Exhibit 2.01
ASSET PURCHASE AGREEMENT
AMONG
TRIAD PERSONNEL SERVICES, INC.,
GENERATION TECHNOLOGIES, INC.,
AND
MICHAEL P. VERONA
FagelHaber LLC
55 East Monroe Street, 40th Floor
Chicago, Illinois 60603
TABLE OF CONTENTS
Page
1. Sale and Purchase of Assets -1-
2. Excluded Assets -3-
3. Non Assumption of Liabilities -4-
(a) Assumed Liabilities -4-
(b) Seller's Obligations -5-
(c) Assignment and Assumption of Contracts -5-
4. Purchase Price (Cash Consideration and Earn Out
Consideration), Method of Payment, and Allocation of
Purchase Price -5-
5. Representations and Warranties of Seller and the
Shareholder -8-
(a) Existence and Good Standing -8-
(b) Authority -9-
(c) No Conflicts -9-
(d) Seller's Financial Statements -9-
(e) Title to, and Condition of, the Assets -10-
(f) Permits -10-
(g) Intellectual Property -10-
(h) Contracts and Leases -11-
(i) Absence of Undisclosed Liabilities -12-
(j) Insurance -12-
(k) Labor Relations and Employee Agreements -13-
(l) Benefit Plans -14-
(m) Payment of Taxes -17-
(n) Litigation -17-
(o) Computer Systems -17-
(p) Customers and Suppliers -17-
(q) Compliance with Laws -18-
(r) Misstatements or Omissions -18-
6. Representations and Warranties of Purchaser -18-
(a) Existence and Good Standing -18-
(b) Authority -18-
(c) No Conflicts -18-
(d) Misstatements or Omissions -19-
7. Covenants of the Parties -19-
(a) Employment/Covenant Not To Compete -19-
(b) Inspection of the Business -19-
(c) Seller's Name Change -19-
(d) Consents and Approvals -19-
(e) Satisfaction of Existing Liabilities of Seller -20-
(f) Prorations and Adjustments -20-
(g) Life Insurance on Shareholder -21-
(h) Payment of Transfer Taxes -21-
(i) Further Assurances -21-
(j) Seller's Continuation Coverage -21-
(k) Seller's Employee Benefits -21-
8. Conditions Precedent To Closing -22-
(a) Preconditions To Purchaser's Closing -22-
(b) Preconditions To Shareholder's and Seller's Closing-24-
9. Closing Date -24-
(a) Seller's and the Shareholder's Deliveries -24-
(b) Purchaser's Deliveries -26-
10. Indemnifications; Survival of Representations,
Warranties and Indemnifications -26-
(a) Seller's and the Shareholder's Indemnification -26-
(b) Purchaser's Indemnification -27-
(c) Survival of Representation and Warranties-28-
(d) Claim Procedure -28-
11. Construction -30-
(a) Binding Effect -30-
(b) Communications -30-
(c) Amendments -30-
(d) Governing Law -31-
(e) Counterparts -31-
(f) Entire Agreement -31-
(g) Waivers and Consents -31-
(h) Headings -31-
(i) Expenses -31-
(j) Recitals -31-
(k) Schedules and Exhibits -31-
(l) Non-Disclosure -31-
(m) Press Releases -32-
(n) Plurality -32-
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and
entered into this 10th day of April, 2001, by and among Triad
Personnel Services, Inc., an Illinois corporation ("Purchaser"),
Generation Technologies, Inc., a Pennsylvania corporation
("Seller") and Michael P. Verona, an individual resident of
Pennsylvania (the "Shareholder"). The parties to this Agreement
agree that the transactions described in and contemplated by this
Agreement shall be deemed to be effective as of 12:01 a.m. on
April 11, 2001 (the "Effective Date").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business of recruitment and
placement of technical personnel (the "Business");
WHEREAS, the Shareholder owns beneficially and holds of
record all of the issued and outstanding shares of capital stock
of Seller and will be financially benefitted by the consummation
of the transactions described in and contemplated by this
Agreement; and
WHEREAS, Seller desires to sell, convey, grant, transfer,
assign and deliver to Purchaser, and Purchaser desires to
purchase, acquire, assume and accept from Seller, substantially
all of the assets owned by Seller which are used, useable or
useful in or in connection with the operation of the Business,
upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by the parties to this Agreement and intending
to be legally bound hereby, Seller, the Shareholder and Purchaser
agree as follows.
1. Sale and Purchase of Assets. Seller hereby sells,
conveys, grants, transfers, assigns and delivers to Purchaser, and
Purchaser hereby purchases, acquires and accepts from Seller, as
of the "Closing Date" (as defined in Section 9 hereof),
substantially all of the assets, properties, rights, powers and
privileges of Seller, tangible and intangible, whether or not
written-off, expensed or fully depreciated, used, useable or
useful in or in connection with the operation of the Business, as
more specifically described below (collectively, the "Assets"),
except the "Excluded Assets" (as defined in Section 2 hereof),
free and clear of all liens, claims, charges, pledges, mortgages,
security interests, licenses and other encumbrances and rights of
any person or entity of any kind, nature or description whatsoever
(collectively, "Liens"), except as specifically assumed and
accepted by Purchaser pursuant to the terms of this Agreement:
(a) all machinery, equipment, furniture, file cabinets,
fixtures, office equipment, tools, computer hardware and software,
disks, disk drives and all other items of tangible personal
property owned by Seller, including, without limitation, those
items set forth upon Schedule 1(a) (collectively, "Personal
Property");
(b) all inventories of maintenance and office supplies,
brochures, pamphlets, videos and other marketing pieces owned by
Seller;
(c) all of Seller's transferrable federal, state, local
and foreign licenses, permits, authorizations and registrations,
including, without limitation, all exemption, waiver or similar
benefits under any "grandfather" or similar provision contained in
any federal, state, local or foreign law, statute, ordinance,
rule, regulation, policy or order (collectively, "Governmental
Laws" and individually, a "Governmental Law"), necessary or useful
in connection with the operation of the Business or the ownership
and use of the Assets (collectively, the "Permits") which are set
forth upon Schedule 1(c);
(d) all of Seller's customer and prospective customer
lists, accounting and credit records, sales and business records,
correspondence, maintenance and operating records, customer
complaint records, warranty records, manuals (including those for
Personal Property), vendor records and all other documents
maintained by Seller relating to the operation of the Business
(collectively, "Records");
(e) all United States and foreign common law and
registered intellectual property and proprietary rights owned or
used or usable by Seller or developed by Seller or its agents or
employees in connection with the operation of the Business,
whether acquired by Seller as owner, inventor, employer of an
inventor, licensor, licensee or otherwise, whether developed in
whole or in part by Seller or its agents or employees in the
operation of the Business, including, without limitation, all
patent rights, patents, pending patent applications and any
patents issuing therefrom, patent renewals or extensions,
continuations, continuation-in-part, divisional applications, re-
examination certificates, reissues, patent licenses and all rights
to sue for all past, future and present patent infringement,
registered and common law trademarks, service marks and trademark
and service applications, and all rights to sue for all past,
future and present trademark or service mark infringement, all
goodwill associated with such trademarks and service marks, trade
names, including, without limitation, the corporate name
"Generation Technologies", assumed names and all registrations and
applications therefor, all domain names, copyrights, copyright
applications and all rights to sue for all past, future and
present copyright infringement, technical information, inventions,
processes and techniques, designs, drawings, research, software,
source codes, other know-how, confidential information, trade
secrets and other similar intangible property and rights of Seller
(collectively, "Intellectual Property");
(f) those certain agreements with Seller's customers
and accepted by Seller for Seller's services and those certain
licenses and other contracts and agreements [other than Personal
Property Leases (as defined in Section 1(h) hereof), Real Property
Lease (as defined in Section 1(g) hereof) and Benefit Plans (as
defined in Section 5(l)(i)) or any contracts related thereto],
including, without limitation, bids, sales representative
agreements, maintenance agreements, confidentiality agreements and
non-competition agreements, to which Seller is a party or under
which Seller has any type of interest whatsoever which pertain in
any way to the operation or safeguard of the Business and that
Purchaser agrees to assume pursuant to the terms of this Agreement
(collectively, "Contracts") which are set forth upon Schedule
1(f);
(g) that certain real property lease relating to the
Business that Purchaser agrees to assume pursuant to the terms of
this Agreement, if assignable (collectively, the "Real Property
Lease") which is set forth on Schedule 1(g);
(h) those certain personal property leases relating to
the Business that Purchaser agrees to assume pursuant to the terms
of this Agreement (collectively, the "Personal Property Leases")
which are set forth on Schedule 1(h);
(i) all of Seller's rights, claims and choses in action
whatsoever, at law or in equity, now existing or hereafter
arising, liquidated or unliquidated, foreseeable or unforeseeable,
insured or uninsured, that Seller has or hereafter may have
relating to the Assets or the Business against any person or
entity other than Purchaser or the Shareholder, including, without
limitation, all transferable rights under both express and implied
third party warranties with respect to the Personal Property and
rights to indemnification under any of the Contracts, Personal
Property Leases and the Real Property Lease (collectively,
"Choses");
(j) all of Seller's rights and obligations under those
certain contracts of insurance and Benefit Plans (as defined in
Section 5(l)(i) hereof) set forth on Schedule 1(j) (the "Assumed
Plans"), but only to the extent such obligations arise after the
Closing Date. An obligation does not arise after the Closing Date
to the extent it is based on an action or inaction of Seller or an
event or condition that existed on or before the Closing;
(k) all of Seller's right, title and interest in and to
the telephone and telefax numbers, post office boxes, web sites,
domain names, listings and numbers, lock boxes, telex numbers,
advertising, telephone and other directory and catalog listings
utilized or useful in the operation of the operation of the
Business to the extent such rights are transferable; all of which
are set forth on Schedule 1(k);
(l) all maintenance and security deposits, prepaid
expenses and purchase order deposits which relate to the
Contracts, the Personal Property Leases, or the Real Property
Lease (the Personal Property Leases together with the Real
Property Lease shall sometimes hereinafter be collectively
referred to as the "Leases" and individually as the "Lease") all
of which are described on Schedule 1(l); and
(m) all of Seller's accounts receivable and trade
receivables except the "Excluded Receivables" (as defined in
Section 2(g) hereof) all of which are set forth on Schedule 1(m),
which Schedule shall be updated as of April 7, 2001 (collectively,
"Receivables"). It is mutually agreed between Seller, Shareholder
and Purchaser that the amount of "Cash Consideration" (hereinafter
defined) shall be adjusted as of the Closing Date such that
Receivables will not be less than fifty percent (50%) of "Net
Revenues" of Seller for the three (3) month period ending March
31, 2001. For purposes of this Agreement, "Net Revenues" shall be
determined in accordance with generally accepted accounting
principles as determined by Purchaser's regularly retained
accounting/audit firm. Receivables earned and cash collected
after April 7, 2001 shall belong to Purchaser as a purchased Asset
hereunder.
