EXHIBIT 10.37
SECOND AMENDED OPTION TO PURCHASE EMPLOYEE/CUSTOMER BASE
This Agreement ("Agreement") is entered into this date, is by and between
BioLynx Outsource Services, Inc., a Texas corporation ("Purchaser") and Alamo
Commercial Group, Inc. ("Seller").
RECITALS:
WHEREAS, the Seller is in the business of providing business staffing to
its customers by way of leasing employees; and
WHEREAS, the Purchaser desires to acquire all of the leased employees of
the Seller, together with all contracts to furnish services and staffing for the
customers and clients of the Seller (collectively hereinafter referred to as the
"Employee/Customer Base"); and
WHEREAS, Purchaser is expected to become a wholly owned subsidiary of
XxxXxxx.Xxx, Inc. and will cause XxxXxxx.Xxx, Inc. to issue stock, as
hereinafter provided, in payment for the purchase price for the
Employee/Customer Base.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Purchase of Employee/Customer Base.
1.1 Purchase of Employee/Customer Base. Subject to the terms and conditions
set forth herein, at the Closing (as defined below) Seller will sell its
Employee/Customer Base to Purchaser and Purchaser will purchase all of its
Employee/Customer Base from Seller. This purchase and sale will be effective on
the Closing Date (as defined below).
1.2 Purchase Price. As the purchase price, Purchaser will cause
XxxXxxx.Xxx, Inc. to issue Seller 3,605,535 shares of Convertible Preferred
Stock of XxxXxxx.Xxx, Inc., with a liquidation privilege equal to its face
amount, issued in increments of $1,000.00, bearing an eight percent (8%) non-
cumulative dividend (the "Preferred Stock"). The Preferred Stock will, at the
option of the holder of the stock, be convertible into Common Stock of
XxxXxxx.Xxx, Inc. at the rate of the liquidation privilege, together with any
declared but unpaid dividend, divided by $3.30 per share of common stock.
1.3 Closing. The Closing Date of this Agreement shall be December 31, 1999.
As of the Closing Date, all employees of the Seller will become the employees of
the Purchaser and all contracts to provide staffing and services which are owned
by the Seller will be transferred to the Purchaser concurrently with such
employees. All liability related to such employees and contracts prior to the
effective date of the transfer will be retained by the Seller. All liabilities
and obligations subsequent to the date of transfer related to the leased
employees and contracts will be the liabilities and obligations of the
Purchaser.
Section 2. Representations and Warranties of the Seller. As a material
inducement to Purchaser to enter into this Agreement and purchase the
Employee/Customer Base, Seller represents and warrants that:
2.1 Organization and Corporate Power. The Seller is a corporation duly
incorporated and validly existing under the laws of the state of Texas and the
Seller is qualified to do business in every jurisdiction in which its ownership
of property or conduct of business requires it to qualify. The Seller has all
requisite corporate power and authority and all material licenses, permits, and
authorizations necessary to own and operate its properties and to carry on its
business as now conducted. The copies of the Seller's charter documents and
bylaws have been furnished to Purchaser's counsel reflect all amendments made
thereto at any time prior to the date of this Agreement and are correct and
complete.
2.2 Compliance with Laws. To the best of Seller's knowledge, the Seller is,
in the conduct of its business, in substantial compliance with all laws,
statutes, ordinances, regulations, orders, judgments, or decrees applicable to
them,
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the enforcement of which, if the Seller was not in compliance therewith, would
have a materially adverse effect on the business of the Seller, taken as a
whole. The Seller has not received any notice of any asserted present or past
failure by the Seller to comply with such laws, statutes, ordinances,
regulations, orders, judgments, or decrees.
2.3 No Brokers. There are no claims for brokerage commissions, finders'
fees, or similar compensation in connection with the purchase based on any
arrangement or agreement binding upon any of the parties hereto.
2.4 Employees and Labor Relations Matters.
2.4.1 The Seller is not aware that any executive or key employee of the
Seller or any group of employees of the Seller has any plans to terminate
employment with the Seller;
2.4.2 To the best of Seller's knowledge, the Seller has substantially
complied in all material respects with all labor and employment laws,
including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining, Americans With Disabilities Act, and the payment of
social security and other taxes;
2.4.3 There is no unfair labor practice charge, complaint, or other
action against the Seller pending or, to Seller's best knowledge,
threatened before the National Labor Relations Board and the Seller is not
subject to any order to bargain by the National Labor Relations Board;
2.4.4 No questions concerning representation have been raised or, to
Seller's and the Seller's best knowledge, are threatened with respect to
employees of the Seller;
2.4.5 No grievance that might have a material adverse effect on the
Seller and no arbitration proceeding arising out of or under any collective
bargaining agreement is pending and, to the best knowledge of Seller and
the directors and responsible officers of the Seller, no basis exists for
any such grievance or arbitration proceeding; and
2.4.6 To the best knowledge of Seller and the directors and responsible
officers of the Seller, no employee of the Seller is subject to any non-
competition, nondisclosure, confidentiality, employment, consulting, or
similar agreements with persons other than the Seller relating to the
present business activities of the Seller.
