AGREEMENT AND PLAN OF MERGER By and among ELS HUMAN RESOURCE SOLUTIONS, INC. RESOLVE STAFFING, INC. ELS OF DAYTON PREMIER BUSINESS SOLUTIONS, LLC and ELS ADMINISTRATIVE SERVICES, L.L.C. As of October 1, 2006
AGREEMENT
AND PLAN OF MERGER
By
and among
ELS
HUMAN RESOURCE SOLUTIONS, INC.
RESOLVE
STAFFING, INC.
ELS
OF DAYTON PREMIER BUSINESS SOLUTIONS, LLC
and
ELS
ADMINISTRATIVE SERVICES, L.L.C.
As
of October 1, 2006
TABLE
OF
CONTENTS
|
ARTICLE
I. The Merger
|
1
|
|
|
Section
1.01
|
Merger
into ELS HRS.
|
1
|
|
Section
1.02
|
Effective
Time and Effective Date
|
2
|
|
Section
1.03
|
Effects
of the Merger
|
2
|
|
Section
1.04
|
Articles
of Incorporation and Code of Regulations
|
2
|
|
Section
1.05
|
Directors
|
2
|
|
Section
1.06
|
Officers
|
2
|
|
Section
1.07
|
Rights
and Obligations.
|
2
|
|
ARTICLE
II. CLOSING
|
||
|
Section
2.01
|
Closing
|
3
|
|
Section
2.02
|
Deliveries
by each Constituent Company to ELS HRS
|
3
|
|
Section
2.03
|
Deliveries
by ELS HRS to the Constituent Companies
|
3
|
|
Section
2.04
|
Conversion
of Equity.
|
4
|
|
Section
2.05
|
Surrender
of Certificates.
|
6
|
|
ARTICLE
III. REPRESENTATIONS AND WARRANTIES OF THE CONSTITUENT
COMPANIES
|
6
|
|
|
Section
3.01
|
Corporate
Existence and Qualification: Corporate Documents.
|
6
|
|
Section
3.02
|
Capitalization
and Ownership
|
7
|
|
Section
3.03
|
Preemptive
Rights; Registration Rights
|
7
|
|
Section
3.04
|
No
Defaults or Consents
|
7
|
|
Section
3.05
|
No
Proceedings
|
7
|
|
Section
3.06
|
Absence
of Certain Changes
|
7
|
|
Section
3.07
|
Insurance
|
9
|
|
Section
3.08
|
Patents,
Trademarks, Service Marks and Copyrights.
|
9
|
|
Section
3.09
|
Title
to Assets; Condition of Assets.
|
9
|
|
Section
3.10
|
Compliance
with Laws
|
9
|
|
Section
3.11
|
Litigation;
Default
|
10
|
|
Section
3.12
|
Other
Transactions
|
10
|
|
ARTICLE
IV. REPRESENTATIONS AND WARRANTIES OF ELS HRS AND RESOLVE
|
10
|
|
|
Section
4.01
|
Corporate
Existence and Qualification; Corporate Documents
|
10
|
|
Section
4.02
|
Authority,
Approval and Enforceability
|
10
|
|
Section
4.03
|
No
Defaults or Consents
|
11
|
|
Section
4.04
|
No
Proceedings
|
11
|
|
Section
4.05
|
Securities
|
11
|
|
ARTICLE
V. SURVIVAL
|
11
|
|
|
Section
5.01
|
Survival
of Representations and Warranties
|
11
|
|
ARTICLE
VI. INDEMNIFICATION
|
12
|
|
|
Section
6.01
|
Obligation
of each Constituent Company to Indemnify
|
12
|
|
Section
6.02
|
Obligation
of ELS HRS and Resolve to Indemnify
|
12
|
|
Section
6.03
|
Notice
and Opportunity to Defend.
|
12
|
|
Section
6.04
|
Limitations
on Indemnification
|
14
|
|
ARTICLE
VII. POST-CLOSING OBLIGATIONS
|
14
|
|
|
Section
7.01
|
Further
Assurances
|
14
|
|
Section
7.02
|
Access
to Records
|
14
|
|
|
||
|
ARTICLE
VIII. MISCELLANEOUS
|
15
|
|
|
Section
8.01
|
Brokers
|
15
|
|
Section
8.02
|
Costs
and Expenses
|
15
|
|
Section
8.03
|
Notices
|
15
|
|
Section
8.04
|
Governing
Law
|
16
|
|
Section
8.05
|
Entire
Agreement, Amendments and Waivers
|
16
|
|
Section
8.06
|
Binding
Effect and Assignment
|
16
|
|
Section
8.07
|
Remedies
|
17
|
|
Section
8.08
|
Exhibits
and Schedules
|
17
|
|
Section
8.09
|
Multiple
Counterparts
|
17
|
|
Section
8.10
|
References
|
17
|
|
Section
8.11
|
Survival
|
17
|
|
ARTICLE
IX. DEFINITIONS
|
17
|
|
|
Section
9.01
|
Affiliate
|
17
|
|
Section
9.02
|
Company
Assets
|
17
|
|
Section
9.03
|
Governmental
Authorities
|
18
|
|
Section
9.04
|
Knowledge
|
18
|
|
Section
9.05
|
Legal
Requirements
|
18
|
|
Section
9.06
|
Material
Adverse Change
|
18
|
|
Section
9.07
|
Material
Adverse Effect
|
18
|
|
Section
9.08
|
Permits
|
18
|
|
Section
9.09
|
Properties
|
18
|
|
Section
9.10
|
Regulations
|
18
|
|
Section
9.11
|
Taxes
or Tax
|
18
|
|
Section
9.12
|
Tax
Returns
|
18
|
|
Section
9.13
|
Used
|
18
|
This
AGREEMENT AND PLAN OF MERGER (the “Agreement”)
is
made and entered into as of October 1, 2006, by and among ELS Human Resource
Solutions, Inc., an Ohio corporation (“ELS
HRS”),
Resolve Staffing, Inc., a Nevada corporation (“Resolve”),
ELS
of Dayton Premier Business Solutions, LLC, an Ohio limited liability company
(“Dayton”)
and
ELS Administrative Services, L.L.C (“Admin”)(Admin
and Dayton each a “Constituent
Company”
and
collectively the “Constituent
Companies”).
