Purchase Agreement by and among TRADESHOW PRODUCTS INC. A NEVADA CORPORATION AND EMPLOYMENT SYSTEMS INC. A CALIFORNIA CORPORATION Dated: April 1, 2008
Exhibit
10.01
_______________________________________________________________
by
and among
TRADESHOW
PRODUCTS INC.
A
NEVADA CORPORATION
AND
EMPLOYMENT
SYSTEMS INC.
A
CALIFORNIA CORPORATION
_________________________________
Dated:
April 1,
2008
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This
PURCHASE AGREEMENT (the “Agreement”),
effective as of the April 1, 2008 (the “Closing
Date”), by and among Employment Systems, Inc. (“Seller”), and Tradeshow
Products, Inc. (“Buyer”).
B
A C K G R O U N D
WHEREAS,
Seller is in the business of staffing and other professional employment services
and owns and maintains those “Client
Contracts” (as identified in Schedule A) as well as certain office
equipment leases (“Leases’)
as listed on Schedule B;
WHEREAS,
the Client Contracts are subject to termination by the applicable client with or
without cause;
WHEREAS,
Seller is obligated to various services pursuant to the Client
Contracts;
WHEREAS,
Seller is presently unable to discharge its obligations under the Client
Contracts and/or maintain worker’s compensation insurance for the benefit of its
clients;
WHEREAS,
Seller is presently indebted to Buyer in the approximate amount of $96,753.39
(the “Debt”) for professional employment services rendered;
WHEREAS,
recorded tax liens presently exist amounting to approximately $550,000.00 (the
“Tax Liens”).
WHEREAS,
Buyer desires to purchase and acquire, and Seller desires to sell and/or
transfer, the Client Contracts and Leases on the terms and subject to the
conditions set forth in this Agreement;
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants,
promises and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE
I
THE
TRANSACTION
1.1 Sale and
Purchase. Subject to the terms and conditions set forth
herein, the Seller hereby sells, transfers and assigns the Client Contracts to
Buyer, and Buyer hereby purchases the Client Contracts from the
Seller. Further, Seller shall cooperate with Buyer in order to
effectuate the transfers and assignments of the Leases from Seller to
Buyer.
1.2 Purchase
Price. The aggregate purchase price for the Client Contracts
shall be $100,000.00 in addition to an ongoing payment of 3% of the gross
payroll each month for as long as the clients remain with Seller, or $15,000.00
per month for sixty (60) months, whichever is greater (the “Purchase
Price”). Payments to be made as payroll occurs either weekly, bi
weekly or monthly and adjusted on a monthly basis.† Ten thousand dollars
($10,000.00) monthly of the Purchase Price shall be paid, as the obligation
arises, directly from Buyer to the appropriate tax collection authority(ies) in
order to pay down the Tax Liens. Buyer shall not be obligated the
balance of the Purchase Price directly to Seller. Further, Buyer
shall, in exchange for receipt of the Leases, discharge and forgive Seller’s
Debt obligation.
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1.3 Deliveries.
(a) Deliveries by
Seller. On the Closing Date, Seller will deliver to Buyer the
following: Copies of all client contracts, payroll records, and employee files
as enumerated under Schedule A.
(b) Seller
shall assign the Leases on Schedule B to Buyer.
(c) All
debt by and between Buyer and Seller, prior to April 1, 2008, will be
cancelled.
(c) Seller
shall allow Buyer to have control of Sellers bank accounts, in order to
transition clients, for ninety (90) days.
ARTICLE
II
REPRESENTATIONS AND
WARRANTIES OF Seller AND Buyer
Seller
and Buyer hereby represent and warrant as follows:
2.1 Organization. Seller
and Buyer are corporations duly organized, validly existing and in good standing
under the laws of the state in which they were organized and each has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder.
2.2 Authorization and
Enforceability. The execution, delivery and performance by
Seller and Buyer of this Agreement and the consummation by each of them of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller and Buyer. This Agreement has
been duly executed and delivered by Seller and Buyer and constitutes the legal,
valid and binding obligations of Seller and Buyer, enforceable against Seller
and Buyer in accordance with its terms, except (a)†as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors’ rights generally, and (b)†as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.
2.3 No Violation of Laws or
Agreements. The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated by this Agreement and the
compliance with the terms, conditions and provisions of this Agreement by Seller
and Buyer will not (a)†contravene any provision of the respective entities’
charter or organizational documents, (b) conflict with or result in a breach of
or constitute a default (or an event which might, with the passage of time or
the giving of notice or both, constitute a default) under any of the terms,
conditions or provisions of any indenture, mortgage, loan or credit agreement or
any other agreement or instrument to which Seller or Buyer is a party or by
which any of them or any of their assets may be bound or affected, or any
judgment or order of any court or governmental department, commission, board,
agency or instrumentality, domestic or foreign, or any applicable law, rule or
regulation, (c) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon Seller’s or Buyer’s assets or give to
others any interests or rights therein, or (d) result in the maturation or
acceleration of any liability or obligation of Seller or Buyer (or give others
the right to cause such a maturation or acceleration).