2. Excluded Assets. Notwithstanding Section 1 of this
Agreement, Purchaser is not purchasing the following assets of
Seller, which assets shall remain the property of Seller and shall
be excluded from the definition of Assets and from this Agreement
(collectively, "Excluded Assets"):
(a) cash (including purchase order deposits and
maintenance and security deposits) and cash equivalents, including
all account balances and deposits in bank accounts prior to April
8, 2001, other than as set forth in Section 1(m) hereof;
(b) all refunds and deposits of all federal, state,
local and foreign taxes due to Seller with respect to the Business
for any period;
(c) all of Seller's corporate stock record books,
corporate record books containing minutes of meetings of the Board
of Directors and shareholders of Seller and all other records
related to Seller's corporate organization and capitalization, tax
records and returns, schedules of depreciation and financial
statements (collectively, the "Other Records"), provided that,
Shareholder and Seller will retain and make available to Purchaser
for not less than five (5) years following the Closing Date, for
its inspection and copying, upon reasonable request and during
normal business hours, the Other Records. If Seller elects to
destroy the Other Records after the fifth anniversary of the
Closing Date, Seller agrees to give Purchaser thirty (30) days
prior written notice thereof and afford Purchaser the opportunity
to retain at Purchaser's expense any Other Records Purchaser may
select, in Purchaser's sole discretion;
(d) any purchase orders, contracts, agreements,
licenses and leases not expressly assumed by Purchaser in
accordance with Section 3 of this Agreement;
(e) those assets and properties listed on Schedule
2(e); and
(f) all of Seller's rights and obligations under any
Benefit Plan which is not an Assumed Plan; and
(g) any accounts receivable of Seller which, as of the
Closing Date, (i) are over one hundred twenty (120) days old,
(ii) have been written off by Seller, (iii) Seller has pursued
litigation, arbitration or other collection action, (iv) have been
turned over to a collection agent, attorney or other third party
for collection, or (v) are set forth on Schedule 1(m) and
described as Excluded Receivables, regardless of the age of the
same (collectively, the "Excluded Receivables").
3. Non Assumption of Liabilities.
(a) Assumed Liabilities. Purchaser is not assuming and
will not be liable for any debts, liabilities or obligations of
Seller or the Business, except as follows (collectively, the
"Assumed Liabilities"):
(i) all obligations arising after the Closing Date
under the Contracts, Leases and Assumed Plans except as otherwise
provided in this Agreement, provided however, Purchaser will not
assume or be obligated under any Contract or Lease, even if set
forth on Schedule 1(f), Schedule 1(g) or Schedule 1(h) which, as
of the Closing Date: (i) is in breach or default; (ii) any party
claims another party is in breach or default thereunder; (iii)
under which a notice of event allowing Seller an opportunity to
cure a breach or default has been sent or delivered to Seller, or
(iv) is an exception from Seller's and Shareholder's
representations and warranties set forth in Sections 5(h)(i)
through 5(h)(x) inclusive; and
(ii) the payment of accrued, but unused and unpaid
employee vacation to the extent credited to Purchaser in
accordance with Section 7(f) and only with respect to those
employees employed by Purchaser as of April 6, 2001.
(b) Seller's Obligations. Except for the Assumed
Liabilities, Purchaser is not assuming, and Purchaser shall not be
liable for, any other obligation of Seller or Shareholder,
contingent or absolute, known or unknown, all of which shall be
and remain the sole obligation of Seller and/or Shareholder, as
the case may be, including without limitation:
(i) Accrued Vacation Pay due and owing to any
employee of the Business who is not hired by Purchaser as of the
Closing Date;
(ii) all trade payables and expenses of Seller; and
(iii) secured obligations, financing
obligations, state sales tax, state unemployment compensation
liabilities, federal income taxes or any tax levied upon Seller by
the Commonwealth of Pennsylvania for the transactions described
herein and any other third party claims against the Assets.
(c) Assignment and Assumption of Contracts. Seller
shall assign to Purchaser and Purchaser shall assume on the
Closing Date, all of Seller's rights and obligations with respect
to, and Purchaser shall take the position of Seller under, all
Contracts and Leases. If before the Closing Date, Seller is
unable to secure a duly executed consent, where in the reasonable
opinion of Purchaser such consent is necessary to a binding and
enforceable conveyance of any Contract or Lease being assigned to
Purchaser hereunder, Seller and Shareholder shall cooperate with
Purchaser in any reasonable arrangement designed to provide to
Purchaser the benefit of any such Contract or Lease, including
enforcement of any and all rights Seller has against any other
party to such Contract or Lease or arising under such Contract or
Lease. Seller shall, after the Closing Date, use its best efforts
to secure any such consent if such consent is deemed necessary by
Purchaser.
4. Purchase Price (Cash Consideration and Earn Out
Consideration), Method of Payment, and Allocation of Purchase
Price.
(a) Cash Consideration. Subject to adjustments and
prorations as provided herein, Purchaser agrees to pay to Seller,
and Seller agrees to accept from Purchaser, in payment for the
Assets, the sum of One Million Three Hundred Twelve Thousand Nine
Hundred Ninety Dollars ($1,312,990) (the "Cash Consideration").
Seller and Purchaser acknowledge that the Cash Consideration has
been determined based upon Fifty Percent (50%) of Seller's
adjusted earnings before interest, taxes, depreciation and
amortization ("EBITDA") for the trailing 12 month period ended
March 31, 2001 [based upon the "Interim Financials" (as defined in
Section 5)] multiplied by a factor of five and one-half (5.5).
For purposes of this Section 4(a), EBITDA shall be adjusted by
adding the cash value of the vehicle lease for one 1999 silver
Mercedes Benz E320.
(b) Earn Out Consideration. In addition to the Cash
Consideration, Purchaser agrees to pay Seller a contingent
additional sum once per annum for the three (3) successive twelve
(12) month periods following the Closing Date (the "Earn Out
Consideration"). The first such yearly period to commence as of
the Effective Date and terminate March 31, 2002. Thereafter, such
yearly period shall commence on April 1 and end on March 31 of the
following year. The Earn Out Consideration shall be paid to
Seller within a period not to exceed sixty (60) days of the
anniversary from the Closing Date for the three (3) successive
twelve (12) month periods following the Closing Date.
(i) The Earn Out Consideration shall be equal to
Sixteen and Sixty-Seven One Hundredths percent (16.67%) of the
EBITDA for each respective annual period multiplied by a factor of
five and one-half (5.5).
(ii) For purposes of Section 4(b), EBITDA shall be
adjusted by adding an amount of Two Thousand Five Hundred Dollars
($2,500) per month as a corporate overhead charge.
(iii) For purposes of determining the Earn Out
Consideration, EBITDA shall be calculated by Purchaser in
accordance with generally accepted accounting principles ("GAAP")
consistently applied, as GAAP is determined by Purchaser's
independent accounting firm, from time to time.
(The foregoing Sections 4(a) and 4(b) are collectively
referred to as the "Purchase Price").
(c) Cash Consideration Adjustments. The Cash
Consideration shall be subject to adjustment/proration as provided
herein:
(i) the Cash Consideration shall be reduced by:
(A) the accrued vacation due and owing to any
employee of the Business as of the Closing Date (the "Accrued
Vacation Pay");
(B) the aggregate value of any and all refund
obligations of Seller incurred, but unpaid, as of Closing;
(C) Five Thousand Dollars ($5,000) which
shall be used by Purchaser for Paul Colaizzi's signing bonus;
(D) Thirty Thousand Dollars ($30,000) in
accordance with that certain Tax Escrow Agreement dated of even
date herewith; and
(E) Eight Hundred Twelve Dollars ($812) for
administrative assignment fees.
(ii) the Cash Consideration shall be adjusted in
accordance with the Receivables as April 7, 2001 in accordance
with Section 1(m) such that Seller shall pay Purchaser to the
extent the amount of Receivables is less than fifty percent (50%)
of the Net Revenues for the three (3) month period ending March
31, 2001 and Purchaser shall pay Seller to the extent that the
amount of Receivables is greater than fifty percent (50%) of the
Net Revenues for the three (3) month period ending March 31, 2001.
(iii) the Cash Consideration shall be prorated
in accordance with Section 7(f).
(d) Total Cash Consideration / Method of Payment.
After adjustments and prorations, the total Cash Consideration
portion of the Purchase Price in the amount of One Million Four
Hundred Two Thousand Eight Hundred Sixty-Three Dollars
($1,402,863) is hereby being paid on the Closing Date by bank
tested wire transfer to an account or accounts designated by
Seller.
(e) Earn Out Reduction or Forfeiture. The Earn Out
Consideration may be reduced or forfeited for the following:
(i) Purchaser may reduce the Earn Out
Consideration to satisfy:
(A) Claims (as defined in Section 10(a)
hereof) for which it may be entitled to indemnification from
Seller or the Shareholder; and
(B) any fees required to assign any Real
Property Lease or Personal Property Leases desired to be assumed
by Purchaser.
(ii) Seller shall forfeit the remaining Earn Out
Consideration:
(A) for breach by Shareholder or Stephanie D.
Verona of their respective Employment Agreements as the same is
defined in the respective Employment Agreement, as set forth in
Section 7(a) hereof; or for breach by the Shareholder of the Non-
Disclosure and Non-Competition Agreement as set forth in Section
7(a) hereof. Notwithstanding the foregoing, the Earn Out
Consideration shall not be forfeited if Stephanie D. Verona shall
breach her Employment Agreement if such breach should occur after
a final judgement for dissolution of marriage is entered between
her and Shareholder; or
(B) if Shareholder is not employed by
Purchaser, for any reason whatsoever, on the date in which the
Earn Out Consideration becomes due and owing in accordance with
Section 4(b) hereof.
(f) Purchaser will promptly notify Seller in writing if
Purchaser desires to make any deduction to the Earn Out
Consideration pursuant to Section 10, which notice will state the
nature of the Claim in reasonable detail and the amount thereof.
