EXHIBIT 10.59
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ASSET PURCHASE AGREEMENT
Dated March 24, 1997,
among and between
PMI LP I,
FIRST IN TEMPORARIES, INC.,
and
XXXXX X. XXXXXXX
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TABLE OF CONTENTS
Page
ARTICLE I. Purchase and Sale 1
Section 1.1. Purchased Assets 1
Section 1.2. Excluded Assets 2
ARTICLE II. Purchase Price 3
Section 2.1 Purchase Price 3
Section 2.2 Payment of Purchase Price 3
ARTICLE III. Assumption of Liabilities 3
Section 3.1. Assumed Liabilities 3
Section 3.2. Excluded Liabilities 3
ARTICLE IV. Closing and Effective Time 3
Section 4.1. Closing; Closing Date; Effective Time 3
Section 4.2. Closing Requirements 3
ARTICLE V. Other Actions, Agreements and Covenants of the Parties 5
Section 5.1. Assignment of Contracts 5
Section 5.2. Delivery of Property Received After Effective Time 5
Section 5.3. Post-Closing Cooperation of Seller 5
Section 5.4. Execution of Further Documents; Financial Statements 5
Section 5.5. Employment by Purchaser of Seller's Employees 6
Section 5.6. Noncompetition and Confidentiality Agreements 6
Section 5.7. Allocation of Purchase Price 6
Section 5.8. COBRA and Other Compliance 6
ARTICLE VI. Representations and Warranties by Seller and Xxxxxxx 6
Section 6.1. Corporate Existence and Qualification 6
Section 6.2. Subsidiaries and Affiliates 7
Section 6.3. Financial Statements 7
Section 6.4. Events Subsequent to December 31, 1996 7
Section 6.5. Undisclosed Expenses or Liabilities 8
Section 6.6. Tax Returns 9
Section 6.7. Leased Office Space 9
Section 6.8. Environmental Matters 9
Section 6.9. Personal Property - Owned 9
Section 6.10. Personal Property - Leased 9
Section 6.11. Restrictive Covenants 9
Section 6.12. Intellectual Property Rights 10
Section 6.13. Necessary Property 10
Section 6.14. No Breach, Default or Violation 10
Section 6.15. Litigation and Claims 10
Section 6.16. Material Contracts 10
Section 6.17. Validity of Purchased Contracts 10
Section 6.18. Powers of Attorney 10
Section 6.19. Insurance 11
Section 6.20. Employment Matters; Employee Benefit Plans; ERISA
Compliance 11
Section 6.21. Guaranties 12
Section 6.22. Compliance With Laws; Licenses 12
Section 6.23. Authorization of Agreement 12
Section 6.24. All Material Information 12
Section 6.25. Material Adverse Contract 13
Section 6.26. Copies of Documents 13
Section 6.27. Shareholders 13
Section 6.28. Consents of Third Parties 13
Section 6.29. Other Approvals 13
Section 6.30. Customer Relations 13
ARTICLE VII. Representations and Warranties by Purchaser 14
Section 7.1. Valid Existence and Qualification of Purchaser 14
Section 7.2. Authorization of Agreement by Purchaser 14
ARTICLE VIII. Indemnification 14
Section 8.1. Indemnification by Seller and Xxxxxxx 14
Section 8.2. Indemnification by Purchaser 15
Section 8.3. Survival of Covenants, Representations and Warranties 15
Section 8.4. Payment and Settlement of Amounts Due 16
ARTICLE IX. Use of Names by Purchaser 16
ARTICLE X. Expenses of the Parties 16
ARTICLE XI. Brokers' Commission 17
ARTICLE XII. Miscellaneous 17
Section 12.1. Waivers and Amendments 17
Section 12.2. Entire Agreement 17
Section 12.3. Headings 17
Section 12.4. Notices 17
Section 12.5. Severability 18
Section 12.6. Governing Law 18
Section 12.7. Consent to Jurisdiction 18
Section 12.8. Third Parties 19
Section 12.9. Counterparts 19
Section 12.10. Successors and Assigns 19
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 24th day of March, 1997, effective as of 12:01 a.m. on March 24,
1997 (the "Effective Time"), among and between FIRST IN TEMPORARIES, INC., a
Florida corporation ("Seller"), XXXXX X. XXXXXXX, a Florida resident
("Xxxxxxx"), and PMI LP I, an Indiana limited partnership ("Purchaser").
