EXHIBIT 10.1
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated the ___ day of ______________, 19__, by and among
COMFORCE GLOBAL, INC. (hereinafter referred to as the "Purchaser"), a Delaware
corporation, with its principal office at 0000 Xxxxxx Xxxxxx, Xxxx Xxxxxxx, XX
00000, and XXXXXXXX COMMUNICATIONS SERVICES, INC., a Florida corporation, with
its principal office located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000,
Xxxxx 0, Xxx 00X, Xxxxxxxx, XX 00000 (hereinafter referred to as the "Seller"),
and XXXXX XXXXXXXX, an individual residing at Xxxxx 0, Xxx 00X, Xxxxxxxx, XX
00000, (hereinafter alternatively referred to as "Xxxxxxxx" or "Stockholder").
WHEREAS, the Seller desires to sell and the Purchaser desires to acquire certain
of the properties and assets utilized by Seller in the operation of its business
as they exist as of the Closing Date, and to take over such business and operate
it thereafter as its own, subject only to certain liabilities enumerated herein,
for the purchase price hereinafter described and upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of such sale and of the foregoing and of the
mutual agreements hereinafter set forth, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. In addition to the terms defined
throughout this Agreement (as defined), the following terms shall have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):
"Affiliate" means any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and, without limiting the generality of the foregoing, includes (i) any
Person which beneficially owns or holds 25% or more of any class of voting
securities of such Person or 25% or more of the equity interest in such Person,
(ii) any Person of which such Person beneficially owns or holds 25% or more of
any class of voting securities or in which such Person beneficially owns or
holds 25% or more of the equity interest in such Person and (iii) any director,
officer or employee of such Person. For the purposes of this definition, the
term "control" (including, with correlative meanings, the terms "controlled by"
and "under common control with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Agreement" means this Agreement together with all exhibits,
schedules, supplements and documents as may be attached hereto or incorporated
herein by reference.
"Billable Employees" means those employees, consultants and
independent contractors of Seller who work or perform services who are on
assignment to Seller's Customers and for whom a direct charge to the Customer is
made.
"Business" means providing one or more of a wide range of
technical and consulting services to communications, governmental customers and
clients through the use of skilled personnel who are generally qualified
designers, drafters, engineers, computer programmers, systems analysts,
technicians and other skilled personnel. The personnel are generally utilized by
the clients and customers on a temporary, project or peak period basis. Primary
lines of business activity include information technology, design, drafting,
engineering, telecommunications, transmission, switching, CATV systems, OSP and
construction, premises network and data services, support services, systems
analysis, technical publications, consulting and technical staff augmentation
services.
"Closing" the consummation of the within transaction including
the execution and delivery of all Property, funds, documents, certificates,
resolutions, assignments and opinions contemplated in this Agreement.
"Closing Adjustment" shall be the adjustments referenced in
Section 11.2 of this Agreement.
"Closing Date" means the established date for the Closing,
which date shall be and mean such other date as shall be agreed upon by the
parties.
"Customers" those Persons to which Seller has made sales or
rendered services during any time prior to Closing and unless the context so
requires, any prospective customers.
"Escrow Agreement" has the meaning ascribed thereto in Section
3.1(b).
"GAAP" means generally accepted accounting principles in the
United States of America.
"Net Income" means the net operating income of the Business
acquired hereunder, before allocation of Federal and State income taxes and the
Purchaser's general overhead, administrative and management costs and fees. The
operating expenses to be deducted from the revenue of the Business are all
expenses incurred by the Business which shall include, but not be limited to,
office rental and utility expense, wages, payroll associated costs, deductions
and expenses, sales and recruiting expenses, depreciation and interest (but not
including interest on any funds used for acquisition of the assets sold
hereunder). Interest will be limited to the lesser of actual interest or $10,000
per year.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a business trust or any other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Primary Contractor" shall have the meaning ascribed thereto
in Section 3.1(a).
"Property" means all of the following assets of the Company to
the extent the same are generally utilized by Company in connection with the
operation of the Business as of the date hereof and/or at any time prior to
Closing:
(a) "General Intangibles" - (i) the sole and exclusive right,
to use the names "Xxxxxxxx Communications Services, Inc.", any similar names,
and, the sole and exclusive right to utilize any and all of the following
associated with, arising out of, relating to or utilized, as of the date hereof,
in connection with the Business: any and all trade names, trademarks,
copyrights, service marks, logos and slogans (including, without limitation, all
registrations, filings and certificates and the sole and exclusive rights to
file and/or prosecute any such registrations, filings and certificates) and (ii)
all Seller=s right title and interest in computer software, programs, know-how,
trade secrets and data bases used in the Business.
(b) "Customer Materials" - any and all agreements, orders,
requirements and inquiries from or with customers (present and/or past) and/or
prospective customers arising out of or relating to the operation of and/or the
Business including, without limitation, any and all of such materials from or
with any of Customers.
(c) "Resumes" - all information for or with respect to
current, former or prospective employees in whatever medium that it be
manifested, depicted, stored or presented including, but not limited to, paper,
hardcopy, computer disks, tapes and databases of the Seller whose services are
or have been provided to customers of the Seller prior to the date hereof
(collectively "Customers").
(d) "Real Property" - those leasehold interests described on
Exhibit "A" annexed hereto and made a part hereof.
(e) "Records" - the originals or certified copies of those
business or financial records of the Seller, evidencing the Customer Materials,
Resumes, General Intangibles, Equipment and/or Company Employees.
(f) "Equipment" - all of the furniture and equipment utilized
by the Company as set forth on Exhibit "B" annexed hereto and made a part
hereof.
(g) "Company Employees" - those persons whose services have
been provided to Customers by the Company at any time during the last 10 months
including, without limitation, the sole and exclusive right to employ such
individuals.
"Purchase Price" has the meaning ascribed thereto in Article
III of this Agreement.
"Purchaser" has the meaning ascribed thereto in the Preamble.
"Receivables" shall have the meaning ascribed thereto in
Section 3.5.
"Receivables Collection Period" shall have the meaning
ascribed thereto in Section 3.5(b) of this Agreement.
"Seller" has the meaning ascribed thereto in the Preamble.
"Stockholder" has the meaning ascribed thereto in the
Preamble.
"U.S. $ or $" means the currency of the United States of
America.
"Western Region" shall have the meaning ascribed thereto in
Section 3.1(a).
1.2 Certain Terms. All references to Articles and Sections herein
are to the Articles and Sections of this Agreement unless otherwise specified.
ARTICLE II
SALE OF THE ASSETS OF THE BUSINESS
2.1 Upon the terms and subject to the conditions set forth in this
Agreement including Article VIII and in consideration of the payment to the
Seller of the purchase price described in Section 3.1, the Seller hereby agrees
to sell, convey, assign and transfer to the Purchaser the following which relate
to the Seller's Business of providing qualified personnel in the contract
technical services industry to its clients on a temporary or project basis:
(a) All contracts and work orders issued pursuant thereto held
by Seller with clients for the providing of services and personnel, which are
listed in Schedule C hereto.
(b) All files and records pertinent, relevant or in any way
connected with the performance of services under the contracts referred to in
2.1 (a) above.
(c) All sales records and client listings dealing with or
pertaining to former or prospective Customers including but not necessarily
limited to records of sales calls and follow-ups previously made in connection
with the solicitation of business.
(d) All personnel files relating to employees wherever
located, in whatever form in which they exist and whatever medium maintained or
stored, including but not necessarily limited to all payroll records, resume
files maintained by Seller including those with respect to personnel previously
employed by Seller and those being maintained for possible future use by Seller
in the performance and conduct of its business, all payroll records, and
year-to-date earning statements and reports. It being agreed that such personnel
files, payroll records, earning statements, reports and inventory of resumes are
an essential and important element of the assets being purchased herein, Seller
represents that it has utilized its best efforts to maintain the files and
inventory of resumes in a current and usable condition.
(e) The office furniture, fixtures, supplies, brochures, sales
material, computer equipment, and any other equipment owned by the Seller
wherever located, listed and described in Schedule B which is annexed and made a
part hereof.
(f) All signs and any and all other similar assets, including
without limitation, the name "Xxxxxxxx Communications Services, Inc.", and any
variations of such name; good will; and trade names used and usable by the
Seller with respect to the conduct of its business.
(g) All right, title and interest which Seller has to computer
software, programs, know-how, trade secrets and computer data bases utilized in
the Business.
