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ASSET PURCHASE AGREEMENT
dated as of September 25, 1996
by and among
TRANSWORLD SERVICES GROUP, LTD.,
A FLORIDA LIMITED PARTNERSHIP,
TRANSWORLD SERVICES GROUP I, LLC,
A NEW JERSEY LIMITED LIABILITY COMPANY,
TRANSWORLD SERVICES GROUP II, LLC,
A SOUTH CAROLINA LIMITED LIABILITY COMPANY,
CORESTAFF ACQUISITION SUB #6, INC.,
A DELAWARE CORPORATION,
AND
GULF COAST CORPORATE VENTURES, INC.,
XXXX X. XXXXX
AND
XXXXXX XXXXXXX
COVERING THE PURCHASE OF CERTAIN ASSETS OF
TRANSWORLD SERVICES GROUP, LTD.,
TRANSWORLD SERVICES GROUP I, LLC,
AND
TRANSWORLD SERVICES GROUP II, LLC,
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TABLE OF CONTENTS
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1. GENERAL DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Delivery of Assets and Transfer Documents . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Closing; Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Price and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Earned Payout Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Assumed Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Excluded Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.6 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4 Events Since the Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.5 Competing Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.6 Taxes and Governmental Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.7 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.8 Contracts and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.9 Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.10 Properties, Assets and Leasehold Estates . . . . . . . . . . . . . . . . . . . . . . . 11
4.11 Intangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.12 Suits, Actions and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.13 Licenses and Permits; Compliance with Governmental Regulations . . . . . . . . . . . . 12
4.14 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.15 No Untrue Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.16 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.17 Work-In-Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.18 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.19 Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.20 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.21 Telephone Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.22 Workers' Compensation Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.23 Customer List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.24 No Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.25 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.26 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4 Consents and Approvals .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.5 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6 No Misrepresentations or Omissions. . . . . . . . . . . . . . . . . . . . . . . . . . 15
6. PRE-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Notices and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Operation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Full Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.6 Notice of Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.7 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.8 Delivery of Schedules; Acceptance. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. CONDITIONS TO OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.1 Conditions to Obligation of the Purchaser . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Conditions to Obligation of the Seller . . . . . . . . . . . . . . . . . . . . . . . . 18
8. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1 Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . 20
10. SPECIAL CLOSING AND POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.1 Delivery of Funds and Other Assets Collected by Purchaser; Power of
Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.2 Delivery of Funds and Other Assets Collected by Sellers; Power of
Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.3 Change of Name of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.4 Management of the Business During Earn-Out.. . . . . . . . . . . . . . . . . . . . . . 21
11. INDEMNITY BY SELLERS AND PARTNERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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11.2 Indemnification by Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.3 Procedure for Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.4 Limitation of Certain Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.5 Payment; General Right of Offset . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12. LEASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13. NON-COMPETITION AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15. ASSIGNMENT OF CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . 26
16.1 New Employees of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.2 Hiring of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16.3 Existing Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16.4 Indemnity Concerning Accrued Benefits . . . . . . . . . . . . . . . . . . . . . . . . 27
17. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
18. FURTHER ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
19. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
20. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.1 GOVERNING LAW; INTERPRETATION; SECTION HEADINGS . . . . . . . . . . . . . . . . . . . 29
20.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.6 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
20.7 Gender; Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
20.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
20.9 Telecopy Execution and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
20.10 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into this 25th day of September, 1996, by and among TRANSWORLD SERVICES GROUP,
LTD., a Florida limited partnership ("TRANSWORLD"), TRANSWORLD SERVICES GROUP
I, LLC, a New Jersey limited liability company ("TWNJ") and TRANSWORLD SERVICES
GROUP II, LLC, a South Carolina limited liability company ("TWSC;"
collectively, Transworld, TWNJ and TWSC are referred to as the "SELLERS"),
CORESTAFF ACQUISITION SUB #6, INC., a Delaware corporation ("PURCHASER"), and
GULF COAST CORPORATE VENTURES, INC., a Florida corporation ("GULF COAST"), XXXX
X. XXXXX ("XXXXX") and XXXXXX XXXXXXX ("XXXXXXX;" collectively, Gulf Coast,
Xxxxx and Xxxxxxx are referred to as the "PARTNERS").
W I T N E S S E T H
WHEREAS, Sellers are the owners of all right, title and interest in
and to the assets described on Schedule 2.1 hereto (the "ASSETS"), with such
assets being certain of the assets currently used in the temporary personnel
service business operated by the Sellers (the "BUSINESS");
WHEREAS, Sellers desire to sell the Assets to Purchaser and Purchaser
desires to acquire the Assets from Sellers, all pursuant to this Agreement as
hereinafter provided; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the execution and delivery of this Agreement, and to set forth
certain additional agreements related to the transactions contemplated hereby;
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. GENERAL DEFINITIONS. For purposes of this Agreement, the
following terms shall have the respective meanings set forth below:
.1 GOVERNMENTAL AUTHORITY shall mean any and all
federal, state or local governments, governmental institutions, public
authorities and governmental entities of any nature whatsoever, and any
subdivisions or instrumentalities thereof, including, but not limited
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to, departments, boards, bureaus, commissions, agencies, courts, administrations
and panels, and any divisions or instrumentalities thereof, whether permanent or
ad hoc and now constituted and/or existing.
.2 GOVERNMENTAL REQUIREMENT shall mean any and all laws
(including, but not limited to, applicable common law principles), statutes,
ordinances, codes, rules, regulations, interpretations, guidelines, directions,
orders, judgments, writs, injunctions, decrees, decisions or similar items or
pronouncements, promulgated, issued, passed or set forth by any Governmental
Authority.
.3 PERSON shall mean any natural person, any
Governmental Authority and any entity the separate existence of which is
recognized by any Governmental Authority or Governmental Requirement,
including, but not limited to, corporations, partnerships, joint ventures,
joint stock companies, trusts, estates, companies and associations, whether
organized for profit or otherwise.
.4 TAXES. "TAX" and "TAXES" shall mean any and all
income, excise, franchise or other taxes and all other charges or fees imposed
or collected by any Governmental Authority or pursuant to any Governmental
Requirement, and shall also include any and all penalties, interest,
deficiencies, assessments and other charges with respect thereto.
.5 AFFILIATE of any Person shall mean any Person
Controlling, Controlled by or under common Control with such Person.
.6 CONTROL and all derivations thereof shall mean the
possession, direct or indirect, of either (i) the ownership of or ability to
direct the voting of, as the case may be, fifty percent (50%) or more of the
equity interests, value or voting power in any Person or (ii) the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
.7 BEST KNOWLEDGE OF SELLERS OR THE PARTNERS means
actual knowledge after reasonable inquiry and investigation.
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
.1 PURCHASE AND SALE. Sellers hereby sell, assign,
transfer and deliver to Purchaser all right, title and interest in and to the
Assets (as more fully described on Schedule 2.1 hereto), free and clear of any
liens or encumbrances of any nature whatsoever (except for any liens,
encumbrances or obligations, if any, expressly assumed by Purchaser hereunder).
Purchaser hereby purchases from Sellers the Assets in consideration for the
Purchase Price (as hereinafter defined) payable as set forth in Section 3
below.
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2. DELIVERY OF ASSETS AND TRANSFER DOCUMENTS. At the
Closing (hereinafter defined in Section 2.3), Sellers shall have taken all
steps necessary to put Purchaser in possession of the Assets, free and clear of
any liens or encumbrances of any nature whatsoever (except for liens,
encumbrances or obligations, if any, expressly assumed by Purchaser hereunder),
and have delivered to Purchaser (i) a duly executed general warranty xxxx of
sale covering the Assets, in the form of and containing the same terms and
provisions as the General Warranty Xxxx of Sale attached hereto as Attachment
2.2, (ii) duly executed assignments for all accounts receivable, patents,
trademarks, trade names and similar intangible property included in the Assets,
in form and substance acceptable to Purchaser and in recordable form as
appropriate, and (iii) such other duly executed transfer and release documents
which Purchaser has reasonably requested to evidence the transfer of the Assets
to Purchaser free and clear of any liens or encumbrances of any nature
whatsoever (except for liens, encumbrances or obligations, if any, expressly
assumed by Purchaser hereunder).
3. CLOSING; CLOSING DATE. Subject to the terms and
conditions herein contained, the consummation of the transactions referred to
above shall take place (the "CLOSING") at the offices of Purchaser, commencing
at 9:00 a.m. local time on October 14, 1996, or such other date as the parties
may mutually determine (the "CLOSING DATE") and shall be effective for all
purposes as of 12:01 a.m. October 14, 1996.
3. PURCHASE PRICE.
.1 PRICE AND PAYMENT.
(a) The aggregate consideration for the Assets
and the Non-Competition Agreements (set forth in Section 13 below) shall be an
amount equal to the sum of (i) $18,000,000 payable by wire transfer or delivery
of other immediately available funds (the "CASH PORTION OF THE PURCHASE PRICE")
and (ii) the Earned Payout Amounts (as hereinafter defined). The Cash Portion
of the Purchase Price and the Earned Payout Amounts are collectively referred
to herein as the "PURCHASE PRICE."