PRELIMINARY STATEMENT
Seller conducts an employment staffing and placement business from an
office at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000. (Seller also
conducts similar businesses at other locations in other states, none of which
are included in the transaction contemplated by this Agreement.) Seller desires
to sell to Purchaser, and Purchaser desires to purchase from Seller,
substantially all of the non-cash assets owned by Seller and held or used by
Seller in connection with the operation of such business conducted by Seller at
its Louisville office, subject to and on the terms and conditions herein set
forth. Xxxxxxx is the sole shareholder of Seller.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and of the mutual
representations, warranties, covenants and conditions hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
Purchase and Sale
Section 1.1. Purchased Assets. Seller agrees to and does hereby sell,
transfer, assign, convey and deliver to Purchaser, and Purchaser hereby agrees
to and does hereby purchase and acquire from Seller, free and clear of all
liens, encumbrances, claims, restrictions, security interests, obligations and
liabilities except as otherwise expressly provided herein, all of the assets
that are owned by Seller and that are held or used by Seller in connection with
the operation of Seller's staffing and placement business conducted at or
through Seller's office at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx
00000 (the "Business") at the Effective Time except the Excluded Assets (as
hereinafter defined), including in the assets being purchased and sold
hereunder, without limiting the generality of the foregoing, the following
assets of the Business as the same shall exist at the Effective Time (which
assets being acquired are hereinafter collectively called the "Purchased
Assets"):
1.1.1. all furniture, furnishings, fixtures, leasehold improvements,
equipment and other fixed assets, including, without limitation, the assets
listed on Schedule 1.1.1;
1.1.2. all of Seller's rights, title, and interest in and to all
software owned by Seller or licensed to Seller by third parties, including
all documentation, source codes, software modules and enhancements and
software in development;
1.1.3. all inventories including marketing materials (including video
tapes, brochures, and the like), spare parts and supplies;
1.1.4. all of Seller's rights under all leases (including an $825
damage deposit under the Lease described on Schedule 1.1.4), contracts
(including software license agreements and maintenance agreements),
agreements, and sales orders, including but not limited to those leases,
contracts, agreements, and sales orders listed on Schedule 1.1.4 (the
"Purchased Contracts");
1.1.5. all prepaid and deferred items including prepaid rentals and
deposits;
1.1.6. all operating and financial data and information and books and
records relating to the Purchased Assets or the Business (wherever located
and in every format and media whatsoever), including without limitation
software databases, written records, personnel files (but only as to
personnel hired by Purchaser and only with their knowledge), files,
policies, customer lists, mailing lists, supplier lists, credit
information, correspondence, designs, slogans, processes, know-how, trade
secrets, and other similar property;
1.1.7. all registrations, permits, licenses, consents, approvals and
qualifications of Federal, State, local or other government agencies
relating to the Business or the Purchased Assets;
1.1.8. all rights to warranties and guarantees or other claims
relating to any of the Purchased Assets, including without limitation
rights under agreements for the supply of equipment or leasehold
improvements;
1.1.9. the goodwill relating to the Business.
Section 1.2. Excluded Assets. Seller is retaining and is not selling,
transferring, conveying, assigning or delivering to Purchaser the following
assets (hereinafter collectively called the "Excluded Assets"):
1.2.1. any cash and cash equivalents of Seller on hand or in bank
accounts at the Effective Time;
1.2.2. all accounts receivable of Seller for work performed prior to
the Effective Time;
1.2.3. all notes receivable of Seller at the Effective Time; and
1.2.4. Seller's assets not held or used by Seller in connection with
Seller's operation of the Business, including, without limitation, Seller's
assets held or used by Seller exclusively in connection with the operation
of other offices by Seller (other than the office in Louisville, Kentucky).
ARTICLE II
Purchase Price
Section 2.1. Purchase Price. The total purchase price for the Purchased
Assets (the "Purchase Price") is the sum of Three Hundred Eleven Thousand
Dollars ($311,000).
Section 2.2. Payment of Purchase Price. Purchaser shall pay the Purchase
Price in full to Seller at Closing by check.
ARTICLE III
Assumption of Liabilities
Section 3.1. Assumed Liabilities. Purchaser hereby assumes and agrees to
pay, perform or discharge, to the extent not theretofore paid, performed or
discharged, Seller's liabilities and obligations accruing or attributable to
events occurring after the Effective Time under (i) those Purchased Contracts,
if any, listed on Schedule 1.1.4, and (ii) any other Purchased Contracts to the
extent (but only to the extent) expressly assumed by Purchaser in writing.
Section 3.2. Excluded Liabilities. Except as otherwise expressly provided
in Section 3.1, Purchaser does not assume and shall not be liable for any of the
liabilities or obligations of Seller, including, without limitation, Seller's
liabilities or obligations which are known or unknown, fixed or contingent, now
existing or hereafter arising (which liabilities and obligations not assumed by
Purchaser are hereinafter referred to as the "Excluded Liabilities").
ARTICLE IV
Closing and Effective Time
Section 4.1. Closing; Closing Date; Effective Time. The execution of this
Agreement and the taking of various actions to consummate the transactions
contemplated hereby (the "Closing") shall take place on March 24, 1997 (the
"Closing Date"). As provided in the preamble to this Agreement, the transactions
contemplated hereby shall be effective as of 12:01 a.m. (Indianapolis, Indiana
time) on March 24, 1997 (as previously defined, the "Effective Time").
Section 4.2. Closing Requirements. Seller, Xxxxxxx and Purchaser shall take
the following actions ("Closing Requirements") at or prior to the Closing:
4.2.1. Seller shall take such actions and execute and deliver
to Purchaser such bills of sale, certificates of title, endorsements,
assignments, or other instruments, with all documentary or transfer
taxes applicable thereto duly paid or provided for, as shall be
necessary to vest in Purchaser at the Effective Time good and
marketable title to the Purchased Assets and to assign to Purchaser
such leases with respect to real property and other Purchased Contracts
as are being assumed by Purchaser in connection herewith, together with
all necessary consents of third parties applicable thereto, subject in
each case to no liens, encumbrances, claims, restrictions, security
interests, obligations, liabilities or rights in any other party
whatsoever except for the Assumed Liabilities.
4.2.2. Seller shall have delivered to Purchaser a certified
copy (certified by the Secretary of State of Florida) of Seller's
Articles of Incorporation, including all amendments thereto and
restatements thereof.
4.2.3. Seller shall have delivered to Purchaser a certified
copy (certified by the Secretary or other appropriate officer of
Seller) of Seller's Bylaws, including all amendments thereto and
restatements thereof.
4.2.4. Seller shall have delivered to Purchaser certified
copies (certified by the Secretary or other appropriate officer of
Seller) of resolutions and/or consents setting forth the authorization
and approval of the Board of Directors and shareholders of Seller of
the execution, delivery and performance of this Agreement and all other
agreements, documents and transactions pertaining hereto or
contemplated hereby.
4.2.5. Seller and Xxxxxxx shall have executed and delivered to
Purchaser the Noncompetition and Confidentiality Agreement (as
hereinafter defined and in the form of Exhibit A hereto).
