EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
By and Among
XXXX, XXXXXX & ASSOCIATES, INC., and
ONSTAFF ACQUISITION CORP.,
On the One Hand, and
HEALTHCARE STAFFING RESOURCES, INC.,
XXXXXXX X. XXXXX,
XXXXXXX XXXXXXXX
GRANTOR RETAINED ANNUITY TRUST DATED APRIL 23, 2001,
XXXXX XXXXXX XXXXXXXX
GRANTOR RETAINED ANNUITY TRUST DATED APRIL 23, 2001,
XXXXXXX AND XXXXX XXXXXXXX
2001 IRREVOCABLE GIFT TRUST DATED APRIL 23, 2001,
XXXXXXXX LIVING TRUST DATED March 27, 2001
and
XXXXXXX XXXXXXXX, as Seller Representative,
On the Other Hand
Dated as of August 9, 2002
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS ........................................................ 1
1.01. Definitions ........................................................ 1
1.02. Index of Other Defined Terms ....................................... 7
ARTICLE II. TRANSFER OF ASSETS ................................................ 8
2.01. Transfer of Assets by Seller ....................................... 8
2.02. Excluded Assets .................................................... 10
2.03. Assumption of Liabilities .......................................... 10
2.04. Excluded Liabilities ............................................... 10
2.05. Assignment of Contracts and Rights ................................. 11
2.06. Closing ............................................................ 12
2.07. [Intentionally Omitted] ............................................ 14
2.08. Total Consideration Allocation ..................................... 14
2.09. [Intentionally Omitted] ............................................ 14
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER ......................... 14
3.01. Corporate Existence and Power ...................................... 14
3.02. Authorization ...................................................... 15
3.03. Capital Stock; Subsidiaries ........................................ 15
3.04. Governmental Authorization ......................................... 15
3.05. Non-Contravention .................................................. 15
3.06. Financial Statements; Undisclosed Liabilities ...................... 15
3.07. Absence of Certain Changes ......................................... 16
3.08. Properties; Leases; Tangible Assets ................................ 18
3.09. Sufficiency of and Title to the Transferred Assets ................. 19
3.10. Affiliates ......................................................... 19
3.11. Litigation ......................................................... 20
3.12. Contracts .......................................................... 20
3.13. Permits; Required Consents ......................................... 21
3.14. Compliance with Applicable Laws .................................... 21
3.15. Employment Agreements; Change in Control; and Employee Benefits .... 21
3.16. Labor and Employment Matters ....................................... 23
3.17. Intellectual Property .............................................. 24
3.18. Advisory Fees ...................................................... 25
3.19. Environmental Compliance ........................................... 25
3.20. Insurance .......................................................... 25
3.21. Tax Matters ........................................................ 26
3.22. Clients ............................................................ 27
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3.23. Books and Records .................................................. 27
3.24. Warranties ......................................................... 27
3.25. Bank Accounts ...................................................... 27
3.26. Certain Business Practices ......................................... 28
3.27. Complete Disclosure ................................................ 28
3.28. No Other Representations ........................................... 28
ARTICLE IV. CERTAIN REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES .......... 28
4.01. Understanding that Shares will Be Issued without Registration ...... 28
4.02. Accredited Investor ................................................ 29
4.03. Receipt of Information; Access to Information ...................... 29
4.04. Authority Relative to this Agreement ............................... 30
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER ................. 30
5.01. Corporate Existence and Power ...................................... 30
5.02. Corporate Authorization ............................................ 30
5.03. Governmental Authorization ......................................... 30
5.04. Non-Contravention .................................................. 31
5.05. Parent SEC Filings; No Material Adverse Effect ..................... 31
5.06. No Other Representations ........................................... 31
ARTICLE VI. COVENANTS OF SELLER ............................................... 31
6.01. Compliance with Terms of Required Contractual Consents ............. 31
6.02. Confidentiality .................................................... 31
6.03. Change of Name ..................................................... 32
6.04. Administration of Accounts ......................................... 32
6.05. Specific Performance ............................................... 32
6.06. Taxes .............................................................. 33
6.07. COBRA .............................................................. 33
ARTICLE VII. COVENANTS OF BUYER AND PARENT .................................... 33
7.01. Confidentiality .................................................... 33
7.02. Specific Performance ............................................... 34
7.03. Pre-paid Rent ...................................................... 34
ARTICLE VIII. COVENANTS OF ALL PARTIES ........................................ 34
8.01. Further Assurances ................................................. 34
8.02. Certain Filings .................................................... 34
8.03. Public Announcements ............................................... 35
8.04. Specific Performance ............................................... 35
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ARTICLE IX. INDEMNIFICATION ................................................... 35
9.01. Seller Parties' Agreement to Indemnify ............................. 35
9.02. Parent's and Buyer's Agreement to Indemnify ........................ 36
9.03. Survival of Representations, Warranties and Covenants .............. 37
9.04. Claims for Indemnification ......................................... 38
9.05. Defense of Claims .................................................. 38
9.06. Limitations on Remedies ............................................ 39
9.07. Nature of Payments ................................................. 39
9.08. Right of Set-Off ................................................... 39
9.09. Appointment of the Seller Representative ........................... 40
9.10. Deductibles, Caps and Set-Off Rights ............................... 40
ARTICLE X. MISCELLANEOUS ...................................................... 41
10.01. Notices ........................................................... 41
10.02. Amendments; No Waivers ............................................ 42
10.03. Expenses .......................................................... 42
10.04. Successors and Assigns ............................................ 42
10.05. Governing Law ..................................................... 43
10.06. Counterparts; Effectiveness ....................................... 43
10.07. Entire Agreement .................................................. 43
10.08. Captions .......................................................... 43
10.09. Severability ...................................................... 43
10.10. Construction ...................................................... 43
10.11. Arbitration ....................................................... 44
10.12. Cumulative Remedies ............................................... 45
10.13. Third Party Beneficiaries ......................................... 45
10.14. Knowledge ......................................................... 45
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EXHIBITS
EXHIBIT A Financial Statements
EXHIBIT B Form of Employment Agreement with Xxxxxxx Xxxxx
EXHIBIT C Form of Opinion of Counsel to Seller and Shareholders
EXHIBIT D Form of Opinion of Counsel to Buyer and Parent
EXHIBIT E Form of Noncompetition and Nonsolicitation Agreement
EXHIBIT F Form of Guaranty
EXHIBIT G Form of Escrow Agreement
EXHIBIT H Form of Employment Agreement with Xxxxxxx Xxxxxxxx
SCHEDULES
Schedule 2.02 Excluded Assets
Schedule 3.01 Qualifications to do Business
Schedule 3.03 Ownership Table and Related Agreements
Schedule 3.05 Non-Contravention
Schedule 3.06(b) Financial Statements
Schedule 3.06(c) Undisclosed Liabilities
Schedule 3.07(a) Absence of Certain Changes
Schedule 3.08(a) Encumbrances on Property
Schedule 3.08(d) Leases
Schedule 3.08(e) Detractions on Real Property
Schedule 3.08(f) Regulatory Proceedings
Schedule 3.10 Affiliates
Schedule 3.11 Litigation
Schedule 3.12(a) Scheduled Contracts
Schedule 3.12(b) Limitations on Enforceability of Contracts
Schedule 3.12(c) Significant Clients
Schedule 3.13(a) Permits
Schedule 3.13(b) Required Consents
Schedule 3.14 Compliance with Applicable Laws
Schedule 3.15(a) Employment Agreements
Schedule 3.15(b) Benefit Plans
Schedule 3.15(c) Employee Pension Benefit Plans
Schedule 3.16(a) Labor and Employment Matters
Schedule 3.16(b) Labor Disputes
Schedule 3.17(a) Intellectual Property Rights
Schedule 3.17(b) Actions Affecting Intellectual Property
Schedule 3.17(c) Ownership of Intellectual Property Rights
Schedule 3.19(a) Environmental Permits
Schedule 3.19(b) Compliance with Environmental Laws
Schedule 3.19(c) Continuing Compliance with Environmental Laws
Schedule 3.20 Insurance Policies
Schedule 3.21 Tax Matters
Schedule 3.22 Clients
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Schedule 3.24 Warranties
Schedule 3.25 Bank Accounts
Schedule 5.04 Non-Contravention
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of August 9,
2002, is by and among Xxxx, Xxxxxx & Associates, Inc., a Delaware corporation
("Parent") andOnStaff Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Parent ("Buyer"), on the one hand, and Healthcare Staffing
Resources, Inc., a California corporation ("Seller"), Xxxxxxx X. Xxxxx, an
individual ("Xxxxx"), Xxxxxxx Xxxxxxxx Grantor Retained Annuity Trust dated
4/23/01 (the "Matt Annuity Trust"), Xxxxx Xxxxxx Xxxxxxxx Grantor Retained
Annuity Trust dated 4/23/01 (the "Xxxxx Annuity Trust"), Xxxxxxx and Xxxxx
Xxxxxxxx 2001 Irrevocable Gift Trust dated 4/23/01 (the "Gift Trust"), Xxxxxxxx
Living Trust dated 3/27/01 (the "Living Trust," and collectively, with Xxxxx,
the Xxxx Annuity Trust, the Xxxxx Annuity Trust and the Gift Trust, the
"Shareholders" and individually, a "Shareholder"), and Xxxxxxx Xxxxxxxx, as a
representative of the Seller (the "Seller Representative") and the Shareholders
(collectively, the "Seller Parties"), on the other hand.
RECITALS
A. WHEREAS, Seller is engaged i n the business of sourcing and
delivering human capital and providing temporary staff and personnel; and
B. WHEREAS, Seller desires to sell and transfer to Buyer
substantially all of its assets (other than the Excluded Assets, as defined
below) in consideration of Buyer's obligations hereunder.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows.
ARTICLE I.
DEFINITIONS
1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such other Person, through the ownership of all or part of any Person.
"Ancillary Agreements" means the Escrow Agreement, the Noncompetition
and Nonsolicitation Agreements, the Xxxxx Employment Agreement, the Xxxxxxxx
Employment Agreement, the Xxxx of Sale, the Assignment and Assumption Agreement
and the Registration Rights Agreement.
"Applicable Law" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, policy, guidance,
rule, administrative interpretation,
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regulation, order, writ, injunction, directive, judgment, decree or other
requirement of any Governmental Authority (including any Environmental Law)
applicable to such Person or any of its Affiliates or Plan Affiliates or any of
their respective properties, assets, officers, directors, employees, consultants
or agents (in connection with such officer's, director's, employee's,
consultant's or agent's activities on behalf of such Person or any of its
Affiliates or Plan Affiliates).
"Assignment and Assumption Agreement" means that certain Assignment and
Assumption Agreement dated the date hereof by and between Seller and Buyer.
"Associate" or "Associated With" means, when used to indicate a
relationship with any Person, (a) any other Person of which such Person is an
officer or partner or is, directly or indirectly, the beneficial owner of ten
percent (10%) or more of any class of equity securities issued by such other
Person, (b) any trust or other estate in which such Person has a substantial
beneficial interest or as to which such Person serves as trustee or in a similar
fiduciary capacity, and (c) any relative or spouse of such Person, or any
relative of such spouse who has the same home as such Person or who is a
director or officer of such Person or any Affiliate thereof.
"Benefit Arrangement" means any benefit arrangement that is not an
Employee Benefit Plan, including, without limitation, (i) each employment or
consulting agreement, (ii) each arrangement providing for insurance coverage or
workers' compensation benefits, (iii) each incentive bonus or deferred bonus
arrangement, (iv) each arrangement providing termination allowance, severance or
similar benefits, (v) each equity compensation plan, (vi) each deferred
compensation plan and (vii) each compensation policy and practice maintained by
Seller or any ERISA Affiliate of Seller covering the employees, former
employees, directors and former directors of Seller and the beneficiaries of any
of them.
"Benefit Plan" means an Employee Benefit Plan or Benefit Arrangement.
"Xxxx of Sale" means that certain Xxxx of Sale dated the date hereof
executed by Seller.
"Business" means the business as currently conducted by Seller.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in San Francisco, California are authorized or
required by law to close.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and part of Title I
of ERISA.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts" means all contracts, agreements, options, leases, licenses,
sales and accepted purchase orders, commitments and other instruments of any
kind, whether written or oral, to which Seller is a party on the Closing Date,
including the Scheduled Contracts.
"Damages" means all demands, claims, actions or causes of action,
assessments, losses, damages, costs, expenses, liabilities, judgments, awards,
fines, sanctions, penalties,
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charges and amounts paid in settlement (net of insurance proceeds actually
received), including (i) interest on cash disbursements in respect of any of the
foregoing at the Reference Rate in effect from time to time, compounded
quarterly, from the date each such cash disbursement is made until the Person
incurring the same shall have been indemnified in respect thereof and (ii)
reasonable costs, fees and expenses of attorneys, accountants and other agents
of such Person.
"Debt" means any indebtedness of Seller, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or other
similar instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing capitalized lease obligations
or the balance deferred and unpaid of the purchase price of any property, except
any such balance that constitutes an accrued expense or account payable, if and
to the extent any of the foregoing indebtedness (other than letters of credit)
would appear as a Liability upon a balance sheet of Seller prepared in
accordance with GAAP, as well as all indebtedness of others secured by a Lien on
any asset of Seller (whether or not such indebtedness is assumed by Seller) and,
to the extent not otherwise included, any guaranty by Seller of any indebtedness
of any other Person.
"Employee Benefit Plan" means any employee benefit plan, as defined in
Section 3(3) of ERISA, that is sponsored by or contributed to Seller or any
ERISA Affiliate thereof covering employees or former employees of Seller.
"Employee Pension Benefit Plan" means any employee pension benefit
plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA,
other than a Multiemployer Plan.
"Environmental Laws" means all Applicable Laws relating to Hazardous
Substances, toxic torts, occupational health and safety, or the environment,
including without limitation, the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response Compensation and Liability
Act ("CERCLA"), the Clean Air Act, the Water Pollution Control Act, the Safe
Drinking Water Act, and the Toxic Substances Control Act ("TSCA"), and any
requirements promulgated pursuant to these Applicable Laws or any analogous
foreign, state or local Applicable Laws.
"Environmental Liabilities" means all Liabilities of a Person (whether
such Liabilities are owed by such Person to Governmental Authorities, third
parties, or otherwise) whether currently in existence or arising hereafter which
arise under or relate to any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" of any Person means any other Person that, together
with such Person as of the relevant measuring date under ERISA, was or is
required to be treated as a single employer under Section 414 of the Code.
"Escrow Agent" means Comerica Bank - California.