(b) At the Closing, the Purchaser shall cause the
Purchase Price to be paid as follows:
(i) Payment of $14,064,939.00 of the Cash
Portion of the Purchase Price to Transworld;
(ii) Payment of $1,418,333.00 of the Cash
Portion of the Purchase Price to TWNJ; and
(iii) Payment of $2,516,728.00 of the Cash
Portion of the Purchase Price to TWSC; and,
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.2 EARNED PAYOUT AMOUNTS. In addition to the Cash
Portion of the Purchase Price, Purchaser shall pay to Sellers the following:
(a) An amount, if any, by which the product of
(i) Adjusted Earnings Before Interest and Taxes (determined as provided in
Schedule 3.2(a) (the "ADJUSTED EBIT")) for the calendar year ending December
31, 1996 (the "1996 ADJUSTED EBIT") and (ii) 6.5, exceeds $18,000,000 (the
"1996 EARNED PAYOUT"); provided, however, that the maximum aggregate amount
payable to Sellers under this Section 3.2(a) shall in no event exceed
$4,000,000.
(b) An amount equal to $1,500,000, if, and only
if, the Adjusted EBIT for the calendar year ending December 31, 1997 exceeds
$3,349,750 (the "FIRST 1997 EARNED PAYOUT").
(c) An amount equal to the product of (i) three
and (ii) the amount, if any, by which the Adjusted EBIT for calendar year 1997
exceeds $3,349,750; provided, however, in no event will the Second 1997 Earned
Payout exceed $1,000,000 (the "SECOND 1997 EARNED PAYOUT").
(d) Payment of the 1996 Earned Payout, the First
1997 Earned Payout and the Second 1997 Earned Payout, if earned, shall be made
on or prior to the earlier of (i) ten days after receipt of the audited
financial statements of the Purchaser for calendar year 1996 or 1997, as the
case may be, or (ii) March 1, 1997 (with respect to the 1996 Earned Payout) or
March 1, 1998 (with respect to the First 1997 Earned Payout and the Second 1997
Earned Payout). The 1996 Earned Payout, the First 1997 Earned Payout and the
Second 1997 Earned Payout are collectively referred to herein as the "EARNED
PAYOUT AMOUNTS."
.3 EXCLUDED ASSETS. The Purchased Assets shall not
include any of the assets listed on Exhibit A-1 to Schedule 2.1 hereto
(collectively, the "EXCLUDED ASSETS").
.4 ASSUMED OBLIGATIONS. Purchaser hereby assumes the
obligations of Seller under all contracts and agreements transferred by Seller
to Purchaser under this Agreement that are listed and described on Schedule 3.4
hereto (the "ASSUMED LIABILITIES AND OBLIGATIONS"); provided that Purchaser
specifically does not assume any liabilities of Seller under such contracts or
agreements with respect to any breaches of such contracts or agreements
occurring on or before the Closing Date or any damages to third parties
resulting from acts, events or omissions occurring on or before the Closing
Date.
.5 EXCLUDED LIABILITIES AND OBLIGATIONS.
(a) Except as expressly set forth in Section 3.4
above, the Purchaser shall not assume and shall not be liable or responsible
for any debt, obligation or liability of the Business, the Sellers, the
Partners or any Affiliate of the Sellers, or any claim against any of the
foregoing parties, of any kind, whether known or unknown, contingent, absolute
or otherwise.
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(b) Except for the Assumed Liabilities and
Obligations expressly provided for in Section 3.4 hereof, the Sellers and the
Partners shall jointly and severally forever defend, indemnify and hold
harmless the Purchaser from and against any and all liabilities, obligations,
losses, claims, damages (including incidentals and consequential damages),
costs and expenses (including court costs and reasonable attorney's fees)
resulting from the Business prior to the Closing Date.
.6 TRANSFER TAXES. Purchaser and Sellers acknowledge
and agree that the consideration (including, without limitation) the Purchase
Price and any adjustments thereto) is deemed to have been paid for any sales,
use, transfer or other similar tax purposes by Purchaser to Sellers pursuant to
this Agreement, includes and is inclusive of any and all sales, use, transfer
or other similar tax imposed as a result of the consummation of the
transactions contemplated by this Agreement, and Sellers and the Partners
hereby agree to pay and discharge, and to indemnify Purchaser against, and
protect, save and hold Purchaser harmless from, any liability, obligation,
claim, assessment or deficiency (whether or not ultimately successful) for any
and all sales, use, transfer or other similar taxes (and any and all interest,
penalties, additions to tax and fines thereon or related thereto) resulting or
arising from or incurred in connection with the consummation of the
transactions contemplated by this Agreement.
.7 ALLOCATION OF PURCHASE PRICE. The Purchase Price
shall be allocated as set forth in Schedule 3.7 attached hereto, and made a
part hereof.
4. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers and the
Partners, jointly and severally, hereby represent and warrant to Purchaser as
follows:
.1 ORGANIZATION. Transworld is a limited partnership
duly organized, validly existing and in good standing under the laws of the
state of Florida, and is duly authorized, qualified and licensed under all
applicable Governmental Requirements to carry on its business in the places and
in the manner as now conducted. TWNJ is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
New Jersey, and is duly authorized, qualified and licensed under all applicable
Governmental Requirements to carry on its business in the places and in the
manner as now conducted. TWSC is a limited liability company duly organized,
validly existing and in good standing under the laws of the state of South
Carolina, and is duly authorized, qualified and licensed under all applicable
Governmental Requirements to carry on its business in the places and in the
manner as now conducted. Each of the Sellers is qualified to do business in
every jurisdiction in which the failure to so qualify might reasonably be
expected to have a material adverse effect on the financial condition,
operating results, assets, or business prospects of Sellers, taken as a whole.
.2 OWNERSHIP. The Partners own, in the aggregate, all
of the outstanding general and limited partnership interests of Transworld.
Gulf Coast is the sole general partner of Transworld. Gulf Coast and
Transworld own all of the membership interests of TWNJ and
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TWSC. Except as listed on Schedule 4.2 hereto, there are no options, rights or
other grants currently outstanding for the acquisition or purchase of any
partnership or membership interests of any of the Sellers.
.3 FINANCIAL STATEMENTS. Sellers have delivered to
Purchaser copies of the following consolidated financial statements for
Sellers, all of which financial statements are included in Schedule 4.3(A)
hereto:
(a) Consolidated Audited Balance Sheet of Sellers
(the "REFERENCE BALANCE SHEET") as of December 31, 1995 (the "BALANCE SHEET
DATE") and Consolidated Audited Income Statements of Sellers for the
twelve-month period ended on the Balance Sheet Date;
(b) Consolidated Audited Balance Sheet and Income
Statement of Sellers for Sellers' three (3) most recent fiscal years; and
(c) Consolidated Unaudited Balance Sheet and
Income Statement of Sellers as of and for the eight (8) months ended August 31,
1996.
All financial statements supplied to Purchaser by Sellers, which are included
in Schedule 4.3(A) hereto, are correct and complete in all respects and, except
as set forth on Schedule 4.3(B) hereto, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, and present fairly the consolidated financial
condition of Sellers as of the dates and for the periods indicated thereon.
The Reference Balance Sheet reflects, as of the Balance Sheet Date, all
material liabilities, debts and obligations of any nature of Sellers, whether
accrued, absolute, contingent or otherwise, and whether due, or to become due,
including, but not limited to, liabilities, debts or obligations on account of
taxes or other governmental charges, or penalties, interest or fines thereon or
in respect thereof, to the extent such items are required to be reflected on
such balance sheet under generally acceptable accounting principles,
consistently applied, except as set forth on Schedule 4.3(B) hereto.
.4 EVENTS SINCE THE BALANCE SHEET DATE. Except as set
forth on Schedule 4.4 hereto, since the Balance Sheet Date, there has not been:
(a) any change in the condition (financial or
otherwise) or in the properties, assets, liabilities, and Business, except
normal and usual changes in the ordinary course of business, all of which in
the aggregate have not been adverse;
(b) any labor trouble, strike or any other
occurrence, event or condition affecting the employees of Sellers that
adversely affects the condition (financial or otherwise) of the Assets or the
Business.
(c) any breach or default by Sellers or, to the
Best Knowledge of Sellers and the Partners, by any other party, under any
agreement or obligation included in the Assets or by which any of the Assets
are bound;
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(d) any damage, destruction or loss (whether or
not covered by insurance) adversely affecting the Assets or the Business;
(e) any change in the types, nature, composition
or quality of the services of the Business, any adverse change in the
contributions of any of the service lines of the Business to the revenues or
net income of such Business, or any adverse change in the sales, revenue or net
income of the Business;
(f) any transaction related to or affecting the
Assets or the Business other than transactions in the ordinary course of
business of Sellers; or
(g) to the Best Knowledge of Sellers, any other
occurrence, event or condition that has adversely affected (or can reasonably
be expected to adversely affect) the Assets or the Business.
.5 COMPETING INTERESTS. Except as set forth on Schedule
4.5 hereto, neither Sellers nor the Partners, nor, to the Best Knowledge of
Sellers and the Partners, any member, manager, partner or officer of, or
consultant to, Sellers, and no Associate (as hereinafter defined) of Sellers:
(a) owns, directly or indirectly, any equity
interests in, or is a director, officer or employee of, or consultant to, any
entity which is a competitor, supplier or customer of the Business, or, to the
Best Knowledge of Sellers and the Partners, a competitor, supplier or customer
of Purchaser or an Associate of Purchaser (except for ownership, if any, of
less than five percent (5%) by value of the outstanding capital stock of any
corporation the capital stock of which is traded on a nationally recognized
securities exchange); or,
(b) owns, directly or indirectly, in whole or in
part, any property, asset or right which is associated with the Assets or the
Business, or which any Seller is presently operating or using in connection
with or the use of which is necessary for or material to the operation of the
Business.
