EXHIBIT 10.8
ASSET PURCHASE AGREEMENT
DATED MARCH 3, 1997
BY AND BETWEEN
OUTSOURCE INTERNATIONAL OF AMERICA, INC.
AS BUYER
AND
STAFF MANAGEMENT SERVICES, INC.
AS SELLER
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into as of the 3rd
day of March, 1997 ("Agreement") , by and between OutSource International of
America, Inc., Florida corporation ("Buyer"), and Staff Management Services,
Inc., a New Jersey corporation, doing business as Staff Management Services,
(collectively referred to as "SMSI"), sometimes referred to as "Seller".
RECITALS:
WHEREAS, the Seller operates a temporary help business from six (6)
locations in and around Ocean, Middlesex, Essex and Passaic Counties, New Jersey
(the "Business").
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, on the terms and conditions set forth herein, substantially all of
the assets of the Seller, which together constitute substantially all of the
assets that are used in connection with, necessary for, or beneficial to, the
operation of the Business;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. SALE OF ASSETS; ASSUMPTION OF LIABILITIES.
1.1 SALE OF ASSETS OF SELLER. Subject to the terms and conditions
hereof, Seller will sell, convey, assign, transfer and deliver to Buyer at the
Closing (as hereafter defined), and Buyer will purchase and accept at the
Closing, all assets, properties, privileges, rights, interests, business and
goodwill owned by Seller or in which Seller has an interest (except the Excluded
Assets, as hereinafter defined), and used or held for use in connection with the
operation of the Business, of every kind and description, real, personal and
mixed, tangible and intangible and wherever located (such assets, properties,
privileges, rights, interests, business and goodwill being transferred hereunder
are hereinafter referred to collectively as the "Assets"). Without limiting the
generality of the foregoing, the Assets shall include all of Seller's right,
title and interest in and to the following (except to the extent any of the
following constitute Excluded Assets):
(a) All supplies, equipment, vehicles, machinery, furniture,
fixtures, leasehold improvements and other tangible property owned by Seller or
used by Seller in connection with the Business, including the tangible assets
listed on SCHEDULE 1.1.
(b) All of Seller's right, title and interest under all agreements
or contracts to which it is a party or by which it or the Assets are bound or
which otherwise relate to the Business, including, without limitation, the
documents listed in EXHIBIT A or SCHEDULE 3.8 hereto;
(c) All of Seller's right, title and interest in and to the
Intellectual Property (as hereafter defined) owned by Seller or used in the
Business;
(d) All proprietary knowledge, trade secrets, technical
information, quality control data, processes (whether secret or not), methods,
and other similar know-how or rights used in the Business;
(e) The Business as a going concern and its, customer lists,
vendor lists, restrictive covenants, choses in action, rights of recovery,
rights of recoupment, lists of temporary employees, together with all books,
computer software, files, papers, records and other data of Seller relating to
their respective assets, properties, business and operations;
(f) All other property and rights of every kind or nature owned by
Seller or used in the Business, including but not limited to the employment
applications of temporary staff (the "Applications").
(g) All rights of Seller in and to its trade names and trademarks
used in the Business, and variants thereof and all goodwill associated therewith
for a period of twelve (12) months from the date of Closing at no additional
cost of any kind; and
(h) Buyer shall assume all of Sellers equipment and motor vehicle
leases in respect of those items acquired by Buyer, and shall bear full
financial responsibility for those of Sellers real property leases as correspond
to Sellers offices continued by Buyer and partial financial responsibility for
those of Sellers real property leases as correspond to Sellers offices
discontinued by Buyer.
1.2 ASSETS RETAINED BY SELLER. There shall be excluded from the Assets
and retained by Seller all of the following (collectively, the "Excluded
Assets"):
(a) the corporate charters, qualifications to conduct business as
a foreign corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute books,
stock transfer books, blank stock certificates, and other documents relating to
the organization, maintenance, and existence of Seller as corporations;
(b) any of the rights of Seller under this Agreement (or under any
agreement between Seller on the one hand and Buyer on the other hand entered
into on or after the date of this Agreement);
(c) all cash and accounts receivable of the business as of March
2, 1997, and all personal assets of the owner; and
(d) all tax records or copies thereof.
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1.3 ASSUMPTION OF LIABILITIES. At the Closing, Buyer shall assume, and
shall agree to satisfy and discharge as the same become due only those
liabilities and obligations of Seller specifically listed on EXHIBIT A hereto
(the "Assumed Obligations") and, subject to Section 1.4 of this Agreement, the
Assumed Leases (as hereafter defined). Buyer shall not assume or be responsible
at any time for any liability, obligation, debt or commitment of Seller, whether
absolute or contingent, accrued or unaccrued, asserted or unasserted, or
otherwise, that is not expressly listed on EXHIBIT A hereto. Without limiting
the generality of the foregoing sentence, Buyer shall not assume or be
responsible for any of the following: any amounts due to any of Seller's
creditors listed on EXHIBIT A hereto in excess of the amounts expressly listed
thereon; any matured obligations under leases, licenses, contracts or agreements
in excess of the amounts expressly listed on EXHIBIT A hereto; any liabilities,
obligations, debts or commitments of Seller incident to, arising out of, or
incurred with respect to, this Agreement and the transactions contemplated
hereby; any and all sales, use, franchise, income, gross receipts, excise,
payroll, personal property (tangible or intangible), real property, ad-valorem,
value added, leasing, leasing use, or other taxes, levies, imposts, duties,
charges or withholdings of any nature arising out of the transactions
contemplated hereby.
Seller further agrees to satisfy and discharge as the same shall become
due all of its obligations and liabilities not specifically assumed by Buyer
hereunder. Buyer's assumption of the Assumed Obligations shall in no way expand
the rights and remedies of third parties against Buyer as compared to the rights
and remedies which such parties would have had against Seller had this Agreement
not been consummated.
1.4 LEASES. Notwithstanding any other provision of this Agreement,
Buyer's assumption of any liabilities or obligations of Seller with respect to
any lease or leasehold interest (the "Assumed Leases") shall be subject to the
terms of the Lease Assignment and Assumption Agreements to be delivered pursuant
to Sections 2.2(i) and 2.3(e) of the Agreement.
1.5 PAYMENT FOR ASSETS. Buyer shall purchase the Assets for an
aggregate purchase price (the "Purchase Price") of Four Million Dollars
($4,000,000.00) calculated in the manner set forth on EXHIBIT F hereto.
1.6 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets as set forth on EXHIBIT B hereto (the "Allocation"). The
Allocation shall be made in accordance with Section 1060 of the Internal Revenue
Code and applicable Treasury regulations. The Buyer and Seller shall (i) be
bound by the Allocation for purposes of determining any Taxes (as hereafter
defined), (ii) prepare and file tax returns on a basis consistent with the
Allocation and (iii) take no position inconsistent with the Allocation in any
proceeding before any taxing authority or otherwise. In the event that the
Allocation is disputed by any taxing authority, the party receiving notice of
the dispute shall promptly notify the other parties hereto of the receipt of
such notice.
