EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is dated as of May 31, 2003
(the "Effective Date"), by and between Pacific Magtron International Corp., a
Nevada corporation ("Seller"), and Sable Computer, Inc., a California
corporation ("Buyer").
RECITALS
A. Buyer desires to purchase from Seller and Seller desires to sell to Buyer, on
the terms and subject to the conditions of this Agreement, the Assets as defined
below.
B. Buyer and Seller are entering into a Promissory Note in conjunction with this
Agreement to evidence the partial payment of the Purchase Price, as defined
below.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and other good and valuable consideration, the receipt, adequacy
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. PURCHASE AND CONSIDERATION
1.1 Purchase of Selected Assets. Subject to the terms and conditions of
this Agreement, Seller agrees to assign and/or deliver to Buyer on the Closing
Date (as defined in Section 2.1 below), and Buyer agrees to buy from Seller, the
assets listed on Exhibit A and fully incorporated by this reference (the
"Assets"). In addition, Seller shall hereby grant to Buyer the use of the
business name "Frontline Network Consulting" as a d.b.a. to Buyer's business.
1.2 Purchase Price. As consideration for the Assets, Buyer shall pay to
Seller the sum of $15,000.00 (the "Purchase Price"). The Buyer shall pay to the
Seller, in cash, cashier's check or wire transfer the sum of $3,000.00 on the
Closing Date and the remaining $12,000 shall be evidenced by a Promissory Note,
a form of which is attached hereto as Exhibit B, with four installments due and
payable to Seller at the end of June, July, August and September of 2003.
2. CLOSING
2.1 The Closing. The transactions contemplated by this Agreement shall be
consummated (the "Closing") at Seller's principal office as of May 31, 2003, or
at such other time or place as the parties shall mutually agree (the "Closing
Date").
2.2 Actions at the Closing. At the Closing:
2.2.1 Buyer shall deliver cash portion of the Purchase Price to
Seller.
2.2.2 Buyer shall execute the Promissory Note.
2.2.3 Upon receipt of the cash portion of the Purchase Price and the
Promissory Note, Seller will deliver the Assets to the Buyer, in the case such
assets are tangible, or execute and deliver to the Buyer a xxxx of sale and
assignment of assets and all other affidavits, bills of sale, endorsements,
assignments and other instruments as necessary or appropriate in Seller's
commercially reasonable discretion (the "Transfer Documents") to sell, convey,
assign, transfer and deliver to Buyer title to the Assets, in the case such
assets are intangible.
3. REPRESENTATIONS, WARRANTEES AND ADDITIONAL COVENANT OF SELLER.
Seller represents and warrants to Buyer solely as follows:
3.1 Authority. Seller has all requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by, and constitutes the valid and
binding obligation, enforceable in accordance with its terms of Seller.
3.2 Title to or Rights in Assets. Seller has either (i) good title to all
of the Assets it owns, and at the Closing, Seller will sell, convey, assign,
transfer and deliver to Buyer good title to all of the Assets, or (ii) has
sufficient and necessary rights in all of the Assets it licenses, and at the
Closing, Seller will assign and transfer to Buyer all of its rights in the
Assets.
Seller covenants to buyer as follows:
3.3 Seller will provide the necessary assistance to Buyer in Buyer's effort
to obtain any and all information (other than those restricted by Seller's
contractual obligations and/or unlawful) under Frontline Network Consulting's
login ID on Cisco CCO and HP TOSS/Big Deal websites for a period of 90 days from
Closing.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
4.1 Authority. Buyer has all requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by, and constitutes the valid and
binding obligation, enforceable in accordance with its terms of Buyer.
5. MISCELLANEOUS PROVISIONS.
5.1 Assignment, Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and assigns. Neither party to this Agreement may assign its rights
and obligations hereunder without the other party's prior written consent.
5.2 Alterations and Waivers. The waiver, amendment or modification of any
provision of this Agreement or any right, power or remedy hereunder, whether by
agreement of the parties or by custom, course of dealing or trade practice,
shall not be effective unless in writing and signed by the party against whom
enforcement of such waiver, amendment or modification is sought.
