STOCK PURCHASE AGREEMENT
Exhibit 1
This Stock Purchase Agreement (this “Agreement”) is made as of August 1, 2008, by and between
Blue Moon Energy Partners LLC, a Florida limited liability company (the “Buyer”) and Digital Angel
Corporation f/k/a Applied Digital Solutions, Inc., a Delaware corporation (the “Seller”).
A. The Seller owns 2,570,000 shares (the "Acquisition Shares") of the currently issued and
outstanding shares of common stock of IFTH Acquisition Corp. f/k/a InfoTech USA, Inc., a Delaware
corporation (the “Company”), which constitutes approximately 49.9% of the Company’s issued and
outstanding common stock as of July 31, 2008.
B. The Buyer is willing to purchase from the Seller, and the Seller is willing to sell to the
Buyer, the Acquisition Shares.
For valuable consideration received, the parties agree as follows:
1. Purchase and Sale of the Acquisition Shares.
1.1 Purchase and Sale of the Acquisition Shares. Subject to the terms and conditions
of this Agreement, at the Closing (as defined herein), the Buyer agrees to purchase from the
Seller, and the Seller agrees to sell and convey to the Buyer, all of Seller’s right, title and
interest in the Acquisition Shares, free and clear of all liens, claims, security interests,
pledges and encumbrances of every kind, except restrictions on transfer imposed by this Agreement,
the Securities Act of 1933, as amended, and applicable state securities laws.
1.2 Closing; Deliveries.
(a) The purchase and sale of the Acquisition Shares (the “Closing”) shall take place at the
offices of the Seller in Delray Beach, Florida, as soon as practicable, but no later than August 1,
2008, or at such other time and place as the Buyer and the Seller mutually agree upon, orally or in
writing.
(b) At the Closing, the Buyer shall pay to the Seller a purchase price of $400,000 for the
Acquisition Shares by delivering to the Seller $400,000 by wire transfer of immediately available
funds to an account designated by the Seller. The Buyer shall deliver to the Seller such other
documents and instruments, in form and substance reasonably satisfactory to the Seller and its
counsel, as shall be necessary or desirable in order to consummate the transactions contemplated
hereby, each dated the date hereof.
(c) At the Closing, the Seller shall deliver to the Buyer: (i) certificates representing the
Acquisition Shares, together with stock powers, duly endorsed in blank in proper form for transfer;
and (ii) such other documents and instruments, in form and substance reasonably satisfactory to the
Buyer and its counsel, as shall be necessary or desirable in order to consummate the transactions
contemplated hereby, each dated the date hereof.
2. Representations and Warranties of the Seller. The Seller represents and warrants
to the Buyer that the following representations are true and complete as of the Closing, except as
otherwise indicated:
2.1 Organization and Good Standing. The Company is a corporation duly incorporated
and organized, validly existing and in good standing under the laws of the State of Delaware.
2.2 Capitalization.
(a) To the Seller’s knowledge, the authorized capital of the Company consists of:
(i) 5,000,000 shares of preferred stock of the Company, none of which have been issued.
(ii) 80,000,000 shares of common stock of the Company (“Common Stock”), approximately
6,007,093 shares of which are issued, 860,695 shares are in treasury, and approximately 5,146,398
shares of which are outstanding immediately prior to the Closing.
(b) As of the date hereof, options to purchase 5,570,000 shares of Common Stock have been
granted (4,125,000 of which are vested) and are outstanding and warrants to purchase 300,000 shares
of Common Stock are outstanding.
(c) Except as provided in the foregoing paragraph and except as set forth in this Agreement,
there are no outstanding options, warrants, rights (including conversion or preemptive rights and
rights of first refusal or similar rights) or agreements, orally or in writing, for the purchase or
acquisition from the Company of any interests or shares of capital stock. There is not,
immediately upon consummation of the transactions contemplated hereby, any agreement or restriction
relating to the voting of any shares of the capital stock of the Company.
2.3 Authorization. The Seller has full power and authority to enter into this
Agreement. The Agreement, when executed and delivered by the Seller, will constitute valid and
legally binding obligations of the Seller, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
and any other laws of general application affecting enforcement of creditors’ rights generally, and
as limited by laws relating to the availability of a specific performance, injunctive relief, or
other equitable remedies.
2.4 Valid Issuance of Securities. Except as set forth on Schedule 2.4, the
Acquisition Shares that are being transferred to the Buyer are duly and validly issued, fully paid
and nonassessable and free of restrictions on transfer other than restrictions on transfer under
this Agreement, applicable state and federal securities laws and any liens or encumbrances to be
created by or imposed by this Agreement. To the Seller’s Knowledge, the Acquisition Shares were
issued to the Seller in compliance with all applicable federal and state securities laws and
regulations, including, without limitation, in reliance upon an exemption from the registration requirements of such laws pursuant to, inter alia, Section 4(2) and Regulation D of the Securities
Act of 1933, as amended, and corresponding state provisions. The term “Knowledge” as used in this
Agreement shall mean the actual knowledge of Xxxxxx Xxxxxx and Xxxxxxxx Xxxxxx.