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"Escrow Agreement" means the Escrow Agreement dated as of the Closing
Date by and among Buyer, Seller and the Escrow Agent.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fiscal Year" means a twelve month period commencing on January 1 of
each calendar year.
"GAAP" means generally accepted accounting principles in the United
States as in effect on the date hereof and applied on a consistent basis.
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"Group Health Plan" means any group health plan, as defined in Section
5000(b)(1) of the Code.
"Hazardous Substance" means any substance or material: (i) the presence
of which requires investigation or remediation under any Applicable Law; or (ii)
that is defined as a "hazardous waste" or "hazardous substance" under any
Applicable Law; or (iii) that is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic or mutagenic or otherwise hazardous and is
regulated by any Governmental Authority having or asserting jurisdiction over
Seller; or (iv) the presence of which causes a nuisance, trespass or other
tortious condition; (v) the presence of which poses a hazard to the health or
safety of Persons; or (vi) without limitation, that contains gasoline, diesel
fuel or other petroleum hydrocarbons, polychlorinated biphenols (PCBs) or
asbestos.
"Indemnifying Party" means: (1) with respect to any Buyer Indemnitee
asserting a claim under Sections 9.01 or 10.11, Seller Parties; and (2) with
respect to any Seller Indemnitee asserting a claim under Sections 9.02 or 10.11,
Buyer and Parent.
"Indemnitee" means: (1) each of Parent, Buyer and their respective
Affiliates with respect to any claim for which a Seller Party is an Indemnifying
Party under Sections 9.01 or 10.11; and (2) Seller and its respective Affiliates
with respect to claims for which Parent or Buyer is an Indemnifying Party under
Sections 9.02 or 10.11.
"IRS" means the Internal Revenue Service.
"Liability" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise and whether
or not the same is required to be accrued on the financial statements of such
Person or is disclosed on any schedule to this Agreement.
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"Lien" means, with respect to any asset, any mortgage, title defect or
objection, lien, pledge, charge, security interest, hypothecation, restriction,
encumbrance or charge of any kind in respect of such asset.
"Material Adverse Effect" means a change in, or effect on, the
operations, affairs, prospects, financial condition, results of operations,
assets, Liabilities, reserves or any other aspect of Seller or the Business that
results in a material adverse effect on, or a material adverse change in any of
Seller, the Business or the Transferred Assets.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
3(37) and 4001(a)(3) of ERISA.
"Multiple Employer Plan" means any Employee Benefit Plan sponsored by
more than one employer, within the meanings of Section 4063 or 4064 of ERISA or
Section 413(c) of the Code.
"Parent Common Stock Price" means the average of the closing prices of
a share of Parent Common Stock during the thirty (30) trading days ending on the
date which is two (2) trading days prior to the Closing Date.
"Permitted Liens" means (i) Liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due, or for Taxes
the validity of which are being contested in good faith by appropriate
proceedings; (ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Persons and other Liens
imposed by Applicable Law incurred in the ordinary course of business for sums
not yet delinquent or being contested in good faith; (iii) Liens relating to
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security or to
secure the performance of leases, trade contracts or other similar agreements;
(iv) Liens and Encumbrances specifically identified in the 2002 Balance Sheet;
and (v) Liens securing executory obligations under any Lease that constitutes an
"operating lease" under GAAP; provided, however, that, with respect to each of
clauses (i) through (v), to the extent that any such Lien on any Transferred
Asset arose prior to the Closing Date and relates to, or secures the payment of,
a Liability that is required to be accrued for under GAAP, such Lien shall not
be a Permitted Lien unless all Liabilities served thereby have been fully
accrued as Debt on the 2002 Balance Sheet. Notwithstanding the foregoing, no
Lien arising under the Code or ERISA with respect to the operation, termination,
restoration or funding of any Benefit Plan sponsored by, maintained by or
contributed to by Seller or any of its ERISA Affiliates or arising in connection
with any excise tax or penalty tax with respect to such Benefit Plan shall be a
Permitted Lien.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust, estate or other entity or organization,
including a Governmental Authority.
"Plan Affiliate" means, with respect to any Person, any employee
benefit plan or arrangement sponsored by, maintained by or contributed to by
such Person, and with respect to any employee benefit plan or arrangement, any
Person sponsoring, maintaining or contributing to such plan or arrangement.
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"Prohibited Transaction" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA, respectively.
"Reference Rate" means seven percent (7%) per annum.
"Registration Rights Agreement" means that certain Registration Rights
Agreement between Parent and Seller dated as of the date hereof.
"Related Purchase Agreements" means (i) that certain Asset Purchase
Agreement dated the date hereof by and among Parent and Buyer, on the one hand,
and OnStaff and the Shareholders and the Seller Representative, on the other
hand, and (ii) that certain Asset Purchase Agreement dated the date hereof by
and among Parent and Buyer, on the one hand, and Xxxxxxxxxxxx.xxx, Xxxx Xxxxxx,
Xxxxxxx Xxxxx, the Xxxx Annuity Trust, the Xxxxx Annuity Trust, the Gift Trust,
the Living Trust and the Seller Representative, on the other hand.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means, with respect to any Person, (i) any corporation as
to which more than 10% of the outstanding stock having ordinary voting rights or
power (and excluding stock having voting rights only upon the occurrence of a
contingency unless and until such contingency occurs and such rights may be
exercised) is owned or controlled, directly or indirectly, by such Person and/or
by one or more of such Person's Subsidiaries and (ii) any partnership, joint
venture or other similar relationship between such Person (or any Subsidiary
thereof) and any other Person (whether pursuant to a written agreement or
otherwise).
"Tax," including "Taxes," means (A) all taxes imposed of any nature
including federal, state, local or foreign net income tax, alternative or add-on
minimum tax, profits or excess profits tax, franchise tax, gross income,
adjusted gross income or gross receipts tax, employment related tax (including
employee withholding or employer payroll tax, FICA or FUTA), real or personal
property tax or ad valorem tax, sales or use tax, excise tax, stamp tax or duty,
any withholding or back up withholding tax, value added tax, severance tax,
prohibited transaction tax, premiums tax, environmental tax, intangibles tax or
occupation tax, together with any interest or any penalty, addition to tax or
additional amount imposed by any Governmental Authority (domestic or foreign)
responsible for the imposition of any such tax, (B) any Liability for payment of
amounts described in clause (A) whether as a result of transferee liability, of
being a member of an affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law, and (C) any liability for the
payment of amounts described in clauses (A) or (B) as a result of any tax
sharing, tax indemnity or tax allocation agreement or any other express or
implied agreement to indemnify any other Person.
"Tax Return" means all returns, reports, forms or other information
required to be filed with respect to any Tax.
"U.S. Government" means the United States Government, including any
agencies, commissions, branches, instrumentalities and departments thereof.
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1.02. Index of Other Defined Terms. In addition to those terms defined
above, the following terms shall have the respective meanings given thereto in
the sections indicated below:
Defined Term Section
"2002 Balance Sheet" 3.06(a)
"AAA" 10.11(a)
"Additional Tax Gross Up Amount" 2.09(b)
"Agreement" Preamble
"Annual Statements" 3.06(a)
"Assumed Liabilities" 2.03
"Buyer" Preamble
"Buyer Deductible" 9.02(b)
"Buyer Indemnitees" 9.01(a)
"Closing" 2.06(a)
"Closing Date" 2.06(a)
"Contracts" 2.01(c)
"Xxxxx Annuity Trust" Preamble
"Disputing Parties" 10.11(a)
"Disputing Party" 10.11(a)
"Distributions" 3.07(h)
"Employment Agreements" 3.15(a)
"Encumbrances" 3.08(a)
"Equipment" 2.01(a)
"Escrowed Shares" 2.06(b)(ii)
"Xxxxx" Preamble
"Xxxxx Employment Agreement" 2.06(d)
"Excluded Assets" 2.02
"Excluded Liabilities" 2.04
"Financial Statements" 3.06(a)
"Gift Trust" Preamble
"Insurance Policies" 3.20
"Intellectual Property" 3.17(a)
"Interim Statements" 3.06(a)
"Inventory" 2.01(b)
"Xxxxxxxx Employment Agreement" 2.06(d)
"Labor Laws" 3.16(d)
"Leased Real Property" 3.08(d)
"Leases" 3.08(d)
"Living Trust" Preamble
"Matt Annuity Trust" Preamble
"Other Documents" 4.03(a)
"Parent" Preamble
"Parent Common Stock" 2.06(b)(ii)
"Parent SEC Reports" 5.05(a)
"Permits" 3.13(a)
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Defined Term Section
"Proceedings" 3.11
"Real Property" 3.08(c)
"Required Consents" 3.13(b)
"Required Contractual Consent" 3.13(b)
"Required Governmental Approval" 3.13(b)
"Scheduled Contracts" 3.12(a)
"Seller" Preamble
"Seller Common Stock" 3.03(a)
"Seller Deductible" 9.01(b)
"Seller Indemnitees" 9.02
"Seller Parties" Preamble
"Seller Representative" Preamble
"Shareholder(s)" Preamble
"Shares" 2.06(b)(ii)
"Significant Clients" 3.23
"Tax Gross Up Amount" 2.09
"Transferred Assets" 2.01
ARTICLE II.
TRANSFER OF ASSETS
2.01. Transfer of Assets by Seller. Upon the terms and subject to the
conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees to purchase from Seller
and Seller agrees to sell or cause to be sold to Buyer at the Closing, free and
clear of all Liens, other than Permitted Liens, all the assets, properties,
rights, licenses, permits, contracts, causes of action, claims, operations and
businesses of Seller of every kind and description as the same shall exist on
the Closing Date (other than the Excluded Assets), wherever located, whether
tangible or intangible, real, personal or mixed, that are owned by, leased by or
in the possession of Seller, whether or not reflected on the books and records
of Seller (the collective assets, properties, rights, licenses, permits,
contracts, causes of action, claims, operations and businesses to be transferred
to Buyer by Seller pursuant hereto are referred to collectively herein as the
"Transferred Assets") and including, without limitation, all right, title and
interest of Seller in, to and under:
(a) all machinery, equipment, furniture, office equipment,
computer equipment (including all hardware and software), communications
equipment, vehicles, storage tanks, spare and replacement parts, fuel and other
tangible property (and interests in any of the foregoing) of Seller
(collectively, the "Equipment");
(b) all items of inventory notwithstanding how classified in the
financial records of Seller, including all raw materials, work-in-process,
finished goods, supplies, spare parts and samples (collectively, the
"Inventory");
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(c) all contracts, agreements, options, leases, licenses, sales and
purchase orders, commitments and other instruments of any kind, whether written
or oral, to which Seller is a party on the Closing Date, including the Scheduled
Contracts (as defined below) (collectively, the "Contracts");
(d) all prepaid deposits, charges and expenses of Seller, including
any such deposits, charges and expenses with respect to ad valorem taxes, leases
and rentals and utilities;
(e) all rights of Seller to insurance proceeds with respect to claims
for Damages to the Transferred Assets occurring prior to the Closing Date,
unless such proceeds reimburse Seller for the previously completed repair or
restoration of such Transferred Assets;
(f) all of Seller's rights, claims, credits, causes of action or
rights of set-off against third parties relating to the Business or the
Transferred Assets, whether liquidated or unliquidated, fixed or contingent,
including claims pursuant to all warranties, representations and guarantees made
by suppliers, manufacturers, contractors and other third parties in connection
with products or services purchased by or furnished to Seller for use in the
Business or affecting any of the Transferred Assets;
(g) all of Seller's licensed products or processes, patents,
copyrights, trademarks, trade names, service marks, service names, designs,
know-how, processes, trade secrets, inventions, and other proprietary data,
including without limitation, all information relating to Seller's clients;
(h) all transferable franchises, licenses, permits or other
authorizations issued or granted by any Governmental Authority that are owned
by, granted to or held or used by Seller, whether or not utilized in the
Business;
(i) to the extent available, all books, records, files and papers of
the Business, whether in hard copy or computer format, including, without
limitation, invoices, sales and promotional literature, manuals and data, sales
and purchase correspondence, lists of present and former suppliers and
customers, personnel and employment records of present and, to the extent
lawful, former employees, documentation developed or used for accounting,
marketing, or any other purpose related to the conduct of the Business at any
time prior to the Closing, and to the extent available, copies of all corporate
minutes and other corporate records of Seller;
(j) all goodwill associated with Seller, the Business or the
Transferred Assets;
(k) except as specifically provided in Section 2.02, all other assets
and properties of Seller which exist on the Closing Date, whether tangible or
intangible, real or personal; and
(l) all accounts receivable relating to services rendered by Seller or
its employees (and for all purposes of this Agreement, the parties hereto agree
that all the employees of Elegant Lighting shall be considered employees of
Seller) on or after August 5, 2002.
9
2.02. Excluded Assets. Buyer expressly understands and agrees that the
assets and properties set forth on Schedule 2.02 (the "Excluded Assets") shall
be excluded from the Transferred Assets.
2.03. Assumption of Liabilities. Upon the terms and subject to the
conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees, effective at the time
of Closing, to assume, perform and timely pay and discharge the following
Liabilities (subject to the conditions below and excluding the Excluded
Liabilities, the "Assumed Liabilities"):
(i) all Contracts (including Scheduled Contracts);
(ii) all current accounts payable, payroll or accrued expenses of
Seller incurred or accrued in the ordinary course of business on or after August
5, 2002;
(iii) accrued vacation of Seller's employees;
(iv) severance compensation provided in paragraph 7 under the
Compensation and Benefits section of the Letter of Employment to Xxxxx
Xxxxxxxxx, dated January 14, 2002 from Seller, in the mutually agreed amount of
One Hundred Fifty Thousand Dollars ($150,000) in cash; and
(v) all Liabilities arising from and after the Closing which arise
out of or relate in any way to Buyer's ownership or operation of the Transferred
Assets after the Closing;
provided, however, that the assumption by Buyer of the Assumed Liabilities will
be limited as follows: any Liability set forth in subsections (i), (ii), (iii)
and (v) of this Section 2.03 shall constitute an Assumed Liability only to the
extent that it arises out of Seller's normal conduct of the Business.
