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ASSET PURCHASE AGREEMENT
between
TECH RESOURCE, INC.
and
ABLEST SERVICE CORP.
September 15, 1996
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TABLE OF CONTENTS
Page
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ARTICLE I Sale and Purchase; Liabilities Assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Asset Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III Representations and Warranties of Seller and
Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Consent and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.6 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.8 Stock Ownership and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.9 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.11 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.13 Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.14 Compliance with Laws; Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.15 Employee Benefits Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.16 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.17 Books of Account; Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.18 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.19 Insurance Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.21 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV Conditions Precedent to Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Conditions of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Deliveries of Seller at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Deliveries of Buyer at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE VI Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . 12
6.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Limitations on Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4 Procedure for Indemnification with Respect to Third-Party Claims . . . . . . . . . . . . . . . . . . 14
6.5 Procedure for Indemnification with Respect to Non-Third-Party Claims . . . . . . . . . . . . . . . . 14
ARTICLE VII Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 Covenant Against Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 Due Diligence Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.4 Conduct of Interim Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.5 Tax Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.6 Changes to Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.1 Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IX Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1 No Negotiations by Seller and the Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.2 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.4 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.5 No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.8 Waiver; Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.9 Other and Further Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.11 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and
entered into on September 13, 1996, between Tech Resource, Inc., a Georgia
corporation ("Seller") and Britt D. Ehrhardt, the sole shareholder of Seller
("Shareholder"), on the one hand, and Ablest Service Corp., a Delaware
corporation ("Buyer"), on the other.
WHEREAS, Seller owns and operates a staffing services business
concentrating in the computer and information technology areas located in
Atlanta, Georgia, and desires to sell the Assets (as defined herein) upon the
terms and conditions hereinafter stated;
WHEREAS, Buyer desires to purchase the Assets from Seller ("Asset
Purchase") upon the terms and conditions hereinafter stated;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, the parties hereto agree as follows:
ARTICLE I
Sale and Purchase; Liabilities Assumed
1.1 Asset Purchase. Seller shall sell, convey, assign,
transfer and deliver to Buyer, free and clear of all liens and encumbrances of
any kind except those disclosed in the disclosure schedule attached hereto (the
"Disclosure Schedule") those assets, rights and interests, tangible or
intangible, which are listed by category on the attached Exhibit A (the
"Assets"), and all books and records which relate to the Assets (except for
books and records which Seller is required by law to retain in its possession,
copies of which will be provided to Buyer); provided, however, that there shall
be excluded from the Assets those assets listed on the attached Exhibit A-1.
Contemporaneously with the Closing, Seller shall prepare and deliver to Buyer,
and Buyer shall promptly thereafter make, the necessary filings in the State of
Georgia to change Seller's corporate name to BDE Consulting, Inc. or such other
name not containing the names "Tech Resource" or "Ehrhardt."
1.2 Purchase Price. The purchase price for the Assets
shall be One Million Five Hundred Thousand Dollars ($1,500,000) (the "Purchase
Price"). At the Closing, Buyer shall pay to Seller in cash One Million Dollars
($1,000,000) and issue to Seller Buyer's note for Five Hundred Thousand Dollars
($500,000), substantially in the form attached hereto as Exhibit A-2 (the
"Note"). Cash payment hereunder to Seller shall be made by certified or bank
cashier's check payable to the order of, or by wire transfer of same-day funds
pursuant to instructions of, Seller.
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1.3 Assumption of Liabilities.
(a) In connection with the acquisition by Buyer of the Assets
at the Closing, Buyer shall assume only those liabilities under the Material
Contracts (as defined in this Agreement) of Seller that are expressly
identified on the attached Exhibit B. Buyer does not hereby, and will not at
any time be required to, assume, pay, perform or discharge any other
obligations, claims, liabilities, costs or expenses of Seller, including
without limitation any of the following: (i) any liability in respect of
separation or severance pay to any person employed by Seller; (ii) any
liability under any plan, fund, program, policy or arrangement under which any
persons are provided or promised pensions, retirement income, deferred
compensation or profit-sharing; (iii) any liability under any plan, fund,
program or arrangement under which any persons are provided or promised
bonuses, incentive pay, severance pay, vacations or vacation pay, salary
continuation, medical insurance or benefits, savings benefits, stock options,
life insurance or death benefits, travel or accident benefits or unemployment
benefits; (iv) any liability for occupational health and safety or
environmental matters; (v) any liability of Seller (including without
limitation any liability or potential liability with respect to any
consolidated return filed or to be filed by any person) for federal, state or
local income or other taxes or penalties or interest thereon; (vi) any pending
or threatened litigation against Seller or any affiliate of Seller; (vii) any
intercompany loans, advances or other obligations owed by Seller to any
affiliate of Seller; and (viii) liability of any kind, direct or indirect,
fixed or contingent, arising out of, resulting from or relating to actions
taken or omitted to be taken by Seller prior to, on or after the Closing Date.
(b) Notwithstanding anything to the contrary in this Agreement,
to the extent that the assignment hereunder of any Material Contract (as
defined in this Agreement) shall require the consent of any other party (or
in the event that any of the same shall be non-assignable), neither this
Agreement nor any action taken pursuant to its provisions shall constitute an
assignment or an agreement to assign if such assignment or attempted assignment
would constitute a breach thereof or result in the loss or diminution thereof;
provided, however, that in each such case, Seller and the Shareholder shall use
their best efforts to obtain the consent of such other party to an assignment
to Buyer. If such consent is not obtained and is waived by Buyer prior to the
Closing, Seller and the Shareholder shall cooperate with Buyer in any
reasonable arrangement designed to provide for Buyer the benefits under any
such contract from and after the Closing.
1.4 Allocation of Purchase Price. The parties agree on
the written allocation of the Purchase Price among the Assets attached hereto
as Exhibit C. The parties agree to file all federal, state and local tax
returns in accordance with such allocation.
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1.5 Accounts Receivable. Seller shall retain its accounts
receivable and Buyer shall have no obligation to collect them for Seller.
1.6 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at 10:00 a.m., local time,
on September 15, 1996, at the Seller's principal office, or on such other date
or at such other place as the parties may agree. The date and time of the
Closing are sometimes referred to herein as the "Closing Date.".
ARTICLE II
Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller and Shareholder that:
2.1 Corporate Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
has all requisite power and authority to enter into this Agreement, perform its
obligations hereunder and consummate the Asset Purchase.
