Exhibit 2.5
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of the 2nd day
of January, 2001, by and between STRATUS SERVICES GROUP, INC. a Delaware
corporation (the "Buyer"), and CURA STAFFING, INC. and THE WORKGROUP
PROFESSIONAL SERVICES, INC., D/B/A THE WORKGROUP, both of which are Florida
corporations (collectively, the "Seller").
PRELIMINARY STATEMENT
WHEREAS, the Buyer desires to purchase, and the Seller desires to sell
substantially all of the assets of the Seller that comprise the ongoing
businesses of the offices of the Seller located in Miami Springs, Florida, which
includes temporary and permanent Office/Clerical, Accounting, Information
Technology, and Light Industrial staffing services in the greater Miami
metropolitan area (collectively, the "Acquired Business") in exchange for the
consideration and the assumption of certain of the Seller's liabilities as set
forth below, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
The recitals set forth above are true and correct and are hereby incorporated
herein by reference.
1. Sale and Delivery of the Assets
1.1 Delivery of the Assets.
(a) Subject to and upon the terms and conditions of this
Agreement, at the closing of the transactions contemplated by
this Agreement (the "Closing"), the Seller shall sell,
transfer, convey, assign and deliver, and cause its Affiliates
(as defined below) to sell, transfer, convey, assign and
deliver, to the Buyer, and the Buyer shall purchase from the
Seller and such Affiliates, substantially all of the assets,
tangible and intangible, of every kind and nature owned or
used by Seller exclusively in connection with the operation of
the Acquired Business (collectively, the "Assets"), which
Assets include those which are set forth on SCHEDULE 1.1
attached hereto and the following properties, assets, rights
and interests:
(i) all office supplies and similar materials of the
Seller which exist on the Closing Date (as defined
below) and are used exclusively in the Acquired
Business (the "Supplies");
(ii) all rights of the Seller and its Affiliates
under the contracts, agreements, real estate and
equipment leases, licenses and other instruments
relating exclusively to the Acquired Business, as set
forth on Schedule 1.1 attached hereto (collectively,
the "Contracts");
(iii) all books and records (limited to the last
three years profit and loss statements, accounts
receivable invoices and supporting documents for
invoices purchased pursuant to Section 1.2(iv)
below), correspondence, service employee and customer
information in the possession of the Seller, and
reports and summaries relating exclusively to the
Acquired Business or the other assets described
herein (collectively, the "Records");
(iv) all rights of the Seller, if any, under express
or implied warranties from the suppliers of the
Seller in connection with the Acquired Business;
(v) all furniture, fixtures, equipment and leasehold
improvements owned by Cura Staffing, Inc. on the
Closing Date and relating exclusively to the Acquired
Business, whether or not reflected as capital assets
in the accounting records of the Cura Staffing, Inc.,
as specifically set forth on Schedule 1.1 attached
hereto (collectively, the "Fixed Assets"); and
(vi) except as provided in subsection (b) below, all
other assets, properties, claims, rights and
interests of the Seller and its Affiliates existing
on the Closing Date, of every kind and nature and
description, whether tangible or intangible, real,
personal or mixed, that are used solely in connection
with the Acquired Business.
An "Affiliate" shall mean as to any person, any
person which directly or indirectly through one or
more intermediaries, is in control of, is controlled
by, or is under common control with, such person, and
any officer or director of such person.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, the assets, properties, claims, rights and
interests of the Seller that are not used exclusively in
connection with the Acquired Business will not be transferred
to Buyer hereunder. In addition, notwithstanding anything to
the contrary set forth in this Agreement, the following items
are not included in the sale of Assets contemplated hereby:
(i) the cash and cash equivalents, accounts receivables (to
the extent not purchased in Section 1.2(iv)), prepaid items
and deposits, used in or relating to the Acquired Business,
(ii) the Purchase Price (as hereinafter defined) and the other
rights of the Seller under or relating to this Agreement,
(iii) the corporate minute books, stock records, qualification
to conduct business as a foreign corporation, and other
documents relating to the organization, maintenance or
existence as a corporation of the Seller or any Affiliate of
the Seller, (iv) any proprietary software of Seller or any
Affiliate of Seller, are not to be transferred to Buyer
hereunder and are not included within the definition of the
Assets, (v) the furniture, fixtures, and office equipment on
the books of The Work Group Professional Services, Inc., and
(vi) The WorkGroup Professional Services, Inc.'s Coral Gables
office lease, (vii) any real property owned by the Seller or
any Affiliate of the Seller, and (viii) the historical
accounting books and records of the Seller or its Affiliates
other than accounts receivable invoices and supporting
documentation for invoices purchased pursuant to Section 1.2
(iv) below and the historical payroll, billing and accounts
receivable data included in the Dataforce Spectrum software
that is being transferred to the Buyer. In addition, Buyer
acknowledges that Seller has an office lease with respect to
the property located at Eastern Financial Credit Union Bldg,
000 Xxxxx Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000, with a security
deposit of $2,435 (the "Deposit"). The parties will cooperate
with each other to have the Deposit released by its landlord
and paid in full to Seller prior to the Closing Date or to
negotiate with the landlord as to a resolution with respect to
the Deposit. In all events, Buyer acknowledges that the
Deposit is the property and shall remain the property of the
Seller until released. Buyer agrees that in the event the
Deposit is released, Buyer will place the same or similar
security deposit in the place of Seller if so desired by the
landlord and if such Deposit will not be released by landlord,
Buyer shall promptly pay Seller the Deposit.
2
1.2 PURCHASE PRICE. The purchase price for the Assets shall be One
Hundred Seventy-Five Thousand and 00/100 Dollars ($175,000.00),
together with payment to be received for accounts receivables of Seller
purchased by Buyer in accordance with subsection (iv) below
(collectively, the "Purchase Price"), payable as follows:
(i) the Buyer shall pay to the Seller on the Closing
Date a non-contingent cash payment of One Hundred
Thousand and 00/100 Dollars ($100,000.00) by wire
transfer of immediately available funds to Seller's
designated account (the "Closing Payment");
(ii) the Buyer shall execute and deliver to Seller on
the Closing Date a promissory note, in the form
attached hereto as EXHIBIT A (the "90 Day Note"). The
90 Day Note shall be in the principal amount of Fifty
Thousand and 00/100 Dollars ($50,000.00) bearing
interest at six percent (6%) per annum, with the
principal and interest payable in full in one lump
sum, subject to the right of set-off for any accounts
receivable purchased pursuant to subsection (iv)
below which remain uncollected as of the due date of
the 90 Day Note, on the ninetieth (90th) day after
the Closing Date, unless payment is accelerated as
provided in the 90 Day Note; and
(iii) the Buyer shall pay Seller Five Thousand and
00/100 Dollars ($5,000.00) per month for each of five
months after payment of the 90 Day Note, subject to
the right of set-off for any purchased receivables
uncollected as of the due date of the 90 Day Note,
based upon Buyer using its best efforts in good faith
to maintain a monthly gross margin (related to the
client lists with which Seller has done business) of
Thirty Thousand and 00/100 Dollars ($30,000.00) for
each such month (the "Gross Margin Amount").
(iv) at Closing, the Buyer shall purchase the
eligible accounts receivable of Seller listed on
Schedule 1.2 by wire transfer of immediately
available funds to Seller's designated account. Buyer
will pay to seller $.98 for each $1.00 of face value
of the invoices purchased in a total amount as
indicated on Schedule 1.2. (the "Receivable
Payment").
1.3 ASSUMPTION OF LIABILITIES.
(a) The Buyer agrees to assume, as of the Closing Date, the
liabilities of the Seller arising after the Closing on the
Contracts and any other on-going obligations under the Assets
assumed by Buyer hereunder (the "Assumed Liabilities"). To the
extent that the Assets are leased by Seller or any of its
Affiliates as of the Closing Date, the Buyer will thereafter
be responsible for paying the rental charge or lease payment
for same directly to the lessor. Notwithstanding anything
contained herein to the contrary, Buyer will not assume any
liabilities related to any litigation of Seller as are set
forth on SCHEDULE 2.4 hereto, and such liabilities shall
remain the obligations of Seller.
(b) The Buyer shall not assume or agree to perform, pay or
discharge, and the Seller and its Affiliates, as the case may
be, shall remain unconditionally liable for, all obligations,
liabilities and commitments, fixed or contingent, of the
Seller and its Affiliates, other than the Assumed Liabilities.
