Exhibit 2.2
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 4th day of January, 1999, by
and between STRATUS SERVICES GROUP, INC., a Delaware corporation, whose address
is 000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Purchaser") and B &
R EMPLOYMENT INC., a Delaware corporation, whose address is 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Seller") and shall be considered effective
as of the 1st day of January, 1999.
W I T N E S S E T H:
WHEREAS, Seller is the owner of an ongoing temporary personnel services
business known as B & R Employment Inc., located in Wilmington, Delaware with
additional locations in Newark, Delaware and Dover, Delaware (the "Business");
and
WHEREAS, Purchaser desires to purchase and Seller desires to sell,
substantially al of the assets of the business of Seller in two stages, upon the
terms and conditions contained herein. The first stage shall be the Physical
Closing, at which time, the Seller shall transfer to the Purchaser, title to and
control over all of the business assets of Seller to be sold by Seller to
Purchaser pursuant to the terms of this Agreement. The second stage, the
Financial Closing, will occur at a later date, as provided herein, at which time
certain amounts will be paid to Seller by Purchaser, as set out herein.
NOW, THEREFORE, intending to be legally bound, and in consideration of the
mutual promises, covenants, and agreements hereinafter set forth, Purchaser and
Seller hereby agree as follows:
TERMS AND CONDITIONS
1. Purchase and Sale of Assets. On the Physical Closing Date, as hereinafter
defined, on the terms, subject to the conditions and for the consideration
hereinafter set forth, Seller shall sell, assign, transfer, convey, and deliver
to Purchaser, and Purchaser agrees to purchase from Seller the following assets
and properties of Seller (collectively hereinafter called the "Sale Assets"):
(a) Fixed Assets. All of the Seller's fixed assets, including, without
limitation, equipment, furniture, office equipment, supplies,
leasehold improvements, fixtures, and inventory located at the
addresses of the Business. Seller acknowledges that a complete list
of Seller's fixed assets is set forth on Exhibit "A" attached
hereto.
(b) Other Assets. The following other assets owned by Seller and used in
the Business:
1) Copies of Seller's sales and operating records;
2) All of Seller's general intangible assets, including trade names
and service marks; Seller makes no warranty that it has good and
marketable title to its trade names and service marks. Seller agrees
to transfer to Purchaser at Closing whatever right, title, and
interest it has in its trade names and service marks.
3) All of Seller's customer contracts and agreements, if any, and
client lists inclusive of names, contact names, comments and status;
4) Seller's goodwill and business relating to its operations; and to
the extent they are assignable, all business and charter licenses,
sales tax certificates and numbers, occupancy permits, and similar
types of operating permits;
5) All of Seller's customer and vendor lists and records relating to
Seller's business; and
6) All of Seller's prospect lists.
Such assets shall not include the excluded assets in subparagraph (c)
below.
(c) Excluded Assets: Notwithstanding the above or anything in this
Agreement to the contrary, the following assets owned by Seller are
specifically excluded from this Agreement and will be retained by
Seller:
1) Seller's corporate books and records and original sales and
operating records;
2) Seller's lines of credit or loans; and
Title to the Sale Assets and risk of loss and damage to the Sale Assets on
hand on the Physical Closing Date, by casualty (whether or not covered by
insurance) or by condemnation, will pass to the Purchaser upon the Physical
Closing, as hereinafter defined, but will remain with Seller until the Physical
Closing has occurred. Risk of loss with respect to liability (of all types) for
temporary staffers shall not pass until 11:59 p.m., December 31, 1998.
2. Assumption of Liabilities. Purchaser hereby agrees to assume the specific
liabilities, duties, and obligations of Seller described below in paragraphs (a)
and (b), that are due and payable or required to be performed on or after the
Closing Date, as hereinafter defined, but not for or with respect to the period
prior to the Closing Date (the "Assumed Liabilities).