Preliminary
Statements
A. The
issued and outstanding membership units of the Constituent Companies are set
forth on Exhibit
A
hereto;
and
B. Resolve
owns 100% of the issued and outstanding stock of ELS HRS; and
C. It
is
proposed that each Constituent Company be merged with and into ELS HRS, with
ELS
HRS as the surviving corporation (the “Merger”),
and
that the presently issued and outstanding membership units of the Constituent
Companies be converted into merger consideration as set forth herein;
and
D. The
Managers and members of the Constituent Companies and the Board of Directors
and
sole shareholder of ELS HRS have each approved the Merger upon the terms and
conditions set forth herein and have approved this Agreement; and
E. The
Constituent Companies and ELS HRS desire to enter into and carry out the
transactions contemplated by this Agreement in accordance with the terms hereof,
and the provisions of the Ohio Revised Code; and
F. The
parties intend that the Merger shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Internal
Revenue Code").
Capitalized
terms used herein but not defined herein shall have the respective meanings
given such terms in Article IX hereof.
Agreement
In
consideration of the premises, mutual covenants and agreements contained herein
and the benefits to accrue to the parties hereto, and subject to the
satisfaction or waiver of the conditions contained herein, the parties hereto
hereby agree as follows:
ARTICLE
I.
The
Merger
Section
1.01
Merger
into ELS HRS.
At
the
Effective Time on the Effective Date (each as hereinafter defined), each
Constituent Company shall be merged with and into ELS HRS, with ELS HRS
(hereinafter sometimes called the “Surviving
Corporation”)
as the
surviving corporation of the Merger. Following the Effective Time, the corporate
existence of ELS HRS shall continue unaffected and unimpaired, and as the
Surviving Corporation of the Merger, ELS HRS shall continue to be a corporation
governed by the laws of the State of Ohio. On the Closing Date, each Constituent
Company and ELS HRS shall cause a Certificate of Merger to be executed and
filed
with the Secretary of State of Ohio in form required by the Ohio Revised Code
(the “Ohio
Certificate of Merger”).
Section
1.02 Effective
Time and Effective Date
.
The
effective date of the Merger shall be October 1, 2006 (the “Effective
Date”),
and
the effective time of the Merger shall be 12:01 a.m. on October 1, 2006 (the
“Effective
Time”).
Section
1.03 Effects
of the Merger
. The
Merger shall have the effects set forth in the Ohio Revised Code, as
amended.
Section
1.04 Articles
of Incorporation and Code of Regulations
.
(a) The
articles of incorporation of ELS HRS, as in effect immediately prior to the
Effective Time, shall be the articles of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(b) The
code
of regulations of ELS HRS as in effect immediately prior to the Effective Time
shall be the code of regulations of the Surviving Corporation, until thereafter
changed or amended as provided therein or by applicable law.
Section
1.05 Directors
.
The
directors of the Surviving Corporation from and after the Effective Time, and
until the earlier of their respective death, resignation or removal or until
their respective successors are duly elected and qualified, as the case may
be,
shall be the directors of ELS HRS.
Section
1.06 Officers
.
The
officers of the Surviving Corporation from and after the Effective Time, and
until the earlier of their respective death, resignation or removal or until
their respective successors are duly elected and qualified, as the case may
be,
shall be the officers of ELS HRS.
Section
1.07 Rights
and Obligations.
At
the
Effective Time, the separate existence of each Constituent Company shall cease,
and in accordance with the terms of this Agreement, ELS HRS shall possess and
be
vested with all of the rights, privileges, franchises, immunities and powers
and
all property (real, personal or mixed) of each Constituent Company, debts due
to
each Constituent Company, choses in action and all other things belonging to
each Constituent Company, and ELS HRS shall be subject to all of the
restrictions, liabilities, disabilities and duties of ELS HRS.
The
identity, existence, purposes, powers, objects, franchises, privileges, rights
and immunities of ELS HRS shall continue unaffected and unimpaired by the
Merger.
ARTICLE
II.
CLOSING
Section
2.01 Closing
.
The
closing of the transactions contemplated hereby (the “Closing”)
shall
be held as of 12:01 a.m. as of October 1, 2006 at the offices of ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, unless another date or place is agreed to in writing by the parties
hereto. The date upon which the Closing occurs is hereinafter referred to as
the
“Closing
Date.”
Section
2.02 Deliveries
by each Constituent Company to ELS
HRS
.
At the
Closing, each Constituent Company shall deliver to ELS HRS:
(a) the
resignations of all officers and members of the board of managers of each
Constituent Company;
(b) the
stock
books, stock ledgers or other records reflecting the ownership of all
outstanding membership units, minute books and corporate seals, if any of each
Constituent Company;
(c) a
certificate of the Manager of each Constituent Company certifying, as complete
and accurate as of the Closing, as to attached copies of the Articles of
Organization and Operating Agreement of each Constituent Company and all
necessary action on behalf of each Constituent Company approving its execution,
delivery and performance of this Agreement; and
(d) a
certificate of good standing of each Constituent Company issued by the Secretary
of State of Ohio.
