EXHIBIT 10(A)
AGREEMENT AND ASSIGNMENT OF RIGHTS
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This Agreement and Assignment of Rights (the "Agreement") is entered into
effective as of the 24th day of October, 2003 (the "Effective Date"), by and
between ePEO Link a Corporation ("Seller") and Source One Group, Inc., a
wholly-owned subsidiary of Imaging Technologies Corporation, a Delaware
Corporation (Buyer).
WITNESSETH
WHEREAS, Buyer is a provider of Professional Employer Organization Services
which include, but are not limited to, human resource consultants, payroll
processing services, human resources management services, safety services,
workers compensation, medical, dental, short term and long term disability
coverages, and other employment related benefits products (collectively, "PEO
Services");
WHEREAS, Seller is a provider of PEO Services to the persons or entities
described on the attached Exhibit A (each, an "Existing Client") and Seller has
previously provided PEO Services to the persons or entities described on the
attached Exhibit B (each, a "Previous Client") (Existing Clients and Previous
Clients are each sometimes referred to herein as an "Seller Client");
WHEREAS, benefits available to Existing Clients (the "Benefits") and union
agreements applicable to Existing Clients ("Union Contracts") are described on
the attached Exhibit C;
WHEREAS, pursuant to the terms of this Agreement, SPL desires to assign all
of its rights and delegate certain of its obligations arising out of its
relationship with the Existing Clients as a provider of PEO Services;
WHEREAS, pursuant to the terms of this Agreement, Buyer desires to acquire
all rights and assume certain obligations of Seller arising under or related to
the provision of PEO Services to the Existing Clients; and
NOW THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby covenant and agree as follows:
1. ASSIGNMENT OF CONTRACT RIGHTS.
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1.1 SELler hereby irrevocably assigns, conveys and transfers to Buyer
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all of its right, title, and interest in and to all of the rights and benefits
arising under or out of Personnel Staffing Agreements with the Existing Clients
as described on the attached Exhibit "A" (each, a ("Seller Contract"). Buyer
and Seller agree to jointly notify each Existing Client of this assignment
within five (5) days following the Effective Date. Such notification will be
made in a form and manner approved by Seller, which shall not be unreasonably
withheld or delayed.
1.2 INSURANCE AND BENEFIT CONTRACTS. Buyer shall obtain its own
insurance policies and employee benefits programs which will provide coverage or
benefits to the Existing Clients or employees of the Existing Clients, including
but not limited to all workers' compensation policies, health, dental, vision,
life and disability insurance or indemnity policies, retirement plans or other
employee benefit plans or agreements. Both parties understand that worker's
compensation coverage is currently not being provided by Seller and understands
that Buyer will only make its best efforts to secure such coverage but is not
obligated to do so. It is further understood that all existing insurance
policies and related brokers and/or agents of record will be transferred to
Smart Wealth, Inc.
2. TRANSITION PERIOD. Seller agrees to immediately commence the
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transition and enrollment of Exiting Clients. Seller also agrees to close their
PEO facilities and terminate or transfer existing employees of Seller at the
direction of the Buyer, within thirty days of this agreement.
3. ASSUMPTION OF OBLIGATIONS BY BUYER. Buyer assumes all duties,
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liabilities, and obligations of Seller to each Existing Client, co-employee,
governmental authority, and other third party accruing on or after the Effective
Date, liabilities accruing prior to effective date but limited to those
specifically identified on the attached Exhibit 1, and to pay all employment
taxes and to perform all obligations under all applicable Client Agreements
(collectively, the "Assumed Liabilities"). Buyer shall defend, indemnify and
hold Seller harmless from and against any and all loss, liability, cost, claims,
and expenses (including but not limited to attorneys fees) which directly or
indirectly, either in whole or in part, arises out of or is related to any of
the Assumed Liabilities. Seller retains exclusive responsibility for all duties,
liabilities and obligations of Seller which accrued prior to the Effective Date
of this agreement, except as those assumed by Buyer noted on Exhibit 1, and as
specifically provided for in this paragraph,.(collectively, the "Retained
Liabilities"). Seller shall defend, indemnify and hold Buyer harmless from and
against any and all loss, liability, cost, claims, and expenses (including but
not limited to attorneys fees) which directly or indirectly, either in whole or
in part, arises out of or is related to any of the Retained Liabilities. Buyer
does, as part of this agreement, assume up to $2,000,000 in liabilities,
including those identified in Exhibit 1 and the liabilities related to provider
claims. The liabilities related to provider claims will be offset to the extent
of any insurance coverage in force and applied to liquidate such liabilities
under or with respect to the Seller Contracts. Additionally, Buyer shall
utilize up to $10,000 per month of gross profits derived from the contracts
purchased under this agreement for legal fees associated with settling past
disputes. Further, Buyer will assume responsibility for the settlement of
leases as identified in Exhibit 2.
