ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (hereinafter "Agreement") dated as of
November 25, 2003 by and among Nuvotec, Inc., a Washington corporation
(hereinafter "Nuvotec"), in conjunction with its subsidiary Vivid Learning
Systems, Inc. (hereinafter "Vivid"), and XxxxXxxxxx.xxx, Inc., a Delaware C
corporation (hereinafter "FoodSafety").
WHEREAS, the respective Boards of Directors of Nuvotec and FoodSafety have
determined that the purchase of the assets of FoodSafety (a list thereof
attached hereto as Exhibit A) by Nuvotec pursuant to, and subject to all of the
terms and conditions of, this Agreement, is advisable, fair, and in the best
interests of Nuvotec and FoodSafety and their respective shareholders;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants, and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
THE PURCHASE
Section 1.1 The Purchase. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time (as hereinafter defined), Nuvotec shall
have lawful, valid, and indefeasible title to all of the assets of FoodSafety,
(reference Exhibit A). This Agreement in no manner shall be interpreted to be
neither a purchase of the FoodSafety corporate entity nor a purchase of the
shares of FoodSafety. The corporate existence of FoodSafety shall continue or
cease at the election of the Board of Directors of FoodSafety.
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 at 10:00 a.m. local time, at the offices of Nuvotec,
000 Xxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx, xx November 25, 2003. On the
Closing date or as specified below, Nuvotec shall deliver all funds and
documents required by this Agreement and FoodSafety shall deliver a xxxx of sale
for the assets.
ARTICLE II
CONSIDERATION
Section 2.1 Consideration. In exchange for the assets sold by FoodSafety
to Nuvotec and for certain promises regarding non-compete by Mr. Xxxxxx Xxxx
(hereinafter "Mick") as noted in Mick's consulting agreement with Vivid
described herein, Nuvotec shall issue to FoodSafety: a) Eighty Thousand Dollars
($80,000.00) cash in equal monthly payments over a six (6) month period, with
the first payment due within five (5) business days of Closing; b) One Hundred
Thousand Dollars ($100,000.00) in stock and/or options (to be defined by
FoodSafety such that there be a value of One Hundred Thousand Dollars
($100,000.00) net of an exercise price, if applicable, in the event of stock
options)- said stock and/or options to be issued at a discounted value of
sixty-six and two thirds percent (66 2/3%) of the stock price of Vivid at the
time of a financing of One Million Five Hundred Thousand Dollars ($1,500,000.00)
or greater and with a six (6) month lockup- provided that if Vivid does not go
public within (6) months of closing then FoodSafety will receive an additional
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premium of fifty percent (50%) of Vivid stock- further, if after an additional
nine (9) months Vivid is not public, then FoodSafety will have a put option with
a five (5) year payback for all stock and/or options with interest at the lowest
permissible rate allowed by the Internal Revenue Service; c) Vivid will enter a
consulting agreement for the services of Mick effective on closing for One
Hundred Thousand Dollars ($100,000.00) for one (1) year- reference Exhibit B for
specific terms; d) payment to FoodSafety of a five percent (5%) royalty fee on
subscription sales, said payments to be based on the net revenue (gross revenue
less returns, allowances, insurance, freight, and commissions to certain
distributors in certain markets) realized by Vivid on sales of online courseware
in the food safety industry that were either developed from materials obtained
via this asset purchase or other training products or online food safety
information services developed in conjunction with Mick- royalties on custom
projects will be negotiated on a case-by-case basis- the five percent (5%)
royalty shall continue to be paid after the initial five (5) year period based
on the aforenoted conditions should Mick remain in a "non-compete" status as
defined in his consulting agreement (Exhibit B); e) Mick shall receive a five
percent (5%) finders' fee for any capital raise or consideration received by
Vivid or its affiliates of Twenty-five Thousand Dollars ($25,000.00) or more
from any entity previously unknown to Nuvotec, Vivid, Mr. Xxxxx Xxxx, Xxxxxxxxxx
& Partners LLP, or any third party working on behalf of Nuvotec; f) Vivid will
enter a consulting agreement for the services of Xx. Xxx Xxxxx (hereinafter
"Costa"); and, f) Vivid has reserved the right to offer to third parties the
services of Mick and/or Costa, as an addition to their respective consulting
agreements, and enter into agreements at billing rates determined by Vivid, with
the approval of Mick and/or Costa, said approval to not be unreasonably
withheld, for consulting or services otherwise unrelated to online or CBT
delivered training that are the result of Vivid's marketing and sales efforts-
in the instance that Vivid discovers an opportunity for such consulting or
services, but opts to not provide said consulting or services to third parties,
Mick and/or Costa may elect to provide such services directly, and will provide
Vivid a ten percent (10%) finders fee for any resulting direct contracts.