2.4 Brokerage. Neither
Seller nor Buyer has made any agreement or taken any other action which might
cause anyone to become entitled to a broker’s fee or commission as a result of
the transactions contemplated hereunder.
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ARTICLE
III
COVENANTS AND
AGREEMENTS
3.2 Costs and
Expenses. Each of the parties shall pay all of the fees and
expenses incurred by such party in negotiating and preparing this Agreement (and
all other documents executed in connection herewith or therewith) and in
consummating the transactions contemplated hereby.
3.5 Post-Closing
Cooperation. Buyer and Buyer shall reasonably cooperate, and
shall cause their respective subsidiaries, officers, employees, agents, auditors
and other representatives reasonably to cooperate, in preparing and filing all
returns, including maintaining and making available to each other all records
necessary in connection with taxes and in resolving all disputes and
audits.
3.6 Tax
Matters. Notwithstanding any provision in this Agreement to
the contrary, all Transfer Taxes (defined below) incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by Buyer,
and Seller and Buyer shall cooperate in timely making all filings, returns,
reports and forms as may be required to comply with the provisions of such tax
laws. For purposes of this Section 4.6, the term “Transfer
Taxes” shall mean transfer, documentary, sales, use, registration and
other such taxes.
ARTICLE
IV
INDEMNIFICATION
4.1 Indemnification.
(a) By
Seller. From and after the Closing Date, Seller shall
indemnify, defend and hold Buyer and its directors, officers, agents,
representatives, successors and assigns (collectively, “Buyer
Indemnified Parties”) harmless of and from and against any and all
damages, liabilities, losses, costs and expenses (including reasonable and
documented attorneys’ fees) (collectively, “Losses”)
in connection with any claims, suits, demands, actions, causes of action or
other proceedings brought or threatened against any Buyer Indemnified Parties
which arise out of, result from or relate to any breach of the representations
or warranties set forth herein. In no event shall Seller be liable to
any Buyer Indemnified Parties for special, exemplary, indirect, loss of profits,
incidental, consequential, diminution in value or punitive damages.
(b) By
Buyer. From and after the Closing Date, Buyer shall indemnify,
defend and hold Seller and its subsidiaries, affiliates and parents and its and
their respective directors, officers, agents, representatives, successors and
assigns (collectively, “Seller
Indemnified Parties”) harmless of and
from and against any and all Losses in connection with any claims, suits,
demands, actions, causes of action or other proceedings brought or threatened
against any Seller Indemnified Parties which arise out of, result from or relate
to (i) any misrepresentation or breach of or default in connection with any of
the representations, warranties, covenants and agreements given or made by Buyer
in this Agreement, and (ii) the operation or use of the business or assets of
Buyer on or after the Closing Date. In no event shall Buyer be liable
to any Seller Indemnified Parties for special, exemplary, indirect, loss of
profits, incidental, consequential, diminution in value or punitive
damages.
4.2 Conditions of
Indemnification of Third-Party Claims. The respective
obligations and liabilities of Buyer and Seller (the “Indemnifying
Party”) to the Buyer Indemnified Parties or the Seller Indemnified
Parties, as the case may be, as indemnified parties (the “Indemnified
Party”) with respect to claims resulting from the assertion of liability
by third parties (“Third Party Claim”)
shall be subject to the following terms and conditions:
(a) Within
ten (10) calendar days (or such earlier time as might be required to avoid
prejudicing the Indemnifying Party’s position) after receipt of notice of
commencement of any action evidenced by service of process or other legal
pleading, or with reasonable promptness after the assertion of any claim by a
third party, the Indemnified Party shall give the Indemnifying Party written
notice thereof together with a copy of such claim, process or other legal
pleading, and the Indemnifying Party shall have the right to undertake the
defense thereof by representatives of its own choosing and at its own expense;
provided, that the Indemnified Party
may participate in the defense with counsel of its own choice and at its own
expense (provided that the Indemnifying Party will bear the expense of counsel
for the Indemnified Party if counsel for the Indemnified Party could have an
inconsistent or conflicting interest from that of the Indemnifying Party or one
or more legal defenses that are different from or additional to those available
to the Indemnifying Party).
