EXHIBIT 10.58
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ASSET PURCHASE AGREEMENT
Dated March 17, 1997,
by and among
PMI LP I,
XXXXXX XXXXX ENTERPRISE, INC.,
XXXXXX X. XXXXXX
and
XXXXXXX X. XXXXXX
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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 and Payment Method 3
Section 2.2 Seller's Right to Audit 5
Section 2.3 Establishing and Resolving Disagreements 5
ARTICLE III. Assumption of Liabilities 6
Section 3.1. Assumed Liabilities 6
Section 3.2. Excluded Liabilities 6
ARTICLE IV. Closing and Effective Time 6
Section 4.1. Closing; Closing Date; Effective Time 6
Section 4.2. Closing Requirements 6
ARTICLE V. Other Actions, Agreements and Covenants of the Parties 8
Section 5.1. Assignment of Contracts 8
Section 5.2. Delivery of Property Received After Effective Time 8
Section 5.3. Purchaser Appointed Attorney for Seller 8
Section 5.4. Execution of Further Documents; Financial Statements 8
Section 5.5. Employment by Purchaser of Seller's Employees 9
Section 5.6. Noncompetition and Confidentiality Agreement 9
Section 5.7. IRS Form 8594 9
Section 5.8. COBRA and Other Compliance 9
Section 5.9. Rental of Carrollton Office 9
ARTICLE VI. Representations and Warranties by Seller and the Garners 10
Section 6.1. Corporate Existence and Qualification 10
Section 6.2. Subsidiaries and Affiliates 10
Section 6.3. Financial Statements 10
Section 6.4. Events Subsequent to Latest Seller Financial Statements 10
Section 6.5. Undisclosed Liabilities 12
Section 6.6. Tax Returns 12
Section 6.7. Real Property 12
Section 6.8. Personal Property - Owned 13
Section 6.9. Personal Property - Leased 13
Section 6.10. Use and Condition of Property; Environmental Concerns 13
Section 6.11. Restrictive Covenants 14
Section 6.12. Intellectual Property Rights 14
Section 6.13. Necessary Property 14
Section 6.14. No Breach, Default or Violation 14
Section 6.15. Litigation and Claims 14
Section 6.16. Material Contracts 14
Section 6.17. Validity of Purchased Contracts 15
Section 6.18. Powers of Attorney 15
Section 6.19. Insurance 15
Section 6.20. Employment Matters; Employee Benefit Plans; ERISA
Compliance 15
Section 6.21. Guaranties 16
Section 6.22 Compliance With Laws; Licenses 16
Section 6.23. Authorization of Agreement 16
Section 6.24. All Material Information 17
Section 6.25. Material Adverse Contract 17
Section 6.26. Copies of Documents 17
Section 6.27. Shareholders 17
Section 6.28. Consents of Third Parties 17
Section 6.29. Other Approvals 17
Section 6.30. Customer Relations 18
ARTICLE VII. Representations and Warranties by Purchaser 18
Section 7.1. Valid Existence and Qualification of Purchaser 18
Section 7.2. Authorization of Agreement by Purchaser 18
ARTICLE VIII. Indemnification 19
Section 8.1. Indemnification by Seller and the Garners 19
Section 8.2. Indemnification by Purchaser 19
Section 8.3. Survival of Covenants, Representations and Warranties 20
Section 8.4. Payment and Settlement of Amounts Due 20
ARTICLE IX. Change of Names; Use of Names by Purchaser 20
ARTICLE X. Expenses of the Parties 21
ARTICLE XI. Brokers' Commission 21
ARTICLE XII. Miscellaneous 21
Section 12.1. Waivers and Amendments 21
Section 12.2. Entire Agreement 21
Section 12.3. Headings 22
Section 12.4. Notices 22
Section 12.5. Severability 22
Section 12.6. Governing Law 23
Section 12.7. Consent to Jurisdiction 23
Section 12.8. Third Parties 23
Section 12.9. Counterparts 24
Section 12.10. Successors and Assigns 24
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 17th day of March, 1997, effective as of 12:01 a.m. on March 17,
1997 (the "Effective Time"), by and among XXXXXX XXXXX ENTERPRISE, INC., a
Kentucky corporation ("Seller"), XXXXXX X. XXXXXX, a Kentucky resident
("Xxxxxx"), XXXXXXX X. XXXXXX, a Kentucky resident ("Xxxxxxx"), and PMI LP I, an
Indiana limited partnership ("Purchaser"). Xxxxxx and Xxxxxxx are sometimes
collectively referred to herein as the "Garners".