Section
2.03 Deliveries
by ELS HRS to
the Constituent Companies
.
At
the
Closing, ELS HRS shall deliver to the Constituent Companies:
(a) a
certificate of the Secretary of ELS HRS certifying, as complete and accurate
as
of the Closing, as to attached copies of the Articles of Incorporation and
Code
of Regulations of ELS HRS and all necessary corporate action on behalf of ELS
HRS approving its execution, delivery and
performance of this Agreement;
(b) a
certificate of good standing of ELS HRS issued by the Secretary of State of
the
State of Ohio;
(c) a
certificate of good standing of Resolve issued by the Secretary of State of
the
State of Nevada;
(d)
certificates
for shares of Resolve Common Stock (defined below) issued in accordance with
Section 2.04; and
(e) promissory
notes, duly executed by Resolve, in accordance with Section 2.04.
Section
2.04 Conversion
of Equity.
(a) Dayton.
At the
Effective Time on the Effective Date, (i) all membership units of Dayton issued
and outstanding immediately prior thereto (“Dayton
Equity”)
and
owned by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be converted into the right to receive,
collectively, a promissory note from Resolve in the principal amount of $249,922
for all Dayton Equity so converted; (ii) all Dayton equity owned by FTJ
Consulting, LLC shall be converted into the right to receive, collectively,
250,000 shares of common stock, par value $0.0001 per share of Resolve
(“Resolve
Common Stock”)
for
all Dayton Equity so converted; (iii) all Dayton Equity owned by ▇▇▇ ▇▇▇▇▇
shall
be converted into the right to receive, collectively, 250,000 shares of Resolve
Common Stock for all Dayton Equity so converted; (iv) all Dayton Equity owned
by
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. shall be converted into the right to receive, collectively,
39,470 shares of Resolve Common Stock for all Dayton Equity so converted; and
(v) all Dayton Equity owned by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be converted into the
right to receive, collectively, a promissory note from Resolve in the principal
amount of $249,922 for all Dayton Equity so converted (collectively, the
“Dayton
Merger Consideration”).
On
the Closing Date, Resolve will send irrevocable instructions to its transfer
agent to issue certificates to FTJ Consulting, LLC, ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇. representing 250,000, 250,000 and 39,470 shares of Resolve Common Stock,
respectively, to be issued hereunder.
(b) Admin.
At the
Effective Time on the Effective Date, (i) all membership units of Admin issued
and outstanding immediately prior thereto (“Admin
Equity”)
and
owned by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be converted into the right to receive,
collectively, a promissory note from Resolve in the principal amount of $284,615
for all Admin Equity so converted; (ii) all Admin equity owned by ▇▇▇▇▇ ▇.
▇▇▇▇▇
shall be converted into the right to receive, collectively, 50,000 shares of
Resolve Common Stock for all Admin Equity so converted; (iii) all Admin Equity
owned by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ shall be converted into the right to receive,
collectively, 50,000 shares of Resolve Common Stock for all Admin Equity so
converted; and (iv) all Admin Equity owned by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be
converted into the right to receive, collectively, 97,692 shares of Resolve
Common Stock and a promissory note from Resolve in the principal amount of
$89,231 for all Admin Equity so converted (collectively, the “Admin
Merger Consideration”).
On
the Closing Date, Resolve will send irrevocable instructions to its transfer
agent to issue certificates to ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ representing 50,000, 50,000 and 97,692 shares of Resolve Common Stock,
respectively, to be issued hereunder. For purposes of this Agreement, the shares
of Resolve Stock being issued hereunder are valued at $2.00 per
share.
(c) The
shares of Resolve Common Stock to be issued as set forth in the above paragraphs
shall not be registered under state or federal securities laws but shall qualify
as exempt from registration under Regulation D promulgated under the Securities
Act of 1933 (“Act”)
or
other recognized exemptions from registration, and as such, shall be deemed
to
be
(d)
restricted
securities as defined in Rule 144(a)(3) of the Act. As such, the Resolve Common
Stock shall include a customary form of restrictive legend which indicates
that
the shares may not be resold, transferred, pledged or hypothecated by the
holder(s) thereof unless such shares are registered under the Act or in
accordance with a legal opinion permitting such sale or transfer, which legal
opinion shall be in form and substance acceptable to counsel for
Resolve.
(e) Shares
of
ELS HRS capital stock outstanding at the Effective Time shall not be converted
or changed as a result of the Merger
Section
2.05 Surrender
of Certificates.
From
and
after the Effective Time, each holder of certificates, if any, representing
Dayton Equity and Admin Equity converted by virtue of the Merger into the right
to receive merger consideration, upon surrender of such certificates to ELS
HRS
(the “Exchange
Agent”),
shall
be entitled forthwith to receive in exchange therefor, respectively, only the
Dayton Merger Consideration or Admin Merger Consideration to which such holder
is entitled pursuant to the terms of this Agreement. Such conversion shall
be
complete and effective at the Effective Time without regard to the date or
dates
upon which outstanding certificates are surrendered for the applicable merger
consideration.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES OF THE
CONSTITUENT COMPANIES
Subject
to the limitations of Section 6.04 hereof, each Constituent Company represents
and warrants to ELS HRS as of the Closing Date as set forth in this
Article:
Section
3.01 Corporate
Existence and Qualification: Corporate Documents.