(b) If
the Indemnifying Party, by the fifteenth (15th)
calendar day after receipt of notice of any such claim (or, if earlier, by the
tenth (10th)
calendar day preceding the day on which an answer or other pleading must be
served in order to prevent judgment by default in favor of the person asserting
such claim), does not elect to defend against such claim, the Indemnified
Party,
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such
settlement involves only the payment of money and the claimant provides to the
Indemnified Party a general release from all liability in respect of such
claim. If the settlement of the claim involves more than the payment
of money, the Indemnifying Party shall not settle the claim without the prior
consent of the Indemnified Party, which consent shall not be unreasonably
withheld.
(d) The
Indemnified Party and the Indemnifying Party will each cooperate with all
reasonable requests of the other for the purpose of defending against any
claims.
(e) Notwithstanding
anything to the contrary in this Agreement, the Indemnified Party’s failure to
give any notice under this Section 5.2 shall not relieve the Indemnifying
Party’s obligations under this Article V, except to the extent the Indemnifying
Party is materially prejudiced by such failure.
4.3 Procedure for
Claims. In the event any Indemnified Party has a claim against
an Indemnifying Party hereunder which does not involve a Third Party Claim, the
Indemnified Party shall provide written notice to the Indemnifying Party (the
“Notice of
Claim”), describing in detail the nature of the claim, the basis of the
Indemnified Party’s request for indemnification under this Agreement and the
amount for which indemnification is sought (the “Indemnification
Amount”), if
known.
4.4 Sole
Remedy. Buyer hereby acknowledges and agrees that, from and
after the Closing Date, its sole remedy with respect to any and all claims for
money damages arising out of or relating to this Agreement shall be pursuant and
subject to the requirements of the indemnification provisions
herein.
ARTICLE
V
MISCELLANEOUS
5.1 Nature and Survival of
Representations. The representations and warranties of Buyer,
Seller and Buyer contained in this Agreement shall survive the closing for a
period ending on the first anniversary of the Closing Date.
5.2 Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered, or
if mailed, when mailed by United States first-class, certified or registered
mail, postage prepaid, or if delivered through a nationally recognized overnight
carrier, to the other party at the following addresses (or at such other address
as shall be given in writing by any party to the other):
If to
Buyer, to:
Tradeshow Products Inc
0000 Xxxxxx Xxx., #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxx
Xxxxxxxx
If to Seller:
Employment Systems Inc.
0000 Xxxxx Xxxxx Xx.
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
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5.3 Successors and
Assigns. Neither Buyer nor Seller may assign this Agreement
without the prior written consent of the other party hereto; provided, however, either party
may assign this Agreement to any wholly owned subsidiary without having to
obtain such written consent. Subject to the foregoing, this
Agreement, and all rights and powers granted hereby, will bind and inure to the
benefit of the parties hereto and their respective successors and
assigns.
5.4 Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of California without giving effect to
principles of conflicts of laws. The parties hereto agree that the
federal and state courts located in Orange or San Diego counties shall
constitute the exclusive jurisdiction and venue for purposes of any dispute
arising under or regarding this Agreement.
5.5 Headings;
Interpretation. The headings preceding the text of the
sections and subsections hereof are inserted solely for convenience of reference
and shall not constitute a part of this Agreement, nor shall they affect its
meaning, construction or effect. The parties agree that any rule of
law or any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived.
5.6 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but which together shall constitute one and the same
instrument.
5.7 Further
Assurances. Each party shall cooperate and take such action as
may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
5.8 Amendment and
Waiver. The parties may by mutual agreement amend this
Agreement in any respect. To be effective, any such amendment or any
waiver must be in writing and be signed by each party hereto.
5.9 Severability. This
Agreement shall be deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or enforceability of
this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties
hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be valid
and enforceable.
5.10 No Other
Beneficiaries. This Agreement is being made and entered into
solely for the benefit of Buyer and Seller and none of Buyer, Buyer or Seller
intends hereby to create any rights in favor of any other person, as a third
party beneficiary of this Agreement or otherwise.
5.11 Entire
Agreement. This Agreement and the Schedules and Exhibits
hereto, each of which is hereby incorporated herein, set forth all of the
promises, covenants, agreements, conditions, undertakings, representations and
warranties between the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written.
[SIGNATURES
ON FOLLOWING PAGE]
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IN
WITNESS WHEREOF, the parties hereto have executed this Purchase Agreement the
day and year first above written.
TRADESHOW
PRODUCTS INC.
/s/ Xxxxx
Xxxxxxxx
By:______________________________
Xxxxx
Xxxxxxxx
CEO
Date:
4/1/2008
EMPLOYMENT
SYSTEMS INC
/s/ Xxxxx
Xxxxx
By:______________________________
Xxxxx
Xxxxx
Chairman
Date:
4/1/2008
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