(h) All keys, combinations, security devices and codes for or
with respect to all offices, storage units, vaults, safety deposit boxes of the
Seller;
(i) The originals or all permits, licenses, consents,
authorizations and/or permissions for or with respect to the Business;
(j) A copy of all computer software and programs, licenses,
data bases utilized in connection with the operation of the Business together
with a right to use same;
(k) All physical embodiments of the Property; and
(l) Executed counterparts, and/or copies, as the case may be,
of the instruments and documents required to be delivered to the Purchaser at
the Closing as herein provided.
ARTICLE III
PURCHASE PRICE
3.1 Upon the terms and subject to the conditions, and the performance
of Seller's obligations and duties set forth in this Agreement, and in
consideration for the conveyance, transfer and assignment of the assets and
other rights to the Purchaser as described in Section 1 above, the Purchaser
shall pay the Seller the purchase price set forth below:
a. The sum of TWO MILLION ($2,000,000) DOLLARS on the date of
Closing, provided that Seller has been designated as the "primary contractor" in
the Western region of its customer Reltec. For the purpose of this Agreement
"Primary Contractor" shall mean the vendor of Reltec which is given personnel
requirements prior to any other vendor to Reltec. The "Western Region" shall
mean California and all contiguous states.
(i) If at the Closing, Reltec has not appointed its vendors
for the coming year, or Seller is not the Primary Contractor to Reltec in the
Western Region, then Purchaser shall pay to Seller the sum of ONE MILLION THREE
THOUSAND ($1,300,000) DOLLARS (including a $100,000 xxxxxxx money deposit to be
delivered on the date of execution hereof) at Closing and at the same time shall
place the sum of SEVEN HUNDRED THOUSAND ($700,000) DOLLARS into an escrow
account or multiple accounts to be maintained by Xxxxx X. XxXxxxxx, P.A. in
accordance herewith with the Escrow Agreement ("Escrow Funds"). The Escrow Funds
will be released to Purchaser or Seller; as the case may be, as follows:
(A) The Escrow Funds together with accrued interest
will be released to Seller at the earliest of either:
(1) Billable Employees on Purchaser=s payroll
generate -net income- in Xxxxxxxx Division at an annual rate which equals or
exceeds one million dollars for the one hundred eighty (180) day period
beginning with the Closing Date, or
(2) Purchaser has been designated the Primary
Contractor of Reltec in the Western Region.
(B) If either the Primary Contractor designation or the
Net Income fails to satisfy the requirements set forth in Section
3.1(a)(i)(A)(1) or (2) above, then the Escrow Funds will be released to the
Seller on a prorated basis in accordance with the following formula:
1. Net Income at 12th & 24th months from Closing (Annualized) = Percentage Net
---------------------------------------------------------- Income
$1,000,000 Net Income
2. Percentage Net Income X $700,000 = Seller's Initial Escrow Fund
Payment
3. The difference between the $700,000 Escrow Fund and the Seller's Initial
Escrow Fund Payment will be maintained in escrow.
(C) If the Seller's Initial Escrow Fund Payment is less
than $700,000 then the Escrow Agent shall maintain the balance of the Escrow
Fund for a period of two (2) years from Closing.
(D) If the Purchaser reaches and maintains Net Income
in Xxxxxxxx Division in an amount which equals or exceeds an annual rate of
$1,000,000 for a period of 180 consecutive days commencing at the Closing ending
at any time within two (2) years from the date of Closing, then the balance of
the Escrow Fund will be paid to Seller by the Escrow Agent.
(E) If the Seller cannot meet the requirements of
Section 3.1(a)(i) above then the entire balance of the Escrow Fund will be
returned to the Purchaser by the Escrow Agent notwithstanding the rate of Net
Income earnings at the end of the two year period.
(F) Escrow Agent shall be provided a customary save
harmless and indemnity clause.
(b) In addition to the payments set forth in Sections 3.1(a), above,
the Purchaser shall pay the Seller an amount not to exceed $500,000 per year for
a period of four (4) years on the first, second, third and fourth anniversary of
the Closing Date in accordance with and subject to the following:
(i) The annual potential earn-out of $500,000 per year shall be
reduced on a dollar for dollar basis for each dollar the Net Income of the
Business of the Xxxxxxxx Division for the immediate preceding year is less than
$1,000,000.
(ii) The Seller shall be entitled to a credit to be used in
calculating the availability of a potential earn out in the next succeeding year
for all amounts in excess of $1,000,000 in net income generated by the Business
in the immediate preceding year.
(iii) Shortfalls in any annual Earn Out payment on account of net
earnings less than the $1 million can be made up in subsequent years within the
four year period to the extent net earnings in such subsequent period exceed $1
million.
(c) Seller shall pay sales or other tax, if any, (with the exception
of income tax) related to this transaction.
3.2 Purchaser agrees to provide the Seller with accounting statements,
in reasonable detail, which will indicate the information necessary to make the
calculation referenced in paragraph 3.1 above and 3.3 below. The determination
of Net Income and calculation of any pay-out will be made in accordance with
GAAP. Said statements will be deemed final and correct unless the Seller shall,
within 30 days from the date of delivery of the accounting statements have
contested the information therein by giving Seller written notice. If the Seller
does not contest the accounting statements within the 30 day period, the
statements will be deemed correct and Seller shall waive all right to contest
the statements. Any notice hereunder must specify the disagreement in reasonable
detail.
3.3 With respect to the collection of accounts receivables due and
owing to the Seller at the time of Closing ("Receivables"); Seller shall xxxx
and collect its own receivables, provided such is done in a commercially
reasonable manner and provided further that suit will not be filed against any
creditor without prior written permission of Purchaser - which shall not be
unreasonably withheld. To the extent funds cannot be related to pre or post
closing work, the party receiving same shall hold the funds in a separate
account until the invoice is agreed upon.
3.4 (a) The sum of $100,000 shall be immediately wire transferred to
the trust account of Xxxxx X. XxXxxxxx, P.A. - to be held in escrow pending the
closing hereof. Xxxxx X. XxXxxxxx, P.A., as escrow agent is authorized to
deposit said funds and hold same in escrow, subject to clearance and to disburse
said funds in accordance with the terms and conditions of the Contract. Failure
of Purchaser to cause said funds to be transferred within twenty-four hours of
the execution hereof and transmittal back by facsimile shall not excuse
Purchaser=s performance and shall, at the option of Seller, render this Contract
voidable. If in doubt as to agent=s duties of liabilities under the provisions
of this Contract, agent may at agent=s option, continue to hold said funds in
escrow until the parties mutually agree to its disbursement or until a judgment
of a court of competent jurisdiction shall determine the rights of the parties
or agent may deposit same with the clerk of the Circuit Court having
jurisdiction of the dispute. Upon notifying all parties concerned of such
action, all liability on the part of agent shall fully terminate except to the
extent of accounting for any items previously delivered out of escrow. The
parties acknowledge and agree that the Escrow Agent has acted and will continue
to act as counsel to the Seller, including, without limitation, in connection
with any dispute arising hereunder. The Escrow Agent shall not be taken or
omitted hereunder except for its gross negligence, bad faith, or willful
misconduct. Any suit between Purchaser and Seller wherein Escrow Agent is made a
party because of acting as agent hereunder or in any suit wherein agent
interpleades the subject matter of the Escrow Funds or equivalent and charged
and awarded as court costs in favor of the prevailing party. The parties agree
that Escrow Agent shall not be liable to any party or person for misdelivery to
Purchaser or Seller of items subject to this escrow unless such misdelivery is
due to willful breach of the Contract or gross negligence, bad faith or willful
misconduct of the Escrow Agent.
(b) Provided that the Seller is ready, willing and able to
close this transaction in all respect at the time of Closing, if Purchaser is
unable to close this transaction in accordance with the provisions of Section
5.1 below, then the deposit paid by Purchaser may be retained by or for the
account of Seller as agreed upon liquidated damages, consideration for the
execution of this Contract and the full settlement of any claims, whereupon
Purchaser and Seller shall be relieved of all obligations under the Contract; or
Seller, at Seller=s option, may proceed in equity to enforce Seller=s rights
under this Contract. If Seller fails, neglects, or refuses to perform this
Contract, the Purchaser may seek specific performance or elect to receive the
return of Purchaser=s deposit, without thereby waiving any action for damages
resulting from Seller=s reach.
ARTICLE IV
ASSUMPTION OF LIABILITIES BY PURCHASER
4.1 Anything hereinabove contained to the contrary notwithstanding,
Purchaser shall not assume any liabilities of Seller with the exception of the
Customer agreements (Exhibit C) and employee contracts (Exhibit D) Purchaser in
its sole discretion agrees in writing to assume.