Section 2.2 Non-compete. It is acknowledged by the parties that Five
Thousand Dollars ($5,000.00) of the afore-noted consideration is designated
specifically as the consideration in exchange for the covenant not to compete.
Section 2.3 Establishment of Escrow. In the event that a claim should
arise or attach to the Assets acquired hereunder, through no fault of Nuvotec or
Vivid, Vivid reserves the right to establish an escrow account for the royalty
payments noted in Section 2.3 (d) above. Vivid will work with FoodSafety's
counsel to determine a reasonable and probable cost to any settlement of the
claim. Vivid will retain royalty payments in an amount to equal to this
determined probable cost. Upon settlement of the claim, any costs incurred by
Nuvotec and/or Vivid in the matter will be applied against the escrow and paid
to Nuvotec and/or Vivid, with any unused amounts in the escrow transmitted to
FoodSafety.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of Nuvotec. Nuvotec hereby
represents and warrants to FoodSafety that:
3.1.1 Organization; Corporate Power and Authority. Nuvotec is a
corporation duly and validly organized and existing under the laws
of the State of Washington. Nuvotec 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 Nuvotec have been
duly authorized by all
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necessary corporate action. This Agreement constitutes the valid and
binding obligation of Nuvotec, 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 Nuvotec or any agreement, commitment, or
instrument, judgment, or decree to which Nuvotec is a party or by
which Nuvotec or its properties are bound.
3.1.3 Disclosure. To the best knowledge of Nuvotec, neither this
Agreement nor any other instrument/document delivered to FoodSafety
pursuant to this Agreement or the due diligence contains any untrue
statement of material fact or omits to state any material fact
required to be stated herein or therein or necessary to make the
statements, representations, or warranties, and information
contained herein or therein to be not misleading.
Section 3.2 Representations and Warranties of FoodSafety. XxxxXxxxxx.xxx,
Inc. hereby represents and warrants to Nuvotec that:
3.2.1 Organization; Corporate Power and Authority. FoodSafety is a
corporation duly and validly organized and existing under the laws
of the State of Delaware. FoodSafety 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 FoodSafety has been
duly authorized by all necessary corporate action. This Agreement
constitutes the valid and binding obligation of FoodSafety,
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 FoodSafety or any agreement, commitment, or instrument, judgment
or decree to which FoodSafety are a party or by which FoodSafety or
the properties of FoodSafety are bound.
3.2.3 Liabilities. FoodSafety 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 Nuvotec.
3.2.4 Disclosure. To the best knowledge of FoodSafety, neither this
Agreement nor any other instrument/document delivered to Nuvotec
pursuant to this Agreement or the due diligence contains any untrue
statement of material fact or omits to state any material fact
required to be stated herein or therein or necessary to make the
statements, representations, or warranties, and information
contained herein or therein to be not misleading.
3.2.5 Title to Assets. FoodSafety is the record and beneficial owner
of the assets to be purchased by Nuvotec from FoodSafety, free and
clear of any security interest, claim, lien, pledge, encumbrance, or
restriction whatsoever in law or in equity, and FoodSafety's
delivery and/or granting of access to Nuvotec on Closing of this
Agreement will convey to Nuvotec lawful, valid, and indefeasible
title thereto, free and clear of any security interest, claim, lien,
pledge, encumbrance, or restriction whatsoever.