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1.7 PAYMENT OF PURCHASE PRICE. Buyer shall pay the Purchase Price as
follows:
(a) Buyer shall pay Two Million Three Hundred Fifty Thousand
Dollars ($2,350,000.00) to SMSI by cashier's check or bank wire (the "Cash
Payment") on the Closing Date; and
(b) At Closing, deliver to SMSI a negotiable note which will be
secured , on a first priority basis, by the general intangibles, of the Dover,
NJ and Paterson, NJ offices that Seller is selling to Buyer, but which shall
otherwise be subordinated to Buyer's senior indebtedness, in the form attached
as EXHIBIT C hereto.
(i) The note shall be for One Million Six Hundred-Fifty
thousand Dollars ($1,650,000.00), it shall bear interest
at Four percent (4%) per annum compounded. It shall be
due in two annual installments. The first installment is
payable on March 15, 1998 and shall be in the amount of
Nine Hundred and Twenty-Five Thousand dollars
($925,000.00) plus accrued interest; the second
installment is payable on March 15, 1999 and shall be in
the amount of Seven Hundred and Twenty-Five Thousand
dollars ($725,000.00) plus accrued interest.
(ii) The note shall contain a provision to increase the
interest in the event of a default. The increases shall
be (a) from four percent (4%) to eight percent (8%) from
loan inception until such time as the amount in default
is paid in full, and (b) a further increase of the prime
interest rate (as published in the Wall Street Journal
on the date of default, or the next publication date if
default occurs on a non-publication date) plus four
percent 4% from the date of default until such time as
the amount in default is paid in full. All such interest
shall be compounded annually.
(d) OutSource will grant Dennis M. Omahen options for 5,000 shares
of stock at the time of Closing, and will grant additional options of 5,000
shares for each of the following two (2) years provided he meets certain
performance requirements to be agreed upon. All such options will be granted
under the terms of OutSource's standard Incentive Stock Option Plan and all such
options will be shares in the entity that will exist following the roll-up of
OutSource's existing Sub-S Corporation into a C-Corporation.
1.8 ENCUMBRANCES. The Assets shall be sold and conveyed to Buyer free
and clear of all mortgages, security interests, charges, encumbrances, liens,
assessments, covenants, claims, title defects, pledges, encroachments and
burdens of every kind or nature whatsoever, except for the matters set forth in
SCHEDULE 3.1 hereto (the "Permitted Liens").
1.9 PRORATION. Seller shall pay at Closing all applicable transfer,
sales, use, bulk sales and other taxes, and all documentary, filing, recording
and vehicle registration fees payable as a result
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of the transfer of the Assets. All ad valorem and property taxes, and any
similar assessment based upon or measured by Seller's ownership interest in the
Assets, shall be prorated between Seller and Buyer as of the Closing Date based
upon such taxes assessed against the Assets for the tax period in question, or
if there is insufficient information for such tax period, based upon taxes
assessed for the immediately preceding tax period. All such taxes shall be
prorated on the basis of a 365-day year. Seller shall be charged for all such
taxes and assessments based upon or measured by Seller's ownership prior to the
Closing Date and Buyer shall be charged for all such taxes and assessments based
upon or measured by Buyer's ownership on or after the Closing Date. All such
prorations and payments shall be made at the Closing.
2. CLOSING DATE.
2.1 TIME AND PLACE OF CLOSING. The closing of the sale and purchase of
the Assets (the "Closing") will take place at the offices of Lindabury,
McCormick & Estabrook, PC in Westfield, NJ at 10:00 a.m., Eastern Time, on March
3, 1997 or at such other time and place as the parties may establish (the date
of the Closing being hereinafter referred to as the "Closing Date"). The
transactions contemplated hereby shall be deemed to be effective as of 12:01
a.m., Eastern standard Time, on the Closing Date. If any extension of time is
needed to close it shall only be by mutual agreement of both parties. In the
event Buyer does not, through its own volition, consummate the transaction
contemplated herein, it shall pay Seller a delay fee of Ten Thousand Dollars
($10,000.00).
2.2 DELIVERIES BY SELLER. At or prior to the Closing, Seller shall
execute and deliver or cause to be executed and delivered to Buyer the
following:
(a) A Bill of Sale, in substantially the form attached as EXHIBIT
D hereto;
(b) An Assignment and Assumption Agreement, in substantially the
form attached as EXHIBIT E hereto;
(c) Noncompetition Agreements in substantially the form attached
as EXHIBIT H hereto executed by Dennis M. Omahen pursuant to which he shall
agree not to compete within a 25 mile radius of any of SMSI's locations until
December 31, 2001. In addition SMSI will use its best efforts to obtain, as of
the Closing, non-competition agreements, in substantially the form attached as
Exhibit H-1 hereto, from branch employees pursuant to which they shall agree not
to compete within a 25 mile radius of any SMSI locations for a period of one (1)
year following cessation of their employment. The non-compete with Dennis M.
Omahen shall be null and void in the event Buyer defaults on its note to Seller.
(d) An Assignment of Applications, in substantially the form
attached as EXHIBIT K hereto;
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(e) A Certificate executed as of the Closing Date by a duly
authorized officer of SMSI certifying: (i) the resolutions of the Board of
Directors and Shareholders of SMSI approving the transactions contemplated
hereby, and (ii) as to the accuracy of SMSI's representations and warranties and
as to the performance and compliance of all of the terms, provisions and
conditions to be performed or complied with by SMSI at or before Closing;
(f) The documents required pursuant to Sections 7.2, 7.3, 7.5,
7.11, 7.12 and 7.13 of this Agreement;
(g) An Assignment and Assumption of lease(s) substantially in the
form attached as EXHIBIT J hereto;
(h) A certification that OutSource has the right to use the "Staff
Management Services" name, for a period of one year, at no charge; and
(i) Such other instruments of sale, transfer, conveyance and
assignment as Buyer and its counsel may reasonably request.
2.3 DELIVERIES BY BUYER. At or prior to Closing, Buyer shall execute
and deliver or cause to be executed and delivered to Seller the following:
(a) The Promissory Note.
(b) An Assignment and Assumption Agreement, in substantially the
form attached as EXHIBIT E hereto;
(c) A Security Agreement attached as EXHIBIT M hereto;
(d) A Partial Rescission of Agreements and Transactions attached
as EXHIBIT N hereto;
(e) A Certificate executed as of the Closing Date by a duly
authorized officer of Buyer certifying: (i) the resolutions of the Board of
Directors of Buyer approving the transactions contemplated hereby, and (ii) as
to the accuracy of Buyer's representations and warranties and as to the
performance and compliance of all of the terms, provisions and conditions to be
performed or complied with by Buyer at or before Closing;
(f) OutSource's standard employment agreement stating that Dennis
Omahen shall be employed, as an employee at will, by OutSource, as a Regional
Manager, beginning on the date of closing, at an annual salary of $90,000 per
year plus a bonus potential plus benefits commensurate with other OutSource
employees in his comparable position and salary level (including payment of
OutSource's normal, published auto allowance).