ARTICLE V
CLOSING AND CLOSING DATE
5.1 It is the Purchaser=s intention to close this transaction by March
1, 1996 and it will make diligent efforts to do so. However, closing of the
transaction contemplated by this Agreement (the -Closing-) shall take place no
later than March 29, 1996 (-Closing Date-) at the offices of Seller or Seller=s
attorney, Xxxxx X. XxXxxxxx, P.A., 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
or such other time and place as may be mutually approved by the parties. All
adjustments shall be made as of 12:01 a.m. of the Sunday of the payroll week of
Closing. The parties shall adjust all expenses on a pro rata basis as of the
date operations are assumed by the Purchaser.
5.2 At the Closing, the Seller shall deliver to the Purchaser the
following:
(a) Assignments of the contracts listed in Schedule C hereto
executed and approved by an authorized representative of Seller's client, in a
form satisfactory to Purchaser.
(b) A Xxxx of Sale conveying title to the tangible personal
property listed in Schedule B, in the form annexed hereto as Exhibit E.
(c) A certified copy of resolutions adopted unanimously by the
Seller's Board of Directors authorizing the execution, delivery and performance
by the Seller of this Agreement and the consummation of the sale contemplated
hereby, or, at Purchaser's option, a written consent executed by all of the
stockholders of the Seller authorizing and consenting to the sale herein.
(d) Verification in a form satisfactory to Purchaser that
Seller has, at the time of Closing, not less than 60 Billable Employees suitable
for Purchaser's Business; and
(e) The Seller will from time to time at the Purchaser's
request, whether prior to, at, or after the Closing, and without further
consideration, execute and deliver such further instruments and conveyances and
transfers, and take such other action as the Purchaser may reasonably require to
more effectively convey and transfer to the Purchaser any of the assets being
sold hereunder.
(f) Employment agreement between Xxxxxxxx and Purchaser
executed by them in substantially the same form as annexed hereto as Exhibit D.
(g) Sole Stockholders certification in the form annexed as
Exhibit "D".
5.3 Immediately upon the Closing Date, Seller and its Stockholder will
cease and refrain from using the name "Xxxxxxxx Communications Services, Inc."
or any similar name or derivation thereof except in the context of "...formerly
known as Xxxxxxxx Communication Services, Inc." in order to collect receivables
or make government filings.
5.4 As soon as practicable after the Purchaser's request, provided that
the request is made after Closing, the Seller will change the name of the entity
now known as "Xxxxxxxx Communications Services, Inc.".
5.5 Each party shall have the absolute right in its sole discretion to
waive any Closing requirement at or before Closing. If a party does not waive
its rights in whole or in part and the other party is not ready, willing and
able to perform as of Closing, the non-waiving party shall
have the right to terminate this Agreement upon written notice. In the event of
such termination, all of the non-waiving party's obligations shall terminate
without further loss, damage, cost, claim, right or remedy in favor of the other
party
5.6 Seller hereby agrees promptly to pay all employee wages and payroll
charges, trade and other accounts payable upon which it is obligated at Closing.
If Seller does not pay such non-assumed liability accounts payable on the later
of the due date thereof or the tenth (10th) day following notice from Purchaser
to pay such accounts or give Purchaser notice that it has a dispute as to the
amount due, then Purchaser may pay or assume such accounts payable, and
thereafter, such amounts shall be reimbursed by Seller to Purchaser, or, at the
Purchaser's option, may be applied against any monies due Seller.
5.7 Seller also agrees (i) to cure any non-waived breaches or defaults
that may exist on the Closing Date, with respect to any of the contracts or
agreements assumed by Purchaser hereunder, and (ii) to make all payments due or
to become due thereunder attributable to periods ending on or before the Closing
Date. In the event Seller fails to cure any such breach or default or make any
such payment when requested to do so by Purchaser, Purchaser will have the right
to cure any such breach or default or make any such payment on or after the
tenth (10th) day following Purchaser's request that Seller do so. Any amounts so
paid by Purchaser to cure any such breach or default shall be reimbursed by
Seller or Stockholder to Purchaser, or at Purchaser's option, may be applied
against any moneys due Seller or Stockholder under the right of offset granted
in Paragraph 10.2.
5.8 Commencing with the execution of this Agreement and to the extent
not previously delivered at or before Closing Purchaser and Seller agree to
commence the preparation of and make diligent application for, to follow up on,
and to actively and diligently pursue all approvals and consents reasonably
requested by Purchaser including but not limited to the consents for approval of
assignment of customer and billable employee contracts in a form reasonably
acceptable to Purchaser. If all such consents, and approvals are not available
at Closing the Stockholder agrees to diligently pursue obtaining such approvals
and consents after the Closing at Purchaser's request, at Stockholder's sole
cost and expense.
ARTICLE VI
SELLER'S AND STOCKHOLDER'S REPRESENTATIONS AND WARRANTIES
In order to induce Purchaser to execute and perform this Agreement,
Seller and Stockholder do hereby represent, warrant, covenant and agree (which
representations, survival warranties, covenants and agreements shall be and be
deemed to be continuing and survive the execution and delivery of this Agreement
and the Closing Date) as follows:
6.1 The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, with full power
and authority, corporate and otherwise, and with all licenses, permits,
certifications, registrations, approvals, consents and franchises necessary to
own or lease and operate its properties and to conduct its business as presently
being conducted. The Seller is duly qualified to do business as a foreign
corporation,
and is in good standing, in all jurisdictions, if any, wherein such
qualification is necessary.
6.2 Seller owns and has good and marketable title in and to the
Property and assets to be sold or transferred hereunder free and clear of all
liens, claims and encumbrances and rights and option of others (except as herein
expressly provided to the contrary).
6.3 Xxxxxxxx is the sole stockholder of the Seller and at the Closing
there shall not be authorized and/or issued and outstanding any shares of
capital stock of the Seller and/or rights to purchase shares of capital stock of
the Seller except those issued to Xxxxxxxx. The issued and outstanding shares of
the Seller have been duly authorized and validly issued, and all such
outstanding shares are fully paid and non assessable. There are not now nor will
there be at the Closing any outstanding options, warrants and similar rights to
purchase shares of the Seller's capital stock. There are no preemptive rights.
During the period from the date hereof through the Closing, there will be no
shares of the capital stock of the Seller issued. Except as herein provided, no
dividends or other distributions of the assets of the Seller have or will be
declared and/or paid prior to the Closing on or with respect to the capital
stock of the Seller.
6.4 (i) Seller has the full power and authority, corporate and
otherwise, to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution, delivery and performance
of this Agreement, the consummation by Seller of the transactions herein
contemplated and the compliance by Seller with the terms of this Agreement have
been duly authorized by all necessary corporate action, and this Agreement has
been duly and properly authorized, executed and delivered by Seller and
Stockholder; (iii) this Agreement is the valid and binding obligation of Seller
and Stockholder, enforceable in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights of creditors generally and the
discretion of courts in granting equitable remedies; (iv) the execution,
delivery and performance of this Agreement by Seller and Stockholder and the
consummation by Seller and Stockholder of the transactions herein contemplated
does not, and will not, with or without the giving of notice or the lapse of
time, or both, (A) result in any violation of the Certificate of Incorporation
or By-laws of Seller, (B) result in a breach of or conflict with any of the
terms or provisions of, or constitute a default under, or result in the
modification or termination of, or result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of Seller and/or pursuant to, any indenture, mortgage, note, contract,
commitment or other agreement or instrument to which Seller is a party or by
which it or any of its properties or assets are or may be bound or affected; (C)
violate any existing applicable law, rule, regulation, judgment, order or decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over Seller or any of its properties or businesses; or (D) have any effect on
any agreement, permit, certification, registration, approval, consent, license
or franchise necessary for Seller to own or lease and operate any of its
properties and to conduct its businesses or the ability of Seller to make use
thereof. No consent, approval, authorization or order of any court, Customer,
governmental agency, authority or body and/or any party to an agreement to which
Seller is a party and/or by which it is bound, is required in connection with
the execution, delivery and performance of this Agreement, and/or the
consummation by Seller of the transactions contemplated by this Agreement except
as noted on Schedule H".