4.2.6. Seller shall have delivered to Purchaser a certificate
of the Secretary or other appropriate office of Seller dated the
Closing Date certifying as to the incumbency of officers and Directors
of Seller, the accuracy and completeness of the Articles of
Incorporation and Bylaws of Seller, the continuing effectiveness of
Seller's authorizing resolutions, and such additional matters as are
customary for similar transactions and as Purchaser shall reasonably
request.
4.2.7. Seller shall have delivered to Purchaser certificates
of public officials as of a current date evidencing (a) the corporate
existence of and compliance with all reporting requirements by Seller
in the State of Florida, and (b) Seller's authorization to do business
and good standing as a foreign corporation in the Commonwealth of
Kentucky.
4.2.8. Purchaser shall have delivered to Seller certified
copies (certified by the Secretary or other appropriate officer of PMI
Administration, Inc., the sole general partner of Purchaser) of
resolutions and/or consents setting forth the authorization and
approval of the Board of Directors of PMI Administration, Inc. as
general partner of Purchaser of the execution, delivery and performance
of this Agreement and all other agreements, documents and transactions
pertaining hereto or contemplated hereby.
4.2.9. Purchaser shall pay the Purchase Price to Seller.
4.2.10. Seller and Purchaser shall mutually execute and
deliver such other agreements, instruments, certificates or other
documents as shall be reasonably required or requested to effect the
transactions contemplated hereby.
ARTICLE V
Other Actions, Agreements and Covenants of the Parties
Purchaser, Xxxxxxx and Seller covenant and agree as follows:
Section 5.1. Assignment of Contracts. Seller hereby transfers and assigns
to Purchaser all of Seller's rights and benefits under the Purchased Contracts.
Section 5.2. Delivery of Property Received After Effective Time. From and
after the Effective Time (i) Seller agrees that it will promptly transfer and
deliver to Purchaser any cash or other property that Seller may receive from
time to time after the Effective Time relating to the Purchased Assets, and (ii)
Purchaser agrees that it will transfer and deliver to Seller any cash or other
property that Purchaser may receive from time to time after the Effective Time
relating to the Excluded Assets.
Section 5.3. Post-Closing Cooperation of Seller. Seller agrees that after
the Effective Xxxx Xxxxxx will cooperate with Purchaser, to the extent
reasonably requested by Purchaser, and at Purchaser's expense, to enable
Purchaser by mutual agreement of Seller and Purchaser (i) to institute and
prosecute all proceedings which Purchaser may deem proper in order to collect,
assert or enforce any claim, right, title or interest of any kind in or to the
Purchased Assets; (ii) to defend or compromise any and all actions, suits or
proceedings in respect of any of the Purchased Assets, and to do all such acts
and things in relation thereto as Purchaser, its successors or assigns, shall
deem advisable; and (iii) to take all action which Purchaser, its successors or
assigns, may reasonably deem appropriate in order to provide for Purchaser, its
successors or assigns, the benefits of or under any of the Purchased Assets
where any required consent of another party to the sale or assignment thereof to
Purchaser pursuant to this Agreement shall not have been obtained. Purchaser
shall be entitled to retain for its own account any amounts collected pursuant
to the foregoing powers and agency which is attributable to its interest
hereunder, including any amounts payable as interest in respect thereof.
Section 5.4. Execution of Further Documents; Financial Statements. After
the Closing, upon the reasonable request of Purchaser, Seller shall take such
additional actions and execute, acknowledge and deliver all such further
documents and instruments, including without limitation bills of sale,
assignments, transfers, conveyances, powers of attorney and assurances, as may
be required to convey and transfer to and vest in Purchaser and protect
Purchaser's right, title and interest in and to all of the Purchased Assets or
as may be appropriate otherwise to carry out the transactions contemplated by
this Agreement.
Section 5.5. Employment by Purchaser of Seller's Employees. It is
understood and agreed that Purchaser is under no obligation to hire and provide
employment for any of Seller's existing employees, it being Seller's obligation
to terminate such employees, if such is necessary. Purchaser, however, presently
intends to hire some of Seller's existing employees as new hires, and Seller
shall use their reasonable efforts to aid Purchaser in engaging such of Seller's
agents and employees as are presently engaged or employed by Seller as Purchaser
shall in its sole discretion determine. For a period of five years from and
after the Effective Time, neither Seller nor Xxxxxxx shall, directly or
indirectly, solicit the employment of any person presently employed by Seller
who becomes employed by Purchaser.
Section 5.6. Noncompetition and Confidentiality Agreement. As additional
consideration for Purchaser's agreement to buy the Purchased Assets, Seller and
Xxxxxxx shall each execute and deliver to Purchaser at Closing an agreement not
to compete with Purchaser for a term of three years, commencing at the Effective
Time, substantially in the form attached hereto as Exhibit A (the
"Noncompetition and Confidentiality Agreement").
Section 5.7. Allocation of Purchase Price. Seller and Purchaser agree that
the Purchase Price shall be allocated as set forth in Schedule 5.7 hereto, and
that neither party will report an allocation inconsistent therewith to the
Internal Revenue Service.
Section 5.8. COBRA and Other Compliance. Seller will honor all rights, if
any, of employees or former employees of Seller to continuation under Seller's
health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"). Seller will comply in all material respects with all laws and
regulations which are applicable to Seller relating to any of Seller's
employees.
ARTICLE VI
Representations and Warranties by Seller and Xxxxxxx
In order to induce Purchaser to enter into this Agreement and to consummate
the transactions contemplated hereunder, Seller and Xxxxxxx make the following
representations, warranties, covenants and agreements, each of which shall be
deemed to be independently material and relied upon by Purchaser regardless of
any investigation made or information obtained by Purchaser:
Section 6.1. Corporate Existence and Qualification. Seller (i) is a
corporation duly organized and validly existing under the laws of the State of
Florida, (ii) has all requisite corporate power and authority to own its
properties and to carry on its business as it is now being conducted, and (iii)
is qualified to transact business as a foreign corporation in the Commonwealth
of Kentucky and in any other jurisdictions where failure to so qualify would
have a materially adverse effect on Seller's business. Copies of Seller's
Articles of Incorporation and Bylaws, including all amendments thereto, have
been delivered to Purchaser and such copies are true, complete and correct in
every particular.