2.04. Excluded Liabilities. Neither Parent nor Buyer assumes, and shall not
at any time hereafter (including on or after the Closing Date) become liable
for, any Liabilities of Seller, any of its Affiliates or any Plan Affiliate,
other than the Assumed Liabilities (the "Excluded Liabilities"); in furtherance
of and not in limitation of the foregoing, the Excluded Liabilities shall
include, but are not limited to, the following:
(a) any Liability of Seller or any of its Affiliates or Plan
Affiliates of any of the foregoing, whether currently in existence or arising
hereafter, that is not attributable to, or that does not arise out of, Seller's
normal conduct of the Business;
(b) any Liability whether presently in existence or arising hereafter
which is attributable to an Excluded Asset;
(c) any Environmental Liability imposed on Seller whether presently in
existence or arising hereafter;
10
(d) any Liability the existence of which constitutes a breach of any
representation or warranty or covenant hereunder which would be indemnifiable to
Parent and Buyer pursuant to Section 9.01 hereof.;
(e) any Liability whether currently in existence or arising hereafter
relating to fees, commissions or expenses owed to any broker, finder, investment
banker, attorney, accountant or other intermediary, consultant or advisor
employed by any of the Seller Parties or any of its or his Affiliates or Plan
Affiliates in connection with the transactions contemplated hereby or otherwise;
(f) all Debt (other than current accounts payable or accrued expenses
as set forth in Section 2.03(ii));
(g) any Liability of Seller or any of its shareholders or any of their
Affiliates for any Taxes, including without limitation, (i) any Liability for
any Taxes with respect to the Transferred Assets attributable to any period
prior to the Closing and (ii) any Taxes relating to or arising from Seller's
issuance of its Series B common stock;
(h) any Liability, whether currently in existence or arising
hereafter, owed by Seller to any of its Associates or Affiliates;
(i) any Liability incurred by Seller with respect to any of Seller's
employees or former employees, agents, consultants or independent contractors,
including but not limited to, worker's compensation, severance, salary, bonuses
or other benefits and Liabilities arising pursuant to Seller's employment
agreements with Xxxxx, Xxxxxxx Xxxx and Xxxxx Xxxxxxxxx (other than the
obligation to pay severance to Mr. Mossesson pursuant to the terms and
conditions of his employment agreement with Seller);
(j) any Liability arising from, arising out of, based on or relating
to any of Seller's Benefit Plans, whether arising before, on or after the
Closing Date;
(k) any Liability for indebtedness of Seller, including without
limitation, any principal, interest or other amount owing in respect of any such
indebtedness;
(l) any negative cash balances, book overdrafts, held checks or
similar liabilities of Seller;
(m) any Liability for payroll or similar Taxes relating to Seller's
arrangement with Elegant Lighting; and
(n) all current accounts payable, payroll or accrued expenses of
Seller, incurred or accrued in the ordinary course of business prior to August
5, 2002.
2.05. Assignment of Contracts and Rights.
(a) With respect to any Contract and any claim, right or benefit
arising thereunder or resulting therefrom, promptly after the date hereof, to
the extent requested by Buyer, Seller will use its best efforts to obtain the
written consent of the other parties to any such
11
Contract for the assignment thereof to Buyer or written confirmation from such
parties confirming that such consent is not required in form and substance
reasonably satisfactory to Buyer.
(b) If (i) such consent, waiver or confirmation is not obtained with
respect to any such Contract and (ii) Buyer shall elect to consummate the
Closing, Seller and Buyer shall cooperate in an arrangement reasonably
satisfactory to Buyer and Seller under which Buyer would obtain, to the extent
practicable, the claims, rights and benefits and assume the corresponding
obligations thereunder in accordance with this Agreement, including
subcontracting, sub-licensing or sub-leasing to Buyer, or under which Seller
would enforce for the benefit of Buyer, with Buyer assuming Seller's
obligations, any and all claims, rights and benefits of Seller against a third
party thereto. Seller will promptly pay to Buyer when received all monies
received by Seller under any Transferred Asset or any claim, right or benefit
arising thereunder not transferred to Buyer pursuant to this Section 2.05.
2.06. Closing.
(a) The closing (the "Closing") of the transactions contemplated by
this Agreement shall take place at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP,
0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, on the date hereof (the
"Closing Date").
(b) At the Closing, Parent and/or Buyer shall deliver to Seller the
following:
(i) by wire transfer (to a bank account designated by Seller in
writing at least three (3) Business Days prior to the Closing Date), One Million
Seventy Four Thousand Three Hundred Forty One Dollars ($1,074,341) in
immediately available funds; and
(ii) one or more stock certificates for an aggregate number of
duly authorized, validly issued, fully-paid and nonassessable shares of common
stock, par value $0.001 per share, of Parent ("Parent Common Stock") equal to
Twenty Four Thousand One Hundred Fifty Two (24,152) (the "Shares"); provided,
however, a certificate representing one-third (1/3) of the Shares ("Escrowed
Shares") registered in the name of Seller shall be delivered to the Escrow Agent
to be held and distributed by the Escrow Agent in accordance with the Escrow
Agreement. Neither Parent nor Buyer shall have any responsibility for the
allocation of the Shares among the Shareholders or other equityholders of
Seller. Seller shall deliver to the Escrow Agent stock powers or other
assignments of interest duly executed in blank for the Escrowed Shares.
(c) Buyer shall deliver to Seller such customary instruments of
assumption as may be reasonably requested by Seller to evidence such assumption
of the Assumed Liabilities; provided, however, that no such document shall
expand in any way any of Buyer's obligations to assume anything other than the
Assumed Liabilities.
(d) At the Closing, Seller shall deliver to Parent and/or Buyer:
(i) such bills of sale, certificates of title, endorsements,
consents, assignments and other good and sufficient instruments of conveyance
and assignment
12
of such rights as the parties and their respective counsel shall deem reasonably
necessary or appropriate to vest in Buyer all of Seller's right, title and
interest in, to and under the Transferred Assets;
(ii) a copy of the resolutions of the board of directors of
Seller and a copy of the resolutions of the Shareholders, each authorizing the
execution and delivery of this Agreement and each of the Ancillary Agreements,
and the consummation of the transactions contemplated hereby and thereby, both
certified by the Secretary of Seller;
(iii) a copy of the resolutions of the board of directors of
Seller terminating Seller's Benefit Plans, including Seller's 401(k) plan;
(iv) written releases of any and all Liens on the Transferred
Assets and executed termination statements with respect to any security
interests filed by any creditor of Seller pursuant to the Uniform Commercial
Code;
(v) a signed opinion of counsel to Seller, dated the Closing
Date, in substantially the form attached hereto as Exhibit C;
(vi) all Required Consents for the transactions contemplated by
this Agreement;
(vii) an employment agreement substantially in the form attached
hereto as Exhibit B executed by Xxxxxxx X. Xxxxx (the "Xxxxx Employment
Agreement");
(viii) an employment agreement substantially in the form attached
hereto as Exhibit H executed by Xxxxxxx Xxxxxxxx (the "Xxxxxxxx Employment
Agreement");
(ix) terminations of any agreements between any Affiliate of
Seller and Seller, if requested by Parent or Buyer, at no cost;
(x) a Noncompetition and Nonsolicitation Agreement
substantially in the form attached hereto as Exhibit E executed by Xxxxx Xxxxxx
Xxxxxxxx;
(xi) a fully executed Escrow Agreement substantially in the form
attached hereto as Exhibit G;
(xii) Guaranties in the form attached hereto as Exhibit F
executed by each of Xxxxxxx Xxxxxxxx and Xxxxx Xxxxxx Xxxxxxxx;
(xiii) Agreement executed by Seller and Xxxxxxx Xxxxxxxx
rescinding that certain Executive Deferred Compensation Agreement dated as of
June 28, 2002 by and between Seller and Xxxxxxx Xxxxxxxx;
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(xiv) Agreement executed by Seller and Xxxxx rescinding that
certain Executive Deferred Compensation Agreement dated as of June 28, 2002 by
and between Seller and Xxxxx;
(xv) Agreements or other documents in form reasonably
satisfactory to Parent evidencing the termination of Seller's employment
agreements with Xxxxx, Xxxxxxx Xxxx and Xxxxx Xxxxxxxxx;
(xvi) Amendment to the Living Trust; and
(xvii) Agreement with Elegant Lighting in form reasonably
satisfactory to Parent.
2.07. [Intentionally Omitted].
2.08. Total Consideration Allocation. The parties agree to allocate the
consideration paid for the Transferred Assets under this Agreement among the
Transferred Assets in accordance with Section 1060 of the Code as mutually
agreed to by the parties within one hundred and eighty (180) days after the
Closing. If Buyer and Seller are unable to agree, the final allocation of such
consideration among the Transferred Assets shall be determined by an independent
party mutually agreed to by Parent and the Seller Representative (the "Selected
Firm") and the Selected Firm's determination of the allocation shall be final
and binding upon the parties hereto for purposes of this Agreement. Buyer and
Seller and the shareholders of Seller shall use such mutually agreed-to
allocations in preparing any filings required pursuant to Section 1060 of the
Code or any similar provisions of state or local law, shall report the tax
consequences of the transactions contemplated by this Agreement in a manner
consistent with such allocations on all relevant tax returns and shall not take
any position inconsistent therewith.
2.09. [Intentionally Omitted]
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated herein, Seller represents and warrants, as of the
date of this Agreement and as of the Closing Date, to Buyer as follows:
3.01. Corporate Existence and Power. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of California, and has all corporate power and all governmental licenses,
governmental authorizations, governmental consents and governmental approvals
required to carry on the Business as now conducted and to own and operate the
Transferred Assets as now owned and operated. Seller is not required to be
qualified to conduct business in any jurisdiction other than: (a) the
jurisdictions set forth in Schedule 3.01, in which jurisdictions Seller is duly
qualified to do business and in good standing, and (b) such jurisdictions where
the failure to be so qualified, whether singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
14
3.02. Authorization. The execution, delivery and performance by Seller of
this Agreement and the consummation by Seller of the transactions contemplated
hereby are within Seller's corporate powers and have been duly authorized by all
necessary corporate action on the part of Seller. This Agreement has been duly
and validly executed by Seller and constitutes the legal, valid and binding
agreement of Seller, enforceable against it in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and subject to
general principles of equity.
3.03. Capital Stock; Subsidiaries.
(a) The entire authorized capital stock of Seller consists of 10,000
shares, no par value, of common stock (the "Seller Common Stock"), of which
143.896 shares of Seller Common Stock are issued and outstanding. The
Shareholders are the sole owners of all of the outstanding capital stock of the
Seller, and their respective ownership of the Seller Common Stock are set forth
on Schedule 3.03. Except as set forth on Schedule 3.03, there are no outstanding
obligations, options, warrants, convertible securities, phantom stock, stock
appreciation rights or other rights, agreements, arrangements or commitments of
any kind relating to the capital stock of Seller or obligating Seller to issue
or sell any shares of capital stock of, or any other interest in, Seller. Except
as set forth on Schedule 3.03, there are no outstanding contractual obligations
of Seller to repurchase, redeem or otherwise acquire any shares of Seller Common
Stock or to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any other Person. Except as set forth on
Schedule 3.03, there are no voting trusts, shareholder agreements, proxies or
other agreements or understandings in effect with respect to the voting or
transfer of any of the Seller Common Stock.
(b) Seller has no Subsidiaries.
3.04. Governmental Authorization. The execution, delivery and performance
by the Seller Parties of this Agreement require no action by, consent or
approval of, or filing with, any Governmental Authority. To the best knowledge
of Seller, there are no facts relating to the identity or circumstances of
Seller that would prevent or materially delay obtaining any of the Required
Consents.
3.05. Non-Contravention. Except as set forth on Schedule 3.05, the
execution, delivery and performance by the Seller Parties of this Agreement does
not and will not (a) contravene or conflict with the Articles of Incorporation
or Bylaws of Seller, true and correct copies of which have been delivered to the
Buyer by Seller; (b) assuming receipt of the Required Consents and compliance
with the matters referred to in Section 3.04 hereof, contravene or conflict with
or constitute a violation of any provision of any Applicable Law binding upon or
applicable to Seller, the Business or any of the Transferred Assets; or (c)
result in the creation or imposition of any Lien on any of the Transferred
Assets, other than Permitted Liens.
3.06. Financial Statements; Undisclosed Liabilities.
(a) Attached hereto as Exhibit A are true and complete copies of (i)
the balance sheets and related statements of operations and retained earnings
for Seller for the
15
years ended December 31, 2001, 2000 and 1999, in each case prepared by Frankel,
Lodgen, Lacher, Golditch, Sardi & Xxxxxx and (ii) the balance sheet and related
statements of income and cash flow for Seller for the year ended December 31,
2001 prepared by Seller in accordance with GAAP (collectively, (i) and (ii) the
"Annual Statements"), and the balance sheets and related statements of
operations for the five (5) months ended May 31, 2002 (collectively, the
"Interim Statements" and, together with the Annual Statements, the "Financial
Statements"). The May 31, 2002 balance sheet is referred to herein as the "2002
Balance Sheet."
(b) Except as set forth on Schedule 3.06(b), each of the Financial
Statements (i) has been prepared based on the books and records of Seller in
accordance with GAAP and Seller's normal accounting practices, consistent with
past practice and with each other, and present fairly the financial condition,
results of operations of Seller as of the dates indicated or for the periods
indicated; (ii) contains and reflects all necessary adjustments, accruals,
provisions and allowances for a fair presentation of its financial condition and
the results of its operations for the periods covered by such financial
statement; (iii) to the extent applicable, contains and reflects adequate
provisions for all reasonably anticipated liabilities for all Taxes, federal,
state, local or foreign, with respect to the periods then ended and all prior
periods; and (iv) with respect to contracts and commitments for the sale of
goods or the provision of services by Seller, contains and reflects adequate
reserves for all reasonably anticipated losses and costs and expenses in excess
of expected receipts.
(c) Except as set forth on Schedule 3.06(c), there are no
Liabilities of Seller other than: (i) any Liability accrued as a Liability on
the 2002 Balance Sheet; (ii) Liabilities specifically disclosed and expressly
identified as such in the schedules to this Agreement; and (iii) Liabilities
incurred since the date of the 2002 Balance Sheet in Seller's ordinary course of
business consistent with past practice.
