EXHIBIT 2.1
AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into, by and among
Diversified Corporate Resources, Inc., a Texas corporation ("DCRI"), MAGIC
Northeast, Inc., a Delaware corporation ("Seller"), Xxxxxx X. Xxxxxx, an
individual ("Xxxxxx"), and Xxxxxx Xxxxxx, an individual ("X. Xxxxxx")(X. Xxxxxx
and Xxxxxx are sometimes collectively referred herein to as the "Buyers").
WHEREAS, Seller owns all of the issued and outstanding shares of
capital stock of Mountain, Ltd., a Maine corporation ("Mountain"); and
WHEREAS, Mountain is engaged in the business of providing staffing
services (the "Business"); and
WHEREAS, DCRI is engaged in the business of providing staffing
services, and Seller is a wholly-owned subsidiary of DCRI; and
WHEREAS, the Seller desires to sell to Buyers, and Buyers desire to
purchase from Seller, on the terms and conditions hereinafter set forth, all of
the issued shares of the capital stock of Mountain (the "Transaction"); and
WHEREAS, DCRI has agreed to guarantee all of the commitments and
obligations of Seller hereunder; and
WHEREAS, the parties to this Agreement were parties to that certain
Purchase Agreement (herein referred to as the "Original Agreement") dated August
6, 1999 related to the sale of Mountain to Seller; and
WHEREAS, Xxxxxx, Seller, Mountain and DCRI have previously entered into
two separate employment agreements, the first of which was dated August 6, 1999
(the "1999 Employment Agreement"), and the second was dated as of September 1,
2001 (the "2001 Employment Agreement"); and
WHEREAS, in connection with the Original Agreement, one or more of the
parties hereto are parties to the following agreements: (a) that certain
Supplemental Agreement Re: X. Xxxxxx (the "X. Xxxxxx Agreement"), which is dated
August 6, 1999, and is between Seller, DCRI and X. Xxxxxx, (b) that certain
Conditional Exercise Agreement (the "Conditional exercise Agreement") which is
dated November 5, 1999, and is between the parties to the Original Agreement,
and (c) that certain Alpine-Maine Agreement (the "Alpine-Maine Agreement") which
is dated as April 12, 2001 and is between X. Xxxxxx and Seller (the X. Xxxxxx
Agreement, the Conditional Exercise Agreement, and the Alpine-Maine Agreement
are herein collectively referred to as the "Supplemental Agreement"); and
WHEREAS, Xxxxxx has previously loaned money to J. Xxxxxxx Xxxxx
("Xxxxx"), the Chairman and Chief Executive Officer of DCRI; the unpaid amount
of such loan (inclusive of accrued interest) is $78,000.00 (the "JMM Payable");
and
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WHEREAS, pursuant to the Original Agreement, Seller and DCRI owe at
least $2.1 million (the actual unpaid amount is herein referred to as the
"Unpaid Original Consideration"); and
WHEREAS, this Agreement contains limited representations by Seller and
DCRI related to Mountain because of the unique relationship that Buyers have
with Mountain; and
WHEREAS, the parties desire to document their agreements and
understandings as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, DCRI, Buyers, and the Shareholders hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF STOCK
1.1 Agreement to Purchase and Sell. On the terms and subject to the
conditions of this Agreement, Seller agrees to sell, convey, transfer, assign
and deliver to Buyers, free and clear of all liens, claims and encumbrances, and
Buyers agrees to purchase from Seller, all of the issued and outstanding shares
of capital stock of Mountain (the "Mountain Stock").
1.2 Assets Not to Be Conveyed. Certain of the assets of Mountain
(herein collectively referred to as the "Excluded Assets") shall be conveyed to
DCRI at the time of closing of the transactions contemplated by this Agreement,
and the Excluded Assets are agreed to be as follows:
(a) Such of the books, records, papers and instruments of
Mountain which are in the Dallas, Texas offices and which relate to, or part of,
the accounting and financial records of DCRI a list of which is attached hereto
as Schedule 1.2(a); PROVIDED, HOWEVER, Buyers shall be given copies of all such
records at no additional cost and shall be granted access to such documents as
may be reasonably requested from time to time by Buyers or Mountain for any
legitimate business purpose. DCRI shall provide all accounting data with respect
to the operations of Mountain for the period from August 6, 1999 through
December 20, 2002; to the extent such documents are in machine readable form,
DCRI shall provide them to Buyers in machine readable form.
(b) The benefit of and the right to enforce the covenants and
warranties, if any, that Mountain is entitled to enforce with respect to the
Excluded Assets.
(c) All of Mountain's accounts receivable from customers and
others and in and to any income and payment due to Mountain arising out of the
Business, including (but not by way of limitation) accrued and unbilled
receivables (all of such billed and unbilled receivables are herein collectively
referred to as the "Mountain Receivables"), all as of the close of business on
December 20, 2002..
(d) All of Mountain's cash in its bank accounts on the close of
business on December 23, 2002, , including cash in transit.
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(e) All claims of Mountain for refunds of any income taxes
(whether federal, state, local, foreign or other) applicable to periods prior to
the close of business on December 20, 2002..
(f) Subject to the exceptions hereinafter set forth, all of the
right, title and interest of Mountain in and to the following: (i) the
ISCC/Sprint Contract (as herein defined), (ii) the ISCC portion of the
Mountain/Sprint Contract (as herein defined), (ii) the personnel placement
contracts (herein collectively referred to as the "Other Customer Contracts)
which involve subsidiaries of DCRI other than Mountain, which have been assigned
to Mountain prior to the Closing date, and which are listed on Schedule 1.2 (f)
attached hereto, and (iii) the management and/or service agreements (written or
unwritten) that Mountain has obtained with respect to the ISCC/Sprint Contract,
and the Other Customer Contracts.
(g) Any rights accruing as a result of, or any proceeds paid or
payable in accordance with this Agreement.
1.3 Workers Compensation Matters. The parties hereto acknowledge and
agree that (a) in the state of Maine workers compensation insurance is estimated
and paid in advance with subsequent obligations to pay, or rights to receive
refunds, once a final determination is made as to actual premiums owed, (b) if
Mountain owes additional premiums for workers compensation insurance for any
period of time prior to the close of business on December 20, 2002, such
obligations shall be the responsibility of the Seller, and (c) if Mountain is
entitled to a refund, due to overpayment of workers compensation insurance
during the period of time prior to the close of business on December 20, 2002,
upon receipt such refund shall be paid to the Seller.
