EXHIBIT 1.0
Asset Purchase Agreement 06/13/03
TRSG and Asmara
Page 1 of 36
ASSET PURCHASE AGREEMENT
by and among
Asmara, Inc., a North Carolina Corporation,
And
The Resourcing Solutions Group, Inc., a Nevada Corporation
Dated April 25, 2003
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is dated April 25, 2003, by and
among The Resourcing Solutions Group, Inc., a Nevada corporation ("Buyer"); and
Asmara, Inc., a North Carolina corporation (Seller").
RECITALS
Seller desires to sell, and Buyer desires to purchase, the Assets of Seller for
the consideration and on the terms set forth in this Agreement.
The parties, intending to be legally bound, agree as follows:
1. Sale and Transfer of Assets.
1.1 ASSETS TO BE SOLD. Upon the terms and subject to the conditions set forth in
this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and
clear of any encumbrances other than any permitted herein, all of Seller's
right, title and interest in and to all of Seller's property and assets, real,
personal or mixed, tangible and intangible, of every kind and description,
wherever located, including the following (the "Assets"):
(a) all tangible personal property, as listed in Exhibit "A" (the "Tangible
Personal Property");
(b) all cash on deposit, cash equivalents and short-term investments on
hand prior to consummation of this transaction, including those amounts
received from a business for which Seller has agreed to provide PEO
services ("Clients") in connection with the performance by Clients of
obligations under their PEO Contracts with Seller and for which Seller has
a corresponding obligation that constitutes an Assumed Liability and all
funds on deposit or in restricted accounts for the purpose of securing
insurance coverage.
(c) all accounts receivable, as listed in Exhibit "B" (the "Accounts
Receivable");
(d) all contracts with customers and suppliers, as listed in Exhibit "C",
which includes all outstanding offers or solicitations made by or to Seller
to enter into any contract (the "Contracts");
(e) all Governmental Authorizations and all pending applications therefor
or renewals thereof, as listed in Exhibit "D" (the "Governmental
Authorizations");
(f) all insurance programs being offered by Seller to its PEO (Professional
Employer Organization) customers, as listed in Exhibit "E" (the "Insurance
Programs");
(g) all interest in and securities owned of all subsidiary operations and
corporations as listed in Exhibit "F";
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(h) all claims for refund of taxes and other governmental charges of
whatever nature; and
(i) all data and records related to the operations of Seller, including
client and customer lists and records, referral sources, market research
reports, financial and accounting records, advertising materials,
promotional materials, correspondence and other similar documents and
records, which shall be preserved by Buyer as provided in Paragraph 10.8,
below;
(j) all of the intangible rights and property of Seller, including
intellectual property assets, telephone, telecopy and e-mail addresses and
listings;
(k) all claims of Seller against third parties relating to the Assets; and
(l) all rights of Seller relating to deposits and prepaid expenses,
claims for refunds and rights to offset in respect thereof.
The transfer of the Assets pursuant to this Agreement shall not include the
assumption of any liability related to the Assets unless Buyer expressly assumes
that liability herein.
1.2 EXCLUDED ASSETS: Notwithstanding anything to the contrary contained in
Section 1.1 or elsewhere in this Agreement, the following assets of Seller
(collectively, the "Excluded Assets") are not part of the sale and purchase
contemplated hereunder, are excluded from the Assets and shall remain the
property of Seller after the Closing:
(a) all minute books, stock Records and corporate seals;
(b) the shares of capital stock of Seller held in treasury;
(c) all affiliated company receivables from other organizations and
corporations owned by the sole shareholder of the Seller.
(d) all personnel records and other records that Seller is required by law
to retain in its possession, in which case, copies will be made at Buyer's
request and at Buyer's expense; and
(e) all rights of Seller under this Agreement, the ▇▇▇▇ of Sale and the
Assignment and Assumption Agreement.
1.3 CONSIDERATION: The consideration for the Assets (the "Purchase Price") will
be $1,965,000 in the assumption of certain liabilities as specified in Section
1.4(a), following (the Assumed Liabilities). At the Closing, the Purchase Price
shall be delivered by Buyer to Seller as follows:
(a) five thousand dollars ($5,000.00) by cash or company check; and
(b) the assumption of the Assumed Liabilities through the execution and
delivery of the Assignment and Assumption Agreement.
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Thereafter, the Buyer shall cause the following options to be delivered annually
to ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇:
(c) Options on 500,000 shares of the common stock of the Buyer, at a strike
price of $0.03 per share, should Asmara achieve an average EBITDA of
greater than one percent (1%) and less than two percent (2%) of sales
during the 24 months following the closing.
(d) Options on 1,000,000 shares of the common stock of the Buyer, at a
strike price of $0.03 per share, should Asmara achieve an average EBITDA of
greater than two percent (2%) of sales or greater over the 24 months
following the closing.
1.4 LIABILITIES
(a) Assumed Liabilities. On the Closing, Buyer shall assume and agree to
discharge only the following liabilities of Seller (the "Assumed
Liabilities") :
(i) the outstanding liabilities of Seller listed on Schedule
1.4(a)(i), not to exceed one million, five hundred thousand dollars
($1,525,000.00) at the time of the Closing;
(ii) the outstanding amounts payable by Seller directly to the
shareholder of Asmara, Inc., ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, as listed on Schedule
1.4(a)(ii), not to exceed four hundred thirty thousand dollars
($430,000.00) at the time of the Closing;
(iii) any Liability arising after the Closing under the Contracts
described in Schedule 3.15(a), except for:
A. any Liability arising out of or relating to a breach of any of
the Contracts described in Schedule 3.15(a) that occurred prior
to the Closing other than that referred to in Paragraph 1.4
(a)(i), above, and
B. any liability arising out of or relating to any of the Contracts
described in Schedule 3.15(a) for which Seller has received
payment from a Client thereunder and for which Seller has not
provided the full payment thereof to Buyer other than that
referred to in Paragraph 1.4(a)(i), above;
(iv) any liability of Seller described in Schedule 1.4(a)(iii)
(b) Retained Liabilities. All liabilities not expressly assumed by Buyer
herein (the "Retained Liabilities"), at the time of the Closing, shall
remain the sole responsibility of and shall be retained, paid, performed
and discharged solely by Seller.
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2. Closing.
2.1 TIME AND PLACE. The purchase and sale provided for in this Agreement (the
"Closing") will take place at the offices of the Seller on April 25, 2003,
unless Buyer and Seller otherwise agree.
2.2 CLOSING OBLIGATIONS. At the Closing:
(a) Seller shall deliver to Buyer (together referred to as "Seller's
Closing Documents"):
(i) a ▇▇▇▇ of sale for all of the Assets that are Tangible Personal
Property in the form of Exhibit "G" (the "▇▇▇▇ of Sale") executed by
Seller;
(ii) an assignment of all of the Assets that are intangible personal
property in the form of Exhibit "H", which assignment shall also contain
Buyer's undertaking and assumption of the Assumed Liabilities (the
"Assignment and Assumption Agreement") executed by Seller, except that the
Contracts with Seller's PEO clients, (A) existing at the time of the
Closing and (B) entered into between that time and December 31, 2002 (which
shall be included as part of the "Contracts"), which have not been
terminated prior to April 30, 2003, will be assigned to Buyer on the first
business day following May 1, 2003;
(iii) assignments of all intellectual property assets identified in
Schedule 3.18;
(iv) employment agreements in the form of Exhibit "I" (the "Employment
Agreements") executed by ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇;
(v) non-competition agreement in the form of Exhibit "J" (the
"Non-competition Agreement"), executed by ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇;
(vi) a certificate executed by an officer of the Seller as to the
accuracy of Seller's representations and warranties as of the date of this
Agreement and as of the Closing, and as to Seller's compliance with and
performance of Seller's covenants and obligations to be performed or
complied with at or before the Closing; and
(vii) a certificate of the Secretary of Seller certifying requisite
resolutions or actions of Seller's board of directors and shareholders
approving the execution and delivery of this Agreement and the consummation
of the transactions contemplated herein; and certifying to the incumbency
and signatures of the officers of Seller executing this Agreement and any
other document relating to the transactions contemplated herein.
(b) Buyer shall deliver to Seller (together referred to as "Buyer's Closing
Documents"):
(i) five thousand dollars ($5,000.00) by cash or company check;
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(ii) the Assignment and Assumption Agreement executed by Buyer;
(iii) agreements for the employment of ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ("the Employment Agreements") executed by Buyer;
(iv) a certificate executed by an officer of the Buyer as to the
accuracy of Buyer's representations and warranties as of the date of this
Agreement and as of the Closing, and as to Buyer's compliance with and
performance of Buyer's covenants and obligations to be performed or
complied with at or before the Closing; and
(v) a certificate of the Secretary of Buyer certifying, all requisite
resolutions or actions of Buyer's board of directors and shareholders
approving the execution and delivery of this Agreement and the consummation
of the transactions contemplated herein and certifying to the incumbency
and signatures of the officers of Buyer executing this Agreement and any
other document relating to the transactions contemplated herein.
3. Representations and Warranties of Seller. Seller represents and warrants to
Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING. Schedule 3.1 contains a complete and
accurate list of Seller's jurisdiction of incorporation and any other
jurisdictions in which it is qualified to do business as a foreign corporation.
Seller is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, with full corporate power
and authority to conduct its business as it is now being conducted, to own or
use the properties and assets that it purports to own or use, and to perform all
its obligations under the Contracts. Seller is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the properties owned
or used by it, or the nature of the activities conducted by it, requires such
qualification.