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(g) The full or partial (as the case may be) release of SMSI from
liability on all real property leases involving SMSI;
(h) Such other instruments of assumption as Seller and their
counsel may reasonably request.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller as a material inducement to
Buyer to enter into this Agreement and consummate the transactions contemplated
hereby, makes the following representations and warranties to Buyer. Exceptions
to such representations and warranties are set forth in the disclosure schedule
accompanying this Agreement (the "Disclosure Schedule"). The Disclosure Schedule
shall be effective to modify only those representations and warranties to which
the Disclosure Schedule makes explicit reference. All representations and
warranties are stated to the actual knowledge without investigation of the
President of Seller.
3.1 TITLE TO ASSETS. Except as described in SCHEDULE 3.1 hereto, Seller
has good, marketable and unencumbered title to the Assets (or, with respect to
any real or personal property leases included in the Assets, a valid leasehold
interest therein), free and clear of all mortgages, security interests, liens,
claims, encumbrances, title defects, pledges, charges, assessments, covenants,
encroachments and burdens of any kind or nature whatsoever, and have full right
and authority to transfer and deliver all the Assets. Except as described in
SCHEDULE 3.1 hereto, upon consummation of the transactions contemplated hereby,
Seller will have transferred to Buyer good, marketable and unencumbered title to
the Assets (or with respect to any real or personal property leases included in
the Assets, a valid leasehold interest therein), free and clear of all
mortgages, security interests, liens, claims, encumbrances, title defects,
pledges, charges, assessments, covenants, encroachments and burdens of any kind
or nature whatsoever. The Assets constitute all of the assets that are used in
connection with, necessary for, or beneficial to the operation of the Business.
3.2 CORPORATE STATUS OF SMSI. Staff Management Services, Inc. is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey. It is qualified to do business and is in good
standing in each jurisdiction where the operation of its business requires that
it be so qualified. It has all requisite corporate power and authority to own,
operate and lease its properties and assets, to conduct its business as it is
now being conducted, to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. An accurate
and complete copy of the Articles of Incorporation and Bylaws, as presently in
effect, are included as an attachment to SCHEDULE 3.2 hereto.
3.3 AUTHORITY CONCERNING THIS AGREEMENT. The execution, delivery and
performance by Seller of this Agreement and of each agreement, document or
instrument executed and delivered or to be executed and delivered in connection
with the transactions contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby, have been duly and validly
authorized and approved by all necessary corporate action of Seller. This
Agreement is (and, when executed and delivered, each agreement, document or
instrument to be executed and delivered in
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connection with the transactions contemplated hereby will be) valid and binding
upon Seller, and enforceable against Seller in accordance with their respective
terms except to the extent that enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency or moratorium laws, or other laws
affecting the enforcement of creditors' rights or by the principles governing
the availability of equitable remedies.
3.4 CONDITION OF REAL AND PERSONAL PROPERTY; LEASES. All real property
leased by Seller and used in the operation of the Business is listed and
described in SCHEDULE 1.4 hereto. All material items of tangible personal
property and assets owned or leased by Seller and used in the operation of the
Business are described in SCHEDULE 1.1 hereto. All machinery and equipment
listed in SCHEDULE 1.1 conforms to all applicable ordinances, regulations, and
zoning or other laws. Except as described in SCHEDULE 1.1, all items listed on
SCHEDULE 1.1 are in good operating condition and repair, subject only to normal
wear and tear, and are adequate to conduct the Business as it is now being
conducted. Seller has delivered to Buyer accurate and complete copies of all
leases relating to real and personal property leased by Seller and used in the
operation of the Business and, except as described in SCHEDULE 1.4, all such
leases are in full force and effect, no event of default has been declared
thereunder and, to the Seller's knowledge, no basis for any default exists.
3.5 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. Attached hereto as
part of SCHEDULE 3.5 are the Seller's Financial Statements for the period ending
December 31, 1996. The Financial Statements (x) present fairly the financial
position and results of operations of the Seller for the dates or periods
indicated thereon, (y) have been prepared in Accordance with generally accepted
accounting principles applied on a consistent basis throughout the period
indicated and (z) accurately reflect the transactions, assets and liabilities of
Seller as of the dates and for the periods presented. Except as set forth in the
Financial Statements or on SCHEDULE 3.5 and the other schedules hereto, Seller
has no debts, liabilities or obligations, whether direct or indirect, accrued,
absolute, contingent, matured, known, unknown or otherwise, and whether or not
of a nature required to be reflected or reserved against in a balance sheet in
accordance with generally accepted accounting principles. Seller is not aware of
any basis for the assertion of any claims or liabilities of any nature which are
not fully reflected or reserved against in the Financial Statements or otherwise
disclosed in SCHEDULE 3.5 hereto.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since February 7, 1997,
Seller has conducted its business only in the normal and ordinary course in
substantially the same manner as heretofore conducted and have used all
reasonable efforts consistent with normal business practices to preserve and
promote such business and to avoid any act that might have a material adverse
effect upon the value of such business as a going concern or upon the Assets. No
event has occurred to prevent the Seller's business from operating in a normal
and usual manner and in substantially the same manner as heretofore operated.
