Attached files
| file |
filename |
| S-1 - IVDESK HOLDINGS, INC. | ivdesks-1vfinal1132014.txt |
| EX-3.7 - IVDESK HOLDINGS, INC. | ex3ii.2bylawsivdeskmn.txt |
| EX-3.4 - IVDESK HOLDINGS, INC. | ex3i.4artofamendname.txt |
| EX-10.9 - IVDESK HOLDINGS, INC. | ex10.9ingwersennote.txt |
| EX-10.5 - IVDESK HOLDINGS, INC. | ex10.5kellyagr.txt |
| EX-4.1 - IVDESK HOLDINGS, INC. | ex4.1stockincentplan.txt |
| EX-10.7 - IVDESK HOLDINGS, INC. | ex10.7xpartnersnote.txt |
| EX-5.1 - IVDESK HOLDINGS, INC. | ex5.1.txt |
| EX-3.2 - IVDESK HOLDINGS, INC. | ex3i.2certofcorrectde.txt |
| EX-10.8 - IVDESK HOLDINGS, INC. | ex10.8hilldalenote.txt |
| EX-10.6 - IVDESK HOLDINGS, INC. | ex10.6polakowskiagr.txt.txt |
| EX-10.11 - IVDESK HOLDINGS, INC. | ex10.11polakowskinote.txt |
| EX-21.1 - IVDESK HOLDINGS, INC. | ex21.1.txt |
| EX-10.2 - IVDESK HOLDINGS, INC. | ex10.2fivexagr.txt.txt |
| EX-10.4 - IVDESK HOLDINGS, INC. | ex10.4sorensonagr.txt |
| EX-10.3 - IVDESK HOLDINGS, INC. | ex10.3bignallagr.txt.txt |
| EX-3.3 - IVDESK HOLDINGS, INC. | ex3i.3artofincmn.txt |
| EX-3.1 - IVDESK HOLDINGS, INC. | ex3i.1certofincde.txt |
| EX-3.6 - IVDESK HOLDINGS, INC. | ex3ii.1bylawsivdesk.txt |
| EX-10.10 - IVDESK HOLDINGS, INC. | ex10.10sorensonnote.txt |
| EX-3.5 - IVDESK HOLDINGS, INC. | ex3i.5artofamendadd.txt |
| EX-23.2 - IVDESK HOLDINGS, INC. | ex23.2.txt |
EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
IVDESK HOLDINGS, INC.,
IVDESK MINNESOTA, INC.,
AND
FOCUSED SOLUTIONS CONSULTING, INC.
DATED AS OF
SEPTEMBER 14, 2012
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is made effective this
14 day of September 2012 ("CLOSING DATE"), by and between IVDesk Holdings, Inc.,
a Delaware Corporation, IVDesk Minnesota, Inc., a Minnesota corporation
("BUYER"), and Focused Solutions Consulting, Inc., a Minnesota "S" Corporation
("SELLER"), William E. Sorenson and James J. Polakowski. SELLER, BUYER, William
E. Sorenson, James J. Polakowski and IVDesk Holdings, Inc. are hereinafter
jointly referred to as the "PARTIES".
W I T N E S S E T H:
WHEREAS, SELLER owns certain assets, including equipment, inventory,
receivables, customer contracts, and good will, all used in connection with its
business operated under the name Focused Solutions Consulting, Inc., and doing
business as IVDesk from its offices at 1509 Marshall Street NE, Suite 300,
Minneapolis, MN 55413 (the "Premises"); and
WHEREAS, SELLER provides Information Technology services to
approximately 100 business customers; and
WHEREAS, SELLER was founded and is currently 100% owned by William E.
(Bill) Sorenson, its CEO, and James J. (Jim) Polakowski, its President and COO;
("SELLER'S SHAREHOLDERS") and
WHEREAS, the Board of Directors of SELLER has approved the asset
purchase by BUYER of certain assets and liabilities as described herein for the
consideration described herein, as being in the best interests of SELLER and its
stockholders in accordance with the applicable provisions of the Minnesota
Business Corporations Act; and
WHEREAS, BUYER is a Minnesota Corporation, and a wholly owned
subsidiary of IVDesk Holdings, Inc. BUYER is a duly organized, validly existing
corporation and in good standing under the laws of the State of Minnesota, and
was formed specifically to operate an IT service targeted at mid-market (15-150
employees) organizations (the "Business") that will result from this Asset
Purchase and;
WHEREAS, the Board of Directors of BUYER and the Board of Directors of
IVDesk Holdings, Inc. has approved the acquisition for the consideration
described herein, as being in the best interests of their respective
shareholders.