For purposes of this Agreement, the term "ASSOCIATE" shall
mean:
(i) with respect to an individual:
(A) the spouse of the individual and
all lineal descendants of the individual and the
spouse,
(B) any trust in which the individual
or any person described in (i) above has an interest
or any trustee of such a trust, and
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(C) any Person which is directly or
indirectly Controlled by any of the foregoing; and
(ii) with respect to a Person (other than an
individual), any Person Controlling, Controlled by or under
common Control with such Person, and any director or officer
of such Person and any Associate of any such Person.
.6 TAXES AND GOVERNMENTAL RETURNS. Except as set forth
on Schedule 4.6 hereto, as of the date hereof, all Tax returns, information
returns and governmental reports of every nature required by any Governmental
Authority or Governmental Requirement to be filed by Sellers or which include
or should include Sellers, including, but not limited to, those relating to
Taxes of any nature to which Sellers, the Partners or any of the Business is
subject ("GOVERNMENTAL RETURNS"), have been filed for all periods ending on or
before the date hereof, and all Taxes shown to be due and payable on such
Governmental Returns or on any assessments related to such Governmental Returns
have been paid. All such Governmental Returns and reports and the information
and data contained therein have been properly and accurately compiled and
completed, fairly present the information purported to be shown therein, and
reflect all Tax liabilities of Sellers and Partners for the periods covered by
such Governmental Returns. Except as specifically disclosed in this Agreement
or the Schedules hereto, Sellers and/or Partners have no unpaid liability for
any Taxes of any nature whatsoever for any period prior to the date hereof.
Except as set forth on Schedule 4.6 hereto, the Governmental Returns of Sellers
or that include Sellers have not been audited, and are not now under audit, by
any Governmental Authority. There are not agreements, waivers or other
arrangements providing for an extension of time with respect to the assessment
of any Taxes of any nature against Sellers or Partners or with respect to any
Taxes filed by Sellers or Partners or that include Sellers, or any suits or
other actions, proceedings, investigations or claims now pending or threatened
against Sellers or Partners with respect to any Taxes or any matters under
discussion with any Governmental Authority relating to any Taxes, or any claims
for additional Taxes asserted by any Governmental Authority.
.7 EMPLOYEE MATTERS. Schedule 4.7(A) hereto, sets forth
a true and complete list of the names of and current annual compensation paid
by Sellers to each corporate or administrative (non-temporary) employee of
Seller utilized in connection with the operation of the Business. Except as
specifically described on Schedule 4.7(B) hereto, Sellers have no employee
benefit plans (including, but not limited to, pension plans and health or
welfare plans), arrangements or understandings, whether formal or informal.
Purchaser will have no liability with respect to any such plans as a result of
the transactions contemplated by this Agreement. Sellers do not now and have
never contributed to a "multi-employer plan" as defined in section 4001(a)(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Sellers have complied with all applicable provisions of ERISA and all rules and
regulations promulgated thereunder and neither Sellers nor any trustee,
administrator, fiduciary, agent or employee thereof has at anytime been
involved in a transaction that would constitute a "prohibited transaction"
within the meaning of Section 406 of ERISA. Sellers are not a party to any
collective bargaining or other union agreements. Sellers have not, within the
last five (5)
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years, had or been threatened with any union activities, work stoppages or other
labor trouble with respect to their employees which had or might have had a
material adverse effect on any of the Business. Other than wage increases in
the ordinary course of business, since the Balance Sheet Date, Sellers have not
made any commitment or agreement to increase the wages or modify the conditions
or terms of employment of any of the corporate or administrative (non-temporary)
employees of Sellers used in connection with the Business.
.8 CONTRACTS AND AGREEMENTS. Schedule 4.8 hereto, sets
forth a true and complete list of and briefly describes (including termination
date) all of the following contracts, agreements, leases, licenses, plans,
arrangements or commitments, written or oral, that relate to the Assets or the
Business (including all amendments, supplements and modifications thereto):
(a) all contracts, agreements, or commitments in
respect of the sale of services;
(b) all offers, tenders or the like outstanding
and capable of being converted into an obligation of Sellers by the passage of
time or by an acceptance or other act of some other person or entity or both;
(c) all sales or agency agreements or franchises
or legally enforceable commitments or obligations with respect thereto;
(d) all collective bargaining agreements, union
agreements, employment agreements, consulting agreements or agreements
providing for the services of an independent contractor;
(e) all profit-sharing, pension, stock option,
severance pay, retirement, bonus, deferred compensation, group life and health
insurance or other employee benefit plans, agreements, arrangements or
commitments of any nature whatsoever, whether or not legally binding, and all
agreements with any present or former officer, member, manager or partner of
Sellers;
(f) all loan or credit agreements, indentures,
guarantees (other than endorsements made for collection), mortgages, pledges,
conditional sales or other title retention agreements, and all equipment
financing obligations, lease and lease-purchase agreements relating to or
affecting the Assets or the Business;
(g) all leases related to the Assets or the
Business, and all other contracts, agreements or legally enforceable
commitments relating to or affecting the Assets or the Business;
(h) all performance bonds, surety bonds and the
like, all contracts and bids covered by such bonds, and all letters of credit
and guaranties;
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(i) all consent decrees and other judgments,
decrees or orders, settlement agreements and agreements relating to competitive
activities, requiring or prohibiting any future action;
(j) all accounts, notes and other receivables,
and all security therefor, and all documents and agreements related thereto;
(k) all contracts or agreements of any nature
with the Partners, or any Associate (as defined in Section 4.5 above) of the
Partners; and
(l) all contracts, commitments and agreements
entered into outside the ordinary course of the operation of the Business.
All of such contracts, agreements, leases, licenses, plans, arrangements, and
commitments and all other such items included in the Assets, but not
specifically described above, (collectively, the "CONTRACTS") are valid,
binding and in full force and effect in accordance with their terms and
conditions but the Sellers and the Partners have no knowledge that any such
Contract is a valid binding and enforceable agreement of the other parties to
such Contracts and there is no existing default thereunder or breach thereof by
Sellers, or, to the Best Knowledge of Sellers and the Partners, by any other
party to the Contracts, or any conditions which, with the passage of time or
the giving of notice or both, might constitute such a default by Sellers, or,
to the Best Knowledge of Sellers and the Partners, by any other party to the
Contracts, and the Contracts will not be breached by or give any other party a
right of termination as a result of the transactions contemplated by this
Agreement. Sellers are not aware of any reason why any of the Contracts (i)
will result in a loss to Purchaser on completion by performance or (ii) cannot
readily be fulfilled or performed by Purchaser with the Assets on time without
undue or unusual expenditure of money or effort. Copies of all of the
documents (or in the case of oral commitments, descriptions of the material
terms thereof) relevant to the Contracts listed in Schedule 4.8 hereto, have
been delivered by Sellers to Purchaser, and such copies and descriptions are
true, complete and accurate and include all amendments, supplements or
modifications thereto. All of the Contracts are and shall be included in the
Assets. To the Best Knowledge of Sellers, no purchaser of services under any
Contract will stop or decrease its rate of buying services (on an annualized
basis) from Sellers prior to the Closing Date, or under any Contract assigned
to Purchaser by Sellers pursuant to the transactions contemplated by this
Agreement, from Purchaser after the Closing Date. Except as set forth on
Schedule 4.8A hereto, all of the Contracts may be assigned to Purchaser without
the approval or consent of any Person.
.9 EFFECT OF AGREEMENT. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
will not (i) result in any breach of any of the terms or conditions of, or
constitute a default under, the Certificate of Limited Partnership or Limited
Liability Company or the Limited Partnership Agreement or Operating Agreement
or other governing documents of any Seller, or any commitment, mortgage, note,
bond, debenture, deed of trust, contract, agreement, license or other
instrument or obligation to which any Seller is now a party or by which any
Seller or any of its properties or assets may be bound or affected
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which is not to be discharged at Closing; (ii) result in any violation of any
Governmental Requirement; (iii) relieve any Person of any obligation (whether
contractual or otherwise) or enable any Person to terminate any such obligation
or any right or benefit enjoyed by Sellers or to exercise any right under any
agreement in respect of the Assets or the Business, except as may be disclosed
on Schedule 4.8(A) hereto; or (iv) require notice to or the consent,
authorization, approval or order of any Person (except as may be contemplated by
the last sentence of Section 4.8 hereof). To the Best Knowledge of Sellers and
the Partners (without any requirement of investigation of third parties), the
business relationships of clients, customers and suppliers of the Business will
not be adversely affected by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
.10 PROPERTIES, ASSETS AND LEASEHOLD ESTATES. Sellers
have good and marketable title to all the Assets, free and clear of
all mortgages, liens, pledges, conditional sales agreements, charges,
easements, covenants, assessments, options, restrictions and encumbrances of
any nature whatsoever except as such may be discharged at Closing. All leases
to which real property is leased in connection with the Business are in good
standing, valid and enforceable with respect to their terms.
.11 INTANGIBLE PROPERTY. Except as set forth on Schedule
4.11 hereto, the operation of the Business as now conducted by Sellers does not
require the use of or consist of any rights under any patents, inventions,
trademarks, trade names, brand names or copyrights. Sellers own and have the
full and exclusive right to use in connection with the Business all of the
items listed on Schedule 4.11 hereto, which items are in full force and effect.
Sellers have not transferred, encumbered or licensed to any Person any rights
to own or use any portion of the items listed on Schedule 4.11 hereto or any
other intangible property included in the Assets. To the Best Knowledge of
Sellers and the Partners, none of (i) the items listed on Schedule 4.11, (ii)
any other intangible property included in the Assets, or (iii) the operation of
the Business as presently conducted, violates or infringes upon any patents,
inventions, trademarks, trade names, brand names or copyrights owned by others.