1.4 OTHER AGREEMENTS.
3
(a) As further consideration for the transaction contemplated
hereby, as of the Closing Date, Xxx Band will be prohibited
from competing for three (3) years following the Closing Date
in any business competitive with the Acquired Business in
Miami-Dade County and prohibited from actively soliciting
clients or employees of the Acquired Business (who were
clients or employees of the Acquired Business on the Closing
Date) for purposes of competing with the Acquired Business for
a period of three (3) years from the Closing Date in such
county.
1.5 THE CLOSING. Subject to and after fulfillment of the conditions set
forth in Section 4 of this Agreement, the Closing shall take place at
the offices of Akerman Senterfitt & Xxxxxx, P.A. in Miami, Florida, at
9:00 a.m. Eastern Time, on January 2, 2000, or such other time or date
or such other location as the parties may mutually agree (the "Closing"
or "Closing Date"). The transfer of the Assets by the Seller to the
Buyer shall be deemed to occur at 12:01 a.m., Eastern Time, on the
Closing Date (the "Effective Date").
1.6 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the various Assets by mutual agreement of the parties.
2. REPRESENTATIONS OF THE SELLER. The Seller represents and warrants to
the Buyer as follows:
2.1 ORGANIZATION. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida
and is duly qualified to do business in, and is in good standing under,
the laws of the State of Florida. The Seller has all requisite power
and authority (corporate and other) to execute and deliver this
Agreement and the documents, instruments and agreements contemplated
herein, and to consummate the transactions contemplated hereby and
thereby.
2.2 AUTHORIZATION. The execution and delivery of this Agreement, and
the agreements provided for herein by the Seller, and the consummation
by the Seller of all transactions contemplated hereby and thereby, have
been duly authorized by all requisite corporate action. This Agreement
and all such other agreements and obligations entered into and
undertaken in connection with the transactions contemplated hereby to
which the Seller is a party constitute the valid and legally binding
obligations of the Seller, enforceable against the Seller in accordance
with their respective terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity. The
execution, delivery and performance of this Agreement and the
agreements provided for herein, and the consummation by the Seller of
the transactions contemplated hereby and thereby, will not, with or
without the giving of notice or the passage of time or both, (a) to the
Seller's knowledge, violate the provisions of any law, rule or
regulation applicable to the Seller; (b) violate the provisions of the
Seller's Articles of Incorporation or Bylaws; or (c) violate any
judgment, decree, order or award of any court, governmental body or
arbitrator applicable to the Seller.
2.3 OWNERSHIP OF THE ASSETS; NO OTHER OBLIGATION TO TRANSFER. Except
where any property subject to this sale is leased and except as
otherwise provided on SCHEDULE 2.3 attached hereto, the Seller has good
and marketable title to all of the Assets, free and clear of all liens,
claims, encumbrances and restrictions whatsoever.
2.4 LITIGATION. Except as otherwise provided on SCHEDULE 2.4 attached
hereto, there are no judgments, suits, actions, investigations or
proceedings pending or, to the Seller's knowledge,
4
threatened against the Seller that relate to or affect the Assets or
the Acquired Business by any court, administrative agency or other
governmental authority.
2.5 REAL PROPERTY; LEASES. Seller does not own any real estate used in
connection with the Acquired Business. SCHEDULE 2.5 attached hereto
sets forth a true, correct and complete list as of the date hereof of
all leases of real property to which the Seller is a party in
connection with the Acquired Business (collectively, the "Leases").
True, correct and complete copies of the Leases, and all amendments and
modifications thereof, have previously been delivered by the Seller to
the Buyer. The Leases are in full force and effect and have not been
modified or amended since the date of delivery to the Buyer. No party
to any Lease has sent written notice to the other claiming that such
other party is in default thereunder, which alleged default remains
uncured.
2.6 COMPLIANCE WITH AGREEMENTS AND LAWS. The Seller has all requisite
licenses, permits and certificates from federal, state and local
authorities necessary to conduct the Acquired Business and own and
operate the Assets (collectively, the "Permits").
3. REPRESENTATIONS OF THE BUYER. The Buyer represents and warrants to the
Seller as follows:
3.1 ORGANIZATION AND AUTHORITY. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has requisite power and authority (corporate and
other) to own its properties and to carry on its business as now being
conducted. The Buyer has full power to execute and deliver this
Agreement and all other documents, instruments and agreements to be
delivered by it hereunder and to consummate the transactions
contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution and delivery of this Agreement by the
Buyer, and the agreements provided for herein, and the consummation by
the Buyer of all transactions contemplated hereby, have been duly
authorized by all requisite corporate action. This Agreement and all
such other agreements and obligations entered into and undertaken in
connection with the transactions contemplated hereby constitute the
valid and legally binding obligations of the Buyer, enforceable against
it in accordance with their respective terms. The execution, delivery
and performance of this Agreement and the agreements provided for
herein, and the consummation by the Buyer of the transactions
contemplated hereby and thereby, will not, with or without the giving
of notice or the passage of time or both, (a) violate the provisions of
any law, rule or regulation applicable to the Buyer; (b) violate the
provisions of the Buyer's Articles of Incorporation or Bylaws; (c)
violate any judgment, decree, order or award of any court, governmental
body or arbitrator; or (d) conflict with or result in the breach or
termination of any term or provision of, or constitute a default under,
or cause any acceleration under, or cause the creation of any lien,
charge or encumbrance upon the properties or assets of the Buyer
pursuant to, any indenture, mortgage, deed of trust or other agreement
or instrument to which it or its properties is a party or by which the
Buyer is or may be bound.
3.3 CONSENTS. No consent, approval, authorization or other action by,
or filing with, any governmental authority or any other third party is
required in connection with the execution, delivery and performance by
the Buyer of its obligations under this Agreement and the consummation
by the Buyer of the transactions contemplated hereby.
4. CLOSING DELIVERIES AND CONDITIONS
4.1 BY SELLER. The Seller shall deliver to the Buyer at the Closing
each of the following documents:
5
(a) a Xxxx of Sale in the form attached hereto as EXHIBIT C,
duly executed by Seller;
(b) an Assignment and Assumption of Contracts and Liabilities
executed by the Seller evidencing, among other things, the
Seller's assignment and the Buyer's assumption of the Assumed
Liabilities contemplated by Section 1.3 hereof in the form
attached hereto as EXHIBIT D (the "Assignment and Assumption
Agreement");
(c) the Records;
(d) consents, in a form acceptable to the Buyer, from each
lessor relating to all Leases identified on SCHEDULE 2.5
attached hereto, consenting to the assumption of each such
Lease by the Buyer; provided that the parties agree that any
other third party consents, including those related to
equipment leases, may be delivered following the Closing and
that the parties will cooperate with each other in good faith
in obtaining such consents;
(e) cross receipt executed by the Seller, in the form of
EXHIBIT E ("Cross Receipt");
(f) a certificate executed by an officer of the Seller that
all representations and warranties made herein by the Seller
are true and correct at the time of Closing;
(g) approval by the shareholders of the parent holding company
of the Seller (a meeting of which has been called for on
December 26, 2000);
(h) a certificate from the secretary of the Seller attesting
to the accuracy of resolutions or minutes to be attached
thereto approving this Agreement and the transactions
contemplated herewith by the Shareholders and Board of
Directors of the Seller and providing incumbency information
for the individual signing this Agreement on behalf of the
Seller; and
(i) a copy of (i) the consent of SunTrust Bank, Miami,
N.A.(the "Lender") to the sale, transfer and assignment of the
Assets to the Buyer as contemplated by this Agreement, and
(ii) the pay-off of the Lender and further release of the
Lender as evidenced by UCC-3 Termination Statements, pursuant
to which the Lender releases or terminates its security
interest in the Assets, it being acknowledged that the Lender
currently has a lien on all of the Assets.
4.2 BY THE BUYER. The Buyer shall deliver to the Seller at the Closing
each of the following documents:
(a) the Assignment and Assumption Agreement (EXHIBIT D),
executed by Buyer;
(b) payment of the Closing Payment and the Receivable Payment,
and substitution or payment by the Buyer of the Deposit (as
referenced in Section 1.1(b) above);
(c) the 90 Day Note (EXHIBIT A), executed by the Buyer;
(d) the Security Agreement-All Assets (EXHIBIT B), executed by
the Buyer;
(e) a UCC-1 financing statement, executed by the Buyer;
(f) the Cross Receipt, executed by the Buyer;
6
(g) a certificate executed by an officer of the Buyer that all
representations and warranties made herein are true and
correct at the time of Closing; and
(h) a certificate of the secretary of the Buyer attesting to
the accuracy of the resolutions of the Board of Directors of
the Buyer authorizing the purchase of the Assets and providing
incumbency information for the individual signing this
Agreement on behalf of the Buyer.