3.07. Absence of Certain Changes. Except as set forth on Schedule 3.07,
since the date of the 2002 Balance Sheet, the Business has been conducted in the
ordinary course consistent with past practice, and there has not been:
(a) to Seller's best knowledge, any event, occurrence, state of
circumstances or facts or change in Seller, the Transferred Assets or the
Business that has had or that may be reasonably expected to have, either alone
or together, a Material Adverse Effect;
(b) to Seller's best knowledge, (i) any change in any Liability of
Seller reflected in the 2002 Balance Sheet or that should be reflected as a
Liability on the 2002 Balance Sheet that has had or may be reasonably expected
to have a Material Adverse Effect or (ii) any incurrence, assumption or
guarantee of any indebtedness for borrowed money by Seller in connection with
the Business, any of the Transferred Assets or otherwise;
(c) any (i) payments by Seller in respect of Debt of Seller or in
satisfaction of any Liabilities of Seller related to the Business, other than in
the ordinary course of business consistent with past practice, or the guarantee
by Seller of the Debt of any other Person; or (ii) creation, assumption or
sufferance of the existence of (whether by action or omission) any Lien on any
Transferred Asset, other than Permitted Liens;
16
(d) any commitment made, or any Contract entered into, by Seller
(including the acquisition or disposition of any Transferred Assets), or any
waiver, amendment, termination or cancellation of any Contract by Seller, or any
relinquishment of any rights thereunder by Seller, or of any other right or debt
owed to Seller, other than in each such case actions taken in the ordinary
course of business consistent with past practice;
(e) any (i) grant of any severance, continuation or termination
pay to any director, officer, stockholder or employee of Seller or any Associate
of any of the foregoing, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any director, officer, stockholder or employee of Seller or any
Associate of any of the foregoing, (iii) increase in benefits payable or
potentially payable under any severance, continuation or termination pay
policies or employment agreements with any director, officer, stockholder or
employee of Seller or any Associate of any of the foregoing, (iv) increase in
compensation, bonus or other benefits payable or potentially payable to
directors, officers, stockholders or employees of Seller or any Associate of any
of the foregoing, (v) change in the terms of any bonus, pension, insurance,
health or other Benefit Plan of Seller, or (vi) representation of Seller to any
employee or former employee of any of the foregoing that Buyer would assume,
continue to maintain or implement any Benefit Plan after the Closing Date;
(f) any loan to or guarantee or assumption of any loan or
obligation on behalf of any stockholder, director, officer or employee of Seller
or to any Associate of Seller, except reasonable travel advances and expenses
occurring in the ordinary course of business consistent with past practice;
(g) any change by Seller in its accounting principles, methods or
practices or in the manner it keeps its books and records or any change by
Seller of its current practices with regards to sales, receivables, payables or
accrued expenses, other than those changes resulting from Deloitte & Touche
LLP's audit of Seller's financial statements;
(h) any distribution, dividend, bonus or other payment by Seller
to any officer, director, stockholder or Affiliate of Seller (collectively,
"Distributions");
(i) the entering into of any Contract or other arrangement between
Seller and any officer, director, stockholder or Affiliate of Seller;
(j) any (i) single capital expenditure or commitment in excess of
Fifteen Thousand Dollars ($15,000) for additions to property, plant, equipment
or intangible capital assets, (ii) capital expenditures or commitments in an
aggregate amount in excess of Thirty Thousand Dollars ($30,000) for additions to
property, plant, equipment or intangible capital assets or capital expenditures,
(iii) sale, assignment, transfer, lease or other disposition of or agreement to
sell, assign, transfer, lease or otherwise dispose of any asset or property
having a value of Ten Thousand Dollars ($10,000) in the aggregate;
(k) to Seller's best knowledge, any labor dispute or any activity
or proceeding by a labor union or representative thereof to organize any
employees of Seller, who were not subject to a collective bargaining agreement
at the date of the 2002 Balance Sheet, or
17
any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to any such employees; or
(l) any payment, discharge or satisfaction of any Liabilities of
Seller, other than payments, discharges or satisfactions in the ordinary course
of business consistent with past practice.
3.08. Properties; Leases; Tangible Assets.
(a) Seller has good and valid title to or, in the case of leased
properties or properties held under license, good and valid leasehold or license
interests in, all of its properties, including all such properties (real,
personal or mixed, tangible or intangible (including the Intellectual Property
Rights)) reflected on the 2002 Balance Sheet. Except as disclosed in Schedule
3.08(a), Seller holds title to each such property and asset free and clear of
all Liens, adverse claims or any other rights of others or other adverse
interests of any kind, including leases, chattel mortgages, conditional sales
contracts, collateral security arrangements and other title or interest
retention arrangements (collectively, "Encumbrances"), except Permitted Liens.
(b) All material tangible properties and assets (other than
inventory) included in the Transferred Assets are in reasonably serviceable
operating condition and repair and are adequate for the uses to which they are
put, and no material properties or assets necessary for the conduct of the
Business in substantially the same manner as the Business has heretofore been
conducted are in need of replacement, maintenance or repair, except for routine
replacement, maintenance and repair.
(c) Seller owns no real property.
(d) Schedule 3.08(d) sets forth all personal property leases to
which Seller is a party or by which it is bound and that are necessary for the
conduct of the Business in substantially the same manner as the Business has
heretofore been conducted and all real property leases (such Schedule 3.08(d)
describing separately those leases relating to real property (the "Leased Real
Property") and those leases relating to personal property and indicating where
appropriate those leases that have been recorded for tax, protection of title or
interest, or other purposes) entered into by Seller (the "Leases"). With respect
to the Leases, there exist no material defaults by Seller or, to the best
knowledge of Seller, any default or threatened default by any third party
thereunder, that has affected or could reasonably be expected to affect the
rights and privileges thereunder of Seller or result in any Liability of Seller.
Except as disclosed in Schedule 3.08(d), each Lease is a legal, valid and
binding obligation of Seller, and, to the best knowledge of Seller, each other
party thereto, enforceable against each such party thereto in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and subject to general principles of equity. Except as provided in Schedule
3.08(d), the transfer of the Transferred Assets contemplated by this Agreement
will not result in any default, penalty or modification to any Lease, nor will
any consents thereto be required.
18
(e) Except as disclosed in Schedule 3.08(e), (i) to Seller's best
knowledge, the current use and operation of all Leased Real Property is in
compliance with all Applicable Laws (including, without limitation, laws
relating to parking, zoning and land use) and public and private covenants and
restrictions, (ii) Seller has not received written notice of non-compliance with
any Applicable Laws and (iii) to Seller's best knowledge, the utilities, access
and parking for each such Leased Real Property are adequate for the current use
and operation of each such Leased Real Property.
(f) Except as disclosed in Schedule 3.08(f), to Seller's best
knowledge, there are no zoning, building code, occupancy restriction or other
land-use regulation proceedings or, to the best knowledge of Seller, any
proposed change in any Applicable Laws, which could detrimentally affect the use
or operation of any Leased Real Property, nor has Seller received any written
notice of any special assessment proceedings affecting the Leased Real Property,
or applied for any change to the zoning or land use status of the Leased Real
Property.
(g) Seller has obtained all licenses, permits, approvals,
easements and rights of way (and all such items are currently in full force and
effect) required from any Governmental Authority having jurisdiction over each
Leased Real Property or from private parties for the current use and operation
of each Leased Real Property, other than those the absence of which would not
affect the use or operation of such Leased Real Property in the manner currently
used or operated by Seller.
3.09. Sufficiency of and Title to the Transferred Assets. Upon
consummation of the transactions contemplated by this Agreement, Seller will
have sold, assigned, transferred and conveyed to Buyer, free and clear of all
Liens or Encumbrances, other than Permitted Liens, good and marketable title to
or other right to use all of the Transferred Assets, which constitute all of the
properties and assets now held or employed by Seller in connection with the
Business and necessary for the conduct of the Business, other than the Excluded
Assets.
3.10. Affiliates. Except as set forth in Schedule 3.10, none of (i)
Seller, (ii) to the best knowledge of Seller, any stockholder of Seller or any
Affiliate of any such stockholder or any Associate of any such stockholder or
Affiliate or (iii) any officer or director of Seller (or any immediate family
member of any such officer or director):
(a) now has or is or at any time subsequent to June 30, 2002 had,
either directly or indirectly, an equity or debt interest in any Person which
furnishes or sells, or during such period furnished or sold, services or
products to Seller, or purchases, or during such period purchased, from Seller
any goods or services, or otherwise does, or during such period did, business
with Seller; provided, however, that no Person identified in clauses (i), (ii)
or (iii) of this Section 3.10 shall be deemed to have such an interest solely by
virtue of the ownership of less than one percent (1%) of the outstanding voting
stock or debt securities of any publicly-held company, the stock or debt
securities of which are traded on a national stock exchange or quoted on the
National Association of Securities Dealers Automated Quotation System; or
19
(b) was a party to any contract, commitment or agreement to which
Seller is, or during such period was, a party or under which any of them is or
was obligated or bound or to which any of their properties may be or may have
been subject.
3.11. Litigation. Except as disclosed in Schedule 3.11, (i) there are no
actions, suits, claims, hearings, arbitrations, proceedings (public or private)
or governmental investigations that have been brought by or against any
Governmental Authority or any other Person (collectively, "Proceedings") pending
or, to the best knowledge of Seller, threatened, against or by Seller, the
Business or any of the Transferred Assets or which seek to enjoin or rescind the
transactions contemplated by this Agreement; and (ii) there are no existing
orders, judgments or decrees of any Governmental Authority naming Seller as an
affected party or otherwise affecting any of the Transferred Assets or the
Business.
3.12. Contracts.
(a) Schedule 3.12(a) sets forth a complete list of all existing
contracts, commitments and obligations (whether written or oral) of Seller and
the Business that are material to Seller, including without limitation, the
following (collectively with the Leases and the Employment Agreements, the
"Scheduled Contracts"):
(i) each agreement or arrangement of Seller that requires
the payment or incurrence of Liabilities, or the rendering of services, by
Seller, subsequent to the date of this Agreement, of more than Ten Thousand
Dollars ($10,000);
(ii) all Contracts relating to, or evidences of, or
guarantees of, or providing security for, Debt or the deferred purchase price of
property (whether incurred, assumed, guaranteed or secured by any asset);
(iii) all license, sale, distribution, commission, marketing,
agent, franchise, technical assistance or similar agreements relating to or
providing for the marketing and/or sale of the products or services to which
Seller is a party or by it is otherwise bound;
(iv) all acquisition, partnership, joint venture, teaming
arrangements or other similar Contracts, arrangements or agreements entered into
by the Company since its incorporation; and
(v) each agreement, arrangement, contract, commitment or
obligation of Seller restricting or otherwise affecting the ability of Seller to
compete in the Business or otherwise in any jurisdiction.
(b) Seller has made true and correct copies of all such Scheduled
Contracts available to Buyer. To the best knowledge of Seller, no notice of
material default arising under any Scheduled Contract has been delivered to or
by Seller. Except as disclosed in Schedule 3.12(b), each Scheduled Contract is a
legal, valid and binding obligation of Seller and each other party thereto,
enforceable against each such party thereto in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and subject to
general principles of equity, and neither Seller nor, to Seller's best
knowledge, the other party thereto is in default thereunder.
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Except as provided in Schedule 3.12(b), the transfer of the Transferred Assets
contemplated by this Agreement will not result in any default, penalty or
modification to any Scheduled Contract.
(c) Schedule 3.12(c) sets forth a list (by name, address and
Persons to contact) of the twelve (12) largest (determined by aggregation of
revenues generated from such Persons by all of Seller's and its Affiliates'
offices) clients of Seller for the six quarters ended June 30, 2002, together
with the approximate dollar amount of services provided to such Persons during
said period and a summary description of the services provided.
3.13. Permits; Required Consents.
(a) To Seller's best knowledge, Schedule 3.13(a) sets forth all
approvals, authorizations, certificates, consents, licenses, orders and permits
and other similar authorizations of all Governmental Authorities (and all other
Persons) necessary for the operation of the Transferred Assets or the Business
in substantially the same manner as currently operated or affecting or relating
in any way to the Business (the "Permits").
(b) Schedule 3.13(b) lists (i) each governmental or other
registration, filing, application, notice, transfer, consent, approval, order,
qualification and waiver known by Seller to be required under Applicable Law to
be obtained by Seller by virtue of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby to avoid the loss of
any Permit or otherwise (each, a "Required Governmental Approval"), and (ii)
each Scheduled Contract with respect to which the consent of the other party or
parties thereto must be obtained by Seller by virtue of the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby to avoid the invalidity of such Scheduled Contract, the termination
thereof, a breach or default thereunder or any other change or modification to
the terms thereof (each, a "Required Contractual Consent" and, together with the
Required Governmental Approvals, the "Required Consents").
3.14. Compliance with Applicable Laws. Except as set forth in Schedule
3.14, Seller has not violated or infringed, nor is it in violation or
infringement of, any material Applicable Law or any order, writ, injunction or
decree of any Governmental Authority.
3.15. Employment Agreements; Change in Control; and Employee Benefits.
(a) Except as set forth on Schedule 3.15(a), there are no
employment, consulting, severance pay, continuation pay, termination pay or
indemnification agreements or other similar agreements of any nature whatsoever
(collectively, "Employment Agreements") between Seller, on the one hand, and any
current or former stockholder, officer, director, employee or Affiliate of
Seller or any consultant or agent of Seller, on the other hand, that are
currently in effect. Except as set forth on Schedule 3.15(a), there are no
Employment Agreements or any other similar agreements to which Seller is a party
under which the transactions contemplated by this Agreement (i) will require any
payment by Seller, Buyer, or any consent or waiver from any stockholder,
officer, director, employee or Affiliate of Seller, any of their respective
Associates or any consultant or agent of Seller or Buyer or (ii) will result in
any change in the nature of any rights of any stockholder, officer, director,
employee or
21
Affiliate of Seller, or any of their respective Associates or any consultant or
agent of Seller under any such Employment Agreement or other similar agreement.
(b) Schedule 3.15(b) sets forth all Benefit Plans of Seller.
Seller has made true and correct copies of all governing instruments and related
agreements pertaining to such Benefit Plans available to Buyer, including, in
the case of any Benefit Plan not set forth in writing, a written description
thereof.
(c) Except as set forth on Schedule 3.15(c), neither Seller nor
any of its ERISA Affiliates sponsors or, within the last five (5) years has
sponsored, maintained, contributed to, or incurred an obligation to contribute
to, any Employee Pension Benefit Plan.
(d) Neither Seller nor any of its ERISA Affiliates sponsors or has
ever sponsored, maintained, contributed to, or incurred an obligation to
contribute to any Multiemployer Plan or to a Multiple Employer Plan.
(e) No individual shall accrue or receive additional benefits,
service or accelerated rights to payments of benefits under any Benefit Plan,
including the right to receive any parachute payment, as defined in Section 280G
of the Code, or become entitled to severance, termination allowance or similar
payments as a direct result of the transactions contemplated by this Agreement.
(f) No Employee Benefit Plan has participated in, engaged in or
been a party to any non-exempt Prohibited Transaction, and neither Seller nor
any of its ERISA Affiliates has had asserted against it any claim for taxes
under Chapter 43 of Subtitle D of the Code and Section 5000 of the Code, or for
penalties under ERISA Section 502(c), (i) or (l), with respect to any Employee
Benefit Plan nor, to the best knowledge of Seller, is there a basis for any such
claim. No officer, director or employee of Seller has committed a material
breach of any responsibility or obligation imposed upon fiduciaries by Title I
of ERISA with respect to any Employee Benefit Plan.