2.2 Authorization. All necessary and appropriate corporate
action has been taken by Buyer with respect to the execution and delivery of
this Agreement and the performance of its obligations hereunder, and this
Agreement constitutes a valid and binding obligation of Buyer enforceable
against it in accordance with its terms.
2.3 Consents and Approvals. To the best of Buyer's knowledge,
no consent, approval, order or authorization of, or registration, declaration
or filing with, any governmental or regulatory authority or agency is required
in connection with the execution and delivery of this Agreement by Buyer or
its performance of the terms hereof or for the validity or enforceability
thereof. Buyer's Board of Directors has approved the execution, delivery and
performance of this Agreement. No consent of any lender of Buyer is required
in connection with this Agreement.
2.4 No Conflict. Neither the execution and delivery of this
Agreement by Buyer nor the consummation by Buyer of the Asset Purchase will
(i) conflict with or result in a breach of any provision of the Certificate of
Incorporation or ByLaws of Buyer, (ii) violate, conflict with or result in a
breach of any provision of, or constitute a default (or an event which, with
the giving of notice, the passage of time or otherwise, would constitute a
default) under, or entitle any party (with the giving of notice, the passage of
time or otherwise) to terminate, accelerate or cause a default under, or result
in the creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of Buyer, under any agreement, indenture, or
instrument,
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binding on Buyer or its properties or assets, or (iii) violate any judgment,
order, decree, stipulation, injunction or charge of any court, administrative
agency or commission or other governmental authority or instrumentality by
which Buyer is bound.
2.5 Brokers and Finders. Except for employing International
Business Consultants Inc. ("IBC"), Buyer has not employed any broker or finder
or incurred any liability for brokerage fees in connection with the Asset
Purchase. Buyer will be responsible for the fee owed to IBC.
ARTICLE III
Representations and Warranties of Seller and Shareholder
Seller and the Shareholder jointly and severally represent and
warrant to Buyer that:
3.1 Corporate Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia. Seller has all requisite power and authority and, except as set forth
on the Disclosure Schedule, all governmental licenses, authorizations, consents
and approvals necessary to own, lease and operate its respective properties and
conduct its respective businesses as presently or as currently proposed to be
conducted. Seller is not qualified to do business as a foreign corporation in
any jurisdiction, and neither the nature of the business conducted by it nor
the property it owns, leases or operates requires it to qualify to do business
as a foreign corporation in any jurisdiction except where the failure to be so
qualified would not have a Material Adverse Effect on Seller. "Material
Adverse Effect" as used in this Agreement means, with respect to any event,
act, condition or occurrence, a material adverse effect upon any of (i) with
respect to Seller, the properties, assets, liabilities, business, results of
operations, prospects or condition (financial or otherwise) of Seller, and (ii)
with respect to the Seller, the Shareholder or Buyer, the ability of either
Seller, the Shareholder or Buyer, as the case may be, to consummate the Asset
Purchase or to perform their obligations set forth herein.
3.2 Authorization. Seller has the power and authority, and
Shareholder has the capacity and legal right, to execute, deliver and perform
this Agreement and to consummate the Asset Purchase. This Agreement has been
executed and delivered by the Seller and Shareholder and constitutes the valid
and binding obligation of each of them. Seller's Board of Directors and the
Shareholder have approved the execution, delivery and performance of this
Agreement by Seller.
3.3 Consent and Approvals. To the best of Seller's and the
Shareholder's knowledge, and except as set forth in the disclosure schedule
attached hereto (the "Disclosure Schedule"), no
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consent, approval, order or authorization of, or declaration or filing with,
any governmental or regulatory authority or agency is required in connection
with the execution and delivery of this Agreement by Seller and Shareholder or
its and his performance of the terms hereof or for the validity or
enforceability thereof as to it and him.
3.4 Subsidiaries. Seller has no subsidiaries and holds no
direct or indirect beneficial interest in any corporation, partnership, joint
venture, limited liability company, or other entity or enterprise.
3.5 Capitalization. The authorized capital stock of Seller
consists solely of 1,000 shares of common stock, 600 of which are issued
and outstanding (the "Stock"). All outstanding shares of common stock of
Seller are validly authorized, issued, fully paid and nonassessable. There are
no outstanding subscriptions, options (including employee stock options),
warrants, puts, calls, agreements, understandings, or other commitments or
rights of any type to which Seller or Shareholder is a party, or by which
either is bound, relating to the issuance, sale or transfer by Seller or
Shareholder of any securities of Seller. There are no outstanding securities
which are convertible into or exchangeable for any shares of capital stock of
Seller. Seller has no obligation of any kind to issue any additional
securities or to repurchase, redeem or otherwise acquire any of the Stock.
3.6 Affiliates. Neither Seller nor Shareholder has any direct or
indirect interest in any corporation, partnership, limited liability company,
or any other entity which is involved in any way with, competes with, or
conducts any business similar to any business conducted by Seller or Buyer.
3.7 Litigation. Except as set forth in the Disclosure Schedule,
there is no claim, litigation, arbitration, action, suit, proceeding,
investigation or inquiry, administrative or judicial, pending or, to the best
knowledge of Seller and Shareholder, threatened, against Seller or Seller's
assets or business, at law or in equity, before any federal, state or local
court, regulatory agency, or governmental authority which is reasonably likely
to have a Material Adverse Effect on Seller. Except as set forth on the
Disclosure Schedule, Seller is not a party to or subject to the provisions of
any judgment which may have a Material Adverse Effect on it.
3.8 Stock Ownership and Authority. Shareholder owns
beneficially and of record all the Stock.
3.9 No Conflicts. Except as set forth on the Disclosure
Schedule, neither the execution and delivery of this Agreement by Seller and
Shareholder nor the consummation by Seller and Shareholder of the Asset
Purchase will (i) conflict with or result in a breach of any provision of the
Certificate of Incorporation or the ByLaws of Seller, (ii) violate, conflict
with or result
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in the breach of any term, condition or provision under any law or regulation
applicable to Seller or Shareholder or any of Seller's assets, (iii) except for
third-party consents to assignment required under the Material Contracts,
violate, conflict with or result in a breach of any provision of, or constitute
a default (or an event which, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any party (with the
giving of notice, the passage of time or otherwise) to terminate, accelerate or
cause a default under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of Seller
under, any agreement, indenture, or instrument, binding on Seller or
Shareholder or upon any of their respective properties or assets, or (iv)
violate any judgment, order, decree, stipulation, injunction or charge of any
court, administrative agency or commission or other governmental or regulatory
authority or instrumentality by which Seller or Shareholder is bound.