(a) Leases. At the Closing, Seller shall deliver to Purchaser, executed
lease agreements memorializing the month-to-month oral leases currently in
effect, in the form attached hereto as Exhibit "B", duly consented to by
the respective landlord(s) of the Leased Property(s). Prior to the Closing
Date, Seller and Purchaser shall cooperate in obtaining all requisite
consents to such agreements. In the event such consent is not obtained
prior to the Physical Closing, Seller and Purchaser agree to cooperate to
obtain said consent as soon as practicable after the Physical Closing
Date.
(a) Contracts. At the Closing, Purchaser shall deliver an assignment and
assumption in form of Exhibit "C" acceptable to the parties of such
other contracts of Seller as Purchaser may elect to assume.
(b) Other Liabilities Excluded. Except as expressly provided in this
Agreement or any other document signed by Purchaser, Purchaser is
not assuming any obligation to pay for
2
any of the debts, liabilities, or obligations of Seller, whether now
or hereafter existing, accrued or contingent, or arising out of or
related to consummation of the transactions herein contemplated
(including, without limitation, all taxes of any kind or description
and any employee claims). Seller covenants and agrees that Seller
shall pay promptly, when due or within the ordinary course of
business, all of Seller's debts, liabilities, and obligations to all
creditors, specifically including, but not limited to, those listed
in Exhibit "D", as of the Closing Date, and to all employees for
services performed through 11:59 p.m. on December 31, 1998.
3. Purchase Price. Subject to adjustment as provided in Paragraph 9, the
aggregate purchase price ("Purchase Price") to be paid by Purchaser to Seller
for the Sale Assets shall be four (4) times the trailing twelve (12) month's
Earnings Before Interest and Taxes (EBIT) to be determined as of the most recent
month end thirty days (30) prior to the Financial Closing. In no event shall the
EBIT be below that calculated for the twelve (12) months ended December 31,
1998. Said Purchase Price shall be payable as:
(a) One Million, Five Hundred Thousand Dollars ($1,500,000) evidenced by
Seller Note #1 transferred on the Physical Closing and payable at
the Financial Closing by cashier's check, certified check or via
wire transfer.
1) Seller has requested that a portion of the purchase price
enumerated in (a) be delivered on his behalf to the following
parties and in amounts to be provided by said parties at the
Financial Closing:
(i) Internal Revenue Service
(ii) Wilmington Trust Company
(b) Two Hundred Fifty Thousand Dollars ($250,000) evidenced by Seller
Note #2 to be paid in eight (8) equal quarterly installments of
Thirty-Four Thousand, Eight Hundred Sixty-Six Dollars and
Eighty-Four Cents ($34,866.84) beginning ninety (90) days after the
Financial Closing Date.
(c) Forty-Eight Thousand, Four Hundred (48,400) shares of the
Purchaser's Common Stock. The Purchaser hereby grants the Seller, in
the event the Purchaser does not conduct an Initial Public Offering
of Common Stock within twenty-four (24) months of the closing of
this Asset Purchase Agreement, an option to sell its stock back to
the Purchaser at Ten Dollars ($10) per share. In the event Seller
plans to exercise this option, he must give Purchaser ninety (90)
days written notice of its intention.
(d) The amounts due hereunder shall be evidenced by a promissory notes
in form attached hereto as Exhibit "E" (the "Seller Notes"). The
Seller Notes shall be secured by a Security Agreement and UCC-1 in
form attached hereto as Exhibit "F" providing Seller with a security
interest in the following:
1) Seller's fixed assets as set forth on Exhibit "A";
2) Seller's trade name and service marks "B & R Employment Inc.";
and
3
3) Customer lists and database and applicant database.
The Security Agreement shall include such terms as may be customary and
standard; provided, however, that the Security Agreement shall contain a
provision for a cure period of thirty (30) days for a default by Purchaser.
