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EXHIBIT 99.1
AGREEMENT OF PURCHASE AND SALE OF ASSETS
AGREEMENT dated March 31, 2000, by and among Oceanic Exploration
Company, a Delaware corporation having its principal office at 5000 S. Quebec
Street, Denver, CO 80237 ("Purchaser"), Alliance Services Associates, Inc., a
Delaware corporation having its principal office at 10085 Carroll Canyon Road,
San Diego, CA 92131 ("Seller"), Alliance Staffing Associates, Inc., a Delaware
corporation having its principal office at 10085 Carroll Canyon Road, San Diego,
CA 92131 ("Staffing"), and the parties executing this Agreement as shareholders
of Staffing (hereinafter collectively called the "Shareholders").
W I T N E S S E T H :
In consideration of the mutual covenants and agreements hereinafter set
forth, the parties hereto hereby agree as follows:
1. Purchase and Sale of Business and Assets.
Subject to and upon the terms and conditions set forth in this
Agreement, Seller will sell, transfer, convey, assign and deliver to Purchaser,
and Purchaser will purchase, at the Closing hereunder, all of the business,
assets, properties, goodwill and rights of Seller as a going concern, of every
nature, kind and description, tangible and intangible, wheresoever located or
reflected on the books and records of Seller (hereinafter sometimes collectively
called "Seller's Assets"), including, without limitation, (i) the right to use
Seller's corporate name and all variations thereof, (ii) the assets referred to
in the form of Bill of Sale annexed hereto as Exhibit "1" and (iii) the assets
reflected on the Balance Sheet referred to in Section 5 hereof, with only such
dispositions of such assets reflected on the Balance Sheet as shall have
occurred in the ordinary course of Seller's business between the date hereof and
the Closing and which are permitted by the terms hereof, but excluding accounts
receivable arising or incurred for periods prior to the Closing (whether or not
reflected in the Balance Sheet) and accounts payable arising or incurred for
periods prior to the Closing, as well as the minute books, corporate seal and
stock records of Seller. Seller's Assets shall be conveyed free and clear of all
liabilities, obligations, liens and encumbrances excepting only those
liabilities and obligations which are expressly to be assumed by Purchaser
hereunder and those liens and encumbrances securing the same which are
specifically disclosed herein or expressly permitted by the terms hereof.
2. Purchase Price.
(a) In consideration of the sale, transfer, conveyance,
assignment and delivery of the Seller's Assets by Seller to Purchaser, and in
reliance upon the representations and warranties made herein by Seller and
Shareholders, Purchaser will, in full payment thereof, pay to Seller at the
Closing a total purchase price of $581,000.00 payable by wire transfer in
immediately available funds to a bank account of Seller as per written
instructions of Seller given to Purchaser at least seventy-two (72) hours prior
to the Closing.
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(b) In addition to the foregoing, Purchaser will execute and
deliver to Seller at the Closing a Liabilities Undertaking in the form of
Exhibit "2" annexed hereto.
(c) In the event that between the Balance Sheet Date (as
defined in Section 5(e) below) and the Closing Seller shall make any payment or
payments to any person, firm or entity in respect of any matter (including,
without limitation, any and all expenses in respect of this Agreement) other
than the reduction or elimination of liabilities or obligations which Purchaser
would otherwise have assumed under the aforesaid Liabilities Undertaking, then
Seller shall pay to Purchaser at the Closing, by cashier's or certified check,
an amount equal to the aggregate amount of all such payments.
3. Closing. The Closing shall take place at 10:00 a.m., local time, on
the 31st day of March, 2000 at the offices of LeBoeuf, Lamb, Greene & MacRae,
L.L.P., 633 Seventeenth Street, Suite 2000, Denver, Colorado 80202, or at such
other time and place as the parties may agree. The day on which the Closing
actually takes place is herein referred to as the Closing Date.
4. Seller's Obligations at Closing; Further Assurances; Post-Closing
Adjustment.
(a) At the Closing, Seller, Staffing, and each of the
Shareholders will deliver to Purchaser:
(i) a cashier's or certified check drawn by Seller to
the order of Purchaser in the aggregate amount of all of Seller's cash
on hand and in banks less an amount equal to all uncleared checks which
have been drawn by Seller prior to the Closing in payment of
liabilities of Seller which are assumed by Purchaser hereunder (and
Seller agrees to retain in such banks an amount equal to such uncleared
checks until such checks are cleared) or, at Purchaser's option, an
assignment of all of Seller's bank accounts in form and substance
satisfactory to Purchaser;
(ii) a Bill of Sale in the form of Exhibit "1"
annexed hereto, duly executed by Seller;
(iii) such other good and sufficient instruments of
conveyance, assignment and transfer, in form and substance satisfactory
to Purchaser's counsel, as shall be effective to vest in Purchaser good
and marketable title to Seller's Assets;
(iv) all contracts, files and other data and
documents pertaining to Seller's Assets; and
(v) all other documents required to be delivered to
Purchaser under the provisions of this Agreement.
(b) At any time and from time to time after the Closing, at
Purchaser's request and without further consideration, Seller, Staffing, and
Shareholders will execute and deliver such other instruments of sale, transfer,
conveyance, assignment and confirmation and take such action as Purchaser may
reasonably deem necessary or desirable in order to more effectively transfer,
convey and assign to Purchaser, and to confirm Purchaser's title to, all of
Seller's Assets, to put Purchaser in actual possession and operating control
thereof and to assist Purchaser in exercising all rights with respect thereto.