3.10 Financial Statements. The unaudited financial statements of
Seller for the year ended December 31, 1995, and for the three months ended
March 31, 1996, are accurate in all material respects, were prepared (except
as disclosed in the Disclosure Schedule) according to generally accepted
accounting principles and have been furnished to Buyer (the "Financial
Statements").
3.11 Absence of Certain Changes or Events. Except as set forth
on the Disclosure Schedule, since December 31, 1995, there has not been any
event or change relating to the business of Seller that has had or would be
reasonably likely to have a Material Adverse Effect on Seller.
3.12 Taxes.
(a) For purposes of this Agreement, (i) "Tax" or "Taxes" shall
mean all Federal, state, local and foreign taxes and assessments, including
all interest, penalties and additions imposed with respect to such amounts;
(ii) "Pre-Closing Tax Period" shall mean all taxable periods ending before or
including the Closing Date; and (iii) "Returns" means returns, reports or
forms, including information returns.
(b) (i) Seller and Shareholder have filed or caused to be filed in
a timely manner (within any applicable extension periods) all Tax Returns
required to be filed by such party by the Internal Revenue Code of 1986, as
amended, (the "Code") or by applicable state, local or foreign Tax law, and
each such Return is complete and accurate, (ii) all Taxes of Seller and
Shareholder shown as due on such Returns have been duly and timely paid or
accrued and (iii) no material Tax liens have been filed and no claims are being
asserted in a writing received by Seller and Shareholder with respect to any
Taxes.
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(c) Seller has made and the Shareholder has consented to a valid
election, which election has not been revoked or terminated or otherwise become
ineffective, under Section 1362(a) of the Code to be taxed as an "S corporation
" under Sections 1361 through 1379 of the Code. Seller has made and the
Shareholder has consented to valid elections, which elections have not been
revoked or terminated or otherwise become ineffective, to be taxed in a
comparable fashion under Georgia Tax law. Except as set forth in the
Disclosure Schedule, Seller has not been, nor will it be, subject to any
Federal corporate income taxes imposed under Chapter 1 of the Code (other than
Code Sections 1374 and 1375 (and their predecessor Sections under the Internal
Revenue Code of 1954, as amended)) or any state, local or income or franchise
Taxes in Georgia for any period for which it elected to be taxed as an "S
corporation".
(d) Seller has not been a member of any affiliated, consolidated,
combined, unitary or aggregate group for purposes of filing Tax Returns or
paying Taxes, and Seller has no liability under Treasury Regulation Section
1.1502-6 or any comparable provision of state, local or foreign Tax law for the
Taxes of any member (other than such party) of such a group.
3.13 Fixed Assets. Except as set forth on the Disclosure
Schedule, Seller has marketable title to all furniture, fixtures, equipment,
and machinery (the "Fixed Assets") included in the Assets, free and clear of
all liens, charges, security interests or other encumbrances of any nature
whatsoever. Except as set forth in the Disclosure Schedule, all of the Fixed
Assets are in good operating condition and repair, ordinary wear and tear
excepted, and are usable in the regular and ordinary course of business.
3.14 Compliance with Laws; Authorization. To the best of
Seller's knowledge, except as set forth on the Disclosure Schedule, Seller is
in compliance in all material respects with all applicable laws, statutes,
orders, rules, regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered, by any federal or state court or governmental
authority applicable to Seller, its business or its properties (collectively,
the "Applicable Laws"). To the best of Seller's knowledge, except as set forth
on the Disclosure Schedule, Seller is not under investigation with respect to,
nor has it been charged with or given notice of any violation of, any of the
Applicable Laws. For purposes hereof, Seller will be deemed in compliance in
all material respects with Applicable Laws if a violation thereof would not
have a Material Adverse Effect on the continued operations of Seller in the
manner in which it is currently conducting its business.
3.15 Employee Benefits Plans. Except as set forth in the
Disclosure Schedule:
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(a) Seller has never directly or indirectly maintained or
contributed to, nor is Seller directly or indirectly maintaining or
contributing, for the benefit of the current and/or former employees of Seller,
any employee benefit plan, including, without limitation, any "employee
benefit plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), any employment or severance
contract, any stock option plan or any plan of deferred compensation
(individually, a "Plan" and collectively the "Plans"). Seller does not have
any commitment, whether formal or informal, to create any such plans.
(b) Seller does not directly or indirectly maintain or
contribute to (or have an obligation to contribute to) any plan, fund or
program which provides medical, health, hospitalization, life, stock options,
stock purchase rights, or other employee benefits with respect to present or
former employees of Seller.
(c) The consummation of the Asset Purchase will not
entitle any current or former employee of Seller to severance pay, unemployment
compensation or any other payment.
3.16 Contracts. Seller has made or will make available to
Buyer all contracts, agreements, and instruments to which Seller is a party,
including all amendments and supplements thereto, which are material to the
business operations, assets, properties or condition (financial or otherwise)
of Seller (the "Material Contracts"). Except as set forth on the Disclosure
Schedule, each Material Contract is legally valid and binding against Seller,
in full force and effect and enforceable against Seller in accordance with its
terms, except where the invalidity or non-binding nature would not have a
Material Adverse Effect on Seller.
3.17 Books of Account; Records. To the best of Seller's
knowledge, Seller's general ledgers, stock record books, minute books and other
corporate records relating to the assets, properties, contracts and outstanding
legal obligations of Seller are, in all material respects, true, correct and
complete.
3.18 Labor Relations.
(a) There is no collective bargaining agreement to which
Seller is a party, collective bargaining agreement currently being negotiated by
Seller, or union or collective bargaining unit representing any of Seller's
employees.
(b) Seller has complied in all material respects with all
applicable laws, rules and regulations relating to the employment of labor or
the termination thereof, including those related to wages, salary withholdings,
employee health and safety, bonus, vacation pay and severance pay, working
hours, and benefits
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for employees and former employees, and the payment and withholding of taxes
and other sums as required by appropriate governmental authorities, or is
holding for payment not yet due to such authorities all amounts required to be
withheld from such employees and former employees of Seller and is not liable
to any person or entity (including any governmental entity) for any arrears of
wages, commissions and benefits for employees, taxes, penalties or other sums
for failure to comply with any of the foregoing, other than amounts not yet due
and payable in the ordinary course or business.