(a) Such
Constituent Company is duly organized, validly existing and in good standing
under the laws of its state of organization and is not required to be qualified
to do business as a foreign entity in any other jurisdiction where the failure
to so qualify would have a material adverse effect on it. Such Constituent
Company has all requisite limited liability company power and authority to
own
its Properties and carry on its business as presently conducted. The copies
of
the Articles of Organization and Operating Agreement of such Constituent Company
attached to the Manager’s Certificate for such Constituent Company delivered
pursuant to Section 2.04(c) are complete and reflect all amendments thereto
through the date hereof.
(b) The
minute books of such Constituent Company have been made available to ELS HRS
for
review and contain a complete and accurate record of all members of such
Constituent Company and all material actions of the members and managers (and
any committees thereof) taken at meetings of members or managers of such
Constituent Company or by written consent.
(c) Such
Constituent Company has no subsidiaries, participates in any partnership or
joint venture, or owns any outstanding capital stock of any other
entity.
(d)
Capitalization
and Ownership
.
As of
the date of this Agreement, the entire authorized equity of such Constituent
Company is set forth on Exhibit
A
hereto,
and all issued and outstanding membership units of such Constituent Company
are
owned of record and beneficially as set forth on Exhibit
A
hereto.
All of the presently outstanding membership units of such Constituent Company
have been validly authorized and issued and are fully paid and non-assessable.
Such Constituent Company has not issued any other equity, and there are no
outstanding options, warrants, subscriptions or other rights or obligations
to
purchase or acquire any of such equity, nor any outstanding securities
convertible into or exchangeable for such equity. Except as contemplated under
this Agreement, or as set forth in Schedule
3.02
with
respect to the Articles of Organization, Operating Agreement and certain
agreements, there are no agreements to which such Constituent Company or its
members is a party regarding the issuance, registration, voting or transfer
of
its outstanding equity. No dividends are accrued but unpaid on any equity of
such Constituent Company.
Section
3.02 Preemptive
Rights; Registration Rights
.
Such
Constituent Company’s Articles of Organization do not afford pre-emptive rights
to any member. There have been no interests of such Constituent Company issued
to which preemptive rights accrued or are outstanding. There are no registration
rights affecting the issuance or sale of equity of such Constituent
Company.
Section
3.03 No
Defaults or Consents
.
Neither
the execution nor delivery of this Agreement nor the carrying out of the
transactions contemplated hereby will:
(i) violate
or conflict with any of the terms, conditions or provisions of the Articles
of
Organization or Operating Agreement of such Constituent Company;
(ii) violate
in any material respect any Legal Requirements applicable to such Constituent
Company;
(iii) result
in
the creation of any lien, charge or other encumbrance on the shares of capital
stock or any Property of such Constituent Company; or
(iv) require
such Constituent Company to obtain or make any waiver, consent, action, approval
or authorization of, or registration, declaration, notice or filing with, any
private non-governmental third party or any Governmental Authority except where
the failure to so obtain or make would not have a Material Adverse
Effect.
Section
3.04 No
Proceedings
.
No
suit, action or other proceeding is pending or, to the Knowledge of such
Constituent Company, threatened before any Governmental Authority seeking to
restrain such Constituent Company or prohibit its entry into this Agreement
or
prohibit the Closing, or seeking damages against such Constituent Company or
its
Properties, as a result of the consummation of the transactions contemplated
by
this Agreement.
Section
3.05 Absence
of Certain Changes
.
Since
August 31, 2006, such Constituent Company has not:
suffered
any Material Adverse Change;
(a) contracted
for the purchase of any capital assets having a cost in excess of $10,000 or
paid any capital expenditures in excess of $10,000, except in the ordinary
course of business consistent with past practice;
(b) incurred
any indebtedness for borrowed money or issued or sold any debt securities,
except in the ordinary course of business consistent with past
practice;
(c) incurred
or discharged any material liabilities or obligations except in the ordinary
course of business consistent with past practice;
(d) paid
any
amount on any indebtedness prior to the due date, forgiven or canceled any
material debts or claims or released or waived any material rights or claims,
except in the ordinary course of business consistent with past
practice;
(e) mortgaged,
pledged or subjected to any security interest, lien, lease or other charge
or
encumbrance any of its Properties or Company Assets;
(f) suffered
any damage or destruction to or loss of any Company Assets (whether or not
covered by insurance) that has materially adversely affected its
business;
(g) acquired
or disposed of any material Company Assets except in the ordinary course of
business consistent with past practice;
(h) made
any
payments to any person or entity except in the ordinary course of business
consistent with past practice or loaned any money to any person or entity that
is not reflected in the Financial Statements;
(i) formed
or
acquired or disposed of any interest in any corporation, partnership, joint
venture or other entity;
(j) redeemed,
purchased or otherwise acquired, or sold, granted or otherwise disposed of,
directly or indirectly, any of its capital stock or securities or any rights
to
acquire such capital stock or securities, or agreed to change the terms and
conditions of any such rights or paid any dividends or made any distribution
to
the holders of its capital stock;
(k) entered
into or terminated any material agreement with any person or group, or modified
or amended in any material respect the terms of any existing agreement except
in
the ordinary course of business consistent with past practice;
(l) received
any indication from any customer or supplier that it intends to discontinue
or
change the terms of its relationship with each Constituent Company;
(m) materially
changed its accounting methods; or
(n) entered
into any agreement (written or oral) to do any of the foregoing.
(o)
Insurance
.
Such
Constituent Company has previously made available to ELS HRS a list of all
insurance policies (including self insurance arrangements) with respect to
the
property, assets and operations of such Constituent Company’s business and a
summary of the loss experience of such Constituent Company. All such insurance
policies and arrangements are in full force and effect. There are no pending
claims by such Constituent Company relating to its business under such insurance
policies as to which the insurers listed thereon have denied
liability.
Section
3.06 Patents,
Trademarks, Service Marks and Copyrights.
