FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This
First Amendment to Asset Purchase Agreement (this
“Amendment”) is
entered into as of March 1, 2021 by and among Xxxxxxxx Staffing,
LLC, a Delaware limited liability company (“Xxxxxxxx
Staffing”), Xxxxxxxx Services, LLC, a Delaware limited
liability company (“Snelling
Services”), Snelling Employment, LLC, a Delaware
limited liability company (“Xxxxxxxx
Employment”), Xxxxxxxx Medical Staffing, LLC, a
Delaware limited liability company (“Xxxxxxxx Medical
Staffing”), and Xxxxxxxx Investments, Inc., a Texas
corporation (“Snelling
Investments”) (Xxxxxxxx Staffing, Xxxxxxxx Services,
Xxxxxxxx Employment, Xxxxxxxx Medical Staffing and Snelling
Investments are also referred to herein individually as a
“Seller” and
collectively as the “Sellers”),
Snelling Holdings, LLC, a Delaware limited liability company, in
its capacity as the Sellers’ Representative (the
“Sellers’
Representative”), HQ Xxxxxxxx Corporation, a Delaware
corporation (“Buyer”), and
HireQuest, Inc., a Delaware corporation (“Parent”).
WHEREAS, Sellers, Buyer, Sellers’
Representative and Parent entered into that certain Asset Purchase
Agreement dated January 29, 2021 (the “Agreement”);
and
WHEREAS, the parties hereto desire to
amend the Agreement as set forth herein.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as
follows:
1. Capitalized Terms; References.
Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Agreement. All
references herein to Sections, Exhibits or Schedules shall mean
such Sections, Exhibits or Schedules set forth in the
Agreement.
2. Amendment. The Agreement is
hereby amended as follows:
a. Section 3.1(b) is hereby
amended and restated in its entirety as follows:
“(b) If
the Estimated Net Working Capital exceeds the Target Net Working
Capital (such excess, the “Estimated Buyer Working
Capital Escrow Amount”), the Purchase Price will be
increased at Closing by an amount equal to the Estimated Buyer
Working Capital Escrow Amount, and at Closing Buyer will pay, or
cause to be paid, the Estimated Buyer Working Capital Escrow
Amount to the Escrow
Agent to be held in escrow (as set forth in Sections 2.4(a), and
2.6(b)). In
addition to the Estimated Buyer Working Capital Escrow Amount, the
Buyer, at Closing, will fund $2,100,000 related to the Assumed
Payroll Liability, which the Sellers covenant and agree to use to
pay such Assumed Payroll Liability. To the extent any difference
exists between the estimated Assumed Payroll Liability of
$2,100,000 and the actual amount of the Assumed Payroll Liability
paid by the Seller, such amount will be trued-up following Closing
as set forth in footnote (1) to the Estimated Net Working Capital
worksheet delivered by Sellers’ Representative pursuant to
Section
3.1(a).”
b. A new Section 6.9(d) is hereby added
immediately following Section 6.9(c) and shall read
in its entirety as follows:
“(d) If
Buyer or any of its Affiliates (including Hire Quest, L.L.C.), or
any of their Representatives contracts with or engages a third
party for a novation with respect to any of Sellers’
workers’ compensation claims at any time within the
thirty-six (36) months following the Closing Date, Sellers will be
entitled to receive, and Buyer shall pay or shall cause its
Affiliate or Representative to pay, as applicable, fifty percent
(50%) of any amounts paid by or on behalf of the third party to
such Person, such amount to be paid at the closing of such
transaction (and in any event within five (5) Business Days
following receipt) by wire transfer of immediately available funds
in accordance with the wire transfer instructions designated in
writing by Sellers’ Representative (on behalf of Sellers).
Nothing in this Agreement shall be interpreted to require Buyer or
any of its Affiliates to actively search for or entertain such
third-party novation opportunities or engage in any
negotiations with any such third party.”