PRELIMINARY STATEMENT
Seller conducts a temporary staffing business, and operates such
business out of offices in Madison, Indiana and Carrollton, Kentucky (the
"Business"). Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, substantially all of the non-cash assets owned by Seller
that are used or useful by Seller in the operation of the Business, on the terms
and conditions hereinafter set forth. Xxxxxx and Xxxxxxx, together with their
three daughters identified on Schedule 6.27, are the owners of 100 percent of
the outstanding capital stock of Seller.
NOW, THEREFORE, in consideration 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 used or useful by Seller in the operation
of 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 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, 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 or
operations of Seller (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 intellectual property rights of Seller, including
Seller's rights, title and interest in and to all United States and
foreign patents (including all reissues, divisions, continuations and
extensions thereof), patent applications, patent disclosures docketed,
copyrights, trademarks, trademark rights, trademark applications,
trade names, service marks, service xxxx rights, service xxxx
applications and licenses;
1.1.8. all registrations, permits, licenses, consents, approvals
and qualifications of Federal, State, local or other government
agencies relating to the business or operations of Seller or the
Purchased Assets;
1.1.9. 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;
1.1.10. all rights to the use of Seller's name and derivatives
thereof, all past corporate names of Seller and all assumed business
names or other names used or previously used by Seller or its
predecessors in its business; and
1.1.11. the goodwill relating to Seller's customers and 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 and marketable securities of Seller
at the Effective Time;
1.2.4. all motor vehicles owned or leased by Seller; and
1.2.5. all assets of Seller used exclusively in the cleaning
business operated by Seller.
ARTICLE II
Purchase Price
Section 2.1. Purchase Price and Payment Method. The total purchase
price for the Purchased Assets (the "Purchase Price") shall be an amount
determined and paid as follows:
2.1.1. Purchaser shall pay $250,000 to Seller at Closing.
2.1.2. After the Closing Purchaser shall pay to Seller such
sum or sums as shall be determined in accordance with the following
provisions:
(a) Within 100 days after the end of each of
Purchaser's fiscal years beginning with the fiscal year ending
October 31, 1997 and ending with the fiscal year ending
October 31, 2001 (the "Earnout Period"), Purchaser shall pay
to Seller, net of advances received for quarters occurring
during such fiscal year (or, as the case may be, Seller shall
pay to Purchaser any amounts owed to Purchaser by Seller due
to aggregate advances received by Seller in excess of the
amount payable by Purchaser for such fiscal year), an amount
(the "Earnout Payment") equal to 33.3 percent of the net
income before taxes, goodwill amortization and interest
expense of Purchaser for such fiscal year from the operation
of the Madison, Indiana and Carrollton, Kentucky branch
offices acquired by Purchaser pursuant to this Agreement (and
any additional offices included pursuant to subsection
2.1.2(c) below). Within 45 days after the end of each fiscal
quarter of Purchaser during the Earnout Period Purchaser shall
advance to Seller, as refundable advances to be applied
against the Earnout Payment that will be owed for the
applicable fiscal year, an amount reasonably estimated by
Purchaser to be the Earnout Payment amount that will be
attributable to such fiscal quarter based on the results of
Purchaser's operations during such quarter.
(b) Within 100 days after the end of the
period beginning November 1, 2001 and ending February 28, 2002
(the "Stub Period"), Purchaser shall pay to Seller an amount
equal to 33.3 percent of the net income before taxes, goodwill
amortization and interest expense of Purchaser for such Stub
Period from the operation of the Madison, Indiana and
Carrollton, Kentucky branch offices acquired by Purchaser
pursuant to this Agreement (and any additional offices
included pursuant to subsection 2.1.2(c) below).