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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. FoodSafety covenants and agrees that
the Vivid shares and/or options to be issued to her 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"). FoodSafety will not,
directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate, or
otherwise dispose of any of the Vivid shares and/or options except in compliance
with the Securities Act. FoodSafety agrees that no transfer of assignment of any
Vivid shares or options shall be effective if the assignment would violate the
provisions of the securities laws. If Nuvotec so requires, no assignment shall
be effective unless FoodSafety delivers an opinion of counsel to Nuvotec, which
opinion must be satisfactory to Nuvotec in all respects, to the effect that such
transfer will not violate the securities laws. FoodSafety understands that all
stock certificates will bear a legend noting these transfer restrictions.
Section 4.2 Registration Rights. In the event Vivid shall undertake to
file a registration statement, FoodSafety shall have the right to register
shares provided FoodSafety pursuant to Section 2.1.
Section 4.3 Shareholder Information. So long as FoodSafety owns the Vivid
shares and/or options, FoodSafety will be provided with a copy of any
information which Vivid sends to its shareholders in general.
ARTICLE V
TERMINATION OF AGREEMENT
This Agreement may be terminated at any time before the Closing, as
follows, and in no other manner: By mutual consent of the parties.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification of FoodSafety. 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, Nuvotec agrees to indemnify, defend, and hold harmless FoodSafety and
its designees, successors, and assigns from and against all losses, judgments,
liabilities, claims, damages, or expenses (including reasonable attorneys' 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 Nuvotec
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
Nuvotec contained in this Agreement.
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Section 6.2 Indemnification of Nuvotec. 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, FoodSafety agrees to indemnify, defend, and hold harmless Nuvotec and
its designees, successors, and assigns from and against all losses, judgments,
liabilities, claims, damages, or expenses (including reasonable attorneys' 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 FoodSafety
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
FoodSafety 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 may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
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:
If to Nuvotec: Nuvotec, Inc.
000 Xxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: 509/ 000-0000
Facsimile No.: 509/ 943-5528
If to FoodSafety: XxxxXxxxxx.xxx, Inc.
Xxxx Xxxxxx Xxx 000
Xxxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telephone No.: 973/ 000-0000
Facsimile No.: 973/ 663-6159
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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 affect in any way 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.
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.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
NUVOTEC, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx
Chairman & Chief Executive Officer
FOODSAFETY, INC.
By: /s/ Xxxxxx X. Xxxx
--------------------------------------
Xxxxxx X. Xxxx
Chairman & Chief Executive Officer
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EXHIBIT A
LIST OF ASSETS
1. The URL xxx.xxxxxxxxxx.xxx. Ownership of the URL will be transferred
to Nuvotec immediately upon Closing.
2. Approximately 1200 copies of Food Safety Management & Compliance
(retail price $149 each). These books will continue to be stored at
their current location for a future disposition.
3. All Intellectual Property of XxxxXxxxxx.xxx, Inc. including
copyrights, trademarks, patent applications, business plans,
marketing schema, demo courses, source code and databases to include
complete and up-to-date contact information on all XxxxXxxxxx.xxx
inquiries (verbal, written, and electronic), prospective customers,
potential strategic partners, and associations.
4. Exclusive rights to commercialize any and all online food safety
related information and food safety training materials produced by
Mick for a five (5) year period, independent of the renewal of the
Consulting Agreement executed between Vivid and Mick as part of this
transaction.
5. Mick shall develop and deliver to Vivid, in storyboard form, a food
worker course and a food manager certification course, such courses
to be defined by mutual agreement and developed in a form and manner
suitable to Vivid.
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EXHIBIT B
CONSULTING AGREEMENT: VIVID - MICK
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CONSULTANT AGREEMENT
Xxxxxx X. Xxxx
This letter hereby serves as the written agreement that Xxxxxx X. Xxxx
henceforth shall act as a consultant to Vivid Learning Systems, Inc. (Vivid) on
an as needed basis to provide Subject Matter Expertise for the following
services related to the food safety industry: lesson development, business
development, and other tasks as needed and directed by the Vivid President.
Vivid Learning Systems, Inc. is a wholly owned subsidiary of Nuvotec, Inc.
It is acknowledged that Procurement Integrity, Non-Disclosure, and/or
Organizational Conflict of Interest certificates may be required on a
case-by-case basis. The consultant shall complete and sign said certifications
when requested by Vivid.
