TERM SHEET
This Term Sheet, dated as of the 29th day of December, 2003, is made between
Humana Trans Services Holding Corp., a Delaware corporation (hereinafter
referred to as "HTSC") and its subsidiary Humana National Program Administrators
Corp., a Delaware corporation (hereinafter referred to as "HNPA"), 0000 Xxx
Xxxxx Xxxx, Xxxxx 0, Xxxxxxx, Xxxxxxxx 00000 and Personnel Management Solutions,
LLP., a Connecticut LLP (hereinafter referred to as "PMS"), 000 Xxxxxxxxx Xxxx,
Xxxxxxxxx. CT.
WHEREAS, HTSC and PMS have entered into a Memorandum of Understanding, dated as
of the 10th day of December, 2003 (the "Memorandum");
WHEREAS, HTSC and PMS desire to set forth the terms and conditions pursuant to
which a Definitive Agreement may be completed and a closing date scheduled; and
WHEREAS, HTSC and PMS desire to set forth the basis of operations of the
business and to allow PMS to administer and manage the accounts of HTSC and HNPA
prior to the execution and closing of a Definitive Agreement between HTSC and
PMS;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH HEREIN, IT IS
XXXXXX AGREED:
1. Agreement for Terms of Acquisition. HTSC and PMS agree that upon
completion of due diligence by the parties hereto (as set forth
on Schedule A to the Memorandum), a Definitive Purchase Agreement
will be prepared and executed by the parties. The Definitive
Agreement will contain the exact terms and conditions of the
purchase of PMS by HTSC.
2. Terms of Purchase. HTSC agrees to purchase PMS in a stock
transfer, for the payment of three times net earnings of PMS. Net
earnings shall have the meaning of profit of PMS after payment of
all expenses, including payroll taxes and all salaries, but prior
to payment of any income taxes of PMS.
3. Purchase Price. The Purchase Price to be paid by HTSC to the
owners of PMS shall be paid as TWENTY-FIVE Percent (25%) in cash
but not less than Ninety Thousand Dollars $90,000.00 at the time
of closing, plus the issuance, as directed, of shares of common
stock of HTSC ("Purchase Shares"), to equal the entire purchase
price to be paid. The Purchase Shares shall be valued by taking
the average of closing price of the common stock of HTSC, as
quoted by the OTC BB for the five trading days prior to execution
of the Definitive Agreement. All shares shall bear a restrictive
legend and shall be subject to Rule 144 as fully set forth in the
Definitive Agreement.
4. Employment Agreements. HTSC shall tender to the owners of PMS
Employment Contracts, for an agreed upon term, with the same
compensation as currently verified pursuant to the due diligence
of the parties. The Employment Agreements shall contain a stock
option or grant to be paid after 180 days from the date of the
Definitive and Employment Agreements of FIFTY THOUSAND shares of
HTSC common stock, to each owner, subject to the same conditions
as the Purchase Shares. HTSC shall also enter into Incentive
Agreements that will pay additional compensation of FIFTEEN
Percent (15%) of the net pre-tax profit of PMS to be split by the
owners equally (after the closing of the transaction) for all
operations processed through PMS by HTSC from its other locations
and venders.
5. Commission Agreements. HTSC shall also enter into a Commission
Agreement with the owners of PMS (individually or collectively)
to pay a commission for all driver leasing sales generated that
are then operated by the Maryland office, on the same terms and
conditions as all other commission agents.