(c) For purposes of this Agreement, the
"Earnout Territory" means and includes the geographic
territory within a 10-mile radius of Seller's office location
in Madison, Indiana, and within a 10-mile radius of Seller's
office location in Carrollton, Kentucky. Purchaser shall be
free to open, close and relocate offices in the Earnout
Territory, and to transfer business and accounts between
offices in the Earnout Territory, without the necessity of
obtaining Seller's approval or consent to do so. With one
exception noted below, the Earnout Payment payable to Seller
shall be based on, and shall include Purchaser's operations
and income from, all offices maintained by Purchaser in the
Earnout Territory during the Earnout Period or the Stub
Period, as applicable. The exception is that if Purchaser
acquires any additional offices in the Earnout Territory by
acquiring an existing office or offices from another party,
the operations and income of those additional offices will not
be included in the calculation of the Earnout Payment payable
to Seller. Purchaser contemplates that it might close the
Carrollton, Kentucky office, in which event the business and
accounts will be transferred to the Madison, Indiana office.
(d) Purchaser may from time to time maintain
an office or offices outside the Earnout Territory that could,
logistically speaking, provide service to customer facilities
within the Earnout Territory as efficiently (or perhaps more
efficiently) than an office located in the Earnout Territory.
Conversely, an office in the Earnout Territory might
potentially be an appropriate office to provide service to a
facility outside the Earnout Territory. Purchaser agrees to
make all decisions as to which office should provide services
to a particular customer facility, whether located within or
outside the Earnout Territory, in the ordinary course of
Purchaser's day-to-day business operations based on the same
factors that Purchaser applies to such decisions generally
with respect to all of its offices. Additionally, Purchaser
agrees that it will not fill orders for employees at locations
within the Earnout Territory from offices maintained by
Purchaser outside the Earnout Territory if an office
maintained by Purchaser in the Earnout Territory has qualified
employees available to fill such orders.
(e) The Earnout Payment (and the various
components thereof) shall be determined in accordance with
generally accepted accounting principles.
Section 2.2. Seller's Right to Audit. Seller and its designated
representatives shall be entitled, at Seller's own expense and upon advance
written request at all reasonable times, to audit, examine, inspect and/or copy
Purchaser's relevant books, records and other data or information (including
computer records and data or information in electronic form) for the purpose of
confirming and/or disproving the accuracy of Purchaser's determinations as to
the amounts owed from time to time to Seller as an Earnout Payment; provided,
however, that none of such inspection and/or information need be permitted by or
provided to Seller until after the financial information for the fiscal year or
other period involved has been made public by Personnel Management, Inc. ("PMI")
in a filing with the Securities and Exchange Commission; provided, further,
Seller will treat all such information furnished to Seller acquired as a result
of such inspection by Seller as confidential and agree not to disclose same to
any other person or persons except as required by law or pursuant to court order
or as necessary in the course of any disagreement with Purchaser as to the
amount of any Earnout Payment owed to Seller.
Section 2.3. Establishing and Resolving Disagreements. The Earnout
Payment paid to Seller with respect to any fiscal year of Purchaser shall be
conclusively presumed to be the correct amount payable unless either Seller or
Purchaser, on or before the end of the next following fiscal year of Purchaser,
notifies the other party in writing of its disagreement with respect to such
amount paid (a "Notice of Disagreement"). The party providing a Notice of
Disagreement shall include therein or therewith the amount that such party
believes to be the correct amount of the Earnout Payment that should have been
paid to Seller for such fiscal year in question and copies of relevant documents
or other data or information underlying and supporting such party's calculation
of the Earnout Payment amount. Seller and Purchaser mutually agree to exchange
information and discuss the differences in their respective calculations of the
amount of the Earnout Payment in hopes that they may be able to resolve any such
disagreement as to the correct amount thereof on a mutually agreeable basis. If
any such disagreement has not been resolved by mutual agreement prior to the
expiration of sixty (60) days after the Notice of Disagreement with respect
thereto was received by the party to whom it was provided, either party shall be
entitled to request arbitration to resolve such disagreement by providing a
written request for arbitration to the other party. Any such arbitration shall
be conducted by and in accordance with the applicable rules of the American
Arbitration Association unless the parties mutually agree otherwise in writing.
Each party shall bear its own costs and expenses in connection with such
arbitration except that the fees and expenses payable to the arbitrator or
arbitrators and/or to the American Arbitration Association shall be allocated
and payable by either or both of the parties in such manner and amount as the
arbitrator or arbitrators shall determine under the circumstances considering
the positions of the parties and the outcome of the arbitration.