4. PAYMENTS BY BUYER
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The assumption of liabilities by Buyer as stipulated in this agreement
shall constitute sufficient consideration for the book of business Buyer shall
acquire.
5. REPRESENTATIONS AND WARRANTIES.
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5.1 REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents and
warrants to Buyer that it has the requisite power and authority to execute,
deliver and fully perform all of its obligations under this Agreement, and all
other documents and instruments contemplated by this Agreement, according to
their respective terms. Seller and the person(s) signing this Agreement on
behalf of Seller in a representative capacity (such as an officer, general
partner, manager or trustee of a party) each represent and warrant to Buyer that
each person signing this Agreement on behalf of Seller in a representative
capacity has obtained all organizational or other approvals necessary to vest
him with actual authority to execute and deliver this Agreement on behalf of
Seller and that upon execution of this Agreement by such person(s) on behalf of
Seller in their stated representative capacity and delivery of this Agreement to
Buyer, this Agreement will be a valid and binding obligation of and upon Seller
which is fully enforceable according to its terms. Seller further represents
and warrants to Buyer that the execution, delivery and performance of this
Agreement, and any other documents or instruments contemplated by this Agreement
(with or without the giving of notice, the lapse of time, or both), by Seller:
(i) does not require the consent of any governmental or regulatory authority or
any third party; (ii) will not conflict with any provision of Seller's
organizational documents; and (iii) to the best of Seller's knowledge, will not
conflict with, result in a breach of, or constitute a default under any law,
ordinance, regulation, ruling, judgment, order or injunction of any court or
governmental instrumentality to which Seller is a party or by which Seller is
bound.
In addition Seller warrants and represents that Seller will make all
reasonable efforts to ensure that the Existing Clients are transferred and
enrolled to Buyer and that said enrollment shall not take more than thirty days.
Further, Seller warrants to the best of Seller's knowledge the Existing Clients
have no present intention to move their accounts. Further Seller, agrees that
the purchase price of $600,000 is based on representation of Exiting Clients
revenue base of $58,000,000.
5.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller that it has the requisite power and authority to execute,
deliver and fully perform all of its obligations under this Agreement, and all
other documents and instruments contemplated by this Agreement, according to
their respective terms. Buyer and the person(s) signing this Agreement on behalf
of Buyer in a representative capacity (such as an officer, general partner,
manager or trustee of a party) each represent and warrant to Seller that each
person signing this Agreement on behalf of Buyer in a representative capacity
has obtained all organizational or other approvals necessary to vest him with
actual authority to execute and deliver this Agreement on behalf of Buyer and
that upon execution of this Agreement by such person(s) on behalf of Buyer in
their stated representative capacity and delivery of this Agreement to Seller,
this Agreement will be a valid and binding obligation of and upon Buyer which is
fully enforceable according to its terms. Buyer further represents and warrants
to Seller that the execution, delivery and performance of this Agreement, and
any other documents or instruments contemplated by this Agreement (with or
without the giving of notice, the lapse of time, or both), by Buyer: (i) does
not require the consent of any governmental or regulatory authority or any third
party; (ii) will not conflict with any provision of Buyer's organizational
documents; and (iii) to the best of Buyer's knowledge, will not conflict with,
result in a breach of, or constitute a default under any law, ordinance,
regulation, ruling, judgment, order or injunction of any court or governmental
instrumentality to which Buyer is a party or by which Buyer is bound.
