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EXHIBIT 1
ASSET PURCHASE AGREEMENT
between
SOLUTION SOURCE, INC.
and
ABLEST SERVICE CORP.
April 25, 1997
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TABLE OF CONTENTS
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ARTICLE I Sale and Purchase; Liabilities Assumed ....................... 1
1.1 Asset Purchase ........................................................ 1
1.2 Tech Resource Group ................................................... 1
1.3 Consideration for the Assets .......................................... 2
1.4 Assumption of Liabilities ............................................. 4
1.5 Allocation of Consideration ........................................... 5
1.6 Accounts Receivable ................................................... 5
1.7 Closing ............................................................... 5
1.8 Effective Time ........................................................ 5
ARTICLE II Representations and Warranties of Buyer ...................... 6
2.1 Corporate Organization ................................................ 6
2.2 Authorization ......................................................... 6
2.3 Consents and Approvals ................................................ 6
2.4 No Conflict ........................................................... 6
2.5 Brokers and Finders ................................................... 6
ARTICLE III Representations and Warranties of Seller and
Shareholder .................................................. 7
3.1 Corporate Organization ................................................ 7
3.2 Authorization ......................................................... 7
3.3 Consent and Approvals ................................................. 7
3.4 Subsidiaries .......................................................... 7
3.5 Capitalization ........................................................ 8
3.6 Affiliates ............................................................ 8
3.7 Litigation ............................................................ 8
3.8 Stock Ownership and Authority ......................................... 8
3.9 No Conflicts .......................................................... 8
3.10 Financial Statements .................................................. 9
3.11 Absence of Certain Changes or Events................................... 9
3.12 Taxes ................................................................. 9
3.13 Title to Assets ....................................................... 10
3.14 Compliance with Laws; Authorization ................................... 10
3.15 Employee Benefits Plans ............................................... 10
3.16 Contracts ............................................................. 11
3.17 Books of Account; Records ............................................. 11
3.18 Labor Relations ....................................................... 11
3.19 Insurance Funds ....................................................... 12
3.20 Environmental Matters ................................................. 12
3.21 Brokers and Finders ................................................... 12
ARTICLE IV Conditions Precedent to Obligations .......................... 12
4.1 Conditions to Obligations of Buyer .................................... 12
4.2 Conditions of Seller and Shareholders ................................. 13
ARTICLE V Closing ...................................................... 14
5.1 Deliveries of Seller at Closing ....................................... 14
5.2 Deliveries of Buyer at Closing ........................................ 15
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ARTICLE VI Indemnification .............................................. 15
6.1 Survival of Representations, Warranties and Agreements ................ 15
6.2 Indemnification ....................................................... 15
6.3 Limitations on Indemnification ........................................ 16
6.4 Procedure for Indemnification with Respect to Third-Party Claims ...... 17
6.5 Procedure for Indemnification with Respect to
Non-Third-Party Claims ................................................ 17
ARTICLE VII Covenants .................................................... 18
7.1 Covenant Not to Compete ............................................... 18
7.2 Covenant Against Hiring ............................................... 19
7.3 Due Diligence Access .................................................. 19
7.4 Conduct of Interim Operations ......................................... 19
7.5 Tax Covenants ......................................................... 20
7.6 Changes to Disclosure Schedule ........................................ 21
7.7 Liabilities ........................................................... 21
7.8 Effect of Termination of Employment ................................... 21
7.9 Certain Employees ..................................................... 21
7.10 Certain Covenants ..................................................... 22
ARTICLE VIII Termination .................................................. 22
8.1 Termination of Agreement .............................................. 22
ARTICLE IX Miscellaneous Provisions ..................................... 23
9.1 No Negotiations by Seller and the Shareholders ........................ 23
9.2 Notice ................................................................ 23
9.3 Entire Agreement ...................................................... 24
9.4 Binding Effect; Assignment ............................................ 24
9.5 No Third-Party Beneficiaries .......................................... 24
9.6 Counterparts .......................................................... 24
9.7 Expenses .............................................................. 24
9.8 Waiver; Consent ....................................................... 24
9.9 Other and Further Covenants ........................................... 24
9.10 Governing Law ......................................................... 25
9.11 Public Announcements .................................................. 25
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered
into on April 25, 1997, between Solution Source, Inc., a Georgia corporation
("Seller"), Xxxxx Xxxxxxxxxx and Xxxxx Xxxxxxxxx, the sole shareholders of
Seller ("Shareholders"), on the one hand, and Ablest Service Corp., a Delaware
Corporation ("Buyer"), on the other.
WHEREAS, Seller owns and operates a staffing services business
concentrating in the computer and information technology areas located in
Duluth, Georgia, and desires to sell the Assets (as defined herein) upon the
terms and conditions hereinafter stated;
WHEREAS, Buyer desires to purchase the Assets from Seller ("Asset
Purchase") upon the terms and conditions hereinafter stated;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, the parties hereto agree as follows:
ARTICLE I
Sale and Purchase; Liabilities Assumed
1.1 Asset Purchase. At the Closing (as defined herein), to be effective
as of the Effective Time (as defined herein), Seller shall sell, convey, assign,
transfer and deliver to Buyer, free and clear of all liens and encumbrances of
any kind except those disclosed in the disclosure schedule attached hereto (the
"Disclosure Schedule") those assets, rights and interests, tangible or
intangible, which are listed by category on the attached Exhibit A (the
"Assets"), and all books and records which relate to the Assets (except for
books and records which Seller is required by law to retain in its possession,
copies of which will be provided to Buyer); provided, however, that there shall
be excluded from the Assets those assets listed on the attached Exhibit A-1. The
parties hereto agree that the name "Solution Source" is included in the Assets.
The Shareholders agree to cause Seller to be dissolved or to have its name
changed no later than December 31, 1997, prior to which Seller may use the name
"Solution Source" only in connection with winding up its business.
1.2 Tech Resource Group. The business of Seller as operated by Buyer
following the Effective Time will be combined with the business of Buyer's
information technology group ("Tech Resource Group") and will be operated under
the name of that group. The combined operation will operate following the
Effective Time out of the location currently used by Seller to operate its
business, provided that sufficient space is available at such location for the
personnel and facilities of Tech Resource Group.
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1.3 Consideration for the Assets.
(a) Base Purchase Price. The consideration to be paid for the
Assets at the Closing shall be One Million Three Hundred Thousand Dollars
($1,300,000) (the "Base Purchase Price")
(b) Base Earnout.
(i) As additional consideration for the Assets, Buyer
shall pay to Seller (and after Seller's dissolution to the Shareholders) up to
an aggregate of $675,000 (the "Base Earnout Purchase Price"). The Base Earnout
Purchase Price shall be paid in up to three consecutive payments (each a "Base
Earnout Payment"), one with respect to each of fiscal years 1997, 1998 and 1999
of Buyer (each a "Fiscal Year"), each as calculated as provided herein.