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, (i) Seller's liabilities and obligations arising after the Effective
Time under those Purchased Contracts, if any, listed on Schedule 1.1.4, and (ii)
if Purchaser, in its sole discretion and at its option, elects in writing after
the Closing (as hereinafter defined) to assume liabilities or obligations of
Seller under any Purchased Contracts not listed on Schedule 1.1.4, Seller's
liabilities and obligations arising after the Effective Time under each such
nonlisted Purchased Contract that is expressly assumed in writing by Purchaser,
excluding with respect to clauses (i) and (ii) any liability for default
thereunder occurring prior to the Effective Time and, with respect to
liabilities for rent and taxes, excluding any liability as to periods of time
prior to the Effective Time.
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 in connection therewith as
provided herein with respect to the transactions contemplated hereby (the
"Closing") shall take place at a mutually agreeable location in the State of
Indiana on March 17, 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 time) on March 17, 1997 (as previously defined, the
"Effective Time").
Section 4.2. Closing Requirements. Seller, the Garners 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, subject 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 Kentucky) 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 the Garners 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 of Seller certifying as to the incumbency of officers
and Directors of Seller, dated the date hereof.
4.2.7. Seller shall have delivered to Purchaser certificates
of public officials as of a current date evidencing the corporate
existence of and compliance with all reporting requirements by Seller
in the state of its incorporation and its qualification as a foreign
corporation to conduct business in and compliance with all reporting
requirements of each other state in which Seller maintains an office or
conducts business.
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.
ARTICLE V
Other Actions, Agreements and Covenants of the Parties
Purchaser, the Garners 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. Purchaser Appointed Attorney for Seller. Seller agrees
that, effective as of the Effective Time, it hereby constitutes and appoints
Purchaser, its successors and assigns, the true and lawful agent and
attorney-in-fact of Seller in the name of Purchaser or in the name of Seller,
but for the benefit and at the expense of Purchaser, its successors and assigns,
(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. If Purchaser, in the name of Seller, desires to institute and
prosecute any action, suit or proceeding, or take any other action pursuant to
this Section 5.3, Purchaser shall give Seller 10 days' prior written notice.
Seller acknowledges that the foregoing powers and agency are coupled with an
interest and shall be irrevocable. 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. Promptly after Closing (or at such later date as shall be
acceptable to Purchaser if uncertainty exists as to whether Purchaser will waive
this requirement in whole or in part), Seller shall provide Purchaser with
independently audited financial statements of Seller for the years ended
December 31, 1995 and December 31, 1996, prepared in accordance with generally
accepted accounting principles consistently applied and reported on by an
independent certified public accountant employed by Seller and acceptable to
Purchaser (this requirement for audited financial statements will be waived by
Purchaser in whole or in part if Purchaser's limited partner, Personnel
Management, Inc., is not required to have audited financial statements of Seller
for its financial accounting and reporting purposes).
Section 5.5. Employment by Purchaser of Seller's Employees. Purchaser
intends to hire all of Seller's existing employees except Xxxxxx X. Xxxxxx (a
total of four employees to be hired by Purchaser) as new hires, and Seller shall
use its reasonable efforts to aid Purchaser in engaging such employees.
Purchaser agrees not to discharge any of those four employees effective during
the ninety day period following the date of this Agreement.
Section 5.6. Noncompetition and Confidentiality Agreement. As
additional consideration for Purchaser's agreement to buy the Purchased Assets,
Seller and the Garners shall each execute and deliver to Purchaser at Closing an
agreement not to compete with Purchaser for a term of five years, commencing at
the Effective Time, substantially in the form attached hereto as Exhibit A (the
"Noncompetition and Confidentiality Agreement").
Section 5.7. IRS Form 8594. 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 on Form 8594
subsequently filed with 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 not being hired by Purchaser
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.
Section 5.9. Rental of Carrollton Office. The Garners hereby agree to
rent to Purchaser the office space currently rented by Seller at 000 0xx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx, xx a month-to-month rental basis through May 31, 1997, at
a rent of $500 per month payable in advance on the 1st day of each month (with a
prorata rent amount being payable at the Closing for the month of March 1997).
The Garners will pay all utilities except long distance telephone charges
incurred by Purchaser, which shall be paid by Purchaser. Purchaser shall have no
responsibility for maintenance or repairs of the rented premises. Purchaser may
terminate such tenancy as of the end of any month by oral or written notice to
the Garners. The Garners and Purchaser agree to negotiate in good faith as to
the rental terms applicable after May 31, 1997, if Purchaser intends for its
occupancy to extend beyond that date.
