Exhibit No. 10.1 Asset Purchase Agreement with I.S. Solutions LLC dated
February 24, 2005
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made on February 24, 2005,
by and among I. S. Solutions, LLC, a New Mexico limited liability company
("Seller"), and DataLogic New Mexico, Inc., a Delaware corporation
("Purchaser"), a wholly owned and newly formed subsidiary of DataLogic
International, Inc., a Delaware corporation ("DLGI").
WHEREAS, Seller is engaged in the business of IT services, has contracts with
existing customers (the "Seller's Business Agreements"), owns certain office
equipment used to conduct the IT services covered by Seller's Business
Agreements (the "Seller's Equipment"), and desires to sell to Purchaser,
subject to the terms and conditions of this Agreement, Seller's Business
Agreements and Seller's Equipment.
WHEREAS, DLGI provides IT services through its wholly owned subsidiary,
Datalogic Consulting, Inc., a Texas corporation, desires to expand its
offering of IT services, Purchaser is a newly formed wholly owned subsidiary
of DLGI, and desires to purchase, subject to the terms and conditions of this
Agreement, Seller's Business Agreements and Seller's Equipment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, including the recitals above and
the mutual covenants, agreements, representations and warranties contained in
this agreement, the parties agree as follows:
1. PURCHASE AND SALE OF AGREEMENTS AND EQUIPMENT.
Purchaser agrees to purchase and Seller agrees to sell the Seller's Business
Agreements and Seller's Equipment.
Seller intends to convey all of its right, title and interest in all contracts
and agreements with all existing or potential customers of the Seller for IT
services and Purchaser shall perform all duties and responsibilities of all
contracts and agreements as defined in Schedule 1 attached. Moreover, Seller
intends to convey all of its right, title and interest in all office equipment
and tangible personal property of the Seller. Schedule 1 attached hereto sets
forth a non-exclusive list of the contracts, agreements, customer list, office
equipment and tangible personal property of Seller sold, transferred and
conveyed under this Agreement. There are three (3) open purchase orders from
customers of Seller ("P.O.'s") that have been partially shipped and invoiced
by Seller. The remaining balance of the P.O's are forecasted to be shipped
after the Close and upon shipment will be invoiced by Purchaser to those
customers ("Invoices") as identified on Schedule 1 attached. Upon collection
of the Invoices by Purchaser, Purchaser shall remit to Seller the amount
collected on the Invoices. Seller shall be responsible for all costs
associated with the fulfillment of the P.O.'s including the costs of goods and
services provided to fulfill those P.O.'s. Purchasers sole obligation to
Seller shall be limited to the actual collection of the Invoices. In the
event customers cancel the P.O.'s or do not pay an Invoice, in whole or in
part, Purchaser shall be under no obligation to remit any proceeds or provide
to Seller any other payments related to the P.O.'s.
Purchaser is not assuming any liabilities in connection with this transaction,
Seller's Business Agreements and Seller's Equipment shall be delivered free
and clear of all liens, claims and encumbrances of every nature, save and
except for the AFS lease agreement covering a server and 5 computers.
2. PURCHASE PRICE.
The Purchase Price for the Seller's Business Agreements, Seller's Equipment
and the items specified as conditions precedent to closing in Section 5 shall
be comprised of two elements: (a) the Cash Payment and (b) the Stock Payment.
"Cash Payment" shall mean the sum of Fifty Thousand Dollars ($50,000).
"Stock Payment" shall mean that number of newly issued shares of restricted
common stock of DLGI having an agreed value of Fifty Thousand Dollars
($50,000) on a date within 10 business days of the Closing. For the purpose
of this section "agreed value" will be determined by the average closing price
of DLGI common stock as reported by the National Quotation Bureau on a date
within 10 business days of the Closing times the number of shares issued.
Seller understands that the Stock Payment shares will contain a Rule 144
legend and that subsequent transfer or sale of the shares is limited by
applicable securities laws. Seller (i.e. the "Investor") agrees that this
agreement involves the purchase and sale of securities. Accordingly, Investor
represents that (1) the securities which are being acquired, are being
acquired for the Investor's own account and for investment and not with a view
to the public resale or distribution thereof; (2) the Investor will not sell,
transfer or otherwise dispose of the securities except in compliance with the
Securities Act of 1933, as amended (the "Act"), and are being transferred in
reliance on exemptions, including but not limited to Section 4 of the Act; (3)
each Investor acknowledges that each Investor has been furnished with
disclosure documents that the Investor feels necessary to make an economic
decision to acquire the securities; (4) Investor further acknowledges that
Investor has had an opportunity to ask questions of and receive answers from
duly designated representatives concerning the terms and conditions pursuant
to which the securities are being purchased and Investor has been afforded an
opportunity to independently examine such documents and other information for
the purpose of verifying the financial condition of DLGI; (5) Investor is
fully aware of the applicable limitations on the resale of the securities; (6)
by reason of Investor's knowledge and experience in financial and business
matters in general, and investments in particular, Investor is capable of
evaluating the merits and bearing the economic risks of an investment in the
securities and fully understands the speculative nature of the securities and
the possibility of such loss; and (7) the present financial condition of
Investor is such that it is under no present or contemplated future need to
dispose of any portion of the securities to satisfy an existing or
contemplated undertaking, need or indebtedness.