5. INDEMNIFICATION.
5.1 BY THE SELLER. The Seller shall indemnify and hold the Buyer
harmless from any and all actions, claims, liabilities, damages, costs
or expenses (including, without limitation, reasonable attorney's fees
and expenses) that the Buyer may incur, or to which it may become
subject, from third party claims arising from or relating to the
operation of the Acquired Business prior to the Effective Date.
5.2 BY THE BUYER. The Buyer shall indemnify and hold the Seller
harmless from any and all actions, claims, liabilities, damages, costs
or expenses (including, without limitation, reasonable attorney's fees
and expenses) that the Seller may incur, or to which it may become
subject, from third party claims arising from or relating to the
operation of the Acquired Business from and after the Effective Date.
5.3 SURVIVAL OF REPRESENTATIONS; BASKET. All representations and
warranties made by the parties herein or in any instrument or document
furnished in connection herewith shall survive for a period of eight
(8) months following the Closing and any claims related thereto shall
be brought within such period of time. Notwithstanding anything
contained herein to the contrary, Seller shall have no obligation for
any breaches under any provision of this Agreement until the aggregate
of all claims for which Seller is responsible exceeds $5,000, with the
Seller only responsible for any excess amount over the $5,000.
5.4 REDUCTION FOR INSURANCE PROCEEDS. To the extent that any
indemnified party shall receive payment under any insurance policies on
account of claims arising under Section 5.1 or Section 5.2 hereof, the
amount (if any) payable by the indemnifying party on account of such
claims shall be reduced by the amount of such payment or, if the
indemnified party shall have already collected on such claims from the
indemnifying party, then the indemnified party shall repay to the
indemnifying party the amount of such payment.
6. PRE-CLOSING AGREEMENTS.
6.1 CORE EMPLOYEES. While the Buyer understands that the Seller cannot
guarantee that any employees will enter into employment,
non-competition and non-solicitation agreements with the Buyer, Seller
will make a good faith effort in encouraging the core staff employees
who are retained by Buyer to enter into such agreements with Buyer, the
forms of which are attached hereto as EXHIBIT F. The salaries, bonuses
and benefits of such employees retained by Buyer shall be no less
favorable than that which existed with the Seller. The parties
acknowledge that certain employees of Seller have previously entered
into employment and non-competition agreements with the Seller. The
parties agree that any employees who are not retained by the Buyer and
whose agreements are still enforceable against such employees shall
only be subject to the nonsolicitation provisions, relating to clients
and employees of Seller, of said agreements
6.2 CONDUCT OF BUSINESS. Between the date of this Agreement and the
Closing Date, the Seller shall carry on the Acquired Business
substantially in the same manner as heretofore and
7
shall not make or institute any unusual or new methods of purchase,
sale, performance, lease, management, accounting or operation. Between
the date of this Agreement and the Closing Date, all of the Assets
shall be used, operated, repaired and maintained by the Seller in a
normal business manner consistent with past practice. Unless instructed
otherwise by the Buyer in writing, the Seller will accept customer
requests for services in the ordinary course of business and consistent
with past practice for all services offered by the Seller but expected
to be performed by the Buyer after the Effective Date. The Seller and
the Buyer will cooperate in communications with suppliers and customers
to accomplish the transfer of the Assets to the Buyer on the Effective
Date. Prior to the Closing Date, the Seller will comply with all
material laws and regulations, which are applicable to its ownership of
the Assets or to the conduct of the Acquired Business and will perform
and comply with all material contracts, commitments and obligations by
which it is bound. Seller agrees to notify and consult with Buyer with
respect to all decisions outside of the ordinary course relating to the
Acquired Business and to notify Buyer of any employee departures or any
pending employee departures.
6.3 ACCESS TO MANAGEMENT, PROPERTIES AND RECORDS. From the date of this
Agreement, the Seller shall afford the officers, attorneys, accountants
and other authorized representatives of the Buyer reasonable access
upon reasonable notice and during normal business hours to all
management personnel, and books and records of the Seller relating
solely to the Acquired Business. The Buyer shall be permitted to make
abstracts from, or copies of, all such books and records. The Seller
shall furnish to the Buyer such financial and operating data and other
information as to the Assets and the Acquired Business as the Buyer
shall reasonably request and cause its management personnel to
cooperate with the Buyer and to be available at the reasonable request
of the Buyer so as to provide the Buyer's agents with any and all
information concerning the Assets and the Acquired Business that may
reasonably be required to close the transactions contemplated hereby.
Seller shall be permitted to copy and retain such copies of invoices
for accounts receivable purchased pursuant to section 1.2(iv) hereof.
Any information obtained by a party pursuant to this Section 6.3 shall
be subject to the confidentiality provisions of that certain letter of
intent between the parties dated November 29, 2000. Notwithstanding
anything contained in this Section 6.3 above, the Buyer's right to
continue its due diligence procedures shall in no way be construed to
imply that completion of such due diligence, or the ability of the
Buyer to obtain financing, is or will be a condition to closing this
transaction.
6.4 CONSENTS OF THIRD PARTIES; PAY-OFF AND RELEASE OF LENDER. Prior to
the Closing, the Seller shall use its best efforts to deliver to Buyer
all required consents, waivers or approvals necessary or desirable to
consummate the transactions contemplated hereby; provided that in the
event all consents are not received (other than the consents for all
leases included in the Assets purchased hereunder) by the Closing Date,
then both parties shall cooperate with each other in obtaining such
consents, waivers or approvals following the Closing. The parties also
acknowledge that Lender has a lien on all of the Assets and upon paying
the Lender the full amount owed to it with the Purchase Price received
hereunder, Seller should be fully released from such liens on the
Assets.
7. POST-CLOSING AGREEMENTS. The Seller and the Buyer, as the case may be,
agree that from and after the Closing Date:
7.1 PROPRIETARY INFORMATION.
(a) The Seller shall hold in confidence, and use its best
efforts to have all of its officers, directors and personnel
hold in confidence, all knowledge and information of a
8
secret or confidential nature with respect to the Acquired
Business and shall not disclose, publish or make use of the
same without the consent of the Buyer, except (i) to the
extent that such information shall have become public
knowledge other than by breach of this Agreement by the
Seller, (ii) as may be required to enforce any of Seller's
rights against Buyer, (iii) that which is rightfully received
from a third party without restriction on disclosure or
without breach of an obligation to the disclosing party, or
(iv) as may be required by law or legal process.
(b) The Seller agrees that the remedy at law for any breach of
this Section 7.1 may be inadequate and that the Buyer shall be
entitled to seek injunctive relief in addition to any other
remedy it may have upon breach of any provision of this
Section 7.1.
7.2 FURTHER ASSURANCES AND DATA.
(a) At any time and from time to time after the Effective
Date, at the Buyer's reasonable request and without further
consideration, the Seller shall execute and deliver, and use
its best efforts to cause its Affiliates to execute and
deliver, such instruments of sale, transfer, conveyance,
assignment and confirmation, and take such other action, all
at the Seller's sole cost and expense, as the Buyer may
reasonably request to more effectively transfer, convey and
assign to the Buyer, and to confirm the Buyer's title to, all
of the Assets, to put the Buyer in actual possession and
operating control thereof, to assist the Buyer in exercising
all rights with respect thereto, and to carry out the purpose
and intent of this Agreement. Immediately after the Closing,
the Seller shall, to the extent applicable, authorize the
release, and use its best efforts to cause its Affiliates to
authorize the release, to the Buyer of all files pertaining to
the Assets or the Acquired Business held by any federal,
state, county or local authorities, agencies or
instrumentalities.
(b) The parties agree that from and after the Effective Date,
as to any monies received that rightfully belong to the other
party, they shall remit such monies promptly to the other
party.
(c) Within fifteen (15) business days after the Closing Date,
the parties shall mutually agree on the pro-ration as of the
Effective Date of rent, utilities and telephone for the
Acquired Business, and the party obligated to pay the net
amount of such pro-rated items to the other party will make
such payment ten (10) days after the agreement on pro-rations
is consummated. Seller will pay the premiums for health
benefits of the employees of the Acquired Business through the
Closing Date.
(d) The Buyer and Seller shall have the right, for a period of
three (3) years following the Closing Date, to have reasonable
access to those books, records and accounts, including
financial and tax information, correspondence, employment
records and other records that may, at that time, be retained
by either party to the extent that any of the foregoing
relates to the Acquired Business and is needed by such party
in order to comply with its obligations under applicable
securities, tax, environmental, employment or other laws and
regulations.