Except as expressly set forth in SCHEDULE 3.6 hereto, since February 7, 1997;
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(a) there has not been any damage, destruction or loss, whether
covered by insurance or not, materially and adversely affecting the Seller's
business or the Assets;
(b) there has not been any (i) increase (other than normal merit
or cost-of-living increases in the ordinary course of business and consistent
with past practices) or material change: (y) in compensation or bonuses payable
to or to become payable by Seller to its officers, employees or agents, or (z)
in any insurance, pension or other benefit plan, payment or arrangement made to,
for or with any of such officers, employees or agents; or (ii) other material
change in the employment terms of any officer, employee or agent of Seller;
(c) there has not been any sale, transfer or other disposition of
any tangible or intangible asset, or real or personal property or interest
therein, or any mortgage, lien or encumbrance placed thereon except in the
ordinary course of business and consistent with past practice;
(d) there has not been any failure to maintain any Seller's books,
accounts and records in the usual, regular and ordinary manner and in accordance
with good business practices and consistent with past practice;
(e) there has not been any action taken or omitted to be taken by
Seller which could cause (with or without the giving of notice or the passage of
time, or both) the breach, default, acceleration, amendment, termination or
waiver of or under any Material Agreement (as hereinafter defined) or the
imposition of any lien, encumbrance, mortgage or other claim or charge against
the Assets;
(f) there has not been any liability, obligation or commitment
incurred by Seller, outside of the ordinary course of business, involving,
individually or in the aggregate, more than $2,500.00;
(g) Seller has not entered into, nor has Seller or the Assets
become subject to, any contracts, agreements, commitments, indentures,
mortgages, notes, bonds, license, real or personal property leases or other
obligations of the type required to be disclosed in SCHEDULE 3.7 hereto that are
not otherwise disclosed herein;
(h) Seller has not made any capital investment in, any loan to, or
any acquisition of the securities or assets of any person or entity;
(i) there has been no change made or authorized in the charter or
bylaws of Seller other than as may be necessary to carry out the purposes and
intents of this Agreement;
(j) Seller has not issued, sold or otherwise disposed of any of
its capital stock or granted any options, warrants or other rights to purchase
or obtain any of its capital stock;
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(k) Seller has not declared, set aside or paid any dividend or
made any distribution with respect to its capital stock (whether in cash or in
kind) or redeemed, purchased or otherwise acquired any of its capital stock;
(l) Seller has not made any loan to, or entered into any other
transaction with, any of its directors, officers or employees;
3.7 CONTRACTS AND COMMITMENTS. EXHIBIT A and SCHEDULE 3.7 hereto
together include a true, correct and complete list of all material contracts,
agreements, commitments, indentures, mortgages, notes, bonds, licenses, real and
personal property leases and other obligations to which Seller is a party, by
which Seller or its assets or properties are bound or may be affected or which
otherwise relate to the Business (the "Material Agreements"). Without limiting
the generality of the foregoing, the term Material Agreement includes: (a) any
lease or license with respect to any Assets, whether a Seller is tenant,
landlord, licensor or licensee thereunder; (b) any agreement, contract,
indenture or other instrument relating to the borrowing of money or the
guarantee of any obligation or the deferred payment of the purchase price of any
Assets; (c) any agreement concerning a partnership or joint venture; (d) any
agreements between Seller on the one hand and any of its shareholders, officers,
directors or employees on the other; (e) any agreement relating to
confidentiality or noncompetition; (f) any preferential purchase right, right of
first refusal or similar agreement; (g) any agreement entered into outside of
the ordinary course of business; or (h) any other agreement (or group of related
agreements) which could involve expenditures (in cash or in kind) by Seller in
excess of $2,500.00 per year. True and complete copies of all of the Material
Agreements are included as part of SCHEDULE 3.7 hereto. Each of the Material
Agreements listed in EXHIBIT A and SCHEDULE 3.7 are valid, binding and
enforceable in accordance with their respective terms and are in full force and
effect and were entered into in the ordinary course of business on an "arms
length" basis. No part of Seller's rights or benefits under any Material
Agreement has been assigned, transferred, or in any way encumbered. Seller is
not in breach of nor has Seller defaulted under any of the Material Agreements
and no occurrence or circumstance exists which constitutes (with or without the
giving of notice or the passage of time or both) a breach or default by Seller
under any Material Agreement. The other parties to the Material Agreements are
not in default thereunder and no occurrence or circumstance exists which
constitutes or would constitute (with or without the giving of notice or the
passage of time or both) a breach or default by the other party thereunder.
Except as set forth on SCHEDULE 3.7 hereto, neither Seller nor any of the Assets
are bound by or subject to any contract, agreement, commitment, indenture,
mortgage, note, bond, license, real or personal property lease or other
obligation which on the Closing Date cannot be terminated upon thirty (30) days'
written notice by Seller or Buyer without penalty or other obligation being
incurred upon such termination.
3.8 INTELLECTUAL PROPERTY. Seller owns or is licensed to use
Intellectual Property ("Intellectual Property"), as set forth in SCHEDULE 3.8.
Each item of Intellectual Property owned or used by Seller immediately prior to
the Closing shall be owned or available for use by Buyer on identical terms and
conditions immediately subsequent to the Closing. Seller has not received any
charge, complaint, claim, demand or notice alleging any such interference,
infringement,
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misappropriation or violation with any Intellectual Property right of 3rd
parties. No third party has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of Seller.
SCHEDULE 3.9 hereto contains a true and correct description of the following:
(a) All Intellectual Property currently owned, in whole or in
part, by Seller, and all licenses, royalties, assignments and other similar
agreements relating to the foregoing to which Seller is a party; and
(b) All agreements relating to Intellectual Property that Seller
is licensed or authorized to use from others or which Seller licenses or
authorizes others to use.
3.9 TAXES. All federal, state, local and foreign tax returns (including
information returns) and reports of Seller required by any applicable law, rule,
regulation or procedure of any federal, state, local or foreign agency,
authority or body to be filed have been duly filed by Seller. Seller has either
(i) paid all federal, state, county, local, foreign and other taxes (hereinafter
"Taxes" or individually a "Tax") required to be paid by them through the Closing
Date and all deficiencies or other additions to Tax, including interest or
penalties owed in connection with any such Taxes or (ii) included adequate
provision for all such Taxes and deficiencies or other additions to Tax
applicable to Seller in the Seller's Financial Statements. All Taxes and other
assessments and levies required to be collected or withheld by Seller with
respect to the operation of their business from customers with respect to sales
of products or from employees for income taxes, social security taxes and
unemployment insurance taxes have been collected or withheld, and either paid to
the respective governmental agencies, or set aside in an account owned by Seller
and established for that purpose.
Seller is not a party to any pending action or proceeding regarding
assessment or collection of Taxes by any governmental authority. To Seller's
knowledge, no action or proceeding regarding assessment or collection of Taxes
is threatened against Seller. There are no facts or state of facts existing that
(with or without the giving of notice) or the passage of time or both) could
form the basis for any such action or proceeding. Seller has not executed or
filed any agreement with the Internal Revenue Service or any other taxing
authority extending the period for the assessment or collection of any Taxes.
3.10 LITIGATION. There is no suit, proceeding, action, claim or
investigation, at law or in equity, pending or threatened against Seller
materially affecting the assets, properties or property interests of Seller.
There are no facts or state of facts existing that (with or without the giving
or notice or the passage of time or both) could form the basis for any such
suit, proceeding, action, claim or investigation. Neither Seller nor any of its
assets, property or property interests is subject to any judgement, order, writ,
injunction or decree of any court or any federal, state, municipal, foreign or
other governmental authority, department, commission, board, bureau, agency or
other instrumentality.
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3.11 EMPLOYEE BENEFIT PLANS; ERISA.
(a) SCHEDULE 3.11 hereto lists all employee benefit plans (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) and each other employee benefit arrangement, contract,
agreement or policy, including, without limitation, pension, profit sharing or
thrift plans, medical benefit programs, death benefit and disability programs,
and severance, vacation and sick leave policies applicable to employees of the
Seller (hereinafter referred to collectively as the "Plans").
(b) All Plans have complied in all material respects with all
applicable requirements of the Internal Revenue Code of 1986, as amended (the
"Code"), and any predecessor Federal income tax laws, ERISA, all other
applicable laws and any applicable collective bargaining agreements.