1.4 Sprint Matters. The parties hereto acknowledge and agree that (a)
Information Systems Consulting Corporation ("ISCC"), a subsidiary of DCRI, is a
party to a contract (herein referred to as the "ISCC/Sprint Contract", which as
amended is dated June 1, 1998, and which involves ISCC providing contract
placement services to Sprint Corporation ("Sprint") and which involves
information technology ("IT") personnel (such services are herein collectively
referred to as the "Sprint IT Services"), (b) Mountain is now a party to a
contract with Sprint (herein referred to as the "Mountain IT Contract"), which
is dated August 15, 2002, and which involves Mountain providing IT personnel to
Sprint, (c) in the recent past, Mountain has provided contract placement
services to United Management Company ("United"), a subsidiary of Sprint, which
involved telecommunications personnel not directly involved in the IT sector of
the business of Sprint and United (such telecommunications activities are herein
collectively referred to as "Sprint/United Engineering Services"), (d) since
August 6, 1999, Mountain has on occasion provided Sprint and/or United with
personnel providing Sprint IT Services or Sprint/United Engineering Services,
(e) subsequent to the Closing Date, (i) Mountain is permitted to provide
Sprint/United Engineering Services to Sprint and/or United, and (ii) DCRI and
its subsidiaries are permitted to provide Sprint IT Services to Sprint and/or
United, (iii) Mountain is not permitted to provide Sprint IT Services to Sprint
and/or United, and (iv) DCRI and its subsidiaries are not permitted to provide
Sprint/United Engineering Services to Sprint and/or United, (g) ISCC shall be
entitled to the benefits of the ISCC portion of the Mountain IT Contract by
being allowed by Mountain to provide IT personnel to Sprint and/or United
pursuant to the Mountain IT Contract, (h) Buyers shall use their best efforts
to, and shall cause and Mountain to use its best efforts to, cause the Mountain
IT Contract to be assigned by Sprint to ISCC (or such other subsidiary of DCRI
as DCRI shall select) without any consideration to
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be paid to Mountain, and (i) any and all references in this Agreement to Sprint
and/or United shall include any and all existing and future subsidiaries,
affiliates, and assigns of Sprint and/or United.
1.5 Liabilities to Be Retained. The parties hereto acknowledge and
agree that (a) Mountain shall not be responsible for any of the liabilities of
Mountain, accrued or unaccrued, whether or not such liabilities appear on
Mountain's balance sheet, including, but not limited any claims brought against
Mountain arising from alleged acts or omissions during the period beginning on
August 6, 1999, and ending on the close of business on December 20, 2002 (herein
referred to as the "Mountain Payables") which have been incurred but which are
unpaid as of the close of business on December 20, 2002, and (b) Seller and
DCRI, jointly and severally, shall assume, and shall be responsible for paying,
the Mountain Payables. Seller shall pay the Mountain Payables within a
reasonable period of time from the dates such obligations become due and
payable. To the extent that Seller does not pay the Mountain Payables within
such time period, Mountain may pay those Mountain Payables which have not been
paid within such period of time, and in each such event, (i) Mountain must
provide written notice to Seller setting forth the Mountain Payables which have
been paid by Mountain, the date of payment of each of these payables, and the
amount of payment with respect to each of these payables, and (ii) Seller shall
then be obligated to pay to Mountain the amount of Mountain Payables paid by
Mountain, plus interest on the amounts paid by Mountain from the date of the
respective payments at the rate of eighteen percent (18%) per annum.
1.6 Stock Redemption. As part of this Transaction, at the time of
Closing (as herein defined), DCRI shall redeem from Buyers, at $0.10 per share,
77,000 shares of common stock of DCRI owned by Buyers (such shares are herein
referred to as the "DCRI Shares"), and Buyers shall assign the DCRI Shares to
DCRI.
ARTICLE 2
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PURCHASE PRICE
2.1 Purchase Price. The total purchase price (the "Purchase Price")
shall be the sum of the following: (a) cash payment at the time of Closing (as
herein defined) in the amount of $572,000.00, (b) $78,000.00 payable on the same
date as the JMM Payable is paid in full, (c) the amount of the Unpaid Original
Consideration shall be waived by Buyers and shall not be required to be paid by
Seller or DCRI, and (d) any and all additional amounts owed by DCRI (or any of
its subsidiaries and affiliates) to Xxxxxx and/or Xxxxxx Xxxxxx in connection
with (i) the 1999 Employment Agreement, (ii) the 2001 Agreement, (iii) accrued
but unpaid compensation, bonuses, or commissions, and (iv) the Original
Agreement. If the JMM Payable is not paid prior to December 31, 2007, Buyers
shall thereafter be relieved from making the payment required by subsection (b)
of this Section 2.1. In the event that the JMM Payable is paid to Xxxxxx, and
that Xxxxx files for protection from his creditors within ninety (90) days of
the final payment of the JMM Payable, that Xxxxxx is ultimately required by a
court of competent jurisdiction to pay, either into the court involved or the
bankruptcy estate of Xxxxx, any part of the amounts received in connection with
the JMM Payable (such amount is herein referred to as the "Recapture Amount"),
and that Buyers have paid in full the amount required to be paid by subsection
(b) of this Section 2.1, the following shall be applicable: (1) Buyers shall
have the right to request that Seller and DCRI pay to Buyers an amount equal to
the Recapture Amount, (2) Seller and DCRI shall then be obligated to pay to
Buyers an amount equal to the Recapture Amount, and (3) Buyers shall be required
to pay to Seller and DCRI, at the time of receipt by Xxxxxx, such amount as
Xxxxxx ultimately receives form Xxxxx or his bankruptcy estate in connection
with the JMM Payable.
2.2. Allocation of Purchase Price. The parties agree that the
Transaction shall not be treated by Buyers and Seller as a purchase of the
assets of Mountain pursuant to Section 338 of the Internal Revenue Code of 1986,
as amended (the "Code").
ARTICLE 3
CLOSING
3.1 Time and Place of Closing. The sale and purchase of the Mountain
Stock pursuant to this Agreement (the "Closing") shall take place on December
23, 2002, at the offices of DCRI, located at 00000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000, or at such other time and place as the parties may
agree. The effective date of Closing shall be December 20, 2002, and such date
is referred to in this Agreement as the "Closing Date." The parties agree that
time is of the essence with respect to the foregoing and all other time periods
set forth herein.
3.2 Actions to be Taken at Closing by Seller. At the Closing and
subject to the terms and conditions hereof, the Seller and DCRI agree to take
the following actions, all of which shall constitute conditions precedent to
Buyers' obligations to close hereunder:
(a) Execute and deliver to Buyers the following:
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1. Bills of sale or stock power assignments (or stock power
assignment) executed by the Seller conveying to Buyers all of the Mountain Stock
(the "Bills of Sale").
2. Seller shall pay $7,700.00 to Buyers in connection with
redeeming the DCRI Shares.
3. Such other agreements, documents and/or instruments, including
such specific assignments, bills of sale and other instruments of conveyance and
transfer, in form and substance acceptable to Buyers and to vest in Buyers title
thereto free and clear of all liens, claims and encumbrances.
(b) Deliver to Buyers the following:
1. Certificate of the Secretary of the State of Maine, dated as
of a recent date, duly certifying as to the existence and good standing of
Mountain as a corporation under the laws of the State of Maine.
2. A certificate duly executed by the Secretary or Assistant
Secretary of each of DCRI and Seller pursuant to which such officer shall
certify (i) the due adoption by the Board of Directors of DCRI and Seller of
corporate resolutions attached to such certificate authorizing the execution and
delivery of this Agreement and the other agreements and documents contemplated
hereby and the taking of all actions contemplated hereby and thereby, (ii) the
incumbency and true signatures of those officers of DCRI and Seller duly
authorized to act on their respective behalf, in connection with the Transaction
and this Agreement and to execute and deliver this Agreement and the other
agreements and documents contemplated hereby on behalf of DCRI and Seller, and
(iii) that the copy of the Articles of Incorporation and Bylaws of Mountain
attached to such certificate are true and correct and, except as reflected in
such copy, such Articles of Incorporation and Bylaws have not been amended since
August 6, 1999.