4. Allocations of Consideration. The consideration furnished by Purchaser for
the Sale Assets will be allocated among the components of the Sale Assets in
accordance with the Allocation of Consideration Schedule (IRS Form 8594)
attached hereto as Exhibit "G". The allocated consideration may be adjusted at
the Closing Date to reflect any adjustments made pursuant to paragraph 9. Each
party to this Agreement accepts and shall abide by the foregoing allocation of
the consideration for the Sale Assets and shall not include in any tax return
filed by it an item of gain, income, or deduction that reflects a different
allocation of any portion of the Purchase Price for the Sale Assets.
5. Warranties, Representations, and Covenants of Seller. Seller represents and
warrants to and covenant with Purchaser that as of the date hereof and as of the
Closing Date:
(a) Clear Title.
1) Seller will at Closing transfer to Purchaser all of the Sale
Assets free and clear of all security interests, liens, mortgages,
conditional sales contracts, lessors' interests, attachments,
judgments, and encumbrances of every kind and nature;
2) Seller agrees that, at Closing Seller will execute and deliver to
Purchaser such instruments of sale, assignment, transfer, and
conveyance as Purchaser shall deem reasonably necessary or
appropriate to effect such transfer and conveyance;
3) Exhibit "H" attached hereto contains a complete listing of any
existing security interests, liens, mortgages, or other encumbrances
on the Sale Assets and Seller agrees to deliver at the Closing such
instruments to effect a release of such encumbrances as Purchaser
shall deem reasonably necessary or appropriate.
(b) Contractual Commitments. Except for this Agreement and those
obligations specified in paragraph 2(b) hereof, the Seller Notes and
Employment Agreement, Seller is not a party to any written or oral
contractual commitment, contract, or agreement which shall be
binding upon Purchaser on or after the Closing Date.
(c) Litigation. There is no action, suit, litigation, proceeding or
controversy in any court, nor any legal proceeding before any public
or governmental commission, bureau, board or agency, pending or, to
the best knowledge of Seller, threatened by or against Seller in
respect of Seller's Business or Sale Assets. Seller is not subject
to any judgment, order, writ, or injunction enjoining it in respect
of any business practice in the conduct of its business.
(d) Material Defaults. Seller is not in default under, or in violation
of any
4
applicable statute, law, decree, order, rule or regulation, or in
default under or in violation of any provision of any contractual
agreement in a manner that would materially or adversely affect the
Sale Assets.
(e) Tax Matters. Seller has filed with the proper governmental agencies
all tax returns and reports required by law, except for those
subject to valid extensions; and (i) all income, ad valorem,
franchise, sales, use, occupation, withholding (including income,
social security, and unemployment compensation taxes), excise, and
other taxes have been fully paid, (ii) no agreement for the
extension of time or waiver of any statute of limitation has been
given or is in effect with respect to the assessment or payment of
any tax against or by the Seller, (iii) there is no unpaid tax
deficiency that has been assessed or that is proposed, threatened,
or in process against the Seller by any taxing authority, and (iv)
no audit of any tax return of the Seller by any taxing authority is
pending, in progress, threatened, or in process.
Seller shall deliver to Purchaser on or before the Closing Date (i)
copies of all state and federal tax returns filed by the Seller
since January 1, 1995, for federal income taxes, all state taxes,
employee federal income tax withholding, social security taxes,
excise taxes, and federal and state unemployment compensation taxes,
and (ii) reasonably satisfactory proof of the payment of all tax
liabilities shown on the foregoing returns. Seller shall be
responsible for the preparation and filing of all applicable tax
returns for the fiscal year ended 1998 and shall be responsible for
any taxes due therefrom. Seller shall copy Purchaser on all filings
and correspondence with any and all taxing authorities regarding the
filing of said returns.
(f) Examination and Access. Seller agrees to permit Purchaser and its
employees, representatives, agents, and accountants to conduct site
visitations to Seller's Business during the period immediately
following execution of this Agreement by the last signatory through
and including the Closing Date (the "Examination Period"), and to
furnish to Purchaser, its employees, representatives, agents, and
accountants access at any reasonable time to Seller's books,
records, tax returns, and other information related to the Business.