To the Best Knowledge of Sellers and the Partners, none of the items listed on
Schedule 4.11 hereto or any other intangible property included in the Assets is
being infringed upon by any Person.
.12 SUITS, ACTIONS AND CLAIMS. Except as set forth in
Schedule 4.12 hereto, (i) there are no suits, actions, claims, inquiries or
investigations by any Person, or any legal, administrative or arbitration
proceedings in which Sellers are engaged or which are pending or, to the Best
Knowledge of Sellers and the Partners, threatened against or affecting Sellers
or any of their properties, assets or business, or to which Sellers are or
might become a party, or which question the validity or legality of the
transactions contemplated hereby, (ii) no basis or grounds for any such suit,
action, claim, inquiry, investigation or proceeding exists, and (iii) there is
no outstanding order, writ, injunction or decree of any Governmental Authority
against or affecting Sellers or any of their properties, assets or business.
Without limiting the foregoing, except as set forth in Schedule 4.12 hereto,
Sellers and the Partners have no knowledge of any state of facts or the
occurrence of any event forming the basis of any present or potential claim
against Sellers.
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.13 LICENSES AND PERMITS; COMPLIANCE WITH GOVERNMENTAL
REGULATIONS. Schedule 4.13 hereto, sets forth a true and complete list of all
licenses and permits known to be necessary for the conduct of the Business.
Sellers have all such licenses and permits validly issued to it and in its
name, and all such licenses and permits are in full force and effect. True and
correct copies of all such licenses and permits are included in Schedule 4.13
hereto. No violations are or have been recorded in respect of such licenses or
permits and no proceeding is pending or, to the Best Knowledge of Sellers and
the Partners, threatened seeking the revocation or limitation of any of such
licenses or permits. All such licenses and permits that are subject to
transfer are included in the Assets. Sellers have complied with all
Governmental Requirements applicable to the Business, and all Governmental
Requirements with respect to the distribution and sale of products and services
by them; provided, however, Sellers make no representation with respect to the
applicability of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
.14 AUTHORIZATION. Sellers have full legal right, power
and authority to enter into and deliver this Agreement and to consummate the
transactions set forth herein and to perform all the terms and conditions
hereto to be performed by it. The execution and delivery of this Agreement by
Sellers and the performance by each of them of the transactions contemplated
herein has been duly and validly authorized by all requisite action of Sellers,
and this Agreement has been duly and validly executed and delivered by Sellers
and is the legal, valid and binding obligation of each of the Sellers,
enforceable against them in accordance with its terms, except as limited by
applicable bankruptcy, moratorium, insolvency or other similar laws affecting
generally the rights of creditors or by principles of equity.
.15 NO UNTRUE STATEMENTS. The statements,
representations and warranties of Sellers set forth in this Agreement and the
Schedules hereto do not include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements, representations
and warranties made not misleading. There is no fact that is not disclosed to
Purchaser in this Agreement or the Schedules hereto that adversely affects the
condition (financial or otherwise) of any of the Assets or the Business or the
ability of Sellers to perform their respective obligations under the Agreement.
.16 RECORDS. The books, records and minutes kept by
Sellers with respect to the Assets and the Business, including, but not limited
to, all customer files, service agreements quotations, correspondence and
historic revenue data of Sellers since January 1, 1994, have been kept properly
and contain records of all matters required to be included therein by any
Governmental Requirement, and such books, records and minutes are true,
accurate and complete and (except for corporate and other entity minute books
and stock records) are included in the Assets. Purchaser agrees to store for a
period of at least three (3) years from the Closing Date all of Sellers' tax
and accounting records for the three (3) year period prior to the Closing Date.
Such records shall be made available for inspection and copying by Sellers or
Partners upon reasonable advance notice and during reasonable business hours.
Purchaser further agrees that if Purchaser intends to destroy any of such tax
or accounting records during the period ending six (6) years after the Closing
Date, Purchaser will first notify Sellers and Partners and
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provide Sellers and Partners with an opportunity to take possession of such
records within a period of not less than thirty (30) days following such notice.
.17 WORK-IN-PROCESS. Except as set forth on Schedule
4.17 hereto, Sellers have not received any payments with respect to any
work-in-process.
.18 BROKERS AND FINDERS. No broker or finder has acted
for Sellers or the Partners in connection with this Agreement or the
transactions contemplated by this Agreement and no broker or finder is entitled
to any brokerage or finder's fee or to any commission in respect thereof based
in any way on agreements, arrangements or understandings made by or on behalf
of Sellers or the Partners.
.19 ADVERSE FACTS. Sellers and/or the Partners are not
aware (without the obligation to make inquiries) of any fact or matter not
disclosed in this Agreement or in the Schedules hereto which might be expected
to adversely effect the Assets or the Business after Closing.
.20 DEPOSITS. Sellers do not now hold, nor do Sellers
expect to receive between the date hereof and the Closing Date, any deposits or
prepayments by third parties with respect to any of the Assets or the Business
which are not reflected as liabilities on the Reference Balance Sheets.
.21 TELEPHONE NUMBERS. All telephone numbers used by
Sellers in connection with the Business are included in the Assets and (with
the consent of the appropriate telephone company) are fully transferable to
Purchaser.
.22 WORKERS' COMPENSATION DATA. All data set forth in
the workers' compensation report of Sellers attached hereto as Schedule 4.22 is
true, correct and complete as of the date thereof.
.23 CUSTOMER LIST. Schedule 4.23 hereto sets forth a
true, correct and complete list of all customers of the Business to which
Sellers have sold or provided services during the five (5) years immediately
preceding the date hereof. This list provides an accurate statement of the
gross revenues received from each such customer by the Business during the
twenty-four (24) month period ended December 31, 1995. To the Best Knowledge
of Sellers, no customer listed on Schedule 4.23 hereto will stop or decrease
its rate of buying services (on an annualized basis) from Sellers prior to the
Closing Date, or to the Best Knowledge of the Sellers (without the obligation
to make inquiry of third parties) to the extent any such customer becomes a
customer of Purchaser pursuant to the transactions contemplated by this
Agreement, from Purchaser after the Closing Date.
.24 NO ROYALTIES. No royalty or similar item or amount
is being paid or is owing by Sellers, nor is any such item accruing, with
respect to the operation, ownership or use of the Business of the Assets.
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.25 BUSINESS. All of the revenues generated by the
Sellers from the Business have been earned and received by Sellers, and not
through or in any Subsidiary (as hereinafter defined).
.26 SUBSIDIARIES. Except as set forth on Schedule 4.26
hereof, the Sellers and the Partners do not own any Subsidiaries, other than
Transworld's ownership of 99% of the membership interests of each of TWNJ and
TWSC. As used in this Agreement, the word "SUBSIDIARY" means any corporation
or other organization, whether incorporated or unincorporated, of which such
party or any other Subsidiary of such party is a general partner, or at least a
majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries, or by such party and one or more of its Subsidiaries.
Transworld and Gulf Coast have good and marketable title to all of the
membership interests of TWNJ and TWSC, free and clear of all mortgages, liens,
pledges, equity, security interests, restrictions and charges of any nature
whatsoever.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND CORESTAFF,
INC. Purchaser and COREStaff, Inc. represent and warrant to Sellers and the
Partners as follows:
.1 INCORPORATION. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
.2 AUTHORIZATION. Purchaser has full legal right and
corporate power to enter into and deliver this Agreement and to consummate the
transactions set forth herein and to perform all the terms and conditions
hereof to be performed by it. This Agreement has been duly executed and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser enforceable in accordance with its terms, except as limited by
applicable bankruptcy, moratorium, insolvency, or other laws affecting
generally the rights of the creditors or by principals of equity. The
execution and delivery of this Agreement by Purchaser and the performance by
Purchaser of the transactions contemplated herein have been duly and validly
authorized by all requisite corporate action of Purchaser.
.3 BROKERS AND FINDERS. No broker or finder has acted
for Purchaser in connection with this Agreement or the transactions
contemplated by this Agreement and, no broker or finder is entitled to any
brokerage or finder's fee or to any commission in respect thereof based in any
way on agreements, arrangements or understandings made by or on behalf of
Purchaser.
.4 CONSENTS AND APPROVALS. Neither the execution and
delivery by Purchaser of this Agreement, nor the consummation by Purchaser of
the transactions
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contemplated hereby, nor compliance by Purchaser with any of the provisions
hereof will (i) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Purchaser, (ii) result in a violation of any order,
writ, injunction, decree, judgment, ruling, law, rule, or regulation of any
court or governmental authority, applicable to Purchaser, (iii) result in the
breach of any note, bond, mortgage, indenture, deed of trust, trust, license,
franchise, permit, contract, agreement or other instrument or commitment or
obligation of Purchaser, or (iv) require any consent, approval, authorization
of, or notice to, or declaration, filing or registration with, any governmental
or regulatory authority or any other Person, except for such consents,
approvals, authorizations, notices, declarations, filings or registrations which
have been obtained, given or made, as the case may be, and which are
unconditional and in full force and effect
.5 LITIGATION. There are no claims, actions, suits,
inquiries, investigations or proceeding pending, or to the Best Knowledge of
Purchaser threatened or imminent, against Purchaser which question or challenge
the validity of this Agreement or any action taken or to be taken by Purchaser
pursuant hereto (other than any such claim, action, suit, inquiry,
investigation or proceeding to which the Sellers or their affiliates are a
party or otherwise involved) before or by any court or governmental body.