The Purchase Price shall be allocated in a manner consistent with generally
accepted accounting principles applied on a consistent basis. Seller and
Purchaser each agree to report the federal, state and local income and other
tax consequences of the transactions in a manner consistent with such
allocation.
The Cash Payment shall be earned and delivered to Seller at Closing.
The Stock Payment shall be earned and delivered to Seller upon the transfer
and assignment of Seller's Business Agreements to Purchaser. Seller
understands and agrees that the approval of third parties, including the State
of New Mexico, is required to complete the transfer and assignment and/or
cause these parties to enter similar contracts with Purchaser before the Stock
Payment will be earned and delivered.
CLOSING
A closing (the "Closing") to effect the purchase and sale shall be held at the
offices of Purchaser or by exchange of facsimile signature pages on February
24, 2005, or such other date as may be mutually agreed upon by the parties.
At the Closing, Seller shall execute such bills of sale and instruments of
assignment as are necessary to convey title to Purchaser. Purchaser shall
pay the Purchase Price to Seller or Seller's designee(s).
At the Closing, Seller shall deliver or cause to be delivered to Purchaser the
following:
(1) A xxxx of sale or instruments of conveyance, assignment and transfer
as may be reasonably required by Purchaser substantially in the form of
Exhibit A; and
(2) An opinion of Seller's counsel addressed to Purchaser and Purchaser's
counsel substantially in the form of Exhibit B;
(3) A Closing Certificate from Seller's Managing Member substantially in
the form of Exhibit C;
(4) A Certificate of Acknowledgment from all Members and their spouses of
the Seller substantially in the form of Exhibit D;
At the Closing, Purchaser shall deliver or cause to be delivered to Seller the
following:
(1) The Cash Payment, satisfactory evidence of Purchaser's ability to
deliver the Stock Payment (copies of newly issued shares of DLGI common stock
shall constitute satisfactory evidence for Closing); and
(2) An opinion of Purchaser's counsel addressed to Seller and Seller's
counsel substantially in the form of Exhibit E;
(3) Letter from DLGI notifying Laurus concerning the Agreement
substantially in the form of Exhibit F;
(4) Evidence of the Board of directors approval of the Agreement in the
form of Exhibit G; and
(5) Evidence of DataLogic Consulting, Inc. applications for accounts with
Xxxxxx Micro and Tech Data in the form of Exhibit H
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents
and warrants to Purchaser as follows.
3.1. Organization and Good Standing of Seller. Seller is a limited
liability company duly organized and validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization.
3.2. Binding Effect. This Agreement has been or will have been duly
authorized, executed and delivered by Seller and is the legal, valid and
binding obligation of Seller enforceable in accordance with its terms except
that (i) enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability. Seller is not an insolvent person within the meaning of the
Bankruptcy Act and will not become an insolvent person as a result of the
Closing.
3.3. No Conflicts; Consents and Approvals. Except as contemplated
elsewhere herein, neither the execution and delivery by Seller of this
Agreement nor the consummation by it of the transactions contemplated hereby
will violate, breach, be in conflict with, or constitute a default under, or
permit the termination or the acceleration of maturity of, or result in the
imposition of any lien, claim or encumbrance upon any property or asset of
Seller. Seller has, and will convey to Purchaser at Closing, good and
marketable title to Seller's Business Agreements and Seller's Equipment.
Seller has disclosed and Purchaser understands that Seller's Equipment
includes an AFS server and five computers subject to existing leases and that
use and access to these items depends upon Purchaser's payment of the
remaining obligations under the lease agreements.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to Seller as follows:
4.1. Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. Purchaser has the corporate power and authority and all licenses
and permits required by governmental authorities to execute, deliver and
perform this Agreement. This Agreement has been duly authorized, executed and
delivered by Purchaser and is the legal, valid and binding obligation of it,
enforceable in accordance with its terms except that (i) enforceability may be
limited by bankruptcy, insolvency, or other similar laws affecting creditors'
rights and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
5. CONDITIONS PRECEDENT TO CLOSING.
The obligations of Seller and Buyer to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction on or
before the Closing Date of each of the following conditions:
(1) Purchaser shall have provided offer letters for the persons set forth
on Schedule 5.1. Purchaser shall have entered into a written employment
agreement with Xxxx Xxxxxxxx.
(2) DLGI and Purchaser have agreed upon the Operating Procedures as set
forth on Schedule 5.2.
6. MISCELLANEOUS.
Termination. This Agreement and the transactions contemplated hereby may be
terminated at any time on or before the Closing Date.