(c) Except as set forth in the Disclosure Schedule,
Seller is not a party to any employment contract or agreement with respect to
any of its employees, nor has Seller in any other manner limited its right to
terminate the employment relationship with its employees.
3.19 Insurance Funds. Except as set forth on the Disclosure
Schedule:
(a) Seller maintains an insurance policy in full force
and effect with the Georgia State Insurance Fund covering all its employees;
and Seller has paid all premiums on said policy and has no outstanding debts
with respect thereto; and
(b) To the best of Seller's knowledge, no work-related
accident has occurred for which Seller may be classified as an uninsured
employer.
3.20 Environmental Matters. To the best of Seller's knowledge,
Seller is and has been in compliance in the conduct of its business with all
applicable environmental laws and regulations or any order, decree, judgment,
or injunction issued, entered, promulgated or approved thereunder.
3.21 Brokers and Finders. Neither Seller nor Shareholder has
employed any broker or finder or incurred any liability for brokerage fees,
commissions or finders' fees in connection with the Asset Purchase.
ARTICLE IV
Conditions Precedent to Obligations
4.1 Conditions to Obligations of Buyer. Each and every
obligation of Buyer to be performed under this Agreement shall be subject to
the satisfaction by Seller and the Shareholder at or prior to the Closing Date
of each of the following conditions (unless waived in writing by Buyer):
(a) Representations and Warranties. The representations
and warranties set forth in Article III of this Agreement shall have been true
and correct when made and shall be
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true and correct at and as of the Closing Date as though such representations
and warranties were made as of the Asset Purchase Closing.
(b) Performance of Agreement. Seller and Shareholder
shall have fully performed and complied with the covenants, conditions and other
obligations under this Agreement which are to be performed or complied with by
them at or prior to the Closing Date.
(c) Consents. All applicable third-party approvals or
consents, including consents and approvals under Material Contracts, shall have
been received or satisfied.
(d) No Adverse Change. There shall not have been any
Material Adverse Effect with respect to Seller or its business since the date
of this Agreement.
(e) No Adverse Proceeding. There shall not be pending or
threatened any claim, action, litigation or proceeding (judicial or
administrative) or governmental investigation against Buyer, Seller or
Shareholder for the purpose of enjoining or preventing the consummation of this
Agreement, or otherwise claiming that this Agreement or the consummation of the
Asset Purchase is illegal.
(f) Certificate. Seller shall have delivered to Buyer
at the Closing a certificate signed on its behalf by one of its officers, dated
the date of Closing, to the effect that the conditions set forth in subsections
a) through (e) of this Section 4.1 have been satisfied to the best knowledge
of such officer.
(g) Employee Agreement and Restrictive Agreement. At the
Closing, Shareholder will execute and deliver to Buyer an employment agreement
(the "Employment Agreement") and a restrictive agreement (the "Restrictive
Agreement") substantially in the form of Exhibits D and E attached hereto.
(h) Assignment and Assumption Agreement. At the
Closing, Buyer and Seller shall execute and deliver the Assignment and
Assumption Agreement in the form attached hereto as Exhibit F (the "Assignment
and Assumption Agreement").
4.2 Conditions of Seller. Each and every obligation of Seller
and Shareholder to be performed under this Agreement shall be subject to
the satisfaction by Buyer at or prior to the Closing Date of the following
conditions (unless waived in writing by Seller and Shareholder):
(a) Representations and Warranties. The representations
and warranties of Buyer set forth in Article II of this Agreement shall have
been true and correct when made, and shall be true and correct at and as of the
Closing Date as though
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such representations and warranties were made as of the Closing Date.
(b) Performance of Agreement. Buyer shall have fully
performed and complied with the covenants, conditions and other obligations
under this Agreement which are to be performed or complied with by it at or
prior to the Closing Date.
(c) Consents. All applicable third-party approvals or
consents shall have been received or satisfied, including, but not limited to,
approvals by boards of directors and shareholders.
(d) No Adverse Proceedings. There shall not be pending
or threatened any claim, action, litigation or proceeding (judicial or
administrative) or governmental investigation against Buyer, Seller or
Shareholder for the purpose of enjoining or preventing the consummation of the
Asset Purchase, or otherwise claiming that this Agreement or the consummation
of the Asset Purchase is illegal.
(e) Certificate. Buyer shall have delivered to Seller
at the Closing a certificate signed on its behalf by one of its officers, dated
the date of the Closing Date, to the effect that the conditions set forth in
subsections (a) through (d) of this Section 4.2 have been satisfied to the best
knowledge of such officer.
(f) Purchase Price. Buyer shall have paid the cash
portion of the Purchase Price at the Closing in accordance with Section 1.2
hereof and delivered the Note.
(g) Employee Agreement and Restrictive Agreement. At the
Closing, Buyer will execute and deliver to Shareholder the Employment Agreement
and the Restrictive Agreement.
(h) Assignment and Assumption Agreement. At the
Closing, Buyer and Seller shall execute and deliver the Assignment and
Assumption Agreement.
ARTICLE V
Closing
5.1 Deliveries of Seller at Closing. At the Closing, Seller and
the Shareholder will deliver or cause to be delivered to Buyer the following at
Seller's expense:
(a) The certificate referred to in Section 4.1(f) of
this Agreement.
(b) A certificate from the Secretary of State evidencing
the good standing of Seller in Georgia.
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(c) A copy of the Certificate of Incorporation of
Seller and all amendments thereto certified by the Secretary of State of
Georgia.
(d) Certified copies of minutes reflecting the
authorization by the Board of Directors of Seller and by the Shareholder of the
execution, delivery and performance of this Agreement and consummation of the
Asset Purchase.
(e) The Restrictive Agreement and the Employment
Agreement.
(f) The Assignment and Assumption Agreement.
5.2 Deliveries of Buyer at Closing. At the Closing, Buyer will
deliver or cause to be delivered to Seller the following:
(a) The Purchase Price as set forth in Section 1.2
hereof, including the Note;
(b) The certificate referred to in Section 4.2(e) of
this Agreement;
(c) Certified copies of resolutions adopted by the Board
of Directors of Buyer authorizing the execution, delivery and performance of
this Agreement and consummation of the Asset Purchase.
(d) The Restrictive Agreement and the Employment
Agreement.
