Exhibit 10.1
AGREEMENT
This Agreement (this "Agreement") is made and entered into as of
December 23, 2002 by and among Trident Systems International, Inc., a Nevada
corporation ("Trident") and National Employment Alternatives, Inc., a New Jersey
corporation ("NEA").
Preliminary Statement
Trident desires to purchase, and NEA desires to sell, certain of the
assets of NEA constituting NEA's Professional Employer Organization ("PEO")
business (the "Business"), for the consideration set forth below, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. SALE OF THE BUSINESS
1.1 THE TRANSACTION
The subject matter of this Agreement shall be the purchase by Trident
of the Business from NEA, in the form, as further described herein, of an
assignment by NEA to Trident of NEA's agreements with its PEO clients (the "NEA
Clients") and the hiring by Trident of those NEA employees, who provide services
at the NEA Client work sites ("Worksite Employees").
1.2 ASSIGNMENT OF CONTRACTS
Subject to and upon the terms and conditions of this Agreement, at the
closing of the transactions contemplated by this Agreement (the "Closing"):
(a) NEA shall sell, transfer, convey, assign and deliver to Trident,
and Trident shall purchase from NEA, free and clear of all liens, liabilities,
security interests, and encumbrances of any nature whatsoever, all rights under
all contracts, agreements, licenses, purchase orders and other instruments
pursuant to which NEA provides PEO services to clients as specifically set forth
in Schedule "A" hereto (collectively, the "Contract"); and
(b) NEA shall hereby assign and deliver to Trident all books and
records; accounts; customer lists; customer and sales prospect
list for the past three (3) years; correspondence; technical,
accounting, procedural manuals; employment and personnel
records; and other useful business records, including
electronic media, and any confidential or other information
which has been reduced to writing, utilized in the conduct of
or relating to the Business, subject to NEA's right to retain
copies thereof which NEA reasonably requires for its record
keeping obligations.
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(c) AAMPRO shall license the epractice software suite from ProMana
Technologies to be negotiated as quickly as possible. The NEA
clients shall be subject to the fee and royalty schedule
consummated between the parties while the software is
utilized.
1.3 SECURITY DEPOSITS
NEA hereby assigns to Trident, clear of all liens, liabilities,
security interests, and encumbrances of any nature whatsoever, the security
deposits posted by the NEA Clients, which represent the net payroll amount for
each such NEA Client Worksite Employees for one (1) customary payroll period.
1.4 FURTHER ASSURANCES.
NEA and Trident shall each use its best efforts to obtain as promptly
as possible written consents to the transfer, assignment or sublicense to
Trident of all agreements, commitments, purchase orders, contracts, licenses,
rights and other contract documents being transferred hereunder where the
approval or other consent of any other person is required. The parties agree to
use their best efforts to obtain such approval or consent or, in the event that
any such approval or consent cannot be obtained, to obtain a satisfactory
substitute for such transfer, assignment or sublicense.
1.5 NO ASSUMPTION OF LIABILITIES.
Trident shall not assume any of the liabilities of NEA related to the
conduct of the Business prior to the Closing and NEA represents, warrants and
agrees that Trident shall not be or become liable for any claims, demands,
liabilities or obligations not expressly assumed in this Agreement of any kind
whatsoever arising out of or relating to the conduct of the Business by NEA or
otherwise owed by NEA relating to periods prior to the date of the Closing.
Without limiting the foregoing, Trident shall not at the Closing assume or agree
to perform, pay or discharge, and NEA shall remain unconditionally liable for,
all obligations, liabilities and commitments, fixed or contingent, of NEA,
including but not limited to:
(i) severance, termination or other payments or benefits
(including but not limited to post-retirement benefits);
(ii) worker's compensation claims arising from events prior to
the Closing;
(iii) stock option or other stock-based awards made to the
Worksite Employees;
(iv) liabilities for any federal, state, local or foreign
income taxes (including interest, penalties and additions to such taxes) or any
deferred income taxes of NEA;
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(v) liabilities for any payroll taxes accrued prior to the
Closing; and
(vi) liabilities incurred for violations of occupational
safety, wage, health, welfare, employee benefit or environmental laws or
regulations prior to the Closing.
1.6 PURCHASE PRICE. In consideration of the transfer of the Business by
NEA to Trident hereunder, and subject to the terms and conditions herein,
Trident shall pay to NEA a purchase price (the "Purchase Price") of Forty-Five
Thousand ($45,000.00) Dollars, payable as follows:
(a) Five Thousand ($5,000.00) Dollars paid at the Closing; plus
(b) Five Thousand ($5,000.00) Dollars per month for a period of eight
(8) months payable on the Tenth (10th) day of each month commencing in
February 2003.