(g) Other than routine claims for benefits, there is no claim
pending or, to the best knowledge of Seller, threatened, involving any Benefit
Plan by any Person against such plan, Seller, or any of its ERISA Affiliates.
There is no pending or, to the best knowledge of Seller, threatened, proceeding
involving any Employee Benefit Plan before the IRS, the United States Department
of Labor or any other Governmental Authority.
(h) There is no violation of any reporting or disclosure
requirement imposed by ERISA or the Code with respect to any Benefit Plan that
could have a Material Adverse Effect.
(i) Each Benefit Plan has at all times prior hereto been
maintained in all material respects, by its terms and in operation, in
accordance with ERISA and the Code. In accordance with Applicable Law, each
Benefit Plan can be amended or terminated at any time, without consent from any
other party and without liability other than for benefits accrued as of the date
of such amendment or termination. Seller and its ERISA Affiliates have made full
and timely payment of all amounts required to be contributed under the terms of
each Benefit Plan
22
and Applicable Law or required to be paid as expenses under such Benefit Plan,
and Seller and its ERISA Affiliates shall continue to do so through the Closing.
(j) With respect to any Group Health Plans maintained by Seller or
its ERISA Affiliates, whether or not for the benefit of Seller's employees,
Seller and its ERISA Affiliates have complied in all material respects with the
provisions of Part 6 of Title I of ERISA and Sections 4980B, 9801 and 9802 of
the Code. Seller is not obligated to provide health care benefits of any kind to
its retired employees pursuant to any Employee Benefit Plan, including without
limitation, any Group Health Plan, or pursuant to any agreement or
understanding, other than as required by Applicable Law.
(k) Seller has made available to the Buyer a copy of (i) the three
(3) most recently filed Federal Form 5500 series and accountant's opinion, if
applicable, for each Employee Benefit Plan, (ii) the most recent IRS
determination letter obtained with respect to each Benefit Plan intended to be
qualified under Section 401(a) of the Code or exempt under Section 501(a) of the
Code and (iii) the most recently prepared financial statements of each Benefit
Plan.
(l) Each Benefit Plan intended to be qualified under Section
401(a) of the Code has been determined to be so qualified by the IRS. Each trust
established in connection with any Benefit Plan which is intended to be exempt
from Federal income taxation under Section 501(a) of the Code has been
determined to be so exempt by the IRS. Since the date of each most recent
determination referred to in this Section 3.15(l), no event has occurred and no
condition or circumstance has existed that has adversely affected, or is likely
to adversely affect, the qualified status of any Benefit Plan.
3.16. Labor and Employment Matters.
(a) Except as set forth on Schedule 3.16(a), no collective
bargaining agreement exists that is binding on Seller and, except as described
on Schedule 3.16(a), no petition has been filed or proceedings instituted by an
employee or group of employees with any labor relations board seeking
recognition of a bargaining representative. Schedule 3.16(a) describes any
organizational effort that, to the best knowledge of Seller, is currently being
made or threatened or has been made since January 1, 2001 by or on behalf of any
labor union to organize any employees of Seller.
(b) Except as set forth on Schedule 3.16(b), (i) there is no labor
strike, slow down or stoppage pending or, to the best knowledge of Seller,
threatened, against or directly affecting Seller; (ii) no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is pending and no claims therefor exist; and (iii) neither Seller nor
any of its respective Affiliates has received any notice or has any knowledge of
any threatened labor or employment dispute, controversy or grievance or any
other unfair labor practice proceeding or breach of contract claim or action
with respect to claims of, or obligations to, any employee or group of employees
of Seller.
(c) If required under the Workers Adjustment and Retraining
Notification Act or other applicable state law regulating plant closing or mass
layoffs, Seller and
23
its Affiliates have timely caused there to be filed or distributed, as
appropriate, all required filings and notices with respect to employment losses
occurring through the Closing Date.
(d) Seller and its Affiliates have complied and are currently
complying, in respect of all employees of Seller and its Affiliates, with all
Applicable Laws respecting employment and employment practices and the
protection of the health and safety of employees, from whatever source such law
may be derived, including, without limitation, statutes, ordinances, laws,
rules, regulations, policies, standards, judicial or administrative precedents,
judgments, orders, decrees, awards, citations, licenses, official
interpretations and guidelines ("Labor Laws"), except for such instances which
would not, in the aggregate, result in a Material Adverse Effect.
(e) All individuals who are performing or have performed services
for Seller or any of its Affiliates and who are or were classified by Seller or
any of its Affiliates as "independent contractors" qualify for such
classification under Section 530 of the Revenue Act of 1978 or Section 1706 of
the Tax Reform Act of 1986, as applicable, except for such instances which would
not, in the aggregate, result in a Material Adverse Effect.
3.17. Intellectual Property.
(a) Schedule 3.17(a) sets forth a complete and correct list of
each patent, patent application and docketed invention, trademark, trade name,
trademark or trade name registration or application, copyright or copyright
registration or application for copyright registration, servicemark, brand xxxx
or brand name or any pending application related thereto, or any trade secret,
proprietary know-how, programs or processes or any similar rights, and each
license or licensing agreement for any of the foregoing relating to any
Transferred Asset or the Business or held by Seller (the "Intellectual
Property").
(b) Except as disclosed in Schedule 3.17(b), Seller has not during
the three years preceding the date of this Agreement been a party to any
Proceeding, nor to the best knowledge of Seller is any Proceeding threatened, in
any case, as to which there is a reasonable possibility of a determination
adverse to Seller, that involved or may involve a claim of infringement brought
by any Person (including any Governmental Authority) with respect to the
Intellectual Property. Except as disclosed in Schedule 3.17(b), the Seller's use
of the Intellectual Property is not subject to any outstanding order, judgment,
decree, stipulation or agreement restricting the use thereof by Seller, or
restricting the licensing thereof by Seller to any Person. Except as disclosed
in Schedule 3.17(b), to Seller's best knowledge, the current use of such
Intellectual Property by Seller does not conflict with, infringe upon or violate
any patent, patent license, patent application, trademark, tradename, trademark
or tradename registration, copyright, copyright registration, service xxxx,
brand xxxx or brand name or any pending application relating thereto, or any
trade secret, know-how, programs or processes, or any similar rights, of any
Person.
(c) Except as set forth in Schedule 3.17(c), Seller either owns
the entire right, title and interest in, to and under, or has acquired an
express license to use or, in connection with the acquisition of Equipment or
Inventory, has acquired an implied license to use, any and all patents,
trademarks, tradenames, brand names and copyrights which are material
24
to the conduct of the Business in the manner that the Business has heretofore
been conducted. No other inventions, processes, computer programs, know-how,
formulae, trade secrets, patents, chip designs, mask works, trademarks, trade
names, brand names, copyrights, licenses or applications for any of the
foregoing are reasonably necessary for the unimpaired continued operation of the
Business in the manner that the Business has heretofore been conducted.
3.18. Advisory Fees. Except for Barrington Associates, there is no
investment banker, broker, finder or other intermediary or advisor that has been
retained by or is authorized to act on behalf of Seller, who is entitled to any
fee, commission or reimbursement of expenses from Seller, Buyer or any of their
respective Affiliates or Associates upon consummation of the transactions
contemplated by this Agreement or otherwise.
3.19. Environmental Compliance.
(a) Except as disclosed in Schedule 3.19(a), Seller has obtained
all approvals, authorizations, certificates, consents, licenses, orders and
permits or other similar authorizations of all Governmental Authorities, or from
any other Person, that are required under any Environmental Law. Schedule
3.19(a) sets forth all material permits, licenses and other authorizations
issued under any Environmental Law relating to Seller, the Business or the
Transferred Assets.
(b) Except as disclosed in Schedule 3.19(b), Seller is in
compliance with all terms and conditions of all Permits of all Governmental
Authorities (and all other Persons) required under all Environmental Laws that
are used in the Business or that relate to Seller or the Transferred Assets.
Seller is also in compliance in all material respects with all other
limitations, restrictions, conditions, standards, requirements, schedules and
timetables required or imposed under all Environmental Laws.
(c) Except as set forth in Schedule 3.19(c), there are no past or
present events, conditions, circumstances, incidents, actions or omissions
imposed on Seller relating to or in any way affecting Seller, the Business or
the Transferred Assets that violate, or may violate after the Closing, any
Environmental Law, or that may give rise to any Environmental Liability, or
otherwise form the basis of any claim, action, demand, suit, Proceeding,
hearing, study or investigation (i) under any Environmental Law, (ii) based on
or related to the manufacture, processing, distribution, use, treatment, storage
(including without limitation underground storage tanks), disposal, transport or
handling, or the emission, discharge, release or threatened release of any
Hazardous Substance or (iii) resulting from exposure to workplace hazards.
(d) Seller has delivered to Buyer all environmental documents,
studies and reports in its possession or under its control relating to: (i) any
facilities or real property ever owned, operated or leased by Seller; or (ii)
any Environmental Liability of Seller or the Business.
3.20. Insurance. Schedule 3.20 sets forth a complete and correct list of
all insurance policies of any kind currently in force or in force at any time
subsequent to December 31, 2000 with respect to the Business (the "Insurance
Policies"), including all "occurrence based" liability policies regardless of
the periods to which they relate. Schedule 3.20 also sets forth for each such
Insurance Policy the type of coverage, the name of the insureds, the insurer,
the
25
premium, the expiration date, the period to which it relates, the deductibles
and loss retention amounts and the amounts of coverage.
3.21. Tax Matters.
Except as set forth on Schedule 3.21:
(a) Seller has duly and timely filed all Tax Returns required to
be filed with respect to the Transferred Assets, and such Tax Returns are
complete and accurate and correctly reflect the Tax liability required to be
reported thereon. Such Tax Returns do not contain (and were not required to
contain in order to avoid the imposition of a penalty) a disclosure statement
under Section 6662 of the Code (or any predecessor provision or comparable
provision of state, local or foreign law).
(b) Seller and the shareholders of Seller have timely paid all
Taxes that have become due and payable with respect to the Transferred Assets
prior to the Closing Date, and have adequately provided in the Financial
Statements for all Taxes accrued through the date of such Financial Statements
that were not yet due and payable as of the date thereof; all Taxes of Seller
accrued with respect to the Transferred Assets following the end of the most
recent period covered by the Financial Statements have been accrued in the
ordinary course of business of Seller. Seller has not taken any action not in
accordance with past practice that would have the effect of deferring a measure
of Tax with respect to the Transferred Assets (including but not limited to
income, sales, gross receipts or payroll) from a period (or portion thereof)
ending on or prior to the Closing to a period (or portion thereof) beginning
after the Closing; and no election has been made with respect to Taxes of Seller
in any Tax Return that has not been provided to Buyer.
(c) No claim for assessment or collection of Taxes with respect to
the Transferred Assets has been or is presently being asserted against Seller or
its shareholders; no rationale underlying a claim for Taxes with respect to the
Transferred Assets has been asserted previously by any taxing authority that
reasonably could be expected to be asserted in any other period; and Seller is
not a party to any action, proceeding, audit or investigation by any taxing
authority nor does Seller have knowledge of any such threatened action,
proceeding, audit or investigation.
(d) There are no Taxes of Seller or the shareholders of Seller or
deficiencies in Taxes or claims for Taxes against Seller or the shareholders of
Seller for any taxable period that could become a liability of, or which could
be assessed or collected against Buyer as a result of or after the transfer of
assets contemplated by this Agreement.
(e) The Transferred Assets are subject to no Liens for Taxes other
than Liens for current Taxes not yet due and payable on the Transferred Assets
or which are being contested in good faith.
(f) All amounts that are required to be collected or withheld by
Seller, or with respect to Taxes of Seller or the shareholders of Seller, have
been duly collected or withheld and all such amounts that are required to be
remitted to any taxing authority have been duly remitted.
26
(g) None of the Transferred Assets is property that is required to
be treated as owned by any other Person pursuant to the "safe harbor lease"
provisions of former Section 168(f)(8) of the Code and in effect immediately
prior to the enactment of the Tax Reform Act of 1986 and none of the Transferred
Assets is "tax exempt use property" within the meaning of Section 168(h) of the
Code.
(h) Seller is not a party to or bound by any obligation under any
Tax sharing, Tax allocation, Tax indemnity or similar agreement or arrangement.
(i) At all times during Seller's existence through the Closing
Date, Seller has been and will be an "S corporation," as such term is defined in
Section 1361(a)(1) of the Code (and comparable provisions of state, local or
foreign law), and neither Seller nor any of its shareholders has taken any
action that would cause, or would result in, the termination of such S
corporation status. None of the income or gain of Seller recognized prior to or
in connection with the Closing has been or will be subject to Section 1374 or
1375 of the Code.
3.22. Clients. Schedule 3.22 sets forth (i) the ten (10) largest clients
by gross revenues to Seller during the last fiscal year (the "Significant
Clients"). Since December 31, 2001, no Significant Client has: (a) stopped or
expressly stated its intention to stop doing business with Seller, (b) reduced
or expressly stated its intention to materially reduce, its business with Seller
or (c) changed or expressly stated its intention to change, materially the terms
and conditions on which it is prepared to do business with Seller. No
Significant Client has given Seller notice or expressly stated that, as a result
of the transactions contemplated by this Agreement, it will: (x) not do business
with Seller (y) reduce substantially its business with Seller, or (z) change the
terms and conditions on which it is prepared to do business with Seller. Seller
has no knowledge of any facts, conditions or events that would give rise to a
material claim by Seller against any of its Significant Clients or any material
claim by a Significant Client against Seller.
3.23. Books and Records. Seller has maintained books and records which,
in reasonable detail, accurately and fairly reflect all material transactions
entered into by Seller or to which Seller is a party. Seller has not engaged in
any transaction, maintained any bank account or used any corporate funds, except
for transactions, bank accounts and funds which have been and are reflected in
its normally maintained books and records.
3.24. Warranties. Schedule 3.24 sets forth a summary of the material
terms of all unexpired service warranties and guarantees given by Seller to any
client. Except as described on Schedule 3.24, (i) no claims are pending or, to
Seller's best knowledge, are threatened under the service warranties of Seller
thereof, and (ii) to Seller's best knowledge, there exists no event or
circumstance which after notice or the passage of time on both, could create or
result in liabilities or obligations under any of the service warranties of
Seller.
3.25. Bank Accounts. Schedule 3.25 sets forth a true and complete list
of all bank accounts, safe deposit boxes and lock boxes of Seller, including the
names in which such accounts or boxes are held and identification of all Persons
authorized to draw thereon or have access thereto.