If Purchaser receives no written objection from Seller within
fifteen (15) days after such notice is given to Seller, Purchaser
may set-off the amount of such Claim against the Earn Out
Consideration immediately and automatically, which reduction shall
be deemed to be effective as of the Closing Date of this
Agreement. If Seller timely and properly objects to the validity
or amount of any Claim made pursuant to this Section 4(f),
Purchaser will not be entitled to set-off the amount of such Claim
from the Earn Out Consideration until a resolution is reached by
Purchaser and Seller in accordance with the procedure set forth in
this Section 4. If Purchaser and Seller are unable to agree as to
the payment of any Claim pursuant to this Section 4 and Section 10
Seller and Purchaser shall each have the right to litigate the
resolution of such disputed Claim.
(g) Purchaser will withhold from the payment to Seller
the amount of any disputed Claim until a resolution of such Claim
has been reached irrespective of the due date of any such Earn Out
Consideration. In the event Purchaser does withhold payment
hereunder and later pays all or any portion of the withheld amount
to Seller, such payment shall include interest at a rate equal to
two percent (2%) below the prime or base rate of interest on such
date as published in The Wall Street Journal, Eastern Edition.
(h) All Claims by Purchaser pursuant to this Section 4
are subject to the provisions of Section 10.
(i) The Purchase Price is hereby allocated among the
Assets as set forth upon Schedule 4(i), which allocation and
Schedule may be amended following the Closing Date to reflect any
adjustment to the Purchase Price. Seller and Purchaser shall:
(i) prepare and file all tax returns, reports
(including an Asset Acquisition Statement, Form 8594) and
supporting schedules consistent with the allocation of the
Purchase Price described upon Schedule 4(i), as may be amended;
and
(ii) not claim or assert in any tax audit, review,
examination or litigation that the allocation of the Purchase
Price is or should be different that or inconsistent with the
allocation described upon Schedule 4(i).
5. Representations and Warranties of Seller and the
Shareholder. For purposes of this Section 5, the term "Seller's
knowledge" shall mean the actual knowledge or that knowledge
reasonably imputed to a prudent person engaged in the same line of
business, or any officer, director or employee of Seller or
Shareholder. Seller and the Shareholder, jointly and severally,
hereby represent and warrant to Purchaser as follows:
(a) Existence and Good Standing. Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania, having full
power and authority to carry on the Business as it has been and is
now being conducted. Seller is duly qualified to transact
business as a foreign corporation and is in good standing in each
jurisdiction in which its operation of the Business and its
ownership of the Assets requires it to be so qualified or its
failure to do so would not result in an adverse effect on Seller's
or Purchaser's Business, operations or financial condition (an
"Adverse Effect"). Attached as Schedule 5(a) is a listing of each
jurisdiction in which Seller is qualified to conduct business.
(b) Authority. Seller and Shareholder each have the
requisite power and authority to negotiate, execute, deliver and
perform this Agreement, their respective covenants, duties and
obligations under this Agreement and the transactions described in
or contemplated by this Agreement. This Agreement has been duly
executed by Seller and Shareholder. Seller has obtained the
necessary authorization of its shareholders and its Board of
Directors in accordance with all applicable laws and its Articles
of Incorporation and By-Laws. This Agreement is the valid, legal
and binding obligation of Seller and Shareholder, enforceable
against Seller and Shareholder in accordance with its terms. No
other action by Seller or Shareholder is necessary to authorize
the execution and delivery of this Agreement by Seller and
Shareholder, the performance by Seller and Shareholder of their
respective covenants, duties and obligations set forth in this
Agreement or the consummation by Seller or Shareholder of the
transactions described in or contemplated by this Agreement.
(c) No Conflicts. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions
described in or contemplated by this Agreement, constitute a
default under or conflict with any judgment, decree or order of
any court or other federal, state, local or foreign governmental
agency or authority (individually, a "Governmental Authority") to
which Seller or Shareholder is subject or to any agreement or
understanding to which Seller or Shareholder is a party. The
execution, delivery and performance of this Agreement by Seller
and Shareholder does not require the consent, approval or action
of, or any filing with or notice to, any public authority or any
other person or entity whatsoever, except as may be required to
transfer and assign the Contracts, Leases and the Permits from
Seller to Purchaser.
(d) Seller's Financial Statements. Prior to Closing,
Seller has furnished or will furnish to Purchaser copies of
financial statements consisting of (i) the balance sheet of Seller
as of March 31, 2001 and the related statement of income for the
12 month period then ended, (the "Interim Financials"), and (ii)
the balance sheets of Seller as of December 31, 2000 and the
related statements of income, retained earnings and cash flow for
the years then ended (the "Year-End Financials"), [the Interim
Financials and the Year-End Financials shall hereinafter be
collectively referred to as "Seller's Financial Statements"].
Seller's Financial Statements are true, correct and complete in
all material respects to the extent they refer to dates and
periods covered thereby, and present an accurate and complete
disclosure of the financial condition and results of operations of
Seller as of the respective dates and for the respective periods
covered thereby. Seller's Financial Statements have been prepared
in accordance with GAAP consistently applied during the periods
therein indicated, subject, in the case of the Interim Financials,
to normal recurring year-end adjustments and the absence of notes.
Seller's Financial Statements are consistent with the books and
records of Seller, and there are no material transactions required
by GAAP to be recorded in accounting records that have not been
recorded in the accounting records underlying Seller's Financial
Statements.
(e) Title to, and Condition of, the Assets. Except as
set forth on Schedule 5(e), Seller has good and marketable title
to the Assets, free and clear of all Liens. The Assets will be
transferred to the Purchaser on the Closing Date free and clear of
all Liens. All of the Personal Property material to the Business
is in working order, condition and repair, ordinary wear and tear
excepted, and fit for the purposes intended in connection with the
operation of the Business.
(f) Permits. Seller currently maintains all material
Permits required by all applicable Governmental Authorities for
Seller's operation of the Business and Seller's ownership and use
of the Assets, and all such Permits are valid and in full force
and effect. Except as disclosed upon Schedule 5(f): (i) Seller is
in compliance in all material respects with the terms and
conditions of all such Permits and, where applicable or necessary,
has applied for and obtained renewal of each such Permit, (ii)
Seller has not received, nor does Seller anticipate receiving, any
notice regarding the revocation or amendment of any Permit, and
(iii) there are no pending, or to Seller's knowledge threatened,
actions or proceedings relative to the revocation or amendment of
any Permit.
(g) Intellectual Property. Except as set forth on
Schedule 5(g) Seller is the sole and exclusive owner of all of the
Intellectual Property used in the Business. The Intellectual
Property will be transferred to Purchaser on the Closing Date free
and clear of all Liens. Set forth upon Schedule 5(g) is a listing
by filing office, registration number, filing date and expiration
of renewal date of all Intellectual Property that has been
registered with, filed in or issued by the United States Patent
and Trademark Office, the United States Copyright Office or the
corresponding offices of any other countries or any state, which
offices are identified on said Schedule, and those so registered
or filed in, or issued by, have been properly maintained and
renewed in accordance with all applicable provisions of law and
administrative regulations of all applicable countries and states.
(i) Seller has not assigned, licensed,
sublicensed, encumbered, made subject to a Lien or transferred, in
whole or in part, any Intellectual Property utilized in the
operation of the Business.
(ii) With respect to the operation of the Business,
to Seller's knowledge, Seller is not infringing upon the patent,
copyright, trademark, service mark, trade name, design, trade
secret or other intellectual or proprietary property of any other
person or entity, and Seller or Shareholder has not received, nor
does Seller or Shareholder anticipate receiving, any notice of any
such infringement or notice of any need to seek a license for any
Intellectual Property nor, to Seller's knowledge, shall Seller's
sale, assignment and transfer to Purchaser of the Intellectual
Property infringe upon the patent, copyright, trademark, service
mark, trade secret, trade name, design or other intellectual
property or proprietary right of any other person or entity.
(iii) To Seller's knowledge, no person or
entity has infringed or is infringing upon, or is engaged in any
activity which would constitute a misappropriation of, any
Intellectual Property of Seller utilized in connection with the
operation of the Business.
(iv) Seller has paid in full through the date of
this Agreement all required license fees and other charges
associated with Seller's use of software utilized in connection
with the operation of the Business.
(v) No current or former employee of Seller and no
other person or entity owns or has any proprietary, financial or
other interest or right, direct or indirect, in whole or in part,
in any of the Intellectual Property, or in any application
therefor, including any right to royalties or other compensation
in connection therewith.
(vi) Except as set forth on Schedule 5(g)(vi),
Seller is not obligated to pay any amount, whether as a royalty,
license fee or other payment, to any person or entity to use any
of the Intellectual Property.
(vii) Seller has at all times taken all
reasonably necessary and appropriate secrecy safeguards and other
affirmative acts to maintain the confidentiality of the
Intellectual Property.
(h) Contracts and Leases. Except as disclosed upon
Schedule 5(h), with respect to each Contract and Leases being
assumed by Purchaser pursuant to the terms of this Agreement:
(i) Seller is not in breach or default in any
material respect thereunder and, to Seller's knowledge, no other
person or entity to any such Contract or Lease is in breach or
default thereunder in any material respect;
(ii) there are no pending, or to Seller's knowledge
threatened, claims or allegations that any person or entity to any
such Contract or Lease is in breach or default thereunder in any
material respect;
(iii) Seller has not received, nor does Seller
anticipate receiving, and Seller has not given, nor does Seller
anticipate giving, any notice of an event of breach or default by
any person or entity to a Contract or Lease, notwithstanding any
right to cure such breach or default;
(iv) no Contract or Lease is the subject of any
known dispute, litigation, arbitration or alternative dispute
resolution proceeding which, if adversely decided, would have a
material adverse effect on the Business or the use of the Assets
following the Closing Date;
(v) other than purchase order deposits in the
ordinary course of business which are listed upon Schedule
5(h)(v), no customer has prepaid any sum to Seller pursuant to a
Contract, including, without limitation, any portion of an open
purchase order or services to be performed, by or on behalf of
Seller to or for such customer;
(vi) Seller has not prepaid any sum to any vendor
or supplier of Seller pursuant to any Contract or Lease (except
for insurance premiums);
(vii) other than purchase orders in the
ordinary course of business, an original counterpart or a true,
correct and complete copy of each written Contract and Lease has
been provided to Purchaser, including all amendments and
modifications thereto;
(viii) subject to the discretion of courts
generally and except as enforcement may be limited by laws
affecting the rights of creditors generally, each Contract and
Lease is a valid and binding obligation of Seller and the other
party or parties thereto and is enforceable against Seller and the
other party or parties in accordance with its terms and is in full
force and effect;
(ix) Seller has not received, nor does Seller
reasonably anticipate receiving, any notice, direction or other
communication regarding any change in pricing, payment, volume of
business or any other modification of any material term, or the
termination, of any Contract, other than in the ordinary course of
business; and
(x) no Contract or business was obtained by Seller
as a result of any price reduction, price abatement, price
guarantee, discount, rebate or any payment or other remuneration
to any of Seller's customers or any of Seller's customers'
employees or agents by virtue of any other transaction or
arrangement outside of the ordinary course of the Business,
including, without limitation, by virtue of an illegal payment or
an illegal price reduction.