.6 NO MISREPRESENTATION OR OMISSION. No representation
or warranty by the Purchaser in this Article V, or in any Schedule, contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained therein not
misleading.
.7 CORESTAFF, INC. COREStaff, Inc. has full legal right
and corporate power to enter into and deliver the guarantee attached to this
Agreement as Attachment 5.7 and to perform all the terms and conditions
contained therein to be performed by it. This guarantee has been duly executed
and delivered by COREStaff, Inc. and is a legal, valid and binding obligation
of COREStaff, Inc., enforceable in accordance with its terms, except as limited
by applicable bankruptcy, moratorium, insolvency, or other laws affecting
generally the rights of the creditors or by principals of equity. The
execution and delivery of the guarantee by COREStaff, Inc. and the performance
by COREStaff, Inc. of the transactions contemplated therein have been duly and
validly authorized by all requisite corporate action of COREStaff, Inc.
6. PRE-CLOSING COVENANTS. The parties agree as follows with
respect to the period between the execution of this Agreement and the Closing.
.1 GENERAL. Each of the parties will use its best
efforts to take all action and to do all things necessary, proper, or advisable
to consummate and make effective the transactions contemplated by this
Agreement (including satisfying the closing conditions set forth in Section 7
below).
.2 NOTICES AND CONSENTS. The Sellers will give any
notices to third parties, and the Sellers will use their best efforts to obtain
the third party consents set forth on Exhibit 6.2
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hereto that the Purchaser may request in connection with the matters pertaining
to the Sellers disclosed or required to be disclosed by this Agreement. Each of
the parties will take any additional action that may be necessary, proper or
advisable in connection with any other notices to, filings with, and
authorizations, consents, and approvals of governments, governmental agencies,
and third parties that it may be required to give, make or obtain.
.3 OPERATION OF BUSINESS. The Sellers will not engage
in any practice, take any action, embark on any course of inaction, or enter
into any transaction outside the ordinary course of business. Without limiting
the generality of the foregoing, the Sellers will not engage in any practice,
take any action, embark on any course of inaction, or enter into any
transaction of the sort described in Section 4.4 hereof.
.4 PRESERVATION OF BUSINESS. The Sellers will keep the
business and properties substantially intact, including its present operations,
physical facilities, working conditions, and relationships with lessors,
licensors, suppliers, customers, and employees.
.5 FULL ACCESS. The Sellers will permit representatives
of the Purchaser to have full access at all reasonable times, and in a manner
so as not to interfere with the normal business operations of the Sellers, to
all premises, properties, books, records, contracts, tax records, and documents
of or pertaining to the Sellers.
.6 NOTICE OF DEVELOPMENTS. The Sellers will give prompt
written notice to the Purchaser of any material development affecting the
assets, liabilities, business, financial condition, operations, results of
operations of the Sellers taken as a whole. Each party will give prompt
written notice to the other of any material development affecting the ability
of the parties to consummate the transactions contemplated by this Agreement.
No disclosure by any party pursuant to this Section 6.6, however, shall be
deemed to amend or supplement the Schedules or Attachments hereto, or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
.7 EXCLUSIVITY. The Sellers and the Partners will not
(i) solicit, initiate, or encourage the submission of any proposal or offer
from any person relating to any (A) liquidation, dissolution, or
recapitalization, (B) merger or consolidation, (C) acquisition or purchase of
securities or assets, or (D) similar transaction or business combination
involving Sellers or Gulf Coast, or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
person to do or seek any of the foregoing. The Sellers and the Partners will
notify the Purchaser immediately if any person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
.8 DELIVERY OF SCHEDULES; ACCEPTANCE. To the extent
that the Closing occurs after the execution and delivery of this Agreement
Purchaser acknowledges that the preparation and delivery of the Schedules to
the Agreement may not be prepared and/or final at the time of the execution and
delivery of this Agreement. As such, the parties agree as follows:
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(i) The Sellers and the Partners shall have the right to
deliver the Schedules to the Agreement and/or to amend, restate and
update the Schedules to the Agreement on or before the Closing Date;
(ii) At the Closing, the Sellers shall deliver to the
Purchaser two (2) complete copies of the proposed final Schedules to
the Agreement;
(iii) Purchaser shall notify Sellers in writing at the
Closing that either (A) Purchaser accepts such Schedules, in which
case they shall become part of this Agreement as if in existence on
the date of this Agreement and all such disclosures made in such
amended Schedules shall be deemed disclosed as if they had been
disclosed in the Schedules as of the date of this Agreement, or (B)
that Purchaser in its sole reasonable discretion does not accept such
Schedules and elects to terminate this Agreement pursuant to Section 8
of this Agreement without any liability to the Sellers.
7. CONDITIONS TO OBLIGATION TO CLOSE.
.1 CONDITIONS TO OBLIGATION OF THE PURCHASER. The
obligations of the Purchaser to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions:
(a) the representations and warranties set forth
in Section 4 hereof shall be true and correct in all material respects at and
as of the Closing Date;
(b) the Sellers and Partners shall have performed
and complied with all of their covenants hereunder in all material respects
through the Closing;
(c) the Sellers shall have procured all of the
third party consents specified in Section 6 above;
(d) no action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction wherein an
unfavorable judgment, order, decree, stipulation, injunction, or charge would
(i) prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation, or (iii) affect adversely the right of the
Purchaser to own, operate, or control the Assets (and no such judgment, order
decree, stipulation, injunction, or charge shall be in effect);
(e) the Sellers shall have delivered to the
Purchaser a certificate (without qualification as to knowledge or materiality
or otherwise) to the effect that each of the conditions specified above in
Section 7.1(a)-(d) is satisfied in all respects;
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(f) the Purchaser shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies set forth in this Agreement;
(g) the Purchaser shall have received from Xxxxx
and Xxxxxxx and each person listed in Schedule 16.2(b) an executed Employment
Agreement in substantially the form and substance attached hereto as Attachment
16.2(g);
(h) the Purchaser shall have received from the
Partners and each person listed in Schedule 16.2(c) an executed Non-Competition
Agreement in substantially the form and substance attached hereto as Attachment
16.2(h);
(i) all actions and approvals to be taken by the
Sellers or Partners in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments, and other
documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Purchaser;
(j) the Purchaser shall have received from Xxxxx,
Xxxxxxxx & Xxxxxxxxx, counsel for the Sellers, an opinion addressed to
Purchaser dated the date of the Closing, and in form and substance attached
hereto as Attachment 7.1(j);
(k) Purchaser shall have received from the
Sellers all necessary documents to evidence Sellers' release of the persons
listed on Schedule 16.2(b) from any and all obligations regarding
confidentiality, non-disclosure, non-solicitation and non-competition;
(l) the Purchaser shall have received from the
Sellers their consolidated audited financial statements (balance sheets and
income statements for fiscal years 1993, 1994 and 1995) and federal income tax
returns for the same period that have been prepared and/or filed. In addition,
the Sellers shall have permitted Ernst & Young LLP to have commenced an interim
audit of the financial statements of Sellers for the period commencing January
1, 1996 and continuing through the date of Closing (at the joint expense of
Purchaser and the Sellers); and
(m) the Purchaser shall have received from the
Sellers documents necessary to change the partnership or limited liability
company names to one without the name "Transworld" and a check to cover filing
fees therefor.
The Purchaser may waive any condition specified in this
Section 7.1 if it executes a writing so stating at or prior to the Closing.
.2 CONDITIONS TO OBLIGATION OF THE SELLER. The
obligation of the Sellers to consummate the transactions to be performed by
them in connection with the Closing is subject to satisfaction of the following
conditions:
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(a) the representations and warranties set forth
in Section 5 above shall be true and correct in all material respects at and as
of the Closing Date;
(b) the Purchaser shall have performed and
complied with all of its covenants hereunder in all material respects through
the Closing;
(c) no action, suit, or proceeding shall be
pending before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction, or charge would (i) prevent
consummation of any of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such judgment, order, decree, stipulation,
injunction, or charge shall be in effect);
(d) the Purchaser shall have delivered to Sellers
a certificate (without qualification as to knowledge or materiality or
otherwise) to the effect that each of the conditions specified above in Section
7.2(a)-(c) is satisfied in all respects;
(e) all actions and approvals to be taken by the
Purchaser in connection with the consummation of the transactions contemplated
hereby and all certificates, opinions, instruments and other documents required
to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to the Sellers.
(f) the Sellers shall have received from the
General Counsel for COREStaff, Inc., a Delaware corporation and the parent
corporation of Purchaser, an opinion addressed to Sellers and dated as of the
Closing Date in form and substance attached hereto as Schedule 16.2(g); and
(g) the Purchaser shall have delivered to Xxxxx
and Xxxxxxx and each person listed in Schedule 16.2(b) an executed Employment
Agreement in substantially the form and substance attached hereto as Attachment
16.2(h).
The Sellers may waive any condition specified in this Section
7.2 if they execute a writing so stating at or prior to the Closing.
8. TERMINATION.
.1 TERMINATION OF AGREEMENT. Certain of the parties may
terminate this Agreement as provided below:
(a) the Purchaser and the Sellers may terminate
this Agreement by mutual written consent at any time prior to the Closing;
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(b) Either party may terminate this Agreement by
giving written notice to the other party at any time prior to the Closing in
the event the other party is in breach.
(c) the Purchaser may terminate this Agreement by
giving written notice to the Sellers on or before October 10, 1996 if the
Purchaser is not satisfied with the results of its continuing business, legal,
and accounting due diligence regarding the Sellers.