6.5 The Seller is not in violation of, or in default under, (i) any
term or provision of its Certificate of Incorporation or By-Laws; (ii) any
material term or provision or any financial covenant of any indenture, mortgage,
contract, commitment or other agreement or instrument to which it is a party or
by which it or any of its properties or business is or may be bound or affected;
or (iii) any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over it or any of its properties or business. Seller owns,
possesses or has obtained all governmental and other licenses, permits,
certifications, registrations, approvals or consents and other authorizations
necessary to own or lease, as the case may be, and to operate its properties and
to conduct its business or operations as presently conducted and all such
governmental and other licenses, permits, certifications, registrations,
approvals, consents and other authorizations are outstanding and in good
standing, and there are no proceedings pending or, to the best of its knowledge,
threatened, or any basis therefore existing, seeking to cancel, terminate or
limit such licenses, permits, certifications, registrations, approvals or
consents or authorizations.
6.6 Prior to the date hereof Seller has delivered to Purchaser the
compiled financial statement of the Seller described on Exhibit "I" annexed
hereto and made a part hereof ("Financial Statements"); copies of which have
been initialed by the parties hereto for identification. The Financial
Statements fairly present the financial position of the Seller as of the
respective dates thereof and the results of operations, and changes in financial
position of the Seller, for each of the periods covered thereby and are true and
accurate. The Financial Statements have been prepared in conformity with
generally accepted accounting principles, applied on a consistent basis
throughout the entire periods involved. As of the date of any balance sheet
forming a part of the Financial Statements, and except as and to the extent
reflected or reserved against therein, the Seller did not have any material
liabilities, debts, obligations or claims (absolute or contingent) asserted
against it and/or which should have been reflected in a balance sheet or the
notes thereto; and all assets reflected thereon are properly reported and
present fairly the value of the assets therein stated in accordance with
generally accepted accounting principles.
6.7 The financial and other books and records of the Seller (including
those forming a part of the Property) (i) are in all material respects true,
complete and correct and have, at all times, been maintained in accordance with
good business and accounting practices; (ii) contain a complete and accurate
description, and specify the location, of all trucks, automobiles, machinery,
equipment, furniture, supplies, tools, drawings and all other tangible personal
property (collectively the "Personal Property") owned by, in the possession of,
or used by the Seller in connection with the operation of the Business in the
normal course of business; (iii) except as set forth on Exhibit "J" annexed
hereto and made a part hereof, none of such Personal Property is leased or
subject to a security agreement, conditional sales contract or other title
retention or security agreement or is other than in the possession of and under
the control of the
Seller, (iv) the Personal Property reflected in such books and records
constitutes all of the tangible personal property necessary for the conduct by
the Seller of the Business as now conducted; and all of the same is in normal
operating condition and the use thereof as presently employed conforms to all
applicable laws and regulations.
6.8 Annexed hereto and labeled Exhibit "A" is a schedule setting forth
a description of each parcel of improved or unimproved real property owned by or
leased to the Seller. Exhibit "A" is true correct and complete in all respect;
each of such leases are in full force and effect with no event of default in
existence or event or occurrence which, with the passage of time and/or giving
of notice would or could mature into an event of default thereunder.
6.9 The Seller owns all rights to utilize the General Intangibles free
and clear of all liens, claims and encumbrances and rights and options of third
parties (including without limitation former or present officers, directors,
stockholders, employees and agent, but excluding the rights of licensors); the
Seller has not licensed or leased any of the General Intangibles and/or any
interest therein to any person and/or entity; the Seller has not infringed, nor
is infringing, upon the rights of others with respect to the General
Intangibles; and the Seller has not received any notice of conflict with the
asserted rights of others with respect to the General Intangibles and the Seller
knows of no basis therefore; and to the best of the knowledge, of the Seller, no
others have infringed upon the General Intangibles.
6.10 The Customer Materials, Resumes and Records represent all of such
materials at any time utilized in connection with, arising out of or relating to
the Business; and none of Seller nor any employee, officer, director or
stockholder of Seller has or shall retain copies thereof and have not prior to
the date hereof, and shall not prior to the Closing, provide to any person or
entity or authorize or permit another to make, receive or utilize any of such
Customer Materials, Resumes or Records and/or the information therein or thereon
reflected, except as permitted in Article VIII.
6.11 The Seller did not have any material liabilities, debts,
obligations or claims asserted against it, whether accrued, absolute, contingent
or otherwise, and whether due or to become due, including, but not limited to,
liabilities on account of due and unpaid taxes, other governmental charges or
lawsuits except as listed on Exhibit "K".
6.12 Since the date of the most recent balance sheet included in the
Financial Statement, there has been no material adverse change to the business
of the Seller nor its prospects and the Seller has not, except as set forth on
Exhibit "L" annexed hereto and made a part hereof, (i) incurred any obligation
or liability (absolute or contingent, secured or unsecured) except obligations
and liabilities incurred in the ordinary course of the operation or business of
its business as carried on at and prior to such date; (ii) canceled, without
payment in full, any notes, loans or other obligations receivable or other debts
or claims held by it other than in the ordinary course of business; (iii) sold,
assigned, transferred, abandoned, mortgaged, pledged or subjected to lien any
contract, permit, license, franchise or other agreement other than sales or
other dispositions of goods or services in the ordinary course of business at
customary prices; (iv) increased compensation payable to any of its officers,
directors or other employees including
in the term "compensation", salaries, fringe benefits, pensions, profit
participation and payment of benefits of any kind whatsoever); (v) entered into
any line of business other than that conducted by it on such date or entered
into any transaction in the ordinary course of its business; (vi) conducted any
line of business in any manner except by transactions customary in the operation
of its business as conducted on such date; (vii) declared, made or paid, or set
aside for payment, any cash or non-cash dividends or other distribution on any
shares of its capital stock; (viii) changed or modified any accounting practice;
(ix) waived any rights; (x) made any capital expenditure; (xi) pay any amounts
to shareholders except the usual salary and benefits; (xii) entered into any
agreement too take any of the actions above referenced.
6.13 Seller has not incurred any liability for any finders fees or
similar payments in connection with the transactions herein contemplated except
as set forth herein.
6.14 Except as set forth on Exhibit "M" annexed hereto and made a part
hereof, the Seller is not in default under the terms of any outstanding
agreement which is material to the business, operations, properties, assets or
condition of the Company; and there exists no event of default or event which,
with notice and/or the passage of time, or both, would constitute any such
default.
6.15 Except as set forth on Exhibit "N" annexed hereto and made a part
hereof, there are no claims, actions, suits, proceedings, arbitrations,
investigations or inquiries against the Seller before any court or governmental
agency, court or tribunal, domestic, or foreign, or before any private
arbitration tribunal, pending, or, to the best of the knowledge of Seller,
threatened against the Seller or involving its properties or businesses; nor, to
the best of the knowledge of Seller, is there any basis for any such claim,
action, suit, proceeding, arbitration, investigation or inquiry to be made by
any person and/or entity, including without limitation any customer, supplier,
lender, stockholder, former or current employee, agent or landlord. There are no
outstanding orders, judgments or decrees or any court, governmental agency or
other tribunal specifically naming the Seller and/or enjoining the Seller from
taking, or requiring the Seller to take, any action, and/or by which the Seller,
and/or its properties or businesses are bound or subject.
6.16 The Seller has filed all federal tax returns (whether relating to
income, sales, franchise, withholding, real or personal property, employment or
otherwise) required to be filed under the laws of the United States and Florida,
and has been paid in full all taxes which are due pursuant such returns or
claimed to be due by any taxing authority or otherwise due and owing. No
penalties or other charges are or will become due with respect to the late
filing of any such return. To the best of the knowledge of Seller, after due
investigation, each such tax return heretofore filed by the Seller correctly and
accurately reflects the amount of its tax liability thereunder. The Seller has
withheld, collected and paid all other levies, assessments, license fees and
taxes to the extent required and, with respect to payments, to the extent that
the same have become due and payable. Seller may owe taxes in other states and
shall indemnify Comforce for any liability it may incur therefore.
6.17 Since the date of the most recent balance sheet included in
the Financial Statements, the Seller has not sustained any material loss or
interference with its business of any kind nature or description including
without limitation, from fire, storm, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; nor have there been, and prior to the
Closing, there will not be, any material adverse change in or affecting the
general affairs, management, financial condition, stockholders_ equity, results
of operations or properties of the Seller.
6.18 No labor problems exist with the employees of the Seller or are
imminent, which would adversely affect the Seller.