3. All of Mountain's books and records which are not included as
part of the Excluded Assets.
4. The certificates of Seller and DCRI referred to in Section 7.1
and Section 7.2.
5. Possession or constructive possession of the Business.
6. UCC-3 Termination Statement with respect to the UCC-1
Financing Statement of General Electric Capital Corporation ("GE") affecting the
assets of Mountain (excluding the Mountain Receivables), and any other UCC-1
Financing Statement affecting the assets of Mountain (excluding the Mountain
Receivables).
7. The legal opinion referred to in Section 7.4.
8. A document pursuant to Sections 7.6, Section 7.7 and Section
7.8 of this Agreement.
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9. All other documents required to be executed and delivered by
DCRI and the Seller pursuant to this Agreement.
(c) Perform all other obligations required to be performed at
Closing by DCRI and the Seller pursuant to this Agreement.
3.3 Actions to be Taken at Closing by Buyers. At the Closing, subject
to the terms and conditions hereof, Buyers shall take the following actions, all
of which shall constitute conditions precedent to the obligations of Seller and
DCRI to close hereunder:
(a) Deliver to Seller and DCRI the following:
1. The certificate of Buyers referred to in Section 8.1 and
Section 8.2.
2. The legal opinion referred to in Section 8.4.
3. A document pursuant to Section 8.6, Section 8.7 and Section
8.8.
4. An assignment to (i) DCRI with respect to the Excluded Assets,
and (ii) ISCC with respect to the ISCC/Sprint Contract and the ISCC portion of
the Mountain IT Contract, and (iii) to DCRI with respect to the Other Customer
Contracts. .
5. Stock power assignment(s) executed by Buyers conveying title
to the DCRI Shares.
6. All other documents required to be executed and delivered by
Buyers pursuant to this Agreement.
(b) Perform all other obligations required to be performed at
Closing by Buyers pursuant to this Agreement.
3.4 Audit. Subsequent to the Closing Date, the Buyers shall cause
Mountain to cooperate with DCRI in connection with audit of the financial
statements of Mountain for the year 2002. The cost of such audit shall be the
responsibility of DCRI.
3.5 Accounts Receivable Agreement. At the time of Closing, the
parties hereto shall enter into a written agreement, related to the collection
of the Mountain Receivables subsequent to the Closing Date, which shall provide
that (a) Mountain shall promptly pay to DCRI all amounts of the Mountain
Receivables paid to Mountain subsequent to the Closing Date, (b) DCRI shall
timely pay to Mountain all amounts paid to DCRI (or any subsidiary of DCRI) in
connection with accounts receivables of Mountain which are generated from
revenues of Mountain subsequent to the Closing Date, (c) the actual invoices
being paid by a client of Mountain shall be determining factor as to whether
such payment involves the collection of receivables which arose on or before the
Closing Date, or subsequent to the Closing Date, (d) if there is any genuine
doubt as to which invoice is being paid by a client of Mountain, the payment
involved shall be deemed to be paying the oldest outstanding invoice(s) of the
client involved, (e) subsequent to the Closing date, Buyers shall cause
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Mountain to use its best efforts (at no cost to DCRI or Seller) to effectuate
the collection of the Mountain Receivables, and (f) timely payment by both
parties hereto is agreed to be within five (5) business days from the date of
each receipt by the party obligated to pay some amount to the other party
pursuant to this Section 3.5.
ARTICLE 4
PERSONNEL AND EMPLOYEE BENEFITS
4.1 Personnel. Seller and DCRI shall not be responsible for the
employment, on a temporary or permanent basis, of the employees of Mountain
after the close of business on December 20, 2002 (collectively, the
"Employees").
4.2 Employee Benefits. Seller and DCRI shall be responsible for all
compensation, fringe benefits, sick pay, severance pay, group health benefits
and any other benefits payable pursuant to any benefit plans for Employees (such
obligations are herein collectively referred to as "Employee Benefits") for
Employees which has accrued but is unpaid as of the close of business on
December 20, 2002, and which is listed on Schedule 4,2 attached hereto (such
schedule shall be jointly prepared by Buyers and DCRI). Buyers shall be
responsible for all Employee Benefits which (a) accrue subsequent to the close
of business on December 20, 2002, and (b) prior to the close of business on
December 20, 2002 if not listed on Schedule 4.2 attached hereto.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER AND DCRI
Seller and DCRI, jointly and severally, represent and warrant to Buyers as
follows:
5.1 Organization and Standing. Mountain is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maine.
5.2 Authority. Seller and DCRI have the full power and authority to
execute and deliver this Agreement and the other agreements and documents
contemplated hereby and to carry out the terms and obligations hereof and
thereof. Seller and DCRI have taken all action necessary to authorize the
execution, delivery and performance of this Agreement and the other agreements
and documents contemplated hereby.
5.3 Execution and Delivery. This Agreement has been, and the other
agreements and documents contemplated hereby to be executed by Seller and DCRI
have been, or at Closing will be, duly executed by them, and each constitutes
the valid and binding obligation of Seller and DCRI, enforceable in accordance
with their respective terms and conditions.
5.4 Capitalization. Seller owns all of the issued and outstanding
capital stock of Mountain, free and clear of all liens, claims, encumbrances,
equities and proxies. Each outstanding share of capital stock of Mountain has
been legally and validly issued and is fully paid and non-
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assessable. There exist no options, warrants, subscriptions or other rights to
purchase, or securities convertible into or exchangeable for, any of the
authorized or outstanding securities of Mountain. No shares of capital stock of
Mountain are owned by Mountain in treasury or otherwise have been issued or
disposed of in violation of the preemptive rights of Seller.
5.5 Corporate Records. The copies of the Articles of Incorporation
and all amendments thereto and the Bylaws of Mountain that have been delivered
to Buyers are true, correct and complete copies thereof. The minute books of
Mountain, copies of which have been delivered to Buyers, contain accurate
minutes of all meetings of, and accurate consents to all actions taken without a
meeting by, the Boards of Directors (and any committees thereof) and the
stockholders of Mountain since August 6, 1999.
5.6 Taxes.
(a) Since August 6, 1999, Mountain has filed all federal,
state, foreign and other tax reports or returns required by applicable legal
requirements to be filed by it in connection with the Business and has either
discharged or caused to be discharged, as the same have become due, all taxes
attributable or relating to the Business for any period or periods beginning on
August 6, 1999, and ending on or before the Closing Date.
(b) All such tax reports or returns fairly reflect the taxes
of Mountain for the periods covered thereby. Mountain is not delinquent in the
payment of any tax, assessment or governmental charge, there is no tax
deficiency or delinquency asserted against Mountain, and there is no unpaid
assessment, proposal for additional taxes, deficiency or delinquency in the
payment of any of the taxes of Mountain that could be asserted by any taxing
authority. No Internal Revenue Service audit of Mountain is pending or, to the
knowledge of Seller or DCRI, threatened. Mountain has not granted any extension
to any taxing authority of the limitation period during which any tax liability
may be asserted. Mountain has not committed any violation of any federal, state,
local or foreign tax laws. To the knowledge of Seller and DCRI, all monies
required to be withheld by Mountain from Employees or collected from customers
for income taxes, social security and unemployment insurance taxes and sales,
excise and use taxes, and the portion of any such taxes to be paid by Mountain
to governmental agencies or set aside in accounts for such purpose have been so
paid or set aside, or such monies have been approved, reserved against and
entered upon the books of Mountain.