(d) the Purchaser may terminate this Agreement by
giving written notice to the Sellers at any time prior to the Closing if the
Closing shall not have occurred on or before October 31, 1996 by reason of the
failure of any condition precedent under Section 7.1 hereof (unless the failure
results primarily from the Purchaser itself breaching any representation,
warranty, or covenant contained in this Agreement);
(e) the Sellers may terminate this Agreement by
giving written notice to the Purchaser at any time prior to the Closing if the
Closing shall not have occurred on or before October 31, 1996 by reason of the
failure of any condition precedent under Section 7.2 hereof (unless the failure
results primarily from the Sellers or Partners breaching any representation,
warranty, or covenant contained in this Agreement);
(f) The Purchaser may terminate this Agreement at
the Closing in the event the Purchaser in its sole reasonable discretion is not
satisfied with any of the Schedules delivered to Purchaser after the signing of
this Agreement or on the Closing Date, or any amendment to the Schedules
delivered to Purchaser.
.2 EFFECT OF TERMINATION. If any party terminates this
Agreement pursuant to Section 8.1 above, all obligations of the parties
hereunder shall terminate without any liability of any party to any other party
(except for any liability of any party then in breach of this Agreement.
9. NATURE OF STATEMENTS AND SURVIVAL OF INDEMNIFICATIONS,
GUARANTEES, REPRESENTATIONS AND WARRANTIES OF PARTIES. All statements of fact
contained in this Agreement or in any written statement (including financial
statements), certificate, schedule or other document delivered by or on behalf
of Sellers or Purchaser pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be deemed representations and warranties
of Sellers and/or the Partners or the Purchaser, as the case may be, hereunder.
All indemnifications, guarantees, covenants, agreements, representations and
warranties made by Sellers and/or the Partners or the Purchaser, as the case
may be, hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing for a period of two years and one
day from the Closing Date, regardless of any investigation at any time made by
or on behalf either party.
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10. SPECIAL CLOSING AND POST-CLOSING COVENANTS.
.1 DELIVERY OF FUNDS AND OTHER ASSETS COLLECTED BY
PURCHASER; POWER OF ATTORNEY. To the extent Purchaser receives any funds or
other assets in payment of receivables or work-in-process incurred prior to the
Closing Date or the other Excluded Assets, Purchaser shall immediately deliver
such funds and assets to Sellers and take all steps necessary to vest title to
such funds and assets in Sellers. Purchaser hereby designates Transworld as
Purchaser's true and lawful attorney-in-fact, with full power of substitution,
to execute or endorse for the benefit of Sellers any checks, notes or other
documents received by Purchaser in payment of or in substitution or exchange
for any of the Excluded Assets. Purchaser hereby acknowledges and agrees that
the power of attorney set forth in the preceding sentence is coupled with an
interest, and further agrees to execute and deliver to Sellers from time to
time any documents or instruments reasonably requested by Sellers to evidence
such power of attorney.
.2 DELIVERY OF FUNDS AND OTHER ASSETS COLLECTED BY
SELLERS; POWER OF ATTORNEY. To the extent Sellers receive any funds or other
assets in payment of receivables or work-in-process incurred on or after the
Closing Date, or in connection with any other Assets being sold to Purchaser
hereto, Sellers shall immediately deliver such funds and assets to Purchaser
and take all steps necessary to vest title to such funds and assets in
Purchaser. Sellers hereby designate Purchaser and its officers as Sellers true
and lawful attorney-in-fact, with full power of substitution, to execute or
endorse for the benefit of Purchaser any checks, notes or other documents
received by Purchaser in payment of or in substitution or exchange for any of
the Assets. Sellers hereby acknowledge and agree that the power of attorney
set forth in the preceding sentence is coupled with an interest, and further
agrees to execute and deliver to Purchaser from time to time any documents or
instruments reasonably requested by Purchaser to evidence such power of
attorney.
.3 CHANGE OF NAME OF SELLERS. Immediately upon the
occurrence of the Closing, Sellers shall cease using the word "Transworld" and
all derivations thereof. Sellers and the Partners each covenant and agree that
after the Closing he or it will not, directly or indirectly, use the name
"Transworld" or any derivations thereof in connection with any business
enterprise.
.4 MANAGEMENT OF THE BUSINESS DURING EARN-OUT. During
the period ending December 31, 1997, the Partners will have the necessary
authority to manage the Business consistent with prior practices and prudent
business practices. Purchaser agrees that it will not unreasonably require the
Partners to substantially change any prior business practice, including but not
limited to the customers served, the prices charged, the level and compensation
of full-time corporate employees and the level of G&A expenses, unless the
prior practices are unreasonable or imprudent, unless the changes are
reasonably necessary to support the growth of the Business. The Partners agree
not to cut staff, capital expenditures and G&A expenses or take other actions
that are not consistent with prior practices and/or prudent business practices,
and each agrees not to engage in any activity in order to increase current year
profits of the Business at the expense of the longer term growth of the
Business.
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11 INDEMNITY BY SELLERS AND PARTNERS.
.1 INDEMNITY. Sellers and the Partners, jointly and
severally (the "INDEMNIFYING PARTIES") shall, and hereby do indemnify, hold
harmless and defend Purchaser, its Affiliates and their officers, directors,
shareholders, employees, agents, representatives and consultants (collectively,
the "INDEMNIFIED PARTIES") at all times from and after the date of this
Agreement, from and against any and all penalties, demands, damages, punitive
damages, losses, loss of profits, liabilities, suits, costs, costs of any
settlement or judgment, claims of any and every kind whatsoever, refund
obligations (including, without limitation, interest and penalties thereon),
remediation costs and expenses, less applicable tax benefits (including,
without limitation, reasonable attorneys' fees), of or to any of the
Indemnified Parties ("DAMAGES"), which may now or in the future be paid,
incurred or suffered by or asserted against the Indemnified Parties by any
Person resulting or arising from or incurred in connection with any one or more
of the following (provided that this Section 11 shall not apply to any items
that have been expressly assumed by Purchaser under this Agreement):
(a) any liability or claim for liability
(whether in contract, in tort or otherwise, and whether or not successful) of
or against Sellers or the Partners or related in any way to the Business or
Assets of any of them;
(b) any liability or claim for liability
(whether in contract, in tort or otherwise, and whether or not successful)
related in any way to the Assets or the Business to the extent such liability
arises in connection with any action, omission or event occurring on or prior
to the Closing Date;
(c) any liability or claim for liability
(whether in contract, in tort or otherwise, and whether or not successful)
related to any liens, obligations or encumbrances of any nature whatsoever
against or in any way related to the Assets or the Business which have not been
expressly assumed by and/or transferred to the Purchaser hereunder;
(d) any liability or claim for liability
(whether in contract, in tort or otherwise, and whether or not successful)
related to the Taxes of Sellers or the Partners;
(e) any liability or claim for liability
(whether or not successful) related to any lawsuit or threatened lawsuit or
claim asserted against the Sellers or the Partners, including but not limited
to, those items listed on Schedule 4.12 hereto;
(f) any misrepresentation, breach of warranty or
nonfulfillment of any covenant or agreement on the part of the Sellers and/or
the Partners under this Agreement or from any misrepresentation in or omission
from any list, schedule, certificate or other instrument furnished or to be
furnished to Purchaser pursuant to the terms of this Agreement; and
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(g) all actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including costs of court and
reasonable attorneys' fees) incident to any of the foregoing.
.2 INDEMNIFICATION BY PURCHASER. Purchaser agrees
that notwithstanding the Closing and regardless of any investigation made at any
time by or on behalf of Sellers or of any information Sellers may have in
respect thereof, it will indemnify and save and hold Sellers and the Partners
harmless from and against any Damages which Sellers or the Partners may sustain
or to which they may be subjected arising out of (a) any inaccuracy in any
representation or the breach of any warranty made by Purchaser pursuant to this
Agreement; (b) any failure by Purchaser to duly perform or observe any term,
provision, covenant, agreement or condition in this Agreement on the part of
Purchaser to be performed or observed; or (c) any Assumed Liability or
Obligation asserted against Sellers and/or the Partners.
.3 PROCEDURE FOR INDEMNIFICATION. If a party entitled
to indemnification pursuant to Section 11 (the "Indemnitee") receives notice of
the assertion by a person who is not a party to this Agreement of any claim or
of the commencement by any such person of any action or proceeding (a "Third
Party Claim") with respect to which another party to this Agreement (the
"Indemnifying Party") is obligated to provide indemnification, the Indemnitee
shall give the Indemnifying Party written notice thereof within one hundred
twenty (120) days after becoming aware of such Third Party Claim, unless earlier
notice is required in order to timely file any answer in such pending Third
Party Claim. Such notice shall describe the Third Party Claim in reasonable
detail, and shall indicate the amount (estimated if necessary) of the
Indemnifiable Loss that has been or may be sustained by the Indemnitee. The
Indemnifying Party may elect to compromise or defend, at such Indemnifying
Party's own expense and by such Indemnifying Party's own counsel, any Third
Party Claim. If the Indemnifying Party elects to compromise or defend such
Third Party Claim, it shall, within thirty (30) days (or sooner if the nature of
the Third Party Claim so requires) notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Third Party Claim. If the
Indemnifying Party elects not to compromise or defend against the Third Party
Claim, or fails to notify the Indemnitee of its election as herein provided, the
Indemnitee may pay, compromise, or defend such Third Party Claim without waiving
its claims for indemnification hereunder. In any event, the Indemnitee and the
Indemnifying Party may each participate, at its own expense, in the defense of
such Third Party Claim. If the Indemnifying Party chooses to defend any claim,
the Indemnitee shall make available on a reasonable basis to the Indemnifying
Party any personnel or any books, records, or other documents within its control
that are necessary for such defense. If the Indemnifying Party elects to
compromise or defend such Third Party Claim, no compromise or settlement thereof
may be effected by the Indemnifying Party without the Indemnitee's written
consent (which shall not be unreasonably withheld) unless (i) the sole relief
provided is monetary damages that are paid in full by the Indemnifying Party and
(ii) the Indemnifying Party receives a release from the claimant releasing
Indemnitee from any and all claims claimant may have against Indemnitee.