(c) No single employer defined benefit pension plan or defined
benefit plan for a controlled group of corporations included within the Plans
has since 1976: (i) had any accumulated minimum funding deficiency; (ii) been
granted a waiver of the minimum funding standards contribution; (iii) been
terminated by its plan sponsor or the Pension Benefit Guaranty Corporation
("PBGC"); or (iv) incurred or reported a reportable event; and no such Plan has
assets valued at fair market value that are less than the present value of all
accrued liabilities using PBGC actuarial and interest rate assumptions in effect
on the date hereof as applicable to single employer plan terminations or plans
for a controlled group of corporations.
3.12 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution nor
delivery by Seller of this Agreement, or any agreement, document or instrument
executed and delivered or to be executed and delivered in connection with the
transactions contemplated hereby, nor the consummation by Seller of the
transactions contemplated hereby or thereby, nor compliance by Seller with any
of the provisions hereof or thereof, will (a) conflict with or result in a
breach of any provision of Seller's Articles of Incorporation or Bylaws, (b)
result in the breach of, or conflict with, any of the terms and conditions of,
or constitute a default (with or without the giving of notice or the passage of
time or both) with respect to, or result in the cancellation or termination of,
or the acceleration of the performance of any obligations or of any indebtedness
under, any Material Agreement, (c) result in the creation of a lien, security
interest, charge or encumbrance upon any of the Assets, or (d) violate any law
or any rule or regulation of any administrative agency or governmental body, or
any order, writ, injunction or decree of any court, administrative agency or
governmental body to which any Seller or its properties or assets may be
subject. No approval, authorization, consent or other action of, or filing with,
or notice to any court, administrative agency or other governmental authority or
any other person or entity is required for the execution and delivery by any
Seller of this Agreement or any agreement, document or instrument executed and
delivered or to be executed and delivered in connection with the transactions
contemplated hereby or thereby, or the consummation of the transactions
contemplated hereby or thereby.
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3.13 LICENSES, PERMITS AND AUTHORIZATIONS. Seller has all permits,
licenses, certificates of occupancy, approvals or other authorizations from and
registrations with federal, state, municipal and foreign governmental agencies
and private associations necessary to operate their business (collectively the
"Permits") and all such Permits are in full force and effect and no suspension
or cancellation of any such Permit is threatened. A list of the Permits is
included in SCHEDULE 3.14 hereto.
3.14 INSURANCE. SCHEDULE 3.15 hereto contains a complete list of all
insurance policies maintained by Seller with respect to the Business or the
Assets. Such insurance is in full force and effect; will not terminate or lapse
by reason of the transaction contemplated hereby; is sufficient for compliance
with all requirements of law and any agreements to which Seller is a party or by
which the Assets are bound; and will remain in full force and effect until
Closing. SCHEDULE 3.15 specifically excludes worker's compensation insurance.
Worker's compensation insurance for the Business of Seller has been provided by
an affiliate of Buyer effective January 1, 1997, and Buyer acknowledges its
obligations to provide such coverage until Closing and Seller acknowledges its
obligations to reimburse Buyer for such coverage, all of which has heretofore
been agreed upon by Seller and an affiliate of Buyer.
3.15 GUARANTEES. Neither the Business nor any of the Assets is or will
be at the Closing, directly or indirectly, (i) liable, by guarantee or
otherwise, upon or with respect to, (ii) obligated, by discount or repurchase
agreement or in any other way, to provide funds in respect of, or (iii)
obligated to guarantee or assume, any debt, dividend or other obligation of any
person, corporation, association, partnership or other entity.
3.16 CORPORATE AND PERSONNEL DATA; LABOR RELATIONS. Seller is in
compliance with all federal, state, local and foreign laws, rules and
regulations affecting employment and employment practices of Seller, including
those relating to terms and conditions of employment and wages. There are no
complaints pending against Seller in connection with any employment related
matters. Seller is not a party to any collective bargaining agreement. SCHEDULE
3.16 includes a monthly report which reflects Seller's current payroll; this
report accurately reflects Seller's entire current monthly payroll obligations
to their employees. SCHEDULE 3.16 also includes a list of the names and
compensation levels of any consultants, independent contractors or temporary
employees regularly utilized by Seller.
3.17 COMPLIANCE WITH LAWS/ENVIRONMENTAL MATTERS. Seller has at all
times conducted its business and the Assets have been held in compliance with
all applicable laws, regulations, ordinances, orders and other requirements of
governmental authorities having jurisdiction over Seller, the failure to comply
with which would have a material adverse affect on its Business and the Assets.
Seller has not received any formal or informal notice, advice, claim or
complaint alleging that Seller has violated or may have violated any law,
regulation, ordinance or order and, no such notice, advice, claim or complaint
of any type is threatened. Seller has at all times complied and presently comply
with all applicable federal, state, local and foreign laws, rules and
regulations respecting occupational safety and health standards, the failure to
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comply with which would have a material adverse affect on its Business and the
Assets, and Seller has not received complaints from any employee or any federal,
state, local or foreign agency alleging any violation of any federal, state,
local or foreign laws respecting occupational safety and health standards.
3.18 ACCURACY OF INFORMATION FURNISHED. No statement contained in this
Agreement or any Exhibit or Schedule attached hereto, and no statement contained
in any certificate or other instrument or document furnished by or on behalf of
Seller pursuant to this Agreement, contains or will contain any untrue statement
of a material fact or omits or will omit to state any material fact that is
necessary to make the statements contained herein or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. As a material inducement for Seller
to enter into this Agreement and to consummate the transactions contemplated
hereby, Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of Illinois. Buyer has
all requisite corporate power and authority to own and operate its properties,
to carry on its business as now being conducted and to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby.
4.2 AUTHORITY CONCERNING THIS AGREEMENT. The execution, delivery and
performance by Buyer of this Agreement and of each agreement, document or
instrument executed and delivered or to be executed and delivered in connection
with the transactions contemplated hereby, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by all necessary corporate action of Buyer. This
Agreement is (and, when executed and delivered, each agreement, document or
instrument to be executed and delivered in connection with the transactions
contemplated hereby will be) valid and binding upon Buyer, and enforceable
against Buyer in accordance with their respective terms except to the extent
that enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency or moratorium laws, or other laws affecting the
enforcement of creditors' rights or the principles governing the availability of
equitable remedies.