Section 6.2. Subsidiaries and Affiliates. Seller has no subsidiaries and
has no investment of any kind in any other corporation, joint venture, limited
liability company, partnership or other entity.
Section 6.3. Financial Statements. Attached hereto as Schedule 6.3 is an
Income Statement of Seller with respect to the Business for the year ended
December 31, 1996 (the "Seller Financial Statements"). The Seller Financial
Statements (i) are complete, true and correct in all material respects, (ii)
have been prepared on an accrual basis with prior periods, and (iii) present
fairly the results of operations of the Business by Seller for the period
indicated.
Section 6.4. Events Subsequent to December 31, 1996. Since December 31,
1995, there have been no adverse changes in the condition of the assets,
liabilities, business, operations, prospects or properties of the Business, or
in the financial condition or earnings of the Business as shown in the Seller
Financial Statements, other than changes in the ordinary course of the operation
of the Business which, individually or in the aggregate, are not material,
Seller has not entered into any material transaction not in the usual and
ordinary course of the operation of the Business, and the Business assets,
business, operations, prospects or properties have not been adversely affected
in any material way as a result of any fire, accident or other casualty or by
any act of God. Without limiting the generality of the foregoing, since December
31, 1995:
6.4.1. Seller has not done (or failed to do, as the case may be) any
of the following in respect of the Business:
(i) sold, assigned, transferred or otherwise disposed of, or
removed or permitted to be removed from any Real Estate (as
hereinafter defined) or any building or structure thereon, any assets
of Seller or any assets used or useful in its business or operations
of the type that, but for such sale or other event described above,
would have been includable in the Purchased Assets;
(ii) waived or cancelled any rights of value or amended,
modified, altered, terminated, cancelled or allowed to expire (to the
extent renewable) any lease, contract, agreement or understanding;
(iii) made, accrued or become liable for any bonus, profit
sharing or incentive payment or, directly or indirectly, increased or
granted an increase in the rate of compensation or any benefit payable
or to become payable by Seller to its employees, except for those
payments, liabilities or increases made, incurred or payable in the
ordinary course of business;
(iv) taken or permitted any act or omission constituting a breach
or default under any contract, indenture, agreement or understanding
by which Seller or its properties is or was bound;
(v) failed to use reasonable efforts or to act in good faith (a)
to preserve the assets and business of Seller, (b) to keep available
the services of Seller's present employees, agents and
representatives, (c) to preserve the goodwill of Seller's customers,
suppliers, and all others having business with Seller, (d) to conduct
and operate Seller's business, and maintain Seller's books, accounts
and records, in the customary manner, in a prudent and normal fashion,
and in the ordinary course of business, or (e) to maintain the
Purchased Assets in the same condition as such assets were in as of
December 31, 1995 and preserve Seller's physical properties, business
premises, fixtures, furniture and equipment, ordinary wear and tear
excepted;
(vi) made any material changes in the scope or nature of any of
Seller's business activities or engaged, directly or indirectly, in a
business substantially different from Seller's business on the date
hereof;
(vii) made any disclosure regarding the transactions contemplated
by this Agreement without the prior approval of Purchaser;
(viii) failed to maintain in effect (a) sufficient insurance to
insure the Purchased Assets to their full insurable value, and (b)
liability insurance prudent and appropriate for entities of the size,
scope and nature of Seller's business; or
(ix) failed to duly comply in all material respects with all
laws, regulations, permits, permissions or authorizations which are
applicable to Seller or to the conduct of Seller's business.
6.4.2. Seller has conducted the Business and kept its records in a
manner consistent with its practices at the time and during the periods
reflected in the Seller Financial Statements without material change of
practices, policies or procedures, including without limitation practices
in connection with the treatment of expenses, receivables and reserves in
respect thereof, and selling and purchasing policies.
Section 6.5. Undisclosed Expenses or Liabilities. There are no expenses,
nor are there any absolute or contingent liabilities or obligations of Seller
which if paid by Seller would have been reported as expenses, with respect to
Seller's conduct of the Business during the period covered by the Seller
Financial Statements except those expenses reflected on the Seller Financial
Statements.
Section 6.6. Tax Returns. Seller has filed with the appropriate agencies
all tax returns and tax reports required by law to be filed by or with respect
to Seller and has paid all taxes due, specifically including all returns and
taxes with respect to employment matters, and (i) no audit of any federal,
state, county or municipal returns or other tax returns filed by Seller is in
progress or pending or threatened, (ii) there are no unpaid taxes, penalties or
interest which are or may become a lien or charge on any of the Purchased Assets
or for which Purchaser may be liable and there are no known or proposed
deficiency assessments in respect of any Federal, State, county, municipal or
other tax return filed by Seller which might adversely affect the Purchased
Assets or Seller's business or for which Purchaser may be liable.
Section 6.7. Leased Office Space. Seller leases its office space at 000
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx (the "Leased Premises"), from
Miraflores Center ("Landlord") pursuant to a Lease between Seller and Landlord
dated August 1, 1996 (the "Lease"), a complete and accurate copy of which has
been provided by Seller to Purchaser and the remaining term of which (excluding
option periods) expires August 1, 1997. Neither Seller nor, to Seller's
knowledge, Landlord is in default under or in violation of any term of the
Lease. Seller has no knowledge of any violations or alleged violations by Seller
or Landlord of any applicable law, regulation, code, ordinance or other
applicable requirement of any governmental authority having jurisdiction thereof
(including, without limitation, building codes and environmental laws or
requirements) with respect to the condition of the Leased Premises or the use
thereof by Seller.