6.19 Neither the Seller nor its present or former officers, directors,
employees or agents (including any third party acting on behalf of the Seller)
have: (i) directly or indirectly, made or authorized to be made, any bribes,
kickbacks or other payments of a similar nature, whether lawful or not, to any
person or entity, public or private, regardless of the form thereof, whether in
money, property or services, to obtain favorable treatment in securing business
or to obtain special concessions or to pay for favorable treatment for business
secured or for special concessions already obtained; (ii) paid funds or property
of any kind was donated, loaned or made available, directly or indirectly, for
the benefit of, or for the purpose of opposing, any government or subdivision
thereof, either domestic or foreign; (iii) the Seller has not made any loans,
donations, or other disbursements, directly or indirectly, to officers or
employees of the Seller, for contributions made, or to be made, directly or
indirectly, for the benefit of, or for the purpose of opposing, any government
or subdivision thereof, either domestic or foreign; and (iv) the Seller has not
and does not maintain a bank account or other account of any kind, whether
domestic or foreign, which account was not reflected in the corporate books.
6.20 The corporate record books of the Seller have been duly and
properly maintained, are in good order, complete, accurate, up to date and with
all necessary signatures, and set forth all meetings and actions heretofore held
and/or taken by the stockholders and/or directors of the Seller, as the case may
be, and/or as set forth in all certificates of votes of stockholders or
directors hereto fore furnished to anyone at any time.
6.21 The copies of the Certificate of Incorporation (and all amendments
thereto) and the By-Laws of the Seller heretofore delivered by the Seller and
initialed by the parties hereto for identification, are true, correct and
complete in all respects; are, and shall remain, in full force and effect; and
shall not be altered, amended, modified, terminated or rescinded prior to the
Closing without the prior written consent of the Purchaser in each instance.
6.22 The officers and members of the Board of Directors of the Seller
are as set forth on Exhibit "O" annexed hereto and made a part hereof; and
during the period from the date hereof until the Closing, there shall be no
change in such officerships and/or memberships without the prior written consent
of the Purchaser in each instance.
6.23 Except as set forth on Exhibit"P" annexed hereto and made a part
hereof, no officer or director of the Seller or the Seller (and/or any member of
their respective immediate families) has a financial interest (direct or
indirect) in any competitor, supplier or customer of the Seller.
6.24 Each of the agreements and purchase orders described on Exhibit
"Q" annexed hereto and made a part hereof are in full force and effect, have not
been altered, amended, modified, terminated or rescinded, are fully enforceable
in accordance with their respective terms.
6.25 Other than as set forth on Exhibit "R" annexed hereto and made a
part hereof, the Seller is not a party (i) to any contract or agreement calling
for the payment of more than $10,000 per annum or $25,000 in the aggregate
and/or which cannot be terminated on no more than 90 days prior written notice
from the Seller to the other party thereto; (ii) to any profit sharing, bonus,
deferred compensation, pension or retirement plan, severance policy or other
similar agreement or arrangement; (iii) to any collective bargaining agreement;
or (iv) to any agreement not entered into in the ordinary course of business.
6.26 Seller represents that the Customer contracts of the Company are
effective and there exists no breach or default with respect to same. That the
copies of those contracts previously delivered to Purchaser are accurate and
complete and there exist no amendments or set of facts with respect to same
which were not previously disclosed. Seller knows of no present condition or set
of facts that the requirements or pricing for personnel in such contracts shall
materially be reduced or changed adversely. That Seller is not presently aware
of any past deficiencies in its performance of services under such contracts
that might adversely affect the continuation of supplying services under such
contracts.
6.27 There have been no past proceedings or are there any proceedings
now pending nor, to Seller's knowledge or belief, threatened against Company
before the National Labor Relations Board, State Department of Labor, State
Commission on Human Rights and Opportunities, State Department of Labor, Equal
Employment Opportunity Commission or any other local, state or Federal agencies
having jurisdiction over employee rights with respect to hiring, tenure,
conditions of employment within the three year period prior to the execution of
this Agreement.
6.28 Seller, to its best knowledge and belief, represents that Seller
has made, reported and remitted all appropriate Federal, State and local payroll
related deductions and taxes to Florida and state of employee residence
including: FICA, FUTA, SUI and income tax withholdings presently due and owing;
all Florida and state of employee residence Sales and Use Taxes; and further
warrants that it will report and remit all withholdings and taxes due for
activities prior to the Closing Date.
6.29 That none of the contracts referenced or listed on Exhibit "Q"
were obtained or executed based in whole or in part on the fact or
representation that Seller is a minority or woman owned or operated business or
a small business enterprise as those or similar terms are defined by Federal or
state statutes or regulations.
6.30 The Seller has not been the subject of any union organizing
activity and there have been no attempts to unionize the employees of Seller.
6.31 Seller has paid all employees whether staff or Billable Employees
in accordance with applicable state and federal law. All non exempt employees
have been paid appropriate and correct premium wages where applicable. There
have been no past or present exempt employees on the payroll of Seller; no
payment for the lease and/or rental of vehicles or equipment; and no payment or
reimbursement to employees for moving, meals, incidental or lodging expenses
(commonly known as per diem payments) and no payments to Billable Employees as
consultants or independent contractors with the exception of those listed on
Exhibit "S" annexed hereto and made a part hereof.
6.32 Seller has not retained the services of any independent contractor
or consultant for assignment to Customers except as listed on Exhibit "T"
annexed hereto and made a part hereof.
6.33 There are no contracts, agreements, or arrangements, written or
oral, relating to the conduct of the business of the Seller to be sold hereunder
to which Seller is a party or is bound, except as may be referred to in this
Agreement, or any schedule or exhibit annexed hereto.
6.34 Exhibit "U" contains complete, correct and current copies of all
insurance policies in effect as of the time of this agreement. Seller represents
that the coverage provided is valid and adequate to fully cover against all
suits, claims, obligations, damages and liabilities arising from the conduct of
the business or the property utilized therein, including damage to property or
personal injury. Seller shall keep such coverage in effect through the date of
Closing.
6.35 The representations, warranties, covenants and agreement of the
Seller and Stockholder contained in this Agreement, including, without
limitation, those contained in this Paragraph 6.35, are true, complete, accurate
and correct in all respects as of the date hereof and shall be true, accurate
and correct and complete, in all respects as of the Closing; and will not
contain any untrue statement of any material fact, or omit to state a material
fact in order to make any or all of such representations and warranties not
materially misleading as of this date and as of the Closing Date; and at the
Closing the Seller shall deliver to the Purchaser a certificate, executed by
Xxxxxxxx remaking each of the Seller's representations, warranties, covenants
and agreement set forth in this Agreement, including without limitation, those
set forth in this Paragraph 6.35.
ARTICLE VII
PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Seller as follows:
7.1 The Purchaser is a corporation duly organized, validly existing and
in good standing under and by virtue of the laws of the State of Delaware, and
the execution and delivery of this Agreement and the purchase contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Purchaser.
7.2 The Purchaser has corporate power to execute and perform this
Agreement, and to consummate the transactions contemplated hereby.
7.3 The execution and performance of this Agreement by Purchaser will
not conflict with, or result in a breach of, any of the terms, conditions, or
provisions of any law or any regulations, order, writ, injunction, or decree of
any court or governmental instrumentality, or of the corporate charter or
by-laws of the Purchaser or of any agreement, whether written or oral, or other
instrument to which it is a party or by which it is bound, or constitute (with
the giving of notice or the passage of time, or both) a default thereunder.
ARTICLE VIII
ACCESS AND INFORMATION
8.1 From and after the Closing Date, and for a period of seven (7)
years thereafter, the Seller shall give to the Purchaser, and the Purchaser
shall maintain the same intact in the State of Florida and shall not remove or
destroy the same without the written consent of the Seller, all operating books
and financial records (other than corporate records) relating to the business to
be sold hereunder (including paid supplier invoices, customers' xxxxxxxx and
payroll records and returns). Seller need not, however, give to or leave in
Purchaser's possession any of the following, unless they are found to be
necessary for the continued operation of the business to be sold hereunder:
Seller's corporate, financial and accounting books, records, journals, the
general ledger and all other journals and ledgers which constitute books of
original entry, bank statements, canceled checks and internal financial
statements. From and after the Closing Date, the Purchaser shall give to the
Seller and its representatives from time to time upon request of the Seller full
access during normal working hours to any and all books, contracts and other
records (including credit files) of the Seller left in the possession of the
Purchaser, including the right to make copies thereof. This right to access may
be unilaterally extended by Purchaser by written notice to accommodate any
audit, investigation, lawsuit or similar need, whether perceived or real by
Seller.
8.2 From and after the Closing Date, and for a period of seven (7)
years, the Seller shall give to the Purchaser and its representatives from time
to time within the State of Florida upon request of the Purchaser full access
during normal working hours to all books, contracts and other records, including
credit files, which are not to be conveyed to the Purchaser hereunder and which
are relevant to the present business which have been retained in the Seller's
possession, including the right to make copies of relevant portions thereof. The
Seller shall be obligated to give reasonable notice of not less than thirty (30)
days in writing to the Purchaser of the Seller's intention to dispose of or
destroy any such books, contracts or other records related to the business and
shall, at the Purchaser's request, turn over to the Purchaser any of the books
contracts, or other records set forth in any such notice to the extent that they
relate to the business.
