Exhibit 10.56


 


ASSET
PURCHASE AGREEMENT


 


This Asset Purchase
Agreement (“Agreement”) is entered into on this 26th day of November, 2008 (“Closing Date”) by and
between New Horizons Computer Learning Centers, Inc., a California
corporation (“Buyer”) on the one hand, and Technology Training &
Services Corporation, a California corporation (“Seller), Phyllis Scott, an
individual, and Clay Scott, an individual (collectively “Shareholders”) on the
other hand.  Buyer, Shareholders and
Seller are hereinafter sometimes individually referred to as a “Party” or
collectively as the “Parties”.


 


WHEREAS, Seller wishes to
sell to Buyer substantially all of Seller’s assets related to its business of
providing Online IT training and consulting services for government and industry
worldwide (the “Business”), which shall consist of the assets set forth on Exhibit “A”
(the “Assets”); and


 


WHEREAS, Buyer desires to
acquire the Assets from Seller; and


 


WHEREAS, concurrent with
the transaction described in this Agreement, Buyer desires to procure a
perpetual  license from Terillian, an
Oklahoma C Corporation an affiliate of Seller (“Terillian”), and a license to
use certain technology known as “Lab on Demand” (“LOD License”), the terms of
which shall be established as a condition precedent to the consummation of the
transactions contemplated by this Agreement.


 


NOW, THEREFORE, in
consideration of the covenants and agreements contained herein, the Parties
agree as follows:


 


1.                                      Purchase
of Assets; Excluded Assets; Closing Date:


 


(a)                                  Pursuant
to the terms and subject to the conditions set forth in this Agreement, Seller
hereby agrees to sell, grant, transfer, convey, assign and deliver the Assets
to Buyer as of the close of business on Friday, November 30, 2008 (the “Acquisition
Date”), which may be extended as forth in Section 4(i) below and
subject to fulfillment of each of the conditions set forth in Section 4
below.  The Assets shall include, without
limitation, all currently developed virtual labs and associated intellectual
property to continue the development thereof, all computer hardware and
software associated with the Business, and all other assets which are more
particularly set forth on Exhibit “A”.


 


(b)                                 The
Parties acknowledge and agree that, other than as otherwise expressly stated in
this Agreement, no other assets, personal or real property of Seller is
included in this transaction.


 


2.                                      Consideration:  In consideration for the transfer of the
Assets, Buyer shall remit to Seller the following:


 

















 


(a)                                  $581,000
on the Closing Date in the form of a $550,000 wire transfer to a bank account
designated by Seller in writing to Buyer, and the payment of $31,000 for November payroll
included in the December 6th payroll paid directly by New Horizons;


 


(b)                                 $100,000
per month on the 15th day of each month for the five (5) month
period commencing December 15, 2008 and ending April 15, 2009;


 


(c)                                  an
earn-out payment, payable annually each year commencing December 31, 2009
and ending December 31, 2013, equal to fifty percent (50%) of the cumulative
net income of the Business as determined using U.S. Generally Accepted
Accounting Principles (“GAAP”) consistently applied, from the Acquisition
Date  through that calendar year end,
less all earn-out payments made to Seller previously, (each an “Earn-out
Payment” and collectively the “Earn-out Payments”).  For purposes of determining Net Income of the
Business, it is stipulated and agreed that all virtual lab development costs
will be treated as a current period expense, and income taxes shall be deducted
at a 30% rate.  Moreover, no Earn-out
Payment shall be due until Buyer’s external auditors have approved the
financial statements of the Business for each such year that an Earn-out
Payment is otherwise due.  Buyer shall
remit $500,000 to Seller as an advance payment against future Earn-out Payments
(the “Advance Earn-out Payment”), which Advance Earn-out Payment shall be
payable March 31, 2009.


 


3.                                      Taxes:  Seller shall be solely responsible for the
payment of any and all taxes, excise and other governmental charges or fees, if
any, which are payable in connection with the purchase of the Assets.


 


4.                                      Conditions Precedent to Closing; Covenants;
Extension of Closing Date:


 


(a)                                  On
the Closing Date, Seller shall cause any UCC filings to be terminated or
otherwise released such that the Assets are unencumbered.


 


(b)                                 On
the Closing Date, Buyer shall have entered into a service agreement with TulsaConnect for data hosting services of Seller’s
hosted servers and associated equipment at TulsaConnect’s data center in Tulsa,
Oklahoma, on terms and conditions acceptable to Buyer.


 


(c)                                  On
the Closing Date, Buyer shall have procured a perpetual and  semi-exclusive license with Terillian, on
terms and conditions acceptable to Buyer, to use certain technology known as “Labs
on Demand”.


 


(d)                                 On
the Closing Date, Buyer shall have procured the approval of its Board of
Directors.


 


(e)                                  On
the Closing Date, Seller shall execute and deliver to Buyer the Bill of Sale in
the form attached hereto as Exhibit “B”.


 


(f)                                    On
the Closing Date, Buyer shall have procured key man life insurance policy with
a face value of $1 million and a five (5) year term for each of Clay Scott
and Phyllis Scott.


 


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(g)                                 In
the event that all of the foregoing conditions are not fully and completely
satisfied on or before the Closing Date, then such failure shall extend the
Closing Date until such time as any unmet conditions have been satisfied, but
in any event not later than December 31, 2008.   Failure to meet the closing conditions by December 31,
2008 will release Buyer of its obligations to perform under this Agreement and
Buyer shall thereafter have no liability to Seller whatsoever.