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2.5 No Conflict. Except as set forth on Schedule 2.5, neither the execution and
delivery of this Agreement nor the consummation or performance of any of the transactions
contemplated hereby (i) will violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of the Seller, (ii) is prohibited by or requires the Seller to obtain or
make any consent, approval, registration or filing under any law, regulation, judgment, order,
decree or other restriction of any government, governmental agency, court, body, department,
authority, or other person or entity; or (iii) will result in the creation or imposition of any
lien, claim, charge, restriction or encumbrance of any kind or give to any person (other than the
Buyer) any interest or right in or with respect to the Acquisition Shares. The Seller is not a
party to any contract or subject to any legal restriction that would prevent or restrict complete
fulfillment by the Seller of all of the terms and conditions of this Agreement or compliance with
any of its obligations hereunder.
2.6 Litigation. There is no action, suit, proceeding or investigation, either at law
or in equity, by or before any governmental or other instrumentality or agency or any other entity
or person pending or, to the Seller’s Knowledge, threatened against or affecting the Company or any
of its properties or assets.
2.7 Intercompany Amounts. Any amounts owing by the Company to the Seller or by the
Seller to the Company are listed on Schedule 2.7.
3. Representations and Warranties of the Buyer. At the Closing, the Buyer represents
and warrants to the Seller that:
3.1 Organization and Good Standing. The Buyer is a limited liability company duly
incorporated and organized, validly existing and in good standing under the laws of the State of
Florida.
3.2 Authorization. The Buyer has full power and authority to enter into this
Agreement. The Agreement, when executed and delivered by the Buyer, will constitute a valid and
legally binding obligation of the Buyer, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
and any other laws of general application affecting enforcement of creditors’ rights generally, and
as limited by laws relating to the availability of a specific performance, injunctive relief, or
other equitable remedies.
3.3 Purchase Entirely for Own Account. This Agreement is made with the Buyer in
reliance upon the Buyer’s representation to the Seller, which by the Buyer’s execution of this
Agreement, the Buyer hereby confirms, that the Acquisition Shares to be acquired by the Buyer will
be acquired for investment for the Buyer’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that the Buyer has no present intention
of selling, granting any participation in, or otherwise distributing the same. By executing this
Agreement, the Buyer further represents that the Buyer does not presently have
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any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the Acquisition
Shares. The Buyer is knowledgeable and experienced in financial and business matters and is
capable of evaluating the merits and risks of an investment in the Acquisition Shares and has the
capacity to protect its own interests in connection with the purchase of the Acquisition Shares.
The Buyer can bear the economic risks of his investment in the Company including the possible loss
of the entire investment.
3.4 Disclosure of Information. The Buyer has had an opportunity to discuss the
Company’s business, management, financial affairs and the terms and conditions of the offering of
the Acquisition Shares with the Company’s management and has had an opportunity to review the
Company’s facilities. The Buyer understands that such discussions, as well as the Company’s
business plan and any other written information delivered by the Company to the Buyer, were
intended to describe the aspects of the Company’s business which it believes to be material. The
foregoing does not limit or modify the representations and warranties relating to the Company in
Section 2 of this Agreement or the right of the Buyer to rely thereon.
3.5 Restricted Securities. The Buyer understands that the Acquisition Shares are
“restricted securities” under applicable U.S. federal and state securities laws and that, pursuant
to these laws, the Buyer must hold the Acquisition Shares indefinitely unless they are registered
with the Securities and Exchange Commission and qualified by state authorities, or an exemption
from such registration and qualification requirements is available. The Buyer acknowledges that
the Company has no obligation to register or qualify the Acquisition Shares for resale. The Buyer
further acknowledges that if an exemption from registration or qualification is available, it may
be conditioned on various requirements including, but not limited to, the time and manner of sale,
the holding period for the Acquisition Shares, and on requirements relating to the Company which
are outside of the Buyer’s control, and which the Company is under no obligation and may not be
able to satisfy.
3.6 Accredited Investor. The Buyer is an accredited investor as defined in Rule
501(a) of Regulation D promulgated under the Securities Act.
4. Conditions of the Buyer’s Obligations at the Closing. The obligations of the Buyer
to the Seller under this Agreement at the Closing are subject to the fulfillment, on or before the
Closing, of each of the following conditions, unless otherwise waived:
4.1 Representations and Warranties. The representations and warranties of the Seller
contained in Section 2 shall be true and correct in all material respects on and as of the Closing
with the same effect as though such representations and warranties had been made on and as of the
date of the Closing.