(c) Seller and DCRI, jointly and severally, shall be responsible
for any taxes payable by Mountain with respect to any periods beginning on
August 6, 1999, and ending on or before the Closing Date. If any part of such
taxes are not paid within fifteen (15) days from the date due and payable,
Mountain may pay such unpaid tax obligations, and in such event, Mountain must
provide written notice to Seller and DCRI setting forth the specific tax
obligation(s) paid, the amount of each tax obligation paid, and the date of each
such payment, and Seller shall then be obligated to pay to Mountain, within five
(5) business days from the date of the receipt of the notice involved, the
amount of such taxes paid by Mountain, plus interest on the amount of unpaid
taxes paid, from the date(s) of each payment, at the rate of eighteen percent
(18%) per annum.
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5.7 Litigation. To the knowledge of Seller and DCRI, no legal action,
suit or proceeding, judicial or administrative, or governmental investigation is
pending or threatened against Mountain, that (a) if adversely determined, has a
reasonable possibility of causing in the future a material adverse effect on the
Business, or (b) questions or might question the validity of this Agreement or
any actions taken or to be taken by Mountain pursuant hereto or seeks to enjoin
or otherwise restrain the Transaction. To the knowledge of Seller and DCRI,
there are no orders, decrees or judgments of any court or governmental body
against Mountain (i) that remain undischarged or otherwise are in effect and
that interfere in any respect with, or impose a burden on, the Business, or (ii)
with respect to which Mountain is in default.
5.8 Disclosure. To the knowledge of Seller and DCRI, no
representation or warranty by Seller and DCRI in this Agreement, and no
statement respecting Mountain, or Seller and DCRI contained in any other
agreement or document contemplated hereby, contains or will contain any untrue
statement of material fact or omits or will omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which it was or will be made, not misleading.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers, jointly and severally, represent and warrant to Seller and DCRI
as follows:
6.1 Unpaid Amounts. To the knowledge of Buyers, all monies required
to be withheld by Mountain from Employees or collected from customers for income
taxes, social security and unemployment insurance taxes and sales, excise and
use taxes, and the portion of any such taxes to be paid by Mountain to
governmental agencies or set aside in accounts for such purpose have been so
paid or set aside, or such monies have been approved, reserved against and
entered upon the books of Mountain.
6.2 Litigation. To the knowledge of Buyers, no legal action, suit or
proceeding, judicial or administrative, or governmental investigation is pending
or threatened against Mountain, that (a) if adversely determined, has a
reasonable possibility of causing in the future a material adverse effect on the
Business, or (b) questions or might question the validity of this Agreement or
any actions taken or to be taken by Mountain pursuant hereto or seeks to enjoin
or otherwise restrain the Transaction. To the knowledge of Buyers, there are no
orders, decrees or judgments of any court or governmental body against Mountain
(i) that remain undischarged or otherwise are in effect and that interfere in
any respect with, or impose a burden on, the Business, or (ii) with respect to
which Mountain is in default.
6.3 Disclosure. Prior to the Closing Date, Xxxxxx has been an officer
and director of both DCRI and Mountain and in such capacity Xxxxxx is very much
aware of most, if not all, of the operational matters related to Mountain,
including the financial condition of Mountain. Such being the case, Buyers
confirm that (a) in August, 2002, Mountain undertook to effectuate the transfer
of the ISCC/Sprint Contract to Mountain, and (b) to the knowledge of Buyers, (i)
Schedule 1.2 a attached hereto sets forth a complete list of the books and
records of Mountain as of the Closing Date, (ii) except as listed in Schedule
1.2b(f) attached hereto, there have not been any Other
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Customer Contracts transferred to Mountain prior to the Closing Date, , and
(iii) no representation or warranty by Seller and DCRI in this Agreement,
contains any untrue statement of material fact or omits to state any material
fact necessary to make the statements herein or therein, in light of the
circumstances under which it was made, not misleading.
6.4 Stock Ownership. Buyers own the DCRI Shares free and clear of any
and all liens, claims or other encumbrances.
6.5 Execution and Delivery. This Agreement has been, and the other
agreements and documents contemplated hereby at Closing will be, duly executed
by Buyers and each constitutes the valid and binding obligation of Buyers,
enforceable in accordance with their respective terms and conditions.
ARTICLE 7
CONDITIONS PRECEDENT OF BUYERS
Except as may be waived in writing by Buyers, the obligations of Buyers
hereunder are subject to the fulfillment at or prior to the Closing of each of
the following conditions:
7.1 Representations and Warranties. The representations and warranties
of Seller and DCRI contained herein shall be true and correct as of the Closing
Date with the same force and effect as if such representations and warranties
had made on and as of the Closing Date, and at Closing, Seller and DCRI shall
certify to that effect.
7.2 Covenants. Seller and DCRI shall have performed and complied in
all material respects with all covenants or conditions required by this
Agreement to be performed and complied with by it prior to the Closing, and at
Closing, Seller and DCRI shall certify to that effect.
7.3 Actions at Closing. Seller and DCRI shall have taken all actions
required of them pursuant to this Agreement.
7.4 Legal Opinion. Buyers shall have received the opinion of Xxxxxx &
Xxxxxx, P.C., counsel to the Seller and DCRI, substantially in the form of
Schedule 7.4.
7.5 Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing or otherwise,
asserted, instituted or entered to restrain or prohibit the carrying out of the
Transaction.
7.6 Release Agreement. Seller and DCRI shall execute and deliver to
Buyers a document, in form reasonably acceptable to Buyers, wherein Seller and
DCRI release any and all claims they may have against (a) Mountain except to the
extent otherwise provided in this Agreement, (b) Buyers with respect to the
Original Agreement (as amended to date), (c) Xxxxxx with respect to (i) the 1999
Employment Agreement, and (ii) the 2001 Employment Agreement, and (d) X. Xxxxxx
with respect to the Supplemental Agreement.
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7.7 Resignations. Each or the officers and directors of Mountain,
other than Xxxxxx and Xxx Xxxxxxxx, shall execute written resignations pursuant
to which such individuals resign as officers and/or directors of Mountain, and
such resignations shall be delivered to Buyers at the Closing.
7.8 GE Release. GE shall execute, and DCRI shall cause to be delivered
to Buyers, a copy of (a) a written release executed by GE pursuant to which
Mountain is released from all liability to GE with respect to the line of credit
(the "GE Line of Credit") extended by GE to various subsidiaries of DCRI,
including Mountain, and (b) a UCC-3 Financing Statement to evidence the release
by GE of all liens on the assets of Mountain (other than on the Accounts
Receivable, as of the Closing Date) held by GE in connection with the GE Line of
Credit.
7.9 Assumption of Payables. DCRI shall execute and deliver to Buyers a
written document pursuant to which DCRI shall assume the responsibility for
paying the Mountain Payables.