3.2 ENFORCEABILITY; AUTHORITY; NO CONFLICT
(a) This Agreement, and all other agreements related hereto, constitute the
legal, valid and binding obligation of Seller, enforceable against it in
accordance with its terms. Seller has the absolute and unrestricted right,
power and authority to execute and deliver this Agreement and the Seller's
Closing Documents and to perform its obligations under this Agreement and
the Seller's Closing Documents, and such action has been duly authorized by
all necessary action by Seller's shareholders and board of directors.
(b)Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated herein
will, directly or indirectly (with or without notice or lapse of time):
(i) breach any provision of any of the governing documents of Seller
or any resolution adopted by the board of directors or the shareholders of
Seller;
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(ii) breach or give any governmental body or other person or entity
the right to challenge any of the transactions contemplated herein or to
exercise any remedy or obtain any relief under any legal requirement or any
order to which Seller or any of the Assets may be subject;
(iii) contravene, conflict with or result in a violation or breach of
any of the terms or requirements of, or give any governmental body the
right to revoke, withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by Seller or that otherwise relates
to the Assets or to the business of Seller;
(iv) cause Buyer to become subject to, or to become liable for the
payment of, any tax;
(v) Breach any provision of, or give any person or entity the right to
declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or payment under, or to cancel, terminate or
modify, any Contract;
(vi) result in the imposition or creation of any encumbrance upon or
with respect to any of the Assets; or
(vii) result in any shareholder of the Seller having the right to
exercise dissenters' appraisal rights.
(c) Seller is not required to give any notice to or obtain any consent from
any person or entity in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the transactions
contemplated herein.
3.3 FINANCIAL STATEMENTS. Seller has delivered to Buyer: (a) an unaudited
balance sheet of Seller as at December 31, 2001 (the "Balance Sheet"), and the
related audited statements of income, changes in shareholders' equity and cash
flows for the fiscal year then ended, (b) an unaudited balance sheet of Seller
as at March 31, 2003, (the "Interim Balance Sheet") and the related unaudited
statement[s] of income, and cash flows for the three (3) months then ended. Such
financial statements fairly present the financial condition and the results of
operations, changes in shareholders' equity and cash flows of Seller as at the
respective dates of and for the periods referred to in such financial
statements. The financial statements referred to in this Section 3.3 reflect and
will reflect the consistent application of such accounting principles throughout
the periods involved. The financial statements have been and will be prepared
from and are in accordance with the accounting records of Seller. The books of
account and other financial Records of Seller, all of which have been made
available to Buyer, are complete and correct and represent actual, bona fide
transactions and have been maintained in accordance with sound business
practices and the requirements of Section 13(b)(2) of the Exchange Act
(regardless of whether the Seller is subject to that Section or not), including
the maintenance of an adequate system of internal controls
3.4 SUFFICIENCY OF ASSETS. Except as set forth in Schedule 3.4, the Assets (a)
constitute all of the assets, tangible and intangible, of any nature whatsoever,
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necessary to operate Seller's business in the manner presently operated by
Seller and (b) include all of the operating assets of Seller, other than the
Excluded Assets.
3.5 DESCRIPTION OF LEASED REAL PROPERTY. Schedule 3.5 contains an accurate
description (by location, name of lessor, date of Lease and term expiry date) of
the sole real property lease of Seller. It is agreed that Buyer will assume such
lease for a period of ninety (90) days, with an option to assume the full
balance of such lease term under the current lease terms and conditions.
3.6 TITLE TO ASSETS; ENCUMBRANCES. Seller owns good and transferable title to
all of the Assets free and clear of any Encumbrances. Seller warrants to Buyer
that, at the time of Closing, all Assets shall be free and clear of all
encumbrances.
3.7 ACCOUNTS RECEIVABLE. All Accounts Receivable that are reflected on the
Balance Sheet or the Interim Balance Sheet or on the accounting records of
Seller as of the Closing represent or will represent valid obligations arising
from sales actually made or services actually performed by Seller in the
ordinary course of business. Except to the extent paid prior to the Closing and
those receivables excluded under Section 1.2 of this Agreement, such Accounts
Receivable are or will be as of the Closing current and collectible net of the
respective reserves shown on the Balance Sheet or the Interim Balance Sheet
(which reserves are adequate and calculated consistent with past practice).
Subject to such reserves, each of such Accounts Receivable either has been or
will be collected in full, without any setoff, within ninety (90) days after the
day on which it first becomes due and payable. There is no contest, claim,
defense or right of setoff under any Contract with any account debtor of an
Account Receivable relating to the amount or validity of such Account
Receivable.
3.8 NO UNDISCLOSED LIABILITIES. Seller has no liability except for liabilities
reflected or reserved against in the Balance Sheet or the Interim Balance Sheet
and current liabilities incurred in the ordinary course of business of Seller
since the date of the Interim Balance Sheet.
3.9 TAXES. All Taxes that Seller is or was required by legal requirements to
withhold, deduct or collect have been duly withheld, deducted and collected and,
to the extent required or otherwise disclosed, have been paid to the proper
governmental body or other entity.
3.10 NO MATERIAL ADVERSE CHANGE. Since the date of the Balance Sheet, there has
not been any material adverse change in the business, operations, prospects,
assets, results of operations or condition (financial or other) of Seller, and
no event has occurred or circumstance exists that may result in such a material
adverse change.
3.11 EMPLOYEE BENEFITS.
(a) Set forth in Schedule 3.11(a) is a complete and correct list of all
"employee benefit plans" as defined by Section 3(3) of ERISA, all specified
fringe benefit plans as defined in Section 6039D of the Internal Revenue
Code (the "Code"), and all other bonus, incentive-compensation, deferred-
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compensation, profit-sharing, stock-option, stock-appreciation-right, stock
-bonus, stock-purchase, employee-stock-ownership, savings, severance,
change-in-control, supplemental-unemployment, layoff, salary-continuation,
retirement, pension, health, life-insurance, disability, accident, group-
insurance, vacation, holiday, sick-leave, fringe-benefit or welfare plan,
and any other employee compensation or benefit plan, agreement, policy,
practice, commitment, contract or understanding (whether qualified or
nonqualified, currently effective or terminated, written or unwritten) and
any trust, escrow or other agreement related thereto that (i) is maintained
or contributed to by Seller or any other corporation or trade or business
controlled by, controlling or under common control with Seller (within the
meaning of Section 414 of the Code or Section 4001(a)(14) or 4001(b) of
ERISA) ("ERISA Affiliate") or has been maintained or contributed to in the
last six (6) years by Seller or any ERISA Affiliate, or with respect to
which Seller or any ERISA Affiliate has or may have any liability, and (ii)
provides benefits, or describes policies or procedures applicable to any
current or former director, officer, employee or service provider of Seller
or any ERISA Affiliate, or the dependents of any thereof, regardless of how
(or whether) liabilities for the provision of benefits are accrued or
assets are acquired or dedicated with respect to the funding thereof
(collectively the "Employee Plans"). Schedule 3.11(a) identifies as such
any Employee Plan that is (w) a "Defined Benefit Plan" (as defined in
Section 414(l) of the Code); (x) a plan intended to meet the requirements
of Section 401(a) of the Code; (y) a "Multiemployer Plan" (as defined in
Section 3(37) of ERISA); or (z) a plan subject to Title IV of ERISA, other
than a Multiemployer Plan. Also set forth on Schedule 3.11(a) is a complete
and correct list of all ERISA Affiliates of Seller during the last six (6)
years.
(b) Seller has delivered to Buyer true, accurate and complete copies of (i)
the documents comprising each Employee Plan (or, with respect to any
Employee Plan which is unwritten, a detailed written description of
eligibility, participation, benefits, funding arrangements, assets and any
other matters which relate to the obligations of Seller or any ERISA
Affiliate); (ii) all trust agreements, insurance contracts or any other
funding instruments related to the Employee Plans; (iii) all rulings,
determination letters, no-action letters or advisory opinions from the IRS,
the U.S. Department of Labor, the Pension Benefit Guaranty Corporation
("PBGC") or any other Governmental Body that pertain to each Employee Plan
and any open requests therefor; (iv) the most recent actuarial and
financial reports (audited and/or unaudited) and the annual reports filed
with any Government Body with respect to the Employee Plans during the
current year and each of the three preceding years; (v) all collective
bargaining agreements pursuant to which contributions to any Employee
Plan(s) have been made or obligations incurred (including both pension and
welfare benefits) by Seller or any ERISA Affiliate, and all collective
bargaining agreements pursuant to which contributions are being made or
obligations are owed by such entities; (vi) all securities registration
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statements filed with respect to any Employee Plan; (vii) all contracts
with third-Party administrators, actuaries, investment managers,
consultants and other independent contractors that relate to any Employee
Plan, (viii) with respect to Employee Plans that are subject to Title IV of
ERISA, the Form PBGC-1 filed for each of the three most recent plan years;
and (ix) all summary plan descriptions, summaries of material modifications
and memoranda, employee handbooks and other written communications
regarding the Employee Plans.