(i) Absence of Undisclosed Liabilities. Except as set
forth in this Agreement and the Schedules hereto, Seller is not
obligated for, nor are any of the Assets subject to, any
liabilities, claims or obligations, absolute or contingent, which
have or could have an impact or effect on the operation of the
Business or the sale, conveyance, grant, transfer, assignment and
delivery of the Assets to Purchaser in accordance with the terms
of this Agreement. Seller is not, and will not as a result of the
consummation of the transactions described in or contemplated by
this Agreement be, in default with respect to any term or
condition of any liability or obligation relating to the operation
of the Business or the Assets. There are no debts, liabilities or
obligations of Seller, which, not described in the body of, or on
a Schedule or Exhibit to this Agreement, in the aggregate equal or
exceed Five Thousand Dollars ($5,000).
(j) Insurance. Schedule 5(j) is a true, correct and
complete listing of all the policies of insurance in force as of
the Closing Date covering the life, health and disability of
Seller's employees and former employees, and their respective
dependants or beneficiaries, as the case may be, and covering
casualty, property and product liability in connection with the
operation of the Business, the Assets and the provision of
Seller's services. With respect to each such policy of insurance,
Schedule 5(j) lists: (i) the risk insured against; (ii) the name
of the insurer; (iii) the policy number; (iv) the amount of
coverage, including deductibles and policy limits; (v) the amount
of annual premium; (vi) the expiration date; (vii) the property
insured; (viii) the name of the owner and beneficiary; and (ix) as
to each, whether such policy of insurance insures on an
"occurrence" or "claims made" basis. All of the policies of
insurance set forth upon Schedule 5(j) are, and through the
Closing Date will be, in full force and effect and all premiums,
including retrospective premiums, retention amounts and other
costs and expenses related thereto due with respect to any period
ending on or prior to the Closing Date have been paid in full.
Seller has neither received nor been threatened with and, to
Seller's knowledge, Seller does not anticipate receiving, any
notice of cancellation with respect to any insurance policy listed
upon Schedule 5(j). Seller has not been refused any insurance by
any insurance carrier to which it has applied for insurance during
the last five (5) years. There are no circumstances known to
Seller which would enable any insurer to avoid liability under any
insurance policy listed upon Schedule 5(j).
(k) Labor Relations and Employee Agreements. Seller has
furnished to Purchaser a complete list of all employees of Seller
employed, and all independent contractors engaged by Seller
concerning the Business as of the day immediately prior to the
date of this Agreement. Seller has separately provided to
Purchaser such additional information regarding such employees as
requested by Purchaser, including, without limitation, to the
extent requested, the titles and the following material terms of
employment or engagement, as the case may be, of each such
employee and independent contractor: current wages, salaries or
hourly rate of pay of, and bonus (whether monetary or otherwise)
paid since the beginning of the most recently completed fiscal
year or payable in the current fiscal year to, each such employee
or independent contractor, the date upon which such wage, salary,
rate or bonus became effective, the date upon which each such
employee or independent contractor was first hired or engaged, as
the case may be, by Seller and whether any such employee or
independent contractor has a written employment or consulting
contract with Seller. Except as set forth on Schedule 5(k):
(i) No employee or independent contractor is on
short-term disability, long-term disability leave, extended
absence of any kind (including maternity leave), salary
continuance or receiving workers' compensation;
(ii) There are no written contracts of employment
or consulting contracts entered into with any employees or
independent contractors or any oral contracts of employment or
engagement;
(iii) There are no pending, threatened or, to
Seller's knowledge, reasonably anticipated charges against the
Business or Seller under any applicable Governmental Law
pertaining to the employment or termination of labor, including,
without limitation, the Occupational Safety and Health Act, the
1990 Immigration Act and the Immigration and Nationality Act, Part
6 of Subtitle B of Title I of the Employee Retirement Income
Security Act of 1974, as amended or, if applicable, Internal
Revenue Code Section 498OB (commonly referred to collectively as
"COBRA"), the Family and Medical Leave Act, the Health Insurance
Portability and Accountability Act (including state counterparts
of such statutes), and those other acts relating to wages, hours,
collective bargaining, equal employment opportunity and employment
and labor in general, and to the payment of social security and
similar taxes, and to the extent of any remedial orders issued
under any applicable Governmental Law, Seller has fully complied
therewith;
(iv) There are no grievances or arbitration cases
pending, threatened, or, to Seller's knowledge, reasonably
anticipated, with respect to Seller and any current or former
employee of Seller, including, without limitation, with respect to
the employment or termination of employment of any such current or
former employee or any allegation of harassment or discrimination
against any such current or former employee or with respect to any
union agreement;
(v) There are no pending, or to Seller's knowledge
threatened, strikes or lockouts by the employees of Seller and
Seller has not experienced any work stoppage relating in any
manner to its labor practices and relationship with its employees
during the prior five (5) year period;
(vi) Seller is in full compliance with and has not
received, nor does Seller anticipate receiving, any notice of
violation of any applicable Governmental Law, including, without
limitation, Title VII of the Civil Rights Act, Age Discrimination
in Employment Act, Americans With Disabilities Act, Rehabilitation
Act of 1973, Family and Medical Leave Act, Pregnancy
Discrimination Act, COBRA , Fair Labor Standards Act, Equal Pay
Act, Portal-to-Portal Act, Davis-Bacon Act, Service Contract Act,
Contract Work Hours and Safety Standards Act, Walsh-Healey
Government Contracts Act, Executive Order 11246, Vietnam Veterans
Readjustment Assistance Act, the 1990 Immigration Act and the
Immigration and Nationality Act and the Occupational Safety and
Health Act; and
(vii) None of the employees of Seller is
covered by any collective bargaining agreement, and no collective
bargaining agreement is currently being negotiated by Seller, no
one has petitioned within the last five (5) years, and, to
Seller's knowledge, no one is now taking any action with respect
to organizing any of Seller's employees.
(l) Benefit Plans. Other than the Assumed Plans and
except as set forth on Schedule 5(l), after the Closing Date,
Purchaser will not be obligated or required to continue any bonus
plan, vacation policy, commission arrangements, pension plan,
insurance or any other employee arrangement, benefit plan or
fringe benefit or any other Benefit Plan that may have been in
effect prior to the Closing Date and all payments due to employees
of the Business or to a Benefit Plan maintained on their behalf
which arise or accrue on or prior to the Closing Date (including,
without limitation, accrued vacation to those employees who are
not hired by Purchaser as of the Closing Date) have been, or will
be, paid by Seller on or before the Closing Date.
(i) Schedule 5(l) sets forth a complete list of
all "Employee Pension Benefit Plans" ("Pension Plans") or any
"Employee Welfare Benefit Plans" ("Welfare Plans") as such terms
are defined in Sections 3(2) and 3(1), respectively, of ERISA,
which are subject to ERISA and any bonus, pension, profit sharing,
deferred compensation, incentive compensation, excess benefit,
stock, stock option, severance, termination pay, change in
control, fringe benefit or other employee benefit plans, programs
or arrangements, including, but not limited to, those providing
medical, dental, vision, disability, life insurance and vacation,
sick leave, holidays and other paid time off benefits (other than
those required to be maintained by law), qualified or unqualified,
funded or unfunded, foreign or domestic, and also including,
without limitation, the Assumed Plans (individually, a "Benefit
Plan" and collectively, the "Benefit Plans"), which Seller
maintains or has maintained, or has been obligated to contribute
to within the 10-year period ending on the Closing Date. Seller
has delivered complete and correct copies of each Benefit Plan and
related trust agreement and annuity contract (including amendments
to any of the foregoing) and (to the extent applicable) a copy of
each Benefit Plan's current summary plan description. In
addition, to the extent applicable, Seller has provided to
Purchaser a copy of the most recent IRS determination letter
issued, copies of the three most recently filed IRS Forms 5500
together with all schedules, actuarial reports and accountants'
statements for each Benefit Plan, and a written description of all
non-written benefit plans or arrangements and all employee manuals
or handbooks.
(ii) To the best of Seller's knowledge, each
Assumed Plan has been maintained in compliance with its terms and
all provisions of ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"), applicable thereto (including rules and
regulations thereunder), and other applicable legal requirements.
(iii) Each Benefit Plan which is intended to be
"qualified" within the meaning of Section 401(a) of the Code has
been determined by the Internal Revenue Service (the "IRS") to be
so qualified and each trust created thereunder has been determined
by the IRS to be tax exempt under Section 501(a) of the Code
except with respect to any amendments for which the remedial
amendment period has not expired as of the Closing Date, and no
event or condition exists which is reasonably likely to adversely
affect the qualified status of each such Benefit Plan or the tax
exempt status of each trust created thereunder.
(iv) To the best of Seller's knowledge, none of the
Assumed Plans are currently subject to an audit or other
investigation by the IRS, the Department of Labor, the Pension
Benefit Guaranty Corporation or any other Governmental Authority
nor are any subject to any law suits, complaints, claims or legal
proceedings of any kind pending or threatened or anticipated, and
no filing has been made with respect to any of the Assumed Plans
under the IRS Employee Plans Compliance Resolution System, the
Voluntary Compliance Resolution Program, the Closing Agreement
Program, the Delinquent Filer Voluntary Compliance Program or the
Pension Payback Program, or programs which are predecessor
thereto, which is reasonably likely to result in liability to
Purchaser, now or in the future.
(v) To the best of Seller's knowledge, no
"prohibited transaction" as defined in Section 406 of ERISA or
Section 4975 of the Code has occurred with respect to any Assumed
Plan. No breach of fiduciary responsibility under Part 4 of Title
I of ERISA resulting in any liability to Seller, any trustee,
administrator or fiduciary of any Assumed Plan has occurred.
Neither Seller nor any Commonly Controlled Entity (as defined in
Section 5(lo)(vii) hereof) has any secondary liability resulting
from a transaction described in ERISA Section 4204.