(e) The Assignment and Assumption Agreement.
ARTICLE VI
Indemnification
6.1 Survival of Representations, Warranties and Agreements.
Subject to the limitations set forth in Section 6.3 of this Agreement, all
representations, warranties and covenants of the parties contained herein shall
survive execution and delivery of this Agreement.
6.2 Indemnification.
(a) Subject to the limitations set forth in Section 6.3
of this Agreement, Seller and the Shareholder hereby covenant and agree to
indemnify and hold harmless Buyer, from and against any and all losses,
liabilities, damages, demands, claims, suits, actions, judgments or causes of
action, assessments, costs and expenses, including, without limitation,
interest, penalties, attorneys' fees, any and all expenses incurred in
investigating,
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preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation (collectively, "Damages"), asserted against, resulting to, imposed
on or incurred or suffered by Buyer directly or indirectly, as a result of or
arising from (i) any breach of any of the representations, warranties or
covenants made by Seller and the Shareholder, (ii) any liability of Seller not
specifically assumed by Buyer hereunder, (iii) any Federal income Taxes
attributable to Seller, any state, local or foreign income or franchise Taxes
attributable to Seller, or any sales, use or similar Taxes for any Pre-Closing
Tax Period, and (iv) Seller's operation of the business prior to the Closing
(collectively, "Buyer's Indemnifiable Claims").
(b) Buyer hereby covenants and agrees to indemnify and
hold harmless Seller and the Shareholder, as the case may be, from and against
any and all Damages asserted against, resulting to, imposed on or incurred or
suffered by Seller or Shareholder, directly or indirectly, as a result of or
arising from (i) any breach of any of the representations, warranties or
covenants made by Buyer in this Agreement, (ii) any liability specifically
assumed by Buyer hereunder and (iii) Buyer's operation of the business after
the Closing (other than Damages arising from or as a result of Shareholder's
gross negligence or willful misconduct) (collectively, "Seller's Indemnifiable
Claims").
(c) Buyer's Indemnifiable Claims and Seller's
Indemnifiable Claims are collectively referred to hereinafter as "Indemnifiable
Claims."
6.3 Limitations on Indemnification. Rights to
indemnification hereunder are subject to the following limitations:
(a) The obligation of indemnity provided herein with
respect to the representations and warranties set forth in Section 3.12
shall terminate on the expiration of the periods of limitations applicable to
assessment and collection of federal, state, local and foreign taxes, taking
into account any extensions of such periods of limitations approved by Seller
prior to the date hereof.
(b) The obligations of indemnity provided herein with
respect to the representations and warranties set forth in Articles II and
III (except Section 3.12 of this Agreement) shall terminate on the first
anniversary of the Closing Date.
(c) The foregoing provisions of this Section
notwithstanding, if, prior to the termination of any obligation to indemnify as
provided for herein, written notice of a claimed breach is given by Buyer,
Seller or the Shareholder, or a suit or action based upon a claimed breach is
commenced against any party, no party shall be precluded from pursuing such
claimed breach or suit or action, or from recovering from the other party
hereunder
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(whether through the courts or otherwise) on the claim, suit or action, by
reason of the termination otherwise provided for above.
6.4 Procedure for Indemnification with Respect to Third-Party
Claims.
(a) If a party (the "Indemnitee") determines to seek
indemnification under this Article with respect to Indemnifiable Claims
resulting from the assertion of liability by third parties, it shall give
notice to the other party (the "Indemnifying Party") within 30 days of the
Indemnitee's becoming aware of any such Indemnifiable Claim; the notice shall
set forth such information with respect thereto as is then reasonably available
to the Indemnitee. In case any such liability is asserted against the
Indemnitee, and the Indemnitee notifies the Indemnifying Party thereof, the
Indemnifying Party will be entitled, if it so elects by written notice
delivered to the Indemnitee within 30 days after receiving the Indemnitee's
notice, to assume the defense thereof with counsel reasonably satisfactory to
the Indemnitee at all times during the defense of such liability.
Notwithstanding the foregoing, (i) the Indemnitee shall also have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Indemnitee (as long as the Indemnifying
Party continues to defend such matter); (ii) the Indemnitee shall not have any
obligation to give any notice of any assertion of liability by a third party
unless such assertion is in writing; and (iii) the rights of the Indemnitee to
be indemnified hereunder in respect of Indemnifiable Claims shall be deemed
forfeited by its failure to give notice pursuant to the foregoing only to the
extent that the Indemnifying Party is materially prejudiced by such failure to
give notice. With respect to any assertion of liability by a third party that
results in an Indemnifiable Claim, the parties hereto shall make reasonably
available to each other all relevant information in their possession material
to any such assertion.
(b) In the event that the Indemnifying Party, within 10 days
after receipt of the aforesaid notice of an Indemnifiable Claim, fails to
assume the defense of the Indemnitee against such Indemnified Claim, the
Indemnitee shall have the right to undertake the defense and to compromise or
settle such action on behalf of and for the account and risk of the
Indemnifying Party.
6.5 Procedure for Indemnification with Respect to
Non-Third-Party Claims. If the Indemnitee asserts the existence of an
Indemnifiable Claim giving rise to Damages (but excluding claims resulting from
the assertion of liability by third parties), it shall give written notice to
the Indemnifying Party specifying the nature and amount of the claim asserted.
If the Indemnifying Party, within 30 days after the mailing of notice by the
Indemnitee, shall not give written notice to the Indemnitee announcing its
intent to contest such assertion of the Indemnitee,
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such assertion by the Indemnitee shall be deemed accepted and agreed to by the
Indemnifying Party.
ARTICLE VII
Covenants
7.1 Covenant Not to Compete. (a) Shareholder covenants
and agrees that, for a period of three years following the date Shareholder
ceases to be an employee of Buyer, Shareholder shall not engage, directly or
indirectly, whether on his own account or as a shareholder, partner, joint
venturer or agent of any person, firm, corporation (including seller) or other
entity, or otherwise, directly or indirectly, in any or all of the following
activities:
(i) Enter into or engage in the technical staffing
business in the Atlanta, Georgia metropolitan area (the "Territory") (a
"Competing Business") as an officer, sales person, marketing agent, consultant,
supervisor or similar position; or
(ii) Solicit customers or business patronage for any
Competing Business; or
(iii) Promote or assist, financially or otherwise, any
person, firm, association, corporation or other entity engaged in any Competing
Business in the Territory; provided, however, that the foregoing covenant shall
not be deemed to have been violated by the ownership of shares of any class of
capital stock of any corporation so long as the aggregate beneficial or record
holdings of Seller and its affiliates represent less than five percent (5%) of
the outstanding shares of such class of capital stock.