4.3 FINANCIAL STATEMENTS. Attached hereto as part of SCHEDULE 4.3 are
the Buyer's unaudited Financial Statements for the period ending December 31,
1996. The Financial Statements (x) present fairly the financial position and
results of operations of the Buyer for the dates or periods indicated thereon,
(y) have been prepared in Accordance with generally accepted accounting
principles applied on a consistent basis throughout the period indicated and (z)
accurately reflect the transactions, assets and liabilities of Buyer as of the
dates and for the periods presented. Except as set forth in the Financial
Statements or on SCHEDULE 4.3 and the other schedules hereto, Buyer has no
debts, liabilities or obligations, whether direct or indirect, accrued,
absolute,
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contingent, matured, known, unknown or otherwise, and whether or not of a nature
required to be reflected or reserved against in a balance sheet in accordance
with generally accepted accounting principles (except for a $70 million debt and
equity facility that Buyer closed on February 21, 1997). Buyer is not aware of
any basis for the assertion of any claims or liabilities of any nature which are
not fully reflected or reserved against in the Financial Statements or otherwise
disclosed in SCHEDULE 4.3 hereto.
4.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996,
Buyer conducted its business only in the normal and ordinary course in
substantially the same manner as heretofore conducted. No event or events have
occurred since such date that have had, or before the Closing will, or may, have
a material adverse affect on the Buyer's assets and its business.
4.5 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution nor
delivery by Buyer of this Agreement, or any agreement, document or instrument
executed and delivered or to be executed and delivered in connection with the
transactions contemplated hereby, nor the consummation by Buyer of the
transactions contemplated hereby or thereby, nor compliance by Buyer with any of
the provisions hereof or thereof, will (a) conflict with or result in a breach
of any provision of Buyer's Articles of Incorporation or Bylaws, (b) result in
the breach of, or conflict with, any of the terms and conditions of, or
constitute a default (with or without the giving of notice or the passage of
time or both) with respect to, or result in the cancellation or termination of,
or the acceleration of the performance of any obligations or of any indebtedness
under, any Material Agreement, (c) result in the creation of a lien, security
interest, charge or encumbrance upon the purchase price payable by Buyer to
Seller, or (d) violate any law or any rule or regulation of any administrative
agency or governmental body, or any order, writ, injunction or decree of any
court, administrative agency or governmental body to which Buyer or its
properties or assets may be subject. No approval, authorization, consent or
other action of, or filing with, or notice to any court, administrative agency
or other governmental authority or any other person or entity is required for
the execution and delivery by Buyer of this Agreement or any agreement, document
or instrument executed and delivered or to be executed and delivered in
connection with the transactions contemplated hereby or thereby, or the
consummation of the transactions contemplated hereby or thereby.
4.6 LITIGATION. There is no suit, proceeding, action, claim or
investigation, at law or in equity, pending or threatened against Buyer
materially affecting the assets, properties or property interests of Buyer.
There are no facts or state of facts existing that (with or without the giving
or notice or the passage of time or both) could form the basis for any such
suit, proceeding, action, claim or investigation. Neither Buyer nor any of its
assets, property or property interests is subject to any judgement, order, writ,
injunction or decree of any court or any federal, state, municipal, foreign or
other governmental authority, department, commission, board, bureau, agency or
other instrumentality.
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4.7 ACCURACY OF INFORMATION FURNISHED. No statement contained in this
Agreement, or any exhibit or schedule attached, and no statement contained in
any certificate or other instrument or document furnished by or on behalf of
Buyer pursuant to this Agreement, contains or will contain any untrue statement
of a material fact or omits or will omit to state any material fact that is
necessary to make the statements contained herein or therein not misleading.
5. INDEMNIFICATION AND SET OFF.
5.1 INDEMNIFICATION OBLIGATION OF SELLER. Seller hereby agrees to
defend, indemnify and hold harmless Buyer from, against and in respect of any
loss, cost, damage or expense, including but not limited to, legal and
accounting fees and expenses (and sales taxes thereon, if any) asserted against,
imposed upon or paid, incurred or suffered by Buyer (a "Loss"):
(a) as a result of, arising from or in connection with any breach
of any representation, warranty, covenant or agreement of Seller in this
Agreement or in any agreement, document or instrument executed and delivered in
connection with the transactions contemplated hereby; or
(b) any misrepresentation or inaccuracy in, or omission from the
Disclosure Schedule or from any certificate, schedule, statement, document or
instrument furnished by Seller to Buyer in connection with the transactions
contemplated by this Agreement.
5.2 INDEMNIFICATION OBLIGATION OF BUYER. Buyer hereby agrees to defend,
indemnify and hold harmless Seller from, against and in respect of any loss,
cost, damage or expense, including but not limited to, legal and accounting fees
and expenses (and sales taxes thereon, if any) asserted against, imposed upon or
paid, incurred or suffered by Seller (a "Loss"):
(a) as a result of, arising from or in connection with any breach
of any representation, warranty, covenant or agreement of Buyer in this
Agreement or in any agreement, document or instrument executed and delivered in
connection with the transactions contemplated hereby; or
(b) as a result of, arising from or in connection with the Assumed
Obligations;
(c) any misrepresentation or inaccuracy in, or omission from the
Disclosure Schedule or from any certificate, schedule, statement, document or
instrument furnished by Buyer to Seller in connection with the transactions
contemplated by this Agreement.
5.3 INDEMNITY PROCEDURE. A party hereto agreeing to be responsible for
or to indemnify against any matter pursuant to this Agreement is referred to
herein as the "Indemnifying Party" and the other party claiming indemnity is
referred to as the "Indemnified Party." The Indemnified
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Party under this Agreement shall give prompt written notice to the Indemnifying
Party of any liability which might give rise to a claim of indemnity under this
Agreement; provided, however, that any failure to give such notice will not
waive any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually prejudiced. As to any claim, action, suit or
proceeding by a third party, the Indemnifying Party shall be entitled to assume
defense thereof (at its expense) provided that counsel for the Indemnifying
Party who shall conduct the defense of such claim shall be approved by the
Indemnified Party, which approval will not be unreasonably withheld. The
Indemnified Party shall, at its expense, provide such cooperation and such
access to its books, records and properties as the Indemnifying Party shall
reasonably request with respect to such matter; and the parties hereto agree to
cooperate with each other in order to ensure the proper and adequate defense
thereof. If in the Indemnified Party's reasonable judgment, a conflict of
interest between the Indemnified Party and the Indemnifying Party exists in
respect of a third party claim that would materially prejudice the Indemnified
Party, or, if the Indemnifying Party, after written notice from the Indemnified
Party, fails to take timely action to defend a claim, the Indemnified Party may
assume defense, at its expense, of such claim or action with counsel of its
choosing.
An Indemnifying Party shall not make any settlement of any claim
without the written consent of the Indemnified Party, which consent shall not be
unreasonably withheld. Without limiting the generality of the foregoing, it
shall not be deemed unreasonable to withhold consent to a settlement (i)
involving injunctive or other equitable relief against the Indemnified Party or
its assets, employees or business or (ii) which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation.