Section 6.8. Environmental Matters. Seller has no knowledge or notice of
any contamination or pollution of the Leased Premises or the improvements and/or
real estate in or upon which the Leased Premises is located by any materials
that are known to Seller or Xxxxxxx to be regulated or classified as "hazardous"
(or the like) substances by any applicable environmental law or regulation.
Section 6.9. Personal Property - Owned. Seller has good and marketable
title to all of the Purchased Assets, free and clear of all mortgages, liens,
security interests, charges, claims, restrictions and other encumbrances of
every kind.
Section 6.10. Personal Property - Leased. Seller has disclosed in Schedule
1.1.4 all leases under which Seller leases personal property utilized in the
Business from others. Seller has furnished Purchaser with a true and complete
copy of all such leases. The property described in such leases is presently used
by Seller as lessee under the terms of such leases and such leases are in full
force and effect, and no defaults exist under such leases and there exists no
event which, with the giving of notice or passage of time or both, would
constitute a default under such leases. All of such leases are assignable to
Purchaser hereunder, and Seller has obtained all necessary consents to such
assignment.
Section 6.11. Restrictive Covenants. Except for the Noncompetition and
Confidentiality Agreement, neither Xxxxxxx nor Seller is subject to any
agreements not to compete or similar restrictive covenants that restrict or
limit their activities within the Commonwealth of Kentucky.
Section 6.12. Intellectual Property Rights. There are no patents, patent
applications, inventions, discoveries, trade secrets or other intellectual
property relating to or used in the Business developed by Xxxxxxx or any of the
other employees of Seller or any other party to which Seller has or may have a
right of ownership or a right of use which have not been assigned to Seller.
Section 6.13. Necessary Property. Except for the Excluded Assets listed in
Sections 1.2.1, 1.2.2 and 1.2.3, the Purchased Assets constitute all of the
property utilized by Seller in conducting the Business in the manner and to the
extent conducted during all periods reflected in the Seller Financial
Statements.
Section 6.14. No Breach, Default or Violation. Seller is not in default
under or in breach or violation of the provisions of any franchise or license,
any provision of its Articles of Incorporation or Bylaws, any promissory note,
indenture or any evidence of indebtedness or security therefor, or any lease,
contract, purchase or other commitment or any other agreement by which it is
bound, which individually or in the aggregate may result in a material adverse
effect on the Business or the condition, financial or otherwise, of the Business
or the Purchased Assets.
Section 6.15. Litigation and Claims. There is no action, suit, legal or
administrative proceeding, arbitration, investigation or other proceeding or
claim pending or, to the knowledge of Seller threatened, against or affecting
Seller or the Business, and Seller is not a party plaintiff in any action, suit,
arbitration or proceeding. No unsatisfied judgment, order or decree has been
entered and remains pending or in effect as to Seller or the Business.
Section 6.16. Material Contracts. Except as set forth on Schedule 1.1.4,
there are no material contracts, agreements, commitments, licenses, permits,
plans, instruments and binding arrangements to which the Business is subject or
by which Seller is bound, oral or written, expressed or implied, including
without limitation all agreements and instruments relating to purchase orders or
commitments, supply or requirements contracts, employment agreements, agreements
with sales agents or representatives, and franchise or license agreements. For
the purposes of this Section 6.16, "material" shall not include any contract,
agreement or commitment which may be terminated without premium or penalty on 30
days' or less notice.
Section 6.17. Validity of Purchased Contracts. Each Purchased Contract may
be assigned to Purchaser without any restriction, required consent or other
approval (except for such consents or approvals that Seller has obtained), and
each Purchased Contract is in full force and effect and constitutes the valid,
legal and binding obligations of Seller and the other parties thereto.
Section 6.18. Powers of Attorney. There are no outstanding powers of
attorney granted by Seller with respect to the Business or the operations
thereof or the Purchased Assets.
Section 6.19. Insurance. Schedule 6.19 is a true, correct and complete list
of all fire, theft, casualty, liability and other insurance policies insuring
the Business and all insurance policies maintained for any of the employees of
the Business, specifying the type of coverage, the amount of coverage, the
premium, the insurer and the expiration date of each such policy. Seller is not
in default with respect to any provisions of any such policy, nor has Seller
failed to give any material notice or present any material claim known to Seller
under any such policy in due and timely fashion.
Section 6.20. Employment Matters; Employee Benefit Plans; ERISA Compliance.
6.20.1. None of the employees of Seller in respect of the Business is
employed pursuant to a written agreement and all such employees may be
terminated at will. The hours worked by, payments made to and the working
conditions of the employees of Seller in respect of the Business have not
been in violation of the Fair Labor Standards Act or any other applicable
federal, state or local laws, orders or regulations relating to the payment
of wages, conditions of employment, the employment of minors or similar
matters; the practices of Seller in the Business in respect to the hiring,
working conditions, promotion, discharge, discipline and rates of pay of
its employees have not been in violation of any federal, state or local
laws, executive orders or regulations, including but not limited to those
prohibiting discrimination for any reason; and there are not as of the date
of this Agreement and there will not be as of the Closing Date any labor
troubles of any kind or nature pending or threatened against Seller in
respect of the Business.
6.20.2. Schedule 6.20 contains a list of all current and former
employee benefit plans and practices maintained by Seller in respect of the
Business within the past five years (whether funded or unfunded, insured or
uninsured) that provide retirement, disability, health or other benefits
(collectively, all such plans and practices are the "Plans"), including all
such Plans that are either an "employee pension benefit plan" or an
"employee welfare benefit plan" as such terms are defined in the Employee
Retirement Income Security Act of 1974 (together with all regulations of
the Internal Revenue Service, the United States Department of Labor and the
Pension Benefit Guaranty Corporation thereunder, "ERISA"), along with a
notation thereon of "current" as to all such Plans currently maintained by
Seller and the date of termination thereof as to all Plans that have been
terminated.