(c) Full payment has been made of all amounts that are required under the
terms of each Employee Plan to be paid as contributions with respect to all
periods prior to and including the last day of the most recent fiscal year
of such Employee Plan ended on or before the date of this Agreement and all
periods thereafter prior to the Closing, and no accumulated funding
deficiency or liquidity shortfall (as those terms are defined in Section
302 of ERISA and Section 412 of the Code) has been incurred with respect to
any such Employee Plan, whether or not waived. The value of the assets of
each Employee Plan exceeds the amount of all benefit liabilities
(determined on a plan termination basis using the actuarial assumptions
established by the PBGC as of the Closing) of such Employee Plan. Seller is
not required to provide security to an Employee Plan under Section
401(a)(29) of the Code. The funded status of each Employee Plan that is a
Defined Benefit Plan is disclosed on Part 3.16(c) in a manner consistent
with the Statement of Financial Accounting Standards No. 87. Seller has
paid in full all required insurance premiums, subject only to normal
retrospective adjustments in the ordinary course, with regard to the
Employee Plans for all policy years or other applicable policy periods
ending on or before the Closing Date.
(d) No Employee Plan, if subject to Title IV of ERISA, has been completely
or partially terminated, nor has any event occurred nor does any
circumstance exist that could result in the partial termination of such
Employee Plan. The PBGC has not instituted or threatened a Proceeding to
terminate or to appoint a trustee to administer any of the Employee Plans
pursuant to Subtitle 1 of Title IV of ERISA, and no condition or set of
circumstances exists that presents a material risk of termination or
partial termination of any of the Employee Plans by the PBGC. None of the
Employee Plans has been the subject of, and no event has occurred or
condition exists that could be deemed, a reportable event (as defined in
Section 4043 of ERISA) as to which a notice would be required (without
regard to regulatory monetary thresholds) to be filed with the PBGC. Seller
has paid in full all insurance premiums due to the PBGC with regard to the
Employee Plans for all applicable periods ending on or before the Closing
Date.
(e) Neither Seller nor any ERISA Affiliate has any liability or has
knowledge of any facts or circumstances that might give rise to any
liability, and the transactions contemplated herein will not result in any
liability, (i) for the termination of or withdrawal from any Employee Plan
under Sections 4062, 4063 or 4064 of ERISA, (ii) for any lien imposed under
Section 302(f) of ERISA or Section 412(n) of the Code, (iii) for any
interest payments required under Section 302(e) of ERISA or Section 412(m)
of the Code, (iv) for any excise tax imposed by Section 4971 of the Code,
(v) for any minimum funding contributions under Section 302(c)(11) of ERISA
or Section 412(c)(11) of the Code or (vi) for withdrawal from any
Multiemployer Plan under Section 4201 of ERISA.
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(f) Seller has, at all times, complied, and currently complies, in all
material respects with the applicable continuation requirements for its
welfare benefit plans, including (1) Section 4980B of the Code (as well as
its predecessor provision, Section 162(k) of the Code) and Sections 601
through 608, inclusive, of ERISA, which provisions are hereinafter referred
to collectively as "COBRA" and (2) any applicable state statutes mandating
health insurance continuation coverage for employees.
(g) The form of all Employee Plans is in compliance with the applicable
terms of ERISA, the Code, and any other applicable laws, including the
Americans with Disabilities Act of 1990, the Family Medical Leave Act of
1993 and the Health Insurance Portability and Accountability Act of 1996,
and such plans have been operated in compliance with such laws and the
written Employee Plan documents. Neither Seller nor any fiduciary of an
Employee Plan has violated the requirements of Section 404 of ERISA. All
required reports and descriptions of the Employee Plans (including Internal
Revenue Service Form 5500 Annual Reports, Summary Annual Reports and
Summary Plan Descriptions and Summaries of Material Modifications) have
been (when required) timely filed with the IRS, the U.S. Department of
Labor or other Governmental Body and distributed as required, and all
notices required by ERISA or the Code or any other Legal Requirement with
respect to the Employee Plans have been appropriately given.
(h) Each Employee Plan that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
IRS, and Seller has no knowledge of any circumstances that will or could
result in revocation of any such favorable determination letter. Each trust
created under any Employee Plan has been determined to be exempt from
taxation under Section 501(a) of the Code, and Seller is not aware of any
circumstance that will or could result in a revocation of such exemption.
Each Employee Welfare Benefit Plan (as defined in Section 3(1) of ERISA)
that utilizes a funding vehicle described in Section 501(c)(9) of the Code
or is subject to the provisions of Section 505 of the Code has been the
subject of a notification by the IRS that such funding vehicle qualifies
for tax-exempt status under Section 501(c)(9) of the Code or that the plan
complies with Section 505 of the Code, unless the IRS does not, as a matter
of policy, issue such notification with respect to the particular type of
plan. With respect to each Employee Plan, no event has occurred or
condition exists that will or could give rise to a loss of any intended tax
consequence or to any Tax under Section 511 of the Code.
(i) There is no material pending or threatened proceeding relating to any
Employee Plan, nor is there any basis for any such Proceeding. Neither
Seller nor any fiduciary of an Employee Plan has engaged in a transaction
with respect to any Employee Plan that, assuming the taxable period of such
transaction expired as of the date hereof, could subject Seller or Buyer to
a Tax or penalty imposed by either Section 4975 of the Code or Section
502(l) of ERISA or a violation of Section 406 of ERISA. The transactions
contemplated herein will not result in the potential assessment of a Tax or
penalty under Section 4975 of the Code or Section 502(l) of ERISA nor
result in a violation of Section 406 of ERISA.
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(j) Seller has maintained workers' compensation coverage as required by
applicable state law through purchase of insurance and not by
self-insurance or otherwise.
(k) Except as required by legal requirements and as provided in Section
10.1(d), the consummation of the transactions contemplated herein will not
accelerate the time of vesting or the time of payment, or increase the
amount, of compensation due to any director, employee, officer, former
employee or former officer of Seller. There are no contracts or
arrangements providing for payments that could subject any person to
liability for tax under Section 4999 of the Code.
(l) Except for the continuation coverage requirements of COBRA, Seller has
no obligations or potential liability for benefits to employees, former
employees or their respective dependents following termination of
employment or retirement under any of the Employee Plans that are Employee
Welfare Benefit Plans.
(m) None of the transactions contemplated herein will result in an
amendment, modification or termination of any of the Employee Plans. No
written or oral representations have been made to any employee or former
employee of Seller promising or guaranteeing any employer payment or
funding for the continuation of medical, dental, life or disability
coverage for any period of time beyond the end of the current plan year
(except to the extent of coverage required under COBRA). No written or oral
representations have been made to any employee or former employee of Seller
concerning the employee benefits of Buyer.
(n) With respect to any Employee Plan that is a "multiemployer plan" within
the meaning of Section 4001(a)(3) of ERISA ("Multiemployer Plan"), and any
other Multiemployer Plan to which Seller has at any time had an obligation
to contribute:
(i) all contributions required by the terms of such Multiemployer Plan
and any collective bargaining agreement have been made when due; and
(ii) Seller would not be subject to any withdrawal liability under
Part 1 of Subtitle E of Title IV of ERISA if, as of the date hereof, Seller
were to engage in a "complete withdrawal" (as defined in ERISA Section
4203) or a "partial withdrawal" (as defined in ERISA Section 4205) from
such Multiemployer Plan.
(o) Multiemployer Plan.
(i) The parties intend to comply with the requirements of Section 4204
of ERISA in order that the transactions contemplated by this Agreement
shall not be deemed a complete or partial withdrawal from the Asmara MEP
401(k) Plan (the "Multiemployer Plan"). Accordingly, Seller and Buyer
agree:
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(A) After the Closing, Buyer shall contribute to the Multiemployer Plan
with respect to the operations of the Company for substantially the
same number of "contribution base units" for which Seller had an
"obligation to contribute" to the Multiemployer Plan (as those terms
are defined in Sections 4001(a)(11) and 4212 of ERISA, respectively)
pursuant to the Collective Bargaining Agreement.
(B) Buyer shall provide to the Multiemployer Plan, for a period of five
consecutive plan years commencing with the first plan year beginning
after the Closing, either a bond issued by a surety company that is an
acceptable surety for purposes of Section 412 of ERISA or an amount
held in escrow by a bank or similar financial institution satisfactory
to the Multiemployer Plan. The amount of such bond or escrow deposit
shall be equal to the greater of (A) the average annual contribution
that Seller was required to make under the Multiemployer Plan with
respect to the operations of the Company for the three plan years
immediately preceding the plan year in which the Closing occurs, or
(B) the annual contribution that Seller was required to make under the
Multiemployer Plan with respect to the operations of the Company for
the last plan year immediately preceding the plan year in which the
Closing occurs.
(C) If Buyer completely or partially withdraws from the Multiemployer Plan
prior to the end of the fifth plan year beginning after the Closing,
and the resulting liability of Buyer with respect to the Multiemployer
Plan is not paid, then Seller shall be secondarily liable in an amount
not to exceed the amount of withdrawal liability Seller would have had
to pay to the Multiemployer Plan as a result of the transactions
contemplated by this Agreement but for Section 4204 of ERISA. Buyer
shall indemnify Seller against any liability incurred by Seller
pursuant to this clause (iii).
(ii) Seller shall cooperate with Buyer if Buyer wishes to prepare and
submit to the Multiemployer Plan or the Pension Benefit Guaranty
Corporation (PBGC) a request for a variance of exemption from the
bond/escrow requirement of Section 4204(a)(1)(B) of ERISA (as described in
clause (ii) of this subsection). Unless and until such a variance or
exemption is granted, Buyer shall comply with the bond/escrow requirement,
except to the extent provided in PBGC Regulation Section 2643.11(d).