Any claim for indemnity between the parties shall be asserted by
written notice given by the Indemnitee to the Indemnifying Party. The
Indemnifying Party shall have a period
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of one hundred twenty (120) days within which to respond thereto. If the
Indemnifying Party does not respond within such 120-day period, the Indemnifying
Party shall be deemed to have accepted responsibility to make payment, and shall
have no further right to contest the validity of such claim. If the
Indemnifying Party does respond within such 120-day period and rejects such
claim in whole or in part, the Indemnitee shall be free to purchaser such
remedies as may be available to such party by applicable law.
.4 LIMITATION OF CERTAIN LIABILITY. To the extent the
Indemnified Parties incur or suffer Damages for any matter for which Sellers
and the Partners, jointly and severally, are obligated to indemnify, hold
harmless and defend Purchaser under Section 11.1(f) above, neither Sellers nor
the Partners shall be liable for any such Damages (i) until Purchaser has
suffered aggregate losses by reason of all such misrepresentations, breaches of
warranty and/or non-fulfillments of covenants or agreements on the part of
Sellers and/or the Partners in excess of a $65,000 threshold (at which point
Sellers and the Partners will be obligated to indemnify Purchaser from and
against all such aggregate losses including losses back to the first dollar),
and (ii) in excess of $10,000,000; provided, however, that the limitations set
forth in (i) and (ii) above specifically shall not apply to Damages (y)
resulting from or attributable to intentional fraud or any willful misconduct
by Sellers and/or the Partners, or (z) for any matter or matters (other than
those set out in Section 11.1(f) above) for which Sellers and/or the Partners,
jointly or severally, are obligated to indemnify, hold harmless and defend
Purchaser. The provisions of this Section 11 will terminate on the second
anniversary of the Closing Date.
.5 PAYMENT; GENERAL RIGHT OF OFFSET. The Indemnifying
Parties shall promptly pay to Purchaser or such other Indemnified Party as may
be entitled to indemnity hereunder in cash the amount of any Damages to which
Purchaser or such Indemnified Party may become entitled by reason of the
provisions of this Agreement. Furthermore, and in lieu of receiving a cash
payment from the Sellers, as the case may be, Purchaser, at its sole reasonable
discretion, may elect to offset against any Earned Payout Amounts payable to
Sellers, the amount of any Damages or any other payments to which Purchaser or
such Indemnified Parties may become entitled by reason of the provisions of
this Agreement; provided, however, in the event Purchaser is determined by a
Dispute Resolution Forum (as hereinafter defined) to have wrongfully offset any
amounts against the Earned Payout Amounts, the Sellers shall be entitled to
interest at a rate of twelve percent (12%) per annum on such wrongfully offset
amounts from the date such amounts were due until actually paid.
12. LEASE AGREEMENT AND GUARANTEES. Purchaser shall assume the
leases for the office space currently used by Sellers in connection with the
operation of the Business and that are listed on Schedule 3.4 hereto.
Purchaser and COREStaff, Inc. will, from and after Closing, indemnify and hold
harmless Sellers and Partners from any claim, loss or liability thereunder
accruing after Closing, and use its best efforts to obtain the release of any
guarantees made by the Partners.
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13. NON-COMPETITION AGREEMENTS. As an inducement for Purchaser to
enter into this Agreement and in return for the payment of $150,000 as provided
by Section 3.1(a), the parties hereby agree to the provisions of this Section
13. For a period commencing on the date hereof through the third anniversary
of the Closing Date, neither Sellers nor any affiliate of Sellers (including
the Partners), shall (i) within the territorial boundaries of the continental
United States, where the Business of Sellers is now conducted, compete directly
or indirectly with any business engaged in by Purchaser or its Affiliates to
the extent it is similar to any business engaged in by the Sellers as of the
date hereof, (ii) solicit directly or indirectly any of the Accounts (as
hereinafter defined) of Sellers or of Purchaser or its Affiliates, or (iii) be
employed by or otherwise render services to, or own any interest in, any Person
that directly or indirectly (a) competes with the Business as engaged in by
Purchaser or its Affiliates within the States of Florida, South Carolina or New
Jersey, to the extent it is similar to any business engaged in by Sellers as of
the date hereof, or (b) solicits directly or indirectly any of the Accounts of
Sellers or of Purchaser or its Affiliates. For purposes of this Section 13,
the term "Accounts" shall mean any Person located in the United States of
America for which Sellers have performed services or Purchaser or its
Affiliates does perform services during the period beginning three (3) years
prior to the date hereof and ending on the third anniversary of the Closing
Date. Sellers and Partners agree that the limitations set forth herein on the
rights of them and their Affiliates to compete with Purchaser and its Affiliates
are reasonable and necessary for the protection of the Purchaser. In this
regard, Sellers and Partners specifically agree that the limitations as to
period of time and geographic area, as well as all other restrictions on its
activities specified herein, are reasonable and necessary for the protection of
the Purchaser. Sellers and Partners further recognize and agree that violation
of any of the agreements contained in this Section 13 will cause irreparable
damage or injury to Purchaser, the exact amount of which may be impossible to
ascertain, and that, for such reason, among others, Purchaser and its Affiliates
shall be entitled to an injunction, without the necessity of posting a bond,
restraining any further violation of such agreements. Such rights to any
injunction shall be in addition to, and not in limitation of, any other rights
and remedies Purchaser and its Affiliates may have against Seller, the Partners
or their Affiliates, including, but not limited to, the recovery of damages.
Further, it is agreed by Seller and the Partners that in the event the
provisions of this Agreement should ever be deemed to exceed the time or
geographic limitations permitted by applicable law, then such provisions shall
be reformed to the maximum time or geographic limitations permitted.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Sellers and
Partners recognize and acknowledge that they have and will have access to
certain confidential information of Sellers that is included in the Assets
(including, but not limited to, list of customers, and costs and financial
information) that after the consummation of the transactions contemplated
hereby will be valuable, special and unique property of Purchaser. Sellers and
Partners each agree that it will not disclose any such confidential information
to any Person, except to authorized representatives of Purchaser. Sellers and
Partners recognize and agree that violation of any of the agreements contained
in this Section 14 will cause irreparable damage or injury to Purchaser, the
exact amount of which may be impossible to ascertain, and that, for such
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reason, among others, Purchaser shall be entitled to an injunction, without the
necessity of posting bond, therefor, restraining any further violation of such
agreements. Such rights to any injunction shall be in addition to, and not in
limitation of, any other rights and remedies Purchaser may have against Sellers
or the Partners.
15. ASSIGNMENT OF CONTRACTS. Notwithstanding any other provision
of this Agreement, nothing in this Agreement or any related document shall be
construed as an attempt to assign (i) any contract which, as a matter of law or
by its terms, is nonassignable without the consent of the other parties thereto
unless such consent has been given, or (ii) any contract or claims as to which
all of the remedies for the enforcement thereof enjoyed by Sellers would not,
as a matter of law or by its terms, pass to Purchaser as an incident of the
transfers and assignments to be made under this Agreement. In order, however,
that the full value of every contract and claim of the character described in
clauses (i) and (ii) above and all claims and demands on such contracts may be
realized for the benefit of Purchaser, Sellers, at the request and expense and
under the direction of Purchaser, shall take all such action and do or cause to
be done all such things as will be reasonably necessary or proper in order that
the obligations of Sellers under such contracts may be performed in such manner
that the value of such contract will be preserved and will inure to the benefit
of Purchaser, and for, and to facilitate, the collection of the monies due and
payable and to become due and payable thereunder to Purchaser in and under
every such contract and claim incurred after the Closing. Sellers shall
promptly pay over to Purchaser all monies collected by or paid to it in respect
of every such contract, claim or demand to the extent such monies are earned by
the Purchaser on or after the Closing Date. Nothing in this Section 15 shall
relieve Sellers of their obligation to obtain any consents required for the
transfer of the Assets and all rights thereunder to Purchaser, or shall relieve
Sellers from any liability to Purchaser for failure to obtain such consents.
16. SPECIAL PROVISIONS REGARDING EMPLOYEES OF SELLER.
.1 NEW EMPLOYEES OF PURCHASER. It is the intention of
Purchaser, and Sellers hereby acknowledge and agree with such position, that
any employees of Sellers that Purchaser hires will be new employees of
Purchaser as of the Closing Date or the date of hire, whichever is later.
Except as set forth in Section 16.3 below, such new employees shall be entitled
only to such compensation and employee benefits as are agreed to by such
employees and Purchaser, or as are otherwise provided by Purchaser, in its sole
discretion.
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.2 HIRING OF EMPLOYEES.
(a) Purchaser will use its reasonable efforts to
hire the existing employees of Sellers in connection with its purchase of the
Assets; provided however, that Purchaser shall be entitled to review employee
records, conduct employee interviews and employee screening procedures used by
Purchaser in its business, and may refuse to offer employment to any employee of
Sellers if such employee fails to meet the hiring criteria of Purchaser.