6.20.3. In connection with the administration of the Plans (and each
of them) Seller has (i) timely filed all reports and other documents that
Seller was required by ERISA to file with the Internal Revenue Service, the
United States Department of Labor or the Pension Benefit Guaranty
Corporation, (ii) timely furnished to all plan participants and
beneficiaries all reports and documents that Seller was required by ERISA
to furnish to them, and (iii) complied in all other respects with ERISA and
other applicable law and regulations. Seller has not been notified or
accused of any violation of ERISA or other applicable law or regulation
with respect to any of the Plans, and Seller has no liability with respect
to any of the Plans for any funding deficiency, excise or other taxes,
penalties, fines, interest or other expense or damages of any kind
whatsoever.
Section 6.21. Guaranties. There are no contracts or commitments by Seller
guaranteeing the payment or performance by persons or entities other than Seller
or whereby, except for the endorsement of checks in the regular and ordinary
course of its business, Seller in any way is or will be liable with respect to
obligations of any other person or entity, and no other person or entity has
guaranteed or otherwise become contingently liable with respect to any
indebtedness or obligations of Seller.
Section 6.22. Compliance with Laws; Licenses. The Business and the
operations thereof are and have been in compliance in all material respects with
all applicable laws, rules and regulations of all authorities, and Seller has
obtained all licenses, permits, bonds, insurance and the like and have made all
registrations which are required for such compliance. A list of all states in
which Seller is licensed or registered as an employment agency, employment
leasing agency or similar business, and a copy of each license or registration
listed, is attached hereto as Schedule 6.22.
Section 6.23. Authorization of Agreement. The execution, delivery and
performance of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby have been duly and effectively authorized by
all requisite corporate and other action and this Agreement constitutes a legal,
valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms, except as may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by equitable principles. Neither the execution, performance
or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) violate, conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the creation of a lien or encumbrance on any of the
Purchased Assets pursuant to any of the terms, conditions, or provisions of the
Articles of Incorporation or Bylaws of Seller or any note, bond, mortgage,
indenture, deed of trust, license, agreement, or other instrument or obligation
to which Seller is a party or is bound, or (ii) violate any law, rule,
regulation, order, writ, injunction, decree or statute applicable to the
business or operations of Seller or the Purchased Assets.
Section 6.24. All Material Information. No representation or warranty made
by Seller in this Agreement, in any Schedule delivered pursuant to this
Agreement, or in any other agreement, instrument, certificate or other document
executed or provided by Seller pursuant to this Agreement or in connection with
the transaction contemplated hereby (or any statement made to Purchaser by or on
behalf of Seller in connection with the transactions contemplated by this
Agreement), contains in any such case any untrue statement of a material fact or
omits to state any material fact necessary to make such representation, warranty
or statement, in light of the circumstances when made, not misleading. Seller
has no knowledge of any existing or threatened occurrence, event or development
which, as far as can be reasonably foreseen on the basis of information
currently available to Seller, has or would have a material adverse effect upon
the Business, the operations, prospects, property, assets or financial condition
of the Business or the Purchased Assets.
Section 6.25. Material Adverse Contracts. Seller is not a party to any
contract, agreement or arrangement, oral or written, express or implied,
whatsoever which could materially adversely affect the use or operation of the
Purchased Assets by Purchaser or which could materially adversely affect the
value or prevent or hinder the sale of the Purchased Assets.
Section 6.26. Copies of Documents. True, correct and complete copies of the
leases, contracts and all other documents contained, listed or referred to in
this Agreement or in the Schedules to this Agreement have been delivered to
Purchaser prior to the execution of this Agreement.
Section 6.27. Shareholders. The persons listed in Schedule 6.27 constitute
all of the beneficial and record holders of all of the issued and outstanding
shares of capital stock of Seller, each owning that number or percentage of
shares listed in Schedule 6.27 free and clear of any options, warrants,
restrictions, pledges, liens, encumbrances, claims, restrictions and security
interests.
Section 6.28. Consents of Third Parties. Other than the consent of the
Landlord to the assignment of the Lease, Seller has no knowledge that there are
any necessary consents or approvals of third parties to the transfer and
assignment of the Purchased Assets, the absence of which would adversely affect
Purchaser's rights hereunder or its utilization of the Purchased Assets or the
conduct of the Business.
Section 6.29. Other Approvals. All necessary consents, approvals,
authorizations or other official actions of all governmental authorities, the
absence of which would materially affect Purchaser's rights hereunder or to the
utilization of the Purchased Assets or conduct of the Business, have been duly
and validly issued or granted and the period for objection, stay or imposition
of any other impediment to the transactions contemplated hereby by any such
governmental authority has expired.
Section 6.30. Customer Relations. Seller has no actual knowledge that any
person or organization that has been a material customer of the Business during
all or any portion of the period of time encompassed by the Seller Financial
Statements intends or is likely not to be a material customer of Purchaser
within the twelve month period following the Effective Time, and Seller has no
knowledge of any facts, circumstances or conditions (other than general economic
conditions applicable generally to Seller's customers) that, either individually
or in the aggregate, would cause a reasonable person to believe that any such
material customer of the Business will not, or likely will not, be a material
customer of Purchaser during the twelve month period following the Effective
Time.
ARTICLE VII
Representations and Warranties by Purchaser
In order to induce Seller to enter into this Agreement and consummate the
transactions contemplated hereunder, Purchaser makes the following
representations, warranties, covenants and agreements, each of which shall be
deemed to be independently material and relied upon by Seller, regardless of any
investigation made or information obtained by Seller:
Section 7.1. Valid Existence and Qualification of Purchaser. Purchaser is a
limited partnership duly organized and validly existing under the laws of the
State of Indiana, has been authorized to transact business in the Commonwealth
of Kentucky as a foreign limited partnership, and has all requisite partnership
power and authority to acquire and own the Purchased Assets, to assume, pay,
perform and discharge the Assumed Liabilities, and to perform its obligations
under this Agreement.