The parties hereto expressly acknowledge and agree that either party
may terminate this Agreement at any time and for any reason
whatsoever upon failure of a condition precedent prior to Closing.
(g) Seller's Employees. Seller has no agreement, written or oral, with
any employee of Seller regarding employment which will not be
terminated on or before the Physical Closing Date, and Seller is not
a party to any labor union contract or collective bargaining
agreement with respect to any of its employees. Seller maintains no
pension, profit sharing, deferred compensation, life or disability
insurance plan for its employees, except for life insurance provided
pursuant to Seller's health plan. It is understood that Purchaser is
agreeing to employ all full time non-staffer employees of Seller.
Purchaser shall not be obligated to provide any term of employment
to such persons, it being understood that all such employees shall
be terminable at will by Purchaser after the Financial Closing.
Further, effective on the Physical Closing Date, Purchaser or its
assigns shall cover all of Seller's eligible non-staffer employees
who actually are employed by Purchaser under a continuation of
Seller's group health insurance plan for a period of thirty (30)
days from the Closing Date or the period of their employment with
Purchaser, whichever is less or through transfer to Purchaser's
similar plan.
5
(h) Leases. Seller will furnish to Purchaser executed copies of all
leases, executed by the Lessor, for the Purchaser to execute at
closing.
(i) Legal Capacity and Authority. Seller has full right, power, and
authority to engage in the business now conducted free of
interference from or claims of any person, firm, corporation, or
public authority, and to own and operate its assets, properties and
business.
(j) Authorization. The transaction provided for hereunder will have been
duly authorized by the Board of Directors on or before Closing, and
does not require the consent or approval of any other entity or
person to be binding or enforceable upon Seller according to its
terms.
(k) Disclosure. No representation or warranty of Seller contained in
this Agreement, and no statement contained in any Exhibit hereto or
in any Schedule or document furnished to Purchaser by or on behalf
of Seller pursuant to this Agreement contains any untrue statement
or omission of material fact.
(l) Preservation of Business. Seller has done, and prior to Closing will
do or will cause to be done, all things reasonably appropriate to
preserve the possession and control of all Sale Assets, and so far
as within its power, to preserve the goodwill of its customers and
all others having business relations with it.
(m) Ordinary Operation of Business. During the period beginning on the
Physical Closing Date and ending on the Financial Closing Date and
(as may be extended pursuant to the terms of this Agreement and Note
#1) Seller warrants, covenants and represents to the Purchaser the
following:
Seller agrees that it will operate the business and the assets
purchased by Purchaser in the ordinary course of business as
conducted by Seller prior to the Physical Closing Date. Seller
covenants and warrants that it will not make any full time personnel
changes, acquire any new assets, incur any new debt or make any
other significant changes in the operation of the business formerly
conducted by Purchaser without the written approval of Purchaser's
authorized representative. The parties will cooperate to prepare an
operating budget for the operations of the business formerly
conducted by Seller which shall be based on projected sales.
(n) Brokerage. Seller and Purchaser hereby agree to divide evenly any
brokerage fees due as a result of this transaction
6. Purchaser's Warranties, Representations, and Covenants. Purchaser represents
and warrants to and covenants with the Seller that as of the date hereof and as
of the Closing Date:
(a) Organization and Standing. Purchaser is a corporation, duly
organized, validly existing and in good standing under the laws of
the State of Delaware. No provision of this Agreement, or the
transactions contemplated herein will violate any provision of the
Certificate of Incorporation or By-Laws of Purchaser. This Agreement
has been duly
6
authorized and validly executed by Purchaser and is valid, binding
and enforceable according to its terms.
(b) Authorization. The transactions provided for hereunder will have
been duly authorized by the Board of Directors of Purchaser, and
will not require the consent or approval of any other entity or
person to be binding upon Purchaser.