(a) Such
Constituent Company owns all material patents, trademarks, service marks and
copyrights (collectively “Proprietary
Rights”),
if
any, necessary to conduct its business, or possesses adequate licenses or other
rights (except for licenses for the use of non-customized software), if any,
therefor, without conflict with the rights of others.
(b) To
its
knowledge, such Constituent Company has the sole and exclusive right to use
the
Proprietary Rights without infringing or violating the rights of any third
parties. To its knowledge, use of the Proprietary Rights does not require the
consent of any other person and the Proprietary Rights are freely transferable.
No claim has been asserted by any person to the ownership of or right to use
any
material Proprietary Right or challenging or questioning the validity or
effectiveness of any license or agreement constituting a part of any material
Proprietary Right. To its knowledge, each of the Proprietary Rights is valid
and
subsisting, has not been canceled, abandoned or otherwise terminated and, if
applicable, has been duly issued or filed.
Section
3.07 Title
to Assets; Condition of Assets.
(a) Such
Constituent Company owns no real property.
(b) Such
Constituent Company has good and marketable title to its Company Assets (other
than those disposed of in the ordinary course of business), free and clear
of
all security interests, liens, charges and other encumbrances, except for liens
for taxes not yet due and payable or being contested in good faith in
appropriate proceedings. All material facilities, machinery, equipment,
fixtures, vehicles and other properties owned, leased or used by such
Constituent Company are in good operating condition and repair, normal wear
and
tear excepted, are adequate and sufficient for the business of such Constituent
Company and conform in all material respects with all applicable ordinances,
regulations and laws relating to their use and operation.
(c) No
member
of such Constituent Company has any interest in any of the Company Assets except
for salary, and no member of such Constituent Company has any financial interest
in any transaction of such Constituent Company.
Section
3.08 Compliance
with Laws
.
such
Constituent Company has all material franchises, Permits, licenses and other
rights and privileges necessary to permit it to own its Properties and to
conduct its businesses as presently conducted. The business and operations
of
eacsuchh Constituent Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations, and
such
Constituent Company is not
in
violation of any judgment, law or regulation except where any such violation
would not have a Material Adverse Effect. Such Constituent Company has not
received any written notice from any Governmental Authority or any other person
or entity regarding any actual, alleged or potential violation or failure to
comply in any material respect with any Legal Requirement.
Section
3.09 Litigation;
Default
.
There
are no claims, actions, suits, investigations or proceedings against such
Constituent Company pending or, to the Knowledge of such Constituent Company,
threatened in any court or before or by any Governmental Authority, or before
any arbitrator, other than worker’s compensation claims that are covered by such
Constituent Company’s self insurance arrangement.
Section
3.10 Other
Transactions
.
Except
as contemplated by this Agreement, such Constituent Company has not entered
into
any agreements or arrangements and there are no pending offers or discussions
concerning or providing for the merger or consolidation of such Constituent
Company, the sale of all or any substantial portion of its assets, the sale
by
such Constituent Company of any securities of such Constituent Company or any
similar transaction affecting such Constituent Company.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF ELS
HRS AND RESOLVE
Each
of
ELS HRS and Resolve, jointly and severally, represents and warrants to each
Constituent Company as of the Closing Date that:
Section
4.01 Corporate
Existence and Qualification; Corporate Documents
.
Each of
ELS HRS and Resolve is a corporation duly organized, validly existing and in
good standing under the laws of its state of jurisdiction, and is not required
to be qualified to do business as a foreign corporation in any other
jurisdiction where the failure to so qualify would have a material adverse
effect on either of them. Each of ELS HRS and Resolve has all required corporate
power and authority to own its properties and to carry on its business as
presently conducted.
Section
4.02 Authority,
Approval and Enforceability
.
This
Agreement and each other agreement to which ELS HRS or Resolve is a party have
been duly executed and delivered by such entity, and each of ELS HRS and Resolve
has all requisite corporate power and legal authority to execute and deliver
this Agreement and each other agreement to which it is a party, to consummate
the transactions contemplated hereby and thereby, and to perform its obligations
hereunder and thereunder. This Agreement and each other agreement to which
ELS
HRS or Resolve is a party will constitute the legal, valid and binding
obligations of such entity, enforceable in accordance with their respective
terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and except as the
availability of equity remedies may be limited by the application of general
principles of equity (regardless of whether such equitable principles are
applied in a proceeding at law or in equity).
No
Defaults or Consents
.
Neither
the execution nor delivery of this Agreement nor the carrying out of the
transactions contemplated hereby will:
(a) violate
or conflict with any of the terms, conditions or provisions of the Articles
of
Incorporation or Code of Regulations or Bylaws of ELS HRS or
Resolve;
(b) violate
any Legal Requirements applicable to ELS HRS or Resolve;
(c) result
in
the creation of any lien, charge or other encumbrance on the shares of capital
stock or any Property of ELS HRS or Resolve; or
(d) require
ELS HRS or Resolve to obtain or make any waiver, consent, action, approval
or
authorization of, or registration, declaration, notice or filing with, any
private non-governmental third party or any Governmental Authority
Section
4.03 No
Proceedings
.
No
suit, action or other proceeding is pending or, to the Knowledge of each of
ELS
HRS and Resolve, threatened before any Governmental Authority seeking to
restrain ELS HRS or Resolve or prohibit either's entry into this Agreement
or
prohibit the Closing, or seeking damages against ELS HRS or Resolve or their
Properties, as a result of the consummation of the transaction contemplated
by
this Agreement.
Section
4.04 Securities
.