27
3.26. Certain Business Practices. To the extent applicable to Seller and
its officers, directors, employees and representatives, Seller and its officers,
directors, employees and representatives have complied in all material respects
with the U.S. Foreign Corrupt Practices Act or any similar such law in any
foreign jurisdiction. Neither Seller nor any of its officers, directors,
employees or representatives has, directly or indirectly, used funds or other
assets (regardless of form or description of such payment) of Seller, or made
any promise or undertaking in such regard, for any illegal payments to or for
the benefit of any Person, to secure favorable treatment of a contract or the
Business or for the establishment or maintenance of a secret or unrecorded fund;
and there have been no false or fictitious entries made in the books or records
of Seller relating to any such illegal payment or secret or unrecorded fund.
3.27. Complete Disclosure. No representation or warranty by the Seller
in this Agreement, and no exhibit, schedule, statement, certificate, or other
writing furnished to the Buyer, Parent or its advisors pursuant to this
Agreement or the Ancillary Agreements to which it is a party, 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 herein and therein not
misleading.
3.28. No Other Representations. Seller shall not be deemed to have made
to Parent and Buyer any representation or warranty other than as made by Seller
in this Article III.
ARTICLE IV.
CERTAIN REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated herein, each of the Seller Parties, jointly and
severally, hereby represents and warrants, as of the date of this Agreement and
as of the Closing Date, to Buyer as follows:
4.01. Understanding that Shares will Be Issued without Registration.
Each of the Seller Parties understands that the Shares will be issued without
registration under the Securities Act, in reliance upon exemptions from
registration under the Securities Act including, without limitation, the safe
harbor provided by Regulation D promulgated under Section 4(2) of the Securities
Act. Each of the Seller Parties further understands that such exemptions depend
in part upon, and such shares will be issued in reliance on, the representations
and warranties made by the Seller Parties in this Article IV.
(a) Each of the Seller Parties will acquire the Shares for their
own respective accounts for investment purposes only and not with a view to
resale or other distribution thereof, in whole or in part; and none of the
Seller Parties will assign, sell, hypothecate or otherwise transfer the Shares
unless (i)(a) a registration statement is in effect under the Securities Act
with respect to such Shares or (b) an applicable exemption from registration is
available and a written opinion of counsel acceptable to Buyer is obtained to
the effect that no such registration is required pursuant to the application of
such exemption (except that no opinion of counsel shall be necessary if the sale
is made in a routine transaction under Rule 144 promulgated under the Securities
Act), and (ii) they have complied with all applicable
28
holding periods imposed by the Securities Act (and the regulations thereunder)
and this Agreement.
(b) Each of the Seller Parties acknowledges, agrees and is aware
that: (i) no United States federal or state or any foreign agency has passed
upon the accuracy, validity or completeness of this Agreement or made any
finding or determination as to the fairness of an investment in the Shares; (ii)
there may be restrictions on the transferability of the Shares; (iii) the Shares
have not been registered under the Securities Act or under the securities laws
of any other jurisdiction; (iv) an offer or sale of any of the Shares by any of
the Seller Parties in the absence of registration under the Securities Act will
require the availability of an exemption thereunder; and (v) a restrictive
legend is or shall be placed on the certificates representing the Shares and a
notation shall be made in the appropriate records of Parent indicating that the
Shares are subject to restrictions on transfer.
4.02. Accredited Investor. Each of the Seller Parties qualifies as an
"accredited investor" within the meaning of Rule 501 under the Securities Act.
4.03. Receipt of Information; Access to Information. Each of the Seller
Parties acknowledges that he, she or it:
(a) has been furnished with the Certificate of Incorporation and
Bylaws of Parent, the Parent SEC Reports and any documents that may have been
made available upon its, his or her request (collectively, the "Other
Documents"), and are capable of understanding and evaluating the risks of
acquiring the Shares;
(b) has been given the opportunity to ask questions of, and
receive answers from, Buyer and/or Parent and their respective officers
concerning the terms and conditions of the acquisition of the Shares and other
matters pertaining to an investment in the Shares, has been given the
opportunity to obtain such additional information necessary to evaluate the
merits and risks of acquiring the Shares to the extent Buyer or Parent possesses
such information, and has received all documents and information that each of
them has requested relating to an investment in the Shares;
(c) has not relied upon any representations or other information
(whether oral or written) from Buyer or Parent or their respective directors,
officers or Affiliates, or from any other Persons, other than the
representations of Buyer and Parent made in this Agreement and the Other
Documents;
(d) is familiar with the nature of and risks attendant to
investments in the business of Parent and securities in general and has
carefully considered and has, to the extent he, she or it believes such
discussion necessary, discussed with his, her or its respective professional
legal, financial and tax advisers the suitability of an investment in the Shares
for his, her or its respective financial and tax situations and has determined
that the Shares are a suitable investment for him, her or it; and
(e) has made, and is solely responsible for making, his, her or
its respective own independent evaluations of the economic and other risks
involved in his, her or
29
its respective investments in the Shares and his, her or its own respective
independent decisions to make such investments.
4.04. Authority Relative to this Agreement. Each of the Seller Parties
has all requisite legal right, power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which they are signatories and to
perform their respective obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. This Agreement has been, and
the Ancillary Agreements to which the Seller Parties are signatories will be,
duly and validly executed and delivered by the Seller Parties and, assuming that
this Agreement constitutes, and the Ancillary Agreements to which they are
signatories will constitute when signed, the legal, valid and binding
obligations of the other parties hereto and thereto, each such agreement
constitutes or will constitute the legal, valid and binding obligation of the
Seller Parties, as the case may be, enforceable in accordance with its terms
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws (including court decisions) and
doctrines affecting the rights of creditors generally and general equitable
principles.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated herein, each of Parent and Buyer
hereby, jointly and severally, represents and warrants to each of the Seller
Parties as follows:
5.01. Corporate Existence and Power. Parent and Buyer are corporations
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and Parent and Buyer have all corporate power to enter into
this Agreement and consummate the transactions contemplated hereby. Each of
Parent and Buyer is duly qualified to do business as a foreign corporation in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary to carry on its
business as now conducted, except for those jurisdictions where in the aggregate
the failure to be so qualified is not, and is not reasonably expected to become,
material.
5.02. Corporate Authorization. The execution, delivery and performance
by Parent and Buyer of this Agreement and the consummation by Parent and Buyer
of the transactions contemplated hereby are within the corporate powers of
Parent and Buyer and have been duly authorized by all necessary corporate action
on the part of Parent and Buyer. This Agreement constitutes the legal, valid and
binding agreement of Parent and Buyer, enforceable in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and subject to
general principles of equity.
5.03. Governmental Authorization. The execution, delivery and
performance by Parent and Buyer of this Agreement require no action by, consent
or approval of, or filing with, any Governmental Authority other than any
actions, consents, approvals or filings otherwise expressly referred to in this
Agreement.
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5.04. Non-Contravention. The execution, delivery and performance by
Parent and Buyer of this Agreement does not (a) contravene or conflict with the
Certificate of Incorporation or Bylaws of Parent or Buyer, (b) except as set
forth on Schedule 5.04, contravene or constitute a material default under any
agreement to which Parent or Buyer is a party or (c) assuming compliance with
the matters referred to in Section 5.03, contravene or conflict with or
constitute a violation of any provision of any Applicable Law binding upon or
applicable to Parent or Buyer.
5.05. Parent SEC Filings; No Material Adverse Effect.
(a) Parent has filed all forms, reports and documents required to
be filed with the SEC since January 1, 2001, and has heretofore delivered or
made available to the Seller Parties, in the form filed with the SEC, (i) its
Annual Report on Form 10-K for the fiscal year ended December 30, 2001, (ii) its
Quarterly Reports on Form 10-Q for the periods ended March 31, 2002, and (iii)
all proxy statements relating to Parent's meetings of stockholders (whether
annual or special) held since January 1, 2001, (iv) all Forms 8-K filed by
Parent with the SEC since January 1, 2001, (v) all other reports or registration
statements filed by Parent with the SEC since January 1, 2001, and (vi) all
amendments and supplements to all such reports and registration statements filed
by Parent with the SEC since January 1, 2001 (collectively, the "Parent SEC
Reports"). The Parent SEC Reports were prepared in substantial compliance as to
form with the requirements of the Securities Act or the Exchange Act, as the
case may be, and did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) Since January 1, 2002, there has been no Material Adverse
Effect on Parent or its Subsidiaries, taken as a whole, and since the date of
Parent's last filing with the SEC, no event has occurred which would require any
filing by Parent with the SEC regarding any such event.
5.06. No Other Representations. Neither Parent nor Buyer shall be deemed
to have made to any of the Seller Parties any representation or warranty other
than as made by Parent and Buyer in this Article V.
ARTICLE VI.
COVENANTS OF SELLER
Seller hereby agrees that:
6.01. Compliance with Terms of Required Contractual Consents. On and
after the Closing Date, Seller shall comply at its own expense with all
conditions and requirements applicable to it set forth in each Required
Contractual Consent to the extent necessary such that all Required Contractual
Consents will remain effective and enforceable against the Persons giving such
Required Contractual Consents, assuming continued compliance with the terms
thereof by Buyer.
6.02. Confidentiality. Seller will, and will cause its respective
employees,
31
officers, directors, shareholders, outside advisors, agents, Affiliates and
representatives to, treat any data and information obtained with respect to
Buyer or any of its Affiliates from any representative, officer, director, or
employee of Buyer, or from any books or records of Buyer in connection with this
Agreement, confidentially and with commercially reasonable care and discretion,
and will not disclose any such information to third parties; provided, however,
that the foregoing shall not apply to (i) information in the public domain or
that becomes public through disclosure by any party other than Seller or its
Affiliates or representatives, so long as such information is not made public by
such other party in breach of a confidentiality obligation, (ii) information
that may be required to be disclosed by Applicable Law provided Seller
immediately gives Buyer notice of any request or demand for such confidential
information upon receipt of such request or demand along with a copy of any
written correspondence, pleading or other communication concerning the request
or demand, (iii) any information that is disclosed by Seller or its respective
Affiliates, on a confidential basis, to any of their respective agents,
accountants or attorneys in correction with or related to the consummation of
the transactions contemplated hereby; or (iv) information required to be
disclosed to obtain any Required Consents. Each of the parties to this Agreement
agree to be responsible for the breach of any obligation of confidentiality
under this Agreement by and of their agents, accountants, attorneys and any
prospective lenders or investors.
6.03. Change of Name. Seller will amend its articles of incorporation
within ten (10) Business Days of the Closing Date so as to change its corporate
name to a name dissimilar to the name by which the Business as conducted by
Seller is known and will file as promptly as practicable, but in any event
within sixty (60) days after the Closing, in all jurisdictions in which it is
qualified to do business, any documents necessary to reflect such change in its
corporate name or to terminate its qualification therein. At the request of
Buyer, Seller shall consent to Buyer adopting a name that is similar or
identical to Seller's name at the Closing.
6.04. Administration of Accounts. All payments and reimbursements made
in the ordinary course by any third party in the name of or to Seller or any
Affiliate of Seller in connection with or arising out of the Transferred Assets,
the Business or the Assumed Liabilities after the Closing Date shall be held by
Seller or such Affiliate in trust for the benefit of Buyer and, immediately upon
receipt by Seller or any such Affiliate of any such payment or reimbursement,
Seller shall pay, or cause to be paid, over to Buyer the amount of such payment
or reimbursement without right of set off.
6.05. Specific Performance. The parties hereto recognize and agree that
in the event of a breach by Seller of this Article VI, money damages would not
be an adequate remedy to Buyer or its Affiliates for such breach and, even if
money damages were adequate, it would be impossible to ascertain or measure with
any degree of accuracy the damages sustained by Buyer or its Affiliates
therefrom. Accordingly, if there should be a breach or threatened breach by
Seller of the provisions of this Article VI, Buyer and its Affiliates shall be
entitled to seek an injunction restraining Seller from any breach without
showing or proving actual damage sustained by Buyer or its Affiliates, as the
case may be. Nothing in the preceding sentence shall limit or otherwise affect
any remedies that Buyer may otherwise have under Applicable Law.
32
6.06. Taxes.
(a) Each party hereof shall (i) provide the other parties hereof
with such assistance as may reasonably be requested in connection with the
preparation of any Tax Return with respect to the Transferred Assets and the
conduct of any audit or other examination by any taxing authority or in
connection with judicial or administrative proceedings relating to any liability
for Taxes with respect to the Transferred Assets and (ii) retain and provide the
other parties hereof with all records or other information that may be relevant
to the preparation of any Tax Returns with respect to the Transferred Assets, or
the conduct of any audit or examination, or other Tax Proceeding with respect to
the Transferred Assets. The parties shall retain all relevant documents,
including prior year's Tax Returns, supporting work schedules and other records
or information that may be relevant to such returns as required by Applicable
Law.
(b) Seller shall provide Buyer with all tax clearance certificates
or similar documents that may be required by any state or local taxing authority
in order to relieve Buyer of any obligations to withhold any portion of the
consideration paid for the Transferred Assets hereunder.
(c) All sales, value added, use, transfer, registration, stamp and
similar Taxes imposed in connection with the sale of the Transferred Assets
shall be borne by Buyer.
(d) Pursuant to Section 1445(b)(2) of the Code, Seller shall
furnish Buyer an affidavit, stating under penalty of perjury the Seller's United
States taxpayer identification number and that the Seller is not a foreign
person.
6.07. COBRA. Seller shall offer COBRA continuation coverage to all "M &
A qualified beneficiaries" (as such term is defined in Treasury Regulation
section 54.4980B-9, Q&A 4) affected by the asset purchase described in this
Agreement, and Seller shall maintain a Group Health Plan to provide such COBRA
coverage during the entire period of coverage mandated by COBRA for such M & A
qualified beneficiaries.
ARTICLE VII.
COVENANTS OF BUYER AND PARENT
7.01. Confidentiality.
Parent and Buyer will, and will cause their respective employees,
officers, directors, shareholders, outside advisors, agents, Affiliates and
representatives to, treat any agreements, data and information obtained with
respect to Seller from any representative, officer, director or employee of
Seller, or from any books or records of Seller in connection with this
Agreement, confidentially and with commercially reasonable care and discretion,
and will not disclose any such information to third parties; provided, however,
that the foregoing shall not apply to (i) information in the public domain or
that becomes public through disclosure by any party other than Parent, Buyer or
their respective Affiliates or representatives, so long as such other party is
not in breach of a confidentiality obligation, (ii) information that may be
required to be disclosed by Applicable Law, provided Parent or Buyer promptly
gives Seller notice of any request or demand for such confidential information
upon receipt of such request or demand,
33
along with a copy of any written correspondence, pleading or other communication
concerning the request or demand, (iii) information required to be disclosed to
obtain any Required Consents, (iv) any information that is disclosed by Parent
or Buyer or their respective Affiliates, on a confidential basis, to any of
their respective agents, accountants, attorneys or financial advisors or (v) any
information that is disclosed by Parent or Buyer after the Closing shall have
occurred. The parties to this Agreement agree to be responsible for the breach
of any obligation of confidentiality under this Agreement by and of their
agents, accountants, attorneys and financial advisors.