After the Closing, at reasonable times and on reasonable notice, Seller
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shall have access to the books and records pertaining to its operations prior to
the Closing, and Purchaser shall retain such books and records for a period of
three (3) years after the Closing.
(c) Seller and Staffing agree that Purchaser shall have the
right and authority to collect for its own account all receivables and other
items which shall be transferred to Purchaser as provided herein and to endorse
with the name of Seller or Staffing any checks received on account of any such
receivables or other items. Seller agrees that it will promptly transfer and
deliver to Purchaser any cash or other property which Seller may receive in
respect of such receivables or other items.
(d) On or before the 45th business day following the Closing
Date, the Purchaser and Seller shall determine the pro rata allocation of
accounts which are related to the Sellers Assets and which they have agreed
hereunder to apportion as of the Closing (including but not limited to accounts
regarding utilities, telephones, insurance costs, etc.) and by such day
Purchaser and Seller shall pay each other any amounts owed in connection with
such determination.
5. Representations and Warranties by Seller and Staffing. Seller and
Staffing jointly and severally represent and warrant to Purchaser as follows:
(a) Organization; Standing and Qualification. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware; it has all requisite corporate power and authority and
is entitled to carry on its business as now being conducted and to own, lease or
operate its properties as and in the places where such business is now conducted
and such properties are now owned, leased or operated; and it is duly qualified,
licensed or domesticated and in good standing as a foreign corporation
authorized to do business in the state of California, which is the only
jurisdiction where the nature of the activities conducted by it or the character
of the properties owned, leased or operated by it require such qualification,
licensing or domestication. Seller has delivered to Purchaser true and complete
copies of Seller's certificate of incorporation and all amendments thereto,
certified by the Secretary of State of Delaware, and the by-laws of Seller as
presently in effect, certified as true and correct by Seller's Secretary.
(b) Subsidiaries. Seller has no subsidiaries. Seller has no
interest, direct or indirect, and has no commitment to purchase any interest,
direct or indirect, in any other corporation or in any partnership, joint
venture or other business enterprise or entity. The business carried on by
Seller has not been conducted through any other direct or indirect subsidiary or
affiliate of Staffing or any Shareholder.
(c) Transactions with Certain Persons. Except as set forth on
Schedule "5(c)," during the past three years Seller has not purchased or leased
from others or otherwise acquired any property or obtained any services from, or
sold, leased to others or otherwise disposed of any property or furnished any
services to (except with respect to remuneration for services rendered as a
director, officer or employee of Seller), in the ordinary course of business or
otherwise, (i) any shareholder of Seller or (ii) any person, firm or corporation
which, directly or indirectly, alone or together with others, controls, is
controlled by or is under common control with Seller or any shareholder of
Seller. Except as set forth on Schedule "5(c)," Seller does not owe any amount
to, or have any contract with or commitment to, any of its shareholders,
directors, officers, employees or
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consultants (other than compensation for current services not yet due and
payable and reimbursement of expenses arising in the ordinary course of
business), and none of such persons owes any amount to Seller. Except as set
forth on Schedule "5(c)," no part of the property or assets of Staffing or any
Shareholder or any direct or indirect subsidiary or affiliate of any Shareholder
has, during the past three years, been used by Seller.
(d) Execution; Delivery and Performance of Agreement;
Authority. Neither the execution, delivery nor performance of this Agreement by
Seller, Staffing, or any Shareholder will, with or without the giving of notice
or the passage of time, or both, conflict with, result in a default, right to
accelerate or loss of rights under, or result in, cause or create any liability,
reassessment or revaluation of assets, lien, charge or encumbrance pursuant to,
any provision of Seller's certificate of incorporation or by-laws or any
franchise, mortgage, deed of trust, lease, license, agreement, understanding,
law, ordinance, rule, regulation, order, judgment, decree or other legal or
contractual requirement to which Seller, Staffing, or any Shareholder is a party
or by which any of them or the Seller's Assets may be bound or affected. Seller,
Staffing, and each Shareholder have the full power and authority to enter into
this Agreement and to carry out the transactions contemplated hereby, all
proceedings required to be taken by them or their stockholders to authorize the
execution, delivery and performance of this Agreement and the agreements
relating hereto have been properly taken and this Agreement constitutes a valid
and binding obligation of Seller and each Shareholder, enforceable against them
in accordance with its terms.
(e) Financial Statements. Seller has delivered to Purchaser
copies (initialed by Seller's Secretary and identified with a reference to this
Section of this Agreement) of the following financial statements (hereinafter
collectively called the "Financial Statements"), all of which are complete and
correct, have been prepared in accordance with generally accepted accounting
principles consistently applied and maintained throughout the periods indicated
and fairly present the financial condition of Seller as at their respective
dates and the results of its operations for the periods covered thereby:
(i) unaudited balance sheets of Seller as of December
31, 1999, and Seller's unaudited statement earnings and source and
application of funds for each of the three fiscal years then ended; and
(ii) an unaudited balance sheet of Seller (the
"Balance Sheet") as January 31, 2000 (the "Balance Sheet Date").