(c) Cooperation. Purchaser covenants with Seller to reasonably cooperate
in Seller's efforts to obtain necessary approvals of all assignments
of contracts to Purchaser.
(d) Restrictions upon Purchaser. During the period beginning on the
Physical Closing Date and ending on the Financial Closing Date and
(as may be extended pursuant to the terms of this Agreement and Note
#1) Purchaser warrants, covenants and represents to the Seller the
following:
1) Purchaser agrees that until the Financial Closing Date it will
operate the business and the assets purchased from Seller in the
ordinary course of business as conducted by Seller prior to the
Physical Closing Date. Purchaser covenants and warrants that it will
not make any full time personnel changes, acquire any new assets,
incur any new debt or make any other significant changes in the
operation of the business formerly conducted by Seller without the
written approval of Seller's President, Xxxx X. Xxxx, Xx. The
parties will cooperate to prepare an operating budget for the
operations of the business formerly conducted by Seller which shall
be based on projected Sales.
2) Purchaser will not sell, convey, assign or otherwise transfer in
any manner any portion of Purchaser's business as defined in this
Agreement unless (a) such sale, conveyance, assignment or other
transfer is approved in writing by the holder of the Seller Notes;
(b) the person or entity to whom such sale, conveyance, assignment
or other transfer is made assumes all of Purchaser's obligations and
liabilities under this Agreement, the Employment Agreement and the
Seller Notes in written documentation reasonably acceptable to legal
counsel for the holder of the Seller Notes; and (c) Purchaser, its
assigns and all guarantors of the Seller Notes remain fully and
completely liable and obligated under this Agreement, the Employment
Agreement and the Seller Notes as if the sale, conveyance,
assignment or transfer had never occurred.
3) Except for those business operations upon which the Seller will
receive payments on the Seller Notes, Purchaser shall not, directly
or indirectly (including through any related or affiliated
partnership, corporation, limited liability company, sole
proprietorship, trust or other entity), within twenty-five (25)
miles of any Seller location (the "Territory"), engage in the
temporary personnel service business or solicit customers located in
the Territory. This Section 6(d)(2) does not apply to existing
customers of Purchaser as of the Physical Closing Date and
specifically shall exclude Chep Americas, USA Today and any and all
Engineering Services' business.
4) Breach of (1) or (2) above shall constitute a default under this
Agreement.
The parties hereto intend that this paragraph 6(d) provide Seller
and its assigns assurance that Purchaser will not take any actions
after the Closing which would have the effect of
7
reducing or jeopardizing amounts payable to Seller under the Seller
Notes through the transfer of the assets or operation of the
Business.
(a) Disclosure. No representation or warranty of Purchaser contained in
this Agreement, and no statement contained in any Exhibit hereto or
in any Schedule or document furnished to Seller by or on behalf of
Purchaser pursuant to this Agreement contains any untrue statement
or omission of material fact.
(b) Security Interest. The UCC-1 will upon filing vest a first priority
lien in the collateral as defined therein.
7. Conditions Precedent.
(a) Conditions Precedent to Purchaser's Obligation to Perform. The
obligations of Purchaser to purchase the Sale Assets are subject to
the satisfaction at or before the Closing of all of the conditions
set out below in this paragraph 7. Purchaser may waive any or all of
these conditions in whole or in part without prior notice.
1) All representations and warranties of Seller in this Agreement or
in any written statement that shall be delivered to Purchaser by
Seller under this Agreement shall be true and correct in all
material respects on and as of the Closing Date as though made at
that time.
2) Seller shall have performed, satisfied, and complied in all
material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with Seller
on or before the Closing Date.
3) During the period from the date hereof to the Closing Date,
Seller shall not have sustained any material loss or damage to the
Sale Assets, whether or not insured.
4) Purchaser shall have completed its due diligence review of
Seller's business organization.