(b) Injunctive Relief. If Shareholder breaches the covenant
provided herein, or if Buyer shall have reason to believe that Shareholder
intends to, or is attempting to, breach this covenant, then in any such event
Buyer shall be entitled to seek an injunction in any court having jurisdiction
to enforce this covenant, and shall be entitled to recover from Shareholder any
and all damages resulting, directly or indirectly, from said breach.
(c) Reformation. If the time or area of limitations, or
both, contained in this covenant are held by any court of competent
jurisdiction to be unreasonable or otherwise unenforceable, such covenant shall
nevertheless be enforceable for such lesser time or area, or both, as the court
shall find reasonable. Shareholder acknowledges having consulted as to such
covenant with counsel, fully understands the content of the same and agrees, in
view of the relevant facts, that the limitations contained herein are
reasonable.
7.2 Covenant Against Hiring. Seller and the Shareholder
understand that in Buyer's view it is essential to the successful operation of
a technical staffing business in the Territory that
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Buyer retain substantially unimpaired Seller's current operating organization.
Seller and the Shareholder covenant and agree that neither of them, nor any
affiliate of either of them, without the prior written consent of Buyer, shall
take any action which would induce any employee or representative of Seller
prior to the Closing not to become or continue as an employee or representative
of Buyer.
7.3 Due Diligence Access. From the date of this Agreement until
the Closing, to enable Buyer to conduct due diligence, and following the
Closing to the extent needed by Buyer and its accountants to conduct and
complete a financial audit of Seller and its operations, Seller and the
Shareholder shall make or cause to be made available to Buyer: (i) members
of management of Seller for personal interviews; (ii) the Assets; and (iii) all
books of account, contracts, agreements, commitments, authorizations, insurance
policies, records and documents of every character relating to Seller's
business for examination. Accordingly, Seller and Shareholder shall permit
Buyer and its representatives, attorneys, accountants and agents to have access
to the same at all reasonable times and places.
7.4 Conduct of Interim Operations. From the date hereof to the
Closing Date:
(a) Affirmative Covenants. Seller shall do the following:
(1) Operations. Conduct its business as presently
conducted in the usual, regular, and ordinary course and scope, and done all
things in the ordinary course of business, consistent with past practice,
necessary to preserve, renew, and keep in full force and effect all rights and
franchises that are necessary to continue its business.
(2) Corporate Existence. Maintain its corporate
existence, good standing, and qualification to transact business in the State
of Georgia.
(3) Compliance dwith Applicable Laws. Substantially
comply with all Applicable Laws and timely pay all amounts that, if unpaid,
would have a Material Adverse Effect on the Seller's business affairs or
prospects.
(4) Insurance. Maintain all insurance.
(5) Litigation. Advise Buyer immediately of any lawsuit
threatened or filed against Seller or Shareholder.
(6) Payment of Debt. Duly and punctually pay all of
Seller's indebtedness in accordance with the terms and conditions of such
indebtedness as and when due.
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(7) Material Loss. Immediately notify Buyer of any
event causing or that may reasonably be expected to cause a material loss to
Seller with respect to the Assets or result in a material decline in value of
the Assets or the Seller's business or prospects.
(8) Preservation of Business. Employ all reasonable
efforts to preserve the Seller's business intact, to keep available to Buyer
the present employees of the Seller, and to maintain good relations with
suppliers and customers and others having business relations with the Seller.
(b) Negative Covenants. Seller shall not do any of the
following:
(1) New Encumbrances. Create, incur, assume, or suffer
to exist any new encumbrance (including, but not limited to, charges on
property purchased under conditional sales or other title retention agreements)
on any of the Assets other than in the ordinary course and scope of the
Seller's business.
(2) Disposition of Assets. Sell, dispose of, mortgage,
pledge, grant a security interest in or otherwise dispose of or encumber any
Asset or interests therein other than in the ordinary course and scope of the
Seller's business.
(3) Contracts. Enter into any contracts or agreements,
or amend, modify, or terminate any contracts or agreements, except in the
ordinary course and scope of the Seller's business;
(4) Compensation. Except for wage increases required by
law or governmental regulations, and merit or length of service increases
granted in the ordinary course and scope of the Seller's business consistent
with past practices, increased the compensation or benefits payable
or to become payable to any employee.
7.5 Tax Covenants.
(a) Seller, Shareholder and Buyer shall reasonably cooperate,
and shall cause their respective affiliates, officers, employees, agents,
auditors and representatives reasonably to cooperate, in preparing and filing
all Returns relating to Taxes, including maintaining and making available to
each other all records necessary in connection with Taxes and in resolving all
disputes and audits with respect to all taxable periods relating to Taxes.
(b) All transfer, documentary stamp, sales, use, registration
and other such Taxes and related fees (including any penalties, interest and
additions to Tax) incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by Seller; and Buyer shall
cooperate in timely making all
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filings as may be required to comply with the provisions of such Tax laws.
7.6 Changes to Disclosure Schedule. Between the date of
this Agreement and the Closing Date, Seller and Shareholder shall promptly
inform Buyer of events, circumstances, or other developments that occur between
such dates that would have been described in the Disclosure Schedule had such
events, circumstances or other developments occurred on or prior to the date of
this Agreement. Having so informed Buyer, Seller and Shareholder shall provide
Buyer with such further information regarding such event, circumstance or
development as Buyer reasonably requests. Within three business days of
Buyer's receipt of such additional information, Buyer shall notify Seller and
Shareholder that: (i) Seller and Shareholder may amend the Disclosure Schedule
to describe such event, circumstance or other development, without liability to
Seller or Shareholder; or (ii) Buyer intends to terminate this Agreement
pursuant Section 8.1 (b).