(ii) A Base Earnout Payment of $225,000 will be paid
with respect to each Fiscal Year for which the EBIT Earnout Base is reached. If
the EBIT Earnout Base for a Fiscal Year is not reached, the Base Earnout Payment
for such year will be prorated based upon the ratio of EBIT to EBIT Earnout Base
(the "Prorated Payment"). The excess of EBIT Earnout Base over EBIT (the
"Deficiency") shall then be added to the following Fiscal Year's EBIT Earnout
Base (the "Adjusted EBIT Earnout Base") and the excess of $225,000 over the
Prorated Payment (the "Shortfall") shall be paid to Seller dollar-for-dollar to
the extent that the Adjusted EBIT Earnout Base is reached in the next succeeding
Fiscal Year. To the extent that the Adjusted EBIT Earnout Base, if any, for a
Fiscal Year is not reached and as a consequence the full Shortfall is not paid,
the resulting Deficiency shall be carried over to the following Fiscal Year, if
any, for which a Base Earnout Payment is to be calculated and the accumulated
Shortfall shall be paid as aforesaid to the extent the Adjusted EBIT Earnout
Base for such Fiscal Year is reached. Any Shortfall not earned in Fiscal Year
1999 will be deemed forfeited.
(c) Additional Earnout. As additional consideration for the
Assets, with respect to each Fiscal Year for which EBIT exceeds the EBIT Earnout
Base or the Adjusted EBIT Earnout Base (as the case may be) Buyer shall pay an
amount equal to 31% of the excess (if any) of EBIT or EBIT Target, whichever is
less, over the EBIT Earnout Base or Adjusted EBIT Earnout Base (as the case may
be) for such Fiscal Year (the "Additional Earnout Payment"). Buyer shall pay
any such amount to Seller and after Seller's dissolution to the Shareholders
equally, subject if one or more of the Shareholders is terminated as an employee
of Buyer to proration as follows: (i) if payment is to be made to Seller, such
payment shall be prorated as of the date or dates of termination of one or both
of the Shareholders, as the case may be, with Seller being entitled to a
prorated payment with respect to each terminated Shareholder based on 16.5% of
the aforesaid excess; and (ii) if
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such payment is to be made to the Shareholders, such payment shall be prorated
in accordance with Sections 8(f) and 9 of the Employment Agreements if one or
both of the Shareholders is terminated and such payment will be made under the
Employment Agreements and not under this Agreement.
(d) Definitions. For purposes of this Section 1.3, EBIT shall
mean earnings before interest and taxes of Tech Resource Group (including the
business of Seller acquired hereunder) calculated in accordance with generally
accepted accounting principles applied in a manner consistent with the
application thereof (as illustrated in Appendix 1.3(d) hereto) to the operations
of Tech Resource Group prior to the Effective Time; EBIT Earnout Base shall mean
$341,307 with respect to Fiscal Year 1997, $511,961 with respect to Fiscal Year
1998, and $511,961 with respect to Fiscal Year 1999; and EBIT Target shall mean
$540,000 for Fiscal Year 1997, $1,012,500 for Fiscal Year 1998 and $1,263,600
for Fiscal Year 1999. The chart below is intended to illustrate the foregoing:
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1997* 1998 1999
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EBIT TARGET $(540,000) $1,012,500 $1,263,600
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EBIT EARNOUT BASE $(341,307) $ 511,961 $ 511,961
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* Figures are prorated from the Effective Time.
(e) Calculation Example. For the sole purpose of illustrating
the calculation of the Base Earnout Payment and the Additional Earnout Payment,
the following examples are provided:
(i) Assuming EBIT for 1997 (prorated from the
Effective Time) were $700,000, the Base Earnout Payment would be $225,000 and
the Additional Earnout Payment would be $61,595 (31%) of $198,693 the difference
between the EBIT Target and the EBIT Earnout Base for 1997.
(ii) Assuming EBIT for 1998 were $421,200, the Base
Earnout Payment would be $185,112, or about 82.3% of $225,000; and the
difference of $90,761 between the EBIT Earnout Base of $511,961 and EBIT of
$421,200 would be added to the EBIT Earnout Base for 1999, thus increasing such
base from $511,961 to $602,722.
(iii) Assuming EBIT for 1999 were $602,722, the Base
Earnout Payment would be $264,888 (representing the base of $225,000 and a full
recoupment of the $39,888 Shortfall for 1998); and no Additional Earnout Payment
would be made since EBIT equalled the Adjusted EBIT Earnout Base. In this
example, to the extent that EBIT were to fall between the original EBIT Earnout
Base of $511,961 and the Adjusted EBIT Earnout Base of $602,722, only a
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portion (not all) of the 1998 Shortfall would be recouped and the rest of such
Shortfall would be forfeited.
(iv) Assuming instead that EBIT for 1999 were
$2,000,000, the Base Earnout Payment would be $264,888 (the $225,000 plus the
recoupment of the $39,888 1998 Shortfall), and there would be an Additional
Earnout Payment of $204,872 (equaling 31% of the difference between the EBIT
Target of $1,263,600 and the Adjusted EBIT Earnout Base of $602,722).
(f) Method and Timing of Payment. All amounts paid to Seller
under this Section 1.3 (the "Consideration") shall be paid by Buyer by certified
or bank cashier's check payable to the order of, or by wire transfer of same-day
funds pursuant to instructions of, Seller. Each Base Earnout Payment and each
Additional Earnout Payment will be paid on March 1 of the year following the
fiscal year with respect to which such payment is calculated.
(g) EBIT Reports. Buyer shall provide Shareholders with EBIT
statements on a monthly basis and access at reasonable times to Buyer's officers
to discuss the calculation of EBIT.
1.4 Assumption of Liabilities.
(a) In connection with the acquisition by Buyer of the Assets as of the
Effective Time, Buyer shall assume only those liabilities under the Material
Contracts (as defined herein) of Seller that are expressly identified on the
attached Exhibit B. Buyer does not hereby, and will not at any time be required
to, assume, pay, perform or discharge any other obligations, claims,
liabilities, costs or expenses of Seller, including without limitation any of
the following: (i) any liability in respect of separation or severance pay to
any person employed by Seller; (ii) any liability under any plan, fund, program,
policy or arrangement under which any persons are provided or promised pensions,
retirement income, deferred compensation or profit-sharing; (iii) any liability
under any plan, fund, program or arrangement under which any persons are
provided or promised bonuses, incentive pay, severance pay, vacations or
vacation pay, salary continuation, medical insurance or benefits, savings
benefits, stock options, life insurance or death benefits, travel or accident
benefits or unemployment benefits; (iv) any liability for occupational health
and safety or environmental matters; (v) any liability of Seller (including
without limitation any liability or potential liability with respect to any
consolidated return filed or to be filed by any person) for federal, state or
local income or other taxes or penalties or interest thereon; (vi) any pending
or threatened litigation against Seller or any affiliate of Seller; (vii) any
intercompany loans, advances or other obligations owed by Seller to any
affiliate of Seller; and (viii) liability of any kind, direct or indirect, fixed
or contingent, arising out of, resulting from or
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relating to actions taken or omitted to be taken by Seller prior to, on or after
the Closing Date.