WHEREAS, the PARTIES desire to make certain representations,
warranties, covenants and agreements in connection with the asset purchase and
also to prescribe various conditions to this transaction.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, undertakings, representations, warranties, agreements and promises
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the PARTIES hereto
agree as follows:
-2-
I. EXHIBITS
The following Exhibits are made a part of this AGREEMENT and are
incorporated herein by this reference:
EXHIBIT A - Purchased Assets
EXHIBIT B - Assumed Liabilities
EXHIBIT C - Bill of Sale
EXHIBIT D - IVDesk Holdings, Inc. Minutes
EXHIBIT E - SELLER Minutes
EXHIBIT F - Assignment and Assumption Agreement
EXHIBIT G - BUYER Minutes
EXHIBIT H - Certificate of SELLER
EXHIBIT I - Certificate of BUYER
EXHIBIT J - Employment Agreement for CEO
EXHIBIT K - Employment Agreement for President
EXHIBIT L - Employment Agreement for 5X Partners
EXHIBIT M - Bylaws
EXHIBIT N - Shareholder Agreement
II. TERMS OF SALE
1. PURCHASE OF ASSETS: Subject to the terms and conditions of
this AGREEMENT, the SELLER hereby agrees to sell, convey,
transfer and assign to the BUYER and BUYER hereby agrees to
purchase and accept from the SELLER all of the SELLER's right,
title and interest in the Assets of the SELLER itemized in
EXHIBIT A (the "ASSETS") on the CLOSING DATE hereinafter
specified, free and clear of any liens or encumbrances, except
for such liens and encumbrances included in the "Assumed
Liabilities" described in EXHIBIT B hereto. A physical
inventory shall be taken of the ASSETS as of the close of
business on the day preceding the CLOSING DATE. Upon signature
of the closing documents, BUYER acknowledges that BUYER has
inspected the ASSETS being purchased hereunder and is
satisfied with their condition and that BUYER is purchasing
the ASSETS in an "as is" condition as of the CLOSING DATE.
-3-
SELLER expressly disclaims any implied warranties of
merchantability and fitness for a particular purpose in
connection with the ASSETS.
2. ASSUMPTION OF LIABILITIES: BUYER shall assume and be obligated
for the contracts and obligations of SELLER as listed in the
Assumed Liabilities List itemized in EXHIBIT B attached hereto
and incorporated herein (the "Assumed Liabilities") on the
CLOSING DATE hereinafter specified. Any liabilities not
specifically identified in EXHIBIT B will remain the full
responsibility of SELLER.
3. PURCHASE PRICE AND PAYMENT: The total value of the sale
pursuant to this AGREEMENT is $1,520,000.00 ("Purchase
Price"). The Purchase Price shall be payable to SELLER in the
following manner: Effective on the CLOSING DATE, IVDesk
Holdings, Inc. shall transfer ownership of 4,000,000 shares of
IV Desk Holdings, Inc. Common Stock to the SELLER (the "Common
Stock"), which shall then distribute such shares to SELLER's
SHAREHOLDERS in the liquidation and dissolution of SELLER as
provided herein. The parties agree that such transfer of the
shares of IVDesk Holdings, Inc. shall constitute full payment
of the Purchase Price.
4. CLOSING: The closing will be held at the offices of
_____________________ or at such other place as may be agreed
to by the PARTIES.
III. BUYER COVENANTS, REPRESENTATIONS AND WARRANTIES
BUYER and IVDesk Holdings, Inc, as of the date of this Agreement and
the Closing, warrant and represent the following:
1. ORGANIZATION AND AUTHORITY OF IVDESK HOLDINGS, INC.: IVDesk
Holdings, Inc. is an entity duly organized, validly existing
and in good standing under the laws of the State of Delaware.
IVDesk Holdings, Inc. has all requisite corporate power and
corporate authority to enter into the transaction documents to
which it is a party, to consummate the transactions
contemplated hereby, to own, lease and operate its properties
and to conduct its business. With the board of director's
approval attached as EXHIBIT D, the execution, delivery and
performance by IVDesk Holdings, Inc. of the transaction
documents to which it is a party and the consummation of the
transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of IVDesk Holdings,
Inc., including the approval of the Board of Directors of
IVDesk Holdings, Inc. BUYER has heretofore delivered or made
available complete and correct copies of the certificate of
incorporation and by-laws of BUYER, the minute books and stock
transfer records of BUYER, as in effect as of the CLOSING
DATE.
2. ORGANIZATION AND AUTHORITY OF BUYER: IVDesk Minnesota, Inc, is
a wholly owned subsidiary of IVDesk Holdings, Inc., and is an
entity duly organized, validly existing and in good standing
under the laws of the State of Minnesota. IVDesk Minnesota,
Inc. has all requisite corporate power and corporate authority
to enter into the transaction documents to which it is a
-4-
party, to consummate the transactions contemplated hereby, to
own, lease and operate its properties and to conduct its
business. BUYER is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary,
except where the failure to obtain such qualification or
license would not, individually or in the aggregate, have a
material adverse effect.
3. DUE DILIGENCE: IVDesk Holdings, Inc. and BUYER have completed
due diligence on SELLER, including an audit, have received all
necessary information from the SELLER and are satisfied with
the condition of the ASSETS. BUYER acknowledges that it has
inspected the ASSETS and accepts the same "AS IS", "WHERE IS".