Such statements of earnings do not contain any items of special or nonrecurring
income or any other income not earned in the ordinary course of business except
as expressly specified therein, and such interim financial statements include
all adjustments, which consist only of normal recurring accruals, necessary for
such fair presentation.
(f) Absence of Undisclosed Liabilities. Except as and to the
extent reflected or reserved against on the face of the Balance Sheet (excluding
the notes thereto) or set forth on Schedule "5(f)" annexed hereto, as of the
Balance Sheet Date Seller had no debts, liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of any nature whatsoever, including,
without limitation, any foreign or domestic tax liabilities or deferred tax
liabilities incurred in respect
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of or measured by Seller's income, or its period prior to the close of business
on the Balance Sheet Date or any other debts, liabilities or obligations
relating to or arising out of any act, omission, transaction, circumstance, sale
of goods or services, state of facts or other condition which occurred or
existed on or before the Balance Sheet Date, whether or not then known, due or
payable. None of the Seller's employees is now or, will by the passage of time
hereafter become, entitled to receive any vacation time, vacation pay or
severance pay attributable to services rendered prior to the Balance Sheet Date
except as disclosed on the face of the Balance Sheet.
(g) Taxes. All taxes, including, without limitation, income,
property, sales, use, franchise, added value, employees' income withholding and
social security taxes, imposed by the United States or by any foreign country or
by any state, municipality, subdivision or instrumentality of the United States
or of any foreign country, or by any other taxing authority, which are due or
payable by Seller, and all interest and penalties thereon, whether disputed or
not, have been paid in full, all tax returns required to be filed in connection
therewith have been accurately prepared and duly and timely filed and all
deposits required by law to be made by Seller with respect to employees'
withholding and other taxes have been duly made. Seller has not been delinquent
in the payment of any foreign or domestic tax, assessment or governmental charge
or deposit and has no tax deficiency or claim outstanding, proposed or assessed
against it, and there is no basis for any such deficiency or claim. Seller's
federal income tax returns have been audited and accepted by the Internal
Revenue Service for all of its fiscal years through the year ended December 31,
1998, there is not now in force any extension of time with respect to the date
on which any tax return was or is due to be filed by or with respect to Seller,
or any waiver or agreement by it for the extension of time for the assessment of
any tax, and Seller is not a "consenting corporation" within the meaning of the
Internal Revenue Code of 1986, as Amended (the "Code").
(h) Absence of Changes or Events. Except as set forth in
Schedule "5(h)" annexed hereto, since the Balance Sheet Date Seller has
conducted its business only in the ordinary course consistent with its prior
practices.
(i) Litigation. Except as set forth in Schedule "5(i)" annexed
hereto, there is no claim, legal action, suit, arbitration, governmental
investigation or other legal or administrative proceeding, nor any order, decree
or judgment in progress, pending or in effect, or to the knowledge of Seller,
Staffing, or Shareholder threatened, against or relating to Seller, its
officers, directors or employees, its properties, assets or business or the
transactions contemplated by this Agreement, and neither Seller, Staffing, nor
Shareholder knows or has reason to be aware of any basis for the same.
(j) Compliance with Laws and Other Instruments. Seller has
complied with all existing laws, rules, regulations, ordinances, orders,
judgments and decrees now applicable to its business, properties or operations
as presently conducted. Neither the ownership nor use of Seller's properties nor
the conduct of its business conflicts with the rights of any other person, firm
or corporation or violates, or with or without the giving of notice or the
passage of time, or both, will violate, conflict with or result in a default,
right to accelerate or loss of rights under, any terms or provisions of its
certificate of incorporation or by-laws as presently in effect, or any lien,
encumbrance, mortgage, dead of trust, lease, license, agreement, understanding,
law, ordinance, rule or regulation, or any order, judgment or decree to which
Seller is a party or by which it may be bound or affected. Neither Seller,
Staffing, nor either Shareholder is aware of any proposed laws, rules,
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regulations, ordinances, orders, judgments, decrees, governmental takings,
condemnations or other proceedings which would be applicable to its business,
operations or properties and which might adversely affect its properties,
assets, liabilities, operations or prospects, either before or after the
Closing.
(k) Title to Properties. Seller has good, marketable and
insurable title to all the properties and assets it owns or uses in its business
or purports to own, including, without limitation, those reflected in its books
and records and in the Balance Sheet (except inventory sold after the Balance
Sheet Date in the ordinary course of business). None of such properties and
assets are subject to any mortgage, pledge, lien, charge, security interest,
encumbrance, restriction, lease, license, easement, liability or adverse claim
of any nature whatsoever, direct or indirect, whether accrued, absolute,
contingent or otherwise. All of the properties and assets owned, leased or used
by Seller are in good operating condition and repair, are suitable for the
purposes used, are adequate and sufficient for all current operations of Seller
and are directly related to the business of Seller.
(l) Schedules. Annexed hereto as Schedule "5(l)" is a separate
schedule containing an accurate and complete list of:
(i) All real property owned by Seller or in which
Seller has a leasehold or other interest or which is used by Seller in
connection with the operation of its business.
(ii) All of Seller's receivables (which shall include
accounts receivable, loans receivable and any advances), together with
detailed information as to each such listed receivable which has been
outstanding for more than thirty (30) days.
(iii) All equipment, motor vehicles, and other
tangible personal property (other than inventory and supplies), owned,
leased or used by Seller.