1.7 PURCHASE PRICE ADJUSTMENTS. The Purchase Price shall be subject to
adjustment as follows:
In the event that the average monthly gross margin per Worksite
Employee, for the three (3) month period after the Closing, shall be less than
$61.75 per employee, the Purchase Price shall be reduced on a pro rata basis
based upon the ratio of the actual per employee gross margin divided by $65.00.
In the event of a reduction in the Purchase Price pursuant to this
Section 1.5, the monthly payments as set forth in Section 6.4(b) shall be
reduced in the amount of any such reduction.
1.8 THE CLOSING.
The Closing shall take place at the offices of Ellenoff, Grossman,
Schole & Cyruli, LLP, 000 Xxxxxxxxx Xxxxxx; Xxx Xxxx, XX 00000 on December 23,
2002 or such later date or location as may be mutually agreed to by the parties
(the "Closing Date").
2. REPRESENTATIONS OF NEA
NEA represents and warrants to Trident as follows:
2.1 CONTRACTS. (a) Schedule "A" contains a true, complete and correct
list and description of the contracts and agreements, whether written or oral,
which relate to the Business and which are to be assigned from NEA to Trident at
Closing.
(b) Each Contract is a valid and binding agreement of NEA, enforceable
against the parties thereto in accordance with its terms, and NEA has no
knowledge that any Contract is not a valid and binding agreement of the other
parties thereto:
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(c) NEA has fulfilled all material obligations required pursuant to the
Contracts to have been performed by it prior to the date hereof;
(d) NEA is not in breach of or default under any Contract, and no event
has occurred which with the passage of time or giving of notice or both would
constitute such a default, result in a loss of rights or result in the creation
of any lien or charge, thereunder or pursuant thereto (an "Inchoate Default");
and
(e) To the best knowledge of NEA, there is no existing breach or
default by any other party to any Contract, and no Inchoate Default.
(f) The continuation, validity and effectiveness of each Contract would
not be affected by the transfer thereof to Trident under this Agreement and all
such Contracts are assignable to Trident without a consent.
(g) True, correct and complete copies of all of the foregoing contracts
and agreements (other than all unfilled purchase orders and all unfilled
customer orders), including but not limited to the Contracts have been delivered
to Trident.
2.2 BOOKS AND RECORDS. The general ledgers and books of account of NEA
with respect to the Business, and all other books and records of NEA with
respect to the Business are in all material respects complete and correct and
have been maintained in accordance with good business practice and in accordance
with all applicable procedures required by laws and regulations.
2.3 EMPLOYEE RELATIONS.
(a) NEA is in compliance with all material federal, state, local and
foreign laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and is not engaged in any unfair
labor practice, and there are no arrears in the payment of wages or taxes or
workers compensation assessments or penalties.
(b) None of NEA's Employees are represented by any labor union;
(c) there is no unfair labor practice complaint against NEA pending
before the National Labor Relations Board or any state, foreign, or local agency
affecting NEA;
(d) there is no pending labor strike or other material labor trouble
affecting NEA (including but not limited to any organizational campaign);
(e) there is no material labor grievance pending against or affecting
NEA;
(f) there is no pending organizing activities respecting the Worksite
Employees;
(g) there are no pending arbitration proceedings arising out of or
under any collective bargaining agreement to which NEA is a party, or to the
best knowledge of NEA, any basis for which a claim may be made under any
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collective bargaining agreement to which NEA is a party affecting the Worksite
Employees; and
(h) there is no pending litigation, or other proceeding or basis for an
unasserted claim against NEA by any employee or group of employees or
independent contractor or group of independent contractors which is based on
claims arising out of any employee's or group of employees' employment
relationship with NEA or any independent contractor's or group of independent
contractors' independent consulting relationship with NEA (insofar as such
relationship pertains to the Business of NEA), including but not limited to
claims for contract, tort, discrimination, employee benefits, commissions,
wrongful termination, age discrimination, sexual harassment, sexual
discrimination and any and all common law or statutory claims.
2.4 PREPAYMENTS AND DEPOSITS. Except as assigned herein, NEA has no
additional prepayments or deposits from the NEA Clients. All deposits shall be
transferred to the new accounts as quickly as practically possible.
2.5 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by NEA without the
intervention of any other person in such manner as to give rise to any valid
claim for a finder's fee, brokerage commission or other like payment.