4.2 Performance. The Seller shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Closing.
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4.3 Compliance Certificate. The Seller shall deliver to the Buyer at the Closing a
certificate certifying that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Acquisition Shares pursuant to this Agreement
shall be obtained and effective as of the Closing.
4.5 Proceedings and Documents. All corporate and other proceedings in connection with
the transactions contemplated at the Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Buyer, and the Buyer (or its counsel) shall have received
all such counterpart original and certified or other copies of such documents as reasonably
requested.
4.6 Consents. All necessary third party consents shall have been obtained, including
approval of the transactions contemplated hereby by the Seller’s lenders.
5. Conditions of the Seller’s Obligations at the Closing. The obligations of the
Seller to the Buyer under this Agreement are subject to the fulfillment, on or before the Closing,
of each of the following conditions, unless otherwise waived:
5.1 Representations and Warranties. The representations and warranties of the Buyer
contained in Section 3 shall be true and correct in all material respects on and as of the Closing
with the same effect as though such representations and warranties had been made on and as of the
Closing.
5.2 Performance. The Buyer shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with by him on or before the Closing.
5.3 Compliance Certificate. The Buyer shall deliver to the Seller at the Closing a
certificate certifying that the conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.4 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Acquisition Shares pursuant to this Agreement
shall be obtained and effective as of the Closing.
5.5 Consents. All necessary third party consents shall have been obtained, including
approval of the transactions contemplated hereby by the Seller’s lenders.
5.6 Board Approval. Approval by the board of directors of the Seller authorizing the
transactions contemplated by this Agreement.
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6. Covenants.
6.1 Taxes. All transfer, documentary, sales, use, stamp, registration and other such
taxes and fees (including any penalties and interest) incurred in connection with this Agreement
and the exhibits hereto shall be paid by the Buyer at Closing. The Buyer will file all necessary
tax returns and other documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other taxes and fees, and, if required by applicable law, the Seller will
join in the execution of any such tax returns and other documentation.
7. Indemnification.
7.1 The Seller agrees to hold harmless, defend, and indemnify the Buyer and its respective
officers, directors, employees and agents (the “Buyer Indemnitees”) from and against any and all
claims, losses, demands, causes of action, deficiencies, suits, judgments, debts, damages, expenses
or liabilities, including reasonable attorneys’ fees and costs (the “Losses”), arising from (i) any
inaccuracy in any representation or breach of any warranty of the Seller contained in this
Agreement or in any exhibit or schedule, certificate, instrument or other document or agreement
executed or delivered by the Seller in accordance with this Agreement; or (ii) any failure by the
Seller to perform or observe any covenant, agreement or condition to be performed or observed by it
under this Agreement or under any schedule, certificate, instrument or other document or agreement
executed by it in accordance with this Agreement.
7.2 The Buyer agrees to hold harmless, defend, and indemnify the Seller and its respective
officers, directors, employees and agents (the “Seller Indemnitees”) from and against any and all
Losses arising from (i) any inaccuracy in any representation or breach of any warranty of the Buyer
contained in this Agreement, in any schedule, certificate, instrument or other document or
agreement executed or delivered by the Buyer in accordance with this Agreement; or (ii) any failure
by the Buyer to perform or observe any covenant, agreement or condition to be performed or observed
by it under this Agreement or under any exhibit, schedule, certificate, instrument or other
document or agreement executed by it in accordance with this Agreement.
8. Survival of Representations, Warranties, Etc. (a) All representations, warranties,
covenants, and indemnification obligations of the parties shall survive for a period of six (6)
months following the Closing. No person shall be liable for any claim for indemnification under
this Section 7 and Section 8 unless such claim arises prior to the applicable survival period and a
claim notice is delivered to the indemnifying party in writing within 5 days following the
expiration of the applicable survival period. No indemnification shall be made to any Buyer
Indemnitee or any Seller Indemnitee under Sections 6, 7 and 8 hereto unless and until the aggregate
amount of Losses by such indemnitee with respect thereto exceeds $10,000. The maximum liability of
the Seller under Sections 7 and 8 hereof shall be $100,000. The maximum liability of the Buyer
under Sections 7 and 8 hereof shall be $100,000.
(c) Each party agrees to give prompt written notice to the other party of the assertion of any
claim or demand for Losses or the institution of any action, suit, or proceeding in respect of
which indemnification may be claimed hereunder and to provide the indemnifying party with an opportunity to participate in the defense or settlement of such action, suit or
proceeding at the indemnifying party’s own expense.
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9. Miscellaneous.
9.1 Transfer; Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement. Neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by any of the parties hereto without the prior written consent of the other party.