7.10 Release of Second Lien. DCRI will cause Xxxxx and United States
Funding Group, Inc. ("USFG") to execute and deliver to Buyers written evidence
of a release of the lien held by Xxxxx and USFG with respect to the accounts
receivable of Mountain which are generated from revenues of Mountain subsequent
to the Closing Date.
ARTICLE 8
CONDITIONS PRECEDENT OF SELLER AND DCRI
Except as may be waived in writing by the Seller and DCRI, the
obligations of Seller and DCRI hereunder are subject to fulfillment at or prior
to the Closing of each of the following conditions:
8.1 Representations and Warranties. The representations and warranties
of Buyers contained herein shall be true and correct as of the Closing Date with
the same force and effect as if such representations and warranties had been
made on and as of the Closing Date, and at Closing, Buyers will certify to that
effect.
8.2 Covenants. Buyers shall have performed and complied in all
material respects with all covenants or conditions required by this Agreement to
be performed and complied with by it prior to the Closing, and at Closing,
Buyers shall certify to that effect.
8.3 Actions at Closing. Buyers shall have taken all actions required
of them pursuant to this Agreement.
8.4 Legal Opinion. Shareholders shall have received the opinion of Van
Meer and Xxxxxxxx, P.A., counsel to Buyers, substantially in the form of
Schedule 8.4.
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8.5 Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
Transactions.
8.6 Release Agreement. Buyers shall execute and deliver to Seller and
DCRI a document, in form reasonably acceptable to Seller and DCRI, wherein
Buyers release any and all claims they may have against (a) Mountain except to
the extent otherwise provided in this Agreement, and (b) Seller and DCRI with
respect to (i) the Original Agreement (as amended to date), (ii) the 1999
Employment Agreement, and (iii) the 2001 Employment Agreement.
8.7 Resignations. Xxxxxx shall execute a written resignation pursuant
to which Xxxxxx shall resign from all positions as an officer and/or director of
DCRI and its subsidiaries, and such resignation shall be delivered to Seller and
DCRI at the Closing.
8.8 Assignment of Excluded Assets. At Closing, Buyers shall cause
Mountain to assign to DCRI all of the Mountain Receivables, and to enter into a
written arrangement with DCRI as to the collection of the Mountain Receivables.
ARTICLE 9
ASSUMED OBLIGATIONS AND DCRI GUARANTY OF SELLER'S OBLIGATIONS
9.1 Assumed Obligations. Effective as of the close of business on
December 20, 2002, (a) Mountain shall be deemed to have assumed
the obligations of Seller and DCRI, if any, under the client
contracts of Mountain, and under the real property leases of
Mountain as more specifically identified at the Closing, and (b)
DCRI shall assume those liabilities of Mountain which are being
assumed by DCRI pursuant to this Agreement, including the Mountain
Payables and all obligations of Mountain in connection with the GE
Line of Credit. The parties acknowledge that, except as otherwise
provided in this Agreement, (i) Mountain shall be responsible for
all its debts and liabilities which are incurred subsequent to the
close of business on December 20, 2002, and (ii) all of the debts
and liabilities of Mountain as of the close of business on
December 20, 2002 shall be solely the debts and liabilities of
Seller and DCRI.
9.2 DCRI Guaranty. DCRI hereby guarantees to the Buyers all
obligations of Seller pursuant to this Agreement and other agreements and
documents contemplated hereby.
ARTICLE 10
RESTRICTIVE COVENANTS
10.1 Non-Solicitation Restrictions of Buyers. For a five (5) year
period of time from the Closing Date, Buyers and Mountain shall not, directly or
indirectly, (a) solicit for employment or hire any individual who is an
employee, agent or contractor of DCRI, or any of the subsidiaries or affiliates
of DCRI, or who was an employee, agent, or contractor of DCRI, or any of the
subsidiaries
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or affiliates of DCRI, at any time in the twelve (12) month period of time
preceding the date of the solicitation involved, (b) solicit the staffing
business of any person or entity who is a customer, client, agent or
representative of DCRI, or any of the subsidiaries or affiliates of DCRI, or who
was a customer, client, agent or representative of DCRI, or any of the
subsidiaries or affiliates of DCRI, at any time during the twelve (12) months
preceding the Closing Date, or (c) solicit or provide Sprint IT Services to
Sprint or United.
10.2 Nondisclosure Agreement. It is recognized that Buyers have, and
may hereafter continue to obtain, knowledge about the businesses of DCRI and its
subsidiaries and affiliates independent of any relationship with DCRI (such
knowledge is herein referred to as the "Xxxxxx Information"), but that Buyers
may have obtained certain confidential and proprietary information and/or
documentation of DCRI or its subsidiaries and affiliates through Buyers'
relationship with DCRI. Buyers agree that they will not, without the prior
written consent of DCRI, at any time, except as may be required by competent
legal authority, use or disclose to any person, firm or other legal entity, any
confidential records, secrets or information related to DCRI or any subsidiary
or affiliated person or entity of DCRI acquired through Buyers' relationship
with DCRI (collectively, the "DCRI Confidential Information"). The parties
acknowledge that the DCRI Confidential Information (a) shall include, without
limitation, information about the customer lists, product pricing, data,
know-how, processes, computer software and programs, database technologies,
strategic planning, and risk management of DCRI and its subsidiaries and
affiliates, (b) shall not include, for purposes hereof, any information which
has been developed or obtained by Buyers independent of Buyer's involvement with
DCRI, or any of the Mountain Confidential information (as herein defined), and
(c) does not include the Xxxxxx Information. For a period of five (5) years from
the Closing Date, Buyers will exercise utmost diligence to protect and guard the
DCRI Confidential Information.
10.3 Non-Solicitation Restrictions of DCRI. For a five (5) year period
of time from the Closing Date, DCRI and its subsidiaries and affiliates shall
not, directly or indirectly, (a) solicit for employment or hire any individual
who is an employee, agent or contractor of Mountain, or any of its subsidiaries
or affiliates, or who was an employee, agent, or contractor of Mountain, or any
of its subsidiaries or affiliates, at any time in the twelve (12) month period
of time preceding the date of the solicitation involved, or (b) solicit the
business of any person or entity who is a customer, client, agent or
representative of Mountain, or any of the subsidiaries or affiliates of
Mountain, or who was a customer, client, agent or representative of Mountain, or
any of the subsidiaries or affiliates of Mountain, at any time during the twelve
(12) months preceding the Closing Date, or (c) solicit or provide Sprint/United
Engineering Services to Sprint or United.