2.5 Disclosure. Neither this Agreement nor any of the schedules,
attachments, written statements, documents, certificates, or other items
prepared or supplied to Purchaser by or on behalf of the Seller with respect to
this purchase contain any untrue statement of a material fact or omit a material
fact necessary to make each statement contained herein or therein not
misleading. No Seller or any responsible officer or director has intentionally
concealed any fact known by such person to have a material adverse effect upon
the Seller's existing or expected financial condition, operating results,
assets, customer relations, employee relations, or business prospects taken as a
whole.
2.6 Investment Representations
2.6.1 Seller is acquiring the Preferred Stock for its own account for
purposes of investment and without expectation, desire, or need for resale
and not with the view toward distribution, resale, subdivision, or
fractionalization of the Preferred Stock.
2.6.2 During the course of the negotiation of this Agreement, Seller
has reviewed all information provided to it by XxxXxxx.Xxx, Inc. and has
had the opportunity to ask questions of and receive answers from
representatives of XxxXxxx.Xxx, Inc. concerning XxxXxxx.Xxx, Inc., the
securities offered and sold hereby, and this purchase, and to obtain
certain additional information requested by Seller.
2.6.3 Seller understands that the Preferred Stock to be purchased has
not been registered under Securities Act of 1933 ("1933 Act"), or under any
state securities law.
2.6.4 Seller understands that the Preferred Stock cannot be resold in a
transaction to which the 1933 Act and state securities laws apply unless
(i) subsequently registered under the 1933 Act and applicable state
securities laws or (ii) exemptions from such registrations are available.
Seller is aware of the provisions of Rule 144 promulgated
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under the 1933 Act which permit limited resale of shares purchased in a
private transaction subject to the satisfaction of certain conditions.
2.6.5 Seller understands that no public market now exists for the
Preferred Stock and that it is uncertain that a public market will ever
exist for the Preferred Stock.
2.6.6 Seller understands that the certificates for the Preferred Stock
will bear the following legend:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE Seller WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE IS AN
EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTED BY THIS CERTIFICATE
UNDER THE SECURITIES ACT OF 1933 AND ALL APPLICABLE STATE SECURITIES LAWS,
(ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE TO THE BOARD
OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE OPINION OF THE ATTORNEY THE
PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (iii) THE TRANSFER
IS MADE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933.
Section 3. Representations and Warranties of Purchaser. As a material
inducement to Seller to enter into this Agreement and sell the Preferred Stock,
Purchaser hereby represents and warrants to Seller as follows:
3.1 Organization; Power. Purchaser is duly incorporated and validly
existing under the laws of the State of Texas, and has all requisite corporate
power and authority to enter into this Agreement and perform its obligations
hereunder.
3.2 Authorization. The execution, delivery, and performance by Purchaser of
this Agreement and all other agreements contemplated hereby to which Purchaser
is a party have been duly and validly authorized by all necessary corporate
action of Purchaser, and this Agreement and each such other agreement, when
executed and delivered by the parties thereto, will constitute the legal, valid,
and binding obligation of Purchaser enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, and similar statutes affecting creditors' rights generally and
judicial limits on equitable remedies.
3.3 No Conflict with Other Instruments or Agreements. The execution,
delivery, and performance by Purchaser of this Agreement and all other
agreements contemplated hereby to which Purchaser is a party will not result in
a breach or violation of, or constitute a default under, its Articles of
Incorporation or Bylaws or any material agreement to which Purchaser is a party
or by which Purchaser is bound.
3.4 Governmental Authorities. (i) Purchaser is not required to submit any
notice, report, or other filing with any governmental or regulatory authority in
connection with the execution and delivery by Purchaser of this Agreement and
the consummation of the purchase and (ii) no consent, approval, or authorization
of any governmental or regulatory authority is required to be obtained by
Purchaser or any affiliate in connection with Purchaser's execution, delivery,
and performance of this Agreement and the consummation of this purchase.
3.5 Litigation. There are no actions, suits, proceedings, or governmental
investigations or inquiries pending or, to the knowledge of Purchaser,
threatened against Purchaser or its properties, assets, operations, or
businesses that might delay, prevent, or hinder the consummation of this
purchase.
3.6 Brokerage. There are no claims for brokerage commissions, finders'
fees, or similar compensation in connection with this purchase based on any
arrangement or agreement entered into by Purchaser and binding upon any of the
parties hereto.