3.12 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
(a) Seller is, and at all times since March 31, 2003, has been, in full
compliance with each legal requirement that is or was applicable to it or
to the conduct or operation of its business or the ownership or use of any
of its assets. No event has occurred or circumstance exists that (with or
without notice or lapse of time) (A) may constitute or result in a
violation by Seller of, or a failure on the part of Seller to comply with,
any legal requirement or (B) may give rise to any obligation on the part of
Seller to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature. Seller has not received, at any time since
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March 31, 2003, any notice or other communication (whether oral or written)
from any governmental body or any other person or entity regarding (A) any
actual, alleged, possible or potential violation of, or failure to comply
with, any legal requirement or (B) any actual, alleged, possible or
potential obligation on the part of Seller to undertake, or to bear all or
any portion of the cost of, any remedial action of any nature.
(b) Exhibit D contains a complete and accurate list of each Governmental
Authorization that is held by Seller or that otherwise relates to Seller's
business or the Assets. Each Governmental Authorization listed or required
to be listed in Exhibit D is valid and in full force and effect. Seller is,
and at all times since March 31, 2003, has been, in full compliance with
all of the terms and requirements of each Governmental Authorization
identified or required to be identified in Exhibit D. No event has occurred
or circumstance exists that may (with or without notice or lapse of time)
(A) constitute or result directly or indirectly in a violation of or a
failure to comply with any term or requirement of any Governmental
Authorization listed or required to be listed in Exhibit D or (B) result
directly or indirectly in the revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Governmental
Authorization listed or required to be listed in Exhibit D. Seller has not
received, at any time since March 31, 2003, any notice or other
communication (whether oral or written) from any governmental body or any
other person or entity regarding (A) any actual, alleged, possible or
potential violation of or failure to comply with any term or requirement of
any Governmental Authorization or (B) any actual, proposed, possible or
potential revocation, withdrawal, suspension, cancellation, termination of
or modification to any Governmental Authorization. All applications
required to have been filed for the renewal of the Governmental
Authorizations listed or required to be listed in Exhibit D have been duly
filed on a timely basis with the appropriate governmental bodies, and all
other filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the appropriate
governmental bodies. The Governmental Authorizations listed in Exhibit D
collectively constitute all of the Governmental Authorizations necessary to
permit Seller to lawfully conduct and operate its business in the manner in
which it currently conducts and operates such business and to permit Seller
to own and use the Assets in the manner in which it currently owns and uses
such Assets.
3.13 LEGAL PROCEEDINGS; ORDERS. There is no pending or, to Seller's knowledge,
threatened proceeding (i) by or against Seller or that otherwise relates to or
may affect the business of, or any of the Assets owned or used by, Seller; or
(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the transactions
contemplated herein.
To the knowledge of Seller, other than the events leading to the incurring of
the Assumed Liabilities, no event has occurred or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such proceeding.
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3.14 ABSENCE OF CERTAIN CHANGES AND EVENTS. Since the date of the Balance Sheet,
Seller has conducted its business only in the ordinary course of business and
there has not been any:
(a) payment (except in the ordinary course of business) or increase by
Seller of any bonuses, salaries or other compensation to any shareholder,
director, officer or employee or entry into any employment, severance or
similar Contract with any director, officer or employee;
(b) adoption of, amendment to or increase in the payments to or benefits
under, any Employee Plan;
(c) damage to or destruction or loss of any Asset, whether or not covered
by insurance;
(d) entry into, termination of or receipt of notice of termination of (i)
any license, distributorship, dealer, sales representative, joint venture,
credit or similar Contract to which Seller is a party, or (ii) any Contract
or transaction involving a total remaining commitment by Seller of at least
One hundred dollars ($100.00);
(e) sale (other than in the ordinary course of business), lease or other
disposition of any Asset or property of Seller or the creation of any
encumbrance on any Asset;
(f) indication by any customer or supplier of an intention to discontinue
or change the terms of its relationship with Seller;
(g) material change in the accounting methods used by Seller; or
(h) Contract by Seller to do any of the foregoing.
3.15 CONTRACTS; NO DEFAULTS.
(a) Exhibit C contains an accurate and complete list, and Seller has
delivered to Buyer accurate and complete copies, of:
(i) each Contract that involves performance of services or delivery of
goods or materials by Seller of an amount or value in excess of One hundred
dollars ($100.00);
(ii) each Contract that involves performance of services or delivery
of goods or materials to Seller of an amount or value in excess of One
hundred dollars ($100.00);
(iii) each Contract that was not entered into in the ordinary course
of business and that involves expenditures or receipts of Seller in excess
of One hundred dollars ($100.00);
(iv) each Contract affecting the ownership of, leasing of, title to,
use of or any leasehold or other interest in any personal property (except
personal property leases and installment and conditional sales agreements
having a value per item or aggregate payments of less than One hundred
dollars ($100.00) and with a term of less than one year);
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(v) each Contract with any labor union or other employee
representative of a group of employees relating to wages, hours and other
conditions of employment;
(vi) each Contract (however named) involving a sharing of profits,
losses, costs or liabilities by Seller with any other person or entity;
(vii) each Contract containing covenants that in any way purport to
restrict Seller's business activity or limit the freedom of Seller to
engage in any line of business or to compete with any person or entity;
(viii) each Contract providing for payments to or by any person or
entity based on sales, purchases or profits, other than direct payments for
goods or services;
(ix) each power of attorney of Seller that is currently effective and
outstanding;
(x) each Contract entered into other than in the ordinary course of
business that contains or provides for an express undertaking by Seller to
be responsible for consequential damages;
(xi) each Contract for capital expenditures in excess of One hundred
dollars ($100.00);and
(xii) each amendment, supplement and modification (whether oral or
written) in respect of any of the foregoing.
(b) No shareholder of Seller has or may acquire any rights under, and no
shareholder of Seller has or may become subject to any obligation or
liability under, any Contract that relates to the business of Seller or any
of the Assets.
(c) Each Contract identified or required to be identified in Exhibit C is
in full force and effect and is valid and enforceable in accordance with
its terms. Each Contract identified or required to be identified in Exhibit
C is assignable by Seller to Buyer without the consent of any other Person,
except where noted. To the knowledge of Seller, no Contract identified or
required to be identified in Exhibit C will upon completion or performance
thereof have a material adverse affect on the business, assets or condition
of Seller or the business to be conducted by Buyer with the Assets.
(d) Seller is, and at all times since March 31, 2003, has been, in
compliance with all applicable terms and requirements of each Contract
which is being assumed by Buyer. Each other person or entity that has or
had any obligation or liability under any Contract which is being assigned
to Buyer is, and at all times since March 31, 2003, has been, in full
compliance with all applicable terms and requirements of such Contract. No
event has occurred or circumstance exists that (with or without notice or
lapse of time) may contravene, conflict with or result in a breach of, or
give Seller or other person or entity the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of,
or payment under, or to cancel, terminate or modify, any Contract that is
being assigned to or assumed by Buyer. No event has occurred or
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circumstance exists under or by virtue of any Contract that (with or
without notice or lapse of time) would cause the creation of any
encumbrance affecting any of the Assets. Seller has not given to or
received from any other person or entity, at any time since March 31, 2003,
any notice or other communication (whether oral or written) regarding any
actual, alleged, possible or potential violation or breach of, or default
under, any Contract which is being assigned to or assumed by Buyer.
(e) There are no renegotiations of, attempts to renegotiate or outstanding
rights to renegotiate any material amounts paid or payable to Seller under
current or completed Contracts with any person or entity having the
contractual or statutory right to demand or require such renegotiation and
no such person or entity has made written demand for such renegotiation.
(f) Each Contract relating to the sale or provision of products or services
by Seller has been entered into in the ordinary course of business of
Seller and has been entered into without the commission of any act alone or
in concert with any other person or entity, or any consideration having
been paid or promised, that is or would be in violation of any legal
requirement.
3.16 INSURANCE.
(a) Seller has delivered to Buyer:
(i) accurate and complete copies of all policies of insurance (and
correspondence relating to coverage thereunder) to which Seller is a party
or under which Seller is or has been covered at any time since January 1,
1999, a list of which is included in Schedule 3.16(a);
(ii) accurate and complete copies of all pending applications by
Seller for policies of insurance; and
(iii) any statement by any consultant or risk management advisor with
regard to the adequacy of Seller's coverage or of the reserves for claims.
(b) Schedule 3.16(b) describes:
(i) any self-insurance arrangement by or affecting Seller, including
any reserves established thereunder;
(ii) any Contract or arrangement, other than a policy of insurance,
for the transfer or sharing of any risk to which Seller is a party or which
involves the business of Seller; and
(iii) all obligations of Seller to provide insurance coverage to third
parties (for example, under Leases or service agreements) and identifies
the policy under which such coverage is provided.
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(c) Schedule 3.16(c) sets forth, by year, for the current policy year and
since January 1, 1999:
(i) a summary of the loss experience under each policy of insurance;
(ii) a statement describing each claim under a policy of insurance for
an amount in excess of One hundred dollars ($100.00), which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of insurance and
period of coverage; and
(C) the amount and a brief description of the claim; and
(iii) a statement describing the loss experience for all claims that
were self-insured, including the number and aggregate cost of such claims.