4. CAPITALIZATION IMMEDIATELY PRIOR TO CLOSING DATE: As of the
CLOSING DATE the authorized capital stock of IVDesk Holdings,
Inc. consists of 100,000,000 shares of Common Stock and
5,000,000 shares of Preferred Stock, of which 1,000,000 shares
of Common Stock are outstanding hereof and no shares of
Preferred Stock are outstanding. The issued and outstanding
shares of IVDesk Holdings, Inc. Common Stock have been duly
authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of, and are not
subject to, any preemptive, subscription or similar rights. To
IVDesk Holdings, Inc.'s knowledge, none of the outstanding
shares of IVDesk Holdings, Inc. Common Stock were issued in
violation of any law, including without limitation, federal
and state securities laws. On the CLOSING DATE, the shares of
IVDesk Holdings, Inc. Common Stock which shall be issued to
the SELLER in payment of the Purchase Price will have been
duly authorized and, when issued and delivered in accordance
with this AGREEMENT, such shares of BUYER'S Common Stock will
be validly issued, fully paid and nonassessable.
5. CAPITALIZATION IMMEDIATELY AFTER CLOSING: Immediately after
CLOSING the authorized capital stock of IVDesk Holdings, Inc.
will consist of 100,000,000 shares of IVDesk Holdings, Inc.'s
Common Stock and 5,000,000 shares of IVDesk Holdings, Inc.'s
Preferred Stock, of which 5,000,000 shares of Common Stock
will be outstanding hereof and no shares of Preferred Stock
will be outstanding.
6. NO VIOLATION; CONSENTS AND APPROVALS: The execution and
delivery by BUYER and IVDesk Holdings, Inc. of the transaction
documents and the consummation of the transactions
contemplated hereby will not, conflict with or result in any
violation of or default (or an event which, with notice or
lapse of time or both, would constitute a default) under; (a)
the terms and conditions or provisions of the certificate of
incorporation or by-laws of BUYER or IVDesk Holdings, Inc.,
(b) any laws applicable to BUYER or IVDesk Holdings, Inc., (c)
or the property or assets of BUYER or IVDesk Holdings, Inc.,
or (d) give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any lien upon
-5-
any of the properties of BUYER or IVDesk Holdings, Inc. under
any contract to which BUYER or IVDesk Holdings, Inc. is a
party or by which BUYER or any assets of BUYER may be bound.
No Governmental Approval is required to be obtained or made by
or with respect to BUYER or IVDesk Holdings, Inc. in
connection with the execution and delivery of this AGREEMENT
or the consummation by BUYER or IVDesk Holdings, Inc. of the
transactions contemplated hereby.
7. LITIGATION; COMPLIANCE WITH LAWS: There are: (i) no claims,
actions, suits, investigations or proceedings pending or, to
the knowledge of BUYER or IVDesk Holdings, Inc., threatened
against, relating to or affecting BUYER or IVDesk Holdings,
Inc., the business, the assets, or any employee, officer,
director, stockholder, or independent contractor of BUYER or
IVDesk Holdings, Inc, in their capacities as such, and (ii) no
orders of any Governmental Entity or arbitrator are
outstanding against BUYER or IVDesk Holdings, Inc., or the
business, the assets, or any employee, officer, director,
stockholder, or independent contractor of BUYER or IVDesk
Holdings, Inc. in their capacities as such, or that could
prevent or enjoin, or delay in any respect, consummation of
the transactions contemplated hereby.
BUYER and IVDesk Holdings, Inc. have complied with and are in
compliance in all material respects with all laws applicable
to their respective business. BUYER or IVDesk Holdings, Inc.
has not received notice from any Governmental Entity or other
Person of any material violation of law applicable to BUYER or
IVDesk Holdings, Inc. or its business. BUYER has obtained and
holds all required Licenses (all of which are in full force
and effect) from all Government Entities applicable to BUYER
or IVDesk Holdings, Inc. and its business. No violations are
or have been recorded in respect of any such license and no
proceeding is pending, or, to the knowledge of BUYER or IVDesk
Holdings, Inc., threatened to revoke or limit any such
license.
8. SURVIVAL: All covenants, warranties and representations made
by BUYER and IVDesk Holdings, Inc. in this Section III shall
be true and correct as of the CLOSING DATE and shall survive
the CLOSING.
IV. SELLER'S COVENANTS, REPRESENTATIONS AND WARRANTIES
Seller represents and warrants that as of the date of this Agreement
and the Closing, the following:
1. ORGANIZATION AND AUTHORITY OF SELLER: SELLER is a Corporation
duly organized, validly existing and in good standing under
the laws of the State of Minnesota which has elected
Subchapter S status under the U.S. Internal Revenue Code.
SELLER is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each
jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to obtain
-6-
such qualification or license would not, individually or in
the aggregate, have a Material Adverse Effect. SELLER has
heretofore delivered or made available complete and correct
copies of the certificate of incorporation and Bylaws of
SELLER, the minute books, and membership interest records of
SELLER in effect as of the CLOSING DATE of this AGREEMENT.