7.02. Specific Performance. The parties hereto recognize and agree that
in the event of a breach by Parent or Buyer of this Article VII, money damages
would not be an adequate remedy to Seller for such breach and, even if money
damages were adequate, it would be impossible to ascertain or measure with any
degree of accuracy the damages sustained by Seller therefrom. Accordingly, if
there should be a breach or threatened breach by Parent or Buyer of the
provisions of this Article VII, Seller shall be entitled to seek an injunction
restraining Parent and Buyer from any breach without showing or proving actual
damage sustained by Seller. Nothing in the preceding sentence shall limit or
otherwise affect any remedies that Seller may otherwise have under Applicable
Law.
7.03. Pre-paid Items. Parent agrees to promptly reimburse Seller for any
rent or license fees (pro rated by the number of days in the applicable month)
paid by Seller prior to the date hereof pursuant to leases relating to Leased
Real Property or an agreement with Xxxxxxx.xxx for any period after the date
hereof.
ARTICLE VIII.
COVENANTS OF ALL PARTIES
8.01. Further Assurances. Parent, Buyer and Seller Parties agree to
execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be reasonably necessary or
desirable (including, without limitation, obtaining the Required Consents) in
order to consummate or implement expeditiously the transactions contemplated by
this Agreement, including Seller's receipt of any amounts comprising or payable
in respect of any Transferred Assets and Buyer's receipt of any amounts
comprising or payable in respect of any Excluded Assets. Notwithstanding the
foregoing, no party hereto shall have any obligation to expend any funds or to
incur any other obligation in connection with the consummation of the
transactions contemplated hereby (including, by way of illustration only, any
payment in connection with obtaining the Required Consents) other than normal
out-of-pocket expenses (such as fees and expenses of counsel and accountants)
reasonably necessary to consummate such transactions.
8.02. Certain Filings. The parties hereto shall cooperate with one
another in determining whether any action by or in respect of, or filing with,
any Governmental Authority is required or reasonably appropriate, or any action,
consent, approval or waiver from any party to any Contract is required or
reasonably appropriate, in connection with the consummation of the transactions
contemplated by this Agreement. Subject to the terms and conditions of this
Agreement, in taking such actions or making any such filings, the parties hereto
shall furnish
34
information required in connection therewith and seek timely to obtain any such
actions, consents, approvals or waivers.
8.03. Public Announcements. The parties hereto agree that a mutually
agreed upon press release will be issued upon the execution of this Agreement.
Further, the parties may, on a confidential basis, advise and release
information regarding the existence and content of this Agreement or the
transactions contemplated hereby to their respective Affiliates or any of their
agents, accountants, attorneys and prospective lenders or investors in
connection with or related to the transactions contemplated by this Agreement.
8.04. Specific Performance. The parties hereto recognize and agree that
in the event of a breach by one party hereto of this Article VIII, money damages
would not be an adequate remedy to the other party for such breach and, even if
money damages were adequate, it would be impossible to ascertain or measure with
any degree of accuracy the damages sustained by the non-breaching party
therefrom. Accordingly, if there should be a breach or threatened breach by one
party of provisions of this Article VIII, the non-breaching party shall be
entitled to seek an injunction restraining the breaching party from any breach
without showing or proving actual damage sustained by the non-breaching party.
ARTICLE IX.
INDEMNIFICATION
9.01 Seller Parties' Agreement to Indemnify.
(a) Each of the Seller Parties shall, jointly and severally,
indemnify and hold harmless Parent, Buyer and their respective Affiliates
(collectively, the "Buyer Indemnitees") in respect of any and all Damages
incurred by any Buyer Indemnitee as a result of:
(i) any inaccuracy or misrepresentation in or breach of any
representation, warranty, covenant or agreement made in this Agreement by any of
the Seller Parties;
(ii) any Environmental Liability imposed upon any of the
Seller Parties relating to the Business or Seller, whether presently in
existence or arising hereafter from acts, events, conditions or circumstances
existing or occurring on or before the Closing Date (in the case of this clause
(ii) regardless of whether such Environmental Liability arises out of or
constitutes a breach of any representation, warranty or covenant in this
Agreement made by any of the Seller Parties);
(iii) any Liabilities in connection with the Proceedings
described in Schedule 3.11 hereto;
(iv) any Liabilities for Taxes of Seller or any shareholder
of Seller, or any predecessor in interest or any Affiliate of any of them with
respect to any period, and any Liabilities for Taxes relating to the Transferred
Assets with respect to any pre-Closing tax period (in the case of this clause
(iv), regardless of whether such Liabilities for Taxes arise
35
out of or constitute a breach of any representation, warranty or covenant in
this Agreement made by Seller at any time);
(v) any Excluded Liabilities;
(vi) acts or omissions of the Seller Representative (other
than Damages arising solely from claims brought by the Seller Representative on
behalf of the Seller Parties after Closing in the Seller Representative's
capacity as agent for the Seller Parties);
(vii) the violation, conflict, breach of or default under (or
omission or commission of any action, condition or event which, after notice or
lapse of time or both, would result in any such violation, conflict or breach of
or default under) any Contract, Permit or law by any of the Seller Parties prior
to the Closing Date;
(viii) [Intentionally Omitted];
(ix) the enforcement of this Section 9.01; or
(x) Seller's failure to qualify to transact business as a
foreign corporation in good standing in the States of Georgia, Louisiana and
Virginia.
(b) Seller Parties shall have no obligation under Section 9.01(a)
unless and until the aggregate amount of Damages incurred under Section 9.01(a)
hereof and Section 9.01(a) of each of the Related Purchase Agreements exceeds
Two Hundred Fifty Thousand Dollars ($250,000) (the "Seller Deductible"),
whereupon the Seller Parties shall be liable to indemnify the Buyer Indemnitees
for all amounts of Damages over the Seller Deductible; provided, however, that
Damages incurred by any Buyer Indemnitee as a result of any misrepresentation,
breach or inaccuracy of any representations or warranties made by any of the
Seller Parties relating to Sections 3.02, 3.03(a), 3.09, 3.21, and 4.04 or
pursuant to Sections 9.01(a)(v) [Excluded Liabilities] or 9.01(a)(viii) shall
not be subject to the Seller Deductible, and the Buyer Indemnitees shall be
indemnified for any and all Damages as a result of any such misrepresentation,
breach or inaccuracy of any such representations or warranties in such Sections
or pursuant to such Sections 9.01(a)(v) [Excluded Liabilities] or 9.01(a)(viii);
provided, further, (A) the maximum liability of the Seller Parties to indemnify
the Buyer Indemnitees under Section 9.01(a) hereof and Section 9.01(a) of each
of the Related Purchase Agreements shall equal One Million Five Hundred Thousand
Dollars ($1,500,000), and (B) none of the foregoing limit or the Seller
Deductible shall apply with respect to any claim based upon a breach of any of
the representations, warranties, covenants, agreements and obligations set forth
in Sections 3.02, 3.03(a), 3.09, 3.21 and 4.04 of this Agreement or pursuant to
Sections 9.01(a)(v) [Excluded Liabilities] or 9.01(a)(viii) or arising out of
fraud or willful misrepresentation or misconduct.
9.02. Parent's and Buyer's Agreement to Indemnify.
(a) Each of Parent and Buyer shall, jointly and severally,
indemnify and hold harmless the Seller Parties (collectively, the "Seller
Indemnitees") in respect of any and all Damages incurred by any Seller
Indemnitee as a result of:
36
(i) any inaccuracy or misrepresentation in or breach of any
representation, warranty, covenant or agreement made by Parent and Buyer in this
Agreement; and
(ii) any Assumed Liabilities; or
(iii) the enforcement of this Section 9.02.
(b) Neither Parent or Buyer shall have any obligation under
Section 9.02(a) unless and until the aggregate amount of Damages incurred under
Section 9.02(a) hereof and Section 9.02(a) of each of the Related Purchase
Agreements exceeds One Hundred and Fifty Thousand Dollars ($150,000) (the "Buyer
Deductible"), whereupon Parent and Buyer shall be liable to indemnify the Seller
Indemnitees for all amounts of Damages over the Buyer Deductible; provided,
however, that Damages incurred by any Buyer Indemnitee as a result of any
misrepresentation, breach or inaccuracy of any representations or warranties
made by Parent or Buyer relating to Section 5.02 or pursuant to Section
9.02(a)(ii) [Assumed Liabilities] or a claim arising out of fraud or willful
misrepresentation or misconduct shall not be subject to the Buyer Deductible,
and the Seller Indemnitees shall be indemnified for any and all Damages as a
result of any such misrepresentation, breach or inaccuracy of any such
representations or warranties in such Section or pursuant to such Section
9.02(a)(ii) [Assumed Liabilities] or pursuant such claim arising out of fraud or
willful misrepresentation or misconduct.
9.03. Survival of Representations, Warranties and Covenants.
(a) All representations, warranties, covenants, agreements and
obligations of each Indemnifying Party contained in this Agreement, and all
claims of any Buyer Indemnitee or Seller Indemnitee in respect of any breach of
any representation, warranty, covenant, agreement or obligation of any
Indemnifying Party contained in this Agreement shall survive the Closing and
shall expire on the eighteenth month anniversary of the Closing Date, except
that:
(i) covenants or obligations of any of the Seller Parties,
Parent or Buyer which by their terms are to be performed after the Closing shall
survive the Closing and not expire unless otherwise provided in this Agreement;
(ii) the representations and warranties set forth in Sections
3.02, 3.03(a), 3.09 and 4.04 of this Agreement and all claims of any Buyer
Indemnitee in respect of any breach of any such representation or warranty
against any of the Seller Parties as Indemnifying Party shall survive the
Closing Date and shall not expire;
(iii) the representations and warranties set forth in Section
3.21 of this Agreement and all claims of any Buyer Indemnitee in respect of any
breach of any such representation or warranty or in respect of the Seller
Parties' indemnification obligations under Section 9.01(a)(iv) of this Agreement
against any of the Seller Parties as Indemnifying Party shall survive the
Closing Date and shall not expire until thirty (30) days after the expiration of
any applicable statute of limitations, including extensions thereof;
37
(iv) the representations and warranties set forth in Section
3.17 of this Agreement and all claims of any Buyer Indemnitee in respect of any
breach of such representation or warranty against any of the Seller Parties as
Indemnifying Party shall survive the Closing Date and shall not expire until the
third anniversary of the Closing Date; and
(v) all claims of any Buyer Indemnitee against any of the
Seller Parties as an Indemnifying Party in respect of any claim arising out of
fraud or willful misrepresentation or misconduct shall survive the Closing Date
and shall not expire until thirty (30) days after the expiration of any
applicable statute of limitations, including extensions thereof.
(b) Notwithstanding anything herein to the contrary,
indemnification for claims for which written notice as provided in Section 9.04
has been given prior to the expiration of the representation, warranty,
covenant, agreement or obligation upon which such claim is based shall not
expire, and claims for indemnification may be pursued, until the final
resolution of such claim in accordance with Section 10.11.
9.04. Claims for Indemnification. If any Indemnitee shall believe that
such Indemnitee is entitled to indemnification pursuant to this Article IX in
respect of any Damages, such Indemnitee shall give the appropriate Indemnifying
Parties prompt written notice thereof. Any such notice shall set forth in
reasonable detail and to the extent then known the basis for such claim for
indemnification. The failure of such Indemnitee to give notice of any claim for
indemnification promptly, but within the periods specified by Section 9.03(a) or
(b), as the case may be, shall not adversely affect such Indemnitee's right to
indemnity hereunder except to the extent that such failure adversely affects the
right of the Indemnifying Parties to assert any reasonable defense to such
claim. Each such claim for indemnity shall expressly state that the Indemnifying
Parties shall have only the twenty (20) Business Day period referred to in the
next sentence to dispute or deny such claim. The Indemnifying Parties shall have
twenty (20) Business Days following its receipt of such notice either (y) to
acquiesce in such claim and their respective responsibilities to indemnify the
Indemnitee in respect thereof in accordance with the terms of this Article IX by
giving such Indemnitee written notice of such acquiescence or (z) to object to
the claim by giving such Indemnitee written notice of the objection. If the
Indemnifying Parties do not object thereto within such twenty (20) Business Day
period, such Indemnifying Parties shall be deemed to have acquiesced in such
claim and their respective responsibilities to indemnify the Indemnitee in
respect thereof in accordance with the terms of this Article IX.
9.05. Defense of Claims. In connection with any claim which may give
rise to indemnity under this Article IX resulting from or arising out of any
claim or Proceeding against an Indemnitee by a Person that is not a party
hereto, the Indemnifying Parties may (unless such Indemnitee elects not to seek
indemnity hereunder for such claim), upon written notice sent at any time to the
relevant Indemnitee, assume the defense of any such claim or Proceeding. If the
Indemnifying Parties assume the defense of any such claim or Proceeding, the
Indemnifying Parties shall select counsel reasonably acceptable to such
Indemnitee to conduct the defense of such claim or Proceeding, shall take all
reasonable steps necessary in the defense or settlement thereof and shall at all
times diligently and promptly pursue the resolution thereof. If the Indemnifying
Parties shall have assumed the defense of any claim or Proceeding in accordance
38
with this Section 9.05, the Indemnifying Parties shall be authorized to consent
to a settlement of, or the entry of any judgment arising from, any such claim or
Proceeding, without the prior written consent of such Indemnitee; provided,
however, that:
(i) the Indemnifying Parties shall pay or cause to be paid all amounts
arising out of such settlement or judgment either concurrently with the
effectiveness thereof or shall obtain and deliver to such Indemnitees prior to
the execution of such settlement a general release executed by the Person not a
party hereto, which general release shall release such Indemnitee from any
liability in such matter;
(ii) the Indemnifying Parties shall not be authorized to encumber any
of the assets of any Indemnitee or to agree to any restriction that would apply
to any Indemnitee or to its conduct of business; and
(iii) a condition to any such settlement shall be a complete release of
such Indemnitee and its directors, stockholders, officers, employees,
consultants, agents and their respective Affiliates with respect to such claim.