In the event the Indemnified Party shall withhold its consent to a
settlement and resumes the defense of a claim. The liability of the Indemnifying
Party shall be limited to the amount it had agreed to pay in connection with
said settlement. In the event the Indemnified Party reassumes the defense of a
claim, the Indemnifying Party shall be responsible to make payment in respect of
the claim to the Indemnified Party within the limitations hereof only after the
Indemnified Party has concluded a settlement or when a final order of a court of
competent jurisdiction or a final award of an arbitrator having competent
jurisdiction has been entered.
5.4 PAYMENT. The Indemnifying Party shall pay to the Indemnified Party
any amounts owed to the Indemnified Party pursuant to this Section 5 within
twenty (20) days after a final determination with respect to any indemnifiable
Loss hereunder. A "final determination" means a settlement by the Indemnifying
Party or the Indemnified Party as hereinabove described or when a final order of
the court of competent jurisdiction or a final award of an arbitrator having
competent jurisdiction has been entered. Without limiting the generality of the
foregoing, insurance proceeds received or to be received by the Indemnified
Party in respect of any matter for which indemnity is claimed hereunder by such
party shall reduce dollar-for-dollar the indemnity payable by the Indemnifying
Party hereunder, and in the event the Indemnified Party claims tax deductions,
credits or income offsets in respect of any payment or accrual of an amount
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for which indemnity is claimed hereunder by such Party, the indemnity payable by
the Indemnifying Party hereunder shall be reduced dollar-for-dollar by the taxes
saved by the Indemnified Party as a consequence of such tax deductions, credits
or offsets to income. Upon the payment in full of any claim, the Indemnifying
Party shall be subrogated to the rights of the Indemnified Party against any
person, firm or entity with respect to the subject matter of the claim or
litigation.
5.5 LIMITATIONS AS TO AMOUNT. In no event shall indemnification for
Losses by one party to another hereunder exceed the sum of $500,000.00, unless
such Loss is to the any willful misrepresentation or willful breach of warranty
or any willful failure to perform or comply with the provisions of this
Agreement.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE. Seller's obligation to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to Closing, of each of the following conditions
precedent (any or all of which may be waived in writing, in whole or in part, by
Seller):
6.1 PERFORMANCE OF OBLIGATIONS. Buyer shall have performed all of its
obligations and complied with all of its covenants required to be performed or
to be complied with by it under this Agreement on or prior to the Closing Date.
6.2 REPRESENTATIONS AND WARRANTIES. Each representation and warranty of
Buyer contained in this Agreement shall be true and correct both at the date on
which this Agreement is signed and at and as of the Closing Date as if made at
and as of such time.
6.3 DELIVERIES. Buyer shall have delivered or caused delivery of the
items set forth in Section 2.3 of this Agreement.
6.4 APPROVALS. Buyer shall have delivered to Seller any and all
approvals, consents or assignments necessary for the consummation of the
transactions contemplated hereby, including, without limitation, any consents
required (i) by any governmental or administrative body, (ii) under any Material
Agreement, (iii) under any insurance policies that Buyer has determined should
continue in force after the Closing, or (iv) under any Permit.
6.5 ACCESS. Seller shall have had full and complete access during
normal business hours to the properties, assets, books, agreements, files and
records of Buyer for the purpose of verifying the information set forth herein.
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7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. Buyer's obligation to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to Closing, of each of the following conditions
precedent (any or all of which may be waived in writing, in whole or in part, by
Buyer):
7.1 PERFORMANCE OF OBLIGATIONS. Seller shall have performed all of the
obligations and complied with all of the covenants required to be performed or
to be complied with by them under this Agreement on or prior to the Closing
Date.
7.2 APPROVALS. Seller shall have delivered to Buyer any and all
approvals, consents or assignments necessary for the consummation of the
transactions contemplated hereby, including, without limitation, any consents
required (i) by any governmental or administrative body, (ii) under any Material
Agreement, (iii) under any insurance policies that Buyer has determined should
continue in force after the Closing, or (iv) under any Permit.
7.3 ACCESS. Buyer shall have had full and complete access during normal
business hours to the properties, assets, books, agreements, files and records
of Seller for the purpose of verifying the information set forth herein.
7.4 PROPERTY. All of Seller's real and personal property shall be in
good operating condition, structurally sound and in good repair. Notwithstanding
the foregoing, Buyer acknowledges that Buyer is assuming Assumed Leases and
acquiring the Assets in Schedule 1.1 in an "as is" condition.
7.5 APPROVAL.
(a) The board of directors of Seller shall have approved Seller
entering into this Agreement and the consummation of the transactions
contemplated hereby;
(b) The board of directors of Buyer shall have approved Buyer's
entering into this Agreement and consummation of the transactions contemplated
hereby.
7.6 LITIGATION. There shall not have been instituted, pending or
threatened against Seller, any suit, action or other proceeding by any private
party or governmental agency, commission, bureau or body seeking to restrain or
prohibit any of the transactions contemplated by this Agreement.
7.7 ACCRUED EXPENSES AND CONTINGENT LIABILITIES. Seller shall have
resolved, in a manner satisfactory to Buyer in its sole and absolute discretion,
any issues relating to the accrued expenses and contingent liabilities of
Seller.
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7.8 NONCOMPETITION AGREEMENTS. Buyer, Dennis Omahen and all branch
office personnel of Seller who have consented to do so before Closing, shall
have entered into a Noncompetition Agreement prohibiting them from competing
within a 25 mile radius of any of SMSI's locations until December 31, 2001 in
the case of Dennis Omahen and for one (1) year from the date of Closing for all
other employees. The non-compete with Dennis Omahen shall be null and void in
the event Buyer defaults on its note to Seller.
7.9 DISCLOSURE SCHEDULE. Seller shall have furnished to Buyer and its
representatives true, correct and complete copies of all documents, agreements
and instruments listed in the Disclosure Schedule.
7.10 DELIVERIES. Seller shall have delivered or caused delivery of the
items set forth in Section 2.2 hereof.
7.11 REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of Seller contained in this Agreement shall be true and correct both at the date
on which this Agreement is signed and at and as of the Closing Date as if made
anew at and as of such time.
7.12 RIGHT TO USE NAME. Buyer shall have received a certification of
its right to use the name "Staff Management Services", for 12 months from date
of close, at no charge.
8. POST-CLOSING COVENANTS.
8.1 ACCOUNTS RECEIVABLE OF BUYER. Seller covenants and agrees that if
Seller inadvertently collects an account receivable of the Buyer, Seller will
deliver the amount received to Buyer within ten (10) days of receipt by Seller.
8.2 ACCOUNTS RECEIVABLE OF SELLER. Buyer covenants and agrees that if
Buyer inadvertently collects an account receivable of a Seller, Buyer will
deliver the amount received to Seller within ten (10) days of receipt by Buyer.
8.3 ACCOUNTS RECEIVABLE REPORTS. Seller covenants and agrees that
Seller will deliver a weekly accounts receivable report to Buyer for ninety (90)
days following the Closing Date.