SELLER has all requisite corporate power to own its property
and carry on its business as presently conducted and to enter
into and complete the transactions contemplated by this
Agreement. The execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of
Directors of SELLER.
2. VALID AND ENFORCEABLE AGREEMENT: This Agreement constitutes a
valid and binding agreement of SELLER, enforceable in
accordance with its terms, except insofar as enforceability
may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby violates
or conflicts with the Articles of Incorporation or By-Laws of
SELLER or, any agreement or other restriction of any kind or
character by which SELLER is a party, by which SELLER is
bound, or to which any of SELLER's property is subject.
3. FULL DISCLOSURE: Seller has no liabilities (whether known or
unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued), including any liability for taxes,
except for liabilities disclosed on Seller's most recent
monthly balance sheet, or which would be so disclosed
consistent with generally accepted accounting principles.
4. FINANCIAL STATEMENTS: SELLER has previously delivered to BUYER
unaudited financial statements ("Financial Information") of
the Business. All such financial statements are, in all
material respects, true, accurate and complete as of the date
hereof and accurately represent the results of the Business
for the periods thereof, and are consistent with the books and
records of the SELLER.
5. BUSINESS SINCE THE DATES OF THE FINANCIAL INFORMATION;
MATERIAL ADVERSE CHANGE: From the dates of the Financial
Information through the date of this Agreement, the Business
has been conducted in the ordinary course and in substantially
the same manner as it was before the dates of the Financial
Information. Since the dates of the Financial Information,
there has been no material adverse change in the business,
financial condition, operating results, assets, employee
relations, customer or supplier relations or the business
prospects of SELLER, (financial or otherwise) or results of
operations of the Business, except as disclosed by SELLER in
writing prior to Closing.
6. UNTRUE STATEMENTS: No representation or warranty by SELLER
contained in this Agreement and none of the information
provided by SELLER during the due diligence process contains
any untrue statement of material fact or omits to state any
-7-
fact necessary to make the statements herein or therein not
misleading.
7. CONTRACTS AND OBLIGATIONS: SELLER has provided BUYER with
copies of all contracts or obligations for services of
employees or independent contractors; outstanding contracts or
orders for the purchase of services, inventory and supplies
and all contracts and obligations relating to Assumed
Liabilities have been delivered prior to the CLOSING DATE.
8. DUE DILIGENCE: SELLER has successfully completed due diligence
on BUYER and IVDesk Holdings, Inc.; has received all necessary
information from the BUYER; and, based upon the financial
statements and other information provided to SELLER by BUYER
and or IVDesk Holdings, Inc. and upon the Warranties and
Representations of SELLER included herein, is satisfied with
the condition of the BUYER and IVDesk Holdings, Inc., and
SELLER agrees to the capitalization status and plans as
described herein.
9. OWNERSHIP: The SELLER is the record owner of all of the ASSETS
being sold hereunder as of the CLOSING, has good title to all
of the ASSETS and is fully authorized to execute any duly
constituted agreements transferring said ASSETS free and clear
of all claims, liens and encumbrances, except those claims,
liens and encumbrances specifically listed as Assumed
Liabilities in EXHIBIT B; and it shall have full legal right,
power and authority to sell, assign and transfer all of the
ASSETS hereunder.
10. INTELLECTUAL PROPERTY: SELLER is duly authorized by means of
rights, licenses or other authority, to use all Intellectual
Property purchased hereunder. SELLER has not received any
notice with respect to, or has any knowledge of, any
infringement or alleged infringement or unlawful or improper
use by SELLER or any other person of any Intellectual Property
or other intangible property right used in connection with the
Business. No director, member, officer or employee of SELLER
has any interest in any Intellectual Property, all of which
are free and clear of any liens, security interests, claims or
encumbrances of any kind. SELLER has not granted any licenses
or other rights to any Intellectual Property purchased
hereunder. No royalties or fees are payable for use in
connection with the Business for the Intellectual Property and
none will become payable as a result of the transactions
contemplated hereby, there are no defaults under any license
of the Intellectual Property, and except as disclosed by
SELLER, all Intellectual Property and licenses therefore are
assignable.
11. NO VIOLATION; CONSENTS AND APPROVALS: The execution and
delivery of the transaction documents does not, and the
consummation of the transactions contemplated hereby and
compliance with the terms hereof will not conflict with, or
result in any violation of or default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, (a) any agreements to which SELLER is a party; (b) any
laws applicable or the property or assets of SELLER, or (c)
give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any lien upon
any of the properties of SELLER under any contracts to which
-8-
SELLER is a party or by which SELLER or any of its assets may
be bound. No Governmental Approval is required to be obtained
or made by or with respect to SELLER in connection with the
execution and delivery of this AGREEMENT or the consummation
of the transactions contemplated hereby, except where the
failure to obtain such Governmental Approval would not,
individually or in the aggregate, have a material adverse
effect on SELLER.