6. Management Agreement. a) Prior to the execution of a Definitive
Agreement for the purchase of PMS by HTSC, the parties shall
operate as pursuant to the terms of a Management Agreement, as
set forth in subsection b), below, whereby HNPA shall manage all
the operations and accounts of PMS. All operations are to be
continued to be processed by PMS, but shall be in the name of
HNPA. PMS shall retain ownership of all accounts and
responsibility for all liabilities until the date of closing.
b) It is understood and agreed that the parties for this
agreement that in the interest of time the Definitive Purchase
agreement will take time in completing and wish to include a
management section to this term sheet. This management section
will allow the transfer of certain assets specifically the
accounts of PMS to be transferred to HTSC to allow a correct
accounting on payroll related liabilities and statutory benefits
to begin on January 1, 2004 at 12:01 A.M., and continue until the
definitive agreement replaces this term sheet. During this
interim period PMS will continue to process the said accounts on
behalf of HTSC and as compensation for doing so shall retain the
net profit of said accounts processing except a amount equaling
one half of one percent (0.5%) of the total gross payroll
processed during that term this shall be referred to as the
interim term. If the parties for whatever reason fail to enter
into a Definitive Agreement as set forth in this term sheet, the
terms set forth as this Management Agreement section shall end
thirty (30) days after the date of a written notice to the other
party as to the cancellation of any transaction. If after the 30
day period PMS desires to remain in a management agreement it may
do so until December 31, 2004 at 11:59 p.m., or up to the date
HTSC can legally maintain such a relationship whichever comes
first, this shall be known as the extended term. During the
extended term the parties shall split the net profit, after all
expenses, equally, until the extended term ends.
7. Incorporation. All terms and conditions of this Term Sheet shall
be incorporated into, and be superceded by the Definitive
Agreement and related agreements
8. Expenses. All Expenses and costs associated with any part of any
due diligence done by the parties to this Memorandum shall be
paid for by the respective party
9. Notices. All notices and other communications required to be
given by the parties shall be in writing and sent to the
respective parties at the following addresses:
HTSC and HNPA Mr. Xxxx Xxxx
Humana Trans Services Holding Corp.
0000 Xxx Xxxxx Xxxx, Xxxxx 0
Xxxxxxx, Xxxxxxxx 00000
Copy to:
Xxxxxxx X. Xxxxx, Esq.
0 Xxxx Xxxxx
Xxxx Xxxxx, Xxx Xxxx 00000
PMS Personnel Management Solutions, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx. CT
10. Law Venue. This Term Sheet shall be construed in accordance with
the laws of the State of New York. The Parties consent to the
State of New York, Counties of Nassau and Suffolk as the sole
choice of venue for New York and all actions related to this Term
Sheet.
11. Attorney's Fees. In any action brought to enforce this Term
Sheet, or seek damages for breach thereof, the prevailing party
shall be entitled to recover a reasonable attorney's fee
(including a reasonable attorney's fee on any appeal thereof) and
reasonable costs of litigation in addition to any other award or
decree granted or given by the court.
12. No Assignment. Each party hereto may not assign its rights
hereunder, but may, with the prior written consent of the other
party hereto, such consent not to be unreasonably withheld,
delegate any or all of its obligations hereunder.
13. No Waiver. No failure on the part of either party to exercise and
no delay in exercising any rights hereunder shall operate as a
waiver thereof nor shall any waiver or acceptance of a partial,
single or delayed performance of any term or condition of this
Term Sheet operate as a continuing waiver or a waiver of any
subsequent breach thereof.
14. Severability. If any provision of this Term Sheet is held to be
illegal, invalid or unenforceable, such provision shall be fully
severable and this Term shall be continued and enforced as if
such illegal, invalid or unenforceable provision were never a
part hereof and in lieu of such provision, there shall be added
automatically as part of this Term Sheet a provision as similar
in terms to such illegal, invalid or unenforceable provision as
may be possible to make such provision legal, valid and
enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Term Sheet as of the
date first set forth above.
Humana Trans Services Holding Corp.
Humana National Program Administrators Corp.
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Xxxx Xxxx, President
Personnel Management Solutions, Inc.
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President
For the "SHAREHOLDERS" of:
Personnel Management Solutions, Inc.
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Xxxxx Xxxxxxxxxxx
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Xxxx Xxxxxx