2.6 NON-SOLICITATION. NEA shall not for a period of three (3) years
from the date of this transaction solicit or cause to solicit on its behalf or
on behalf of others any present or future clients or employees of AAMPRO, Inc.
or any of its affiliates, subsidiaries, successors and assigns.
3. CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
3.1 CONFIDENTIALITY. All information not previously disclosed to the
public or not generally known to persons engaged in the business of NEA or
Trident which shall have been furnished by Trident or NEA to the other party in
connection with the transactions contemplated hereby shall not be disclosed by
such receiving party to any person other than their respective employees,
directors, attorneys, accountants or financial advisors or other than as
contemplated herein. In the event that the transactions contemplated by this
Agreement shall not be consummated, all such information which shall be in
writing shall be returned to the party furnishing the same, including, to the
extent reasonably practicable, all copies or reproductions thereof which may
have been prepared, and neither party shall at any time thereafter disclose to
third parties, or use, directly or indirectly, for its own benefit, any such
information, written or oral, about the business of the other party hereto.
3.2 PUBLIC ANNOUNCEMENTS. NEA shall not make or issue, or cause to be
made or issued, any announcement or written statement concerning this Agreement
or the transactions contemplated hereby for dissemination to the general public
without the prior consent of Trident except as required by law.
4. EMPLOYEE MATTERS.
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4.1 WORKSITE EMPLOYEES. NEA has furnished to Trident a list containing
the names of all Worksite Employees, including each such employee's status,
social security number and current compensation.
4.2 REPORTING OF DATA. Trident and NEA shall compile and furnish to
each other such actuarial and employee data as shall be required from time to
time for each party to perform and fulfill its obligations under this Section 4.
4.3 PENDING LITIGATION. With respect to any litigation pending, or to
the knowledge of NEA threatened, which claim alleges violation of any
nondiscrimination laws, collective bargaining agreements, employment contract
and termination thereof or wage and hour laws, NEA shall fully defend such
claim. NEA shall be responsible for any monetary damages awarded in connection
therewith. It is understood by the parties that if NEA chooses to settle any
matter relating to any of the foregoing, including the terms and conditions
thereof of any back pay claims, such settlement shall be at the sole discretion
of NEA and NEA shall be solely responsible for the payment or performance of any
such settlement terms.
5. POST-CLOSING AGREEMENTS.
5.1 SALES LEADS. For a period of one (1) year after the Closing, NEA
shall promptly provide Trident or its designee with all PEO-related sales leads
received by NEA.
5.2 PROPRIETARY INFORMATION.
(a) NEA shall hold in confidence, and use its best efforts to have all
officers, shareholders, directors and personnel hold in confidence, all
knowledge and information of a secret or confidential nature with respect to the
Business, and shall not disclose, publish or make use of the same without the
consent of Trident, except to the extent that such information shall have become
public knowledge other than by breach of this Agreement by NEA or by any other
persons who have agreed not to disclose, publish or make use of such
information.
(b) NEA agrees that the remedy at law for any breach of this Section
10.1 would be inadequate and that Trident shall be entitled to injunctive relief
in addition to any other remedy it may have upon breach of any provision of this
Section 10.1.
5.3 SHARING OF DATA. NEA shall have the right for a period of seven
years following the date hereof to have reasonable access to such books, records
and accounts, including financial and tax information, correspondence,
production records, employment records and other similar information as are
transferred to Trident pursuant to the terms of this Agreement for the limited
purposes of concluding its involvement in the business of NEA prior to the date
hereof and for complying with its obligations under applicable securities, tax,
environmental, employment or other laws and regulations. Trident shall have the
right for a period of seven years following the date hereof to have reasonable
access to those books, records and accounts, including financial and tax
information, correspondence, production records, employment records and other
records which are retained by NEA pursuant to the terms of this Agreement to the
extent that any of the foregoing relates to the Business transferred to Trident
hereunder or is otherwise needed by Trident in order to comply with its
obligations under applicable securities, tax, environmental, employment or other
laws and regulations.
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5.4 COOPERATION IN LITIGATION. Each party hereto will fully cooperate
with the other in the defense or prosecution of any litigation or proceeding
already instituted or which may be instituted hereafter against or by such party
relating to or arising out of the conduct of the Business prior to or after the
date hereof (other than litigation arising out of the transactions contemplated
by this Agreement and except as otherwise expressly provided herein). The party
requesting such cooperation shall pay the out-of-pocket expenses (including
legal fees and disbursements) of the party providing such cooperation and of its
officers, directors, employees and agents reasonably incurred in connection with
providing such cooperation, but shall not be responsible to reimburse the party
providing such cooperation for such party's time spent in such cooperation or
the salaries or costs of fringe benefits or similar expenses paid by the party
providing such cooperation to its officers, directors, employees and agents
while assisting in the defense or prosecution of any such litigation or
proceeding.