(b) Notwithstanding anything to the contrary in this Agreement, to the
extent that the assignment hereunder of any Material Contract shall require the
consent of any other party (or in the event that any of the same shall be
non-assignable), neither this Agreement nor any action taken pursuant to its
provisions shall constitute an assignment or an agreement to assign if such
assignment or attempted assignment would constitute a breach thereof or result
in the loss or diminution thereof; provided, however, that in each such case,
Seller and the Shareholders shall use their best efforts to obtain the consent
of such other party to an assignment to Buyer. If such consent is not obtained
and is waived by Buyer prior to the Closing, Seller and the Shareholders shall
cooperate with Buyer in any reasonable arrangement designed to provide for Buyer
the benefits under any such contract from and after the Effective Time.
1.5 Allocation of Consideration. The parties agree on the written
allocation of the Consideration among the Assets attached hereto as Exhibit C.
The parties agree to file all federal, state and local tax returns in accordance
with such allocation.
1.6 Accounts Receivable. Seller shall retain its accounts receivable
and Buyer shall have no obligation to collect them for Seller.
1.7 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at 10:00 a.m., local time, on April 25, 1997, at the
Seller's principal office, or on such other date or at such other place as the
parties may agree. The date and time of the Closing are sometimes referred to
herein as the "Closing Date".
1.8 Effective Time. The "Effective Time" shall mean 12:01 a.m., Atlanta
local time, on Monday, April 28, 1997. The parties agree that (i) between the
Closing Date and the Effective Time the business of Solution Source shall be
operated for the benefit of and at the risk of Seller and the Shareholders (with
Seller hereby agreeing to insure against and hold Buyer harmless with respect to
risk of loss or damage to the Assets during such time) and (ii) the transfer of
the Assets to Buyer and the assumption of any liabilities hereunder by Buyer
shall be effective from and after the Effective Time without further action by
the parties hereto.
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ARTICLE 11
Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller and Shareholders that:
2.1 Corporate Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has all
requisite power and authority to enter into this Agreement, perform its
obligations hereunder and consummate the Asset Purchase.
2.2 Authorization. All necessary and appropriate corporate action has
been taken by Buyer with respect to the execution and delivery of this Agreement
and the performance of its obligations hereunder, and this Agreement constitutes
a valid and binding obligation of Buyer enforceable against it in accordance
with its terms.
2.3 Consents and Approvals. To the best of Buyer's knowledge, no
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental or regulatory authority or agency is required in
connection with the execution and delivery of this Agreement by Buyer or its
performance of the terms hereof or for the validity or enforceability thereof.
2.4 No Conflict. Neither the execution and delivery of this Agreement
by Buyer nor the consummation by Buyer of the Asset Purchase will (i) conflict
with or result in a breach of any provision of the Certificate of Incorporation
or ByLaws of Buyer, (ii) violate, conflict with or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or otherwise)
to terminate, accelerate or cause a default under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of Buyer, under any agreement, indenture, or instrument, binding on Buyer
or its properties or assets, or (iii) violate any judgment, order, decree,
stipulation, injunction or charge of any court, administrative agency or
commission or other governmental authority or instrumentality by which Buyer is
bound.
2.5 Brokers and Finders. Except for employing International Business
Consultants, Inc. ("IBC"), Buyer has not employed any broker or finder or
incurred any liability for brokerage fees in connection with the Asset Purchase.
Buyer will be responsible for the fee owed to IBC.
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ARTICLE III
Representations and Warranties of Seller and Shareholders
Seller and the Shareholders jointly and severally represent and warrant
to Buyer that;
3.1 Corporate Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia.
Seller has all requisite power and authority and, except as set forth on the
Disclosure Schedule, all governmental licenses, authorizations, consents and
approvals necessary to own, lease and operate its respective properties and
conduct its respective businesses as presently or as currently proposed to be
conducted. Seller is not qualified to do business as a foreign corporation in
any jurisdiction, and neither the nature of the business conducted by it nor the
property it owns, leases or operates requires it to qualify to do business as a
foreign corporation in any jurisdiction except where the failure to be so
qualified would not have a Material Adverse Effect on Seller. "Material Adverse
Effect" as used in this Agreement means, with respect to any event, act,
condition or occurrence, a material adverse effect upon any of (i) with respect
to Seller, the properties, assets, liabilities, business, results of operations,
prospects or condition (financial or otherwise) of Seller, and (ii) with respect
to the Seller, the Shareholders or Buyer, the ability of either Seller, the
Shareholders or Buyer, as the case may be, to consummate the Asset Purchase or
to perform their obligations set forth herein.
3.2 Authorization. Seller has the power and authority, and Shareholders
have the capacity and legal right, to execute, deliver and perform this
Agreement and to consummate the Asset Purchase. This Agreement has been executed
and delivered by the Seller and Shareholders and constitutes the valid and
binding obligation of each of them. Seller's Board of Directors and the
Shareholders have approved the execution, delivery and performance of this
Agreement by Seller.
3.3 Consent and Approvals. To the best of Seller's and each
Shareholder's knowledge, and except as set forth in the disclosure schedule
attached hereto (the "Disclosure Schedule"), no consent, approval, order or
authorization of, or declaration or filing with, any governmental or regulatory
authority or agency is required in connection with the execution and delivery
of this Agreement by Seller and such Shareholder or its and his performance of
the terms hereof or for the validity or enforceability thereof as to it and him.
3.4 Subsidiaries. Seller has no subsidiaries and holds no direct or
indirect beneficial interest in any corporation, partnership, joint venture,
limited liability company, or other entity or enterprise.
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3.5 Capitalization. The authorized capital stock of Seller consists
solely of 20,000 shares of common stock, all of which are issued and outstanding
(the "Stock"). All outstanding shares of common stock of Seller are validly
authorized, issued, fully paid and nonassessable. There are no outstanding
subscriptions, options (including employee stock options), warrants, puts,
calls, agreements, understandings, or other commitments or rights of any type to
which Seller or either Shareholder is a party, or by which any such party is
bound, relating to the issuance, sale or transfer by Seller or either
Shareholder of any securities of Seller. There are no outstanding securities
which are convertible into or exchangeable for any shares of capital stock of
Seller. Seller has no obligation of any kind to issue any additional securities
or to repurchase, redeem or otherwise acquire any of the Stock.
3.6 Affiliates. Neither Seller nor either Shareholder has any direct or
indirect interest in any corporation, partnership, limited liability company, or
any other entity which is involved in any way with, competes with, or conducts
any business similar to any business conducted by Seller or Buyer.