(iv) All patents, patent applications, licenses,
trademarks, trademark registrations, service marks, service names,
trade names, copyrights and copyright registrations, and applications
for any of the foregoing, wholly or partially owned or held by Seller
or used in the operation of Seller's business.
(v) All insurance policies insuring Seller or its
properties or interests therein, specifying with respect to each such
policy the name of the insurer, the risk insured against, the limits of
coverage, the deductible amount (if any), the premium rate and the date
through which coverage will continue by virtue of premiums already
paid.
(vi) All agreements providing for the services of an
independent contractor to which Seller is a party or by which it is
bound.
(vii) All contracts relating to patents, trademarks,
trade names, copyrights, inventions, processes, knowhow, formulae or
trade secrets to which Seller is a party or by which it is bound.
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(viii) All loan agreements, indentures, mortgages,
pledges, conditional sale or title retention agreements, security
agreements, equipment obligations, guaranties, leases or lease purchase
agreements to which Seller is a party or by which it is bound.
(ix) All contracts, agreements, commitments or other
understandings or arrangements to which Seller is a party or by which
it or any of its property is bound or affected.
(x) Each collective bargaining agreement, employment
and consulting agreements, and each other agreement, arrangement, or
commitment, including, without limitation, holiday, vacation, Christmas
and other payroll practice related to the terms and conditions of
employment by Seller, to which Seller is a party or is bound or which
relate to the operation of Seller's business and each "employee benefit
plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), bonus, deferred
compensation, equity-based, severance or other plan or written
agreement relating to employment, compensation or fringe benefits for
employees of Seller and Staffing, maintained or contributed to by
Seller or Staffing at any time during the seven (7)-calendar year
period immediately preceding the date hereof and/or with respect to
which Seller or Staffing could incur or could have incurred any direct
or indirect, fixed or contingent liability (collectively, the "Plans").
(xi) The names and current annual salary rates of all
permanent employees of Seller; and
(xii) The names of all of Seller's directors and
officers; the name of each bank in which Seller has an account or safe
deposit box and the names of all persons authorized to draw thereon or
have access thereto; and the names of all persons, if any, holding tax
or other powers of attorney from Seller and a summary of the terms
thereof.
All of the contracts, agreements, leases, licenses and commitments required to
be listed on Schedule "5(l)", (other than those which have been fully performed)
are valid and binding, enforceable in accordance with their respective terms, in
full force and effect and, except as otherwise specified in Schedule "5(l),"
validly assignable to Purchaser without the consent of any other party so that,
after the assignment thereof to Purchaser pursuant hereto, Purchaser will be
entitled to the full benefits thereof. Except as disclosed in Schedule "5(l)",
none of the payments required to be made under any such contract, agreement,
lease, license or commitment has been prepaid more than 30 days prior to the due
date of such payment thereunder, and there is not thereunder any existing
default, or event which, after notice or lapse of time, or both, would
constitute a default or a basis for force majeure or other claim of excusable
delay or non-performance thereunder or result in a right to accelerate or loss
of rights, and none of such contracts, agreements, leases, licenses or
commitments is, either when considered singly or in the aggregate with others,
unduly burdensome, onerous or materially adverse to Seller's business,
properties, assets, earnings or prospects or likely, either before or after the
Closing, to result in any material loss or liability. None of Seller's existing
or completed contracts is subject to renegotiation with any governmental body.
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(m) Trade Names, etc. Except as set forth in Schedule "5(m)"
annexed hereto, Seller owns or possesses the royalty free licenses or other
rights to use all copyrights, trademarks, service marks, service names, trade
names, patents, trade secrets and other proprietary rights necessary to conduct
its business as it is presently operated.
(n) No Guaranties. Except as set forth in Schedule "5(n)"
annexed hereto, one of the obligations or liabilities of Seller is guaranteed
by, or subject to a similar contingent liability of, any other person, firm or
corporation, nor has Seller guaranteed, or otherwise become contingently liable
for, the obligations or liabilities of any other person, firm or corporation.
(o) Supplies. Seller's assets include a sufficient but not an
excessive quantity of each type of such supplies in order to meet the normal
requirements of Seller's business and operations.
(p) Receivables. All receivables of Seller (including accounts
receivable, loans receivable and advances) which are reflected in the Balance
Sheet, and all such receivables which will have arisen since the date of the
Balance Sheet, shall have arisen only from bona fide transactions in the
ordinary course of Seller's business.
(q) Records. The books of account, minute books, stock record
books and other records of Seller are complete and correct in all material
respects and have been maintained in accordance with sound business practices,
and there have been no transactions involving the business of Seller which
properly should have been set forth therein and which have not been accurately
so set forth.
(r) Collective Bargaining; Employment Compliance. Seller's
employees are not represented by any unions. During the past three years, Seller
has not been the subject of a union organizing drive. Seller has complied with
all laws, regulations and provisions relating to employment, safety, wages,
hours, benefits, collective bargaining and all applicable occupational safety
and health acts, laws and regulations. Seller has not discriminated on the basis
of race, color, religion, sex, national origin, age, disability, veteran status
or on the basis of any other legally protected characteristic in its employment
terms, conditions or practices. No action, suit, complaint, charge, arbitration,
employee proceeding or investigation by or before any court, governmental
entity, administrative agency or commission, brought by or on behalf of any
employee, prospective employee, former employee, retired employee, labor
organization or other representative of Seller's employees is pending or, to the
knowledge of Seller, is threatened against Seller except as disclosed in
Schedule 5(r) annexed hereto. Seller is not a party to or otherwise bound by any
consent decree with or citation by any government entity relating to Seller's
employees or employment practices. Seller is in compliance with its obligations
with respect to Seller's employees pursuant to the Worker Adjustment and
Retraining Notification Act of 1988, and all other employment, notification and
bargaining obligations arising under any agreement, statute or otherwise.