10.4 Nondisclosure Agreement. It is recognized that many of the
employees, representatives and agents of DCRI and its subsidiaries and
affiliates have, and may hereafter continue to obtain, knowledge about the
business of Mountain independent of any involvement with Mountain (such
knowledge is herein referred to as the "DCRI Information"), but that DCRI and
its subsidiaries and affiliates may have obtained certain confidential and
proprietary information and/or documentation of Mountain or its subsidiaries and
affiliates acquired through such entities' relationship with Mountain. DCRI
agrees that DCRI and its subsidiaries or affiliates will not, without the prior
written consent of Mountain, at any time, except as may be required by competent
legal authority, use or disclose to any person, firm or other legal entity, any
confidential records, secrets or information related to Mountain or any
subsidiary or affiliated person or entity of
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Mountain acquired through such entities' relationship with Mountain
(collectively, the "Mountain Confidential Information"). The parties acknowledge
that the Mountain Confidential Information (a) shall include, without
limitation, information about the customer lists, product pricing, data,
know-how, processes, computer software and programs, database technologies,
strategic planning, and risk management of Mountain, (b) shall not include, for
purposes hereof, any information which has been developed or obtained by DCRI or
any of its subsidiaries or affiliates, independent of DCRI's involvement with
Mountain, or any of the DCRI Confidential information (as herein defined), and
(c) shall not include the DCRI Information. For a period of five (5) years from
the Closing Date, DCRI and its subsidiaries and affiliates will exercise utmost
diligence to protect and guard the Mountain Confidential Information.
10.5 Permitted Actions. Notwithstanding anything herein to the
contrary, (a) none of the parties hereto, including Mountain, are prevented by
the terms of this Agreement from engaging in advertising of their services at
any time or times, (b) mountain is permitted to provide Sprint/United
Engineering Services to Sprint and/or United subsequent to the Closing Date, (c)
DCRI and its subsidiaries are permitted to provide Sprint IT Services to Sprint
and/or United subsequent to the Closing Date, (d) Mountain, DCRI and any of the
subsidiaries of DCRI may provide to Sprint and/or United services which are not
Sprint IT Services or Sprint/United Engineering Services, and (e) neither of the
Buyers are subject to any of the restrictive covenants (related to
non-competition, non-solicitation , confidential information, and similar types
of covenants) which are set forth in the Original Agreement, the 1999 Employment
Agreement, the 2001 Employment Agreement, or the Supplemental Agreement.
ARTICLE 11
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
AGREEMENTS AND OBLIGATIONS; INDEMNIFICATION
11.1 Survival. Except for the covenants contained in Article 10 of this
Agreement and the payments required to be made to Seller and DCRI pursuant to
the terms of this Agreement, which covenants and obligations shall survive until
satisfied, the representations, warranties, obligations, covenants, indemnities
and agreements of Seller, DCRI and Buyers contained in this Agreement shall
survive the Closing Date for a period of three (3) years; all representations,
warranties, obligations, covenants, indemnities and agreements of Seller and
DCRI related to tax matters of any nature involving Mountain shall survive the
Closing Date for a period of five (5) years. Said representations, warranties,
obligations, covenants, indemnities and agreements shall not be affected by, and
shall remain in full force and effect notwithstanding, any investigation during
such time periods made by or on behalf of any party hereto or any information
any party may have with respect thereto. If written notice of a claim has been
given in good faith prior to the expiration of the applicable representations
and warranties by a party in whose favor such representations and warranties
have been made to the party that made such representations and warranties, the
relevant representations and warranties shall survive as to such claim until the
claim has been finally resolved.
11.2 Indemnification by Buyers. Buyers, jointly and severally, hereby
agree, effective as of the Closing, to pay, and to indemnify, save and hold
harmless Seller and DCRI, their subsidiaries and
15
affiliates, and their respective officers, directors, stockholders and employees
from and against, any and all damages, liabilities, losses, claims,
deficiencies, penalties, interest, expenses, fines, assessments, charges and
costs (including, without limitation, reasonable attorneys' fees, costs of
investigation and court costs) (collectively, "Losses") imposed on, incurred by
or asserted against such person or entity (or any of them) in any way relating
to or arising from or out of (a) any act or omission of Buyers prior to or at
the Closing, (b) the breach of any covenant of Buyers or the failure of Buyers
to perform any obligation of Buyers contained in this Agreement or in the other
agreements and documents contemplated hereby, (c) any inaccuracy in or breach of
any representation or warranty of Buyers, contained in this Agreement or any
other agreement or document contemplated hereby, (d) all liabilities, debts,
duties, obligations or taxes of Mountain that are attributable to periods
subsequent to the close of business on December 20, 2002, and (e) any liability
to Employees or the former employees of Mountain for Employee Benefits that
Buyers are obligated to pay pursuant to Section 4.2 of this Agreement.
Notwithstanding anything herein to the contrary, Seller and DCRI shall
not have any responsibility for liabilities or obligations of Mountain which are
incurred subsequent to the close of business on December 20, 2002.
11.3 Indemnification by Seller and DCRI. Seller and DCRI, jointly and
severally, hereby agree, effective as of the Closing, to pay, and to indemnify,
save and hold harmless Buyers and Mountain from and against, any Losses imposed,
incurred by or asserted against such person or entity (or any of them) in any
way relating to or arising from or out of (a) the obligations of Mountain
expressly assumed by DCRI or Seller hereunder, (b) the breach of any covenant of
DCRI or Seller or the failure of DCRI or Seller to perform any of their
obligations contained herein or in any other agreement or document contemplated
hereby, (c) the GE Line of Credit, (d) any inaccuracy in or breach of any
representation or warranty of DCRI or Seller under this Agreement or any other
agreement or document contemplated hereby, and (e) any liability to Employees or
the former employees of Mountain for Employee Benefits that DCRI or Seller are
obligated to pay pursuant to Section 4.2 of this Agreement.
11.4 Notice; Defense of Claims. Promptly after receipt by an
indemnified party of notice of any claim, liability or expense to which the
indemnification obligations in this Agreement would apply, the indemnified party
shall give notice thereof in writing to the indemnifying party, but the omission
to so notify the indemnifying party promptly will not relieve the indemnifying
party from any liability except to the extent that the indemnifying party shall
have been prejudiced as a result of the failure or delay in giving such notice.
Such notice shall state the information then available regarding the amount and
nature of such claim, liability or expense and shall specify the provision or
provisions of this Agreement under which the liability or obligation is
asserted. If within twenty (20) days after receiving such notice the
indemnifying party gives written notice to the indemnified party stating that:
(a) it would be liable under the provisions hereof for indemnity in the amount
of such claim if such claim were successful, and (b) that it disputes and
intends to defend against such claim, liability or expense at its own cost and
expense, then counsel for the defense shall be selected by the indemnifying
party (subject to the consent of the indemnified party which consent shall not
be unreasonably withheld) and the indemnifying party shall assume the defense
with respect to such claim, liability or expense at the indemnifying party's
expense as long as the indemnifying party is conducting a good faith and
diligent defense at its own expense; provided, however, that the
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assumption of defense of any such matters by the indemnifying party shall relate
solely to the claim, liability or expense that is subject or potentially subject
to indemnification. The indemnifying party shall have the right, with the
consent of the indemnified party, which consent shall not be unreasonably
withheld, to settle all indemnifiable matters related to the claims by third
parties that are susceptible to being settled provided its obligation to
indemnify the indemnifying party therefor will be fully satisfied. As reasonably
requested by the indemnified party, the indemnifying party shall keep the
indemnified party apprised of the status of the claim, liability or expense and
any resulting suit, proceeding or enforcement action, shall furnish the
indemnified party with all documents and information that the indemnified party
shall reasonably request and shall consult with the indemnified party prior to
acting on major matters, including settlement discussions. Notwithstanding
anything herein stated to the contrary, the indemnified party shall at all times
have the right to fully participate in such defense at its own expense directly
or through counsel; provided, however, if the named parties to the action or
proceeding include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the expense of separate counsel
for the indemnified party shall be paid by the indemnifying party, provided,
however, that the separate counsel selected by the indemnified party shall be
approved by the indemnifying party, which approval shall not be unreasonably
withheld. If no such notice of intent to dispute and defend is given by the
indemnifying party, or if such diligent good faith defense is not being or
ceases to be conducted, the indemnified party shall, at the expense of the
indemnifying party, undertake the defense of (with counsel selected by the
indemnified party), and shall have the right to compromise or settle (exercising
reasonable business judgment), such claim, liability or expense. Provided
however, before settling the indemnified party shall first use reasonable
efforts to obtain the consent to that settlement from the indemnifying party,
which consent shall not be unreasonably withheld. After using reasonable efforts
without success the indemnified party may settle without the consent of the
indemnifying party without any prejudice to its claim for indemnity. If such
claim, liability or expense is one that by its nature cannot be defended solely
by the indemnifying party, then the indemnified party shall make available all
information and assistance that the indemnifying party may reasonably request
and shall cooperate with the indemnifying party in such defense.