6. INDEMNIFICATION AND REIMBURSEMENT.
6.1 INDEMNIFICATION.
NEA shall indemnify, defend and hold harmless Trident and any parent,
subsidiary or affiliate thereof and all directors, officers, employees, agents
and consultants of each of the foregoing (collectively, the "Trident Group")
from and against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities (whether absolute, accrued, contingent or
otherwise), costs and expenses, including but not limited to, interest,
penalties and attorneys' fees and expenses (collectively, "Damages"), asserted
against, imposed upon or incurred by the Trident Group or any Stockholder
thereof, directly or indirectly, by reason of or resulting from or relating to
any of the following:
(i) liability and obligation of NEA;
(ii) misrepresentation or breach of warranty or covenant or
agreement by NEA made or contained in this Agreement or in any certificate or
other instrument furnished or to be furnished to Trident under this Agreement;
(iii) failure to comply with any bulk sales or similar laws
applicable to the transaction's contemplated hereby; and
(iv) litigation or other claim arising from acts, failures to
act or events which occurred prior to the date hereof including, without
limitation, the remediation of environmental conditions attributable to the
conduct of the Business at any of NEA Facilities, prior to the date hereof and
claims for product failure or defect (including but not limited to claims for
personal injury, property damages and breach of warranty) which relate to any
product manufactured or sold prior to the date hereof.
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6.2 NOTICE AND DEFENSE OF CLAIMS. NEA's obligations and liabilities
hereunder with respect to claims resulting from the assertion of liability by
Trident or third parties shall be subject to the following terms and conditions:
(a) Notice. Trident shall give prompt written notice to NEA of any
claim or event known to it which does or may give rise to a claim by Trident
against NEA for which Trident believes it is entitled to indemnification
pursuant to this Section 6 of this Agreement, stating the nature and basis of
said claims or events and the amounts thereof, to the extent known, and in the
case of any claim, action, suit or proceeding brought by any third party, a copy
of any claim, process or legal pleadings with respect thereto promptly after any
such documents are received by the indemnified party. Such notice shall be given
in accordance with Section 7 hereof.
(b) Third Party Claims or Actions. In the event any claim, action, suit
or proceeding is made or brought by any third party against Trident, with
respect to which NEA may have liability for Damages under this Section 6 of this
Agreement, NEA shall, at its own expense, be entitled to participate in and, to
the extent that it shall wish, jointly and with any other indemnifying party, to
assume the defense, with independent counsel reasonably satisfactory to Trident,
provided that in assuming the defense of any such third party claim, action,
suit or proceeding, NEA acknowledges in writing to Trident that NEA shall
thereafter be liable for any Damage with respect to such claim, action, suit or
proceeding.
(ii) If NEA elects to assume control of such defense or settlement, it
shall conduct such defense or settlement in a manner reasonably satisfactory and
effective to protect Trident fully; such company and its counsel will keep
Trident fully advised as to its conduct of such defense or settlement, and no
compromise or settlement shall be agreed or made without the written consent of
Trident. In any case, Trident shall have the right to employ its own counsel and
such counsel may participate in such action, but the reasonable fees and
expenses of such counsel shall be at the expense of Trident, when and as
incurred, unless (A) the employment of counsel by Trident has been authorized in
writing by NEA, (B) Trident shall have reasonably concluded that there may be a
conflict of interest between NEA and Trident in the conduct of the defense of
such action, (C) NEA shall not in fact have employed independent counsel
reasonably satisfactory to Trident to assume the defense of such action and
shall have been so notified by Trident, (D) Trident shall have reasonably
concluded and specifically notified NEA either that there may be specific
defenses available to it which are different from or additional to those
available to it or that such claim, action, suit or proceeding involves or could
have a material adverse effect upon it beyond the financial resources of NEA or
the scope of this Agreement, or (E) NEA fails to conduct such defense or
settlement in a manner reasonably satisfactory to protect Trident fully. If
clause (B), (C), (D) or (E) of the preceding sentence shall be applicable, then
counsel for Trident shall have the right to direct the defense of such claim,
action, suit or proceeding on behalf of Trident and the reasonable fees and
disbursements of such counsel shall constitute Damages hereunder.