6. CONFIDENTIALITY. Except as authorized by the other party, neither
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Seller nor Buyer shall disclose the terms of this Agreement either during or
after termination of this Agreement.
7. CONTRACT MODIFICATION. Except as otherwise provided in this
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Agreement, this Agreement may only be modified, amended, rescinded or terminated
by a written agreement executed by all parties to this Agreement and no oral
statement shall in any manner modify or otherwise affect the terms and
conditions set forth herein.
8. WAIVER. Any waiver by any party of a breach of any provision of
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this Agreement shall not operate as or be construed to be a waiver of any other
breach of any other provision of this Agreement. Any waiver must be in writing.
Failure by any party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be considered a waiver or deprive
such party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement.
9. CONTROLLING LAW. The parties agree that this Agreement will be
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interpreted and enforced under the laws of the State of California, excluding
any choice of law rules which may direct the application of laws of any other
jurisdiction.
10. ASSIGNMENT AND DELEGATION. The parties agree that neither party
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may assign any of the benefits derived from this Agreement or delegate any of
its obligations under this Agreement without the prior written consent of the
other party which shall not be unreasonably withheld.
11. AGREEMENT BINDING ON SUCCESSORS AND ASSIGNS. This Agreement shall
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be binding upon the parties' successors and permitted assigns.
12. SEVERABILITY. Each section, subsection and lesser section of this
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Agreement constitutes a separate and distinct undertaking, covenant or provision
hereof. In the event that any provision of this Agreement shall be determined
to be invalid or unenforceable, such provision shall be deemed limited by
construction in scope and effect to the minimum extent necessary to render the
same valid and enforceable, and, in the event such a limiting construction is
impossible, such invalid or unenforceable provision shall be deemed severed from
this Agreement, but every other provision of this Agreement shall remain in full
force and effect.
13. CONSTRUCTION. In the event an ambiguity or question of intent or
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interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring either party by virtue of the authorship of any of the provisions of
this Agreement.
14. HEADINGS. Any paragraph heading, section heading, or caption
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herein is inserted only for convenience and is in no way to be construed as part
of this Agreement.
15. DISPUTE RESOLUTION. Any dispute between the parties arising out of
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this Agreement the proper jurisdiction shall be the State of California in the
venue that shall be San Diego County. The prevailing party in any dispute under
this Agreement will be awarded attorney fees and any court costs incurred by it.
16. COUNTERPARTS. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original for all purposes.
17. SURVIVAL OF TERMS. The terms and provisions of Section 3 and
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Sections 9 through 23 (inclusive) shall survive any termination or expiration of
this Agreement.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire
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understanding between Seller and Buyer with respect to its subject matter, and
supersedes all prior written and oral proposals, understandings, agreements and
representations
19. NOTICE. Any notices shall be sent to the following addresses:
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Seller:
________________________________
________________________________
________________________________
Buyer:
Source One Group, Inc.
Xxxxx X. Xxxxxx, Xx., CEO:
00000 Xxx Xxx xxxxx
Xxx Xxxxx, XX 00000
IN WITNESS WHEREOF, the Parties have executed this Agreement on the 24th of
October 2003, the Effective Date
".Seller"
ePEO Link.
By:
/s/ Xxxxx Xxxxxxxx, Chief Executive Officer
/s/ Xxxx Xxx, Chairman of the Board
"Buyer":
Source One Group, Inc.
By:
/s/ Xxxxx X. Xxxxxx, Xx., CEO
EXHIBIT A
SELLER CLIENT LIST
AS OF OCTOBER 24, 2003
EXHIBIT B
SELLER CLIENT LISTING
CANCELLED CLIENTS
EXHIBIT C
SUMMARY OF BENEFIT PLANS OFFERED
AS OF OCTOBER 24 2003
Benefits Available to All Clients
Benefits Applicable only to Listed Clients
Union Agreements