(d) All policies of insurance to which Seller is a party or that provide
coverage to Seller:
(A) are valid, outstanding and enforceable;
(B) are issued by an insurer that is financially sound and reputable;
(C) taken together, provide adequate insurance coverage for the
Assets and the operations of Seller for all risks normally
insured against by a Person carrying on the same business or
businesses as Seller in the same location; and
(D) are sufficient for compliance with all legal requirements and
Contracts. Seller has not received (A) any refusal of coverage or
any notice that a defense will be afforded with reservation of
rights or (B) any notice of cancellation or any other indication
that any policy of insurance is no longer in full force or effect
or that the issuer of any policy of insurance is not willing or
able to perform its obligations thereunder. Seller has paid all
premiums due, and has otherwise performed all of its obligations,
under each policy of insurance to which it is a party or that
provides coverage to Seller. Seller has given notice to the
insurer of all claims that may be insured thereby.
3.17 LABOR DISPUTES; COMPLIANCE.
(a) Seller has complied in all respects with all legal requirements
relating to employment practices, terms and conditions of employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining and similar legal requirements, the payment
of social security and similar taxes and occupational safety and health.
Seller is not liable for the payment of any taxes, fines, penalties, or
other amounts, however designated, for failure to comply with any of the
foregoing legal requirements.
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(b) Seller has not been, and is not now, a party to any collective
bargaining agreement or other labor contract. Since June 30, 1999, there
has not been, there is not presently pending or existing, and to Seller's
knowledge there is not threatened, any strike, slowdown, picketing, work
stoppage or employee grievance process involving Seller. To Seller's
knowledge no event has occurred or circumstance exists that could provide
the basis for any work stoppage or other labor dispute. There is not
pending or, to Seller's knowledge, threatened against or affecting Seller
any proceeding relating to the alleged violation of any legal requirement
pertaining to labor relations or employment matters, including any charge
or complaint filed with the National Labor Relations Board or any
comparable governmental body, and there is no organizational activity or
other labor dispute against or affecting Seller. No application or petition
for an election of or for certification of a collective bargaining agent is
pending. No grievance or arbitration proceeding exists that might have an
adverse effect upon Seller or the conduct of its business. There is no
lockout of any employees by Seller, and no such action is contemplated by
Seller. To Seller's knowledge there has been no charge of discrimination
filed against or threatened against Seller with the Equal Employment
Opportunity Commission or similar governmental body.
3.18 INTELLECTUAL PROPERTY ASSETS. The Intellectual Property assets of Seller
consist of the license to the computer software, trade names and the URLs
identified in Schedule 3.18. Seller has no registered and unregistered
trademarks, service marks and applications (collectively, "Marks"); registered
and unregistered copyrights in both published works and unpublished works
(collectively, "Copyrights"); know-how, trade secrets, confidential or
proprietary information, customer lists, Software, technical information, data,
process technology, plans, drawings and blue prints (collectively, "Trade
Secrets"); or rights in internet web sites and internet domain names presently
used by Seller (collectively "Net Names").
3.19 DISCLOSURE.
(a) No representation or warranty or other statement made by Seller in this
Agreement, or the certificates delivered pursuant to this Agreement or
otherwise made in connection with the transactions contemplated herein
contains any untrue statement or omits to state a material fact necessary
to make any of them, in light of the circumstances in which it was made,
not misleading.
(b) Seller does not have knowledge of any fact that has specific
application to Seller (other than general economic or industry conditions)
and that may materially adversely affect the assets, business, prospects,
financial condition or results of operations of Seller that has not been
set forth in this Agreement or the related documents.
4. Representations and Warranties of Buyer. Buyer represents and warrants to
Seller as follows:
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4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada,
with full corporate power and authority to conduct its business as it is now
conducted.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement, and the related documents delivered by Buyer at the
Closing, constitute the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with their terms. Buyer has the
absolute and unrestricted right, power and authority to execute and deliver
this Agreement and the related documents delivered by Buyer at the Closing
and to perform its obligations under such Agreement and related documents,
and such action has been duly authorized by all necessary corporate action.
(b) Neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the transactions contemplated herein
by Buyer will give any person or entity the right to prevent, delay or
otherwise interfere with any of the transactions contemplated herein
pursuant to:
(i) any provision of Buyer's governing documents;
(ii) any resolution adopted by the board of directors or the
shareholders of Buyer;
(iii) any legal requirement or order to which Buyer may be subject; or
(iv) any Contract to which Buyer is a party or by which Buyer may be
bound.
Buyer is not and will not be required to obtain any consent from any person
or entity in connection with the execution and delivery of this Agreement
or the consummation or performance of any of the transactions contemplated
herein.
4.3 CERTAIN PROCEEDINGS. There is no pending proceeding that has been commenced
against Buyer and that challenges, or may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the transactions
contemplated herein. To Buyer's knowledge, no such proceeding has been
threatened.
5. Covenants of Seller.
5.1 REQUIRED APPROVALS. As promptly as practicable after the Closing, Seller
shall make all filings required by legal requirements to be made by it in order
to consummate the transactions contemplated herein. Seller also shall cooperate
with Buyer and its representatives with respect to all filings that Buyer elects
to make or, pursuant to legal requirements, shall be required to make in
connection with the transactions contemplated herein.
5.2 BEST EFFORTS. Seller shall use its best efforts to cause the conditions in
Article 7 and Section 8.3 to be satisfied.
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5.3 CHANGE OF NAME. Seller shall (a) amend its governing documents and take all
other actions necessary to change its name to one sufficiently dissimilar to
Seller's present name, in Buyer's judgment, to avoid confusion and (b) take all
actions requested by Buyer to enable Buyer to change its name to Seller's
present name.
5.4 PAYMENT OF LIABILITIES. Seller shall pay or otherwise satisfy in the
ordinary course of business all of its liabilities and obligations other than
the Assumed Liabilities.
5.5 CURRENT EVIDENCE OF TITLE. Seller shall furnish to Buyer, at Seller's
expense complete and current searches in the name of Seller and other
appropriate parties of all Uniform Commercial Code Financing Statements records
maintained by the Secretary of State of the state in which Seller is
incorporated, the state in which Seller maintains its principal place of
business, each jurisdiction in which a filing would be required in order to
perfect a security interest in the Assets, the clerk or recorder of deeds (or
other governmental office where real property documents are filed for recording)
of each county in which any Facility is located and wherever else Seller or
Buyer, based upon its investigation, is aware that a Uniform Commercial Code
Financing Statement has been filed, together with such releases, termination
statements and other documents as may be necessary to provide reasonable
evidence that all items of Intangible Personal Property, Tangible Personal
Property and fixtures to be sold under this Agreement are free and clear of
encumbrances, other than as permitted under this Agreement.
6. Covenants of Buyer.
6.1 REQUIRED APPROVALS. As promptly as practicable after the Closing, Buyer
shall make, or cause to be made, all filings required by legal requirements to
be made by it to consummate the transactions contemplated herein. Buyer also
shall cooperate with Seller (a) with respect to all filings Seller shall be
required by legal requirements to make and (b) in obtaining all consents
identified in Schedule 3.2(c), provided, however, that Buyer shall not be
required to dispose of or make any change to its business, expend any material
funds or incur any other burden in order to comply with this Section 6.1.
6.2 BEST EFFORTS. Buyer shall use its best efforts to cause the conditions in
Article 8 and Section 7.3 to be satisfied.
7. Conditions Precedent to Buyer's Obligation to Close. Buyer's obligation to
purchase the Assets and to take the other actions required to be taken by Buyer
at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Buyer, in whole
or in part):
7.1 ACCURACY OF REPRESENTATIONS. All of Seller's representations and warranties
in this Agreement (considered collectively), and each of these representations
and warranties (considered individually), shall be accurate in all material
respects.
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7.2 SELLER'S PERFORMANCE. All of the covenants and obligations that Seller is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), shall have been duly performed and
complied with in all material respects.
7.3 CONSENTS. Each of the consents identified in Schedule 3.2(c) shall have been
obtained and shall be in full force and effect.
7.4 ADDITIONAL DOCUMENTS. Seller shall have caused the documents and instruments
required by Section 2.2(a) and the following documents to be delivered (or
tendered subject only to Closing) to Buyer:
(a) Releases of all encumbrances on the Assets, other than encumbrances
permitted hereby;
(b) Such other documents as Buyer may reasonably request for the purpose
of:
(i) evidencing the accuracy of any of Seller's representations and
warranties;
(ii) evidencing the performance by Seller of, or the compliance by
Seller with, any covenant or obligation required to be performed or
complied with by Seller;
(iii) evidencing the satisfaction of any condition referred to in this
Article 7; or
(iv) otherwise facilitating the consummation or performance of any of
the transactions contemplated herein.
7.5 NO CONFLICT. Neither the consummation nor the performance of any of the
transactions contemplated herein will, directly or indirectly (with or without
notice or lapse of time), contravene or conflict with or result in a violation
of or cause Buyer or any person related to Buyer to suffer any adverse
consequence under (a) any applicable legal requirement or order or (b) any legal
requirement or order that has been published, introduced or otherwise proposed
by or before any governmental body, excluding Bulk Sales Laws.
7.6 GOVERNMENTAL AUTHORIZATIONS. Buyer shall have received such governmental
authorizations as are necessary or desirable to allow Buyer to operate the
Assets from and after the Closing.
7.7 EMPLOYEES.
(a) Buyer shall have entered into employment agreements with those
employees of Seller identified in Schedule 7.7.
(b) Those key employees of Seller identified on Schedule 7.7, or
substitutes therefor who shall be acceptable to Buyer, in its sole
discretion, shall have accepted employment with Buyer with such employment
to commence on and as of the Closing Date.