3.7 Litigation. Except as set forth in the Disclosure Schedule, there
is no claim, litigation, arbitration, action, suit, proceeding, investigation or
inquiry, administrative or judicial, pending or, to the best knowledge of Seller
and shareholders, threatened, against Seller or Seller's assets or business, at
law or in equity, before any federal, state or local court, regulatory agency,
or governmental authority which is reasonably likely to have a Material Adverse
Effect on Seller. Except as set forth on the Disclosure Schedule, Seller is not
a party to or subject to the provisions of any judgment which may have a
Material Adverse Effect on it.
3.8 Stock Ownership and Authority. The Shareholders own beneficially
and of record all the stock.
3.9 No Conflicts. Except as set forth on the Disclosure Schedule,
neither the execution and delivery of this Agreement by Seller and Shareholders
nor the consummation by Seller and Shareholders of the Asset Purchase will (i)
conflict with or result in a breach of any provision of the Certificate of
incorporation or the ByLaws of Seller, (ii) violate, conflict with or result in
the breach of any term, condition or provision under any law or regulation
applicable to Seller or Shareholders or any of Seller's assets, (iii) except for
third-party consents to assignment required under the Material Contracts,
violate, conflict with or result in a breach of any provision of, or constitute
a default (or an event which, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any party (with the
giving of notice, the passage of time or otherwise) to terminate, accelerate or
cause a default under, or result in the creation of any lien, security interest,
charge or encumbrance upon
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any of the properties or assets of Seller under, any agreement, indenture, or
instrument binding on Seller or Shareholders or upon any of their respective
properties or assets, or (iv) violate any judgment, order, decree, stipulation,
injunction or charge of any court, administrative agency or commission or other
governmental or regulatory authority or instrumentality by which Seller or
either Shareholder is bound.
3.10 Financial Statements. The unaudited financial statements
(consisting of a balance sheet and an income statement prepared on a cash basis)
of Seller for the year ended December 31, 1996 heretofore delivered to Buyer,
are accurate in all material respects, and have been furnished to Buyer (the
"Financial Statements").
3.11 Absence of Certain Changes or Events. Except as set forth on the
Disclosure Schedule, since December 31, 1996, there has not been any event or
change relating to the business of Seller that has had or would be reasonably
likely to have a Material Adverse Effect on Seller.
3.12 Taxes.
(a) For purposes of this Agreement, (i) "Tax" or "Taxes" shall
mean all Federal, state, local and foreign taxes and assessments, including all
interest, penalties and additions imposed with respect to such amounts; (ii)
"Pre-Effective Tax Period" shall mean all taxable periods ending before or
including the Effective Time; and (iii) "Returns" means returns, reports or
forms, including information returns.
(b) (i) Seller and Shareholders have filed or caused to be
filed in a timely manner (within any applicable extension periods) all Tax
Returns required to be filed by such party by the Internal Revenue Code of 1986,
as amended, (the "Code") or by applicable State, local or foreign Tax law, and
each such Return is complete and accurate, (ii) all Taxes of Seller and
Shareholders shown as due on such Returns have been duly and timely paid or
accrued and (iii) no Tax liens have been filed and no claims are being asserted
in a writing received by Seller or Shareholders with respect to any Taxes.
(c) Seller has made and the shareholders have consented to a
valid election which election has not been revoked or terminated or otherwise
become ineffective, under Section 1362 (a) of the Code to be taxed as an "S
corporation" under Sections 1361 through 1379 of the Code. Seller has made and
the Shareholders have consented to valid elections, which elections have not
been revoked or terminated or otherwise become ineffective, to be taxed in a
comparable fashion under Georgia Tax law. Except as set forth in the Disclosure
Schedule, Seller has not been, nor will it be, subject to any Federal corporate
income taxes imposed under Chapter 1 of the Code (other than Code Sections
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1374 and 1375 (and their predecessor Sections under the Internal Revenue Code of
1954, as amended)) or any state, local or income or franchise Taxes in Georgia
for any period for which it elected to be taxed as an "S corporation". The
Shareholders are residents of Georgia and are taxable in Georgia on Seller's
income.
(d) Seller has not been a member of any affiliated,
consolidated, combined, unitary or aggregate group for purposes of filing Tax
Returns or paying Taxes; and Seller has no liability under Treasury Regulation
Section 1.1502-6 or any comparable provision of state, local or foreign Tax law
for the Taxes of any member (other than such party) of such a group.
3.13 Title to Assets. Except as set forth on the Disclosure Schedule,
Seller has marketable title to all furniture, fixtures, equipment, and machinery
(the "Fixed Assets") and good title to all other Assets, in all cases free and
clear of all liens, charges, security interests or other encumbrances of any
nature whatsoever. Except as set forth in the Disclosure Schedule, all of the
Fixed Assets are usable in the regular and ordinary course of business.
3.14 Compliance with Laws; Authorization. To the best of Seller's
knowledge, except as set forth on the Disclosure schedule, Seller is in
compliance in all material respects with all applicable laws, statutes, orders,
rules, regulations, policies or guidelines promulgated, or judgments, decisions
or orders entered, by any federal or state court or governmental authority
applicable to Seller, its business or its properties (collectively, the
"Applicable Laws"). To the best of Seller's knowledge, except as set forth on
the Disclosure Schedule, Seller is not under investigation with respect to, nor
has it been charged with or given notice of any violation of, any of the
Applicable Laws. For purposes hereof, Seller will be deemed in compliance in all
material respects with Applicable Laws if a violation thereof would not have a
Material Adverse Effect on the continued operations of Seller in the manner in
which it is currently conducting its business.
3.15 Employee Benefits Plans. Except as set forth in the Disclosure
Schedule:
(a) Seller has never directly or indirectly maintained or
contributed to, nor is Seller directly or indirectly maintaining or
contributing, for the benefit of the current and/or former employees of Seller,
any employee benefit plan, including, without limitation, any "employee benefit
plan" (as defined in Section (3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), any employment or severance contract, any
stock option plan or any plan of deferred compensation (individually, a "Plan"
and collectively the "Plans") . Seller does not have any commitment, whether
formal or informal, to create any such plans.
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(b) Seller does not directly or indirectly maintain or
contribute to (or have an obligation to contribute to) any plan, fund or
program which provides medical, health, hospitalization, life, disability or
other insurance, vacation, deferred compensation, pension, bonus, stock options,
stock purchase rights, or other employee benefits with respect to present or
former employees of Seller.
(c) The consummation of the Asset Purchase will not entitle
any current or former employee of Seller to severance pay, unemployment
compensation or any other payment.
3.16 Contracts. Seller has made or will make available to Buyer all
contracts, agreements, and instruments to which Seller is a party, including all
amendments and supplements thereto, which are material to the business
operations, assets, properties or condition (financial or otherwise) of Seller
(the "Material Contracts") . Except as set forth on the Disclosure Schedule,
each Material Contract is legally valid and binding against Seller, in full
force and effect and enforceable against Seller in accordance with its terms,
except where the invalidity or non-binding nature would not have a Material
Adverse Effect on Seller.