5.3 Expenses. Each party will bear its expenses incident to the negotiation
and execution of this Agreement and the transactions contemplated hereby,
including, without limitation, all fees of its legal counsel, accountants and
consultants, whether or not such transactions are consummated.
5.4 Governing Law. This agreement shall be construed, governed and enforced
in accordance with the laws of the State of California, without reference to its
choice of law provisions.
5.5 Arbitration. Any and all disputes arising out of or related to this
Agreement shall be settled by final and binding arbitration. The arbitration
will be administered by and in accordance with the Commercial Dispute Resolution
rules of the American Arbitration Association as then in effect, and judgment
upon any award rendered by the arbitrator may be entered by any California state
or federal court having jurisdiction thereof. Any such arbitration shall take
place in Santa Xxxxx County in the State of California and shall be conducted by
a single arbitrator. The arbitrator shall be an active member in good standing
of the State Bar of California or a retired judge. The arbitrator shall comply
with California law in accordance with Section 5.4 of this Agreement. In
addition to any award for damages, the arbitrator shall explicitly determine who
is the prevailing party. The losing party in the arbitration shall reimburse the
prevailing party for all expenses incurred in connection with the arbitration,
including without limitation, reasonable attorney fees, costs and the
arbitrator's fees, as determined by the arbitrator. Each party shall submit
their attorney fees, any incurred costs and arbitrator's fees to the arbitrator
at the conclusion of the arbitration proceeding. The parties intend that this
provision to arbitrate be valid, enforceable, binding and irrevocable.
5.6 Severability. In the event any provision of this Agreement or the
application of any such provision shall be held to be prohibited or
unenforceable in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability. The remaining provisions of this Agreement shall remain in
full, force and effect, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. The parties shall use their best efforts to replace the
provision that is contrary to law with a legal one approximating to the extent
possible the original intent of the parties.
5.7 No Third-Party Beneficiaries. Nothing contained in this Agreement shall
be construed to give any person other than Seller and Buyer any legal or
equitable right, remedy or claim under or with respect to this Agreement or the
Assets.
5.8 Integration and Entire Agreement. This Agreement and the Exhibit and
other documents referred to herein set forth the entire understanding between
the parties and supersede all previous and contemporaneous written or oral
negotiations, commitments, understandings, and agreements relating to the
subject matter hereof and merge all prior and contemporaneous discussions
between the parties. No party shall be bound by any definition, condition,
representation, warranty, covenant or provision other than as contained herein.
5.9 Counterparts. For the convenience of the parties, this Agreement may be
executed in one or more counterparts; each of which shall be deemed an original,
but all of which together constitute one and the same instrument. Facsimile or
electronic signatures shall be deemed originals for all purposes.
5.10 Headings. All Section headings and captions are inserted solely for
convenience of reference are not to be considered a part of this Agreement and
shall not affect the meaning or interpretation hereof.
5.11 Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the parties. The parties acknowledge that:
(a) They have read this Agreement;
(b) They have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) They understand the terms, obligations, limitations and consequences of
this Agreement it contains.
(d) They are fully aware of the legal and binding effect of this Agreement.
6. LITIGATION.
Seller is not currently a party to any litigation, arbitration, or other claim
adjudication process. Buyer has been informed of a potential labor dispute
arising out of the termination of Xxxxxxx Xxxxx of Technical Insight with
Seller. Seller is not aware of any claims, notice of claims, arbitration,
investigation, hearing, or other legal, administrative or governmental
proceedings related to the purchased Assets
7. BROKERS.
All negotiations relative to the Asset Purchase Agreement have been carried out
by Buyer directly with Seller without the intervention of any person on behalf
of Seller in such manner as to give rise to any valid claim by any company or
person against Buyer for a finder's fee, brokerage commission or similar
payment.
8. NON-COMPETITION.
Seller will not, for a period of three (3) years from the Closing, (a) continue
to engage in any type of business conducted by Seller's entities known as
Frontline Network Consultants or Technical Insights except as listed on Exhibit
C, (b) Seller shall not hire or attempt to hire, in any capacity, any
transferred employee; provided, however, that the foregoing shall not apply to
any transferred employee who is terminated by Buyer after the Closing Date.
