
All web site content
|
| 8. |
Complete customer database
|
| 9. |
Complete evaluation license list (sales
leads)
|
| 10. |
Current
qualified sales opportunities
list
|
| 11. |
One
current account receivable:
|
Interactive,
Inc., Huntington, NY - Contact: Xxxx Xxxx Balance Due: $10,825
| 12. |
All
inventory of software packaging
|
TrueActive
Software CD Jackets, approx. 320
WinWhatWhere
Investigator CD Case Inserts
CDs,
approx. 400
| 13. |
Marketing
materials for TrueActive and WinWhatWhere, including folders and
article
reprints
|
8
EXHIBIT
B
March
8,
2005
Xxxxxxx
X. Xxxxx
000
Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Dear
Xxxx,
Based
on
recent discussions, I am very pleased to extend you an offer of employment
as a
Senior Software Developer of Vivid Learning Systems, Inc. located in Richland,
WA, starting on March 16th,
2005.
Attached are the terms of your compensation.
In
addition to the monthly salary offer, I am sure you will find the fringe
benefits package provided by Vivid to be competitive. As a Vivid employee,
we
will provide you a copy of our employee handbook that outlines our employment
policies and benefits programs.
You
will
need to provide documentation that establishes identity and employment
eligibility. For example, if you are a U.S. citizen, a current drivers’ license
and social security card will be sufficient. If you are not a U.S. citizen,
we
will require other documents.
As
discussed in our employment policies, your employment and compensation with
Vivid are consistent with Washington State “at will” law in that they can be
terminated with or without cause, and with or without notice, at any time,
at
the option of either Vivid or yourself, except as otherwise provided by law.
Therefore, there is no intent that the terms of this offer letter create
either
an expressed and/or implied contract of employment with Vivid.
During
your work for Vivid, you agree to perform your best efforts, full time for
Vivid, and not to perform work for other businesses. The terms stated in
this
letter are in addition to terms of your Vivid “Non-Disclosure Agreement” wherein
you agree not to disclose confidential information, not compete with Vivid,
that
your work (whether physical property or intellectual property) is the property
of Vivid and that you will return all materials upon termination of your
work
with Vivid.
Let
me
say again that I am very pleased to make this offer of employment with Vivid
and
we all look forward to working with you. You will be a great addition to
our
team.
Very
truly yours,
/s/Xxxxx
X. Xxxxx
Xxxxx
X.
Xxxxx
President
& CEO
Enclosure
cc:
HRN
Finance
File
ACCEPTED:
Name: /s/
Xxxxxxx X. Xxxxx
Date: 3-14-05
9
TERMS
OF EMPLOYMENT - XXXXXXX X. XXXXX (“Employee”)
Employment
of Employee.
Vivid
will employ Employee in the capacity of Senior Software Developer.
The
term
of Employee’s employment (“Employment Term”) under this Agreement shall be a
period of two (2) years, commencing on March 16th, 2005 and expiring at 5:00
p.m. (local time at Vivid’s headquarters) on March 15th, 2007, unless extended
in writing by both Vivid and Employee, or unless earlier terminated pursuant
to
these Terms.
Notwithstanding
anything in these Terms to the contrary, Employee acknowledges and agrees
that
Employee’s employment with Vivid is “at will” and that Employee’s employment may
be terminated by Vivid at any time and for any reason, subject to applicable
laws.
Position
and Duties. Employee
accepts and agrees to such employment and agrees to be subject to the general
supervision, advice, and direction of the Vivid Chief Technology Officer
or any
individual that the Vivid Chief Technology Officer may designate. Employee
shall
also perform such other duties as are customarily performed by an employee
in a
similar position and such other and unrelated services and duties as may
be
assigned from time to time. Employee shall devote his full business time
and
attention and best efforts to Vivid’s business and affairs, except with Vivid’s
prior approval in case of leaves of absence, vacation, and service on corporate,
civil, or charitable boards or committees involving no conflict of interest
with
Vivid’s interests and not significantly interfering with the regular performance
of his Vivid duties.
Compensation
Base
Salary.
Employee shall receive an annual base salary of $75,000. Employee's base
salary
may be reviewed in accordance with Vivid's regular compensation practices.
Base
salary shall be paid in substantially equal periodic installments, but not
less
frequently than monthly. The parties acknowledge that Employee’s base salary
shall be processed and paid through Human Resource Novations, Inc. Employee’s
base salary may be subject to periodic updates and adjustments, as set forth
in
the Vivid Employee Compensation Plan and incorporated herein by
reference.
Bonus.
Employee may be entitled to performance bonuses and performance based stock
option awards in accordance with the Vivid Employee Compensation
Plan.
Fringe
Benefits.
Employee may participate in all benefit programs that Vivid from time to
time
makes available to other employees holding positions similar to that of
Employee, subject to applicable eligibility rules.
Expenses.
In
accordance with Vivid policies, Employee shall be reimbursed in the amount
of
$300 per month for the home office in which Employee will primarily perform
his
duties, said reimbursement to continue as long as Employee is employed by
Vivid.
Termination.
Due
To Death or Permanent Disability.
Employee's employment shall terminate upon his death or permanent disability.
10
By
Vivid.
Vivid
may terminate Employee's employment at any time, with or without Just Cause.
Vivid shall have "Just Cause" if its Chief Executive Officer in the exercise
of
his reasonable judgment, determines that Employee has committed an act or
acts
constituting any of the following: (i) dishonesty or fraud in connection
with
his duties for Vivid; (ii) disclosure of confidential or private information
regarding Vivid or its parent company; (iii) sexual harassment or other
violation of laws prohibiting discrimination, in each case, committed in
connection with his duties for Vivid; (iv) materially aiding a competitor
of
Vivid or its parent company; (v) misappropriation of a business opportunity
of
Vivid; (vi) repeated
and/or gross misconduct or negligence, in each case in the performance of
his
duties for Vivid; or, (vii) a felony conviction.
By
Employee.
Employee may terminate his employment at any time, with or without Good Reason.
Employee shall have “Good Reason” to terminate in the event of (i) a forced
relocation of the place for Employee's performance of his duties reasonably
requiring a move of more than fifty (50) miles in Employee's residence; or,
(ii)
a material breach of a material provision of these Terms, which breach remains
uncured thirty (30) days after written notice of such breach is delivered
to
Vivid. Good Reason shall not exist if Vivid contemporaneously has Just Cause
to
terminate Employee's employment.
Payments
upon Termination.
If
Employee's employment is terminated (i) due to Employee's death or permanent
disability; (ii) by Vivid for Just Cause; or, (iii) by Employee without Good
Reason, Vivid shall pay Employee's Base Salary through the date of termination,
and provide such other payments and benefits as applicable law or Vivid’s
employee benefit policies may require.
If
Employee's employment is terminated (i) by Vivid without Just Cause; or,
(ii) by
Employee for Good Reason, then Vivid shall pay Employee an amount equal to
four
(4) months salary.
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