ARTICLE VIII
Termination
8.1 Termination of Agreement. This Agreement may be terminated
at any time prior to the Closing:
(a) by mutual written consent of all parties;
(b) by either Buyer or Seller and the Shareholder if any of the
representations or warranties of the other party contained herein shall be
inaccurate or untrue in any material respect and such inaccuracy cannot
reasonably be expected to be cured prior to the Closing;
(c) by either Buyer or Seller and the Shareholder if any
obligation, term or condition to be performed, kept or observed by such other
party hereunder has not been performed, kept or observed in any material
respect at or prior to the time specified in this Agreement;
(d) by either Buyer or Seller and the Shareholder if any
permanent injunction or other order of a court or other competent authority
preventing the consummation of the transactions contemplated by this Agreement
shall have become final and nonappealable;
(e) by either Buyer or Seller and the Shareholder, if not
then in material breach of any of its obligations hereunder, if the Closing has
not occurred by October 1, 1996.
Any termination pursuant to this Section 8.1 shall be effective upon
notice thereof having been given to the non-terminating party in accordance
with Section 9.2 hereof.
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No party hereto shall be liable to any other party hereto if
this Agreement is terminated pursuant to Section 8.1(a), (b) or (d).
ARTICLE IX
Miscellaneous Provisions
9.1 No Negotiations by Seller and the Shareholder. Unless and until
this Agreement has been properly terminated pursuant to Article VIII hereof,
neither Seller nor the Shareholder shall directly or indirectly, through any
officer, director, agent, employee, representative or otherwise, make, solicit,
initiate or encourage the submission of proposals or offers, or accept offers,
from any person (including any of its officers or employees) relating to any
recapitalization, merger, consolidation or other business combination involving
Seller, any sale of all or a substantial portion of the assets of Seller, or
the sale of any material equity interest in Seller (any of the foregoing, a
"Competing Transaction"). During such period, neither Seller nor the
Shareholder shall, directly or indirectly, participate in any negotiations
regarding, furnish to any other person any information with respect to, or
otherwise cooperate, assist or participate in, any effort or attempt by any
third party to propose or effect any Competing Transaction. Seller and the
Shareholder shall notify Buyer of any Competing Transaction or any inquiry
relating to a possible Competing Transaction and shall deliver to Buyer any
information furnished to or by any such third party.
9.2 Notice. All notices, requests, demands and other communications
required or permitted under this Agreement shall be deemed to have been duly
given and made if in writing and served either by personal delivery (which
shall include delivery by Federal Express or similar services) to the party for
whom it is intended or by being deposited postage prepaid, certified or
registered mail, return receipt requested (or such form of mail as may be
substituted therefor by postal authorities), in the United States mail, bearing
the address shown in this Agreement for, or such other address as may be
designated in writing hereafter by, such party:
If to Buyer: With a copy to:
Ablest Service Corp. William Appleton, Esq.
810 North Belcher Road Baker & Hostetler
Clearwater, Florida 34625 3200 National City Center
Attn: W. David Foster 1900 East 9th Street
Cleveland, Ohio 44114-3485
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If to Shareholder or Seller: With a copy to:
Britt D. Ehrhardt Frederick Isaf, Esq.
3125 Presidential Parkway Roberts, Isaf & Summers
Suite 200 Abernathy Road
Atlanta, Georgia 30340 Suite 1100
Atlanta, Georgia 30528
9.3 Entire Agreement. This Agreement and the Disclosure
Schedule embody the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof, and supersede all prior agreements
and understandings relative to said subject matter.
9.4 Binding Effect; Assignment. This Agreement and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon Buyer, its representatives, successors and assigns, and
Seller, its representatives, successors and assigns, and Shareholder, his
heirs, legal representatives and assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be transferred or assigned
(by operation of law or otherwise) by any party hereto without the prior
written consent of the other parties, except that Buyer may assign this
Agreement in its entirety to a wholly-owned subsidiary of Buyer, whether
currently in existence or to be newly formed.
9.5 No Third-Party Beneficiaries. Nothing herein, expressed
or implied, is intended or shall be construed to confer upon or give to any
person, firm, corporation or legal entity, other than the parties hereto, any
rights, remedies or other benefits under or by reason of this Agreement.
9.6 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
9.7 Expenses. Each of the parties hereto will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the Asset Purchase.
9.8 Waiver; Consent. This Agreement may not be changed,
amended, terminated, rescinded or discharged (other than in accordance with its
terms), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless
such waiver shall be in writing and signed by the party claimed to have given
or consented thereto.
9.9 Other and Further Covenants. The parties shall, in good
faith, execute such other and further instruments, assignments or documents as
may be necessary for the consummation of the
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transactions contemplated by this Agreement, and shall assist and cooperate
with each other in connection with these activities.
9.10 Governing Law. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of Georgia,
without regard to any such laws relating to choice or conflict of laws.
9.11 Public Announcements. Neither Buyer nor Seller shall,
without the prior written consent of the other, make any public announcement or
any release to trade publications or to the press or make any statement to any
competitor, customer or any other third party with respect to the transactions
contemplated herein, except such announcement, release or statement necessary
in the opinion of its counsel to comply with applicable requirements of law,
the content of which is mutually agreed to by the parties. The parties hereto
agree that upon execution of this Agreement and on the Closing Date, they shall
jointly prepare press releases for appropriate dissemination.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first set forth above.
TECH RESOURCE, INC.
By: /s/ Britt D. Ehrhardt
---------------------------------
Britt D. Ehrhardt, President
ABLEST SERVICE CORP.
By: /s/ W. David Foster, President
---------------------------------
Title
SHAREHOLDER:
/s/ Britt D. Ehrhardt
-------------------------------
Britt D. Ehrhardt
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Exhibit A
Assets
I. Office furniture, fixtures and equipment (asset class 00.11)
II. Information systems (computers and peripheral equipment)
(asset class 00.12)
III. Data handling equipment, except computers (asset class 00.13)
IV. Other tangible personal property not otherwise listed herein
V. Computer software and all sublicenses or agreements in respect
thereof
VI. Franchises, licenses, permits, consents, authorizations,
approvals and certificates of any regulatory administrative
or other governmental agency or body, if and to the extent
same are transferable
VII. Patents, inventions, trade secrets, processes, proprietary
rights, proprietary knowledge, know-how, trademarks, names,
masthead, service marks, trade names, including, without
limitation, the name Tech Resources, Inc., copyrights, marks,
symbols, logos, franchises and permits and all sublicenses or
agreements in respect thereof
VIII. All claims and rights under leases of equipment, vehicles or
other tangible personal property
IX. All claims and rights under contracts, agreements, leases,
license agreements, franchise rights and agreements, policies,
purchase and sale orders, quotations and executory
commitments, instruments, guarantees, indemnifications,
arrangements, and understandings, other than those shown on
Exhibit A-1.