ARTICLE VI
Representations and Warranties by Seller and the Garners
In order to induce Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereunder, Seller and the Garners 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
Commonwealth of Kentucky, (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 not required to be qualified to transact business as a foreign
corporation in any jurisdictions except Indiana. Copies of Seller's Articles of
Incorporation, including all amendments thereto, certified by the Secretary of
State of Seller's state of incorporation, and Seller's Bylaws, including all
amendments thereto, certified by the Secretary of Seller, 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 are
Statements of Assets, Liabilities and Equity -- Income Tax Basis for Seller at
December 31, 1996 and at December 31, 1995 and related Statements of Revenues &
Expenses -- Income Tax Basis All Departments for Seller for each of its fiscal
years then ended (which balance sheets and income statements are herein
collectively referred to as the "Seller Financial Statements"). The Seller
Financial Statements (i) are complete, true and correct in all material
respects, (ii) have been prepared in accordance with the cash method of
accounting and sound accounting principles applied on a basis consistent with
prior periods, and (iii) present fairly the financial position of Seller at the
dates indicated and the results of operations of Seller for the periods
indicated. Whenever references are made throughout this Agreement to the Seller
Financial Statements, it will be understood that all notes and exhibits thereto
are included therein.
Section 6.4. Events Subsequent to Latest Seller Financial Statements.
Since December 31, 1996: there have been no adverse changes in the condition of
the assets, liabilities, business, operations, prospects or properties of
Seller, or in the financial condition or earnings of Seller as shown in the
Seller Financial Statements, other than changes in the ordinary course of
business of Seller 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 its business; and Seller's 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, 1996:
6.4.1. Seller has not done (or failed to do, as the case may
be) any of the following:
(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, 1996 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 its 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 Liabilities. Except as reflected on the Seller
Financial Statements, Seller has no liabilities or obligations, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, and whether
known or unknown, and there is no basis for any claim against Seller for any
such liabilities or obligations, except liabilities or obligations incurred in
the ordinary course of business of Seller since December 31, 1996, including the
Assumed Liabilities, none of which individually or in the aggregate will have a
material adverse effect upon the Purchased Assets or the business or condition,
financial or otherwise, of Seller.
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 which are or
will 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; and (iii) there are no
taxes, penalties or interest assessed against, due and/or unpaid by Seller with
respect to the Purchased Assets or Seller's business.
Section 6.7. Real Property.
6.7.1. Set forth in Schedule 6.7.1 is a list of the addresses
of each parcel of real property leased or otherwise used by Seller (the
"Real Estate"). Seller rents the space for Seller's office in Madison,
Indiana, from Xxxxxx Xxxxx, and the Garners own, and Seller rents a
portion thereof from the Garners, the property in which Seller's office
in Carrollton, Kentucky, is located. In each case Seller rents its
office space on a month-to-month oral rental agreement, the terms of
which are described on Schedule 6.7 (collectively, the "Real Estate
Leases").
6.7.2. All Real Estate Leases are in full force and effect and
there exists thereunder no event of default or event which, with the
giving of notice or passage of time or both, would constitute an event
of default by any party thereto, and all of the Real Estate Leases are
assignable to Purchaser hereunder, and Seller has obtained any
necessary consents to such assignment. There are no delinquencies or
alleged delinquencies in the payment of rents or other amounts owed any
landlords under any of the Real Estate Leases.
6.7.3. To the best of Seller's knowledge all of the buildings
and improvements on the property covered by the Real Estate Leases
comply with any federal, state and local laws, ordinances and
regulations and insurance requirements applicable to said buildings and
improvements.
Section 6.8. Personal Property - Owned. Seller has good and marketable
title to all personal property reflected on the Seller Financial Statements
(except any sold since the date thereof in the ordinary course of business),
free and clear of all mortgages, liens, security interests, charges, claims,
restrictions and other encumbrances of every kind. The personal property
utilized in Seller's business is owned by Seller and may be used for such
purposes without conflict with the rights of others.
Section 6.9. Personal Property - Leased. Seller has disclosed in
Schedule 1.1.4 all leases under which Seller leases personal property 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 shall obtain all necessary consents to such assignment.
Section 6.10. Use and Condition of Property; Environmental Concerns.