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(s) Employee Benefit Plans.
(i) Each Plan (as defined in Section 5(l)(x) above)
which is intended to be "qualified" within the meaning of Section 401(a) of the
Code, has received a favorable determination letter from the IRS and, to the
knowledge of Seller, Staffing, and Shareholders, no event has occurred and no
condition exists which could reasonably be expected to result in the revocation
of any such determination.
No event which constitutes a "reportable
event" (as defined in Section 4043(c) of ERISA) for which the thirty (30) day
notice requirement has not been waived by the Pension Benefit Guaranty
Corporation (the "PBGC") has occurred with respect to any Plan.
No Plan subject to Title IV of ERISA has
been terminated or is or has been the subject of termination proceedings
pursuant to Title IV of ERISA.
Full payment has been made of all amounts
which Seller or Staffing was required under the terms of the Plans to have paid
as contributions to such Plans on or prior to the date hereof (excluding any
amounts not yet due) and no Plan which is subject to Part 3 of Subtitle B of
Title I of ERISA has incurred any "accumulated funding deficiency" (within the
meaning of Section 302 of ERISA or Section 412 of the Code), whether or not
waived.
(ii) Neither Seller nor, to the knowledge of Seller,
Staffing, or Shareholders, any other "disqualified person" or "party in
interest" (as defined in Section 4975(e)(2) of the Code and Section 3(14) of
ERISA, respectively), has engaged in any transaction in connection with any Plan
that could reasonably be expected to result in the imposition of a material
penalty pursuant to Section 502(i) of ERISA, damages pursuant to Section 409 of
ERISA or a tax pursuant to Section 4975(a) of the Code.
Neither Seller nor Staffing has not
maintained any Plan (other than a Plan which is intended to be "qualified"
within the meaning of Section 401(a) of the Code) which provides benefits with
respect to Seller's employees or former employees following their termination of
service with Seller (other than as required pursuant to Section 601 of ERISA).
Each Plan subject to the requirements of
Section 601 of ERISA has been operated in substantial compliance therewith.
(iii) No individual shall accrue or receive
additional benefits, service or accelerated rights to payment of benefits as a
direct result of the transactions contemplated by this Agreement.
No material liability, claim, investigation,
audit, action or litigation has been incurred, made, commenced or, to the
knowledge of Seller, Staffing or Shareholders, threatened, by or against any
Plan or Seller with respect to any Plan (other than for benefits payable in the
ordinary course and PBGC insurance premiums).
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No Plan or related trust owns any securities
in violation of Section 407 of ERISA.
With respect to each Plan which is subject
to Title IV of ERISA, as of the most recent actuarial valuation report prepared
for each such Plan, the aggregate present value of the accrued liabilities
thereof did not exceed the aggregate fair market value of the assets allocable
thereto.
(iv) No Plan is a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) and neither Seller or Staffing have been obligated
to contribute to any multiemployer plan.
No material liability has been, or could
reasonably be expected to be, incurred under Title IV of ERISA (other than for
benefits payable in the ordinary course or PBGC insurance premiums) or Section
412(f) or (n) of the Code by any entity required to be aggregated with Seller,
pursuant to Section 4001(b) of ERISA and/or Section 414(b) or (c) of the Code
(and the regulations promulgated thereunder) with respect to any "employee
pension benefit plan" (as defined in Section 3(2) of ERISA).
(v) With respect to each Plan, Seller has delivered
or caused to be delivered to Purchaser and its counsel true and complete copies
of the following documents, as applicable, to each respective Plan:
(A) all Plan documents, with all amendments
thereto;
(B) the current summary plan description
with any applicable summaries of material modifications thereto as well as any
other material employee communications;
(C) all current trust agreements and/or
other documents establishing Plan funding arrangements;
(D) the most recent IRS determination letter
and, if a request for such a letter has been filed and is currently pending with
the IRS, a copy of such filing;
(E) the three most recently prepared IRS
Forms 5500;
(F) the three most recently prepared
actuarial valuation reports;
(G) the most recently prepared financial
statements; and
(H) all material related contracts,
including without limitation, insurance contracts, service provider agreements
and investment management and investment advisory agreements.
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(t) Absence of Certain Business Practices. Neither Seller nor
any officer, employee or agent of Seller, nor any other person acting on its
behalf, has, within the past 5 (five) years given any gift or similar benefit to
any customer, supplier, governmental employee or other person who is in a
position to help or hinder the business of Seller (or assist Seller in
connection with any actual or proposed transaction) which (i) might subject
Seller to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii), if not given in the past, might have had an
adverse effect on the assets, business or operations of Seller as reflected in
the Financial Statements or (iii), if not continued in the future, might
adversely affect Seller's assets, business, operations or prospects or which
might subject Seller to suit or penalty in any private or governmental
litigation or proceeding.