(b) As a condition to their employment by
Purchaser, all existing full-time corporate employees of Sellers shall execute
and deliver to Purchaser an Employment Agreement, a confidentiality agreement,
and a non-competition agreement, each in form and substance acceptable to
Purchaser.
.3 EXISTING EMPLOYEE BENEFIT PLANS. Purchaser shall
have no obligation after the Closing to continue any pension plans or work
benefit plans currently offered by Sellers to its employees. Sellers and the
Partners agree to indemnify and hold harmless Purchaser from and against any
claim which may arise because of the failure to continue such pension plans or
work benefit programs. Notwithstanding the above, the Purchaser agrees to use
its best reasonable efforts to maintain Sellers' existing health benefit
programs provided to Sellers' temporary employees, unless such health benefits
continuation by Purchaser is prohibited by law or jeopardizes Purchaser's
existing qualified benefit programs.
.4 INDEMNITY CONCERNING ACCRUED BENEFITS. Sellers and
the Partners agree to indemnify and hold harmless Purchaser from and against
any and all accrued and outstanding employee benefits, salary, vacation pay,
bonuses, commissions and other emoluments of its employees and from any other
employee related matters or liabilities with respect to its employees, except
Purchaser shall assume temporary staffer vacation liability up to $55,000.
17. EXPENSES. Whether or not the transactions contemplated hereby
are consummated, Sellers will pay all of their costs and expenses and Purchaser
will pay all of its costs and expenses, incurred in connection with the
preparation of and execution of this Agreement and the consummation of the
transactions contemplated hereby.
18. FURTHER ACTIONS. From time to time, at the request of any
party hereto, the other parties hereto shall execute and deliver such
instruments and take such action as may be reasonably requested to evidence the
transactions contemplated hereby.
19. NOTICES. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally, given by
prepaid telex or telegram or by facsimile or other similar instantaneous
electronic transmission device or mailing first class, postage prepaid,
certified United States mail, return receipt requested, as follows:
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(a) If to Purchaser, at:
COREStaff Acquisition Sub #6, Inc.
c/o COREStaff, Inc.
0000 Xxxx Xxx Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
COREStaff, Inc.
0000 Xxxx Xxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
(b) If to Sellers, at:
c/o Transworld Services Group, Ltd.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
With a copy to
J. Xxxxxxx Xxxxxxxxx, Esq.
Xxxxx, Xxxxxxxx & Xxxxxxxxx
000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Facsimile No: (000) 000-0000
provided that any party may change its address for notice by giving to the
other party written notice of such change. Any notice given under this Section
19 shall be effective (i) if delivered personally, when delivered, (ii) if sent
by telex or telegram or by facsimile or other similar instantaneous electronic
transmission device, twenty-four (24) hours after sending, and (iii) if mailed,
forty-eight (48) hours after mailing.
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20. GENERAL PROVISIONS.
.1 GOVERNING LAW; INTERPRETATION; SECTION HEADINGS.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO CONFLICT-OF-LAWS RULES
AS APPLIED IN FLORIDA. THE SECTION HEADINGS CONTAINED HEREIN ARE FOR PURPOSES
OF CONVENIENCE ONLY, AND SHALL NOT BE DEEMED TO CONSTITUTE A PART OF THIS
AGREEMENT OR TO AFFECT THE MEANING OR INTERPRETATION OF THIS AGREEMENT IN ANY
WAY.
.2 SEVERABILITY. Should any provision of this Agreement
be held unenforceable or invalid under the laws of the United States of America
or the State of Florida, or under any other applicable laws of any other
jurisdiction, then the parties hereto agree that such provision shall be deemed
modified for purposes of performance of this Agreement in such jurisdiction to
the extent necessary to render it lawful and enforceable, or if such a
modification is not possible without materially altering the intention of the
parties hereto, then such provision shall be severed herefrom for purposes of
performance of this Agreement in such jurisdiction. The validity of the
remaining provisions of this Agreement shall not be affected by any such
modification or severance, except that if any severance materially alters the
intentions of the parties hereto as expressed herein (a modification being
permitted only if there is no material alteration), then the parties hereto
shall use their best reasonable effort to agree to appropriate equitable
amendments to this Agreement in light of such severance, and if no such
agreement can be reached within a reasonable time, any party hereto may
initiate arbitration under the then current rules of the American Arbitration
Association to determine and effect such appropriate equitable amendments. .2
.3 ENTIRE AGREEMENT. This Agreement sets forth the
entire agreement and understanding of the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior agreements,
arrangements and understandings related to the subject matter hereof. No
representation, promise, inducement or statement of intention has been made by
any party hereto which is not embodied in this Agreement, and no party hereto
shall be bound by or liable for any alleged representation, promise, inducement
or statement of intention not so set forth.
.4 BINDING EFFECT. All the terms, provisions,
covenants and conditions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, executors, administrators, representatives, successors and assigns.
.5 ASSIGNMENT. This Agreement and the rights and
obligations of the parties hereto shall not be assigned or delegated by any
party hereto without the prior written consent of the other parties hereto.
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.6 AMENDMENT; WAIVER. This Agreement may be amended,
modified, superseded or canceled, and any of the terms, provisions,
representations, warranties, covenants or conditions hereof may be waived, only
by a written instrument executed by all parties hereto, or, in the case of a
waiver, by the party waiving compliance. The failure of any party at any time
or times to require performance of any provision hereof shall in no manner
affect the right to enforce the same. No waiver by any party of any condition
contained in this Agreement, or of the breach of any term, provisions,
representation, warranty or covenant contained in this Agreement, in any one or
more instances, shall be deemed to be or construed as a further or continuing
waiver of any such condition or breach, or as a waiver of any other condition
or of the breach of any other term, provision, representation, warranty or
covenant.
.7 GENDER; NUMBERS. All references in this Agreement to
the masculine, feminine or neuter genders shall, where appropriate, be deemed
to include all other genders. All plurals used in this Agreement shall, where
appropriate, be deemed to be singular, and vice versa.
.8 COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. This Agreement shall be binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of the
parties reflected hereon as signatories.
.9 TELECOPY EXECUTION AND DELIVERY. A facsimile,
telecopy or other reproduction of this Agreement may be executed by one or more
parties hereto, and an executed copy of this Agreement may be delivered by one
or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party hereto,
all parties hereto agree to execute an original of this Agreement as well as
any facsimile, telecopy or other reproduction hereof.
.10 ATTORNEYS' FEES. In the event of any dispute or
controversy arising under this Agreement which results in a court order or
arbitration or mediation award by any court, arbitrator or mediator (the
"DISPUTE RESOLUTION FORUM"), then the attorneys' fees of both parties in the
Dispute Resolution Forum shall be paid (a) by the prevailing party in any
action inequity and (b) in any action for Damages by the party whose final
asserted amount for the damage award presented to the Dispute Resolution Forum
in pleadings filed with the Dispute Resolution Forum differs by a greater
amount from the actual award determined by the Dispute Resolution Form. If
each party prevails in part, the Dispute Resolution Forum will determine the
appropriate allocation of attorneys' fees among the parties utilizing the
principal described above. Judgment upon the award of attorneys' fees rendered
by the Dispute Resolution Forum may be entered in any court having jurisdiction
thereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"PURCHASER"
CORESTAFF ACQUISITION SUB #6, INC.
ATTEST:
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
/s/ Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
------------------------------------- Title: Senior Vice President
Assistant Secretary: Xxxxxx X. Xxxxxx
[Corporate Seal]
SIGNING SOLELY FOR THE PURPOSE OF EVIDENCING ITS REPRESENTATIONS
AND/OR OBLIGATIONS CONTAINED IN SECTIONS 5 and 12 OF THIS AGREEMENT
"CORESTAFF"
CORESTAFF, INC.
ATTEST:
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
/s/ Xxxxxx X.Xxxxxx Name: Xxxxx X. Xxxxxxx
------------------------------------- Title: Senior Vice President
Assistant Secretary: Xxxxxx X. Xxxxxx
[Corporate Seal]
"SELLERS"
TRANSWORLD SERVICES GROUP, LTD
By: Gulf Coast Corporate Ventures, Inc.
Its: General Partner
ATTEST:
By: /s/ Xxxxxx Xxxxxxx
--------------------------
/s/ Xxxx X. Xxxxxx Name: Xxxxxx Xxxxxxx
------------------------- Title: Chief Executive Officer
Secretary: Xxxx X. Xxxxxx
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TRANSWORLD SERVICES GROUP I, LLC
ATTEST: Gulf Coast Corporate Ventures, Inc.,
Manager
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
/s/ Xxxx X.Xxxxxx Name: Xxxxxx Xxxxxxx
------------------------- Title: Chief Executive Officer
Secretary: Xxxx X. Xxxxxx
TRANSWORLD SERVICES GROUP II, LLC
ATTEST: Gulf Coast Corporate Ventures, Inc.,
Manager
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
/s/ Xxxx X.Xxxxxx Name: Xxxxxx Xxxxxxx
------------------------- Title: Chief Executive Officer
Secretary: Xxxx X. Xxxxxx
[Corporate Seal] "PARTNERS"
GULF COAST CORPORATE VENTURES, INC.
ATTEST:
By: /s/ Xxxxxx Xxxxxxx
---------------------------
/s/ Xxxx X.Xxxxxx Name: Xxxxxx Xxxxxxx
------------------------- Title: Chief Executive Officer
Secretary: Xxxx X. Xxxxxx
[Corporate Seal]
/s/ Xxxx X. Xxxxx
------------------------------
XXXX X. XXXXX
/s/ Xxxxxx Xxxxxxx
------------------------------
XXXXXX XXXXXXX
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