 


(h)                                 Any
debts, liabilities or obligations incurred by or actions, claims or lawsuits
asserted against either Buyer or Seller which relate to the operation of the
Business on or prior to the Closing Date will be the responsibility of Seller.


 


5.                                      Representations
and Warranties of Seller and Shareholders:  Seller and Shareholders jointly and severally
represent, warrant and covenant as follows:


 


(a)                                  Seller
is a California corporation, duly organized, validly existing and in good
standing under the laws of the State of California and has all necessary
corporate powers to own its assets and to operate its business as now owned and
operated by it.  Shareholders own 100% of
the issued and outstanding equity of Buyer.


 


(b)                                 Seller
has the right, power, legal capacity, and authority to enter into and perform
its obligations under this Agreement and the execution of this Agreement has
been duly authorized by Shareholders.


 


(c)                                  Seller
has good and marketable title to all of the Assets, and, except as otherwise
indicated herein, such Assets are free and clear of any restrictions or conditions
to sale, conveyance or transfer and are free and clear of all liens, mortgages,
pledges, encumbrances, leases, agreements, rental agreements, charges, claims,
security interests, taxes, conditions or restrictions of any nature or
description whatsoever.   The Assets are
in good working condition, ordinary wear and tear excepted.  Except as otherwise expressly provided
herein, the Assets are being sold “as is, where is” without any express or
implied warranties whatsoever.


 


(d)                                 There
are no claims, actions or lawsuits pending or threatened against Seller
relating to the Assets and/or the Business.


 


(e)                                  Seller
shall execute all documents and take all steps reasonably necessary to transfer
the Assets to Buyer effective as of the Closing Date.


 


6.                                      Representations
of Buyer and Shareholders:  Buyer
represents, warrants and covenants as follows:


 


(a)                                  Buyer
is a corporation duly organized, validly existing and in good standing under
the laws of the State of California.


 


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(b)                                 Subject
to Section 4(d) above, Buyer has the right, power, legal capacity,
and authority to enter into and perform its obligations under this Agreement.


 


7.                                      Indemnification:  Seller and Shareholders shall, jointly and
severally, indemnify, hold harmless and defend Buyer, its parent company,
affiliates, officers, agents, shareholders and employees from and against any
cause of action, claim, loss or liability arising out of or resulting in any
way from: (i) the negligent acts or omissions of Seller’s officers,
employees, agents or Shareholders; (ii) any breach or inaccuracy of any
representation, warranty or covenant of Seller set forth in this Agreement; and
(iii) any debts, claims, liabilities or lawsuits which relate to the use
or operation of the Business or the Assets on or prior to the Closing
Date.  If after ten  (10) days from receipt of written notice
the Seller fails to defend the Buyer as required above, Buyer will have the
right (but not the obligation) to undertake the defense, compromise or
settlement of such action on behalf of, and for the account and at the risk of
Seller.


 


8.                                      Employees:  Buyer agrees to offer employment to all
employees of Seller upon substantially the same terms and conditions as are
currently in effect for such employees. 
Such employees shall be “at will” and shall be subject to the employment
policies of Buyer.  Seller and
Shareholders shall be liable for any and all employment related liabilities
which arise or relate to the period prior to the Closing Date and shall jointly
and severally indemnify and defend Buyer against any such claims.


 


9.                                      Notices:  All notices with respect to this Agreement
will be sent by certified mail or facsimile, to the following addresses or
facsimile numbers:


 


If to Buyer:


 


New Horizons Computer
Learning Center, Inc.


Attention:  Office of General Counsel


1900 S. State College
Blvd., Suite 120


Anaheim, CA  92806


Tel:  (714) 940-8000


Fax: (714) 938-6007


 


If to
Seller/Shareholders:


 


Technology Training &
Services Corporation


Attention:  Phyllis Scott, President


4910 Campus Drive


Newport Beach, CA  92660


Phone:  949752 6334


Fax 949 752 6363


 


10.                               Entire
Agreement; Assignment:  Except for the License Agreements and related
agreements which are being executed concurrently herewith, this Agreement and
the exhibits attached hereto represent the entire agreement between the Parties
and are binding on each 


 


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Party’s respective successors, heirs and assigns.  This Agreement may not be assigned without
the written consent of the other party, and may only be amended by a written
agreement signed by authorized representatives of both Parties.


 


12.                               Waiver:  The failure of either party to
enforce any right, remedy or condition of this Agreement shall not be deemed a
waiver thereof nor shall it void or otherwise affect its right to enforce the
same right, remedy or condition at any subsequent time.


 


13.                               Survival
of Representations and Warranties:  The
representations and warranties set forth in this Agreement shall survive and
continue until the expiration of the applicable statute of limitations.


 


14.                               Counterparts:  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute but one and the same instrument.


 


15.                               Facsimile
Signatures:  For purposes of
execution of this Agreement, faxed signature pages shall be deemed the
same as original signature pages.


 


16.                               Governing
Law:  This
Agreement will be governed by the laws of the State of California.


 


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IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written above.


 


	
  NEW HORIZONS COMPUTER LEARNING
  CENTERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Charles J. Mallon

  	
   

  
	
   

  	
  EVP & CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TECHNOLOGY TRAINING &
  SERVICES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Phyllis Scott

  	
   

  
	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SHAREHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Clay Scott

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Phyllis Scott

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  *

  	
   

  



 


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