(vi) All contributions required to be paid under
the terms of each Assumed Plan have been made by the due date and
to the extent not yet due, have been accrued as a liability on the
most recent balance sheet.
(vii) At no time during the past seven (7)
years has Seller or any trade or business which together with
Seller would be treated as a single employer under Section
4001(b)(1) of ERISA or Section 414 of the Code (a "Commonly
Controlled Entity"), contributed to, or incurred any liability
with respect to, any Pension Plan which is subject to Title IV of
ERISA, including any multi-employer plan, as such term is defined
in Section 3(37) of ERISA or Section 4001(a)(3); and no event or
condition exists with respect to a Benefit Plan which could give
rise to a Lien on any of the Assets.
(viii) Each Welfare Plan has at all times been
maintained in compliance with its terms and with the provisions of
Section 4980 B of the Code and Parts 6 and 7 of Title I of ERISA.
Except as required by law neither an Assumed Plan nor the Seller
provides or promises post-employment health or life benefits to
current or former employees of Seller, and Seller has made no such
promises, oral or written to its current or former employees.
(ix) Seller has not incurred, nor is reasonably
likely to incur, any liability for any penalty or tax under
Chapter 43 of Subtitle D of the Code or Section 502 of ERISA.
(x) No employee, director or independent
contractor of Seller will become entitled to any retirement,
severance, bonus or similar benefit or enhanced or accelerated
benefit solely as a result of the transactions contemplated
hereby. Without limiting the generality of the foregoing, no
amount required to be paid or payable to or with respect to any
employee of Seller in connection with the transaction contemplated
hereby (either solely as a result thereof or as a result of such
transactions in conjunction with any other event) will be an
"excess parachute payment" within the meaning of Section 280G of
the Code.
(xi) Seller, and after the Closing Date, Purchaser
has the right to amend or terminate any of the Assumed Plans
without creating any liability thereunder.
(xii) Except as individually listed by name,
Social Security number and election date (or election deadline) on
Schedule 5(l), no employees, former employees or their qualified
beneficiaries (as defined in Section 607 of ERISA) of the Seller
have elected continuation coverage, as defined in COBRA, or have
had a qualifying event for which the election period, as defined
in COBRA, has not expired.
(m) Payment of Taxes. Seller has fully and timely
reported and fully paid, and will continue to fully and timely
report and pay all federal, state and local taxes of every kind,
nature and description that are due and payable or accrued with
respect to the Business, including, without limitation, all
payroll, withholding, sales, use, license, franchise, property and
income taxes, which accrue up to and including the Closing Date.
(n) Litigation. Except as disclosed upon Schedule 5(n)
there is no litigation, arbitration, proceeding or controversy
which is pending before any court or Governmental Authority, or
arbitrator or board of arbitrators, to which Seller is a party, or
which is affecting or, to Seller's knowledge, may affect or is
threatened against, the Business, the Assets or Seller's right to
carry on the Business as conducted as of the Closing Date. There
is no action, suit or proceeding pending or threatened or, to
Seller's knowledge, anticipated before any court or Governmental
Authority which would give any party the right to rescind or
enjoin the sale and purchase of the Assets in accordance with the
terms of this Agreement or any of the other transactions described
in or contemplated by this Agreement.
(o) Computer Systems. Seller's computer systems have
been satisfactorily maintained and supported. The computer
systems have adequate capability and capacity for the current
requirements of the Seller. The Seller has sufficient technically
competent and trained employees to ensure proper handling,
operation, monitoring and use of the computer systems. The Seller
has adequate procedures to ensure internal and external security
of the computer systems, including procedures for taking and
storing on-site and off-site back-up copies of computer programs
and data. Except as set forth on Schedule 5(o), the Seller is the
owner of all hardware and is the licensee of software licenses
necessary to enable it to keep, copy, maintain, and use the
Seller's records in the ordinary course of its business.
(p) Customers and Suppliers. Seller has used its best
business efforts to maintain good working relations with all of
its customers and suppliers. Schedule 5(p) contains the following
information: (i) a list of the names and sales figures for of each
of the ten (10) customers that were the largest dollar volume
customers of Seller during the calendar year 2000 and during the
interim year from January 1, 2001 through the Closing Date; and
(ii) a list of the names and sales figures for each of the ten
(10) suppliers of Seller that were the largest dollar volume
suppliers of Seller during the calendar year 2000, and during the
interim year from January 1, 2001 through the Closing Date. To
Seller's knowledge, no existing customer or supplier has given or
threatened to give Seller written or oral notice of termination,
cancellation or modification of any Contract or agreement to which
such customer or supplier, as the case may be, and Seller is a
party. Except for ownership of less than five percent (5%) of the
stock of companies publicly traded on a national exchange or over-
the-counter, there is no financial interest of any kind between
any of Seller's suppliers or customers and Seller, Shareholder, or
any officer, director or employee of Seller or Shareholder.
(q) Compliance with Laws. The Business is, and will
continue to be through the Closing Date, in compliance in all
material respects with all Governmental Laws applicable to the
Business and Seller has secured all necessary permits,
authorizations and licenses issued by Governmental Authorities
applicable to the Business and the Assets, where the failure to do
so would result in an Adverse Effect.
(r) Misstatements or Omissions. No representation or
warranty made by Seller or Shareholder in this Agreement or in any
document, written statement, certificate, Schedule or Exhibit
furnished to Purchaser or its counsel pursuant to this Agreement,
or in connection with the transactions described in or
contemplated by this Agreement, contain any untrue statement of
fact, or omit to state a fact necessary to make the statements of
fact contained therein not misleading. All statements made and
data presented by Seller and Shareholder in any document, written
statement, certificate, Schedule or Exhibit identified in this
Agreement as having been provided to Purchaser pursuant to, or in
connection with, this Agreement are deemed to be representations
and warranties made by Seller and Shareholder to Purchaser under
this Agreement.
6. Representations and Warranties of Purchaser. Purchaser
represents and warrants to Seller and Shareholder as follows.
(a) Existence and Good Standing. Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of State of Illinois.
(b) Authority. Purchaser has the requisite corporate
power and authority to execute, deliver and perform this
Agreement, its covenants, duties and obligations under this
Agreement and the transactions described in or contemplated by
this Agreement. This Agreement has been duly executed by
Purchaser and is a valid, legal and binding obligation of
Purchaser enforceable against Purchaser in accordance with its
terms. No other action by Purchaser is necessary to authorize the
execution and delivery by Purchaser of this Agreement, the
performance by Purchaser of its covenants, duties and obligations
set forth in this Agreement or the consummation of the
transactions described in or contemplated by this Agreement.
(c) No Conflicts. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions
described in or contemplated by this Agreement, constitute a
default under or conflict with any judgment, decree or order of
any court or other Governmental Authority to which Purchaser is
subject or to any agreement or understanding to which Purchaser is
a party. The execution, delivery and performance of this
Agreement by Purchaser does not require the consent, approval or
action of, or any filing with or notice to, any public authority
or any other person or entity whatsoever.
(d) Misstatements or Omissions. No representation or
warranty made by Purchaser in this Agreement or in any document,
written statement, certificate, Schedule or Exhibit furnished to
Seller or Shareholder or their respective counsel pursuant to this
Agreement, or in connection with the transactions described in or
contemplated by this Agreement, contain any untrue statement of
fact, or omit to state a fact necessary to make the statements of
fact contained therein not misleading. All statements made and
data presented by Purchaser in any document, written statement,
certificate, Schedule or Exhibit identified in this Agreement as
having been provided to Seller or Shareholder pursuant to, or in
connection with, this Agreement are deemed to be representations
and warranties made by Purchaser to Seller and Shareholder under
this Agreement.
7. Covenants of the Parties.
(a) Employment/Covenant Not To Compete.
Contemporaneously with the execution of this Agreement, Michael P.
Verona, Stephanie D. Verona and Paul Colaizzi shall enter into,
execute and deliver to Purchaser an Employment Agreement with
Purchaser in the form attached as Exhibit 7(a)(i), Exhibit
7(a)(ii) and Exhibit (iii), respectively, and the Shareholder
shall enter into, execute and deliver to Purchaser a Non-
Disclosure and Non-Competition Agreement with Purchaser in the
form attached as Exhibit 7(a)(iv).
(b) Inspection of the Business. As of the date hereof
through the Closing Date, Shareholder and Seller will give to
Purchaser and its counsel, accountants and other representatives,
full access during normal business hours to its offices,
properties, agreements, records and affairs relating in any manner
to the Business, and will cause Seller's employees to furnish
Purchaser with such financial and operating data and other
information with respect to the Business and properties of Seller
being sold, transferred and assigned to Purchaser as Purchaser may
from time to time reasonably request.
(c) Seller's Name Change. On the Closing Date, Seller
will deliver to Purchaser such documents as Purchaser may require
in order to change Seller's corporate name with the Department of
State of the Commonwealth of Pennsylvania, and all other states in
which Seller is qualified to transact business and Shareholder
will deliver to Purchaser such documents as Purchaser may require
in order to change the name of all other companies owned in whole
or in part by Shareholder which contain the phrase "Generation
Technologies," "GTI" or "GenTech" to a dissimilar name and provide
Purchaser with resolutions of each such company's Boards of
Directors and stockholders as certified by such company's
secretary, authorizing such company to change its name to
effectuate such name change.
(d) Consents and Approvals.
(i) Contemporaneously with the execution of this
Agreement, Seller and Purchaser shall enter into, execute and
deliver to the other an Assignment and Assumption Agreement in the
form attached as Exhibit 7(d).
(ii) Seller will utilize all commercially
reasonable efforts to obtain all necessary consents and approvals
of all persons, entities and Governmental Authorities required to
effectuate the objects of this Agreement and deemed reasonably
necessary by Purchaser.
(iii) Schedule 7(d)(iii) sets forth both those
consents and approvals obtained by Seller prior to the Closing
Date and those consents and approvals deemed reasonably necessary
by Purchaser but not obtained prior to the Closing Date.
(iv) To the extent that Seller was unable to
procure prior to the Closing Date a duly executed consent to the
assignment of any Contract or Lease, where in the reasonable
opinion of Purchaser such consent is necessary to the assignment
to Purchaser of any such Contract or Lease, Seller will cooperate
with Purchaser in any reasonable arrangement designed to provide
to Purchaser the benefit of any such Contract or Lease, including,
without limitation, enforcement of any and all rights Seller has,
or may have, against any other party to such Contract or Lease or
arising under such Contract or Lease, until such time as an
effective consent to such assignment is procured by Seller or
Purchaser. Seller shall, after the date of this Agreement, use its
best efforts to secure any such consent if such consent is deemed
necessary by Purchaser.