6.10.1. There are and have been no violations by Seller of,
and Seller has not received notice of any violation of, any law,
statute, ordinance, regulation, order, rule, judgment, writ,
injunction, decree, permit, registration or other requirement relating
or applicable to the Real Estate or any of Seller's property, assets,
business or operations or the Purchased Assets, including without
limitation violations relating to pollution control or environmental
contamination. To the best of Seller's knowledge there are no orders,
rulings, decrees, injunctions, judgments or writs of any federal, state
or local government or of any court, department, commission, board,
bureau, agency or other instrumentality thereof known to Seller
outstanding against, or relating or applicable to, Seller or its
properties, business or operations or the Real Estate.
6.10.2. There are no facts or circumstances that Seller
reasonably believes could form the basis for the assertion of any claim
against Seller in respect of the business, operations, activities or
properties of Seller or the Real Estate relating to environmental
matters.
6.10.3. There are no environmental operating or other similar
environmental permits or authorizations required for the operation of
Seller's business or the Purchased Assets.
Section 6.11. Restrictive Covenants. Except for the Noncompetition and
Confidentiality Agreement, neither the Garners nor Seller is subject to any
agreements not to compete or similar restrictive covenants.
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 of Seller developed by
the Garners 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. The Purchased Assets and the Excluded
Assets constitute all of the property necessary for the conduct of the
operations and business of Seller 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 its business or condition, financial or otherwise, 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 best knowledge of Seller, threatened, against or
affecting Seller, 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 in effect as to Seller.
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 Seller 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 (i) does not involve future commitments in excess
of $10,000 as to any single contract or $50,000 in the aggregate as to all such
contracts or (ii) 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), is in
full force and effect and constitutes the valid, legal and binding obligations
of Seller and the other parties thereto, enforceable in accordance with its
terms except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought;
Seller is not in default and to the best knowledge of Seller no other party
thereto is in default (and no event has occurred which with notice or lapse of
time or both would become a default) or has an accrued right of termination
thereunder; and no such contract requiring the purchase by Seller of equipment,
furniture, fixtures, operating supplies or other properties or services is for a
quantity in excess of the normal requirements of Seller's business or at a price
in excess of the generally prevailing price for the item to be purchased.
Section 6.18. Powers of Attorney. There are no outstanding powers of
attorney granted by Seller with respect to its business or operations 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
Seller and all insurance policies maintained for any of its employees,
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 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 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 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.
6.20.2. Schedule 6.20 contains a list of all current and
former employee benefit plans and practices maintained by Seller 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
operations of Seller 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. Attached hereto as
Schedule 6.22 is a list of each state in which Seller is licensed or registered
to conduct business as an employment agency, an employee leasing agency or
similar business agency, and attached to such list is a copy of each license or
registration listed.
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 or any Schedule delivered pursuant to this
Agreement (or any statement made to Purchaser by or on behalf of Seller in
connection with the transactions contemplated by this Agreement) contains 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, operations,
prospects, property, assets or financial condition of Seller 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 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. All 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 related
businesses, have been obtained (and shown by evidence satisfactory to
Purchaser), including without limitation the consents and approvals referred to
in this Agreement.
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 related 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 Seller 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 Seller 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 admitted 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 the Garners. Seller and the
Garners each 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 the Garners or Seller pursuant to this Agreement
or in any agreement, schedule, certificate or instrument delivered by
or on behalf of the Garners or Seller pursuant hereto, including
without limitation the Noncompetition and Confidentiality Agreements;
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 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:
8.2.1. 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 asserted by any third party 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 the
Garners pursuant to any of the provisions of this Article VIII shall be
paid to Purchaser by Seller and/or the Garners within 10 days of demand
therefor. If such amounts are not paid to Purchaser when due, Purchaser
shall be entitled, in addition to all other available remedies, to
offset such amounts against amounts otherwise payable to Seller
pursuant to Section 2.1.