9.2 Governing Law; Jurisdiction and Venue. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida applicable to contracts executed in
and to be performed in that state. The parties acknowledge that all of the negotiations,
anticipated performance and execution of this Agreement occurred or shall occur in the State of
Florida, and that, therefore, without limiting the jurisdiction or venue of any other federal or
state courts, each of the parties irrevocably and unconditionally (a) agrees that any suit, action
or legal proceeding arising out of or relating to this Agreement may be brought in the state or
federal courts of record of the Xxxxx xx Xxxxxxx xx Xxxx Xxxxx Xxxxxx; (b) consents to the
jurisdiction of each such court in any suit, action or proceeding; (c) waives any objection which
it may have to the laying of venue of any such suit, action or proceeding in any of such courts;
and (d) agrees that service of any court paper may be effected on such party by mail, as provided
in this Agreement, or in such other manner as may be provided under applicable laws or court rules
in said state.
9.3 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.
Delivery of an executed counterpart of this Agreement via facsimile transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.
9.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
9.5 Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or
sent by fax (upon customary confirmation of receipt), or 48 hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified
at such party’s address as set forth on the signature page, or as subsequently modified by written
notice, and (a) if to the Buyer, with a copy to Xxxxxxx Xxxxxxx, Esq., 000 Xxxxx Xxxxxx Xxxxx,
Xxxxxxxxx 0000, Xxxxx, XX 00000, or (b) if to the Seller, with a copy to with a copy to Xxxxxxxx
Xxxxxxxx, Esq.,1690 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, XX 00000, facsimile:
000-000-0000.
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9.6 Finder’s Fee. Each party represents that it neither is nor will be obligated for
any finder’s fee or commission in connection with this transaction. The Buyer will indemnify and
hold harmless the Seller from any liability for any commission or compensation in the nature of a
finder’s fee (and the costs and expenses of defending against such liability or asserted liability)
for which the Buyer is responsible. The Seller will indemnify and hold harmless the Buyer from any
liability for any commission or compensation in the nature of a finder’s fee (and the costs and
expenses of defending against such liability or asserted liability) for which the Seller or any of
its officers, employees or representatives is responsible.
9.7 Fees and Expenses. Each party shall pay all of his or its own fees and expenses
of experts, consultants and the like and other expenses incurred in connection with performing due
diligence with respect to this Agreement, the documents referred to herein and the transactions
contemplated hereby.
9.8 Attorney’s Fees. If any action at law or in equity (including arbitration) is
necessary to enforce or interpret the terms of any of the Transaction Documents, the prevailing
party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
9.9 Amendments and Waivers. Any term of this Agreement may be amended or waived only
with the written consent of the Seller and the Buyer. Any amendment or waiver effected in
accordance with this Section 9.9 shall be binding upon the Buyer and the Seller and each transferee
of the Acquisition Shares, and each future holder of all such securities.
9.10 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement
for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance
of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of
the Agreement shall be enforceable in accordance with its terms.
9.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any party under this Agreement, upon any breach or default of any other party under
this Agreement, shall impair any such right, power or remedy of such non-breaching or
non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any
waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this Agreement, or any waiver on
the part of any party of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not
alternative.
9.12 Entire Agreement. This Agreement, and the documents referred to herein
constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof
existing between the parties hereto are expressly canceled.
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9.13 Confidentiality. The Buyer and the Seller each agree that, except with the prior
written permission of the other party, it shall at all times hold in confidence and trust and not
use or disclose the terms of this Agreement. Notwithstanding the foregoing, the Buyer or the
Seller each may disclose the terms of this Agreement: (a) as required by any court or other
governmental body, provided that the Buyer or the Seller provides the other party with prompt
notice of such court order or requirement to enable the other party to seek a protective order or
otherwise to prevent or restrict such disclosure; (b) to legal counsel or the financial advisor of
the Buyer or the Seller; (c) in connection with the enforcement of this Agreement or rights under
this Agreement; or (d) to comply with applicable law. Notwithstanding anything herein to the
contrary, the Seller have the right, as required by law and the rules and regulations of the
Securities and Exchange Commission and the Nasdaq Stock Market, to publicly disclose this Agreement
and the transactions contemplated hereby without the prior written approval of the Buyer. The
provisions of this Section 6.14 shall survive the termination of this Agreement.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| BUYER: | ||||
| BLUE MOON ENERGY PARTNERS LLC | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Print Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Manager | |||
| Address: | ||||
| Facsimile: | ||||
| SELLER: | ||||
| DIGITAL ANGEL CORPORATION | ||||
| By: | /s/ Xxxxxxxx X. Xxxxxx | |||
| Print Name: | Xxxxxxxx X. Xxxxxx | |||
| Title: | SVP, CFO | |||
| Address: | 0000 Xxxxx Xxxxxxxx Xxx., Xxxxx 000 | |||
| Xxxxxx Xxxxx, Xxxxxxx 00000 | ||||
| Facsimile: | 000-000-0000 | |||