(v) Seller will utilize all commercially
reasonable efforts (but not the payment of money other than
nominal transfer fees) to assign and transfer all transferable
Permits to Purchaser, and will provide such further assistance as
may be reasonably requested, from time to time after the date of
this Agreement, by Purchaser to assist Purchaser in obtaining any
nontransferable Permits which are necessary by Purchaser to
operate the Business.
(e) Satisfaction of Existing Liabilities of Seller.
Following the date of this Agreement, with the exception of the
Assumed Liabilities, Seller will continue to pay or otherwise
satisfy, in due course, all of Seller's debts, liabilities,
accounts payable and other obligations relating to the operation
of the Business prior to the date of this Agreement and the
ownership or use of the Assets prior to the date of this
Agreement, including, without limitation, all taxes, assessments,
governmental charges and deposits assessed by all applicable
Governmental Authorities with respect to periods prior to the date
of this Agreement.
(f) Prorations and Adjustments. Except for the Assumed
Liabilities, effective as of the date of this Agreement, Seller
and Purchaser hereby agree to prorate all Leases, maintenance
contracts, utilities, Personal Property taxes, assessments and
fees and employee vacation, sick leave and holiday payments to be
made through the day immediately preceding the Closing Date.
Seller and Purchaser agree that the accrued, but unused vacation,
sick leave and holiday pay for all of Seller's employees hired by
Purchaser as the Closing Date is set forth on Schedule 7(f) and
said amount has been subtracted from the Cash Consideration
payable by Purchaser to Seller on the Closing Date. Purchaser
shall pay to those of Seller's employees who are hired by
Purchaser the accrued, but unused vacation pay which is credited
against the Purchase Price in accordance with this Section 7(f)
when such accrued vacation is taken by said employees.
(g) Life Insurance on Shareholder. Shareholder agrees
that Purchaser may obtain life insurance coverage on Shareholder,
at Purchaser's sole cost, in amounts and on such terms as
Purchaser deems necessary, in Purchaser's sole discretion, which
such insurance shall name Purchaser as the beneficiary thereof.
(h) Payment of Transfer Taxes. Notwithstanding
anything herein to the contrary, the obligation to pay any sales
or use tax in connection with the sale and transfer of the Assets
will be the obligation of the Shareholder and Seller.
(i) Further Assurances. Seller, the Shareholder and
Purchaser each agree to execute and deliver such additional
documents, and take such further actions, as may be necessary or
advisable to provide each of the parties to this Agreement with
the rights and benefits intended to be afforded to each pursuant
to the terms of this Agreement, including, without limitation,
cooperating with Purchaser in obtaining the insurance coverage set
forth in this Section 7 and in any reasonable arrangement designed
to provide Purchaser with the benefit of all Choses assigned to
Purchaser by Seller pursuant to the terms of this Agreement.
(j) Seller's Continuation Coverage. Seller has timely
and completely provided, and will continue to provide, all notices
and will provide such continuation of health benefits coverage,
including, without limitation, medical and dental coverage, as is
required to be provided to employees, former employees and the
beneficiaries or dependents of such employees and former employees
under Part 6 of Subtitle B of Title I of ERISA (without regard to
ERISA Section 602(2)(B), Internal Revenue Code Section 4980B
(without regard to Section 4980B(f)(2)(B)(ii)) or state
continuation coverage laws, to the extent such notices and
continuation of health benefits coverage were or are required to
be provided by reason of events occurring prior to or as of the
date of this Agreement or as a result of the consummation of the
transactions described in or contemplated by this Agreement or
otherwise.
(k) Seller's Employee Benefits. Seller shall be
responsible for paying, or causing to be paid, directly to
Seller's employees and former employees, and their respective
beneficiaries or dependents, as the case may be, all benefits to
which such employees or such beneficiaries are entitled under
Seller's Benefit Plans, and Purchaser shall assume no liability
therefor or with respect thereto. Other than the Assumed Plans,
no portion of the assets of any plan, fund, program or
arrangement, written or unwritten, heretofore sponsored or
maintained by Seller (and no amount attributable to any such plan,
fund, program or arrangement) shall be transferred to Purchaser
and Purchaser shall not be obligated or liable to continue any
such Benefit Plan after the date of this Agreement. Purchaser
shall not be liable for any claim for insurance reimbursement or
other benefits payable under any of Seller's Benefit Plans.
(l) Assignment of Real Property Lease, Personal
Property Leases and Assumed Plans. Seller covenants and agrees
that if Seller is unable to assign any Real Property Lease,
Personal Property Lease or Assumed Plan desired by Purchaser, that
Seller shall continue to keep such Real Property Lease, Personal
Property Lease or Assumed Plan, as the case may be, in full force
and effect, such that Purchaser shall receive the full benefit of
such leases or plan. Purchaser covenants and agrees to reimburse
Seller for Seller's actual out of pocket costs to maintain such
leases and plan and the same shall be prorated for any partial
month, including, without limitation, the remainder of the month
of April after the Closing Date.
8. Conditions Precedent To Closing.
(a) Preconditions To Purchaser's Closing. Purchaser's
obligation to consummate the transactions contemplated herein
shall be subject to the following conditions precedent, each of
which must be fulfilled or waived in writing prior to Purchaser
being obligated to consummate the transactions contemplated
herein. If any of the following conditions precedent are not
fulfilled on or before April 5, 2001, or if Purchaser, in
Purchaser's sole discretion, determines that any of the following
conditions precedent are not capable of being fulfilled on or
before April 5, 2001, then Purchaser may terminate this Agreement
without any liability to the Shareholder or Seller or any other
party:
(i) Due Diligence Review. Purchaser's due
diligence review of Seller, the Assets, the Leases, the
Contracts, the Business and the Assumed Liabilities must be
satisfactory to Purchaser, in Purchaser's sole discretion.
(ii) Conduct of Business and Absence of Certain
Changes. Since January 17, 2001, except as set forth on Schedule
8(a)(ii), there has not been any material adverse change in the
Business, the Assets, the Assumed Liabilities or Seller's
operations not applicable to businesses in the industry of the
Business generally. Without limiting the generality of the
foregoing, there has not been, since January 17, 2001:
(1) any increase made or promised in the
compensation or other remuneration or rates thereof payable, or to
become payable, by Seller to any employee of the Business, or any
material change in any of the terms and conditions of employment
of any of the employees of the Business;
(2) any sale or transfer of any Asset other
than in the ordinary course of business;
(3) any sale, license, assignment or other
transfer by Seller of any of the Intellectual Property;
(4) any amendment to, or termination of, any
Contract or Lease, except for terminations of Contracts and Leases
that expire in accordance with the terms thereof;
(5) any commitment made by Seller, through
negotiations or otherwise, or any liability incurred, to any labor
organization with regard to any of Seller's employees;
(6) any discharge or satisfaction of any
obligation or liability (whether accrued, absolute, fixed or
contingent), other than those discharged or satisfied in the
ordinary course of business consistent with past practice and
without accelerations;
(7) the adoption or institution of any new
bonus, profit-sharing, pension plan, Benefit Plan or similar
arrangement or any changes in any such existing plans;
(8) any incurrence (whether discharged or
not) of any obligation or liability (whether accrued, absolute,
fixed or contingent), other than current liabilities incurred, and
obligations entered into, in the ordinary course of business
consistent with past practices;
(9) any material loss, damage or destruction
to any of the Assets, whether or not covered by insurance;
(10) any other event or condition of any
character which materially and adversely affects or threatens to
so affect Seller's financial condition, results of operations,
business or prospects;
(11) any change in accounting principles or
practices from those utilized in the preparation of Seller's
Financial Statements, except for changes in accounting principles
imposed by the accounting profession generally on businesses in
Seller's industry generally; and
(12) any transaction relating to the Business
entered into by Seller other than in the ordinary course of
business consistent with past practice.
(iii) Representations True and Correct. All of
the representations and warranties of Shareholder and Seller
hereunder shall remain true and correct in all material respects
from the date hereof through, and including, the Closing Date.
(iv) Approval by Purchaser's Board of Directors.
Approval of this Agreement, the ancillary agreements relating
hereto and the transactions contemplated herein, by Purchaser's
and Purchaser's parent company's Boards of Directors, in their
sole discretion.
(v) Consents and Approvals. As of the Closing
Date, Shareholder and Seller will have obtained all necessary
consents and approvals of all persons, firms, entities and
Governmental Authorities required by this Agreement. As of the
Closing Date, Purchaser shall have obtained all necessary Permits
to operate the Business.
(vi) Interim Financials. Seller has provided
Purchaser the Interim Financials and Purchaser has had the same
reviewed to Purchaser's sole satisfaction by Purchaser's
accounting/audit firm as the same may be regularly retained by
Purchaser from time to time.
(b) Preconditions To Shareholder's and Seller's
Closing. Shareholder's and Seller's obligation to consummate the
transactions contemplated herein shall be subject to the condition
precedent of all of the representations and warranties of
Purchaser hereunder remaining true and correct in all material
respects from the date hereof through, and including, the Closing
Date. If such condition precedent is not fulfilled on or before
April 5, 2001, or if Shareholder and Seller, in their reasonable
discretion, determine that such condition precedent is not capable
of being fulfilled on or before April 5, 2001, then Shareholder
and Seller may terminate this Agreement without any liability to
Purchaser or any other party.
9. Closing Date. Subject to the satisfaction of the
conditions set forth herein, the closing ("Closing") of the
transactions contemplated by, and described in, this Agreement
with respect to the sale, transfer and assignment of the Assets
will take place on April 10, 2001 (the "Closing Date") at 10 a.m.,
central standard time, at Triad Personnel Services, Inc., One
Tower Lane, Suite 2100, Oakbrook Terrace, Illinois 60181, or on
another date, or at another time or location as is mutually agreed
upon by the parties hereto.