12. LITIGATION; COMPLIANCE WITH LAWS:
a. There are: (i) no claims, actions, suits,
investigations or proceedings pending or threatened
against, relating to or affecting SELLER, its
business, its assets, or any employee, officer,
director, stockholder, or independent contractor of
SELLER in their capacities as such, and (ii) no
orders of any Governmental Entity or arbitrator are
outstanding against SELLER, its business, its assets,
or any employee, officer, director, interest holder,
or independent contractor of SELLER in their
capacities as such, or that could prevent or enjoin,
or delay in any respect, consummation of the
transactions contemplated hereby. To the knowledge of
SELLER, SELLER has not been threatened to be made a
party to, any legal action, claim, suit, litigation,
legal, administrative or arbitral proceeding, labor
dispute, governmental audit or formal investigation,
criminal prosecution or unfair labor practice charge
or complaint, or is aware of any facts which may give
rise to such an action, in connection with the
Business or the Assets.
b. SELLER shall have complied and is in compliance in
all material respects with all laws applicable to
SELLER its business or its assets. SELLER has not
received notice from any Governmental Entity or other
person of any material violation of law applicable to
SELLER, its business or its assets. SELLER has
obtained and holds all required licenses (all of
which are in full force and effect) from all
Government Entities applicable to it, its business or
its assets. No violations are or have been recorded
in respect of any such license and no proceeding is
pending, or threatened to revoke or limit any such
License.
13. TAXES AND TAX RETURNS: SELLER is a Subchapter S corporation
for which a valid election under Section 1362 of the Internal
Revenue Code was filed, and such election has remained in
effect at all times thereafter. SELLER has properly and
accurately completed and duly filed in correct form with the
appropriate United States, state and local governmental
agencies, all tax returns and reports required to be filed;
such returns and reports are accurate and complete; and SELLER
has paid in full or made adequate provisions in its financial
statements for all taxes, interest, penalties, assessments, or
deficiencies shown to be due on such tax returns and reports
-9-
or claimed to be due by any taxing authority or otherwise due
and owing, including, without limitation, those due in respect
of properties, income, franchises, licenses, sales and
payrolls. SELLER has not executed or filed with the Internal
Revenue Service or any other taxing authority, domestic or
foreign, any agreement or other document extending, or having
the effect of extending, the period for assessment or
collection of any taxes. SELLER is not a party to any pending
action or proceeding, nor to the knowledge of SELLER is any
such action or proceeding threatened, by any governmental
authority for assessment or collection of taxes, and no claim
for assessment or collection of taxes has been asserted
against SELLER, nor has SELLER been notified by any
governmental authority that an audit or review of any tax
matter is contemplated. There are no tax liens (other than
liens for taxes for current and subsequent years which are not
yet due and delinquent) upon any properties or assets of
SELLER, whether real, personal or fixed, tangible or
intangible. SELLER is not a party to any tax sharing agreement
or arrangement. SELLER does not have outstanding any power of
attorney authorizing any person to represent it before the
Internal Revenue Service or before the taxing authorities of
any state or subdivision thereof with respect to any tax
matter.
14. HISTORICAL BUSINESS: SELLER operates at least one significant
historic business line, and owns at least a significant
portion of its historic business assets, within the meaning of
Treas. Reg. ss.1.368-1(d).
15. TRANSFER HISTORY: In anticipation of the transaction herein
described, and in no event subsequent to February 16, 2012,
SELLER'S SHAREHOLDERS did not have any portion of their stock
ownership in SELLER redeemed by SELLER, and did not receive
any distributions (other than distributions to cover their tax
liability with respect to their status as shareholders of an S
corporation) with respect to their interests in SELLER, and no
third party related to SELLER within the meaning of Treas.
Reg. ss.1.368-1(e)(3)(i)(B) acquired any stock in SELLER,
where such dispositions or acquisitions would reduce the
aggregate fair value of the assets of SELLER to be received by
Buyer as of the Closing to an amount less than 50% of the
aggregate fair value of such assets determined immediately
before any such distributions or acquisitions.
16. ASSUMED LIABILITIES. The liabilities of SELLER assumed by
BUYER or to which the transferred assets are subject were
incurred by SELLER in the ordinary course of its business.
There is no intercorporate indebtedness existing between
SELLER and BUYER, or between SELLER and IVDesk Holdings, Inc.
that was issued, acquired or settled at a discount.
17. SURVIVAL: All covenants, warranties and representations made
by SELLER in this Section IV shall be true and correct as of
the CLOSING DATE and shall survive the CLOSING.
-10-
V. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES: The Parties,
SELLER'S SHAREHOLDERS and IVDesk Holdings, Inc. shall, at the CLOSING,
enter into, and IVDesk Holdings, shall adopt, the Bylaws attached
hereto as EXHIBIT M. In addition, IVDesk Holdings, Inc., its
shareholders, and the SELLER'S SHAREHOLDERS, shall enter into the
Shareholder Agreement, which contains restrictions on the transfer and
resale of IVDesk Holdings, Inc. common stock, in the form attached
hereto as EXHIBIT N.