ARTICLE IX
INDEMNIFICATION
9.1 The Seller and the Stockholder individually agree to indemnify and
hold the Purchaser harmless against all losses, liabilities, deficiency, damage
or expense, including reasonable counsel fees, resulting from: the assertion of
claims and made against the assets sold hereunder by creditors of the Seller,
whether such creditors be disclosed or undisclosed by Seller to Purchaser and
whether or not related to any states Bulk Sales law.
ARTICLE X
INDEMNIFICATION AND OFF SET
10.1 In addition to the indemnifications set forth in other sections
hereof and subject to the limitations hereinafter described, the Seller and
Stockholder agree, jointly and severally, to indemnify, exonerate, defend and
save the Purchaser its Affiliates, officers, directors, employees and
representatives (collectively the "Purchaser" for the purposes of this Section
10) harmless from, against, for and in respect of the full amounts of any and
all damages, losses, demands, obligations, tax, interest, penalty, suit,
judgment, order, lien, liabilities, debts, claims, actions, causes of action,
encumbrances, costs and expenses, whether administrative, judicial or otherwise,
of every kind and nature, including, without limitation, reasonable attorneys',
consultants', accountants' and expert witness fees, suffered, sustained,
incurred or required to be paid at any time after the Closing by the Purchaser
based upon, arising out of, resulting from or because of:
(a) any obligations of the Seller or Stockholder incurred in
connection with the making and performance of this Agreement;
(b) any claim, demand or cause of action asserted against the
Purchaser with respect to any claims, obligations or liabilities whatsoever,
whether disclosed or undisclosed, absolute or contingent, direct or indirect due
or to become due, now existing or arising hereafter, for debts, liabilities,
contractual obligations, violations, torts, events or incidents existing,
incurred, accrued or occurring prior to Closing;
(c) the untruth, inaccuracy, incompleteness, violation or
breach of any representation, warranty, agreement, undertaking or covenant of
Sellers contained in or made pursuant to this Agreement or any acts or
circumstances constituting untruth, inaccuracy, violation or breach;
(d) any claims made against or expense incurred by Purchaser
including, but not limited to, those with respect to the conditions or
operations of the Seller made by regulatory or administrative agencies having
jurisdiction over the Seller resulting from violations of local, state or
federal laws or regulations by Seller or any of their respective agents,
servants or employees, or resulting form a failure to collect or remit state or
local taxes, arising prior to the Closing;
(e) all reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees, interest, and penalties) incurred by the
Purchaser in connection with any action, suit, proceeding, demand, assessment or
judgment incident to any of the matters indemnified against.
10.2 Seller and Stockholder being the holder of all of the issued and
outstanding shares of Seller, individually hereby grants to Purchaser the right
of full offset against any monies due Seller or Stockholder, either under this
Agreement or any other agreement the Stockholder may have with Purchaser, or
Purchaser's Affiliates, including employment agreements, for the purpose of
applying same to any sums that might become due to Purchaser as a result of the
indemnities herein made or as a result of a breach of any of the covenants,
representations or warranties herein contained. Said right of offset shall in no
way limit Purchaser's ability to collect any funds due and owing to it from the
Seller or the Stockholder.
ARTICLE XI
EFFECTIVE DATES OF TRANSACTIONS
11.1 The effective date of the purchase and sale contemplated herein
shall be to the date of execution with adjustments to be made immediately after
midnight on the Sunday of the payroll week of Closing.
11.2 In amplification of the above stated general understanding of the
parties, the following provisions will govern specific aspects of the change in
ownership:
(a) Seller will remain liable for all of its accounts payable
for items actually delivered or services actually rendered, all payroll
obligations including the deduction and payment to the appropriate Federal state
and local authorities for income tax withholdings, FICA, FUTA, SUI and all other
payroll deductions, and Sales and Use taxes accrued or incurred on or before the
effective date.
(b) The Purchaser shall pay for all supplies and equipment
actually delivered or services actually rendered after the effective date,
provided, however, that such supplies and equipment or such services were
purchased or rendered in the ordinary course of the business and are necessary
for the continuation of the business.
(c) The Purchaser shall be obligated to perform all contracts
and purchase orders with clients with respect to items not performed prior to
effective date, provided that such contracts and purchase orders were entered
into by Seller in the ordinary course of business, disclosed to Purchaser prior
to Closing, and further provided that such obligations arise from services
rendered on or after the date of Closing.
(d) All expenses paid or obligations incurred by Seller, if
any, as a result of which Purchaser will receive after effective date the
benefit of a portion of the consideration for such expenses shall be prorated
between the parties in an equitable manner reflecting the relative benefit
received by each. All expenses paid or obligations incurred by Purchaser (other
than Payables) as a result of which Seller has received on or before effective
date the benefit of a portion of the consideration for such expenses shall be
prorated between the parties in an equitable manner reflecting the relative
benefit received by each. All of such prorations shall be made in accordance
with normal business practice.
(e) All obligations of the Seller for commissions payable to
commission sales agents which relate to work done on or before effective date
shall remain the obligation of the Seller. Purchaser shall be responsible for
all sales commissions for work done after the effective date.
(f) All inquiries and communications received by the Seller
after the effective date will be forthwith mailed to the Purchaser to the extent
the same relate to the business sold by the Seller hereunder.
ARTICLE XII
COVENANTS AND AGREEMENT BY SELLER
From the date hereof until the Closing Date, Seller covenants and
agrees that:
12.1 Conduct of Business.
(a) Seller shall operate the Business in the usual and
ordinary course;
(b) Seller shall not remove or transfer from the Company any
assets for less than full and fair consideration, including but not limited to,
the payment of cash dividends;
(c) Permit the officers and other authorized representatives
of Purchaser (i) full and unrestricted access, from time to time and at one or
more times, to the plants, properties, offices and books and records of the
Seller, during normal business hours, and in connection with such books and
records, such inspection shall be at the offices where such records are normally
maintained, and such parties shall be entitled to make copies of and abstracts
from any of such books and records; (ii) the opportunity to meet, correspond and
communicate with the officers, directors, employees, counsel and accountants to
the Seller, and to secure from each such information as such parties shall deem
necessary or appropriate; and (iii) to review and copy such other, further and
additional financial and operating date, materials and information as to the
business and operations of the Seller as may be requested by such parties;
provided however that all such information and material secured by such parties
in the course of such investigation shall be and be deemed to be confidential
and shall be used solely in connection with the transactions herein described,
and all written memoranda and documents and/or other tangible evidence of such
information shall either be returned to the Seller and/or destroyed in the event
the subject acquisition is not consummated.
(d) Maintain all insurance coverages in full force and effect.
(e) Retain the Business' current employees so that they will
remain employable after Closing.
(f) Take and perform any and all actions necessary to render
accurate and/or maintain the accuracy of, all of the representations and
warranties of the Seller and Stockholder
herein contained and/or satisfy each covenant or condition required to be
performed or satisfied by the Seller and Stockholder at or prior to the Closing
and/or to cause or permit the implementation of the within acquisition.
(g) Not take or perform any action which would or might cause
any representation or warranty made by the Seller and Stockholder herein to be
rendered inaccurate, in whole or in part and/or which would prevent, inhibit or
preclude the satisfaction, in whole or in part of any covenant required to be
performed or satisfied by the Seller and Stockholder at or prior to the Closing
and/or the implementation of the within acquisition.
(h) Cause the Seller to perform, in all material respects all
of the Company's obligations under all material agreements, leases and documents
relating to or affecting the Property and Business; and use its best efforts to
preserve, intact, the relationships with the Company's suppliers, customers,
employees and other having business relations with the Company so that the
Business will be intact at Closing.
(i) Immediately advise Purchaser of any event, condition or
occurrence which constitutes or may, with the passage of time and/or giving of
notice constitute, a breach of any representation or warranty of the Seller or
Stockholder herein contained and/or which prevents, inhibits or limits or may
prevent, inhibit or limit Seller or Stockholder from satisfying, in full and on
a timely basis, any covenant, term or condition herein contained and/or
implementing this Agreement.