5) Purchaser shall have received a certificate dated the Closing
Date signed and verified by the President of Seller certifying, in
such detail as Purchaser and its counsel may reasonably request,
that the conditions specified in paragraphs 7(a)(1), (2), and (3)
have been fulfilled.
6) No action, suit, or proceeding before any court of any
governmental body or authority, pertaining to the transactions
contemplated by this Agreement or to its consummation, the result of
which would affect the Seller's business to a materially adverse
degree, shall have been instituted or threatened on or before the
Closing Date.
7) The execution and delivery of this Agreement by Seller and the
performance of its covenants and obligations under it shall have
been duly authorized by all necessary corporate action, and
Purchaser shall have received copies of all resolutions pertaining
to such authorization, certified by the Secretary of such Seller.
8
8) Seller shall have obtained each respective Lessor's signature on
a lease that memorializes the month-to-month oral leases currently
in effect. Such signatures must not be conditioned on or result in
any increase in the rental rates currently in effect and no changes
in the terms and conditions of the Lease(s) are to be made as a
result of the assignment to Purchaser.
(b) Conditions Precedent to Seller's Obligations to Perform.
1) All representations and warranties of Purchaser in this Agreement
or in any written statement that shall be delivered to Seller by
purchaser under this Agreement shall be in all material respects
true and correct on and as of the Closing Date as though made at
that time.
2) Purchaser shall have performed, satisfied, and complied in all
material respects with all covenants, agreements, and conditions
required by this Agreement to be conformed or complied with by
Purchaser on or before the Closing Date.
3) Seller shall have received a certificate dated the Closing Date
and signed and verified by the chief Executive Officer of Purchaser
certifying, in such detail as Seller and its counsel may reasonably
request, that the conditions specified in paragraphs 7(b)(1) and (2)
have been fulfilled.
4) The execution and delivery of this Agreement by Purchaser and the
performance of its covenants and obligations under it shall have
been duly authorized by all necessary corporate actions, and Seller
shall have received copies of all resolutions pertaining to such
authorization, certified by the Corporate Secretary of Purchaser.
(c) Waiver of Conditions Precedent. Either party may waive any or all
conditions precedent to its obligations in whole or in part without
prior notice, and any condition precedent to either party's
obligations hereunder not satisfied as of closing shall be deemed
waived. The foregoing waiver shall not affect the right of any party
hereto to obtain indemnification to which it would be entitled under
Section 11 of this Agreement on account of any "Indemnified Loss"
(as defined in Section 11) which that party incurs following Closing
as a direct result of any fact or circumstance which it has not
discovered, or which was not disclosed to such party.
8. The Closing.
(a) Closing Date and Place of Closing. The Closing shall take place in
two parts. The Physical Closing shall occur on January 4, 1999 and
shall be evidenced by the signing of this Asset Purchase Agreement
and the exchange of the items contemplated herein. The Financial
Closing shall occur on or before June 1, 1999 and shall be evidenced
by the exchange of the Seller Note #1 for its face value and accrued
interest. Either or both of these Closing Dates may be extended by
the mutual agreement of the parties.
(b) Disengagement. In the event that Seller does not make payment on
Note #1 on or before August 1, 1999, this Agreement shall be
rescinded as between the parties by Purchaser reconveying to Seller
all of the assets purchased by Purchaser from Seller; reassigning
9
any and all leases which were assumed by Purchaser pursuant to this
agreement; relinquishing any and all rights Purchaser might have to
any of the clients which were transferred to Purchaser by Seller; by
relieving Seller and its employees of their obligations under any
covenant(s) not to compete, and, any and all other actions necessary
to rescind this agreement. Seller shall be entitled to retain any
and all amounts paid to it by Purchaser, except amounts paid
pursuant to Section3(a)(1) of this Agreement, as liquidated damages
and all employment agreements shall be rendered null and void. The
parties agree to work together in good faith in order to accomplish
a recision, if necessary. If this Agreement should be rescinded, the
parties agree to keep confidential any and all information that they
have learned with regard to the others business and shall not
disclose such information to any individuals nor shall they use it
themselves in connection with their own business.