VI. COVENANTS AFTER CLOSING:
SELLER, SELLER'S SHAREHOLDERS, BUYER, and IVDesk Holdings, Inc. agree
and covenant that after the CLOSING:
1. BUYER shall, and SELLER'S SHAREHOLDERS and IVDesk Holdings,
Inc. shall cause Buyer to, continue at least one significant
historic business line, and use a significant portion of
SELLER's historic business assets in the business of BUYER,
within the meaning of Treas. Reg.ss.1.368-1(d).
2. Seller shall not, directly or indirectly, grant any options,
warrants, or other rights to purchase or obtain any of the
Common Stock to be issued to Seller by IVDesk Holdings, Inc.
in the transaction herein described, or to sell or otherwise
dispose of such stock except to Seller'S shareholders.
3. Seller shall not transfer the Common Stock except to Seller's
shareholders, and Seller'S Shareholders have no present plan
or present intent to redeem, sell or transfer such stock.
4. Neither IVDesk Holdings, Inc. or Buyer have a plan or intent
to redeem, reacquire or facilitate a transfer of the Common
Stock from, for, or on behalf of SELLER'S SHAREHOLDERS.
Neither IVDesk Holdings, Inc. or Buyer have a plan or intent
to sell or otherwise dispose of the Assets of SELLER acquired
in the transaction, except in the ordinary course of business.
5. Seller shall timely liquidate and dissolve under Minnesota law
in satisfaction of IRC Section 382(a)(2)(G) and shall provide
written documentation to Buyer and IVDesk Holdings, Inc.
reflecting the commencement of such liquidation and
dissolution within 30 days after the Closing. As soon as
reasonably possible after Closing, but no later than 30 days
after Closing, Seller will distribute the Common Stock to
Seller'S Shareholders. Seller, consistent with its liquidation
and dissolution, shall distribute its remaining assets
consistent with Minnesota law. Except as necessary to engage
in its liquidation and dissolution, SELLER shall retain no
assets upon completion of its dissolution and in no event
shall Seller otherwise engage in a trade or business.
6. BUYER, IVDesk Holdings, Inc., SELLER AND SELLER'S SHAREHOLDERS
agree that no consideration shall be due and none shall be
paid in the transaction described herein except for the Common
Stock. Other than the Common Stock, no shares, options,
-11-
warrants, or other stock-based rights in IVDesk Holdings, Inc.
or Buyer shall be issued to SELLER or SELLER'S SHAREHOLDERS in
IVDesk
7. Holdings, Inc. or BUYER in connection with the transaction
described herein.
8. SELLER, and SELLER's SHAREHOLDER to the extent required by
law, will be responsible for (i) the Pre-Closing taxes of or
incurred through SELLER and (ii) all Post-Closing taxes
incurred by or through SELLER, regardless of when due and
payable to the extent such taxes are in excess of the amount
reserved for taxes on SELLER's most recent monthly balance
sheet as of the CLOSING DATE ("CLOSING DATE BALANCE SHEET").
BUYER will be responsible for its Post-Closing taxes,
regardless of when due and payable and any Pre-Closing taxes
to the extent of the amount properly reserved for taxes on the
CLOSING DATE BALANCE SHEET. Pre-Closing taxes are any and all
taxes incurred on or before the CLOSING DATE or by reason of
events or transactions coincident with or through the end of
the CLOSING DATE, including any income taxes incurred as a
result of the transaction herein described. Post-Closing taxes
are taxes incurred after the CLOSING DATE or by reason of
events or transactions occurring after the CLOSING DATE.
9. SELLER's SHAREHOLDERS will cause to be prepared, and will
cause to be filed when due (including any extensions), all
income tax returns of SELLER for all Pre-and Post-Closing
Periods, and shall remit all taxes due thereon. SELLER will
cause all such returns to be accurate and complete in
accordance with applicable laws and, except as otherwise
provided in the Agreement, to be prepared on a basis
consistent with past such returns filed by or on behalf of
SELLER except as otherwise required by law. SELLER shall
provide a copy of any such income tax return for review by
BUYER at least 15 days prior to the date of filing any such
return.
BUYER shall prepare or cause to be prepared and shall file or
cause to be filed all of its tax returns. BUYER shall provide
a copy of any income tax returns, and other material tax
returns, that include Pre-Closing taxes for review by SELLER
and SELLER's SHAREHOLDER at least 15 days prior to the date
for filing such returns. SELLER shall pay to BUYER within 15
days after the date on which taxes are paid with respect to
such periods an amount equal to any Pre-Closing taxes shown on
such returns to the extent such taxes exceed the amount
reserved for such taxes on the CLOSING DATE Balance Sheet.