7.3 COOPERATION IN LITIGATION. Each party hereto will reasonably
cooperate with the other in the defense or prosecution of any
litigation or proceeding already instituted or which may be instituted
hereafter against or by such party relating to or arising out of the
conduct of the Acquired Business prior to the Closing Date (other than
litigation between the parties arising out of the transactions
contemplated by this Agreement). The party requesting such cooperation
shall
9
pay the out-of-pocket expenses (including legal fees and disbursements)
of the party providing such cooperation and of its officers, directors,
employees and agents reasonably incurred in connection with providing
such cooperation, but shall not be responsible to reimburse the party
providing such cooperation for such party's time spent in such
cooperation or the salaries or costs of fringe benefits or similar
expenses paid by the party providing such cooperation to its officers,
directors, employees and agents while assisting in the defense or
prosecution of any such litigation or proceeding.
7.4 NON-COMPETITION/NON-SOLICITATION. Xxx Band will not, for a period
of Three (3) years from the Closing Date, directly or indirectly,
engage in competition in a business similar to the Acquired Business in
Miami-Dade County and will not actively solicit clients or employees of
the Acquired Business (who were clients or employees of the Acquired
Business on the Closing Date) for purposes of competing with the
Acquired Business for a period of Three (3) years from the Closing Date
in such county.
7.5 UNCOLLECTED ACCOUNTS RECEIVABLES. Any payments received by the
Buyer or the Seller following the Closing by any clients listed on
SCHEDULE 1.2 for accounts receivables purchased pursuant to Section 1.2
(iv) hereof shall be applied to the invoices specifically designated by
the clients owing such receivables; provided, however, that if the
client never designates such invoice, Buyer will contact such client in
good faith to have the client designate which invoice such payment is
intended and if such payment is intended for newer receivables rather
than the older receivables purchased by the Buyer from the Seller,
Buyer shall inquire with the client as to the problems in collecting
such receivables and shall immediately inform Seller and its officers
as to such problems and Seller shall be permitted to contact such
client to collect the receivable or resolve the issues. The Buyer shall
(i) collect such accounts receivables in accordance with regular
business practices of Seller; (ii) not permit any sale of such accounts
receivables below the amount reflected for each such receivables on
SCHEDULE 1.2 without Seller's or Xxxxxx Band's prior written consent;
(iii) not delay the collection of and use its best efforts in
collecting such receivables. Buyer will provide Seller an "A/R Aging
Report" on a weekly basis indicating cash collections against the
purchased receivable for the prior week and remaining outstanding
invoices. Buyer and Seller shall jointly work towards collection of any
invoices that reach sixty (60) days old. Any accounts receivables
purchased hereunder pursuant to Section 1.2(iv) hereof (or any portion
thereof) to the extent uncollected by Buyer within 90 days following
the Closing and provided that Buyer uses its best efforts to collect
such accounts (the "Uncollected Receivables") shall be assigned by
Buyer to Seller or its designee up to an aggregate amount of $75,000
worth of uncollected Receivables. Buyer shall provide Seller or its
designee with a list of such Uncollected Receivables and Seller or its
designee shall purchase such Receivables for $.98 for every $1.00 of
full value Receivable. After the Seller or its designee purchases the
Repurchased Receivables, Buyer shall hold in trust and immediately
forward to Seller or its designee any payments received from any
Repurchased Receivables (as if on a first in- first out basis). The
Buyer shall not, and shall not permit its employees, officers,
directors, independent contractors or agents to, directly or
indirectly, encourage any such client not to make payment on any such
Repurchased Receivable or commit any action which could reasonably lead
or cause any client not to make such a payment. The Buyer shall provide
Seller or its designee full access to all books and records to permit
the Seller or its designee to determine compliance with this Section
7.5 (and shall bear the costs of any such noncompliance), and shall
otherwise use its best efforts and cooperate with Seller or its
designee (and cause its personnel and accountants to cooperate) in
collecting the Repurchased Receivables or in any other reasonable
manner requested by Seller or its designee, including but not limited
to discussing the status of such Repurchased Receivables with any
personnel of Buyer. The Repurchased Receivables shall (i) be assigned
and delivered to Seller or its designee, free and clear of any liens or
encumbrances; (ii)
10
not be subject to any defenses, set-offs or counterclaims, and (iii)
not suffer any material change while under Buyer's control. In the
event Buyer breaches any of the covenants contained in this Section
7.5, then Seller shall have recourse against the Assets purchased
hereunder in which Seller has a security interest in accordance with
the Security Agreement, with the term and/or release of such Agreement
being extended for an additional 45 day period (in the event Seller is
required to purchase the Repurchased Receivables), as security for any
such breaches.
7.6 ADDITIONAL PURCHASED RECEIVABLES. In addition to the Purchase Price
enumerated in Section 1.2, on January 3 and 4, 2001, Seller shall
provide Buyer with a written payroll register and Buyer shall
immediately pay the amounts indicated on such registers provided to
them by Seller by wire transfer of immediately available funds to an
account designated by the Seller (the "Initial Payment"). On January 5,
2001, Seller shall provide Buyer with a billing invoice register for
the week commencing on January 1 and ending on January 5, 2001. Buyer
shall purchase those receivables according to the same terms as Section
1.2(iv) above by wire transfer of immediately available funds to an
account designated by the Seller.
7.7 INSURANCE COVERAGE. Buyer covenants that at Closing, Buyer shall
insure all Assets purchased hereunder, including but not limited to the
lease for the Miami Springs property, in an amount appropriate for such
Assets, required by such lease and/or otherwise appropriate for the
staffing industry. Buyer shall also cover any employees of Seller
retained by Buyer with appropriate insurance for employees engaged in
the staffing business under the Buyer's name.
8. GENERAL TAXES; TRANSFER AND SALES TAX. Seller shall be responsible for
payment of all taxes applicable to the Assets for all taxable periods on or
before the Closing Date and Buyer shall be responsible for the payment of such
taxes for all taxable periods following the Closing Date. For the purposes
hereof, a taxable period which ends after the Closing Date but includes a period
of time before the Closing Date shall be deemed to be two taxable periods, the
first ending on the Closing Date and the second beginning the next day.
Notwithstanding any provisions of law imposing the burden of such taxes on the
Seller or the Buyer, as the case may be, the Seller shall be responsible for and
shall pay (a) all sales, use and transfer taxes, and (b) all governmental
charges, if any, upon and due in connection with the sale or transfer of any of
the Assets hereunder. If the Seller shall fail to pay such amounts on a timely
basis, the Buyer may pay such amounts to the appropriate governmental authority
or authorities, and the Seller shall promptly reimburse the Buyer for any
amounts so paid by the Buyer.
9. NOTICES. Any notices or other communications required or permitted hereunder
shall be in writing and shall be sufficiently given if delivered personally or
sent by facsimile (with transmission confirmed), federal express, registered or
certified mail, return receipt requested, postage prepaid, addressed as follows
or to such other address or facsimile number of which the parties may have given
notice:
TO THE SELLER: WITH A COPY TO:
------------- --------------
Mr. Xxxxxx Band Xxxxxx Xxxxxx Xxxxx, Esq.
000 Xxxxxxx Xxxxxx Xxxxxxx Senterfitt & Xxxxxx, P.A.
Xxxxx Xxxxxx, XX 00000 0 X.X. 0xx Xxxxxx, 00xx Xxxxx
Xxxxx, XX 00000
TO THE BUYER: WITH A COPY TO:
------------ --------------
Xx. Xxxxxx X. Xxxxxxx X. Xxxx Xxxxxxx, Esquire
President & CEO General Counsel
Stratus Services Group, Inc. Stratus Services Group, Inc.
000 Xxxxx Xxxx, Xxxxx 000 000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
11
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered (and confirmed if via facsimile), if
delivered personally, by facsimile or by federal express; or (b) three business
days after being sent, if sent by registered or certified mail.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors and
assigns, except that neither party may assign its obligations hereunder without
the prior written consent of the other parties hereto; PROVIDED, HOWEVER, that
the Buyer may assign Buyer's rights hereunder to a subsidiary or affiliate of
Buyer, PROVIDED that the Buyer shall remain liable for its obligations
hereunder. Any assignment in contravention of this provision shall be void. No
assignment shall release the Buyer from any obligation or liability under this
Agreement.
11. ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS.
11.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement, all Schedules and
Exhibits hereto, and all agreements and instruments to be delivered by
the parties pursuant hereto represent the entire understanding and
agreement between the parties hereto with respect to the subject matter
hereof and supersede all prior oral and written and all contemporaneous
oral negotiations, commitments and understandings between such parties.