(c) Documents to be Delivered by Seller. At the Closing, in addition to
any other documents specifically required to be delivered pursuant
to this Agreement, Seller shall execute and deliver to Purchaser, in
form and substance reasonably satisfactory to Purchaser and
Purchaser's counsel:
1) Certified copies of the resolutions of the directors and
shareholders of Seller, authorizing and approving the execution and
delivery of this Agreement and the consummation of the transactions
provided for herein;
2) Certificate or other evidence of Seller's due formation and good
standing under the laws of the State of Delaware.
3) A duly executed Xxxx of Sale, in the form attached hereto as
Exhibit "I" transferring to Purchaser all Sale Assets that consist
of tangible personal property described on Exhibit "A" attached
hereto, free and clear of any lien or encumbrance.
4) An executed Assignment Agreement in the form attached hereto as
Exhibit "C", assigning all of Seller's right, title, and interest in
and to the contracts, to Purchaser;
5) Lease(s), executed by the respective Landlord(s) thereto, in the
form attached hereto as Exhibit "B".
6) An Affidavit from Seller certified to Purchaser, certifying the
following:
A. The Seller owns the Sale Assets, and has the right to
convey the same to Purchaser.
B. That the Sale Assets are free and clear from any liens
or encumbrances;
C. That there are no matters pending or to the best
knowledge of Seller, threatened against Seller that
could give rise to a lien or other claim that would
affect Seller's title to the Sale Assets.
7) Such other documents (including corporate resolutions,
certificates of incumbency, and other similar documents, if
applicable), duly executed in recordable
10
form, as are contemplated herein or reasonably required by
Purchaser, Purchaser's counsel, or Purchaser's lender to consummate
the sale and purchase transaction contemplated herein; and
8) Duly executed Closing Statement in the form attached hereto as
Exhibit "J".
(d) Documents to be Delivered by Purchaser. At the Closing, in addition
to any other documents specifically required to be delivered
pursuant to this Agreement, Purchaser shall execute and deliver to
Seller, in form and substance satisfactory to Seller and Seller's
counsel:
1) Certified copies of the resolution of the Board of Directors of
Purchaser authorizing and approving the execution and delivery of
this Agreement and the consummation of the transactions provided for
herein;
2) Duly executed Closing Statement in the form attached hereto as
Exhibit "J";
3) Duly executed Assignments of Lease(s) with the respective
Landlords relating to the Lease(s) assumed hereunder;
4) Certificates or other evidence of Purchaser's due formation and
good standing under the laws of the State of Delaware;
5) Duly executed Employment Agreements and Non-Compete Agreements
with Xxxx X. Xxxx, Xx. in substantially the forms attached hereto as
Exhibits "K" and "L".
6) Duly executed Seller Notes in the form attached hereto as Exhibit
"E";
7) Duly executed Security Agreement and UCC-1 in the form attached
hereto as Exhibit "F"; and
8) Such other documents, including affidavits, and other similar
documents (if applicable), duly executed in recordable form, as are
contemplated herein, or reasonably required by Seller or Seller's
counsel to consummate the sale and purchase transaction contemplated
herein.
(e) Purchase Price. At the Physical Closing, Purchaser shall deliver to
Seller the cash portion of the Purchase Price set forth in paragraph
3 hereof.
9. Adjustments and Prorations at Closing. The following adjustments and
prorations will be computed through the Closing Date:
(a) EBIT Calculation. For purposes of determining the purchase price at
the Financial Closing, EBIT will be calculated using Schedule #1
attached hereto and updated monthly.
(b) Accounts Payable. Any and all amounts paid by Purchaser on behalf of
Seller for any payables existing prior to Physical Closing shall be
credited against Note #1 at the Financial Closing.