(iii) If NEA does not elect to assume the defense of any such claim, or
if it fails to conduct said defense or settlement in a manner reasonably
satisfactory to protect Trident fully, Trident may engage independent counsel
selected by Trident to assume the defense and may contest, pay, settle or
compromise any such claim on such terms and conditions as the indemnified party
may determine. The reasonable fees and disbursements of such counsel shall
constitute Damages hereunder.
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(iv) Trident and NEA, as the case may be, shall be kept fully informed
of such claim, action, suit or proceeding at all stages thereof whether or not
such party is represented by its own counsel.
6.3 COOPERATION. The parties hereto agree to render to each other such
assistance as they may reasonably require of each other and to cooperate in good
faith with each other in order to ensure the proper and adequate defense of any
claim, action, suit or proceeding brought by any third party. Where counsel has
been selected by NEA or by Trident pursuant to Section 6.2, NEA or Trident, as
the case may be, shall be entitled to rely upon the advice of such counsel in
the conduct of the defense.
6.4 CONFIDENTIALITY. The parties agree to cooperate in such a manner as
to preserve in full the confidentiality of all confidential business records and
the "attorney-client and work-product privileges. In connection therewith, each
party agrees that (a) it will use its best efforts, in any action, suit or
proceeding in which it has assumed or participated in the defense, to avoid
production of confidential business records and (b) all communications between
any party hereto and counsel responsible for or participating in the defense of
any action, suit or proceeding shall, to the extent possible, be made so as to
preserve any applicable attorney-client or work-product privilege.
7. NOTICES.
Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing (including
telecommunications) and delivered personally or sent by telex, telecopy or other
wire transmission (with request for assurance in a manner typical with respect
to communications of that type), federal express or other overnight air courier
(postage prepaid), registered or certified mail (postage prepaid with return
receipt requested), addressed as follows or to such other address of which the
par-ties may have given notice:
To NEA:
00 Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
ATTN: President
To Trident:
0000 Xxxxx 00 Xxxx
XX Xxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
ATTN: President
Unless other-wise specified herein, such notices or other
communications shall be deemed received (a) on the date delivered, if delivered
personally or by wire transmission; (b) on the next business day after mailing
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or deposit with an overnight air courier; or (c) five business days after being
sent, if sent by registered or certified mail.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Neither NEA nor Trident may assign all or a portion of its rights and
obligations hereunder without the prior written consent of the other party,
except that Trident may assign all or a portion of its rights and obligations
hereunder to an affiliate of Trident, provided that Trident shall remain liable
for the performance of Trident's obligations under this Agreement. Any
assignment in contravention of this provision shall be void.
9. ENTIRE AGREEMENT; AMENDMENTS, ATTACHMENTS.
(a) This Agreement, all Schedules and Exhibits hereto, and all
agreements and instruments to be delivered by the parties pursuant hereto
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior oral and written
and all contemporaneous oral negotiations, commitments and understandings
between such parties except as expressly provided herein. Trident and NEA may
amend or modify this Agreement, in such manner as may be agreed upon, by a
written instrument executed by Trident and NEA.
(b) If the provisions of the Schedule or Exhibit to this Agreement are
inconsistent with the provisions of this Agreement, the provisions of the
Agreement shall prevail. The Exhibits and Schedules attached hereto or to be
attached hereafter are hereby incorporated as integral parts of this Agreement.
10. EXPENSES.
Except as otherwise expressly provided herein, Trident and NEA shall
each pay their own expenses in connection with this Agreement and the
transactions contemplated hereby. It is understood and agreed that NEA's
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including, but not limited to, professional fees, shall not
be assumed by Trident.
11. LEGAL FEES.
In the event that legal proceedings are commenced by Trident against
NEA, or by NEA against Trident, in connection with this Agreement or the
transactions contemplated hereby, the party or parties which do not prevail in
such proceedings shall pay the reasonable attorneys' fees and other costs and
expenses, including investigation costs, incurred by the prevailing party in
such proceedings.
12. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey, without reference to conflicts of laws
rules or principles.
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13. SECTION HEADINGS.
The section headings are for the convenience of the parties and in no
way alter, modify, amend, limit, or restrict the contractual obligations of the
parties.
14. SEVERABILITY.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
15. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall be one and the
same document.
IN WITNESS WHEREOF, the parties hereto have entered into and signed
this Agreement as of the date and year first above written.
Trident Systems International, Inc
By: ________________________
Its President
National Employment Alternatives, Inc.
By: ________________________
Its President
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