8.4 FURTHER ASSURANCES. The parties hereto covenant and agree that they
will do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, any and all such further acts, instruments, papers
and documents as may be necessary to carry out and effectuate the intent and
purposes of this Agreement.
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9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT. This Agreement and the Exhibits and Schedules to
this Agreement constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior negotiations,
understandings, agreements, arrangements and understandings, both oral and
written, between the parties hereto with respect to such subject matter. The
Exhibits and Schedules to this Agreement are incorporated into and constitute
part of this Agreement.
9.2 AMENDMENT. This Agreement may not be amended or modified in any
respect, except by the mutual written agreement of the parties hereto.
9.3 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person,
firm, corporation, partnership, association or other entity, other than the
parties hereto and their respective successors and permitted assigns, any rights
or remedies under or by reason of this Agreement.
9.4 SURVIVABILITY. Notwithstanding any investigation made by or on
behalf of any party to this Agreement, the representations and warranties made
under and in connection with this Agreement shall be true and correct on and as
of the Closing Date with the same effect as if made on and as of such date and
shall survive the Closing and consummation of all the transactions contemplated
hereby for a period of one (1) year.
9.5 WAIVERS AND REMEDIES. The waiver by any of the parties hereto of
any other party's prompt and complete performance, or breach or violation, of
any provision of this Agreement shall not operate nor be construed as a waiver
of any subsequent breach or violation, and the waiver by any of the parties
hereto to exercise any right or remedy which it may possess hereunder shall not
operate nor be construed as a bar to the exercise of such right or remedy by
such party upon the occurrence of any subsequent breach or violation.
9.6 SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections or subsections contained in this Agreement
shall not affect the enforceability of the remaining portions of this Agreement
or any part hereof, all of which are inserted conditionally on their being valid
in law, and, in the event that any one or more of the words, phrases, sentences,
clauses, sections or subsections contained in this Agreement shall be declared
invalid by a court of competent jurisdiction, this Agreement shall be construed
as if such invalid word or words, phrase or phrases, sentence or sentences,
clause or clauses, section or sections, or subsection or subsections had not
been inserted.
9.7 DESCRIPTIVE HEADINGS/RECITALS. Descriptive headings contained
herein are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement. The recitals are incorporated
into and made a part of this Agreement.
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9.8 COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be
executed in counterparts by the separate parties hereto, all of which shall be
deemed to be one and the same instrument. Facsimile signatures shall have the
same effect as original signatures.
9.9 NOTICES. All notices, consents, requests, instructions, approvals
and other communications provided for herein and all legal process in regard
hereto shall be in writing and shall be deemed to have been duly given: when
delivered by hand; when delivered by facsimile (if written confirmation of
receipt of the facsimile is obtained from the party to be charged with notice);
five (5) days after being deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid; or on the second
business day after being sent (PREPAID for next day delivery), via Federal
Express, Purolator Courier, DHL or other nationally recognized delivery service,
as follows:
If to Seller: DENNIS M. OMAHEN
4 Kevin Drive
Flanders, NJ 07836
With a copy to: Robert S. Schwartz, Esq
Lindabury, McCormick &
Estabrook
53 Cardinal Drive
Westfield, NJ 07091
If to Buyer: OutSource International, Inc.
Attention: CEO
1144 East Newport Center Drive
Deerfield Beach, FL 33442
954-418-6200
With a copy to: Steven Sonberg, Esq.
Holland & Knight
One East Broward Boulevard
Fort Lauderdale, FL 33301
Phone: 305 468-7819
Fax: 305 463-2030
or to such other address as any party hereto may from time to time designate in
writing delivered in a like manner.
9.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. None of the parties hereto shall assign any of its rights
or obligations hereunder without the express written consent of the other party
hereto; provided, however, all of Seller's rights may be assigned
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and its obligations delegated to Dennis M. Omahen without the consent of the
Buyer in the event the Seller shall liquidate and dissolve.
9.11 APPLICABLE LAW. This Agreement shall be governed by, and shall be
construed, interpreted and enforced in Accordance with, the laws of the State of
Florida.
9.12 BROKERS AND AGENTS. Neither OutSource or SMSI have engaged a
broker in regard to this transaction.
9.13 EXPENSES. Each of the parties hereto agrees to pay all of the
respective expenses incurred by it in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, including accountants' and
attorneys' fees.
9.14 CONFIDENTIALITY. No party hereto shall divulge the existence of
the terms of this Agreement, the transactions contemplated hereby or any
information about another party that such party may have acquired in connection
with the transaction, without the prior written approval of all of the parties
hereto, except and as to the extent (i) obligated by law or, (ii) necessary for
such party to defend or prosecute any litigation in connection with the
transactions contemplated hereby or (iii) to their respective accountants,
attorneys and financial advisors who agree no to divulge except as provided in
clause (i) and (ii) hereof. The parties hereto acknowledge that any breach of
the foregoing will give rise to irreparable injury that is not compensable in
damages and agree that any party may seek and obtain equitable relief in the
form of specific enforcement, temporary restraining order, temporary or
permanent injunction, or any other equitable remedy that may then be available
to such party against the breach or threatened breach of such covenants, in
addition to any other legal remedies which may be available.
9.15 CERTAIN INTERPRETATIONS. Words such as "herein," "hereof,"
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular Section or subsection of this Agreement. The word
"material" as used in this Agreement shall mean a deviation of more than five
(5%) percent.
9.16 CONSENT TO JURISDICTION. The parties to this Agreement agree that
any claim, suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby shall be submitted for
adjudication either in any Florida State or Federal court sitting in Broward
County, Florida, or in the State and Federal courts located in New Jersey, and
each of the parties hereto expressly agrees to be bound by such selection of
jurisdiction and venue for purposes of such adjudication. Each party (i) waives
any objection which it may have that such court is not a convenient forum for
any such adjudication, (ii) agrees and consents to the personal jurisdiction of
such court with respect to any claim or dispute arising out of or relating to
this Agreement or the transactions contemplated hereby and (iii) agrees that
process issued out of such court or in Accordance with the rules of practice of
such court shall be properly served if served personally or served by certified
mail or other form of substituted service, as provided under the
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rules of practice of such court. In the event of any suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby the prevailing party thereunder shall be entitled to recover reasonable
attorneys' and paralegal's fees (for negotiations, trials, appeals and
collection efforts) and court costs incurred in connection therewith in addition
to any other relief to which such party may be entitled. The prevailing party
shall be the party in whose favor an award or judgement is entered in its favor.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
BUYER:
Witness:
/s/ ILLEGIBLE OutSource International of
- -------------------------- America, Inc.
/s/ DAVID VAN SOEST
By:-------------------------
David Van Soest
- -------------------------- Regional Vice President
SELLER:
Witness:
/s/ ILLEGIBLE Staff Management Services, Inc.
- --------------------------
/s/ DENNIS M. OMAHEN
By:-------------------------
Dennis M. Omahen
- --------------------------- President
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