11.5 Set-off. Buyers shall have the right to set-off, upon written
notice to Seller and DCRI, any undisputed amounts payable by DCRI or Seller to
Buyers pursuant to claims for indemnification hereunder against any amount at
any time payable by Buyers to Seller or DCRI under or pursuant to this Agreement
and/or any other agreements now or hereafter entered into between Buyers and
Seller and DCRI.
ARTICLE 12
TERMINATION
12.1 Termination. This Agreement may be terminated prior to the
consummation of the Transaction:
(a) By written consent of DCRI and Buyers.
17
(b) By DCRI or Buyers if either (i) the Closing shall not have
occurred on or before December 31, 2002; however, the right to terminate this
Agreement under this Section 12.1(b)(i) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of the Closing to occur on or before such date,
or (ii) there shall be any statute, law, ordinance, rule, or regulation that
makes consummation of the Transaction illegal or otherwise prohibited or if any
court of competent jurisdiction or governmental entity shall have issued an
order, decree, or ruling or taken any other action restraining, enjoining, or
otherwise prohibiting the Transaction and such order, decree, ruling, or other
action shall have become final and nonappealable;
(c) By DCRI, upon a material breach of any representation,
warranty, or agreement set forth in this Agreement by any of buyers, such that
the condition set forth in Section 8.1 or 8.2 would not be satisfied.
(d) By Buyers, upon a material breach of any representation,
warranty, or agreement set forth in this Agreement by DCRI or Seller such that
the condition set forth in Section 7.1 or 7.2 would be not satisfied.
12.2 Notice and Effects of Termination. In the event there is a basis
for termination of this Agreement by either DCRI or Buyers, as provided in
Section 12.1, and such party desires to terminate this Agreement, it may do so
by giving written notice to the other party pursuant to Section 13.1, whereupon
this Agreement shall forthwith terminate, and there shall be no liability or
obligation on the party of any part hereto, except to the extent that such
termination results from the breach by a party hereto of any of its
representations, warranties, covenants, or agreements set forth in this
Agreement.
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ARTICLE 13
MISCELLANEOUS
13.1 Notices. Any and all notices, requests, instructions and other
communications required or permitted to be given under this Agreement after the
date hereof by any party hereto to any other party may be delivered personally
or by nationally recognized overnight courier service or sent by mail or
facsimile transmission, at the respective addresses or transmission numbers set
forth below and shall be effective (a) in the use of personal delivery or
facsimile transmission, when received; (b) in the case of mail, upon the earlier
of actual receipt or three (3) business days after deposit in the United States
Postal Service, first class certified or registered mail, postage prepaid,
return receipt requested; and (c) in the case of nationally recognized overnight
courier service, one (1) business day after delivery to such courier service
together with all appropriate fees or charges for such delivery. The parties may
change their respective addresses and transmission numbers by written notice to
all other parties, sent as provided in this Section 13.1. All communications
must be in writing and addressed as follows:
BUYERS: Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
with a copy to: Van Meer & Xxxxxxxx, P.A.
20 York Street
Portland, ME. 04101
Attention: Xxxxxx X. Xxxxxxxx
DCRI: Diversified Corporate Resources, Inc.
00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
SELLER: MAGIC Northeast, Inc.
00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
with a copy to: Xxxxxx & Xxxxxx P.C.,
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
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13.2 Further Cooperation. The parties agree that they will, at any time
and from time to time after the Closing, upon request by the other and without
further consideration, do, perform, execute, acknowledge and deliver all such
further acts, deeds, assignments, assumptions, transfers, conveyances, powers of
attorney, certificates and assurances as may be reasonably required in order to
fully consummate the Transaction in accordance with this Agreement or to carry
out and perform any undertaking made by the parties hereunder.
13.3 Amendment. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by the party against which enforcement
of the amendment, modification or supplement is sought.
13.4 Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of Seller, DCRI and Buyers and their respective heirs,
representatives, successors and assigns. This Agreement shall not be deemed to
create or confer any rights, benefits or interests in any other persons, except
through the parties hereto, nor shall anything in this Agreement act to relieve
or discharge the obligation or liability of any third party to any party to this
Agreement, nor shall any provision give any third party any right of subrogation
or action over or against any party to this Agreement.
13.5 Exhibits and Schedules. The exhibits and schedules to this
Agreement (and any appendices thereto) referred to in this Agreement and
attached hereto are and shall be incorporated herein and made a part hereof for
all purposes as though set forth herein verbatim.
13.6 Sections and Articles. All sections and articles referred to
herein are sections and articles of this Agreement. Descriptive headings as to
the contents of particular articles and sections are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.
13.7 Entire Agreement. Except as otherwise expressly provided in
Section 13.17 hereof, this Agreement and the other agreements, documents and
instruments executed and delivered by the parties to each other at the Closing
constitute the full understanding of the parties, a complete allocation of risks
between them and a complete and exclusive statement of the terms and conditions
of their agreement relating to the subject matter hereof and supersedes any and
all prior agreements, whether written or oral, that may exist between the
parties with respect thereto. Except as otherwise specifically provided in this
Agreement, no conditions, usage of trade, course of dealing or performance,
understanding or agreement purporting to modify, vary, explain or supplement the
terms or conditions of this Agreement shall be binding unless hereafter or
contemporaneously herewith made in writing and signed by the party to be bound,
and no modification shall be effected by the acknowledgment or acceptance of
documents containing terms or conditions at variance with or in addition to
those set forth in this Agreement.
13.8 Gender; Plurals. Each use herein of the masculine, neuter or
feminine gender shall be deemed to include the other genders and each use herein
of the plural shall include the singular and vice versa, in each case as the
context requires or as it is otherwise appropriate.
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13.9 Expenses. The parties hereto shall each pay all of their expenses
and costs (including, without limitation, all counsel fees and expenses), in
connection with this Agreement and the consummation of the Transaction.
13.10 Brokerage Fees and Commissions. Neither Buyers, on one hand, nor
DCRI or Seller, on the other, shall have any responsibility or liability for any
fees, expenses or commissions payable to any agent, representative or broker of
the other.