10. After the CLOSING DATE, BUYER and SELLER's SHAREHOLDER will
make available to the other, as reasonably requested, all
information, records or documents (including state
apportionment information) relating to income tax liabilities
or potential income tax liabilities of or incurred though
SELLER with respect to Pre- or Post-Closing Periods. The
Parties will take reasonable steps to preserve all such
information, records and documents until the expiration of any
applicable statute of limitations thereof. BUYER will prepare
and provide to SELLER any information or documents reasonably
requested by SELLER or SELLER's SHAREHOLDER for use in
-12-
preparing or reviewing the SELLER's tax returns referred to
above. Notwithstanding any other provision hereof, each party
will bear its own expenses in complying with the foregoing
provisions.
11. Each party will promptly notify the other in writing upon
receipt by such party (or any of its affiliates) of notice of
any pending or threatened liabilities for Pre-Closing taxes or
through SELLER. BUYER will not settle or otherwise resolve any
Tax Contest, if and to the extent it involves Pre-Closing
taxes, without SELLER's SHAREHOLDER written consent which
consent, will not be unreasonably withheld.
VII. NON-COMPETITION PROVISIONS: During the three (3) year period following
the CLOSING, other than as an employee, officer, director, contractor,
reseller, or agent of BUYER, SELLER and SELLER'S SHAREHOLDERS shall not
directly or indirectly, either for its, his, her or its own account, or
as a partner, shareholder, employee, manager or agent of a competing
company, own, manage, operate, control, be employed by, participate in,
or otherwise be connected with any other business similar to the
Business, or engage in any commercial activity in competition with any
part of the Company's business as conducted at any time herereafter.
Neither SELLER nor SELLER's SHAREHOLDERS will retain, utilize or
disclose to any third party any records, materials, or data related to
the Business except to the extent necessary to satisfy legal
obligations of the SELLER or SELLER's SHAREHOLDERS (i.e., preparation
of income tax returns). In the event any of the provisions of this
Section VII. shall be determined to be invalid by reason of their scope
or duration, this Section VII. shall be deemed modified to such extent
as required to cure the invalidity. In the event of a breach, or a
threatened breach, of this covenant, BUYER shall be entitled to obtain
an injunction restraining the commencement or continuance or the
breach, as well as to any other legal or equitable remedies permitted
by law.
VIII. INDEMNIFICATION:
1. SELLER and SELLER'S SHAREHOLDERS hereby agree to indemnify,
defend and hold BUYER and IVDesk Holdings, Inc. harmless from
and against and in respect of any and all liabilities, losses,
damages, claims, costs and expenses, including, without
limitation, interest, penalties and attorneys' fees relating
to:
a. the breach of any representation, warranty or
covenant of SELLER or SELLER's SHAREHOLDERS contained
in or made pursuant to this Agreement; or
b. the assertion against BUYER or IVDesk Holdings, Inc.
of any liability of SELLER or SELLER's SHAREHOLDERS
not to be assumed by BUYER hereunder.
2. BUYER hereby agrees to indemnify, defend and hold SELLER and
SELLER'S SHAREHOLDERS harmless from and in respect of all
liabilities, losses, damages, claims, costs and expense,
-13-
including, without limitation, interest, penalties and
attorneys' fees relating to:
a. the breach of any representation, warranty or
covenant by BUYER contained in or made pursuant to
this Agreement; or
b. the failure of BUYER to pay, discharge or perform any
of the liabilities assumed by BUYER hereunder.
IX. EMPLOYEES:
At least one day prior to the Closing date, BUYER shall offer
employment to each employee of SELLER; and subject to the Closing, such
employment will be effective on the day following the Closing Date.
BUYER is not assuming any liabilities with respect to any employee
benefit plans (i.e., any and all pension or welfare benefit programs,
payroll practices, fringe benefits, or other plans, arrangements,
agreements and understandings for employees, groups of employees or
specific individual employees to which Seller contributes or is a
party, by which Seller may be bound or under which Seller may have
liability, other than benefits required by applicable law) maintained
by SELLER prior to the CLOSING.
X. OTHER TERMS:
1. HEADINGS: The headings contained in this AGREEMENT are for
reference purposes only and shall not in any way affect the
meaning or interpretation of this AGREEMENT.
2. TRANSFER OF ASSETS: SELLER'S Shareholders agree to assist
BUYER in the orderly transfer of the ASSETS. Shareholders of
the SELLER and BUYER shall, as of the Closing Date, enter into
Employment Agreements substantially in the form attached
hereto as EXHIBITS J and K. Shareholders of the SELLER also
agree to use their best efforts to implement the orderly
transfer of SELLER'S employees to BUYER and for such employees
to execute employee contracts with same.
3. AMENDMENTS: This AGREEMENT may be amended, modified or
supplemented, and waivers or consents to departures from the
provisions hereof may be given, provided that the same are in
writing and signed by or on behalf of both PARTIES.