Such Indemnitee shall be entitled to participate in (but not control) the
defense of any such action, with its own counsel and at its own expense. Each
Indemnitee shall, and shall cause each of its Affiliates, officers, employees,
consultants and agents to, cooperate fully with the Indemnifying Parties in the
defense of any claim or Proceeding being defended by the Indemnifying Parties
pursuant to this Section 9.05. If the Indemnifying Parties do not assume the
defense of any claim or Proceeding resulting therefrom in accordance with the
terms of this Section 9.05, such Indemnitee may defend against such claim or
Proceeding in such manner as it may reasonably deem appropriate, including
settling such claim or Proceeding after giving notice of the same to the
Indemnifying Parties, on such terms as such Indemnitee may reasonably deem
appropriate. If the Indemnifying Parties seek to question the manner in which
such Indemnitee defended such claim or Proceeding or the amount of or nature of
any such settlement, the Indemnifying Parties shall have the burden to prove by
a preponderance of the evidence that such Indemnitee did not defend such claim
or Proceeding in a reasonably prudent manner.
9.06. Limitation on Remedies. The remedies of the Buyer Indemnitees and
Seller Indemnitees under this Article IX shall be their exclusive remedy for any
breach of this Agreement, except that nothing set forth in this Article IX shall
be deemed to prohibit or limit any Buyer Indemnitee's or Seller Indemnitee's
right at any time before, on or after the Closing Date, to seek injunctive or
other equitable relief for the failure of any Indemnifying Party to perform any
covenant or agreement contained herein.
9.07. Nature of Payments. Any payment under this Article IX shall be
treated for tax purposes as an adjustment of the total consideration paid for
the Transferred Assets under this Agreement to the extent such characterization
is proper and permissible under relevant Tax authorities, including court
decisions, statutes, regulations and administrative promulgations.
9.08. Right of Set-Off. Parent or Buyer, after recovery against the
escrow contemplated by the Escrow Agreement, shall have the right to set-off all
or any part of any Damages Buyer or Parent may suffer by notifying the Seller
Representative that Buyer or Parent
39
is reducing the amount of any Earnout due to any of the Seller Parties;
provided, however, Parent's and Buyer's right to set-off pursuant to this
Section 9.08 and Section 9.08 in each of the Related Purchase Agreements shall
not exceed Nine Hundred and Fifty Thousand Dollars ($950,000).
9.09. Appointment of the Seller Representative.
(a) In order to efficiently administer the defense and/or
settlement of any claims for indemnity by a Buyer Indemnitee pursuant to this
Article IX, the Seller Representative is hereby appointed to serve as the
representative of the Seller and the Shareholders. The Seller Representative
shall have full power and authority to make, on behalf of the Seller Parties,
all decisions relating to the defense and/or settlement of any claims for which
any Buyer Indemnitee may claim to be entitled to indemnity pursuant to this
Article IX and otherwise to act on behalf of the Seller Parties in all respects
with respect to this Agreement, including, without limitation, the amendment or
termination thereof. All decisions and actions by the Seller Representative
shall be binding upon all of the Seller Parties, and no Seller Party shall have
the right to object to, dissent from, protest or otherwise contest the same.
(b) Each of the Seller Parties agree that (i) the provision of
this Section 9.09 are independent and severable, are irrevocable and coupled
with an interest and shall be enforceable notwithstanding any rights or remedies
any Seller Party may have in connection with the transactions contemplated by
this Agreement, (ii) the remedy at law for any breach of the provisions of this
Section 9.09 would be inadequate, and (iii) the provisions of Section 9.01 and
this Section 9.09 shall be binding upon the Seller Parties and the successors
and assigns of each of the Seller Parties.
(c) Any notice or communication delivered by Parent or Buyer to
the Seller Representative shall, as between Parent and Buyer, on the one hand,
and the Seller Parties, on the other, be deemed to have been delivered to all of
the Seller Parties. Parent and Buyer shall be entitled to rely exclusively upon
any communication or writings given or executed by the Seller Representative in
connection with any claims for indemnity or set-off and shall not be liable in
any manner whatsoever for any action taken or not taken in reliance upon the
actions taken or not taken or communications or writings given or executed by
the Seller Representative. Parent and Buyer shall be entitled to disregard any
notices or communications given or made by the Seller Parties in connection with
any claims for indemnity or set-off unless given or made through the Seller
Representative.
9.10. Deductibles, Caps and Set-Off Rights. Each of the parties hereof
agree and acknowledge that the Seller Deductible, the Buyer Deductible, the
limitation on liabilities set forth in Section 9.01(b) hereof and the maximum
amount subject to set-off set forth in Section 9.08 hereof shall be applied
against Damages arising under this Agreement and each of the Related Purchase
Agreements. For example, if Buyer or Parent has indemnifiable Damages (in the
circumstances where the Seller Deductible is applicable) pursuant to this
Agreement of One Hundred Thousand Dollars ($100,000) and indemnifiable Damages
of One Hundred Thousand Dollars ($100,000) under each of the Related Purchase
Agreements, then Buyer and Parent shall be deemed to have indemnification rights
under Section 9.01 hereof for Three Hundred
40
Thousand Dollars ($300,000) less the Seller Deductible in the amount of Two
Hundred and Fifty Thousand Dollars.
ARTICLE X.
MISCELLANEOUS
10.01. Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) if
personally delivered, when so delivered, (ii) if mailed, two Business Days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid and addressed to the intended recipient as set forth below,
(iii) if given by telex or telecopier, once such notice or other communication
is transmitted to the telex or telecopier number specified below and the
appropriate answer back or telephonic confirmation is received, provided that
such notice or other communication is promptly thereafter mailed in accordance
with the provisions of clause (ii) above or (iv) if sent through an overnight
delivery service in circumstances to which such service guarantees next day
delivery, the day following being so sent:
If to Seller:
Healthcare
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Weinstock, Manion, Xxxxxxx, Shore & Xxxxxxx
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to Buyer:
Xxxx, Xxxxxx & Associates, Inc.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000-0000
Attn: Chief Executive Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxx Xxxx Xxxx
00
Xxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
Telecopier No.: (000) 000-0000
Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
10.02. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by all parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No waiver by a party of any default, misrepresentation
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent occurrence. No failure or delay by a party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
10.03. Expenses. All costs and expenses incurred in connection
with this Agreement and in closing and carrying out the transactions
contemplated hereby shall be paid by the party incurring such cost or expense.
Without limiting the generality of the immediately preceding sentence, the fees,
costs and expenses of the accountants, attorneys and financial advisors
(including, without limitation, Barrington Associates, Weinstock, Manion,
Xxxxxxx, Shore & Xxxxxxx, and Frankel, Lodgen, Lacher, Golditch, Sardi & Xxxxxx)
to Seller and its Affiliates in connection with the preparation or negotiation
of, or consummation of the transactions contemplated by, this Agreement shall be
borne by Seller and/or the Shareholders and none of such fees, costs or expenses
shall be paid or assumed by Buyer. Without limiting the generality of the second
immediately preceding sentence, the fees, costs and expenses of the accountants,
attorneys and financial advisors (including, without limitation, Xxxxxx, Xxxx &
Xxxxxxxx LLP, Deloitte & Touche LLP and Xxxxxx X. Xxxxx & Co.) to Buyer in
connection with the preparation or negotiation of, or consummation of the
transactions contemplated by, this Agreement shall be borne by the Buyer and
Parent and none of such fees, costs or expenses shall be paid by Seller. This
section shall survive any termination of this Agreement.
10.04. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party hereto may assign either this
Agreement or any of its rights, interests or obligations hereunder without the
prior written approval of each other party, except that Buyer may assign
42
its rights hereunder to Parent or its other Affiliates without the prior written
approval of any of the Seller Parties, so long as Buyer and Parent remain
responsible for satisfying their respective obligations, liabilities, covenants
and agreements hereunder.
10.05. Governing Law and Forum. This Agreement shall in all
respects be interpreted, construed and governed by and in accordance with the
laws of the State of California, disregarding any conflict of laws provisions
which may require the application of the law of another jurisdiction. In the
event that arbitration is unavailable with respect to any action to enforce or
that arises out of or in any way relates to any of the provisions of this
Agreement, or in the event any action is brought to enforce the provisions of
Section 10.11 hereof, such action shall be brought and prosecuted exclusively in
a Federal or state court located in Los Angeles County, California, and the
parties hereto hereby consent to the jurisdiction of any such court and to the
service of process by registered mail, return receipt requested, or by any other
manner provided by the laws of such State.
10.06. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts and the signatures delivered by telecopy, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof signed by the
other parties hereto.
10.07. Entire Agreement. This Agreement (including the Schedules
and Exhibits referred to herein which are hereby incorporated by reference and
the other agreements executed simultaneously herewith) constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement, including, without limitation, the letter of intent between Buyer and
Seller dated as of June 26, 2002, as supplemented and amended. Neither this
Agreement nor any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder. The parties agree and
acknowledge that notwithstanding anything to the contrary in this Agreement,
Seller is not making any representations and warranties that are not expressly
provided in this Agreement.
10.08. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof. All references to an Article or Section include all subparts thereof.
10.09. Severability. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by an
arbitrator or a court of competent jurisdiction to be invalid, unenforceable or
void, the remainder of this Agreement and such provisions as applied to other
Persons, places and circumstances shall remain in full force and effect only if,
after excluding the portion deemed to be unenforceable, the remaining terms
shall provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
10.10. Construction. The parties hereto intend that each
representation, warranty
43
and covenant contained herein shall have independent significance. If any party
has breached any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) that the party has not breached shall not detract from or mitigate
the fact that the party is in breach of the first representation, warranty or
covenant.
10.11. Arbitration.
(a) Any dispute or difference between or among the parties
(such parties being referred to individually as a "Disputing Party," and,
together, as the "Disputing Parties") arising out of this Agreement or the
transactions contemplated hereby which the parties are unable to resolve
themselves shall be submitted to and resolved by arbitration as herein provided.
Any Disputing Party may request the American Arbitration Association (the "AAA")
to designate one arbitrator, who shall be qualified as an arbitrator under the
standards of the AAA, who shall be a retired or former judge of any appellate or
trial court of the State of California, any United States appellate court or the
United States District Court for any California District, who is, in any such
case, not affiliated with any party in interest to such arbitration, and who has
substantial professional experience with regard to corporate legal matters.
(b) The arbitrator shall consider the dispute at issue in
Los Angeles County, California, at a mutually agreed upon time within sixty (60)
days (or such longer period as may be acceptable to the Disputing Parties or as
directed by the arbitrator) of the designation of the arbitrator. The
arbitration proceeding shall be held in accordance with the rules for commercial
arbitration of the AAA in effect on the date of the initial request by the
Disputing Party, that gave rise to the dispute to be arbitrated (as such rules
are modified by the terms of this Agreement or may be further modified by mutual
agreement of the Disputing Parties) and shall include an opportunity for the
parties to conduct discovery in advance of the proceeding. Notwithstanding the
foregoing, the Disputing Parties shall agree that they will attempt, and they
intend that they and the arbitrator should use its best efforts in that attempt,
to conclude the arbitration proceeding and have a final decision from the
arbitrator within one hundred twenty (120) days from the date of selection of
the arbitrator; provided, however, that the arbitrator shall be entitled to
extend such one hundred twenty (120) day period for a total of two one hundred
twenty (120) day periods. The arbitrator shall deliver a written award with
respect to the dispute to each of the parties, who shall promptly act in
accordance therewith. Each Disputing Party to such arbitration agrees that any
award of the arbitrator shall be final, conclusive and binding and that they
will not contest any action by any other party thereto in accordance with an
award of the arbitrator. It is specifically understood and agreed that any party
may enforce any award rendered pursuant to the arbitration provisions of this
Section 10.11 by bringing suit in any court of competent jurisdiction.
(c) All costs and expenses attributable to the arbitrator
shall be allocated among the parties to the arbitration in such manner as the
arbitrator shall determine to be appropriate under the circumstances.
44
10.12. Cumulative Remedies. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.13. Third Party Beneficiaries. Except as specifically provided
in Article IX with respect to indemnification provided to the Indemnitees
identified therein, no provision of this Agreement shall create any third party
beneficiary rights in any Person, including any employee of Buyer or employee or
former employee of Seller or any Affiliate thereof (including any beneficiary or
dependent thereof).
10.14. Knowledge. Whenever used in this Agreement, "to the best
knowledge" of Seller or any variations thereof shall in all cases be understood
as comprising the actual knowledge and belief of Xxxxxxx X. Xxxxx and Xxxxxxx
Xxxxxxxx after reasonable inquiry of Seller's employees and representatives and
reasonable review of Seller's files, books and records.
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
SELLER PARTIES:
HEALTHCARE STAFFING RESOURCES, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: _______________________________
Title: ______________________________
XXXXXXX X. XXXXX, an individual
/s/ Xxxxxxx X. Xxxxx
-------------------------------------
XXXXXXX XXXXXXXX GRANTOR RETAINED
ANNUITY TRUST DATED 4/23/01
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: _______________________________
XXXXX XXXXXX XXXXXXXX GRANTOR
RETAINED ANNUITY TRUST DATED 4/23/01
By: /s/ Xxxxx Xxxxxx Xxxxxxxx
---------------------------------
Name: _______________________________
XXXXXXX AND XXXXX XXXXXXXX 2001
IRREVOCABLE GIFT TRUST DATED 4/23/01
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: _______________________________
XXXXXXXX LIVING TRUST DATED 3/27/01
By: /s/ Xxxxx Xxxxxx Xxxxxxxx
---------------------------------
Name: _______________________________
SIGNATURE PAGE TO HEALTHCARE STAFFING RESOURCES, INC.
ASSET PURCHASE AGREEMENT
SELLER REPRESENTATIVE:
/s/ Xxxxxxx Xxxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxxx
By signing below, the undersigned acknowledges that she has read
the foregoing Asset Purchase Agreement, is aware that her spouse has agreed to
sell substantially all of the assets of Seller, and consents to such a sale and
agrees to be bound by the terms of the foregoing Asset Purchase Agreement.
/s/ Xxxxxx Xxxx Xxxxx
---------------------------------------
Xxxxxx Xxxx, spouse of Xxxxxxx X. Xxxxx
BUYER:
ONSTAFF ACQUISITION CORP.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
---------------------------------
Title: ________________________________
PARENT:
XXXX, XXXXXX & ASSOCIATES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: _________________________________
Title: ________________________________
SIGNATURE PAGE TO HEALTHCARE STAFFING RESOURCES, INC.
ASSET PURCHASE AGREEMENT