(j) Seller or Stockholder will permit access to Customer
representatives and will accompany and introduce Purchaser representatives to
the Customers as may be requested, among other things, Seller=s performance, the
existence of any defaults prices an prospects for further work. This access will
not obviate or release Seller or Stockholder from liability for any
representation or warranty made with respect to the Customers or Customer
contracts. Other than obligations to preserve confidential information as
contained in this Agreement, the Purchaser shall have no liability with respect
to or arising out of meeting with the Customers.
(k) Neither Seller nor Stockholder will solicit or entertain
any offers through principals, agents or brokers to purchase, sell, encumber or
otherwise transfer any or all of the stock or assets of Seller, with the
exception of the sale of goods or services in the ordinary course of business,
unless and until this agreement has been terminated in accordance with its
terms. Seller and Stockholder agree to promptly notify Purchaser in the event
either of them receive any such inquiry or offer.
(l) Not take any action in the singular or aggregate which
results, or with the passage of time is likely to result in a material adverse
change to the business or the prospects of the business of Seller.
ARTICLE XIII
COVENANTS AND AGREEMENTS BY PURCHASER
13.1 Xxxxxxxx and Purchaser shall enter into an employment agreement in
accordance with the terms contained in Exhibit "D" hereto. Said agreement shall
among other things provide that Xxxxxxxx will have significant discretion in
managing the operations of the Business after the Closing and throughout the
contingent payout period.
ARTICLE XIV
SELLER'S CONDITIONS TO CLOSING
The obligation of Seller and Stockholder to consummate the transactions
contemplated by this Agreement is, unless waived by Seller, subject to the
fulfillment, on or before the Closing, of each of the following conditions:
(a) No third party injunction or restraining order shall be in
effect which prohibits, restricts or enjoins, and no suit, action or proceeding
shall be pending which seeks to prohibit, restrict, enjoin, nullify, seek
material damages with respect to or otherwise materially adversely affect the
consummation of the transactions contemplated hereby;
(b) All covenants of Purchaser under this Agreement to be
performed prior to the Closing shall have been performed in all material
respects, except to the extent attributable to actions expressly permitted or
consented to by Seller in writing; or otherwise waived
(c) At the Closing, Seller shall have received a certificate,
executed by the President and Secretary of the Purchaser (effective as of the
Closing), and in form and content reasonably acceptable to Seller, certifying
the truth and accuracy of the representations and warranties of the Purchaser
herein contained.
(d) Seller shall have received from Purchaser a certificate
from the Department of State of the State of Delaware to the effect that
Purchaser is in good standing in such state;
(e) All material authorizations, approvals or waivers of any
federal or state regulatory bodies shall have been obtained;
(f) Seller shall have received all certificates, instruments,
agreements and other documents to be delivered at or before Closing as provided
in this Agreement and a certificate signed by an officer of Purchaser confirming
the matters set forth in paragraphs (a), (b), (c) and (e) above; and
(g) Purchaser shall tender to Seller the Purchase Price
required to be paid at Closing in immediately available funds by check or bank
wire to an account or accounts designated by Seller.
ARTICLE XV
PURCHASER'S CONDITIONS TO CLOSING
The obligation of Purchaser to consummate the transactions contemplated
by this Agreement is, unless waived by Purchaser, subject to the fulfillment, on
or before the Closing, of each of the following conditions:
(a) No injunction or restraining order shall be in effect
which prohibits, restricts or enjoins, and no suit, action or proceeding shall
be pending which seeks to prohibit, restrict, enjoin, nullify, seek material
damages with respect to or otherwise materially adversely affect the
consummation of the transactions contemplated hereby;
(b) All covenants of Seller and Stockholder under this
Agreement to be performed prior to the Closing shall have been performed in all
material respects, except to the extent attributable to actions expressly
permitted or consented to by Purchaser in writing;
(c) At the Closing, Purchaser shall have received a
certificate, executed by the President and Secretary of the Seller and
Stockholder (effective as of the Closing), and in form and content reasonably
acceptable to Purchaser, certifying the truth and accuracy of the
representations and warranties of the Seller and Stockholder herein contained.
(d) Purchaser shall have received from each of Seller a
certificate from the Department of State of the State of Florida to the effect
that Seller is in good standing in such state;
(e) Purchaser has received such documentation as may be
necessary to establish that Purchaser is not required to withhold any portion of
the Purchase Price pursuant to Section 1445 of the Internal Revenue Code of 1986
(substantially in the form of Exhibit V hereto);
(f) Purchaser shall have received all Property, assets,
certificates, instruments, agreements and other documents to be delivered by
Seller at or before Closing as provided in this Agreement, including a
certificate signed by an officer of Seller confirming the matters set forth in
paragraphs (a), (b), (c) and (e) above;
(g) Prior to the Closing there shall not have occurred any
material adverse change in the Business, nor shall any event have occurred or
condition exist which, with the passage of time or the giving of notice, may
cause or create any such adverse material change.
(h) Prior to the Closing, all corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be in form and
content reasonably satisfactory to Purchaser and its counsel, and Purchaser and
its counsel shall have received all counterpart originals or certified or other
copies of such documents and instruments as they may reasonably request.
(i) All statutory requirements for the valid consummation by
the Seller of the transactions herein described shall have been fully and timely
satisfied; all authorizations, consents and approvals of all Federal, state and
local governmental agencies and authorities required to be obtained in order to
permit consummation by Seller of the transactions herein described, and/or to
permit the Business to continue unimpaired in all material respects immediately
following the Closing shall have been obtained and shall be in full force and
effect; and no action or proceeding to suspend, revoke, cancel, terminate,
modify or alter any of such authorizations, consents or approvals shall be
pending or threatened.
(j) Purchaser shall have received all the documentation
including the Xxxx of Sale and Xxxxxxxx=s employment agreement required to be
delivered to it pursuant the provisions of the Agreement.
(k) Purchaser shall have received an opinion of counsel to
Seller with respect to those matters set forth on Exhibit "W" hereto.
ARTICLE XVI
TERMINATION
16.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement and any agreement ancillary hereto may be
terminated and the transactions contemplated hereby abandoned at any time prior
to or at the Closing by:
(a) mutual consent of Seller and Purchaser;
(b) Seller, if any of the conditions set forth in Article XIV
shall not have been met and shall not have been waived by Seller as of the
Closing Date, and at such xxxx Xxxxxx is not in material breach or default of
its obligations contained in this Agreement; or
(c) Purchaser, if any of the conditions set forth in Article
XV shall not have been met and shall not have been waived by Purchaser as of the
Closing Date, and at such time Purchaser is not in material breach or default of
any of its obligations contained in this Agreement. Any party desiring to
terminate this Agreement pursuant to this Article XVI shall give notice of such
termination to the other party hereto in accordance with Section 21.7.
16.2 Effect of Termination.
(a) If this Agreement is terminated in accordance with Section
16.1, then all rights and obligations of the parties hereunder shall terminate
and be of no further effect; provided, however, that no such termination shall
relieve any party of liability for any breach of its obligations under this
Agreement prior to such termination.
ARTICLE XVII
PUBLIC ANNOUNCEMENT
Seller and Stockholder recognize and agree that the Purchaser is a
public company and that the Seller and the Stockholder will not make any public
announcement concerning this Agreement or the negotiations and to keep same
confidential unless given written permission from the Purchaser to make any
announcement or otherwise disclose the information. Purchaser shall have the
right to announce the transaction contemplated hereby and/or the negotiations
between the parties upon notice to the Seller and whether or not the
announcement is required by law regulation or the rules of any public stock
exchange on which Purchaser=s stock is listed.
ARTICLE XVIII
NEGATIVE COVENANTS
18.1 It is understood by the parties herein that the negative covenants
contained in this Section and the one following are a prime and essential
consideration on which Purchaser will rely prior to and after the Closing Date
in consummating this Agreement.
18.2 Seller and Stockholder agree that in consideration of the sale of
its business to Purchaser that for a period of five (5) years after the Closing
Date, they jointly and individually will not:
(a) directly or indirectly, own, manage, operate, control, be
employed by, participate in, render service to, solicit customers for, or be
connected with any business which competes with Purchaser, or any of its
affiliated corporations with respect to the business of supplying technical
personnel and services to others within the States of Florida, California and
Ohio.
(b) solicit or accept any business from clients or potential
clients of Seller that Seller or Stockholder may have contacted or been assigned
at any time during the three (3) year period prior to Closing; or
(c) approach directly or indirectly any employee (billable or
staff) without regard to location for the purpose of attempting to or actually
soliciting or hiring that employee from its/his account or the account of
another.