9. NON-DISCLOSURES AND CONFIDENTIALITY.
9.1 Seller will at all times hold in strictest confidence any and all
confidential information within their knowledge concerning the products,
services, business, suppliers, and customers relating to Frontline Network
Consultants or Technical Insights. Such confidential information includes,
without limitation, discoveries, inventions, ideas, concepts, research,
development, processes, procedures, "know-how", marketing techniques and
materials, marketing and development plans, business plans, employee
compensation information, computer programs and systems, their respective
clients, information obtained from another party and treats as proprietary or
designates as "confidential information", financial information, sales and
distribution information, price lists, the identity and lists of actual and
potential customers and technical information.
9.2 Buyer agree to a joint Press Release after the Closing Date to be
published by Seller. Such Press Release shall be approved by both parties prior
to release. However, under no circumstances shall the press release be issued
later than three (3) business days after the Effective Date.
10. INDEMNIFICATION.
10.1 Effective on the Closing Date and thereafter, Seller shall, jointly
and severally, indemnify and hold harmless Buyer and its directors, officers,
employees and agents, from and against any and all Losses arising from or in
connection with: (a) any claim made or litigation instituted by a third party
relating to Seller's conduct of the business notice of which claim or litigation
has been received by Seller prior to the Closing Date; (b) any claim first made
or litigation instituted by a third party relating to Seller's conduct of the
business prior to Closing Date; (c) any taxes imposed on Buyer, Frontline
Network Consultants or Technical Insights or any of the Assets for any period
prior to the Closing; (d) the breach by Seller of any representations or
warranties made by Seller herein or in any document given by Seller in
connection with the consummation of the transaction contemplated herein.
10.2 Effective on the Closing Date the thereafter, Buyer shall, jointly and
severally, indemnify and hold harmless Seller, and its subsidiaries and their
directors, officers, stockholders, employees and agents, from and against any
and all Losses arising from or in connection with (a) any claim made or
litigation instituted by a third party relating to Buyers conduct or actions
after the Closing Date; (b) any taxes imposed on Seller, or its affiliated
entities after the closing date; (c) the breach by Buyer of any representations
or warranties made by Buyer herein or in any documents given by Buyer in
connection with the consummation of the transaction completed herein.
11. EMPLOYEES.
Buyer may offer employment on an "at will" basis to certain other employees of
Seller identified by Buyer. All employees of Seller not hired by Buyer will be
the sole responsibility of Seller. Buyer would not assume any liabilities of
Seller relating to any employees. The employees who accept employment with Buyer
will be eligible to participate in the benefit plans offered to all employees of
Buyer; provided, however, that the receipt of such benefits by the employees
shall be subject to Buyer' eligibility and enrollment requirements pertaining to
such benefit programs. Each employee's term of service with Seller shall, for
employee plan benefit purposes, be deemed his or her Buyer term of service to
the extent permitted under the benefit plans.
12. NOTICES.
All notices or other communications required or permitted to be given hereunder
shall be in writing and shall be deemed given to a party when (a) delivered by
hand or by a nationally recognized overnight courier service (costs prepaid),
(b) sent by facsimile or e-mail with confirmation of transmission by the
transmitting equipment, or (c) received or rejected by the addressee, if sent by
certified mail, postage prepaid and return receipt requested, in each case to
the following:
If to Buyer, to:
Sable Computer, Inc.
d.b.a.: KIS Computer Center
00000 Xxxxx Xxxx. Xxxxx X
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Tel: (000) 000-0000
E-mail: xxxx@xxxxx.xxx
If to Seller, to:
Pacific Magtron International Corp.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxx Xx
Tel: (000) 000-0000
E-Mail: xxx@xxxxxx.xxx
And a copy to:
Xxxxxxx and Xxxxx, Straich Lang, LLP
2 North Central Ave.
One Renaissance
Xxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxx, Esq.
Either party hereto may change its contact information for notices and
other communications hereunder by notice to the other party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
Pacific Magtron International Corp.
By: /s/ Xxxxxxxx Xx
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Xxxxxxxx Xx, President
Sable Computer, Inc.
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, CEO