The
authorized capital stock of Resolve is 50,000,000 shares of common stock, par
value $0.0001 per share, and 10,000,000 shares of preferred stock, par value
$0.0001 per share. The shares of Resolve Common Stock to be issued hereunder
have been duly authorized and, when issued in accordance with the terms of
this
Agreement, will be validly issued, fully paid and non-assessable and will be
issued in compliance with all applicable federal and state securities laws.
There are no outstanding options, warrants, subscriptions or other rights or
obligations to purchase or acquire any of shares of Resolve Common Stock, nor
any outstanding securities convertible into or exchangeable for such shares.
ARTICLE
V.
SURVIVAL
Section
5.01 Survival
of Representations and Warranties
.
Notwithstanding any right of any party hereto fully to investigate the affairs
of any other party hereto and notwithstanding any knowledge of facts determined
or determinable by any party hereto pursuant to such investigation or right
of
investigation, each of ELS HRS and Resolve, on the one hand, and the Constituent
Companies, on the other hand, has the right to rely fully upon the
representations, warranties, covenants and agreements of ELS HRS and Resolve
and
each Constituent Company, as the case may be, contained in this Agreement,
or in
any certificate delivered pursuant to any of the foregoing; provided, that
no
party hereto shall be entitled to rely on any representation or warranty made
by
any other party hereto herein to the extent that such party has actual knowledge
that such representation or warranty is untrue or incorrect in any material
respect. All such representations and warranties shall survive the execution
and
delivery of this Agreement and the Closing hereunder, and, except as otherwise
specifically provided in this Agreement, shall thereafter terminate and expire
at the end of the twenty fourth (24th) month following the
Closing
Date, subject to the limitations on indemnification set forth in Section 6.04
hereof. Notwithstanding the foregoing, the representations and warranties set
forth in Sections 3.01, 3.02, 3.09(b), 4.01 and 4.02, and all covenants and
agreements, shall survive indefinitely and shall not terminate or expire.
ARTICLE
VI.
INDEMNIFICATION
Section
6.01 Obligation
of each Constituent Company to Indemnify
.
Subject
to the limitations contained in Article V and Section 6.04 hereof, each
Constituent Company agrees to indemnify, defend and hold harmless ELS HRS and
Resolve (and their Affiliates, successors and assigns and their respective
officers and directors) from and against all losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys’ fees and disbursements, but offset by any proceeds from insurance and
taking into account the present value of any tax savings to ELS HRS and Resolve
resulting from such losses, liabilities, damages, deficiencies, costs or
expenses) (“Losses”)
based
upon, arising out of or otherwise in respect of any inaccuracy in or any breach
of any representation, warranty, covenant or agreement of such Constituent
Company contained in this Agreement.
Section
6.02 Obligation
of ELS HRS and Resolve to Indemnify
.
Each of
ELS HRS and Resolve, jointly and severally, agrees to indemnify, defend and
hold
harmless each Constituent Company from and against any Losses based upon,
arising out of or otherwise in respect of any inaccuracy in or any breach of
any
representation, warranty, covenant or agreement of ELS HRS or Resolve contained
in this Agreement.
Section
6.03 Notice
and Opportunity to Defend.
(a) Notice
of Asserted Liability.
Promptly after receipt by any party hereto (the “Indemnitee”)
of
notice of any demand, claim or circumstances which, with the lapse of time,
would or might give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an “Asserted
Liability”)
that
may result in a Loss, the Indemnitee shall give notice thereof (the
“Claims
Notice”)
to any
other party (or parties) obligated to provide indemnification pursuant to
Section 6.01 or 6.02 (the “Indemnifying Party”). The Claims Notice shall
describe the Asserted Liability in reasonable detail and shall indicate the
amount (estimated, if necessary and to the extent feasible) of the Loss that
has
been or may be suffered by the Indemnitee.
(b) Opportunity
to Defend.
The
Indemnifying Party may elect to compromise or defend, at its own expense and
by
its own counsel, any Asserted Liability. If the Indemnifying Party elects to
compromise or defend such Asserted Liability, it shall within thirty (30) days
(or sooner, if the nature of the Asserted Liability so requires) notify the
Indemnitee of its intent to do so, and the Indemnitee shall cooperate, at the
expense of the Indemnifying Party, in the compromise of, or defense against,
such Asserted Liability at the sole cost of the Indemnifying Party. If the
Indemnifying Party elects not to compromise or defend the Asserted Liability,
fails to notify the Indemnitee of its election as herein provided or contests
its obligation to indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such
(c)
Asserted
Liability. Notwithstanding the foregoing, neither the Indemnifying Party nor
the
Indemnitee may settle or compromise any claim over the objection of the other,
provided, however, that consent to settlement or compromise shall not be
unreasonably withheld. In any event, the Indemnitee and the Indemnifying Party
may participate (but not control), at their own expense, in the defense of
such
Asserted Liability. If the Indemnifying Party chooses to defend the claim,
the
Indemnitee shall make available to the Indemnifying Party any books, records
or
other documents within its control that are necessary or appropriate for such
defense.
Section
6.04 Limitations
on Indemnification
.
The
indemnification provided for in Sections 6.01 and 6.02 shall be subject to
the
following limitations:
(a) No
Constituent Company shall be obligated to pay any amounts for indemnification
under this Article VI arising out of any Losses based upon, arising out of
or
otherwise in respect of any inaccuracy or breach disclosed to ELS HRS and
Resolve prior to the Closing.