3.17 Books of Account; Records. To the best of Seller's knowledge,
Seller's general ledgers, stock record books, minute books and other corporate
records relating to the assets, properties, contracts and outstanding legal
obligations of Seller are, in all material respects, true, correct and complete.
3.18 Labor Relations.
(a) There is no collective bargaining agreement to which
Seller is a party, collective bargaining agreement currently being negotiated by
Seller, or union or collective bargaining unit representing any of Seller's
employees.
(b) Seller has complied in all material respects with all
applicable laws, rules and regulations relating to the employment of labor or
the termination thereof, including those related to wages, salary withholdings,
employee health and safety, bonus, vacation pay and severance pay, working
hours, and benefits for employees and former employees, and the payment and
withholding of taxes and other sums as required by appropriate governmental
authorities, or is holding for payment not yet due to such authorities all
amounts required to be withheld from such employees and former employees of
Seller and is not liable to any person or entity (including any governmental
entity) for any arrears of wages, commissions and benefits for employees, taxes,
penalties or other sums for failure to comply with any of the foregoing, other
than amounts not yet due and payable in the ordinary course or business.
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(c) Except as set forth in the Disclosure Schedule, Seller is
not a party to any employment contract or agreement with respect to any of its
employees, nor has Seller in any other manner limited its right to terminate the
employment relationship with its employees.
3.19 Insurance Funds. Except as set forth on the Disclosure Schedule:
(a) Seller maintains an insurance policy in full force and
effect with the Georgia State Insurance Fund covering all its employees; and
Seller has paid all premiums on said policy and has no outstanding debts with
respect thereto; and
(b) To the best of Seller's knowledge, no work-related
accident has occurred for which Seller may be classified as an uninsured
employer.
3.20 Environmental Matters. To the best of Seller's knowledge,
Seller is and has been in compliance in the conduct of its business with all
applicable environmental laws and regulations or any order, decree, judgment,
or injunction issued, entered, promulgated or approved thereunder.
3.21 Brokers and Finders. Neither Seller nor Shareholders have employed
any broker or finder or incurred any liability for brokerage fees, commissions
or finders' fees in connection with the Asset Purchase.
ARTICLE IV
Conditions Precedent to Obligations
4.1 Conditions to Obligations of Buyer. Each and every obligation of
Buyer to be performed under this Agreement shall be subject to the satisfaction
by Seller and the Shareholders at or prior to the Closing Date of each of the
following conditions (unless waived in writing by Buyer);
(a) Representations and Warranties. The representations and
warranties set forth in Article III of this Agreement shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects at and as of the Closing Date as though such representations
and warranties were made as of the Closing Date.
(b) Performance of Agreement. Seller and Shareholders shall
have fully performed and complied with the covenants, conditions and other
obligations under this Agreement which are to be performed or complied with by
them at or prior to the Closing Date.
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(c) Consents. All applicable third-party approvals or
consents, including consents and approvals under Material Contracts, shall have
been received or satisfied.
(d) No Adverse Change. There shall not have been any Material
Adverse Effect with respect to Seller or its business since the date of this
Agreement.
(e) No Adverse Proceeding. There shall not be pending or
threatened any claim, action, litigation or proceeding (judicial or
administrative) or governmental investigation against Buyer, Seller or
Shareholders for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation of the
Asset Purchase is illegal.
(f) Certificate. Seller shall have delivered to Buyer at the
Closing a certificate signed on its behalf by one of its officers, dated the
date of Closing, to the effect that the conditions set forth in subsections (a)
through (e) of this Section 4.1 have been satisfied to the best knowledge of
such officer.
(g) Employee Agreements and Restrictive Agreements. At the
Closing, each Shareholder will execute and deliver to Buyer an employment
agreement (the "Employment Agreement") and a restrictive agreement (the
"Restrictive Agreement") substantially in the form of Exhibits D and E attached
hereto.
(h) Assignment and Assumption Agreement. At the Closing, Buyer
and Seller shall execute and deliver the Assignment and Assumption Agreement in
the form attached hereto as Exhibit F (the "Assignment and Assumption
Agreement").
4.2 Conditions of Seller and Shareholders. Each and every obligation of
Seller and Shareholders to be performed under this Agreement shall be subject to
the satisfaction by Buyer at or prior to the Closing Date of the following
conditions (unless waived in writing by Seller and Shareholders):
(a) Representations and Warranties. The representations and
warranties of Buyer set forth in Article II of this Agreement shall have been
true and correct when made, and shall be true and correct at and as of the
Closing Date as though such representations and warranties were made as of the
Closing Date.
(b) Performance of Agreement. Buyer shall have fully performed
and complied with the covenants, conditions and other obligations under this
Agreement which are to be performed or complied with by it at or prior to the
Closing Date.
(c) Consents. All applicable third-party approvals or consents
shall have been received or satisfied.
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(x) No Adverse Proceedings. There shall not be pending or
threatened any claim, action, litigation or proceeding (judicial or
administrative) or governmental investigation against Buyer, Seller or
Shareholders for the purpose of enjoining or preventing the consummation of the
Asset Purchase, or otherwise claiming that this Agreement or the consummation of
the Asset Purchase is illegal.
(e) Certificate. Buyer shall have delivered to Seller at the
Closing a certificate signed on its behalf by one of its officers, dated the
date of the Closing Date, to the effect that the conditions set forth in
subsections (a) through (d) of this Section 4.2 have been satisfied to the best
knowledge of such officer.
(f) Purchase Price. Buyer shall have paid the Base Purchase
Price at the Closing in accordance with Section 1.3 hereof.
(g) Employee Agreements and Restrictive Agreements. At the
Closing, Buyer will execute and deliver to Shareholders the Employment
Agreements and the Restrictive Agreements.
(h) Assignment and Assumption Agreement. At the Closing, Buyer
and Seller shall execute and deliver the Assignment and Assumption Agreement and
a security agreement in the form attached as Exhibit G (the "Security
Agreement").
(i) No Adverse Change. There shall not have been any Material
Adverse Effect with respect to Buyer or its business since the date of this
Agreement.
ARTICLE V
Closing
5.1 Deliveries of Seller at Closing. At the Closing, Seller and the
Shareholders will deliver or cause to be delivered to Buyer the following at
Seller's expense:
(a) The certificate referred to in Section 4.1(f) of this
Agreement.
(b) A certificate from the Secretary of State evidencing the
good standing of Seller in Georgia.
(c) A copy of the Certificate of Incorporation of Seller and
all amendments thereto certified by the Secretary of State of Georgia.
(d) Certified copies of minutes reflecting the authorization
by the Board of Directors of Seller and by the
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Xxxxxxxxxxxx of the execution, delivery and performance of this Agreement and
consummation of the Asset Purchase.
(e) The Restrictive Agreements and the Employment Agreements.
(f) The Assignment and Assumption Agreement.
(g) A Xxxx of Sale in form satisfactory to Buyer.