(u) Disclosure. No representation or warranty by Seller,
Staffing, or any Shareholder contained in this Agreement, nor any statement or
certificate furnished or to be furnished by Seller, Staffing, or any Shareholder
to Purchaser or its representatives in connection herewith or pursuant hereto,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact required to make the statements herein or
therein contained not misleading or necessary in order to provide a prospective
purchaser of the business of the Seller with adequate information as to Seller
and its condition (financial and otherwise), properties, assets, liabilities,
business and prospects, and Seller, Staffing, and Shareholders have disclosed to
Purchaser in writing all material adverse facts known to them relating to the
same.
6. Representations and Warranties by Purchaser. Purchaser represents
and warrants to Seller, Staffing, and Shareholders as follows:
(a) Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware
and has full corporate power and authority to enter into this Agreement and the
related agreements referred to herein and to carry out the transactions
contemplated by this Agreement and to carry on its business as now being
conducted and to own, lease or operate its properties.
(b) Authorization and Approval of Agreement. All proceedings
or corporate action required to be taken by Purchaser relating to the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby shall have been taken at or prior to the Closing.
(c) Execution, Delivery and Performance of Agreement. Neither
the execution, delivery nor performance of this Agreement by Purchaser will,
with or without the giving of notice or the passage of time, or both, conflict
with, result in a default, right to accelerate or loss of rights under, or
result in the creation of any lien, charge or encumbrance pursuant to, any
provision of Purchaser's certificate of incorporation or by-laws or any
franchise, mortgage, deed of trust, lease, license, agreement, understanding,
law, ordinance, rule or regulation or any order, judgment or decree to which
Purchaser is a party or by which it may be bound or affected. Purchaser has full
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby, all proceedings required to be taken by
Purchaser to authorize the execution, delivery and
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performance of this Agreement and the agreements relating hereto, have been
properly taken and this Agreement constitutes a valid and binding obligation of
Purchaser.
(d) Litigation. There is no legal action, suit, arbitration,
governmental investigation or other legal or administrative proceeding, nor any
order, decree or judgment in progress, pending or in effect, or to the knowledge
of Purchaser threatened, against or relating to Purchaser in connection with or
relating to the transactions contemplated by this Agreement, and Purchaser does
not know or have any reason to be aware of any basis for the same.
7. Conduct of Business Prior to Closing.
(a) Prior to the Closing, Seller shall conduct its business
and affairs only in the ordinary course and consistent with its prior practice
and shall maintain, keep and preserve its assets and properties in good
condition and repair and maintain insurance thereon in accordance with present
practices, and Seller, Staffing, and Shareholder will use their best efforts (i)
to preserve the business and organization of Seller intact, (ii) to keep
available to Purchaser the services of Seller's present officers, employees,
agents and independent contractors, (iii) to preserve for the benefit of
Purchaser the goodwill of Seller's suppliers, customers, landlords and others
having business relations with it, (iv) obtain for Seller working capital
sufficient to maintain necessary cash flow consistent with past and present
business volumes and business practices, and (v) to cooperate with Purchaser and
use reasonable efforts to assist Purchaser in obtaining the consent of any
landlord or other party to any lease or contract with Seller where the consent
of such landlord or other party may be required by reason of the transactions
contemplated hereby.
(b) Seller shall give Purchaser prompt written notice of any
change in any of the information contained in the representations and warranties
made in Section 5 or elsewhere in this Agreement or the Schedules referred to
herein which occurs prior to the Closing.
8. Access to Information and Documents. Upon reasonable notice and
during regular business hours, Seller will give Purchaser and Purchaser's
attorneys, accountants and other representatives full access to Seller's
personnel and all properties, documents, contracts, books and records of Seller
and will furnish Purchaser with copies of such documents and with such
information with respect to the affairs of Seller as Purchaser may from time to
time request, and Purchaser will not improperly disclose the same prior to the
Closing.
9. Employment Contract. At the Closing, Purchaser will execute and
deliver, and Seller will cause Audrey B. Voyles, President/CEO and Director and
Lorraine B. Kulas, Director, Human Resources, to execute and deliver, employment
contracts satisfactory to the parties.
10. Directors and Shareholders Authorization; Change of Corporate Name.
(a) At or prior to the Closing, Seller will deliver to
Purchaser a copy of the resolutions of the Board of Directors of Seller and
Staffing, and the resolutions or consents of the Shareholders, together with any
and all required resolutions or consents of the shareholders thereof, approving
the execution and delivery of this Agreement and the consummation of all of the
transactions contemplated hereby, duly certified by an officer of Seller.
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(b) Prior to or concurrent with the Closing, Seller, Staffing,
and Shareholders will change Seller's corporate name to Alliance Staffing
Associates, Inc., and all rights to such name shall be assigned to Purchaser at
the Closing as part of Seller's Assets. Staffing shall, prior to the Closing,
change its name to a name not resembling Seller's and, following the Closing,
Seller shall change its name to a name not resembling that assigned to
Purchaser.