(a) Seller's and the Shareholder's Deliveries. At
Closing Seller and Shareholder hereby deliver, or cause to be
delivered, to Purchaser, the following:
(i) such bills of sale, assignments (including,
without limitation, recordable assignments of the Intellectual
Property, if any), certificates and other instruments of transfer
required to effectively transfer and assign absolute, good and
marketable title to all of the Assets to Purchaser, free and clear
of all Liens, in accordance with the terms of this Agreement;
(ii) all necessary consents and approvals of all
persons, entities and Governmental Authorities required pursuant
to the terms of this Agreement to the extent received by Seller or
Shareholder prior to or as of the date of this Agreement;
(iii) certified copies of resolutions duly
adopted by the Board of Directors of Seller authorizing the
execution of this Agreement and the consummation of the
transactions described in and contemplated by this Agreement,
including, without limitation, the change of Seller's corporate
name and the execution and delivery of all documents described in
or contemplated by this Agreement;
(iv) originally executed Articles of Amendment to
the Articles of Incorporation of Seller, which are sufficient in
form and substance to properly effectuate a corporate name change
upon filing with the appropriate Secretary of State and such other
originally executed documents as are necessary to effectuate
Seller's name change in all other jurisdictions in which Seller is
authorized to conduct business;
(v) all Records of the Business pursuant to
Section 1(d) and physical possession of all tangible Assets;
(vi) the Employment Agreements attached hereto as
Exhibits 7(a)(i), 7(a)(ii), 7(a)(iii) as executed by the
Shareholder, Stephanie D. Verona and Paul Colaizzi;
(vii) the Non-Disclosure and Non-Competition
Agreement attached hereto as Exhibit 7(a)(iv) as executed by the
Seller and Shareholder;
(viii) the Assignment and Assumption Agreement
attached hereto as Exhibit 7(d) as executed by Seller;
(ix) a good standing certificate issued by the
Secretary of State of each jurisdiction in which Seller is
authorized to conduct business, each of which has been issued
within ten (10) days of the Closing Date;
(x) an incumbency certificate;
(xi) a certificate, signed by the president of
Seller, to the effect that the representations and warranties made
by Seller hereunder are true and correct in all material respects
as of the Closing Date;
(xii) a certificate of the Shareholder to the
effect that the representations and warranties made by the
Shareholder hereunder are true and correct in all material
respects as of the Closing Date;
(xiii) evidence of financing statement
termination to the extent necessary to extinguish any liens
against or other security interest in, any of the Assets;
(xiv) Seller's tax certificates setting forth
that all taxes and withholding, including but not limited to,
sales, excise, income, FICA, workers' compensation and
unemployment, have been paid or will be paid by Seller as they
become due; and
(xv) such other documents and instruments as may be
reasonably requested and satisfactory to Purchaser and its counsel
in connection with the full performance by Seller and Shareholder
of their respective covenants, duties and obligations described in
or contemplated by this Agreement.
(b) Purchaser's Deliveries. At Closing Purchaser
hereby delivers, or causes to be delivered, to Seller or
Shareholder, as applicable, the following:
(i) One Million Four Hundred Two Thousand Eight
Hundred Sixty-Three Dollars ($1,402,863) by wire transfer to an
account or accounts designated by Seller;
(ii) a certified copy of resolutions duly adopted
by the Board of Directors of Purchaser authorizing the execution
of this Agreement and the consummation of the transactions
described in and contemplated by this Agreement;
(iii) an incumbency certificate;
(iv) the Assignment and Assumption Agreement
attached hereto as Exhibit 7(d) as executed by Purchaser; and
(v) such other documents and instruments as may be
reasonably requested and satisfactory to Seller, Shareholder and
their respective counsel in connection with the full performance
by Purchaser of its covenants, duties and obligations described in
or contemplated by this Agreement.
10. Indemnifications; Survival of Representations,
Warranties and Indemnifications.
(a) Seller's and the Shareholder's Indemnification.
Seller and Shareholder, jointly and severally, agree to defend,
indemnify and hold Purchaser and its officers, directors,
employees, shareholders, successors and permitted assigns
(collectively, the "Purchaser Group"), harmless of, from and
against any and all loss, claim, damage, liability, penalty or
other cost or expense, including, without limitation, reasonable
attorneys' fees and costs (collectively "Claims" and individually
a "Claim"), incurred or sustained by the Purchaser Group, or any
of them, arising from or relating to any of the following: (i) any
liability, obligation or claim against Seller arising or accruing
prior to the Closing Date other than the Assumed Liabilities; (ii)
a misrepresentation or breach by Seller or Shareholder of any
term, warranty, covenant or agreement of Seller or Shareholder set
forth in this Agreement or in any Exhibit, Schedule, or other
document identified in this Agreement as having been delivered by
Seller or Shareholder pursuant to, or in accordance with, the
terms of this Agreement; (iii) any actions or omissions of Seller
or Shareholder and any debts, liabilities, accounts payable,
covenants, agreements, contracts, commitments and other
obligations of Seller or Shareholder related in any manner to the
Business or the Assets prior to the Closing Date; (iv) the non-
compliance with or violation of any bulk sales law or any other
similar Governmental Law in effect in the Commonwealth of
Pennsylvania or any other jurisdiction in which the Assets are
located; (v) the termination of Seller's employees or any claims
of Seller's employees arising prior to or effective as of the
Closing Date, or claims of Seller's former employees whose
employment terminated, for any reason, prior to or as of the
Closing Date, arising at any time, for compensation, health and
welfare benefits, Accrued Vacation Pay, workers' compensation
benefits, benefits under the Benefit Plans (except for any benefit
under an Assumed Plan which is fully funded and for which all
required contributions have been made on the Closing Date) or
otherwise, (including, without limitation, health claims or
expenses incurred on or prior to the Closing Date, even if first
revealed after the Closing Date and worker's compensation claims
based on exposures or injuries occurring on or prior to the
Closing Date, even if the claim is first filed after the Closing
Date) except for those obligations of Seller expressly assumed by
Purchaser under this Agreement; (vi) any Claim arising or accruing
on or before the Closing Date or arising out of any act or
omission occurring on or before the Closing Date arising out of or
relating to the operation and or qualification of the Assumed
Plans in accordance with the Code and ERISA, any breach of
fiduciary duty under ERISA or otherwise with respect to any or all
of the Assumed Plans or any penalty tax or other assessment under
Chapter 43 of Subtitle D of the Code; (vii) any personal injuries
to any employee or former employee of the Business, and any
personal injuries or property damage sustained by any person or
entity relative to work performed or services rendered by Seller
prior to the Closing Date regardless of when the claim for such
injury or damage is actually brought; (viii) any claim,
assessment, liability or lien by any Governmental Authority for
any taxes, interest and penalties accrued or due and owing,
directly or indirectly, by Seller on account of income earned,
compensation and benefits paid or provided to employees, former
employees or their respective dependents or beneficiaries, as the
case may be, Seller's ownership, possession, use or transfer of
the Assets, the results of operations of the Business or for any
other reason whatsoever at any time prior to the Closing Date;
(ix) the actual or alleged breach or violation by Seller of any
Contract, Lease or other agreement or understanding with any other
person or entity; (x) services provided by Seller prior to the
Closing Date; (xi) the non-compliance with or violation by Seller
of any Governmental Law in connection with the operation of the
Business prior to the Closing Date; (xii) any claim of any
Governmental Authority relating to Seller's ownership, possession,
use or transfer of the Assets, the results of operations of the
Business or for any other reason whatsoever at any time prior to
the Closing Date; and (xiii) any claim of breach by any party to a
Real Property Lease or Personal Property Lease which Seller was
unable to assign to Purchaser, which Purchaser receives benefit
under Section 7(l) hereunder.
(b) Purchaser's Indemnification. Purchaser agrees to
defend, indemnify and hold Seller, Shareholder and each of their
respective officers, directors, employees, successors, heirs and
assigns, as the case may be (collectively, the "Seller Group"),
harmless of, from and against any and all Claims incurred or
sustained by the Seller Group, or any of them, arising from or
relating to: (i) a material misrepresentation or breach by
Purchaser of any term, warranty, covenant or agreement of
Purchaser contained in this Agreement or in any Schedule, Exhibit
or other document identified in this Agreement as having been
delivered pursuant to this Agreement; and (ii) Purchaser's
operation of the Business and the Assets after the Closing Date.
(c) Survival of Representation and Warranties.
Notwithstanding the closing of the transactions described in and
contemplated by this Agreement, or any investigation made by or on
behalf of Seller, Shareholder or Purchaser, the representations
and warranties of Seller, Shareholder and Purchaser contained in
this Agreement or in any certificate, Exhibit, Schedule or other
document delivered pursuant to this Agreement, and the covenants
and agreements of Seller, Shareholder and Purchaser to indemnify
each other for a breach or violation of this Agreement, will
survive the date of this Agreement for three (3) years, except for
subsections 10(a)(vii) and 10(a)(x), which will survive for a
period commencing as of the date of this Agreement and terminating
ninety (90) days following the expiration of the applicable
statute of limitation period for which a Claim may be made.
(d) Claim Procedure.
(i) If any member of either the Seller Group or
the Purchaser Group, as the case may be (an "Indemnified Party"),
receives notice or has knowledge of any matter which it believes
another party to this Agreement is obligated to provide
indemnification pursuant to this Section 10 (the "Indemnitor"),
regardless of whether such Claim is a Claim which has originated
directly from the Indemnified Party and does not result from a
Claim made by any other person or entity (a "Direct Claim") or a
Claim that has originated from a third person or entity and not
directly from the Indemnified Party (a "Third Party Claim"), the
Indemnified Party will (A) within thirty (30) days of receipt of
such notice or otherwise first becoming knowledgeable thereof,
give the Indemnitor written notice of the assertion of such Claim;
and (B) promptly furnish the Indemnitor with all relevant
information and copies of all pertinent documents relating to the
Claim in the Indemnified Party's possession or control or within a
reasonable period of time after the Indemnified Party's receipt
thereof, as the case may be.
(ii) The failure of the Indemnified Party to give
notice of the Claim within said thirty (30) day period will not
affect the Indemnified Party's rights to indemnification under
this Agreement, except if, and only to the extent that, the
Indemnitor's defense of such Claim is actually prejudiced by
reason of such failure to give timely notice.
(iii) The Indemnitor will promptly undertake
and continuously defend such Claim with counsel of reputable
standing at the Indemnitor's sole cost and expense, and, in the
case of a Third Party Claim, the Indemnified Party shall, at the
sole cost and expense of the Indemnitor, fully cooperate with the
Indemnitor in the defense of such Claim. The Indemnitor may
effect settlement of a Claim on such terms and conditions as it
shall determine provided that at such time the Indemnitor
acknowledges and reaffirms to the Indemnified Party its financial
responsibility for the Claim and the settlement thereof.
(iv) The Indemnitor shall promptly and continuously
provide the Indemnified Party with all information regarding the
Claim and the defense thereof, and shall permit separate counsel
for the Indemnified Party to participate and monitor all
proceedings in connection with the Claim and the defense thereof,
at the Indemnified Party's sole cost and expense.