(b) Neither
each Constituent Company nor ELS HRS and Resolve shall be obligated to pay
any
amounts for indemnification for breach of a representation or warranty under
this Article VI, except those based upon, arising out of or otherwise in respect
of Section 3.01, 3.02, 3.09(b), 4.01, or 4.02 hereof (which shall be
indemnifiable from the first dollar), until the aggregate indemnification
payments, exclusive of those payable with respect to Sections 3.01, 3.02,
3.09(b), 4.01, or 4.02 equals $1,000,000 (the “Deductible”),
whereupon ELS HRS and Resolve, or the applicable Constituent Company, as the
case may be, shall be obligated to pay any indemnification payments, in excess
of the Deductible, in full. This Section 6.04(b) will not apply to any breach
of
any representation and warranty of which the breaching party had Knowledge
at
any time prior to the date on which such representation and warranty is made
or
any intentional breach by any party of any covenant or obligation.
(c) After
the
Closing, the indemnification rights set forth in this Article VI shall be each
party's sole and exclusive remedy against the other party for any breach of
any
representation, warranty or covenant contained in this Agreement.
Notwithstanding the foregoing, nothing herein shall prevent any party from
bringing an action based upon allegations of fraud in connection with this
Agreement.
ARTICLE
VII.
POST-CLOSING
OBLIGATIONS
Section
7.01 Further
Assurances
.
Following the Closing, each of the parties shall execute and deliver such
documents, and take such other action, as shall be reasonably requested by
any
other party hereto to carry out the transactions contemplated by this
Agreement.
Section
7.02 Access
to Records
.
From
and after the Closing, (i) each Constituent Company shall (A) deliver to ELS
HRS
all books, records, files, agreements and other information relating to such
Constituent Company, and (B) use best efforts to permit ELS HRS and its
authorized employees, agents, accountants, legal counsel and other
representatives to
have
access to the employees, counsel, accountants and other representatives of
each
Constituent Company, in each case, to the extent and at all times reasonably
requested by ELS HRS for the purpose of investigating or defending any claim
made against ELS HRS in connection with periods ending on or before the Closing
Date, and (ii) ELS HRS shall (A) permit each Constituent Company and its
authorized employees, agents, accountants, legal counsel and other
representatives to have access to the books, records, files, agreements and
other information of or regarding such Constituent Company, and (B) use its
best
efforts to permit each Constituent Company and its authorized employees, agents,
accountants, legal counsel and other representatives to have access to the
employees, counsel, accountants and other representatives of ELS HRS and its
Affiliates, in each case, to the extent and at all times reasonably requested
by
such Constituent Company, for the purpose of (I) investigating or defending
any
claim made against such Constituent Company in connection with Article VI,
or
(II) with respect to any pre-Closing Date tax matters affecting such Constituent
Company.
ARTICLE
VIII.
MISCELLANEOUS
Section
8.01 Brokers
.
Regardless of whether the Closing shall occur, (i) each Constituent Company
shall indemnify and hold harmless ELS HRS and Resolve from and against any
and
all liability for any brokers or finders' fees arising with respect to brokers
or finders retained or engaged by such Constituent Company in respect of the
transactions contemplated by this Agreement, and (ii) ELS HRS and Resolve,
jointly and severally, shall indemnify and hold harmless each Constituent
Company from and against any and all liability for any brokers' or finders'
fees
arising with respect to brokers or finders retained or engaged by ELS HRS and/or
Resolve in respect of the transactions contemplated by this
Agreement.
Section
8.02 Costs
and Expenses
.
Each of
the parties to this Agreement shall bear its own expenses incurred in connection
with the negotiation, preparation, execution and closing of this Agreement
and
the transactions contemplated hereby.
Section
8.03 Notices
.
Any
notice, request, instruction, correspondence or other document to be given
hereunder by any party hereto to another (herein collectively called
“Notice”)
shall
be in writing and delivered personally or mailed by registered or certified
mail, postage prepaid and return receipt requested, or by telecopier, as
follows:
ELS
HRS
or Resolve: Resolve
Staffing, Inc.
ELS
Human
Resource Solutions, Inc.
▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to: ▇▇▇▇
▇▇▇▇▇▇, Esq.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Constituent
Companies: c/o
Employee Leasing Services, Inc.
▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy
No.: (▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to: ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇, Esq.
▇▇▇▇,
Stettinius & Hollister LLP
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy
No.: ▇▇▇-▇▇▇-▇▇▇▇
Each
of
the above addresses for notice purposes may be changed by providing appropriate
notice hereunder. Notice given by personal delivery or registered mail shall
be
effective upon actual receipt. Notice given by telecopier shall be effective
upon actual receipt if received during the recipient's normal business hours,
or
at the beginning of the recipient's next normal business day after receipt
if
not received during the recipient's normal business hours. All Notices by
telecopier shall be confirmed by the sender thereof promptly after transmission
in writing by registered mail or personal delivery. Anything to the contrary
contained herein notwithstanding, Notices to any party hereto shall not be
deemed effective with respect to such party until such Notice would, but for
this sentence, be effective both as to such party and as to all other persons
to
whom copies are provided above to be given.
Section
8.04 Governing
Law
.
The
provisions of this Agreement and the documents delivered pursuant hereto shall
be governed by and construed in accordance with the laws of the State of Ohio
(excluding any conflict of law rule or principle that would refer to the laws
of
another jurisdiction).
Section
8.05 Entire
Agreement, Amendments and Waivers
.
This
Agreement, together with all exhibits and schedules attached hereto, constitutes
the entire agreement between the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed
or
shall constitute a waiver of any other provision hereof (regardless of whether
similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly provided.
Section
8.06 Binding
Effect and Assignment
.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, executors, legal representatives, permitted
successors and assigns; but neither this Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned, by operation of law or
otherwise, by any party hereto without the prior written consent of the other
party. Nothing in this Agreement, express or implied, is intended to confer
upon
any person or entity, other than the parties hereto
and
their
respective heirs, executors, legal representatives, permitted successors and
assigns, any rights, benefits or obligations hereunder.