11. Bulk Sales Compliance. Seller will give notice, in compliance with
the applicable laws of the State of California, of the bulk transfer
contemplated by this Agreement. In addition, Seller will notify the taxing
authority of the State of California responsible for the collection of sales and
use taxes in accordance with the applicable tax laws. Seller will furnish
Purchaser with evidence, reasonably satisfactory to Purchaser, of Seller's
compliance with such bulk transfer and tax laws, including without limitation,
copies of all required notices, at least fifteen (15) days prior to the Closing
Date. In the event that such laws require Purchaser to deliver one or more
notices, Seller shall timely perform all of its obligations thereunder,
including (if applicable), without limitation, delivery to Purchaser of a
certified list of all of Seller's creditors, including amounts owned to each
creditor; and a list of all of Seller's state and federal tax identification
numbers.
12. Non-Competition Agreement. Seller, Staffing, and Shareholders shall
execute and deliver to Purchaser at or prior to the Closing a Non-Competition
and Continuity of Business Dealings Undertaking in the form of Exhibit "3"
annexed hereto.
13. Conditions Precedent to Purchaser's Obligations. All obligations of
Purchaser hereunder are subject, at the option of Purchaser, to the fulfillment
of each of the following conditions at or prior to the Closing, and Seller,
Staffing, and Shareholders shall exert their best efforts to cause each such
condition to be so fulfilled:
(a) All representations and warranties of Seller, Staffing,
and Shareholders contained herein or in any document delivered pursuant hereto
shall be true and correct in all material respects when made and shall be deemed
to have been made again at and as of the date of the Closing.
(b) All covenants, agreements and obligations required by the
terms of this Agreement to be performed by Seller or by any Shareholder at or
before the Closing shall have been duly and properly performed in all material
respects.
(c) Since the Balance Sheet Date there shall not have occurred
any material adverse change in the condition (financial or otherwise), business,
properties, assets or prospects of Seller.
(d) There shall be delivered to Purchaser a certificate
executed by Presidents and Secretaries of Seller and Staffing, dated the date of
the Closing, certifying that the conditions set forth in paragraphs (a), (b),
and (c) of this Section have been fulfilled.
(e) All documents required to be delivered to Purchaser at or
prior to the Closing shall have been so delivered.
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(f) Seller shall have obtained written consents to the
transfer or assignment to Purchaser of all material contracts of Seller where
the consent of any other party to any such contract is required for such
assignment or transfer.
14. Conditions Precedent to Seller's and Shareholders' Obligations. All
obligations of Seller, Staffing, and Shareholders at the Closing are subject, at
the option of Seller, to the fulfillment of each of the following conditions at
or prior to the Closing, and Purchaser shall exert its best efforts to cause
each such condition to be so fulfilled:
(a) All representations and warranties of Purchaser contained
herein or in any document delivered pursuant hereto shall be true and correct in
all material respects when made and as of the Closing.
(b) All obligations required by the terms of this Agreement to
be performed by Purchaser at or before the Closing shall have been duly and
properly performed in all material respects.
15. Indemnification.
(a) Seller, Staffing, and each of the Shareholders, jointly
and severally, hereby indemnify and agree to hold Purchaser harmless from,
against and in respect of (and shall on demand reimburse Purchaser for):
(i) any and all losses, liabilities or damages
suffered or incurred by Purchaser (A) by reason of any untrue
representation, breach of warranty or nonfulfillment of any covenant by
Seller, Staffing, or any Shareholder contained herein or in any
certificate, document or instrument delivered to Purchaser pursuant
hereto or in connection herewith or (B) which would not have been
suffered or incurred if such representation were true and not breached
or if such covenant were fully performed;
(ii) any and all losses, liabilities or damages
suffered or incurred by Purchaser in respect of or in connection with
any liabilities of Seller not expressly assumed by Purchaser pursuant
to the terms of the Liabilities Undertaking (including but not limited
to those arising from or connected with Civil Action 97-698-J(CGA),
Southern District of California, United States of America, ex rel. Sam
Kholi vs. General Atomics and Alliance Staffing Associates);
(iii) any and all losses, damages, debts, liabilities
or obligations of Seller, direct or indirect, fixed, contingent or
otherwise, which exist at or as of the date of the Closing hereunder or
which arise after the Closing but which are based upon or arise from
any act, omission, transaction, circumstance, production or sale of
goods or services, state of facts or other condition which occurred or
existed on or before the date of the Closing, whether or not then
known, due or payable, except to the extent expressly assumed by
Purchaser pursuant to the terms of the Liabilities Undertaking;
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(iv) the amount of any and all accounts payable,
incurred or arising from periods prior to the Closing;
(v) any and all losses, liabilities or damages
suffered or incurred by Purchaser by reason of or in connection with
any claim for a finder's fee or brokerage or other commission arising
by reason of any services alleged to have been rendered to or at the
instance of Seller or any Shareholder with respect to this Agreement or
any of the transactions contemplated hereby;
(vi) any and all losses, liabilities or damages
suffered or incurred by Purchaser relating to employee benefits
attributable to services performed prior to the Closing; and
(vii) any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses, including,
without limitation, legal fees and expenses, incident to any of the
foregoing or incurred in investigating or attempting to avoid the same
or to oppose the imposition thereof, or in enforcing this indemnity.
(b) Purchaser hereby agrees to indemnify and hold Seller,
Staffing, and each Shareholder harmless from, against and in respect of (and
shall on demand reimburse them for):
(i) Any and all losses, liabilities or damages
resulting from any untrue representation, breach of warranty or
non-fulfillment of any covenant or agreement by Purchaser contained
herein or in any certificate, document or instrument delivered to
Seller hereunder;
(ii) Any and all liabilities or obligations of Seller
specifically assumed by Purchaser pursuant to this Agreement; and
(iii) Any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses, including,
without limitation, legal fees and expenses, incident to any of the
foregoing or incurred in investigating or attempting to avoid the same
or to oppose the imposition thereof, or in enforcing this indemnity.