The Buyer and the Seller, by the consent of their respective Boards of
Directors or officers authorized by such Boards, may amend or modify
this Agreement, in such manner as may be agreed upon, by a written
instrument executed by the Buyer and the Seller.
11.2 ATTACHMENTS. If the provisions of any Schedule or Exhibit to this
Agreement are inconsistent with the provisions of this Agreement, the
provisions of this Agreement shall prevail. The Exhibits and Schedules
attached hereto or to be attached hereafter are hereby incorporated as
integral parts of this Agreement.
12. EXPENSES; DAMAGES. Except as otherwise expressly provided herein, each party
hereto shall pay its own expenses in connection with this Agreement and the
transactions contemplated hereby. Either party shall not be able to recover
special or consequential damages from the other party in connection with this
agreement.
13. LEGAL FEES. In the event that legal proceedings are commenced by any party
hereto against any other party hereto in connection with this Agreement or the
transactions contemplated hereby, the party which does not prevail in such
proceedings shall pay the reasonable attorneys' fees and costs incurred by the
prevailing party in such proceedings.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to conflicts
of law principles. The parties hereto agree to be subject to the exclusive
jurisdiction and venue shall reside in the state and federal courts located in
Delaware for the purpose of adjudicating any dispute relating to or arising out
of this Agreement.
15. SECTION HEADINGS. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.
16. SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
12
17. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which, when taken
together, shall be one and the same document.
18. SURVIVAL. The terms and provisions of Section 5 and Sections 7 through (and
including) this Section 19 shall survive the Closing of the transactions
contemplated hereby.
19. PUBLIC DISCLOSURE. Neither party shall make any public statement about, nor
issue any press release concerning this Agreement or the transaction
contemplated hereby without first consulting with the other party hereto as to
the form and substance of any such press release or public disclosure; provided,
however, that nothing in this Section 19 shall be deemed to prohibit any party
hereto from making any disclosure that its counsel deems necessary or advisable
in order to satisfy such party's disclosure obligation imposed by law.
20. TERMINATION. This Agreement may be terminated at any time by written notice
given prior to or on the Closing Date:
(a) By mutual written consent of the Buyer and Seller;
(b) by the Buyer if the Seller fails to deliver by the Closing Date all
of the documents the Seller is required to deliver under Section 4.1 of
this Agreement or if the Seller materially breaches the provisions of
Section 6.2 or 6.3 of this Agreement (and such breach can not be cured
prior to the Closing Date); or
(c) by the Seller if the Buyer fails to deliver by the Closing all of
the documents the Buyer is required to deliver under Section 4.2 of
this Agreement; or
(d) by any party in the event that the Closing shall not have occurred
on or prior to January 3, 2001; PROVIDED, HOWEVER, that the failure of
the Closing to occur by such date shall not have been the result of the
failure of the party seeking to terminate this Agreement to deliver by
the Closing Date all such documents as are required under the relevant
subsection of Section 4.
13
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of the date first above written.
CURA STAFFING, INC.
THE WORKGROUP PROFESSIONAL SERVICES,
INC., d/b/a THE WORKGROUP
By: /s/ XXXXXX BANK
--------------------------------
Print Name: XXXXXX BAND
Title: PRESIDENT
STRATUS SERVICES GROUP, INC.
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Print Name: XXXXXX X. XXXXXXX
Title: PRESIDENT AND CEO
14
SCHEDULE 1.1
ASSETS
CURA STAFFING'S ASSETS
*Accounts Receivables purchased at closing pursuant to Section 1.2 (iv) of the
Agreement
*Telephone number 000-000-0000
*Fax number 000-000-0000
*Name and Logo
*Letterhead, brochures and marketing materials
*Client list, database and records
*Candidate list, applications, resumes, database and records
*Historical payroll, billing and accounts receivable records contained in
Dataforce's Spectrum software related only to the Assets and Accounts
Receivables purchased.
*Accounts receivable invoices and supporting documentation for invoices
purchased pursuant to Section 1.2(iv) of the Agreement
*Goodwill
*Fixed Assets (see attached schedule)
CURA STAFFING'S CONTRACTS
*License of Dataforce staffing software (Spectrum and Starsearcher)
*Software support agreement with Dataforce
*Lease of copier with Wood Business Products dated 12/9/99
*Equipment lease with ACI Financial dated 4/23/99
*Equipment lease with ACI Financial dated 10/11/99
*Lease Agreement at Eastern Financial Credit Union Building, 000 Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxxx, Xxxxxxx
THE WORKGROUP PROFESSIONAL SERVICE'S ASSETS
*Accounts Receivables purchased at closing pursuant to Section 1.2(iv) of the
Agreement
*Telephone number 000-000-0000
*Fax number 000-000-0000
*Name and Logo
*Letterhead, brochures and marketing materials
*Client list, database and records
*Candidate list, applications, resumes, database and records
*Historical payroll, billing and accounts receivable records contained in
Dataforce's Spectrum software related only to the Assets and Accounts
Receivables purchased
*Accounts receivable invoices and supporting documentation for invoices
purchased pursuant to Section 1.2(iv) of the Agreement
*Goodwill
*Trademark
THE WORKGROUP PROFESSIONAL SERVICE'S CONTRACTS
*Software license with Notes, ETC, Inc.
15
SCHEDULE 2.3
LIENS AND ENCUMBRANCES
1) Seller's bank, SunTrust Bank, Miami, N.A., has liens on substantially all of
the Seller's assets as collateral for outstanding loans to Seller.
2) Equipment liens from ACI Financial and Wood Business Products (or its
assignee, Colonial Pacific Leasing Corp. or Bankcorp Financial Services, Inc.)
for the equipment leased from them.
3) Judgment by Foremost, Inc. against Cura Staffing, Inc. in the total amount of
$270.97.
4) All liens attached to this Schedule 1.2 as Exhibit A.
16
SCHEDULE 2.4
LITIGATION
A. Personally Yours Services, Inc. versus Xxxxx Xxxxxxx and The
WorkGroup, Inc.
Personally Yours Services (PYS), a local staffing company, has
named The WorkGroup and Cura Staffing in a suit alleging The
WorkGroup violated PYS' non-compete agreements with two former PYS
employees, Xxxxx Xxxxxxx and Xxxxxx Xxxxxxxx, neither of which work
for The WorkGroup any longer. PYS is seeking damages from The
WorkGroup. It is in the production of documents stage.
B. Phoenix American has threatened to xxx The WorkGroup for $15,500,
claiming that a permanent placement fee paid to The WorkGroup
should be refunded as the employee was subsequently terminated
within 90 days of starting at Phoenix. We believe that The
WorkGroup's guarantee to replace an employee if s/he is terminated
in the first 90 days of employment was void because Phoenix did not
pay the fee in the time frame required to activate the guarantee as
set forth in the fee agreement.
17
SCHEDULE 2.5
REAL PROPERTY LEASE
CURA STAFFING
Lease of office space at Eastern Financial Credit Xxxxx Xxxx, 000 Xxxxx
Xxxxx Poinciana Blvd, Suite 600, Miami Springs, Florida, including lease
deposit of $2,435
18
EXHIBIT A
PROMISSORY NOTE
U.S. $50,000 January 2, 0000
Xxxxxxxxx, XX
FOR VALUE RECEIVED, STRATUS SERVICES GROUP, INC., a Delaware
corporation (hereinafter referred to as the "Maker") promises to pay to the
order of CURA STAFFING, INC. AND THE WORKGROUP PROFESSIONAL SERVICES, INC.,
d/b/a THE WORKGROUP, both of which are Florida corporations (hereinafter
referred to as the "Lender") at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx 00000,
or at such address as Lender may designate from time to time, the principal sum
of Fifty Thousand and 00/100 Dollars ($50,000.00), together with interest
thereon on a compounded basis at the rate of 6% per annum, by wire transfer in a
lump sum on the Ninetieth (90th) day after the date written above (the "Maturity
Date").
This Note is made pursuant to the provisions of that certain Asset
Purchase Agreement, dated as of January 2, 2001, by and between the Maker and
Lender (the "Asset Purchase Agreement"). Lender and any holder hereof is
entitled to the benefits of that certain Security Agreement of even date
herewith (the "Security Agreement"), and may enforce the agreements of Maker
contained therein, and any holder hereof may exercise the remedies provided for
thereby or otherwise available in respect thereof, all in accordance with the
terms thereof. The capitalized terms herein not otherwise defined, shall have
the meaning given to such terms in the Asset Purchase Agreement and the Security
Agreement.
Payments of the amounts due hereunder shall be made in lawful money of
the United States which shall be legal tender in payment of all debts, public
and private, at the time of payment.