Period of Agreement
The period of performance for the above-noted services shall commence on
November 21, 2003 or date FoodSafety, Inc. definitive agreement with Nuvotec,
Inc. is executed, whichever is later, and end on November 30, 2004. The
agreement can be renegotiated at the sole discretion of Vivid for one (1) year,
and thereafter by mutual agreement.
Termination
During the initial period of performance, neither party may terminate this
agreement without good cause (e.g., health issues, hardship, etc.). In such
circumstance, the terminating party shall provide written notice as soon as
practicable and be willing to negotiate a compromise that allows both parties to
receive the approximate intended benefit of the agreement. During the first
extension, Vivid may terminate with ten (10) days advance written notice. During
the periods of subsequent extensions either party may terminate this agreement
with ten (10) days advance written notice.
Payment Terms
In consideration of the services to be performed, Vivid shall pay the fixed
price amount of $8,333.00 per month for the initial 12 month period of
performance. If options to extend the period of performance are exercised the
payment terms for that option period will be negotiated at that time. It is
anticipated that the Consultant shall incur approximately 20 hours per week
(potentially more during the production and launch phase of the Vivid Food
Safety Program).
All fair and reasonable travel and other direct costs directly attributable to
the work conducted by Consultant as approved by the Vivid President shall be
reimbursed. The Consultant will be eligible for performance based stock options
after 6 months of the start date of this agreement which will be agreed upon in
a separate agreement.
Invoices may be submitted no more than once a month and shall be payable upon
receipt. Invoices shall reference this Consultant Agreement, include all travel
and other direct cost receipts, and be mailed in duplicate to:
Vivid Learning Systems, Inc.
Accounts Payable
000 Xxx Xxxxxxx
Xxxxxxxx, XX 00000
Independent Contractor
Consultant represents, warrants, and agrees that Consultant shall act at all
times as an independent contractor under this contract and shall undertake to
perform all acts, including the payment of any applicable tax and acquisition of
any required licenses or permits, necessary to allow Consultant to perform this
contract as an independent contractor. Consultant shall at no time be considered
or hold itself out as employees of Nuvotec and/or its subsidiaries.
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Confidentiality & Non-Compete
The parties acknowledge that in the course of performance of this agreement
certain confidential, proprietary, and/or business sensitive information may be
exchanged. Each party agrees to keep all such information in strictest
confidence and shall not disclose such without the written consent of the party
to whom said information belongs. The level of care to be given said information
is the same that the party would afford its own such information. If a separate
confidentiality agreement is executed between the parties, it shall take
precedence over this clause.
Consultant agrees not to compete with Vivid for a period of five (5) years from
the date of execution of the FoodSafety, Inc. definitive agreement with Nuvotec,
Inc. Non-compete is defined as: working on behalf of any company, association,
or individual that delivers or plans to deliver any food safety training or
information online, company intranet or extranet, or via CBT; production of any
food safety training materials on or offline for a company, association, or
individual that will sell or market the training to third parties; acting in a
sales or business development capacity for any company, association, or
individual that delivers or plans to deliver any food safety training or
information online, company intranet or extranet, or via CBT.
Each party acknowledges that the other party may participate in activities
related to the subject matter that is pertinent to this Agreement; however, the
parties agree not to compete on specific business opportunities brought to the
attention of one party by the other, unless agreed to in writing by the
disclosing party. Notwithstanding this, each party, its affiliates, and any
entity in which it owns directly or indirectly an equity interest, agrees to not
use, copy, or simulate, in any form or fashion, the Proprietary Information
disclosed under this Agreement without the written agreement of the other party
except for the purpose of this Agreement.
Conclusion
This agreement shall be construed under, and any suits and special proceedings
arising out of this agreement shall be governed by, the laws of the State of
Washington. In the event any provision of this agreement shall be declared
illegal, invalid, or otherwise unenforceable by a court of competent
jurisdiction, all remaining provisions of this agreement shall nevertheless
continue in full force and effect.
AGREEMENT AND ACCEPTED: APPROVED BY
VIVID LEARNING SYSTEMS, INC:
/s/ Xxxxxx X. Xxxx 11/25/03 /s/ Xxxxx X. Xxxxx 11/25/03
---------------------------- ---------------------------------------
Consultant Date President Date
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