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(c) Substantially all other employees of Seller shall be available for
hiring by Buyer, in its sole discretion, on and as of the Closing Date.
8. Conditions Precedent to Seller's Obligation to Close. Seller's obligation to
sell the Assets and to take the other actions required to be taken by Seller at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Seller in whole or in
part):
8.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations and warranties
in this Agreement (considered collectively), and each of these representations
and warranties (considered individually), shall be accurate in all material
respects.
8.2 BUYER'S PERFORMANCE. All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), shall have been performed and complied
with in all material respects.
8.3 ADDITIONAL DOCUMENTS. Buyer shall have caused the documents and instruments
required by Section 2.2(b) and the following documents to be delivered (or
tendered subject only to Closing) to Seller and Shareholders:
(a) an opinion of ▇▇▇▇ ▇▇▇▇▇▇▇▇, dated the Closing Date, in the form of
Schedule 8.3; and
(b) such other documents as Seller may reasonably request for the purpose
of
(i) evidencing the accuracy of any representation or warranty of
Buyer,
(ii) evidencing the performance by Buyer of, or the compliance by
Buyer with, any covenant or obligation required to be performed or complied
with by Buyer or
(iii) evidencing the satisfaction of any condition referred to in this
Article 8.
8.4 NO INJUNCTION. There shall not be in effect any legal requirement or any
injunction or other order that (a) prohibits the consummation of the
transactions contemplated herein and (b) has been adopted or issued, or has
otherwise become effective, since the date of this Agreement.
9. Termination. This Agreement may be terminated by mutual consent of Buyer and
Seller. If this Agreement is terminated, all obligations of the parties under
this Agreement will terminate, except that the obligations of the parties in
Articles 11 and 12 will survive.
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10. Additional Covenants.
10.1 EMPLOYEES AND EMPLOYEE BENEFITS
(a) Employment of Active Employees by Buyer.
(i) Schedule 10.1(a) contains a list of Seller's employees to whom
Buyer has made an offer of employment that has been accepted to be
effective on the Closing Date (the "Hired Active Employees"). Effective
immediately upon the Closing, Seller will terminate the employment of all
of its Hired Active Employees.
(ii) Seller shall not solicit the continued employment of any Hired
Active Employee after the Closing.
(iii) It is understood and agreed that (A) Buyer's expressed intention
to extend offers of employment as set forth in this section shall not
constitute any commitment, Contract or understanding (expressed or implied)
of any obligation on the part of Buyer to a post-Closing employment
relationship of any fixed term or duration or upon any terms or conditions
other than those that Buyer may establish pursuant to individual offers of
employment, and (B) employment offered by Buyer is "at will" and may be
terminated by Buyer or by an employee at any time for any reason. Nothing
in this Agreement shall be deemed to prevent or restrict in any way the
right of Buyer to terminate, reassign, promote or demote any of the Hired
Active Employees after the Closing or to change adversely or favorably the
title, powers, duties, responsibilities, functions, locations, salaries,
other compensation or terms or conditions of employment of such employees.
(c) Salaries and Benefits.
(i) Seller shall be responsible for (A) the payment of all wages and
other remuneration due to Active Employees with respect to their services
as employees of Seller through the close of business on the date of the
Closing, including pro rata bonus payments and all vacation pay earned
prior to the date of the Closing; and (B) the payment of any termination or
severance payments and the provision of health plan continuation coverage
in accordance with the requirements of COBRA and Sections 601 through 608
of ERISA.
(ii) Seller shall be liable for any claims made or incurred by Active
Employees and their beneficiaries through the date of the Closing under the
Employee Plans.
(d) Seller's Retirement and Savings Plans.
(i) All Hired Active Employees who are participants in Seller's
retirement plans shall retain their accrued benefits under Seller's
retirement plans as of the Closing Date, and Seller (or Seller's retirement
plans) shall retain sole liability for the payment of such benefits as and
when such Hired Active Employees become eligible therefor under such plans.
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All Hired Active Employees shall become fully vested in their accrued
benefits under Seller's retirement plans as of the Closing Date, and Seller
will so amend such plans if necessary to achieve this result. Seller shall
cause the assets of each Employee Plan to equal or exceed the benefit
liabilities of such Employee Plan on a plan-termination basis as of the
Effective Time.
(ii) Seller will cause its savings plan to be amended in order to
provide that the Hired Active Employees shall be fully vested in their
accounts under such plan as of the date of the Closing and all payments
thereafter shall be made from such plan as provided in the plan.
(e) No Transfer of Assets. Seller will not make any transfer of pension or
other employee benefit plan assets to Buyer.
10.2 PAYMENT OF ALL TAXES RESULTING FROM SALE OF ASSETS BY SELLER. Seller shall
pay in a timely manner all taxes resulting from or payable in connection with
the sale of the Assets pursuant to this Agreement, regardless of the person or
entity on whom such taxes are imposed by legal requirements.
10.3 PAYMENT OF OTHER RETAINED LIABILITIES. In addition to payment of taxes
pursuant to Section 10.2, Seller shall pay, or make adequate provision for the
payment, in full all of the Retained Liabilities and other liabilities of Seller
under this Agreement. If any such liabilities are not so paid or provided for,
or if Buyer reasonably determines that failure to make any payments will impair
Buyer's use or enjoyment of the Assets or conduct of the business previously
conducted by Seller with the Assets, Buyer may, at any time after the date of
the Closing elect to make all such payments directly (but shall have no
obligation to do so) and shall promptly be reimbursed by Seller for all payments
so made.
10.4 RESTRICTIONS ON SELLER DISSOLUTION AND DISTRIBUTIONS. Seller shall not
dissolve, or make any distribution of the proceeds received pursuant to this
Agreement, until the later of (a) Seller's payment, or adequate provision for
the payment, of all of its obligations pursuant to Sections 10.2 and 10.3; or
(c) the lapse of more than one year after the date of the Closing.
10.4 ASSISTANCE IN PROCEEDINGS. Seller will cooperate with Buyer and its counsel
in the contest or defense of, and make available its personnel and provide any
testimony and access to its books and records in connection with, any proceeding
involving or relating to (a) any transaction contemplated herein or (b) any
action, activity, circumstance, condition, conduct, event, fact, failure to act,
incident, occurrence, plan, practice, situation, status or transaction on or
before the Closing involving Seller or its business.
10.5 NONCOMPETITION, NONSOLICITATION AND NONDISPARAGEMENT
(a) Noncompetition. For a period of Two (2) years after the Closing Date,
Seller shall not, anywhere in any jurisdiction in which Seller has or is at
the time of the Closing doing business, directly or indirectly invest in,
own, manage, operate, finance, control, advise, render services to or
guarantee the obligations of any Person engaged in or planning to become
engaged in the PEO business ("Competing Business"), provided, however, that
Seller may purchase or otherwise acquire up to (but not more than) Five
25
percent (5%) of any class of the securities of any entity (but may not
otherwise participate in the activities of such entity) if such securities
are listed on any national or regional securities exchange or have been
registered under Section 12(g) of the Exchange Act. Seller shall obtain
written agreements in the form of Exhibit "J" from ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ agreeing to these same non-competition terms.
(b) Non-solicitation. For a period of Two (2) years after the date of the
Closing, Seller shall not, directly or indirectly:
(i) solicit the business of any person or entity who is a customer of
Buyer;
(ii) cause, induce or attempt to cause or induce any customer,
supplier, licensee, licensor, franchisee, employee, consultant or other
business relation of Buyer to cease doing business with Buyer, to deal with
any competitor of Buyer or in any way interfere with its relationship with
Buyer;
(iii) cause, induce or attempt to cause or induce any customer,
supplier, licensee, licensor, franchisee, employee, consultant or other
business relation of Seller as of the Closing or within the year preceding
the Closing to cease doing business with Buyer, to deal with any competitor
of Buyer or in any way interfere with its relationship with Buyer; or
(iv) hire, retain or attempt to hire or retain any employee or
independent contractor of Buyer or in any way interfere with the
relationship between Buyer and any of its employees or independent
contractors.
Seller shall obtain written agreements in the form of Exhibit "J" from ▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ agreeing to these same non-solicitation
terms.
(c) Non-disparagement. After the Closing, Seller will not disparage Buyer
or any of Buyer's shareholders, directors, officers, employees or agents.
Seller shall obtain written agreements in the form of Exhibit "J" from ▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ agreeing to these same
non-disparagement terms.
(d) Modification of Covenant. If a final judgment of a court or tribunal of
competent jurisdiction determines that any term or provision contained in
Section 10.5(a) through (c) is invalid or unenforceable, then the parties
agree that the court or tribunal will have the power to reduce the scope,
duration or geographic area of the term or provision, to delete specific
words or phrases or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable
term or provision. This Section 10.5 will be enforceable as so modified
after the expiration of the time within which the judgment may be appealed.
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This Section 10.5 is reasonable and necessary to protect and preserve
Buyer's legitimate business interests and the value of the Assets and to
prevent any unfair advantage conferred on Seller.
(e) The provisions of this Section 10.5 and the agreements signed by
Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, as required in Paragraphs 10.5(a), (b) and (c),
above, shall be terminated and/or unenforceable if this Agreement is
terminated due to the breach of the Buyer.
10.6 CUSTOMER AND OTHER BUSINESS RELATIONSHIPS. After the Closing, Seller will
cooperate with Buyer in its efforts to continue and maintain for the benefit of
Buyer those business relationships of Seller existing prior to the Closing and
relating to the business to be operated by Buyer after the Closing, including
relationships with lessors, employees, regulatory authorities, licensors,
customers, suppliers and others, and Seller will satisfy the Retained
Liabilities in a manner that is not detrimental to any of such relationships.