8.4.2. Any amount due to Seller from Purchaser pursuant to any
of the provisions of this Article VIII shall be paid to Seller 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
Change of Names; Use of Names by Purchaser
If requested to do so by Purchaser at any time after the Closing,
Seller shall change its current corporate name to a name other than, and not
similar to, its current name and shall file appropriate documents reflecting
such name change in Kentucky and in each state where qualified to do business as
a foreign corporation. Seller shall coordinate any such name change and the
filings in connection therewith with Purchaser and its counsel in order to
ensure that Purchaser obtains all rights to the name in all jurisdictions in
which Seller has used such name. From and after the Effective Time Purchaser
shall have full right, power and authority to use, and Seller hereby consents to
the use by Purchaser or Purchaser's designee of, the current corporate name of
Seller and any abbreviations or combinations thereof, all past corporate names
of Seller and other names used or previously used by Seller or its predecessors
in their businesses, including, without limitation, the name Xxxxxx-Xxxxx
Temporaries, and any word or trade name used by Seller prior to the Effective
Time in the conduct of its business, without restriction or adverse claim of
Seller, any of its affiliates, or any person claiming by, through or under
Seller. After the Effective Time, Seller shall not use any such name without
Purchaser's written consent.
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. Unless waived by Purchaser pursuant to Section
5.4, Seller shall pay any and all costs, fees and expenses of independent
auditors in connection with the preparation of audited financial statements of
Seller for the years ended December 31, 1995 and December 31, 1996.
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 contemporaneously
and 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 the Garners, Xxxxxx Xxxxx Enterprise, Inc.
addressed to: and/or Xxxxxx X. Xxxxxx and/or Xxxxxxx X.
Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
With a copy to: G. Xxxxxx Xxxxx, Esq.
Xxxxxxxx, Xxxxxx & Jaines, P.S.C.
000 Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
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.,
its General Partner
By /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx, President
"PURCHASER"
XXXXXX XXXXX ENTERPRISE, INC., a Kentucky
corporation
By /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, President
"SELLER"
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Individually
"XXXXXX"
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Individually
"XXXXXXX"
STATE OF INDIANA )
) SS:
COUNTY OF ________)
Before me, a Notary Public in and for said County and State, on the _____
day of March, 1997, personally appeared Xxx X. Xxxxxx, the President of PMI
Administration, Inc., sole General Partner of PMI LP I, who acknowledged the
execution of the above and foregoing Asset Purchase Agreement for and on behalf
of such corporation in its capacity as such General Partner.
WITNESS my hand and Notarial Seal.
----------------------------------
NOTARY PUBLIC, a Resident of
____________County, Indiana
------------------------------------
My Commission Expires: Name Printed
-------------------------
STATE OF INDIANA )
) SS:
COUNTY OF JEFFERSON )
Before me, a Notary Public in and for said County and State, on the _____
day of March, 1997, personally appeared Xxxxxx X. Xxxxxx, the President of
Xxxxxx Xxxxx Enterprise, Inc., who acknowledged the execution of the above and
foregoing Asset Purchase Agreement for and on behalf of such corporation.
WITNESS my hand and Notarial Seal.
------------------------------------
NOTARY PUBLIC, a Resident of
___________ County, Indiana
------------------------------------
My Commission Expires: Name Printed
-------------------------
STATE OF INDIANA )
) SS:
COUNTY OF JEFFERSON )
Before me, a Notary Public in and for said County and State, on the_____
day of March, 1997, personally appeared Xxxxxx X. Xxxxxx, who acknowledged the
execution of the above and foregoing Asset Purchase Agreement to be his
voluntary act and deed.
WITNESS my hand and Notarial Seal.
------------------------------------
NOTARY PUBLIC, a Resident of
___________ County, Indiana
------------------------------------
My Commission Expires: Name Printed
-------------------------
STATE OF INDIANA )
) SS:
COUNTY OF JEFFERSON )
Before me, a Notary Public in and for said County and State, on the_____
day of March, 1997, personally appeared Xxxxxxx X. Xxxxxx, who acknowledged the
execution of the above and foregoing Asset Purchase Agreement to be her
voluntary act and deed.
WITNESS my hand and Notarial Seal.
------------------------------------
NOTARY PUBLIC, a Resident of
___________ County, Indiana
------------------------------------
My Commission Expires: Name Printed
-------------------------
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 6.20 Employee Benefit Plans
Schedule 6.22 Licenses
Schedule 6.27 Shareholders
Schedule 6.7.1 Real Property -- Leased
Schedule 6.19 Insurance
LIST OF EXHIBITS TO
ASSET PURCHASE AGREEMENT
Exhibit A -- Form of Noncompetition and Confidentiality Agreement (Section 5.6)