13.11 Waiver. Any of the terms or conditions of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof. Such
action shall be evidenced by a signed written notice given in the manner
provided in Section 13.1 hereof. No party to this Agreement shall by any act
(except by a written instrument given pursuant to Section 13.1 hereof) be deemed
to have waived any right or remedy hereunder or to have acquiesced in any breach
of any of the terms and conditions hereof. No failure to exercise, nor any delay
in exercising any right, power or privilege hereunder by any party hereto shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by any party of
any right or remedy on any one occasion shall not be construed as a bar to any
right or remedy that such party would otherwise have on any future occasion or
to any right or remedy that any other party may have hereunder.
13.12 Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all counterparts
hereof so executed by the parties hereto, whether or not such counterpart shall
bear the execution of each of the parties hereto, shall be deemed to be, and
shall be construed as, one and the same Agreement. A telecopy or facsimile
transmission of a signed counterpart of this Agreement shall be sufficient to
bind the party or parties whose signature(s) appear thereon.
13.13 Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of Maine.
13.14 Specific Performance. Each of the parties hereto acknowledges that
the other parties would be irreparably damaged and would not have an adequate
remedy at law for money damages in the event that any of the covenants contained
in this Agreement were not performed in accordance with its terms or otherwise
were materially breached. Each of the parties hereto therefore agrees that,
without the necessity of proving actual damages or posting bond or other
security, the other parties shall be entitled to temporary and/or permanent
injunction or injunctions to prevent breaches of such performance and to
specific enforcement of such covenants in addition to any other remedy to which
it may be entitled, at law or in equity.
13.15 Attorneys' Fees and Costs. In the event attorneys' fees or other
costs are incurred to enforce, through legal action, any of the obligations
herein provided for, or to establish damages for the breach thereof, or to
obtain any other appropriate relief, whether by way of prosecution or defense,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred therein.
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13.16 Severability. In the event that any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws, then
(a) such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
were not a part hereof, (b) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by such illegal,
invalid or unenforceable provision or by its severance from this Agreement, and
(c) there shall be added automatically as a part of this Agreement a provision
as similar in terms to such illegal, invalid or unenforceable provision as may
be possible and still be legal, valid and enforceable.
13.17 Advice of Counsel. Each of the undersigned has read this
Agreement, has had the opportunity to consult with legal counsel concerning the
matters contained herein, and has either obtained legal counsel with respect to
such matters and the execution of this Agreement, or has voluntarily waived such
right.
13.18 Event of Default.
(a) In the event that Buyers shall fail to make any payment to
Seller or DCRI within fifteen (15) days from the date due pursuant to the terms
of this Agreement, Buyers shall be obligated to pay interest on all amounts
payable to Seller and DCRI pursuant to this Agreement at the rate of eighteen
percent (18%) per annum.
(b) In the event that Seller or DCRI shall fail to make any
payment to Mountain or Buyer within fifteen (15) days from the date due pursuant
to the terms of this Agreement, Seller and/or DCRI, as the case may be, shall be
obligated to pay interest on all amounts payable to Mountain and/or Buyers
pursuant to this Agreement at the rate of eighteen percent (18%) per annum.
(c) No extension of time for payment granted by any party of all
or any part of the amount owing herein at any time shall effect the liability of
the parties, including any surety, accommodation party or guarantor. Acceptance
by a party of any payment after any default shall not operate to extend the time
for payment of any amount then remaining unpaid or constitute a waiver of any of
the other rights herein. No delay by a party in exercising any power or right
shall operate as a waiver of any power or right. The waiver of any default by a
party shall not operate as a waiver of any subsequent default or any power or
right that such party may have under the terms of this Agreement.
13.19 Further Assurances of Buyers.
(a) From and after the Closing Date, each party shall afford the
other parties and their attorneys, accountants and other representatives,
reasonable access, during normal business hours, to such books and records
possessed by disclosing party relating to Mountain or the business of Mountain
as may reasonably be required in connection with the preparation of financial
information for any period of time on or prior to the Closing Date. Each party
shall cooperate in all reasonable respects with the other parties with respect
to DCRI'S former interest in Mountain and in connection with financial account
closing and reporting all claims in litigation asserted by or against third
parties, including, but not limited to, making employees of Mountain reasonably
available to assist with, or provide information in connection with financial
account closing and reporting and claims in
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litigation, provided, that the party requesting such assistance reimburses the
disclosing party for its reasonable out-of-pocket expenses (including costs of
employees so assisting) in connection therewith.
(b) For a period of not less than seven (7) years after the
Closing Date, each party shall preserve and retain the corporate accounting,
legal, auditing and other books and records of Mountain (including, but not
limited to any governmental or non-governmental actions, suits, proceedings or
investigations arising out of the conduct of the business and operations of
Mountain prior to the Closing Date); provided, however, that such seven (7) year
period shall be extended in the event that any action, suit, proceeding, or
investigation has been commenced or is pending or threatened at the termination
of such seven (7) year period and such extension shall continue until any such
action, suit proceeding, or investigation has been settled through judgment or
otherwise or is no longer pending or threatened. Notwithstanding the foregoing,
a party may discard or destroy any of such books and records prior to the end of
such seven (7) year period or period of extension, if applicable, if it gives
the other parties at least sixty (60) days prior written notice of its intent to
do so and no other party has not taken possession of such books and records, at
its expense, within such sixty (60) day period.
(c) Nothing in Section 13.19 shall relieve Seller and DCRI of the
obligations to indemnify Buyers pursuant to the terms of this Agreement.
13.20 Arbitration. Any controversy between the parties to this Agreement
involving the construction of application of any of the terms, covenants, or
conditions of this Agreement shall be submitted to arbitration in Dallas County,
Texas, if either party to this Agreement shall request arbitration by notice in
writing to the other party. In such event, the parties to this Agreement shall,
within thirty (30) days after this right to arbitration DCRI and Buyers shall
both appoint one person as an arbitrator to hear and determine the dispute, then
the two arbitrators so chosen shall, within fifteen (15) days, select a third
impartial arbitrator; the majority decision of the arbitrators shall be final
and conclusive upon the parties to this Agreement. Each party to the arbitration
proceedings shall bear his or its own expenses, except that the expenses of the
arbitrators shall be borne by DCRI and/or Buyers as determined by the
arbitrator(s) involved.
This Agreement is dated as of December 20, 2002, but has actually been
executed and delivered by the parties hereto this _______ day of December, 2002.
BUYERS SELLER and DCRI
DIVERSIFIED CORPORATE
RESOURCES, INC.
________________________ By: ______________________________________
Xxxxxx X. Xxxxxx J. Xxxxxxx Xxxxx, Chairman and CEO
MAGIC NORTHEAST, INC.
________________________ ______________________________________
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________________________ By: ______________________________________
Xxxxxx Xxxxxx J. Xxxxxxx Xxxxx, Chairman and CEO
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Schedule 1.2(a)
Retained Books and Records
25
Section 4.2
Employee Benefits
26
Schedule 7.4
Seller Legal Opinion
27
Schedule 8.4
Buyers Legal Opinion
Schedule 9.1
Liabilities Retained by Mountain