Section 4. Covenants of the Seller. Seller covenants and agrees with
Purchaser as follows: upon the reasonable request of any party hereto after the
Closing, any other party will take all action and will execute all documents and
instruments necessary or desirable to consummate and give effect to this
purchase. These include, by way of illustration and not by way of limitation,
the following:
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4.1 Various conditions relating to filing, payment, and collecting of
refunds relating to taxes;
4.2 Provisions relating to delivery of Corporate books and records;
4.3 Provisions relating to treatment of confidential proprietary
information obtained in the acquisition process; and if Purchaser is concerned
that Seller is not getting corporate approval in due time (or vice versa), the
following covenant may be considered.
Seller will cause a meeting of its shareholder to be called and held as
soon as practicable, will recommend approval of the transaction to its
shareholder, and will use its best efforts to obtain shareholder approval.
Section 5. Closing.
5.1 Time, Place, and Manner of Closing. Unless this Agreement has been
terminated and this purchase has been abandoned pursuant to the provisions of
Section 2 or Section 10, the closing ("Closing") will be held at such time as
the parties may agree on the Closing Date at the offices of the Corporation,
0000 Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000, or such other place as the parties
may agree. At the Closing the parties to this Agreement will exchange
certificates, other instruments and documents in order to determine whether the
terms and conditions of this Agreement have been satisfied. Upon the
determination of each party that its conditions to consummate this purchase have
been satisfied or waived, Purchaser shall deliver to Seller the certificate(s)
evidencing the Preferred Stock. After the Closing, Seller, will execute,
deliver, and acknowledge all such further instruments of transfer and conveyance
and will perform all such other acts as Purchaser may reasonably request to
effectively transfer the employees and customers to Purchaser.
5.2 Consummation of Closing. All acts, deliveries, and confirmations
comprising the Closing regardless of chronological sequence shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred. The time of the Closing has been scheduled to correspond with the
close of business at the principal office of the Seller and, regardless of when
the last act, delivery, or confirmation of the Closing shall take place, the
transfer of the employees shall be deemed to occur as of the close of business
at the principal office of the Seller on December 31, 1999.
Section 6. Termination.
6.1 Termination for Cause. If, pursuant to the provisions of Section 7 or 8
of this Agreement, Seller or Purchaser is not obligated at the Closing to
consummate this Agreement, then the party who is not so obligated may terminate
this Agreement.
6.2 Termination Without Cause. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and abandoned at any time
without further obligation or liability on the part of any party in favor of any
other by mutual consent of Purchaser and Seller.
6.3 Termination Procedure. Any party having the right to terminate this
Agreement due to a failure of a condition precedent contained in Sections 7 or 8
hereto may terminate this Agreement by delivering to the other party written
notice of termination, and thereupon, this Agreement will be terminated without
obligation or liability of any party.
Section 7. Miscellaneous Provisions.
7.1 Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified, or supplemented only by a written agreement signed by
Purchaser and Seller.
7.2 Waiver of Compliance; Consents
7.2.1 Any failure of any party to comply with any obligation, covenant,
agreement, or condition herein may be waived by the party entitled to the
performance of such obligation, covenant, or agreement or who has the
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benefit of such condition, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement, or condition will not
operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
7.2.2 Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent will be given in a manner
consistent with the requirements for a waiver of compliance as set forth
above.
7.3 Notices. All notices, requests, demands, and other communications
required or permitted hereunder will be in writing and will be deemed to have
been duly given when delivered by hand or two days after being mailed by
certified or registered mail, return receipt requested, with postage prepaid:
If to Purchaser, or to the Seller
after the Closing, to:
BioLynx Outsource Services, Inc.
0000 Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
or to such other person or address as Purchaser furnishes to Seller pursuant to
the above.
If to the Seller, to
Alamo Commercial Group, Inc.
0000 Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
or to such other address as Seller furnishes to Purchaser pursuant to the above.
7.4 Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
7.5 Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
7.6 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
7.7 Attorney Fees. In the event an arbitration, suit or action is brought
by any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
7.8 Computation of Time. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall be included, unless it is a Saturday, Sunday, or a
legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a Saturday,
Sunday, or legal holiday.
7.9 Pronouns and Plurals. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular, or plural as the
identity of the person or persons may require.
7.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
7.11 Arbitration. If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial
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rules of the American Arbitration Association, and judgment upon the award
rendered by the arbiter may be entered in any court having jurisdiction thereof.
7.12 Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
7.13 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
7.14 Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
7.15 Savings Clause. If any provision of this Agreement, or the application
of such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected thereby.
Dated: December 31, 1999.
PURCHASER:
BIOLYNX OUTSOURCE SERVICES, INC.,
a Texas corporation
By /s/ Xxxx X. Xxxxxx XX
------------------------------------
Xxxx X. Xxxxxx XX, President
SELLER:
ALAMO COMMERCIAL GROUP, INC.
By /s/ Xxxx X. Xxxxxx XX
------------------------------------
Xxxx X. Xxxxxx XX, President
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