Section
8.07 Remedies
.
The
rights and remedies provided by this Agreement are cumulative, and the use
of
any one right or remedy by any party hereto shall not preclude or constitute
a
waiver of its right to use any or all other remedies provided by this
Agreement.
Section
8.08 Exhibits
and Schedules
.
The
exhibits and schedules referred to herein are attached hereto and incorporated
herein by this reference.
Section
8.09 Multiple
Counterparts
.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
Section
8.10 References
.
Whenever required by the context, and as used in this Agreement, the singular
number shall include the plural and pronouns and any variations thereof shall
be
deemed to refer to the masculine, feminine, neuter, singular or plural, as
the
identification of the person may require. References to monetary amounts and
specific named statutes are intended to be and shall be construed as references
to United States dollars and statutes of the United States, respectively, unless
the context otherwise requires.
Section
8.11 Survival
.
Any
provision of this Agreement which contemplates performance or the existence
of
obligations after the Closing Date, and any and all representations and
warranties set forth in this Agreement, shall not be deemed to be merged into
or
waived by the execution and delivery of the instruments executed at the Closing,
but shall expressly survive Closing for the time period set forth in Section
6.01 hereof and shall be binding upon the party or parties obligated thereby
in
accordance with the terms of this Agreement, subject to any limitations
expressly set forth in this Agreement.
ARTICLE
IX.
DEFINITIONS
Capitalized
terms used in this Agreement shall have the respective meanings ascribed to
such
terms in this Article IX, unless otherwise defined in this
Agreement.
Section
9.01 Affiliate
.
The
term “Affiliate”
shall
mean, with respect to any person, any other person controlling, controlled
by or
under common control with such person. The term “control” as used in the
preceding sentence means, with respect to a corporation, the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting rights
attributable to the shares of the controlled corporation and, with respect
to
any person other than a corporation, the possession, directly or indirectly,
of
the power to direct or cause the direction of the management or policies of
such
person.
Section
9.02 Company
Assets
.
The
term “Company
Assets”
shall
mean, with respect to each Constituent Company, all of the Properties, Contracts
and Permits Used by such Constituent Company as of the Closing
Date.
Governmental
Authorities
.
The
term “Governmental
Authorities”
shall
mean any nation or country (including but not limited to the United States)
and
any commonwealth, territory or possession thereof and any political subdivision
of any of the foregoing, including but not limited to courts, departments,
commissions, boards, bureaus, agencies, ministries or other
instrumentalities.
Section
9.03 Knowledge
.
The
term “Knowledge”
shall
mean the actual knowledge of a party and, in the case of a Constituent Company,
of any of its directors or executive officers with respect to the representation
being made.
Section
9.04 Legal
Requirements
.
The
term “Legal
Requirements”,
when
described as being applicable to any person, shall mean any and all laws
(statutory, judicial or otherwise), ordinances, regulations, judgments, orders,
directives, injunctions, writs, decrees or awards of, and any contracts with,
any Governmental Authority, in each case as and to the extent applicable to
such
person or such person's business, operations or Properties.
Section
9.05 Material
Adverse Change
.
The
term “Material
Adverse Change”
shall
mean a material adverse change in a Constituent Company’s condition (financial
or otherwise), operations, results of operations, business, Properties or
liabilities.
Section
9.06 Material
Adverse Effect
.
The
term “Material
Adverse Effect”
shall
mean a material adverse effect on a Constituent Company’s operations, business,
Properties, financial condition or results of operations.
Section
9.07 Permits
.
The
term “Permits”
shall
mean any and all permits or orders under any Legal Requirement or otherwise
granted by any Governmental Authority.
Section
9.08 Properties
.
The
term “Properties”
shall
mean any and all properties and assets (real, personal or mixed, tangible or
intangible).
Section
9.09 Regulations
.
The
term “Regulations”
shall
mean any and all regulations promulgated by the Department of the Treasury
pursuant to the Code.
Section
9.10 Taxes
or Tax
.
The
term “Taxes”
or
“Tax”
means
any federal, state, local, or foreign income, gross receipts, license, payroll,
employment, gift, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code §59A), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
Section
9.11 Tax
Returns
.
The
term “Tax
Return”
means
any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
Section
9.12 Used
.
The
term “Used”
shall
mean, with respect to the Properties, Contracts or Permits of a Constituent
Company, those owned, leased, licensed or otherwise held by such Constituent
Company which were acquired for use or held for use by such
Constituent
Company
in connection with such Constituent Company’s business and operations, whether
or not reflected on the books of account.
EXECUTED
as of the date first written above.
ELS
HUMAN
RESOURCE SOLUTIONS, INC.
By:________________________________
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇▇
President
RESOLVE
STAFFING, INC.
By:________________________________
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇▇
Director
and Authorized Representative
ELS
OF
DAYTON PREMIER BUSINESS SOLUTIONS, LLC
By:________________________________
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
Manager
ELS
ADMINISTRATIVE SERVICES, L.L.C.
By:________________________________
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
Manager
Exhibit
A
Capitalization
1. ELS
of
Dayton Premier Business Solutions, LLC
Membership
Units Owned
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇ 22.5
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ 22.5
FTJ
Consulting, LLC 45
▇▇▇
▇▇▇▇▇ 45
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇. 7.25
2. ELS
Administrative Services, L.L.C.
Membership
Units Owned
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇ 3,700
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ 3,700
▇▇▇▇▇
▇.
▇▇▇▇▇ 1,300
▇▇▇▇▇▇▇
▇. ▇▇▇▇ 1,300