5.2 Deliveries of Buyer at Closing. At the Closing, Buyer will deliver
or cause to be delivered to Seller the following;
(a) The Base Purchase Price as set forth in Section 1.3(a)
hereof;
(b) The certificate referred to in Section 4.2(e) of this
Agreement;
(c) Certified copies of resolutions adopted by the Executive
Committee of the Board of Directors of Buyer authorizing the execution, delivery
and performance of this Agreement and consummation of the Asset Purchase.
(d) The Restrictive Agreements and the Employment Agreements.
(e) The Assignment and Assumption Agreement.
(f) The Security Agreement.
ARTICLE VI
Indemnification
6.1 Survival of Representations, Warranties and Agreements. Subject to
the limitations set forth in Section 6.3 of this Agreement, all representations,
warranties and covenants of the parties contained herein shall survive execution
and delivery of this Agreement.
6.2 Indemnification.
(a) Subject to the limitations set forth in Section 6.3 of
this Agreement, Seller and the Shareholders hereby covenant and agree jointly
and severally to indemnify and hold harmless Buyer, from and against any and all
losses, liabilities, damages, demands, claims, suits, actions, judgments or
causes of action, assessments, costs and expenses, including, without
limitation, interest, penalties, attorney's fees, any and all expenses incurred
in investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all
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amounts paid in settlement of any claim or litigation (collectively, "Damages"),
asserted against, resulting to, imposed on or incurred or suffered by Buyer
directly or indirectly, as a result of or arising from (i) any breach of any of
the representations, warranties or covenants made by Seller and the
Shareholders, (ii) any liability of Seller not specifically assumed by Buyer
hereunder, (iii) any Federal income Taxes attributable to Seller, any state,
local or foreign income or franchise Taxes attributable to Seller, or any sales,
use or similar Taxes for any Pre-Effective Tax Period, and (iv) Seller's
operation of the business prior to the Effective Time (collectively, "Buyer's
Indemnifiable Claims").
(b) Buyer hereby covenants and agrees to indemnify and hold
harmless Seller and the Shareholders, as the case may be, from and against any
and all Damages asserted against, resulting to, imposed on or incurred or
suffered by Seller or Shareholders, directly or indirectly, as a result of or
arising from (i) any breach of any of the representations, warranties or
covenants made by Buyer in this Agreement, (ii) any liability specifically
assumed by Buyer hereunder and (iii) Buyer's operation of the business after the
Effective Time (other than Damages arising from or as a result of either
Shareholder's gross negligence or willful misconduct) (collectively, "Seller's
Indemnifiable Claims").
(c) Buyer's Indemnifiable Claims and Seller's Indemnifiable
Claims are collectively referred to hereinafter as "Indemnifiable Claims."
6.3 Limitations on Indemnification. Rights to Indemnification hereunder
are subject to the following limitations:
(a) The obligation of indemnity provided herein with respect
to the representations and warranties set forth in Section 3.12 shall terminate
on the expiration of the periods of limitations applicable to assessment and
collection of federal, state, local and foreign taxes, taking into account any
extensions of such periods of limitations approved by Seller prior to the date
hereof.
(b) The obligations of indemnity provided herein with respect
to the representations and warranties set forth in Articles II and III (except
Section 3.12 of this Agreement) shall terminate on the second anniversary of the
Closing Date.
(c) The foregoing provisions of this Section notwithstanding,
if, prior to the termination of any obligation to indemnify as provided for
herein, written notice of a claimed breach is given by Buyer, Seller or the
Shareholders, or a suit or action based upon a claimed breach is commenced
against any party, no party shall be precluded from pursuing such claimed breach
or suit or action, or from recovering from the other party hereunder
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(whether through the courts or otherwise) on the claim, suit or action, by
reason of the termination otherwise provided for above.
6.4 Procedure for Indemnification with Respect to Third-Party Claims.
(a) If a party (the "Indemnitee") determines to seek
indemnification under this Article with respect to Indemnifiable Claims
resulting from the assertion of liability by third parties, it shall give notice
to the other party (the "Indemnifying Party") within 30 days of the Indemnitee's
becoming aware of any such Indemnifiable Claim; the notice shall set forth such
information with respect thereto as is then reasonably available to the
Indemnitee. In case any such liability is asserted against the Indemnitee, and
the Indemnitee notifies the Indemnifying Party thereof, the Indemnifying Party
will be entitled, if it so elects by written notice delivered to the Indemnitee
within 30 days after receiving the Indemnitee's notice, to assume the defense
thereof with counsel reasonably satisfactory to the Indemnitee at all times
during the defense of such liability. Notwithstanding the foregoing, (i) the
Indemnitee shall also have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the
Indemnitee (so long as the Indemnifying Party continues to defend such matter);
(ii) the Indemnitee shall not have any obligation to give any notice of any
assertion of liability by a third party unless such assertion is in writing; and
(iii) the rights of the Indemnitee to be indemnified hereunder in respect of
Indemnifiable Claims shall be deemed forfeited by its failure to give notice
pursuant to the foregoing only to the extent that the Indemnifying Party is
materially prejudiced by such failure to give notice. With respect to any
assertion of liability by a third party that results in an Indemnifiable Claim,
the parties hereto shall make reasonably available to each other all relevant
information in their possession material to any such assertion. The Indemnifying
Party may not compromise or settle an Indemnifiable Claim without the written
consent of the Indemnitee.
(b) In the event that the Indemnifying Party, within 30 days
after receipt of the aforesaid notice of an Indemnifiable Claim, fails to assume
the defense of the Indemnitee against such Indemnified Claim, the Indemnitee
shall have the right to undertake the defense and to compromise or settle such
action on behalf of and for the account and risk of the Indemnifying Party.
6.5 Procedure for Indemnification with Respect to Non-Third-Party
Claims. If the Indemnitee asserts the existence of an Indemnifiable Claim giving
rise to Damages (but excluding claims resulting from the assertion of liability
by third parties), it shall give written notice to the Indemnifying Party
specifying the nature and amount of the claim asserted. If the Indemnifying
Party, within 30 days after the mailing of notice by the
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Indemnitee, shall not give written notice to the Indemnitee announcing its
intent to contest such assertion of the Indemnitee, such assertion by the
Indemnitee shall be deemed accepted and agreed to by the Indemnifying Party.
ARTICLE VII
Covenants
7.1 Covenant Not to Compete. (a) Each Shareholder covenants and agrees
that, for a period of five years following the date hereof, except on behalf of
Buyer, he shall not engage, directly or indirectly, whether on his own account
or as a shareholder, partner, joint venturer or agent of any person, firm,
corporation (including seller) or other entity, or otherwise, directly or
indirectly, in any or all of the following activities:
(i) Enter into or engage in the technical staffing business in
the Atlanta, Georgia metropolitan area (the "Territory") (a "Competing
Business") as an officer, sales person, marketing agent, consultant, supervisor
or similar position; or
(ii) Solicit customers or business patronage for any Competing
Business; or
(iii) Promote or assist, financially or otherwise, any person,
firm, association, corporation or other entity engaged in any Competing Business
in the Territory; provided, however, that the foregoing covenant shall not be
deemed to have been violated by the ownership of shares of any class of capital
stock of any corporation (other than Seller) so long as the aggregate beneficial
or record holdings of Seller and its affiliates (including Shareholders)
represent less than five percent (5%) of the outstanding shares of such class of
capital stock.