Notwithstanding anything contained herein to the contrary, all
principal and interest shall immediately become due and payable upon (i) the
sale, transfer, conveyance or other disposition of any of the Assets or sells
the Acquired Businesses, as those terms are defined in the Asset Purchase
Agreement, whether voluntarily, by operation of law or otherwise (other than
accounts receivables purchased by Maker pursuant to the Asset Purchase Agreement
which are pledged by Buyer to Capital Temp Funds, Inc., its financing company);
(ii) the occurrence of an event of default or a breach by Maker under the
Security Agreement and Asset Purchase Agreement; or (iii) the sale of all or
substantially all of the assets or stock of Maker, whether voluntarily, by
operation of law or otherwise to the extent of proceeds thereof (net taxes) by
Maker in connection with such sale, or any filing or proceeding related to the
insolvency, bankruptcy, liquidation, dissolution, or receivership of Maker.
Maker will also be in default under this Note if it fails to make
payment of the principal amount of the Note and accrued and unpaid interest
under this Note on the Maturity Date. Upon the Maker's default, the installment
shall be subject to a five percent (5%) late charge.
Upon any default under this Note, with such default continuing for a
period of five (5) days after written notice to the Maker of such default, the
unpaid principal and interest shall become immediately due and payable and
interest will accrue, commencing at the end of such five (5) day period, at an
annual rate equal to the lesser of eighteen percent (18%) or the maximum rate of
interest permitted by applicable law. Failure to exercise any right as a result
of a default shall not constitute a waiver of Lender's right to exercise the
same in the event of any subsequent default. Any property of the Maker or of any
endorser held by the Lender hereof may be applied, at Lender's discretion, by
the Lender to any sums due and unpaid pursuant to this Note. No exercise of any
right or remedy hereunder shall preclude the exercise of any other right or
remedy.
19
As to this Note and any other instruments securing the indebtedness,
the Maker and all guarantors and endorsers severally waive all notice of
acceleration, presentment, protest and demand, dishonor and non-payment of this
Note, and expressly agree that the maturity of this Note, or any payment
hereunder, may be extended from time to time without in any way affecting the
liability of the Maker and all guarantors and endorsers.
Should it become necessary to collect this Note through an attorney,
the Maker and any surety, endorser or guarantor of this Note hereby agree to pay
all costs and expenses of collection, including reasonable attorneys' fees and
any attorneys' fees incurred in appellate, bankruptcy or post-judgment
proceedings.
This Note shall be governed by and construed in accordance with the
laws of the State of Delaware. The Maker agrees to submit to the jurisdiction of
any court which Lender may select in Delaware to enforce the terms of this Note.
The Maker acknowledges and agrees that this Note has been signed and
delivered in exchange for valuable consideration.
This Note may be prepaid in whole or in part at any time prior to the
Maturity Date without penalty.
This Note may not be changed orally, but only by an agreement in
writing, signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
The term "Maker" as used herein in every instance shall include the
heirs, executors, administrators, successors, legal representatives and assigns
of Maker.
STRATUS SERVICES GROUP, INC.
Attest:
/s/ XXXXX X. XXXXXXXX By: /s/ XXXXXX X. XXXXXXX
------------------------------------ ---------------------------
Xxxxxx X. Xxxxxxx,
President and CEO
Xxxxx X. Xxxxxxxx
Notary Public, State of New Jersey
No. 2078353
Qualified in Monmouth County
Commission Expires July 28 20___
20
EXHIBIT B
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is entered into as
of January 2, 2001 by and between CURA STAFFING, INC. and THE WORKGROUP
PROFESSIONAL SERVICES, INC., d/b/a THE WORKGROUP, both of which are Florida
corporations ("Cura/WorkGroup") at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx
00000, and STRATUS SERVICES GROUP, INC., a Delaware corporation, with its
principal office at 000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 (the
"Debtor").
BACKGROUND INFORMATION
A. Debtor has executed on this date a promissory note in the principal amount of
Fifty Thousand and 00/100 Dollars ($50,000) (the "Note"). The Note was made
pursuant to the provisions of that certain Asset Purchase Agreement, dated as of
January 2, 2001, by and between Cura/WorkGroup and Debtor (the "Asset Purchase
Agreement"). The capitalized terms herein not otherwise defined, shall have the
meaning given to such terms in the Asset Purchase Agreement.
B. In consideration for the loan evidenced by the Note, the Debtor desires to
grant to Cura/WorkGroup a security interest in the Collateral (as hereinafter
defined) in accordance with the terms of this Security Agreement.
PROVISIONS
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, it is agreed as follows:
1. GRANT OF SECURITY INTEREST. Debtor hereby grants, pledges and
assigns to Cura/WorkGroup a security interest in the Assets, including all
customer lists, goodwill, inventory, furnishings, fixtures, equipment, leases,
accounts receivables (it being acknowledged though that Capital Temp Funds has a
first priority lien on such accounts receivables) and all other forms of
personal property of the Debtor in the Acquired Businesses, wherever same may be
located, whether now owned or existing or hereafter arising or acquired by
Debtor, together with all substitutions, replacements, additions and accessions
therefore or thereto, all negotiable documents relating thereto and all cash and
non-cash proceeds thereof including, but not limited to, notes, drafts, checks,
instruments, insurance proceeds, indemnity proceeds, warranty and guaranty
proceeds except no present or future accounts (as defined in the Uniform
Commercial Code of Delaware) or proceeds of such accounts shall be subject to
such security interest (all of the foregoing hereinafter referred to as the
"Collateral").
The security interest hereby granted is to secure the prompt and full
payment and complete performance of all obligations of Debtor to Cura/WorkGroup
under the Note, the Asset Purchase Agreement and this Security Agreement. Debtor
shall not transfer possession or sell the Collateral (other than the accounts
receivables purchased by the Debtor pursuant to the Asset Purchase Agreement
which may only be pledged to Capital Temp Funds, Inc., the Debtor's financing
company) or relocate any portion of the Collateral without Cura/WorkGroup's
prior written consent unless the Collateral is transferred to a jurisdiction in
which Cura/WorkGroup has filed a financing statement in respect of such
Collateral.
2. GENERAL COVENANTS. Debtor represent, warrants and covenants to and
for the benefit of Cura/WorkGroup as follows:
21
(a) Except for the security interest granted hereby (i) Debtor is the
sole owner of the Collateral with good, valid and marketable title thereto, free
from any and all liens, security interests, encumbrances, claims and other
adverse interests; and (ii) no security agreement, financing statement,
equivalent security or lien instrument or continuation statement covering any of
the Collateral has been executed by Debtor, or is on file or of record in any
public office, except for any prior lien of an equipment lessor as to the leased
Assets (the "Prior Lien").
(b) Debtor shall not create, permit or suffer to exist, and shall take
such action as is necessary to remove, any claim to or interest in or lien or
encumbrance upon the Collateral, other than the security interest granted hereby
and the Prior Lien. Debtor shall defend the right, title and interest of
Cura/WorkGroup in, to and under the Collateral against all claims and demands of
all persons and entities at any time claiming the same or any interest therein.
(c) Subject to any limitation stated therein or in connection
therewith, all information furnished by Debtor concerning the Collateral, is or
shall be at the time the same is furnished, accurate, correct and complete in
all material respects.
3. ADDITIONAL ASSURANCES. Debtor shall perform, do, make, execute and
deliver all such additional and further acts, things, deeds, assurances and
instruments as Cura/WorkGroup may require to more completely vest in and assure
to Cura/WorkGroup its rights hereunder and in, to or under the Collateral.
4. PRESERVATION AND DISPOSITION OF COLLATERAL.
(a) Except for the security interest granted hereby and the
Prior Lien, Debtor shall keep the Collateral free from any and all liens,
security interests, encumbrances, claims and interests. Debtor shall advise
Cura/WorkGroup promptly, in writing and in reasonable detail, (i) of any
material encumbrance upon or claim asserted against or sale of any of the
Collateral; (ii) of any material change in the composition of the Collateral;
and (iii) of the occurrence of any other event that would have a material effect
upon the aggregate value of the Collateral or upon the security interest of
Cura/WorkGroup.
(b) Debtor shall not sell or otherwise dispose of the
Collateral.
(c) Debtor shall not use the Collateral in violation of any
statute, ordinance, regulation, rule, decree or order. Debtor shall pay and/or
satisfy any charges or levies upon the Collateral or in respect to the income or
profits therefrom, except that no such charge need be paid if (i) the validity
thereof is being contested in good faith by appropriate proceedings; and (ii)
such proceedings do not involve any danger of sale, forfeiture or loss of any
Collateral or any interest therein.