16. Cooperation Regarding Accounts Receivable and Relationships. Each
party hereto will cooperate with the others with regard to the collection of
accounts receivable. Purchaser shall act as receiving agent on behalf of Seller
and shall pay to Seller the amount of any payments made to Purchaser for
accounts receivable arising for periods prior to the Closing; provided, however,
that Purchaser shall have at no time any affirmative duty to collect any such
amounts; and further provided, that none of Seller, Staffing, or Shareholders
shall attempt to collect any such amounts using methods in any manner which
could be detrimental to the ongoing business relationships of Purchaser with
regard to the Seller's Assets. During the ninety (90) day period following the
Closing, Purchaser shall collect and forward Seller's accounts receivable as set
forth above at no charge to Seller. After such period, Purchaser may agree to
perform such collections for Seller upon terms agreed between Purchaser and
Seller.
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17. Nature and Survival of Representations and Warranties. All
statements, representations, warranties, indemnities, covenants and agreements
made by each of the parties hereto shall survive the Closing.
18. Notices. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
mailed by first class registered mail, return receipt requested, addressed to
the parties at the addresses set forth above (or at such other address as any
party may specify by notice to all other parties given as aforesaid).
19. Legal and Other Costs.
(a) In the event that any party (the "Defaulting Party")
defaults in his or its obligations under this Agreement and, as a result
thereof, the other party (the "Non-Defaulting Party") seeks to legally enforce
his or its rights hereunder against the Defaulting Party, then, in addition to
all damages and other remedies to which the Non-Defaulting Party is entitled by
reason of such default, the Defaulting Party shall promptly pay to the
Non-Defaulting Party an amount equal to all costs and expenses (including
reasonable attorneys' fees) paid or incurred by the Non-Defaulting Party in
connection with such enforcement.
(b) In the event that the Non-Defaulting Party is entitled to
receive an amount of money by reason of the Defaulting Party's default
hereunder, then, in addition to such amount of money, the Defaulting Party shall
promptly pay to the Non-Defaulting Party a sum equal to interest on such amount
of money accruing at the rate of 1% per month (but if such rate is not permitted
under the laws of the State of Colorado, then at the highest rate which is
permitted to be paid under the laws of the State of Colorado) during the period
between the date such payment should have been made hereunder and the date of
the actual payment thereof.
20. Miscellaneous.
(a) This writing constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and may not be
modified, amended or terminated except by a written agreement, specifically
referring to this Agreement signed by all of the parties hereto.
(b) No waiver of any breach or default hereunder shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
of the same or similar nature.
(c) This Agreement shall be binding upon and inure to the
benefit of each corporate party hereto, its successors and assigns, and each
individual party hereto and his heirs, personal representatives, successors and
assigns.
(d) The paragraph headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of said paragraphs.
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(e) Each party hereto shall cooperate, shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out the provisions and purposes
of this Agreement.
(f) Seller will pay all sales, transfer and documentary taxes,
if any, payable in connection with the sale, conveyances, assignments, transfers
and deliveries to be made to Purchaser hereunder.
(g) This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.
(h) This Agreement and all amendments thereof shall be
governed by and construed in accordance with the law of the State of Colorado
applicable to contracts made and to be performed therein.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SELLER:
ATTEST: By: /s/ Audrey B. Voyles
-----------------------------------
Audrey B. Voyles, President
/s/ Lorraine Kulas
- ----------------------------------
Secretary
STAFFING:
ATTEST: By: /s/ Audrey B. Voyles
-----------------------------------
Audrey B. Voyles, President
/s/ Lorraine Kulas
- ----------------------------------
Secretary
PURCHASER:
By: /s/ Charles N. Haas
-----------------------------------
Charles N. Haas, President
SHAREHOLDER:
/s/ Karsten N. Blue
--------------------------------------
Karsten N. Blue
SHAREHOLDER:
/s/ Linden P. Blue
--------------------------------------
Linden P. Blue
19
SCHEDULE 5(c)
TRANSACTIONS WITH CERTAIN PERSONS
[None]
20
SCHEDULE 5(f)
UNDISCLOSED LIABILITIES
[None]
21
SCHEDULE 5(h)
ABSENCE OF CHANGES OR EVENTS
[None]
22
SCHEDULE 5(i)
LITIGATION
Civil Action No. 97-698-J(CGA)
Southern District of California
United States of America, ex rel. Sam Kholi
vs.
General Atomics and Alliance Staffing Associates
23
SCHEDULE 5(l)
SCHEDULE OF ASSETS AND CONTRACTS
o Office Lease By and Between Corsam Development and Alliance
Staffing Associates, Inc., dated September 12 1997.
o Routine Business Contracts with total monthly payments under a
$1,000.
o See asset list attached
24
SCHEDULE 5(m)
TRADE NAMES
[None]
25
SCHEDULE 5(n)
NO GUARANTIES
[None]
26
SCHEDULE 5(r)
COLLECTIVE BARGAINING; EMPLOYMENT COMPLIANCE
[None]