(b) Injunctive Relief. If a Shareholder breaches the covenant provided
herein, or if Buyer shall have reason to believe that a Shareholder intends to,
or is attempting to, breach this covenant, then in any such event Buyer shall be
entitled to seek an injunction in any court having jurisdiction to enforce this
covenant, and shall be entitled to recover from such Shareholder any and all
damages resulting, directly or indirectly, from said breach.
(c) Reformation. If the time or area of limitations, or both, contained
in this covenant are held by any court of competent jurisdiction to be
unreasonable or otherwise unenforceable, such covenant shall nevertheless be
enforceable for such lesser time or area, or both, as the court shall find
reasonable. Shareholders acknowledge having consulted as to such covenant with
counsel, fully understand the content of the same and agree, in view of the
relevant facts, that the limitations contained herein are reasonable.
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7.2 Covenant Against Hiring. Seller and the Shareholders understand
that in Buyer's view it is essential to the successful operation of a technical
staffing business in the Territory that Buyer retain substantially unimpaired
Seller's current operating organization. Seller and the Shareholders covenant
and agree that neither of them, nor any affiliate of either of them, without the
prior written consent of Buyer, shall take any action which would induce any
employee or representative of Seller prior to the Effective Time not to become
or continue as an employee or representative of Buyer.
7.3 Due Diligence Access. From the date of this Agreement until the
Closing, to enable Buyer to conduct due diligence, and following the Closing to
the extent needed by Buyer and its accountants to conduct and complete a
financial audit of Seller and its operations, Seller and the Shareholders shall
make or cause to be made available to Buyer: (i) members of management of Seller
for personal interviews; (ii) the Assets; and (iii) all books of account,
contracts, agreements, commitments, authorizations, insurance policies, records
and documents of every character relating to Seller's business for examination.
Accordingly, Seller and Shareholders shall permit Buyer and its representatives,
attorneys, accountants and agents to have access to the same at all reasonable
times and places.
7.4 Conduct of Interim Operations. From the date hereof to the Closing
Date:
(a) Affirmative Covenants. Seller shall do the following:
(1) Operations. Conduct its business as presently conducted in
the usual, regular, and ordinary course and scope, and do all things in the
ordinary course of business, consistent with past practice, necessary to
preserve, renew, and keep in full force and effect all rights and franchises
that are necessary to continue its business.
(2) Corporate Existence. Maintain its corporate existence,
good standing, and qualification to transact business in the State of Georgia.
(3) Compliance with Applicable Laws. Substantially comply with
all Applicable Laws and timely pay all amounts that, if unpaid, would have a
Material Adverse Effect on the Seller's business affairs or prospects.
(4) Insurance. Maintain all insurance.
(5) Litigation. Advise Buyer immediately of any lawsuit
threatened or filed against Seller or either Shareholder.
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(6) Payment of Debt. Duly and punctually pay all of Seller's
indebtedness in accordance with the terms and conditions of such indebtedness as
and when due.
(7) Material Loss. Immediately notify Buyer of any event
causing or that may reasonably be expected to cause a material loss to Seller
with respect to the Assets or result in a material decline in value of the
Assets or the Seller's business or prospects.
(8) Preservation of Business. Employ all reasonable efforts to
preserve the Seller's business intact, to keep available to Buyer the present
employees of the Seller, and to maintain good relations with suppliers and
customers and others having business relations with the Seller.
(b) Negative Covenants. Seller shall not do any of the following:
(1) New Encumbrances. Create, incur, assume, or suffer to
exist any new encumbrance (including, but not limited to, charges on property
purchased under conditional sales or other title retention agreements) on any of
the Assets other than in the ordinary course and scope of the Seller's business.
(2) Disposition of Assets. Sell, dispose of, mortgage, pledge,
grant a security interest in or otherwise dispose of or encumber any Asset or
interests therein other than in the ordinary course and scope of the Seller's
business.
(3) Contracts. Enter into any contracts or agreements, or
amend, modify, or terminate any contracts or agreements, except in the ordinary
course and scope of the Seller's business;
(4) Compensation. Except for wage increases required by law or
governmental regulations, and merit or length of service increases granted in
the ordinary course and scope of the Seller's business consistent with past
practices, increase the compensation or benefits payable or to become payable to
any employee.
7.5 Tax Covenants.
(a) Seller, Shareholders and Buyer shall reasonably cooperate, and
shall cause their respective affiliates, officers, employees, agents, auditors
and representatives reasonably to cooperate, in preparing and filing all Returns
relating to Taxes, including maintaining and making available to each other all
records necessary in connection with Taxes and in resolving all disputes and
audits with respect to all taxable periods relating to Taxes.
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(b) All transfer, documentary stamp, sales, use, registration and other
such Taxes and related fees (including any penalties, interest and additions to
Tax) incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by Seller; and Buyer shall cooperate in timely
making all filings as may be required to comply with the provisions of such Tax
laws.
(c) Any personal property or similar taxes with respect to the Assets
attributable to the Pre-Effective Tax Period shall be borne by Seller.
7.6 Changes to Disclosure Schedule. Between the date of this Agreement
and the Closing Date, Seller and Shareholders shall promptly inform Buyer of
events, circumstances, or other developments that occur between such dates that
would have been described in the Disclosure Schedule had such events,
circumstances or other developments occurred on or prior to the date of this
Agreement. Having so informed Buyer, Seller and Shareholders shall provide Buyer
with such further information regarding such event, circumstance or development
as Buyer reasonably requests. Within three business days of Buyer's receipt of
such additional information, Buyer shall notify Seller and shareholders that:
(i) Seller and Shareholders may amend the Disclosure Schedule to describe such
event, circumstance or other development, without liability to Seller or
Shareholders; or (ii) Buyer intends to terminate this Agreement pursuant Section
8.1(b).
7.7 Liabilities. Seller shall pay all of its liabilities as they become
due, whether due prior to, on or after the Effective Time (other than
liabilities expressly assumed hereunder by Buyer).
7.8 Effect of Termination of Employment. Sections 7.1 and 7.2 hereof
shall terminate forthwith as to each Shareholder whose employment under an
Employment Agreement is terminated (x) by Buyer without cause or under Section
8(a)(iii) thereof or (y) by such Shareholder under Section 8(b) thereof.
7.9 Certain Employees. It is expressly intended by Buyer that the
employer-employee relationship between Xxxxxxx X. Xxxxxx and Dhandipani
Senapathy and Seller in existence at the time of the Closing and the Effective
Time will continue to exist thereafter under the same terms and conditions as
were present prior to the Closing. Further, Buyer stipulates that all of the
intended employment opportunities and current employment of Seller's above-named
employees remain as stated in the labor certifications and employment-based
non-immigrant visa petitions therefor that have been approved on behalf of
Seller. Such facts of employment include, but are not limited to, employees'
wages, job duties and requirements, and working conditions.