Expenses. Purchaser and Seller shall pay its own expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
Entire Agreement. This Agreement and the exhibits hereto contain the complete
agreement among the parties with respect to the transactions contemplated
hereby and supersede all prior agreements and understandings, oral or written,
among the parties with respect to such transactions. Section and other
headings are for reference purposes only and shall not affect the
interpretation or construction of this Agreement. The parties hereto have not
made any representation or warranty except as expressly set forth in this
Agreement or in any certificate or schedule delivered pursuant hereto.
Public Announcements. No party to this Agreement shall issue any press
release relating to, or otherwise publicly disclose, the transactions
contemplated by this Agreement without the prior approval of the other
parties. Notwithstanding the foregoing, any party may make such disclosure as
may be required by law, provided the disclosing party obtains from the other
party prior approval of the substance of the proposed disclosure (such as the
content of a proposed press release), which approval may not be unreasonably
withheld or delayed.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and
such counterparts together shall constitute only one original.
Notices. All notices, demands, requests or other communications that may be or
are required to be given, served or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be transmitted by a
reputable overnight courier service or by hand delivery or facsimile
transmission, addressed as follows:
If to Purchaser:
DataLogic New Mexico, Inc.
00000 Xxx Xxxxxx Xxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Fax: (000) 000-0000 & 800.549.3067
with copy to:
Xxxxxxx X. Xxxx
Weed & Co. LLP
0000 XxxXxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Telephone (000) 000-0000 xxx 0
Facsimile (000) 000-0000
Email xxxx@xxxxxx.xxx
If to Seller:
I.S. Solutions, LLC
0000 Xxx Xxxxx Xxxxx, XX
Xxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Fax: 000.000.0000
Telephone: 000.000.0000
with copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx Attorney at Law P.C.
0000 Xxx Xxxxx Xxxxx XX
Xxxxxxxxxxx, XX 00000
Telephone 000.000.000
Facsimile 505.884.1404
email xxxxxxxxx@xxxx.xxx
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served,
or sent. Each notice, demand, request or communication that is mailed,
delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time as
it is delivered to the addressee (with the return receipt, the delivery
receipt, fax confirmation sheet or the affidavit of courier or messenger being
deemed conclusive evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.
Assignment; Successors and Assigns. This Agreement may not be assigned by
either of the parties hereto without the written consent of all the other
parties; provided, however, that Purchaser shall be entitled to assign this
Agreement to one or more subsidiary corporations so long as Purchaser remains
liable for the payment of the Purchase Price hereunder. Subject to the
preceding sentence, this Agreement and the rights, interests and obligations
hereunder shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW MEXICO. THE PARTIES AGREE THAT
ANY ACTION TO ENFORCE, INTERPRET, OR RESOLVE ANY DISPUTE WITH RESPECT TO ANY
PROVISION OF THIS AGREEMENT MAY BE BROUGHT IN ALBUQUERQUE, NEW MEXICO, AND ALL
PARTIES HERETO AGREE THAT ANY LITIGATION DIRECTLY OR INDIRECTLY RELATING TO
THIS AGREEMENT MUST BE BROUGHT BEFORE AND DETERMINED BY A COURT OF COMPETENT
JURISDICTION WITHIN ONE OF THOSE JURISDICTIONS. EACH OF THE PARTIES FURTHER
ACKNOWLEDGE THAT THE FOREGOING IS APPROPRIATE AND AGREE NOT TO RAISE ANY
ARGUMENT THAT SUCH VENUE IS IN ANY WAY UNDULY INCONVENIENT FOR ANY OF THEM,
WITH THEIR EXECUTION HEREOF BEING EVIDENCE OF THEIR AGREEMENT TO SUBMIT TO THE
JURISDICTION OF SUCH COURTS.
Waiver and Other Action. This Agreement may be amended, modified, or
supplemented only by a written instrument executed by the parties against
which enforcement of the amendment, modification or supplement is sought.
Severability. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable, such provision shall be fully severable, and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu
of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
Third-Party Beneficiaries. This Agreement and the rights, obligations, duties
and benefits hereunder are intended for the parties hereto, and no other
person or entity shall have any rights, obligations, duties and benefits
pursuant hereto.
Mutual Contribution. The parties to this Agreement and their counsel have
mutually contributed to its drafting. Consequently, no provision of this
Agreement shall be construed against any party on the ground that such party
drafted the provision or caused it to be drafted or the provision contains a
covenant of such party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
SELLER:
I.S. SOLUTIONS, LLC, a New Mexico limited
liability company
/s/ Xxxx Xxxxxxxx
By: __________________________________
Name: Xxxx Xxxxxxxx
Title: Managing Member
PURCHASER:
DATALOGIC NEW MEXICO, INC., a Delaware
corporation
/s/ Xxxxx Xxxxx
By: __________________________________
Name: Xxxxx Xxxxx
Title: President
