Exhibit 10.12
PAYOFF AND TERMINATION AGREEMENT
This Payoff and Termination Agreement (the "AGREEMENT") is made and
entered into this 9th day of April, 2001, by and between LearnCom, Inc., an
Illinois corporation ("LEARNCOM"), and The Bureau of National Affairs, Inc., a
Delaware corporation ("BNA").
RECITALS
A. LearnCom, BNA and BNA Communications, Inc., a Delaware corporation
(the "COMPANY") are parties to that certain Stock Purchase Agreement dated
August 30, 1999 (the "SALE AGREEMENT").
B. Pursuant to the Sale Agreement, BNA sold all of the issued and
outstanding capital stock of the Company to LearnCom in consideration for
$1,250,000, payable at the closing.
C. Pursuant to Section 2.7 of the Sale Agreement, in further
consideration for the purchase of the Company, LearnCom agreed to pay BNA an
additional amount of up to $1,150,000 (the "EARNOUT AMOUNT"), contingent upon
the Company achieving certain levels of sales revenues.
D. A portion of the Earnout Amount has accrued and is owing to BNA,
and additional portions of the Earnout Amount are likely to accrue pursuant to
Section 2.7 of the Sale Agreement.
E. Each of the parties hereto desires to fix and compromise the
amounts due with respect to the Earnout Amount on the terms set forth herein.
NOW THEREFORE, in consideration of the foregoing and the agreements,
covenants and conditions contained herein, the parties hereby agree as follows:
ARTICLE 1
PAYMENT OF ROYALTY AMOUNTS
1.1 PAYMENT. In full and complete satisfaction of the amounts due (now
and in the future) under Section 2.7 of the Sales Agreement with respect to the
Earnout Amount, LearnCom shall pay to BNA the following (the "PAYMENT AMOUNT"):
(1) $25,000, by certified check to the order of BNA, payable upon the
execution of this Agreement; and
(2) $100,000 by certified check to the order of BNA, payable upon a
Liquidity Event.
For purposes of this Agreement, a "LIQUIDITY EVENT" shall be deemed to have
occurred if (i) LearnCom, Inc., a Nevada corporation ("PARENT") conducts a
private or public offering of its
securities (debt, equity or a derivative thereof) that raises net proceeds of at
least $750,000, (ii) any person or entity becomes the beneficial owner, directly
or indirectly, of securities of the Parent representing more than fifty percent
(50%) of the outstanding voting securities of Parent, (iii) the shareholders of
the Parent approve a merger or consolidation which would result in the voting
securities of the Parent outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) less than fifty percent (50%) of the total
voting power represented by the voting securities of the Parent or such
surviving entity outstanding immediately after such merger or consolidation,
(iv) the shareholders of the Parent approve a plan of complete liquidation of
the Parent or an agreement for the sale or disposition by the Parent of (in one
transaction or a series of transactions) all or substantially all of the
Parent's assets, or (v) Parent sells (whether by selling substantially all of
the assets, stock, merger, or otherwise) LearnCom.
1.2 TERMINATION. Upon payment in full of the Payment Amount before
October 9, 2001, (the "Payment Date"), the Sales Agreement and any remaining
obligations under the Sale Agreement, including LearnCom's obligation to pay any
current portion of Earnout Amount that has accrued and is owing, and any portion
of the Additional Amount that may accrue in the future, and BNA's
indemnification obligations thereunder, shall be terminated. If LearnCom fails
to pay the Payment Amount by the Payment Date, this Agreement shall terminate,
and each party's obligations under the Sales Agreement shall continue in full
force; PROVIDED; HOWEVER, LearnCom shall have the right to pay to BNA an
additional $25,000 prior to the Payment Date to extend the Payment Date to April
9, 2002. If this Agreement terminates because LearnCom fails to pay the Payment
Amount in full by the Payment Date (as it may be extended hereunder), any
amounts paid hereunder shall be applied by BNA against LearnCom's obligations
under the Sales Agreement.
ARTICLE 2
MISCELLANEOUS
2.1 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified and supplemented only by written agreement of the parties hereto.
2.2 NOTICES. All notices, requests, demands and other communications
required or permitted to be given in accordance with the terms of the Sale
Agreement.
2.3 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
party hereto without the prior written consent of the other party.
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2.4 GOVERNING LAW. This Agreement shall be governed by the law of the
State of Delaware as to all matters, including, but not limited to, matters of
validity, construction, effect and performance.
2.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.6 SEVERABILITY. In the event that any particular provision or
provisions of this Agreement shall for any reason be determined to be
unenforceable, or in violation of any law, government order or regulation, such
unenforceability or violation shall not affect the remaining provisions of this
Agreement which shall continue in full force and effect and be binding upon the
parties.
2.7 ENTIRE AGREEMENT. This Agreement and the Sales Agreement contain
the entire agreement between the parties with respect to the transactions
contemplated hereby, and supersedes all written or verbal negotiations,
representations, warranties, commitments, and other understandings prior to the
date hereof between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE BUREAU OF NATIONAL AFFAIRS, INC.
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X Xxxxx
Its: VP - Strategic Dev.
Date: April 9, 2001
LEARNCOM, INC., an Illinois corporation
By: /s/ XXXXX XXXXXX
---------------------------------
Name: Xxxxx Xxxxxx
Its: President
Date: April 10, 2001
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