(d) Unless Debtor pays the same within ten (10) business days
after written demand for such payment by Cura/WorkGroup, Cura/WorkGroup may, at
its option, discharge taxes, liens, security interests or other encumbrances at
any time levied or placed on the Collateral and may pay for the maintenance and
preservation of the Collateral. Debtor agrees to reimburse Cura/WorkGroup upon
demand for any payment made or any expense incurred (including reasonable
attorneys' fees) by Cura/WorkGroup pursuant to the foregoing authorization.
Should Debtor fail to pay said sum to Cura/WorkGroup upon demand, interest shall
accrue thereon, from the date of demand until paid in full, at the highest rate
set forth in the Note.
5. EXTENSIONS AND COMPROMISES. With respect to any Collateral held by
Cura/WorkGroup as security for the Note, Debtor assents to all extensions or
postponements of the time of payment thereof or any other indulgence in
connection therewith, to each substitution, exchange or release of the
22
Collateral, to the addition or release of any party primarily or secondarily
liable therefor, to the acceptance of partial payments thereof and to the
settlement, compromise or adjustment thereof, all in such manner and at such
time or times as Cura/WorkGroup may deem advisable. Cura/WorkGroup shall have no
duty as to the collection or protection of the Collateral or any income
therefrom, nor as to the preservation of rights against prior parties, nor as to
the preservation of any right pertaining thereto, beyond the safe custody of the
Collateral in the possession of Cura/WorkGroup, provided, however, nothing
contained in this paragraph 5 shall exculpate Cura/WorkGroup from any liability
which would otherwise arise as a result of any action (as distinguished from an
omission) constituting gross negligence or willful misconduct of Cura/WorkGroup.
6. FINANCING STATEMENTS. At the request of Cura/WorkGroup, Debtor shall
join with Cura/WorkGroup in executing one or more financing statements in form
satisfactory to Cura/WorkGroup and shall pay the cost of filing the same in all
public offices wherever filing is deemed by Cura/WorkGroup to be necessary or
desirable. Debtor hereby agrees that a carbon, photographic or other
reproduction of this Security Agreement or of a financing statement shall be
sufficient as a financing statement.
7. DEFAULT. If Debtor shall fail to make any payment of principal of or
interest on the Note when due in accordance with the terms of the Note or fail
to perform or observe any covenant, agreement or other obligation under the
terms of the Note, the Asset Purchase Agreement or hereunder:
(a) Cura/WorkGroup may, pursuant to the terms of the Note,
declare the unpaid balance of the Note immediately due and payable and this
Security Agreement in default.
(b) Cura/WorkGroup shall have the rights and remedies of a
secured party under this Security Agreement, under any other instrument or
agreement securing the Note and under the Uniform Commercial Code, as amended,
in effect under the laws of the State of Delaware, or otherwise available at law
or in equity, including the right to enter upon the premises of Debtor, with or
without process of law, and take immediate possession of and remove the
Collateral or any part thereof and may sell, lease or otherwise dispose of all
or any portion of the Collateral in any commercially reasonable manner.
8. FURTHER ASSURANCES. At any time and from time to time, upon the
written request of Cura/WorkGroup, and at the sole expense of Debtor, Debtor
will promptly and duly execute, deliver and/or have recorded with appropriate
agencies such further instruments and documents and take such further action as
Cura/WorkGroup may reasonably request for the purpose of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein granted,
including without limitation the filing of any financing or continuation
statements under the Uniform Commercial Code or other similar law in effect in
any jurisdiction with respect to the security interests created hereby.
9. MISCELLANEOUS PROVISIONS.
(a) All of Cura/WorkGroup's rights and remedies, whether at
law or in equity and whether evidenced hereby or by any other agreement,
instrument or paper, shall be cumulative and may be exercised singularly or
concurrently. The exercise of one or more rights or remedies shall not prejudice
or impair the concurrent or subsequent exercise of other rights or remedies.
(b) Any demand upon or notice to Debtor shall be in writing
delivered in person (which delivery shall be acknowledged by written receipt),
by facsimile transmission, or by depositing the same in the U.S. mails, postage
prepaid, addressed to Debtor at the address set forth at the beginning of this
Security Agreement. Such demand or notice shall be effective upon receipt or
upon the refusal by any employee, agent or representative of Debtor to accept
delivery thereof.
23
(c) Cura/WorkGroup shall not be deemed to have waived any of
its rights hereunder or under any other agreement, instrument or paper signed by
Debtor unless such waiver be in writing and signed by Cura/WorkGroup. This
Agreement may not be assignable by Debtor, and Cura/WorkGroup may, upon written
notice to Debtor, assign all of its rights hereunder.
(d) This Security Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall be
governed by the laws of the State of Delaware. The parties hereto agree that any
action concerning, relating to or involving this Security Agreement must be
venued in Delaware, and the parties hereby consent to the jurisdiction of the
courts in Delaware. In any action concerning the Security Agreement or in the
event Cura/WorkGroup shall employ legal counsel to protect its rights hereunder
or enforce any terms hereof, Debtor shall be responsible for paying any
attorneys' fees and all reasonable costs associated therewith.
(e) The provisions hereof shall, as the case may require, bind
or inure to the benefit of the respective successors and assigns of Debtor and
Cura/WorkGroup.
(f) Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. No terms contained
herein shall be amended or waived except by written agreement of both parties.
IN WITNESS WHEREOF, Debtor and Cura/WorkGroup have signed this Security
Agreement as of the date first above written.
CURA STAFFING, INC.
THE WORKGROUP PROFESSIONAL SERVICES,
INC., D/B/A THE WORKGROUP
By: /s/ XXXXXX BAND
-----------------------------------
Name: Xxxxxx Band
Title: President
STRATUS SERVICES GROUP, INC.
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: President and CEO
24
EXHIBIT C
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS, that CURA STAFFING, INC. AND THE
WORKGROUP PROFESSIONAL SERVICES, INC. D/B/A THE WORKGROUP, both of which are
Florida corporations ("Seller"), for good and valuable consideration to Seller
in hand paid (receipt of which is hereby acknowledged), does by these presents,
irrevocably sell, convey, assign, transfer, and deliver unto STRATUS SERVICES
GROUP, INC. (the "Buyer"), its successors and assigns, all right, title and
interest in and to the assets and properties listed on SCHEDULE "A" attached
hereto and by this reference made a part hereof, wherever such assets may be
located and whether or not reflected on the balance sheet of Seller (the
"Assets"). This Xxxx of Sale is made subject to the terms and conditions of that
certain Asset Purchase Agreement, dated as of January 2, 2001, by and between
Seller and Buyer (the "Purchase Agreement"). All terms used but not otherwise
defined herein shall have the meaning assigned to them in the Purchase
Agreement.
TO HAVE AND TO HOLD, unto Buyer, its successors and assigns, FOREVER.
Seller hereby warrants, covenants and agrees with respect to the Assets
that it, except as set forth in the Purchase Agreement or any schedule or
exhibit thereto: (a) is hereby conveying good and indefeasible title to the
Assets, free and clear of any and all mortgages, liens, pledges, charges,
claims, leases, restrictions or encumbrances of any nature whatsoever, except as
set forth in the Purchase Agreement or any schedule or exhibit thereto; (b) will
forever warrant and defend the sale of, title to and right to possession of the
Assets unto Buyer, its successors and assigns, against any and all claims and
demands of any kind whatsoever; and (c) will take all steps necessary and
permitted to put Buyer, its successors or assigns, in actual possession and
control of the Assets. No provision in this Xxxx of Sale shall in any way waive,
diminish or limit the express provisions set forth in the Purchase Agreement,
this Xxxx of Sale being intended solely to effect the transfer of the Assets in
accordance with the Purchase Agreement. The terms of the Purchase Agreement
shall prevail in the event of a conflict between the terms hereof and the terms
of the Purchase Agreement.
Seller transfers all leased property in an "as is" condition and there
are no warranties, express or implied, that are not stated herein or in the
Purchase Agreement.
Seller agrees that it shall execute and deliver or cause to be executed
and delivered from time to time such instruments, documents, agreements,
consents and assurances and take such other actions as Buyer reasonably may
require to more effectively convey, transfer to and vest in Buyer and to put
Buyer in possession of any of the Assets being sold, conveyed, assigned,
transferred and delivered hereunder.
This Xxxx of Sale shall be binding upon Seller and its successors and
assigns, and inure to the benefit of and be enforceable by Buyer and its
successors and assigns.
25
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of Sale to be duly
executed as of as of the date first above written.