(v) If the Indemnified Party is required to pay
any amount with respect to a Third Party Claim to which the
Indemnified Party is entitled to indemnification under this
Agreement, such amount shall be promptly (A) paid by the
Indemnitor to the Indemnified Party upon the Indemnified Party
giving the Indemnitor a written request therefor; or (B) deducted
from the Earn Out Consideration in accordance with this Agreement.
(vi) Provided the Indemnitor promptly undertakes
and continuously defends a Third Party Claim in good faith and at
its sole cost and expense, neither the Indemnitor nor the
Indemnified Party shall admit any liability with respect to any
such Claim or settle, compromise or otherwise resolve such Claim
without the prior written consent of the other Party, which
written consent will not be unreasonably withheld; provided,
however, the Indemnitor may consent to a settlement of any Third
Party Claim, if, but only if, such settlement shall be effected
without admission of liability by the Indemnified Party and solely
by virtue of the Indemnitor's monetary payment whereby adequate
arrangements for such payment, to the Indemnified Party's
reasonable satisfaction, are made by the Indemnitor.
(vii) If the Indemnitor does not timely
undertake or continuously defend any Third Party Claim, then,
without releasing or affecting any of the Indemnitor's covenants
and obligations set forth in this Section 10 or waiving or
excusing the Indemnitor's default or breach of this Section 10,
the Indemnified Party will have the right, without prejudice to
the Indemnified Party's right to indemnification under this
Agreement, to employ separate counsel to defend, settle or
otherwise resolve such Third Party Claim in any manner and upon
any terms as the Indemnified Party deems appropriate or advisable,
as if such defense, settlement or other resolution had been
undertaken, effected or accomplished by the Indemnitor, and, to
the extent the Third Party Claim constitutes a Claim for which the
Indemnified Party is entitled to indemnification under this
Agreement, the Indemnitor shall immediately pay to the Indemnified
Party upon written request therefor all costs and expenses of such
defense, settlement or other resolution and the Indemnified
Party's separate counsel or, at the sole discretion of the
Indemnified Party and if applicable, all such costs and expenses
shall be deducted from the Earn Out Consideration in accordance
with this Agreement.
(viii) With respect to a Direct Claim, if the
Indemnitor and the Indemnified Party agree within fifteen (15)
days after notice of said Direct Claim is given to the Indemnitor,
as to the validity and amount of such Direct Claim, the full
amount of the Direct Claim shall be (A) paid by the Indemnitor to
the Indemnified Party upon the Indemnified Party giving the
Indemnitor a written request therefor; or (B) deducted from the
Earn Out Consideration in accordance with this Agreement, if
applicable; provided, however, if the Indemnitor does not agree to
the validity or amount of any such Direct Claim, the Indemnitor
and the Indemnified Party may litigate such matter.
11. Construction.
(a) Binding Effect. This Agreement will be binding
upon and inure to the benefit of Seller, Shareholder and Purchaser
and each of their respective legal representatives, successors and
permitted assigns, if any. This Agreement may not be assigned
without the prior written consent of the non-assigning party,
except that Purchaser may assign this Agreement to a party which,
directly or indirectly, is controlled by, controls or is under
common control, with Purchaser, without notice to or the consent
of Seller or Shareholder. This Agreement is for the benefit of
Seller, Shareholder and Purchaser only, and no other person or
entity will be deemed a third-party beneficiary of this Agreement.
(b) Communications. All notices and other
communications required or desired to be given pursuant to this
Agreement will be given in writing and will be deemed duly given
(i) upon personal delivery; (ii) on the third day after mailing if
sent by certified mail, postage prepaid, return receipt requested;
(iii) on the day after mailing if sent by a nationally recognized
overnight delivery service which maintains records of the time,
place and recipient of delivery; or (iv) upon receipt of a
confirmed transmission, if sent by facsimile transmission, and in
each case if addressed as follows:
If to Seller or the Shareholder, If to Purchaser, then to:
then to:
Michael P. Verona Herbert Imhoff, Jr., President
c/o Generation Technologies, Inc. c/o Triad Personnel Services, Inc.
665 Rodi Road One Tower Lane, Suite 2100
Pittsburgh, Pennsylvania 15235 Oakbrook Terrace, Illinois 60181
Fax: (412) 244-8480 Fax: (630) 954-6595
With a copy to (which copy alone With a copy to (which copy alone
shall not constitute notice under shall not constitute notice under
this Agreement): this Agreement):
David R. Jamieson A. Jay Goldstein, Esq.
Cohen & Gribsby FagelHaber LLC
11 Stanwix Street, 15th Floor 55 East Monroe Street,40th Floor
Pittsburgh,Pennsylvania 15222-1319 Chicago, Illinois 60603
Fax: (412) 394-4012 Fax: (312) 580-2201
or to such other person, entity, address or facsimile number
as a party may respectively designate in like manner, from time to
time.
(c) Amendments. No modifications or amendments of this
Agreement will be effective unless made in writing and signed by
Seller, Shareholder and Purchaser.
(d) Governing Law. This Agreement will be construed
and enforced in accordance with the laws of the State of Illinois
without regard to its choice of law rules. The parties agree that
jurisdiction and venue in any action brought by any party pursuant
to this Agreement shall non-exclusively lie in any state or
federal court located in Cook County, Illinois, irrespective of
the fact that such party is not a resident or qualified to do
business in such State or County. By execution and delivery of
this Agreement, each party irrevocably submits to the jurisdiction
of such courts for itself and in respect of its property with
respect to such action. The parties irrevocably agree that venue
would be proper in such court, and hereby waive any objection that
such court is improper or inconvenient forum for the resolution of
such action.
(e) Counterparts. This Agreement may be executed in
two or more counterparts, each of which will be deemed an
original, but all of which together will constitute one and the
same instrument.
(f) Entire Agreement. This Agreement, together with
those documents expressly referred to herein, the Schedules and
Exhibits attached, embody the entire agreement and understanding
among the parties to this Agreement and supersede any and all
prior and contemporaneous agreements and understandings between
Seller, Shareholder and Purchaser relating to the subject matter
of this Agreement, whether verbal or written.
(g) Waivers and Consents. The terms and provisions of
this Agreement may be waived, or consent for the departure
therefrom granted, only by the written agreement of the party
entitled to the benefits of such terms or provisions intended to
be waived. Each such waiver or consent will be effective only in
the specific instance and for the specific purpose for which it
was given, and will not constitute a continuing waiver or consent.
(h) Headings. The headings and captions of the various
Sections and Subsections of this Agreement are for convenience of
reference only and will in no way modify or affect the meaning or
construction of any of the terms or provisions hereof.
(i) Expenses. Each of the parties to this Agreement
will pay its or his, as the case may be, own respective fees and
expenses in connection with this Agreement and the transactions
described in and contemplated by this Agreement, including,
without limitation, the fees of any attorneys, accountants,
appraisers or others engaged by such party.
(j) Recitals. The recitals set forth at the beginning
of this Agreement are hereby incorporated into and made a part of
this Agreement as if fully set forth herein.
(k) Schedules and Exhibits. The Schedules and Exhibits
referred to in this Agreement are attached to, made a part of and
incorporated in this Agreement by this reference.
(l) Non-Disclosure. Seller, Shareholder and Purchaser
agree that any information or data involving the sale and purchase
of the Assets and the consummation of the other transactions
described in or contemplated by this Agreement, including, without
limitation, the Purchase Price and other terms and provisions set
forth herein, is of a confidential nature and not generally known
to the public. In order to preserve the confidentiality of all
such information and data and the goodwill associated with the
sale and purchase of the Assets, Seller, Shareholder and Purchaser
agree not to divulge, communicate or disclose any such information
or data, except as may be required by law, in connection with the
performance of their respective covenants and obligations set
forth in this Agreement or Purchaser's operation of the Business
on and after the Closing Date and except for their financial and
legal advisors.
(m) Press Releases. Neither Seller, Shareholder nor
Purchaser will issue any press release or otherwise make any
public statement with respect to the transactions described in and
contemplated by this Agreement without the prior written consent
of the other parties to this Agreement, which written consent
shall not be unreasonably withheld, except as may be required by
applicable Governmental Law.
(n) Plurality. Whenever required by context, the
singular will include the plural and vice versa.
IN WITNESS WHEREOF, Seller, Shareholder and Purchaser have
each duly executed this Agreement as of the date first set forth
above.
SELLER: PURCHASER:
GENERATION TECHNOLOGIES, INC. TRIAD PERSONNEL SERVICES, INC.
By: /s/Michael P. Verona By: /s/Herbert F. Imhoff, Jr.
Its: President Its: President
SHAREHOLDER:
/s/Michael P. Verona
Michael P. Verona
SCHEDULES
Schedule 1(a) Personal Property
Schedule 1(c) Permits
Schedule 1(f) Contracts
Schedule 1(g) Real Property Lease
Schedule 1(h) Personal Property Leases
Schedule 1(j) Assumed Plans
Schedule 1(k) Directory Listings
Schedule 1(l) Deposits
Schedule 1(m) Accounts Receivable and Trade Receivables
Schedule 2(e) Excluded Assets
Schedule 4(i) Allocation of Purchase Price
Schedule 5(a) Jurisdictions Qualified to Conduct Business
Schedule 5(e) Liens on Assets
Schedule 5(f) Seller's Permit Compliance
Schedule 5(g) Intellectual Property
Schedule 5(g)(vi) Royalty and License Fees Payable by
Seller
Schedule 5(h) Contracts and Leases
Schedule 5(h)(v) Purchase Order Deposits
Schedule 5(j) Policies of Insurance
Schedule 5(k) Labor Relations and Employee Agreements
Schedule 5(l) Benefit Plans
Schedule 5(n) Litigation
Schedule 5(o) Computer Systems
Schedule 5(p) Customers and Suppliers
Schedule 7(d)(iii) Consents and Approvals
Schedule 7(f) Accrued Vacation Pay for Employees Hired by
Purchaser
Schedule 8(a)(ii) Conduct of Business and Absence of
Certain Changes
EXHIBITS
Exhibit 7(a)(i) Michael P. Verona Employment Agreement
Exhibit 7(a)(ii) Stephanie D. Verona Employment Agreement
Exhibit 7(a)(iii) Paul Colaizzi Employment Agreement
Exhibit 7(a)(iv) Non-Disclosure and Non-Competition
Agreement
Exhibit 7(d) Assignment and Assumption Agreement
Doc ID: 194471-9