18.3 It is recognized by Seller and Stockholder that an action for
damages may not be an adequate remedy for Purchaser in the event of the breach
of any of the negative covenants contained in this Agreement, and therefore, it
is agreed that in addition to any other rights Purchaser may have in the event
of a breach of this Agreement, Purchaser shall have the right to judicial
enforcement of said covenants by way of injunction, restraining order or any
other similar equitable relief. If any portion of the foregoing covenants is
invalid or unenforceable due to area or time, such fact shall not affect the
validity or enforceability of the remaining portions or prevent enforcement of
restrictions to the extent a court of competent jurisdiction may consider
reasonable. The parties agree that in any event said restrictions shall be
enforced to the maximum extent permitted by law.
18.4 The time period of the negative covenant may be extended for a
period of time equal to that time period utilized during the pendency of any
action by a court of competent jurisdiction in its discretion.
18.5 Seller will deliver negative covenant agreements in the form
annexed as Exhibit "X" for those employees designated by Purchaser at Closing.
ARTICLE XIX
NO BROKERS
19.1 The parties represent and warrant to the other that there are no
claims for brokerage commissions or finders' fees in connection with the
transactions contemplated hereby.
ARTICLE XX
FEES AND EXPENSES
20.1 Except as herein otherwise provided, each of the parties hereto
shall pay its own legal and accounting charges and other expenses incident to
the execution of this Agreement and the consummation of the transactions
contemplated hereby.
ARTICLE XXI
MISCELLANEOUS
21.1 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. All covenants and
agreements made by or on behalf of any of the parties hereto shall be binding
upon and inure to the benefit of their respective successors and assigns, unless
otherwise specifically set forth herein. The terms and provisions of this
Agreement may not be modified or amended, except in writing signed by all
parties hereto. No representations, warranties, or covenants, express or
implied, have been made by any party to this Agreement in connection with the
subject matter hereof, except as expressly set forth in this Agreement and the
exhibits hereto. The headings in this Agreement are for the convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
21.2 No terms and provisions hereof, including, without limitation, the
terms and provisions contained in this sentence, shall be waived, modified or
altered so as to impose any additional obligations or liability or grant any
additional right or remedy, and no custom, payment, act, knowledge, extension of
time, favor or indulgence, gratuitous or otherwise, or words or silence at any
time, shall impose any additional obligation or liability or grant any
additional right or remedy or be deemed a waiver or release of any obligation,
liability, right or remedy except as set forth in a written instrument properly
executed and delivered by the party sought to be charged, expressly stating that
it is, and the extent to which it is, intended to be so effective. No assent,
express or implied, by either party, or waiver by either party, to or of any
breach of any term or provision of this Agreement or of the exhibits or
schedules shall be deemed to be an assent or waiver to or of such or any
succeeding breach of the same or any other such term or provision.
21.3 The captions of this Agreement are for convenience and reference
only, and in no way define, describe, extend or limit the scope or intent of
this Agreement or the intent of any provisions hereof.
21.4 Stockholder agrees that it will, and will cause Seller at any time
before and after the Closing to execute and deliver all additional documents,
and do any other acts or things that may be reasonably requested by Purchaser in
order to further perfect Purchaser's rights and interests contemplated hereunder
and that they will aid in the prosecution, defense or other litigation with
third persons of any rights arising from this Agreement, all without further
consideration.
21.5 Jurisdiction. This Agreement shall be governed by the laws of the
State of Florida Any judicial proceeding brought against any of the parties to
this Agreement on any dispute arising out of this Agreement or any matter
related hereto shall be brought in the courts of the State of Florida or in the
United States District Court for the Middle District of Florida (or the same
Bankruptcy Courts), and, by execution and delivery of this Agreement, each of
the parties to this Agreement accepts for itself or himself the process in any
action or proceeding by the mailing of copies of such process to such party at
its or his address as set forth in Section 21.7, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. Each
party hereto irrevocably waives to the fullest extent permitted by law any
objection that it or her may nor or hereafter have to the laying of the venue of
any judicial proceeding brought in such courts and any claim that any such
judicial proceeding has been brought in an inconvenient forum. The foregoing
consent to jurisdiction shall not constitute general consent to service of
process for any purpose except as provided above and shall not be deemed to
confer rights on any person other than the respective parties to this Agreement.
EACH PARTY HERETO WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING UNDER THIS
AGREEMENT.
21.6 Captions. The Article and Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
21.7 Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to any other
party shall be in writing and shall be deemed to have been given (a) upon
personal delivery, if delivered by hand, (b) three days after the date of
sending such notice by certified mail, return receipt requested, or (c) the next
business day if sent by facsimile transmission or by an over night courier
service, and in each case of mailing, postage prepaid and at the respective
addresses or numbers set forth below:
To Seller: Xxxxx Xxxxxxxx
Xxxxx 0, Xxx 00X
Xxxxxxxx, XX 00000
with a copy to: Xxxxx X. XxXxxxxx, Esquire
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
To Purchaser: COMFORCE Corporation
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, Xxx Xxxx 00000
Attn: President
with a copy to: Xxxx X. Xxxxxxxx, Attorney At Law
00 Xxxxxxx Xxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
FAX: 000-000-0000
To Stockholder: Xxxxx Xxxxxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with a copy to: Xxxxx X. XxXxxxxx, Esquire
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
21.8 Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by Seller or Stockholder, other than by
operation of law or with the prior written consent of the Purchaser, and any
purported transfer, assignment, pledge or hypothecation in violation of this
Section shall be void. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective administrators,
successors and permitted assigns. Notwithstanding the foregoing the Purchaser
may assign its rights and obligations hereunder to any Affiliate or subsidiary
company upon notice to Seller.
21.9 Severability. In the event any provision of this Agreement is
found to be void and unenforceable by a court of competent jurisdiction or
arbitration panel, the remaining provisions of this Agreement shall nevertheless
be binding upon the parties with the same effect as though the void or
unenforceable part had been severed and deleted.
21.10 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
taken together shall constitute one instrument.
21.11 Entire Agreement. This Agreement, including the other documents
referred to herein, contains the entire understanding of the parties hereto with
respect to the purchase of the assets under this Agreement and supersedes all
prior agreements, correspondence, conversation, negotiations and understandings
between the parties with respect to such subject matter.
21.12 Amendments. This Agreement may not be changed orally, but only
by an agreement in writing signed by all of the parties hereto, and no waiver
of compliance with any provision or condition hereof and no consent provided for
herein shall be effective unless evidenced by an instrument in writing duly
executed by the party hereto seeking to be charged with such waiver or consent.
21.13 Third Party Beneficiaries. Each party hereto intends that this
agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto and their respective
successors and assigns as permitted under Section 21.8.
21.14 Gender. As used in this Agreement, any gender includes a
reference to all other genders and the singular includes a reference to the
plural and vice versa.
ARTICLE XXII
EFFECT OF CLOSING
22.1 The terms of this Agreement shall survive the Closing and shall
not become merged therein.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXXXXX COMMUNICATIONS
COMFORCE GLOBAL, INC. SERVICES, INC.
By:_________________________ By:________________________________
Xxxxxxx Xxxxxxxxxx, President Xxxxx Xxxxxxxx, President
----------------------------------
Xxxxx Xxxxxxxx, Individually and
as Sole Stockholder
EXHIBITS AND SCHEDULES
Section Description Designation
------- ----------- -----------
1(d) and 6.8 Real Property Exhibit A
1.1(f) and 2.1(e) Equipment, Furniture and Fixtures Exhibit B
2.1(a), 4.1 and 5.2 Customer Contracts (3) Exhibit C
3.1(b) Escrow Agreement Schedule II
5.2(b) Xxxx of Sale Exhibit E
5.2(d)(ii) List of Billable Employees Schedule F
5.2(g) and 13.1 Employment Agreements Exhibit D
5.2(h) Sole Shareholder Certification Exhibit G
6.4 Consents Necessary Schedule H
6.6 Financial Statements Exhibit I
6.7 Leases & Security Interests Exhibit J
6.11 Liabilities Exhibit K
6.12 Liabilities Since Last Financial Statement Exhibit L
6.14 Defaults on Contracts Exhibit M
6.15 Litigation Exhibit N
6.22 Directors and Officers Exhibit O
6.23 Conflicts Exhibit P
6.24 List of Customer Contracts Exhibit Q
6.25 Material Contracts Exhibit R
6.31 Payments to Employees Exhibit S
6.32 Consultants and Independent Contractors Exhibit T
6.34 Insurance Policies Exhibit U
15(e) IRS Section 1445 Certificate Exhibit V
15(k) Purchaser's Attorney's Opinion Letter Exhibit W
18.6 Restrictive Covenant Agreements Exhibit X