Section 7.2. Authorization of Agreement by Purchaser. The execution,
delivery and performance of this Agreement by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby have been authorized by all
requisite partnership and other action and this Agreement constitutes a legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except as may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by equitable principles. Neither the execution, performance
or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) violate, conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, any of the terms, conditions, or provisions of the Partnership
Agreement of Purchaser or any note, bond, mortgage, indenture, deed of trust,
license, agreement, or other instrument or obligation to which Purchaser is a
party or is bound, or (ii) violate any law, rule, regulation, order, writ,
injunction, decree or statute applicable to Purchaser.
ARTICLE VIII
Indemnification
Section 8.1. Indemnification by Seller and Xxxxxxx. Seller and Xxxxxxx
hereby covenant and agree to indemnify Purchaser and its successors and assigns
against and hold them harmless from any and all liabilities, losses,
deficiencies, damages, expenses and costs (including, without limitation,
reasonable counsel fees and costs and expenses incurred in the investigation,
defense or settlement of any claims covered by this indemnity or incurred in
connection with successfully asserting, proving and collecting indemnity
payments pursuant to this Article VIII with respect to matters not involving
defense of third-party claims) accruing from or arising at any time as a result
of or out of:
8.1.1. Any inaccuracies in or breaches of the representations,
warranties, covenants, obligations or agreements made or to be complied
with or performed by Xxxxxxx or Seller in, under or pursuant to this
Agreement or any agreement, schedule, certificate or instrument delivered
by or on behalf of Xxxxxxx or Seller pursuant hereto or in connection with
the transactions contemplated hereby, including without limitation the
Noncompetition and Confidentiality Agreement;
8.1.2. Any and all of Seller's liabilities other than the Assumed
Liabilities;
8.1.3. Any claims for brokerage commissions or placement or finders'
fees in connection with the transactions contemplated by this Agreement
insofar as such claims shall be alleged to be based on arrangements made by
or on behalf of Seller; and
8.1.4. Any operations or business conducted, commitment made, service
rendered or condition existing or any action taken or omitted by or on
behalf of Seller on or prior to the Effective Time, except for liabilities
expressly assumed by Purchaser pursuant to Section 3.1 hereof.
Section 8.2. Indemnification by Purchaser. Purchaser shall indemnify Seller
and Xxxxxxx and their respective successors and assigns against and hold them
harmless from any and all liabilities, losses, deficiencies, damages, expenses
and costs (including, without limitation, reasonable counsel fees and costs and
expenses incurred in the investigation, defense or settlement of any claims
covered by this indemnity or incurred in connection with successfully asserting,
proving and collecting indemnity payments pursuant to this Article VIII with
respect to matters not involving defense of third-party claims) accruing from or
arising at any time as a result of or out of:
8.2.1. Any claims for brokerage commissions or placement or finders'
fees in connection with the transactions contemplated by this Agreement
insofar as such claims shall be alleged to be based on arrangements made by
or on behalf of Purchaser;
8.2.2. Any failure of Purchaser to pay, discharge or perform the
Assumed Liabilities;
8.2.3. Any liabilities arising out of any act or failure to act by
Purchaser after the Effective Time, except Excluded Liabilities and
liabilities as to which Seller is obligated to indemnify Purchaser pursuant
to Section 8.1; and
8.2.4. Any inaccuracies in or breaches of the representations,
warranties, covenants, obligations or agreements made or to be complied
with or performed by Purchaser pursuant to this Agreement.
Section 8.3. Survival of Covenants, Representations and Warranties. Each of
the covenants, representations and warranties contained herein or in any
agreement, schedule, certificate or instrument delivered pursuant hereto shall
survive the Closing and remain in full force and effect indefinitely, regardless
of any investigation made by or on behalf of any party hereto.
Section 8.4. Payment and Settlement of Amounts Due.
8.4.1. Any amount due to Purchaser from Seller and/or Xxxxxxx pursuant
to any of the provisions of this Article VIII shall be paid to Purchaser by
Seller and/or Xxxxxxx within 10 days of demand therefor.
8.4.2. Any amount due to Seller and/or Xxxxxxx from Purchaser pursuant
to any of the provisions of this Article VIII shall be paid to Seller
and/or Xxxxxxx by Purchaser within 10 days of demand therefor.
8.4.3. Any amounts not paid when due pursuant to the provisions of
this Section 8.4 shall bear interest from the date of demand at the rate of
15 percent per annum.
ARTICLE IX
Use of Names by Purchaser
From and after the Effective Time Purchaser shall have full right, power
and authority to the use for a period of up to 180 days in the Commonwealth of
Kentucky, and Seller hereby consents to such use therein by Purchaser or
Purchaser's designee, of the name "First In Temporaries, Inc.," and any
abbreviations or combinations or derivatives thereof, without restriction or
adverse claim of or use thereof by Seller, any of its affiliates, or any person
claiming by, through or under Seller. For a period of three years following the
Effective Xxxx Xxxxxx shall not use such name, or authorize the use of such name
by any other party (other than Purchaser), in the city limits of Louisville,
Kentucky (as constituted the date hereof) or within a 30-mile radius of the
office location from which Seller has conducted the Business, without in any
such case first obtaining Purchaser's written consent. The foregoing is not
intended and shall not be construed as granting any license or other rights to
use or ownership of the name "First in Temporaries" or any other tradenames,
trademarks, service marks or trade dress, and Purchaser covenants that it shall
at no time in any manner claim any rights in any such proprietary property. All
use of the name First in Temporaries shall be only in connection with the
temporary services business being purchased under this Agreement and all uses
are subject to the reasonable approval of Seller.