CURA STAFFING, INC.
THE WORKGROUP PROFESSIONAL SERVICES, INC.,
d/b/a THE WORKGROUP
By: /s/ XXXXXX BAND
---------------
Name: Xxxxxx Band
Title: President
26
SCHEDULE "A"
DESCRIPTION OF ASSETS
The Assets being sold, conveyed, assigned, transferred, and delivered by Seller
to the Buyer pursuant to this Xxxx of Sale are as follows:
1. LICENSES.
Business license and all other licenses associated with the above
listed trade names or otherwise generated or employed by Acquired Business.
2. GOODWILL.
All goodwill a part of or associated with the operation of the Acquired
Business after effective date.
3. FIXED ASSETS.
All owned leasehold improvements and contents, including furniture,
supplies, equipment and office decor, telephone listings, and telephone
numbers in and for the offices located at Miami Springs as of Effective
Date, including, but not limited to, the owned Assets listed on
Schedule 1.1 to the Purchase Agreement.
4. BOOKS, RECORDS, BUSINESS DATA.
All books, records, correspondence, and business data located at the
offices set forth in 3 above, relating solely to the Acquired Business,
including, but not limited to, current and historical client lists,
contracts, employee records, prospect lists, resumes and related logs,
historical payroll, billing and accounts receivable data contained in
Dataforce's Spectrum software related only to the Assets and accounts
receivable purchased, accounts receivable invoices and supporting
documentation for invoices purchased pursuant to Section 1.2(iv) of the
Purchase Agreement, sales data bases, resume data bases, and training
materials pertaining to the Acquired Business' operations.
5. BOOK OF BUSINESS; PROPOSALS.
The entire book of business of the Acquired Business including, but not
limited to, ongoing contracts, and proposals to secure new contracts,
with customers and prospective customers of the Acquired Business.
6. LEASES AND CONTRACTS ASSUMED
See Schedule 1.1 and 2.5 of Purchase Agreement
27
EXHIBIT D
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND LIABILITIES
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is made and
entered into as of the 2nd day of January, 2000, by and between CURA STAFFING,
INC. AND THE WORKGROUP PROFESSIONAL SERVICES, INC. D/B/A THE WORKGROUP, both of
which are Florida corporations ("Assignor"), and STRATUS SERVICES GROUP, INC., a
Delaware corporation (the "Assignee"). All terms used but not otherwise defined
herein shall have the meaning assigned to them in that certain Asset Purchase
Agreement dated as of January 2, 2001, by and between Assignor and Assignee (the
"Purchase Agreement").
WHEREAS, Assignor has concurrently herewith sold, assigned,
transferred, conveyed and delivered to Assignee the Assets used in connection
with Assignor's operation of the Acquired Business;
WHEREAS, Assignor desires to assign and transfer to Assignee all right,
title and interest in and to the contracts listed on the attached SCHEDULE "A"
to this Agreement (the "Contracts") in connection with the foregoing
transaction, and Assignee desires to accept such assignment; and
WHEREAS, as partial consideration for the sale of the Assets and the
assignment of the Contracts, Assignee desires to assume certain specified
liabilities, as described herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT OF CONTRACTS. Assignor does hereby irrevocably assign,
transfer, sell, deliver and set over to Assignee all right, title and interest
in and to the Contracts, except as provided in the Purchase Agreement, and the
Assignee hereby accepts the assignment of the Contracts. The parties hereto
agree to cooperate with each other in good faith to obtain all third party
consents to such Contracts (other than the leases assumed by Assignee pursuant
to the Purchase Agreement), to the extent they are not received prior to the
Closing Date.
2. ASSUMPTION OF CONTRACTS. Assignee hereby assumes sole responsibility
to faithfully and punctually perform, satisfy and discharge all of the duties,
obligations, terms, conditions, covenants and liabilities of Assignor under the
Contracts arising after the date hereof which Assignor is otherwise bound to
perform, discharge or otherwise satisfy under the Contracts.
3. ASSUMPTION OF OTHER LIABILITIES. Assignee hereby undertakes, assumes
and agrees to perform, pay and discharge the Assumed Liabilities of Seller in
accordance with their respective terms and subject to the respective conditions
thereof. Assignee assumes no debt, liability or obligation of Assignor under the
contracts that arise from or are related to the operation of the Acquired
Business prior to the Effective Date. Other than as specifically provided above
in this Section 3, Assignee assumes no debt, liability or obligation of
Assignor, whether relating to the Acquired Business, whether actual or
contingent, or whether accrued or unaccrued, including any tax obligation,
except for the Assumed Liabilities.
4. FURTHER ACTION. Assignor and Assignee agree that they shall execute
and deliver or cause to be executed and delivered from time to time such
instruments, documents, agreements, and assurances and take such other action as
any other party may reasonably require to more effectively assign and transfer
to and vest in Assignee, its successors and assigns, all right, title and
interest of Assignor in and to the Contracts. Assignor will promptly remit and
send to Assignee any and all payments, funds, notices,
28
and other documents and information received by Assignor as a result of or with
respect to the Contracts or the Assumed Liabilities relating to the period from
and after the Closing Date.
5. CONFLICT. No provision in this Agreement shall in any way waive,
diminish or limit the express provisions set forth in the Purchase Agreement,
this Agreement being intended solely to effect the transfer of the Assets in
accordance with the Purchase Agreement. The terms of the Purchase Agreement
shall prevail in the event of a conflict between the terms hereof and the terms
of the Purchase Agreement.
6. BINDING EFFECT. This Agreement shall be binding upon the parties
hereto and shall inure to the benefit of and be enforceable by their respective
successors and assigns. This Agreement may not be assigned by any party without
the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
CURA STAFFING, INC.
THE WORKGROUP PROFESSIONAL SERVICES, INC.,
d/b/a THE WORKGROUP
By: /s/ XXXXXX BAND
----------------------------------------
Name: Xxxxxx Band
Title: President
STRATUS SERVICES GROUP, INC.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------
Name: XXXXXX X. XXXXXXX
Title: PRESIDENT AND CEO
29
SCHEDULE "A"
LIST OF ASSIGNED CONTRACTS
CURA STAFFING
Licence of Dataforce staffing software (Spectrum and Starsearcher)
Software support agreement with Dataforce
Lease of copier with Wood Business Products dated 12/9/99
Equipment lease with ACI Financial dated 4/23/99
Equipment lease with ACI Financial dated 10/11/99
Lease Agreement at Eastern Financial Credit Union Building, 000 Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxxx, Xxxxxxx
THE WORKGROUP PROFESSIONAL SERVICES
Software license with Notes, ETC, Inc.
30
EXHIBIT E
CROSS-RECEIPT
This Cross-Receipt is being delivered pursuant to Section 4 of that
certain Asset Purchase Agreement dated as of January 2, 2001, by and between
STRATUS SERVICES GROUP, INC. ("Buyer") and CURA STAFFING, INC. AND THE WORKGROUP
PROFESSIONAL SERVICES, INC. D/B/A THE WORKGROUP, both of which are Florida
corporations ("Seller") (the "Purchase Agreement"). Capitalized terms used
herein but not defined shall have the meaning assigned to them in the Purchase
Agreement.
Buyer hereby acknowledge receipt from Seller of: (a) the Assets in
satisfaction of Seller's obligation under Section 1.1(a) of the Purchase
Agreement to sell, assign, transfer, and deliver such Assets to Buyer; and (b)
all documents required to be delivered at Closing by Seller to Buyer pursuant to
Section 4.1 of the Purchase Agreement. Notwithstanding this Cross-Receipt,
however, Buyer retains its right under (i) the Xxxx of Sale and the Assignment
and Assumption of Contracts and Liabilities, both of which are dated as of
January 2, 2001 and executed by Seller in favor of Buyer and (ii) the Purchase
Agreement, to have Seller execute and deliver, or cause to be executed and
delivered, any additional documents and instruments as may be reasonably
necessary to consummate the transfer of the Assets as contemplated thereby.
Dated: January 2, 2001
STRATUS SERVICES GROUP, INC.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
Seller hereby acknowledges receipt from Buyer of: (a) the Purchase
Price pursuant to Section 1.2 of the Purchase Agreement and (b) all documents
required to be delivered at Closing by Buyer to Seller pursuant to Section 4.2
of the Purchase Agreement.
Dated: January 2, 2001
CURA STAFFING, INC.
THE WORKGROUP PROFESSIONAL SERVICES,
INC. d/b/a THE WORKGROUP
By: /s/ XXXXXX BAND
-----------------------------------
Name: Xxxxxx Band
Title: President
31