c. Section 9.9 is hereby amended
and restated in its entirety as follows:
“9.9 Release
of Indemnity Escrow Account. On the date that is ninety (90)
days following the Closing Date, Buyer and Sellers’
Representative shall jointly instruct the Escrow Agent to disburse
to the Sellers’ Representative (for further distribution to
the Sellers in accordance with the provisions of Schedule I hereto) from the
Indemnity Escrow Account $125,000 by wire transfer of immediately
available funds in accordance with the wire transfer instructions
designated in writing by Sellers’ Representative. On the
Interim Indemnity Escrow Release Date, Buyer and Sellers’
Representative shall jointly instruct the Escrow Agent to disburse
to the Sellers’ Representative (for further distribution to
the Sellers in accordance with the provisions of Schedule I hereto) from the
Indemnity Escrow Account the Interim Indemnity Escrow Release
Amount by wire transfer of immediately available funds in
accordance with the wire transfer instructions designated in
writing by Sellers’ Representative. On the Final Indemnity
Escrow Release Date, Buyer and Sellers’ Representative shall
jointly instruct the Escrow Agent to disburse to the Sellers’
Representative (for further distribution to the Sellers in
accordance with the provisions of Schedule I hereto) from the
Indemnity Escrow Account the Final Indemnity Escrow Amount by wire
transfer of immediately available funds in accordance with the wire
transfer instructions designated in writing by Sellers’
Representative.”
d. The definition of
“Current Liabilities” in Exhibit A is hereby amended and
restated as follows:
“
‘Current
Liabilities’ means (a) as of the Effective Time, the
current liabilities of the Sellers that are included in the Assumed
Liabilities and included in the line items set forth on
Exhibit B hereto
under the heading “Current Liabilities” calculated in a
manner consistent with the Accounting Methodology, and (b) all
amounts applied by Seacoast Business Funding to any balance owed by
Sellers as a result of dishonoring payments or otherwise pursuant
to that certain letter dated February 26, 2021 from Seacoast
Business Funding, a Division of Seacoast National Bank to Xxxxxxxx
Staffing, LLC to which certain Sellers and Hire Quest, L.L.C. are
signatories other than such amounts resulting from dishonored
payments arising out of accounts other than Excluded
Receivables.”
e. The definition of
“Interim Indemnity Escrow Release Amount” in
Exhibit A is hereby
amended and restated as follows:
“
‘Interim
Indemnity Escrow Release Amount’ means, as of the
Interim Indemnity Escrow Release Date, an amount equal to One
Hundred Twenty-Five Thousand Dollars ($125,000), reduced, but not
below $0, by the amount of any claims made by Buyer Indemnified
Parties against the Indemnity Escrow Account that are pending and
unresolved as of the Interim Indemnity Escrow Release Date in
accordance with this Agreement and the Escrow
Agreement.”
f. Schedule I is hereby amended
and restated in its entirety by Schedule I attached to this
Amendment.
g. Schedule II is hereby amended
and restated in its entirety by Schedule II attached to this
Amendment.
3. No Other Changes. Except as
expressly provided in this Amendment, the Agreement shall remain in
full force and effect upon its original terms. This Amendment and
the Agreement constitute an integrated agreement with respect to
the subject matter hereof and thereof. This Amendment may be
amended, modified and supplemented only in accordance with the
terms of the Agreement.
4. Governing Law. This Amendment
will be construed and interpreted and the rights of the parties
governed by the internal laws of the State of Texas, without regard
to any conflict of law or choice of law principles that would apply
the substantive law of another jurisdiction.
5. Counterparts. This Amendment
may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together will constitute one
and the same instrument.
[Signature
Page Follows]
IN WITNESS WHEREOF, the parties hereto
have duly executed this Amendment as of the date first written
above.
THE
SELLERS:
XXXXXXXX STAFFING,
LLC
By:
Xxx
Xxxxxx
Name:
Xxx
Xxxxxx
Title:
Authorized Person
XXXXXXXX SERVICES,
LLC
By:
Xxx
Xxxxxx
Name:
Xxx
Xxxxxx
Title:
Authorized Person
XXXXXXXX
EMPLOYMENT, LLC
By:
Xxx
Xxxxxx
Name:
Xxx
Xxxxxx
Title:
Authorized Person
XXXXXXXX MEDICAL
STAFFING, LLC
By:
Xxx
Xxxxxx
Name:
Xxx
Xxxxxx
Title:
Authorized Person
XXXXXXXX
INVESTMENTS, INC.
By:
Xxx
Xxxxxx
Name:
Xxx
Xxxxxx
Title:
Authorized Person
SELLERS’
REPRESENTATIVE:
SNELLING HOLDINGS,
LLC
By:
Xxx
Xxxxxx
Name:
Xxx
Xxxxxx
Title:
Authorized Person
BUYER:
HQ
XXXXXXXX CORPORATION
By:
Xxxx
XxXxxxx
Name:
Xxxx
XxXxxxx
Title:
Secretary
PARENT:
By:
Xxxx
XxXxxxx
Name:
Xxxx
XxXxxxx
Title:
Secretary