ARTICLE X
Expenses of the Parties
Each party shall pay its expenses, including the expenses of its legal and
accounting representatives, in connection with the origin, negotiation,
execution and performance of this Agreement, except as otherwise provided
herein. Purchaser shall pay any and all sales and transfer taxes with respect to
the transactions contemplated hereby. Seller shall pay any and all federal and
state income or other taxes attributable to Seller arising as a result of the
transactions contemplated hereby.
ARTICLE XI
Brokers' Commission
The parties hereby agree and represent and warrant to each other that there
are no claims for brokerage commissions, or placement or finders' fees in
connection with the transactions contemplated by this Agreement.
ARTICLE XII
Miscellaneous
Section 12.1. Waivers and Amendments. This Agreement may be amended or
modified, and its terms or conditions may be waived, only by a written
instrument executed by the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by any party of the breach of any
term or condition contained in this Agreement in any one or more instances shall
be deemed to be, or construed as, a further or continuing waiver of any breach,
or a waiver of the breach of any other term or condition contained herein. The
parties reserve the right to amend or modify this Agreement, or waive the terms
or conditions hereof, without the consent of any third person (natural or
otherwise).
Section 12.2. Entire Agreement. This Agreement (and the Schedules and
Exhibits hereto which are hereby incorporated and made a part hereof) and all
certificates, agreements, documents and instruments delivered pursuant hereto or
in connection herewith constitute the entire understanding of the parties
relative to the subject matter hereof and supersede all prior agreements and
undertakings between or among any of the parties relating to the subject matter
hereof. Any reference herein to this Agreement shall be deemed to include the
Schedules and Exhibits hereto.
Section 12.3. Headings. The table of contents and descriptive headings in
this Agreement and on the Schedules and Exhibits are inserted for convenience
only and shall not constitute a part of, nor affect the meaning or
interpretation of, this Agreement or any section or subsection hereof.
Section 12.4. Notices. Any notice, election or demand to be given hereunder
to any of the parties by another shall be in writing and personally delivered or
sent by prepaid same day or overnight courier or registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to Purchaser, Xxx X. Xxxxxx, President
addressed to: PMI Administration, Inc.
0000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxxx, Esq.
Leagre & Xxxxxx
0000 Xxxxxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
If to Seller or Xxxxxxx, First In Temporaries or Xxxxx X. Xxxxxxx
addressed to: 00000 Xxxxx Xxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
With a copy to: Xxxxxx Xxxx Xxxxx
Xxxxxx & Xxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx
X.X. Xxx 00
Xxxxx, Xxxxxxx 00000-0000
Any party may change the address to which notices are to be sent to it by giving
written notice of such change of address to the other parties in the manner
herein provided for giving notice.
Section 12.5. Severability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein. Should any particular covenant in this Agreement be
held unreasonable or unenforceable for any reason, including without limitation
the time period, geographical area, or scope of activity covered by such
covenant, then such covenant shall be given effect and enforced to whatever
extent would be reasonable and enforceable.
Section 12.6. Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of Indiana.
Section 12.7. Consent to Jurisdiction. Each party hereto hereby
irrevocably:
12.7.1. consents to any suit, action or proceeding with
respect to this Agreement being brought in the Circuit or Superior
Court of the State of Indiana in Xxxxxxx County and in the United
States District Court for the Southern District of Indiana;
12.7.2. waives to the fullest extent permitted by the law
governing this Agreement any objection that it might have now or
hereafter to the laying of the venue of any such suit, action or
proceeding under Section 12.7.1 above in any such court and any claim
that any such suit, action or proceeding under Section 12.7.1 above has
been brought in an inconvenient forum;
12.7.3. acknowledges the competence of any such court, submits
to the jurisdiction of any such court in any such suit, action or
proceeding and agrees that the final judgment in any such suit, action
or proceeding brought in such court shall be conclusive and binding
upon such party and may be enforced in the courts of the jurisdiction
in which such party's principal office or principal residence is
located, subject to any provision of the law of such jurisdiction of
general applicability relating to enforcement proceedings, or in any of
the courts specified in Section 12.7.1, a certified or exemplified copy
of which shall be conclusive evidence of the fact and of the amount of
such party's obligation; provided, that service of process is effected
upon such party in the manner specified below or as otherwise permitted
by law; and
12.7.4. to the extent that such party has or hereafter may
acquire any immunity from jurisdiction of any such court or from any
legal process therein, waives such immunity, to the fullest extent
permitted by law, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any
claim that (i) such party is not personally subject to the jurisdiction
of the above-named courts, (ii) such party is immune from any legal
process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with
respect to such party or the property of such party or (iii) this
Agreement or the subject matter hereof may not be enforced in or by
such courts.
Section 12.8. Third Parties. Except as otherwise provided herein, nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or entity other than the parties hereto and their respective
successors or assigns, any rights or remedies under or by reason of this
Agreement.
Section 12.9. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original.
Section 12.10. Successors and Assigns. All the terms, covenants, and
conditions of this Agreement shall be binding upon, and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PMI LP I, an Indiana Limited Partnership
By: PMI ADMINISTRATION, INC., an Indiana
corporation, its General Partner
By /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx, President
"PURCHASER"
FIRST IN TEMPORARIES, INC.
By /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President
"SELLER"
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Individually
"XXXXXXX"
LIST OF SCHEDULES TO
ASSET PURCHASE AGREEMENT
Schedule 1.1.1 Fixed Assets
Schedule 1.1.4 Purchased Contracts
Schedule 5.7 Allocation of Purchase Price
Schedule 6.3 Seller Financial Statements
Schedule 6.19 Insurance
Schedule 6.20 Employee Benefit Plans
Schedule 6.22 Licenses
Schedule 6.27 Shareholders
LIST OF EXHIBITS TO
ASSET PURCHASE AGREEMENT
Exhibit A -- Form of Noncompetition and Confidentiality Agreement
(Section 5.6)