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7.10 Certain Covenants. Buyer is engaged in the staffing services
business in the United States and has offices in the Atlanta, Georgia
metropolitan area ("Atlanta"). In accordance with Section 10 of the Employment
Agreements and for the Term (as defined therein), if Buyer opens a new office in
Atlanta providing information technology staffing services, it will not solicit
business for such office from any customer of Seller identified on the customer
list included in the Assets, nor will it employ at such office any of Seller's
consultants identified on the list of consultants included in the Assets.
ARTICLE VIII
Termination
8.1 Termination of Agreement. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual written consent of all parties;
(b) by either Buyer or Seller and the Shareholders if any of the
representations or warranties of the other party contained herein shall be
inaccurate or untrue in an material respect and such inaccuracy cannot
reasonably be expected to be cured prior to the Closing;
(c) by either Buyer or Seller and the Shareholders if any obligation,
term or condition to be performed, kept or observed by such other party
hereunder has not been performed, kept or observed in any material respect at or
prior to the time specified in this Agreement;
(d) by either Buyer or Seller and the Shareholders if any permanent
injunction or other order of a court or other competent authority preventing the
consummation of the transactions contemplated by this Agreement shall have
become final and nonappealable;
(e) by either Buyer or Seller and the Shareholders, if not then in
material breach of any of its obligations hereunder, if the Closing has not
occurred by June 28, 1997.
Any termination pursuant to this Section 8.1 shall be effective upon
notice thereof having been given to the non-terminating party in accordance with
Section 9.2 hereof.
No party hereto shall be liable to any other party hereto if this
Agreement is terminated pursuant to Section 8.1(a), (b) or (d).
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ARTICLE IX
Miscellaneous Provisions
9.1 No Negotiations by Seller and the Shareholders. Unless and until
this Agreement has been properly terminated pursuant to Article VIII hereof,
neither Seller nor either Shareholder shall directly or indirectly, through any
officer, director, agent, employee, representative or otherwise, make, solicit,
initiate or encourage the submission of proposals or offers, or accept offers,
from any person (including any of its officers or employees) relating to any
recapitalization, merger, consolidation or other business combination involving
Seller, any sale of all or a substantial portion of the assets of Seller, or the
sale of any material equity interest in Seller (any of the foregoing, a
"Competing Transaction"). During such period, neither Seller nor the
Shareholders shall, directly or indirectly, participate in any negotiations
regarding, furnish to any other person any information with respect to, or
otherwise cooperate, assist or participate in, any effort or attempt by any
third party to propose or effect any Competing Transaction. Seller and the
Shareholders shall notify Buyer of any Competing Transaction or any inquiry
relating to a possible Competing Transaction and shall deliver to Buyer any
information furnished to or by any such third party.
9.2 Notice. All notices, requests, demands and other communications
required or permitted under this Agreement shall be deemed to have been duly
given and made if in writing and served either by personal delivery (which shall
include delivery by Federal Express or similar services) to the party for whom
it is intended or by being deposited postage prepaid, certified or registered
mail, return receipt requested (or such form of mail as may be substituted
therefor by postal authorities), in the United States mail, bearing the address
shown in this Agreement for, or such other address as may be designated in
writing hereafter by, such party:
If to Buyer: With a copy to:
Ablest Service Corp. Xxxxxxx Xxxxxxxx, Esq.
000 Xxxxx Xxxxxxx Xxxx Xxxxx & Xxxxxxxxx LLP
Xxxxxxxxxx, Xxxxxxx 00000 3200 National City Center
Attn: W. Xxxxx Xxxxxx 0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
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If to Shareholders or Seller: With a copy to:
Xxxxx Xxxxxxxxxx Xxxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxxxxx Fourteen North Parkway Square
0000 Xxxxxxx Xxxxx, Xxxxx 000 0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxxx, Xxxxxxx 00000 Xxxxxxx, Xxxxxxx 00000-0000
9.3 Entire Agreement. This Agreement, the Exhibits, the Appendices and
the Disclosure Schedule embody the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof, and supersede all
prior agreements and understandings relative to said subject matter.
9.4 Binding Effect; Assignment. This Agreement and the various rights
and obligations arising hereunder shall inure to the benefit of and be binding
upon Buyer, its representatives, successors and assigns, and Seller, its
representatives, successors and assigns, and each Shareholder, his heirs, legal
representatives and assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be transferred or assigned (by
operation of law or otherwise) by any party hereto without the prior written
consent of the other parties, except that Seller shall assign its rights
hereunder, including all rights to the Base Earnout and the Additional Earnout,
to the Shareholders upon dissolution of Seller.
9.5 No Third-Party Beneficiaries. Nothing herein, expressed or implied,
is intended or shall be construed to confer upon or give to any person, firm,
corporation or legal entity, other than the parties hereto, any rights, remedies
or other benefits under or by reason of this Agreement.
9.6 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
9.7 Expenses. Each of the parties hereto will bear its own costs and
expenses (including legal, accounting and consulting fees and expenses) incurred
in connection with this Agreement and the Asset Purchase.
9.8 Waiver; Consent. This Agreement may not be changed, amended,
terminated, rescinded or discharged (other than in accordance with its terms),
in whole or in part, except by a writing executed by the parties hereto, and no
waiver of any of the provisions or conditions of this Agreement or any of the
rights of a party hereto shall be effective or binding unless such waiver shall
be in writing and signed by the party claimed to have given or consented
thereto.
9.9 Other and Further Covenants. The parties shall, in good faith,
execute such other and further instruments, assignments
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or documents as may be necessary for the consummation of the transactions
contemplated by this Agreement, and shall assist and cooperate with each other
in connection with these activities.
9.10 Governing Law. This Agreement shall in all respects be construed
in accordance with and governed by the laws of the State of Georgia, without
regard to any, such laws relating to choice or conflict of laws.
9.11 Public Announcements. Neither Buyer nor Seller shall, without the
prior written consent of the other, make any public announcement or any release
to trade publications or to the press or make any statement to any competitor,
customer or any other third party with respect to the transactions contemplated
herein, except such announcement, release or statement necessary in the opinion
of its counsel to comply with applicable requirements
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of law. The parties hereto agree that upon execution of this Agreement and on
the Closing Date, they shall jointly prepare press releases for appropriate
dissemination.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
SOLUTION SOURCE, INC.
By: /s/ Xxxxx Xxxxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxxx, President
ABLEST SERVICE CORP.
By: /s/ W. Xxxxx Xxxxxx
--------------------------------
W. Xxxxx Xxxxxx, President
SHAREHOLDERS:
/s/ Xxxxx Xxxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxxx
/s/ Xxxxx Xxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxx
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