Seller will refer to Buyer all inquiries relating to such business. Neither
Seller nor any of its officers, employees, agents or shareholders shall take any
action that would tend to diminish the value of the Assets after the Closing or
that would interfere with the business of Buyer to be engaged in after the
Closing, including disparaging the name or business of Buyer.
10.7 RETENTION OF AND ACCESS TO RECORDS. After the Closing, Buyer shall retain
for a period consistent with Buyer's record-retention policies and practices
those Records of Seller delivered to Buyer. Buyer also shall provide Seller and
its representatives reasonable access thereto, during normal business hours and
on at least three days' prior written notice, to enable them to prepare
financial statements or tax returns or deal with tax audits. After the Closing,
Seller shall provide Buyer and its representatives reasonable access to Records
that are Excluded Assets, during normal business hours and on at least three
days' prior written notice, for any reasonable business purpose specified by
Buyer in such notice.
10.8 FURTHER ASSURANCES. The parties shall cooperate reasonably with each other
and with their respective representatives in connection with any steps required
to be taken as part of their respective obligations under this Agreement, and
shall (a) furnish upon request to each other such further information; (b)
execute and deliver to each other such other documents; and (c) do such other
acts and things, all as the other party may reasonably request for the purpose
of carrying out the intent of this Agreement and the transactions contemplated
herein.
10.9 CONDUCT OF BUSINESS AFTER CLOSING The parties agree that through December
31, 2003, Seller will continue to provide all services required under the
Contracts with Seller's PEO clients under the terms of said Contracts. Seller
shall use the Asstes acquired by Buyer and the employees hired by Buyer to
provide such services. On or before the tenth day of each month, Seller shall
pay to Buyer the amount received from PEO clients for such services during the
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prior month less the amount paid out in rendering such services during the prior
month. Should Seller not receives a sufficient amount to meet the obligations of
rendering such services, Buyer will provide additional funds up to the amount
required to render such services.
11. Indemnification; Remedies.
11.1 SURVIVAL. All representations, warranties, covenants and obligations in
this Agreement and any certificate or document delivered pursuant to this
Agreement shall survive the Closing and the consummation of the transactions
contemplated herein. The right to indemnification, reimbursement or other remedy
based upon such representations, warranties, covenants and obligations shall not
be affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
Closing, with respect to the accuracy or inaccuracy of or compliance with any
such representation, warranty, covenant or obligation. The waiver of any
condition based upon the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, reimbursement or other remedy based upon such
representations, warranties, covenants and obligations.
11.2 INDEMNIFICATION AND REIMBURSEMENT BY SELLER. Seller will indemnify and hold
harmless Buyer, and its representatives, shareholders, subsidiaries and related
persons (collectively, the "Buyer Indemnified Persons"), and will reimburse the
Buyer Indemnified Persons for any loss, liability, claim, damage, expense
(including costs of investigation and defense and reasonable attorneys' fees and
expenses) or diminution of value, whether or not involving a third-party claim,
arising from or in connection with:
(a) any Breach of any representation or warranty made by Seller in this
Agreement or in any certificate, document, writing or instrument delivered
by Seller pursuant to this Agreement;
(b) any breach of any covenant or obligation of Seller in this Agreement or
in any other certificate, document, writing or instrument delivered by
Seller pursuant to this Agreement;
(c) any Liability arising out of the ownership or operation of the Assets
prior to the Closing other than the Assumed Liabilities;
(d) any brokerage or finder's fees or commissions or similar payments based
upon any agreement or understanding made, or alleged to have been made, by
any person or entity with Seller (or any person acting on its behalf) in
connection with any of the transactions contemplated herein;
(g) any noncompliance with any Bulk Sales Laws or fraudulent transfer law
in respect of the transactions contemplated herein;
(i) any Employee Plan established or maintained by Seller; or
(j) any Retained Liabilities.
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11.3 INDEMNIFICATION AND REIMBURSEMENT BY BUYER. Buyer will indemnify and hold
harmless Seller, and will reimburse Seller, for any Damages arising from or in
connection with:
(a) any breach of any representation or warranty made by Buyer in this
Agreement or in any certificate, document, writing or instrument delivered
by Buyer pursuant to this Agreement;
(b) any Breach of any covenant or obligation of Buyer in this Agreement or
in any other certificate, document, writing or instrument delivered by
Buyer pursuant to this Agreement;
(c) any claim by any person or entity for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such person or entity with Buyer (or any
Person acting on Buyer's behalf) in connection with any of the transactions
contemplated herein;
(d) any obligations of Buyer with respect to bargaining with the collective
bargaining representatives of Active Hired Employees subsequent to the
Closing; or
(e) any Assumed Liabilities.
11.4 LIMITATIONS ON AMOUNT. Buyer will have liability (for indemnification or
otherwise) with respect to claims under Section 11 only for an amount equal to
the amount of the Purchase Price paid by Buyer as of the date that the claim for
indemnification is made.
11.5 TIME LIMITATIONS.
(a) After the Closing, Seller will have liability (for indemnification or
otherwise) with respect to any breach of (i) a covenant or obligation to be
performed or complied with prior to the Closing (other than those in
Sections 2.1 and 2.2(b) and Articles 10 and 12, as to which a claim may be
made at any time) or (ii) a representation or warranty (other than those in
Sections 3.9, 3.14 and 3.16, as to which a claim may be made at any time),
only if on or before September 30, 2003, Buyer notifies Seller or
Shareholders of a claim specifying the factual basis of the claim in
reasonable detail to the extent then known by Buyer.
(b) After the Closing, Buyer will have liability (for indemnification or
otherwise) with respect to any breach of (i) a covenant or obligation to be
performed or complied with prior to the Closing (other than those in
Article 12, as to which a claim may be made at any time) or (ii) a
representation or warranty, only if on or before September 30, 2003, Seller
notifies Buyer of a claim specifying the factual basis of the claim in
reasonable detail to the extent then known by Seller.
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11.6 INDEMNIFICATION IN CASE OF STRICT LIABILITY OR INDEMNITEE NEGLIGENCE. THE
INDEMNIFICATION PROVISIONS IN THIS ARTICLE 11 SHALL BE ENFORCEABLE REGARDLESS OF
WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS, CLAIMS OR
LEGAL REQUIREMENTS (INCLUDING ANY PAST, PRESENT OR FUTURE BULK SALES LAW,
ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH LAW
OR PRODUCTS LIABILITY, SECURITIES OR OTHER LEGAL REQUIREMENT) AND REGARDLESS OF
WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT)
ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE
OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT LIABILITY
IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION.
12. Confidentiality.
12.1 DEFINITION OF CONFIDENTIAL INFORMATION
(a) As used in this Article 12, the term "Confidential Information"
includes any and all of the following information of Seller or Buyer that
has been or may hereafter be disclosed in any form, whether in writing,
orally, electronically or otherwise, or otherwise made available by
observation, inspection or otherwise by either party or its representatives
("Disclosing Party") to the other party or its Representatives ("Receiving
Party"):
(i) all information that is a trade secret under applicable trade
secret or other law;
(ii) all information concerning data, know-how, ideas, past,
current and planned methods, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans,
computer hardware, Software and computer software and database
technologies, systems, structures and architectures;
(iii) all information concerning the business and affairs of the
Disclosing Party (which includes historical and current financial
statements, financial projections and budgets, tax returns and
accountants' materials, historical, current and projected sales,
capital spending budgets and plans, business plans, strategic plans,
marketing and advertising plans, publications, client and customer
lists and files, contracts, the names and backgrounds of key personnel
and personnel training techniques and materials, however documented),
and all information obtained from review of the Disclosing Party's
documents or property or discussions with the Disclosing Party
regardless of the form of the communication; and
(iv) all notes, analyses, compilations, studies, summaries and
other material prepared by the Receiving Party to the extent
containing or based, in whole or in part, upon any information
included in the foregoing.
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(b) Any trade secrets of a Disclosing Party shall also be entitled to all
of the protections and benefits under applicable trade secret law and any
other applicable law. If any information that a Disclosing Party deems to
be a trade secret is found by a court of competent jurisdiction not to be a
trade secret for purposes of this Article 12, such information shall still
be considered Confidential Information of that Disclosing Party for
purposes of this Article 12 to the extent included within the definition.
In the case of trade secrets, each of Buyer and Seller hereby waives any
requirement that the other party submit proof of the economic value of any
trade secret or post a bond or other security.
12.2 RESTRICTED USE OF CONFIDENTIAL INFORMATION
(a) Each Receiving Party acknowledges the confidential and proprietary
nature of the Confidential Information of the Disclosing Party and agrees
that such Confidential Information (i) shall be kept confidential by the
Receiving Party; (ii) shall not be used for any reason or purpose other
than to evaluate and consummate the Contemplated Transactions; and (iii)
without limiting the foregoing, shall not be disclosed by the Receiving
Party to any Person, except in each case as otherwise expressly permitted
by the terms of this Agreement or with the prior written consent of an
authorized representative of Seller with respect to Confidential
Information of Seller(each, a "Seller Contact") or an authorized
representative of Buyer with respect to Confidential Information of Buyer
(each, a "Buyer Contact"). Each of Buyer and Seller shall disclose the
Confidential Information of the other party only to its Representatives who
require such material for the purpose of evaluating the transactions
contemplated herein and are informed by Buyer or Seller, as the case may
be, of the obligations of this Article 12 with respect to such information.