X. Books of account
XI. Customer lists
XII. Contractor (employee) lists
XIII. Telephone numbers
XIV. Goodwill and going concern value, if any
XV. Work force
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EXHIBIT "B
List of Material Contracts
A. Software/Systems Consulting Agreements [with ongoing contract projects]
ActaMed Corp.
Aeronomics Incorporated
BellSouth Cellular
BellSouth Information Systems
BellSouth Wireless
Kimberly Clark
State Merit System
B. Contract Temporary Employment Agreements [for contract temporary
employees with ongoing projects]
Deborah Balai Frank Marmurowicz
Shyamala Dhakshinamurthy Hoang Nguyen
David Dwyer Bryan Tarleton
Sam Fistel Peter Trpis
Joe Hansen Unni Vellani
Glen Jones Ken Venator
Hamid Maghdan Rebecca Wrobel
Jim Cobb (SoftEdge, Inc.)
Amr Elgeneidy (Atlanta Digital)
Rajeev Kumar (Gupta Consulting, Inc.)
Theresa Theus (Computer Consultant's, Inc.
Paul Thomas (WinApps Software Development Corporation)
C. Leases, Service Contracts and Operating Agreements
Item Vendor Terms Amount
---- ------ ----- ------
1 Computer Perimeter Micro 1 Yr End 5/97 311.85/Mo
1 Pager PageNet Month-to-Month 29.95/Mo
1 Computer Perimeter Micro 6 Mos End 3/97 312.00/Mo
1 Computer Perimeter Micro 6 Mos End 3/97 297.00/Mo
Office
Space/Furn NE Executive Stes Month-to-Month 3499.00/Mo
1 Cel Phones BellSouth Mobility Month-to-Month 47.55/Mo
Yellow Pgs BellSouth Ad Pub 12 Mos End 12/97 523.00/Mo
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DISCLOSURE SCHEDULE
September 13, 1996
This disclosure schedule ("Disclosure Schedule") is given in connection
with the agreement to purchase certain assets (the "Contract") of Tech Resource,
Inc., a Georgia corporation.
Section References are to the Contract.
3.1 CORPORATE ORGANIZATION. No exceptions.
3.3 CONSENTS AND APPROVALS. Performance of this Agreement is subject
to the consent of parties to material contracts listed on Exhibit "B".
3.7 LITIGATION. No exceptions.
3.9 NO CONFLICTS. No Exceptions.
3.10 FINANCIAL STATEMENTS. Financial statements are prepared on a cash
basis without footnotes, and therefore, were not prepared in accordance with
generally accepted accounting principles. Such statements are unaudited, and
were prepared by the Company utilizing an over-the-counter accounting package.
The financial statements have been prepared in a manner consistent with prior
periods. The Buyer has reviewed Seller's financials and has utilized its own
independent accounts to restate the Seller's financials.
3.11 ABSENCE OF CERTAIN CHANGES OF EVENTS. No Exceptions.
3.13 FIXED ASSETS. No exceptions. The fixed assets are as follows:
(1) Gateway 2000 PC
(1) HP Laser Printer
(1) Answering Machine
(1) Modem/FAX
(1) Compaq Presser 660 PC & Monitor
(1) Filing Cabinet
(1) Minolta Fax Machine - 3700
(1) Electric Fan
(2) Ether-16 Ethernet Cards - EZ 2000
(2) BNC T Connectors
(2) Network LAN Terminators
(1) PC Hardware Toolkit
(1) Ethernet Cable - RG58
(1) Western Digital Hard Drive - Caviar
(2) 3COM 16Bit Combo Ethernet Cards
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(4) Meg Memory Upgrade for PC
(1) HP Scanner - HP ScanJet 3c
(1) Winbook XP5 P90 Laptop Computer
(1) High Speed Port Card IDE-300
(1) Zip Drive
(1) 3COM PCMCLA Etherlink III Combo - 3C589C
(3) Compaq Deskpro 5120 Computers & Token Ring
(1) Dell Portable Computer
(1) Bookcase
(1) Printer Stand
(1) 3COM PCMCLA Etherlink III Combo - 3C589C
(2) Etherlink II PCI cards
(1) Hitachi Pro 15" Monitor
(1) IBM Aptiva A92 P-166 Computer
(1) Sony 15" Monitor - SX25
(1) IBM Aptiva A45 P-133 Computer
3.14 COMPLIANCE WITH LAWS; AUTHORIZATIONS. No exceptions.
3.15 EMPLOYEE BENEFIT PLANS. The Seller maintains the following
employee benefit plans:
(a) The Tech Resource, Inc. 401K Savings Inventive Plan.
(b) (i) Seller sponsors an optional (employee pays) health
insurance plan underwritten through the National
Association of Self Employed in which Britt Ehrhardt and
Eric Snyder participate.
(ii) Staff employees of the Seller currently accrue two
weeks paid vacation per year. Accrued and unpaid
vacation as of September 15, 1996 is as follows:
Britt Ehrhardt 3 days
Claire Ehrhardt 3 days
Stephanie Fountain 1 day
3.16 CONTRACTS. No Exceptions.
3.18 LABOR RELATIONS.
(c) The Seller is party to employment agreements included in
Part B of the Material Contracts list attached to the Contract as Exhibit "B".
In addition, Seller maintains a Staff Consulting Commission Pay in which
Jennifer Greene, Debra Peterson and Eric Synder participate, and an Account
Managers' Pay Plan in which Greg Mayfield participates.
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Exhibit A-1
Excluded Assets
1. Corporate minute books, stock records, corporate seals,
treasury shares, tax returns and supporting schedules
2. Medical, dental, disability and term life insurance
3. Tax utility and all other refunds of any type or nature
4. Federal tax deposits and all other deposits and prepaid items
5. All cash and cash equivalent accounts of any nature including
but not limited to certificates of deposits, bank accounts,
money market accounts, and petty cash accounts.
6. Marketable and non-marketable securities.
7. Accounts receivable.
8. Amounts due from affiliates.
9. The following amounts due Seller and Britt Ehrhardt from
customers representing the remaining balance of the purchase
price of personal computers:
Balance at 09/09/96
-------------------
PC for Jim Cobb $ 88.73
PC for Ken Venator $ 109.73
PC for Paul Thomas $ 657.23
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