4. BROKERAGE: Neither BUYER, SELLER nor the Shareholders of
either of them have engaged any broker, finder, agent, banker
or third party, nor have any of them otherwise dealt with
anyone purporting to act in the capacity of a finder or broker
in connection with the transactions contemplated hereby that
have payment methods related to commissions, finder's fees or
like charges. There are no outstanding commissions, finder's
fees or other similar charges that have been or will be
incurred by BUYER, SELLER, or any of their Shareholders in
-14-
connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
5. EXPENSES: Each of the PARTIES to this AGREEMENT shall pay that
party's own expenses incurred regarding this transaction and
AGREEMENT, including, without limitation, accounting, taxes,
and legal fees.
6. ENTIRE AGREEMENT: The parties agree that this Agreement
contains the entire agreement of the parties and that no prior
understanding, written or oral, statement, promise or
inducement made by any party which is not contained herein or
in the exhibits attached hereto, or in the other agreements
contemplated herein shall be valid or binding; and this
Agreement shall not be modified, altered, or amended except in
writing signed by the parties hereto and made a part of this
Agreement.
7. LEGAL CONDITIONS: The PARTIES shall take all reasonable
actions necessary to comply promptly with all legal
requirements which may be imposed with respect to this Asset
Purchase and will promptly cooperate with and furnish
information to each other in connection with any such
requirements imposed upon any of them or any of their
Subsidiaries in connection with the Acquisition.
8. TAX MATTERS: Notwithstanding that it is the express intention
of the PARTIES hereto that this acquisition shall constitute a
tax free acquisition pursuant to Section 368 (a)(1)(C) and (D)
where relevant, and/or Section 351 of the Internal Revenue
Code, but no representation is made that this is a non-taxable
transaction.
9. INTEGRATION: The PARTIES acknowledge and agree that the ASSETS
and ASSUMED LIABILITIES acquired by the BUYER as described in
this AGREEMENT shall be integrated into IVDesk Holdings,
Inc.'s wholly owned subsidiary, IVDesk Minnesota, Inc., as a
self-standing, fully operating business. The PARTIES agree to
implement this integration as by using their best efforts to
accomplish such integration. If there shall be a default,
non-performance or breach of any of the same, or obligation
existing after notice of such default in accordance with the
terms of this AGREEMENT, non-performance or breach is given to
the party committing the same, the same shall constitute a
material breach of all obligations and all of such agreements,
documents, obligations and transactions entitling either party
to pursue any or all available legal remedies of law, in
equity or by any of such agreements. All remedies shall be
cumulative by choice of either party and the exercise of any
one or more remedies shall not preclude or prevent the later
exercise of any other remedies from time-to-time.
10. SUCCESSORS AND ASSIGNS: The provisions of this AGREEMENT shall
be binding upon and inure to the benefit of the PARTIES hereto
and their respective successors and assigns, provided that
neither of the PARTIES shall assign, delegate or otherwise
transfer any of its rights or obligations under this AGREEMENT
without the written consent of the other party hereto.
-15-
11. GOVERNING LAW: This AGREEMENT shall be construed in accordance
with and governed by the law of the State of Minnesota without
regard to principles of conflict of laws.
12. NOTICES: All notices, requests and other communications to any
party hereunder shall be in writing (including telecopy, telex
or similar writing) and shall be deemed given or made as of
the date delivered, if delivered personally or by telecopy
(provided that delivery by telecopy shall be followed by
delivery of an additional copy personally, by mail or
overnight courier), one day after being delivered by overnight
courier or three days after being mailed by registered or
certified mail (postage prepaid, return receipt requested), to
the PARTIES at the current formal address of the party. On
CLOSING DATE the formal addresses shall be:
AS TO SELLER: FOCUSED SOLUTIONS CONSULTING, INC.
2007 Forest Drive W.
Richfield, Minnesota 55423
Attn: William E. Sorenson, CEO
AS TO BUYER and IVDESK HOLDINGS, INC.
1509 Marshall Street NE
Minneapolis, Minnesota 55413
Attn: Larry D. Ingwersen, Director
13. SEVERABILITY: If any provision herein shall be deemed or
declared unenforceable, invalid or void, the same shall not
impair any of the other provisions contained herein, which
shall be enforced in accordance with the respective terms.
14. COUNTERPARTS: This AGREEMENT may be executed simultaneously in
one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute but one and the
same instrument.
IN WITNESS WHEREOF, the PARTIES hereto have caused this AGREEMENT to be
duly executed the day and year first above written.
SELLER: SELLER'S SHAREHOLDERS:
FOCUSED SOLUTIONS CONSULTING, INC.,
A MINNESOTA CORPORATION
By__________________________________ ________________________________
William E. Sorenson William E. Sorenson
Its Chief Executive Officer
-16-
By__________________________________ ________________________________
James J. Polakowski James J. Polakowski
Its President and
Chief Operating Officer
BUYER:
IVDESK MINNESOTA, INC. IVDESK HOLDINGS, INC.
A MINNESOTA CORPORATION A MINNESOTA CORPORATION
By__________________________________ By______________________________
Larry D. Ingwersen, Director Larry D. Ingwersen, Director
-17