Each of Buyer and Seller shall (iv) enforce the terms of this Article 12 as
to its respective representatives; (v) take such action to the extent
necessary to cause its representatives to comply with the terms and
conditions of this Article 12; and (vi) be responsible and liable for any
breach of the provisions of this Article 12 by it or its representatives.
(b) Unless and until this Agreement is terminated, Seller shall maintain as
confidential any Confidential Information (including for this purpose any
information of Seller of the type referred to in Sections 12.1(a)(i), (ii)
and (iii), whether or not disclosed to Buyer) of the Seller or Shareholders
relating to any of the Assets or the Assumed Liabilities.
(c) From and after the Closing, the provisions of Section 12.2(a) above
shall not apply to or restrict in any manner Buyer's use of any
Confidential Information of the Seller relating to any of the Assets or the
Assumed Liabilities.
12.3 EXCEPTIONS. Sections 12.2(a) and (b) do not apply to that part of the
Confidential Information of a Disclosing Party that a Receiving Party
demonstrates (a) was, is or becomes generally available to the public other than
as a result of a breach of this Article 12 or the Confidentiality Agreement by
the Receiving Party or its representatives; (b) was or is developed by the
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Receiving Party independently of and without reference to any Confidential
Information of the Disclosing Party; or (c) was, is or becomes available to the
Receiving Party on a nonconfidential basis from a Third Party not bound by a
confidentiality agreement or any legal, fiduciary or other obligation
restricting disclosure. Seller shall not disclose any Confidential Information
of Seller relating to any of the Assets or the Assumed Liabilities in reliance
on the exceptions in clauses (b) or (c) above.
12.4 LEGAL PROCEEDINGS. If a Receiving Party becomes compelled in any proceeding
or is requested by a governmental body having regulatory jurisdiction over the
transactions contemplated herein to make any disclosure that is prohibited or
otherwise constrained by this Article 12, that Receiving Party shall provide the
Disclosing Party with prompt notice of such compulsion or request so that it may
seek an appropriate protective order or other appropriate remedy or waive
compliance with the provisions of this Article 12. In the absence of a
protective order or other remedy, the Receiving Party may disclose that portion
(and only that portion) of the Confidential Information of the Disclosing Party
that, based upon advice of the Receiving Party's counsel, the Receiving Party is
legally compelled to disclose or that has been requested by such governmental
body, provided, however, that the Receiving Party shall use reasonable efforts
to obtain reliable assurance that confidential treatment will be accorded by any
person or entity to whom any Confidential Information is so disclosed. The
provisions of this Section 12.4 do not apply to any proceedings between the
parties to this Agreement.
12.5 RETURN OR DESTRUCTION OF CONFIDENTIAL INFORMATION. If this Agreement is
terminated, each Receiving Party shall (a) destroy all Confidential Information
of the Disclosing Party prepared or generated by the Receiving Party without
retaining a copy of any such material; (b) promptly deliver to the Disclosing
Party all other Confidential Information of the Disclosing Party, together with
all copies thereof, in the possession, custody or control of the Receiving Party
or, alternatively, with the written consent of a Seller Contact or a Buyer
Contact (whichever represents the Disclosing Party) destroy all such
Confidential Information; and (c) certify all such destruction in writing to the
Disclosing Party, provided, however, that the Receiving Party may retain a list
that contains general descriptions of the information it has returned or
destroyed to facilitate the resolution of any controversies after the Disclosing
Party's Confidential Information is returned.
13. General Provisions.
13.1 EXPENSES. Each party to this Agreement will bear its respective fees and
expenses incurred in connection with the preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated herein,
including all fees and expense of its representatives.
13.2 PUBLIC ANNOUNCEMENTS. Any public announcement, press release or similar
publicity with respect to this Agreement or the transactions contemplated herein
will be issued, if at all, at such time and in such manner as Buyer determines.
Seller and Buyer will consult with each other concerning the means by which
Seller's employees, customers, suppliers and others having dealings with Seller
will be informed of the transactions contemplated herein, and Buyer will have
the right to be present for any such communication.
32
13.3 NOTICES. All notices, consents, waivers and other communications required
or permitted by this Agreement shall be in writing and shall be deemed given to
a party when (a) delivered to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (b) sent by facsimile or
e-mail with confirmation of transmission by the transmitting equipment; or (c)
received or rejected by the addressee, if sent by certified mail, return receipt
requested, in each case to the following addresses, facsimile numbers or e-mail
addresses and marked to the attention of the person (by name or title)
designated below (or to such other address, facsimile number, e-mail address or
person as a party may designate by notice to the other parties):
Buyer: The Resourcing Solutions Group, Inc.
Attention: ▇.▇.▇▇▇▇▇▇▇,
Chairman of the Board
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
E-mail address: ▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Seller: Asmara, Inc.
Attn: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇,
President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax no.: ▇▇▇-▇▇▇-▇▇▇▇
E-mail address: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
13.4 JURISDICTION; SERVICE OF PROCESS. Any proceeding arising out of or relating
to this Agreement or any transaction contemplated herein must be brought in the
courts of the State of Nevada, or, if it has or can acquire jurisdiction, in the
United States District Court for Nevada, and each of the parties irrevocably
submits to the exclusive jurisdiction of each such court in any such proceeding,
waives any objection it may now or hereafter have to venue or to convenience of
forum, agrees that all claims in respect of the proceeding shall be heard and
determined only in any such court and agrees not to bring any proceeding arising
out of or relating to this Agreement or any transaction contemplated herein in
any other court.
13.5 ENFORCEMENT OF AGREEMENT. Seller acknowledges and agrees that Buyer would
be irreparably damaged if any of the provisions of this Agreement are not
performed in accordance with their specific terms and that any breach of this
Agreement by Seller could not be adequately compensated in all cases by monetary
damages alone. Accordingly, in addition to any other right or remedy to which
Buyer may be entitled, at law or in equity, it shall be entitled to enforce any
provision of this Agreement by a decree of specific performance and to
temporary, preliminary and permanent injunctive relief to prevent breaches or
threatened breaches of any of the provisions of this Agreement, without posting
any bond or other undertaking.
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13.6 WAIVER; REMEDIES CUMULATIVE. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither any failure nor any delay
by any party in exercising any right, power or privilege under this Agreement or
any of the documents referred to in this Agreement will operate as a waiver of
such right, power or privilege, and no single or partial exercise of any such
right, power or privilege will preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or any of the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of that party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to in
this Agreement.
13.7 ENTIRE AGREEMENT AND MODIFICATION. This Agreement (along with Exhibits,
Schedules and other documents delivered pursuant to this Agreement) supersedes
all prior agreements, whether written or oral, between the parties with respect
to its subject matter (including any letter of intent and any confidentiality
agreement between Buyer and Seller) and constitutes (along with Exhibits,
Schedules and other documents delivered pursuant to this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended, supplemented,
or otherwise modified except by a written agreement executed by the party to be
charged with the amendment.
13.8 ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS. No party may assign any
of its rights or delegate any of its obligations under this Agreement without
the prior written consent of the other parties, except that Buyer may assign any
of its rights and delegate any of its obligations under this Agreement to any
subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any person or entity other than
the parties to this Agreement any legal or equitable right, remedy or claim
under or with respect to this Agreement or any provision of this Agreement,
except such rights as shall inure to a successor or permitted assignee pursuant
to this Section 13.8.
13.9 SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
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13.10 LIQUIDATED DAMAGES.
(a) If, prior to the Closing, the Buyer materially fails to meet its
obligations under this Agreement or fails to close on the transactions
contemplated hereby, unless the Buyer is not required to close pursuant to
the terms hereof, the Seller may lawfully terminate this Agreement in
accordance with the notice and lapse of time requirements of Article 9, and
if this Agreement is so terminated, an aggregate of $10,000.00 shall be
payable by the Buyer to the Seller, all as liquidated damages to Seller,
and such payment shall be the sole remedy of the Seller and the Company
against the Buyer with respect to any rights or obligations arising between
them as a result of the relationship created between by this Agreement, or
created otherwisethe Seller shall have the right to pursue all remedies
available at law or in equity.
(b) Notwithstanding the foregoing, in addition to the right to seek and
obtain any damages which the Buyer may have against the Sellers or the
Company with respect to any rights arising between them as a result of this
Agreement, or otherwise, the Buyer shall have the right to seek specific
performance against the Sellers (or the Company) compel either, or both, to
perform any act required of them under the terms of this Agreement or the
Related Agreements.
13.11 CONSTRUCTION. The headings of Articles and Sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation. All references to "Articles," and "Sections" refer to the
corresponding Articles and Sections of this Agreement.
13.12 TIME OF ESSENCE. With regard to all dates and time periods set forth or
referred to in this Agreement, time is of the essence.
13.13 GOVERNING LAW. This Agreement will be governed by and construed under the
laws of the State of Nevada without regard to conflicts-of-laws principles that
would require the application of any other law.
13.14 EXECUTION OF AGREEMENT. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties transmitted by
facsimile shall be deemed to be their original signatures for all purposes.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Buyer: The Resourcing Solutions Group, Inc.
By: /s/▇▇▇▇▇ ▇.▇▇▇▇▇▇▇
-----------------------------
Its: Chairman of the Board
----------------------------
Seller: Asmara, Inc.
By: /s/▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Its: President
----------------------------
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