11
(c) Utility Bills. The amount of all unpaid utility bills with respect
to the Sale Assets allocable in whole or in part to the period prior
to the Closing Date will be prorated through the Closing Date. The
parties agree to attempt to cause such xxxxxxxx to be separated as
of the Closing Date, if at all possible.
(d) Lease Obligations. The amount of any lease obligation, including any
rent, security deposits, maintenance charges, etc., with respect to
the Lease(s), will, to the extent possible, be prorated as of the
Closing Date as further provided in the Assignment and Assumption of
Lease(s). To the extent that such amounts cannot be prorated as of
the Closing Date, the parties agree to make subsequent adjustments
between each other as the obligations become fixed and known.
(e) Property Taxes. The amount of any property taxes, if any, on the
Sale Assets will be prorated.
10. Post Closing Covenants. The parties agree as follows with respect to the
period following the Closing.
(a) Post-Closing Covenants of the Seller.
1) General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this
Agreement, Seller will take such further action (including the
execution and delivery of such further instruments and documents) as
any other Party may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefor).
2) Transition. Seller will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of Seller from
maintaining the same business relationships with Purchaser after the
Closing as it maintained with Seller prior to the Closing. Seller
will refer all customer inquiries relating to the Business to the
Purchaser from and after the Closing
3) Tax Returns. Seller shall cause to be prepared and filed, at its
sole expense all of its required tax returns for all tax periods
ending on or prior to the Closing Date. Seller shall be responsible
for the payment of, all taxes due or assessed which relate to the
operations of the Business for all periods up to and including the
Closing Date.
4) Dissolution. Subsequent to the Closing, Seller will not dissolve
or otherwise terminate their existence for at least twelve (12)
months following the Closing.
5) Nondisclosure of Confidential Information. Seller recognizes and
acknowledges that it has and will have access to certain
confidential information of the Purchaser (including, but not
limited to, list of customers, and costs and financial information)
that Purchaser considers to be valuable, special and unique property
of Purchaser. Following the Closing, Seller agrees that it will not
disclose, and that it will use reasonable efforts to prevent
disclosure by any other Person of, any such confidential information
to any Person, except to authorized representatives of Purchaser.
Seller recognizes and agrees
12
that violation of any of the agreements contained in this Section
10(a)(5) will cause irreparable damage or injury to Purchaser, the
exact amount of which may be impossible to ascertain, and that, for
such reason, among others, Purchaser shall be entitled to seek an
injunction, restraining any further violation of such agreements.
Such rights to any injunction shall be in addition to, and not in
limitation of, any other rights and remedies Purchaser may have
against Seller or its stockholders or members, as applicable.
6) Insurance. Following the Physical Closing Date, Seller shall, if
requested by the Purchaser, assign to the Purchaser or its
designated affiliates Seller's unemployment insurance and workers'
compensation experience ratings and take such steps as the Purchaser
shall reasonably request to effect such assignment, if such
assignment is permitted and does not result in any cost, expense or
penalty to Seller and is otherwise not prejudicial to Seller.
7) Employee Records. Following the Physical Closing Date, unless
prohibited by law, Seller shall make available to the Purchaser all
personnel records. Seller and the Purchaser shall also cooperate,
both before and after the Physical Closing Date, in exchanging
information, including pertinent employment records, benefit
information, salary and compensation records, financial statements
and other data, and in taking other action respecting the interests
of Seller's employees who become employees of the Purchaser at or
shortly following the Closing Date, and their respective
beneficiaries and dependents, in each of the employee benefit plans
of Seller and any plans established by the Purchaser, so as to
secure an orderly and effective transition of the benefit
arrangements for such employees of Seller and their respective
beneficiaries and dependents.
8) Corporate Name. From and after the Physical Closing, Seller shall
not use the words making up its existing name (or any existing trade
names) or similar names in connection with any business.
9) Consents. Following the Physical Closing, Seller shall use all
reasonable best efforts to obtain any consents not previously
obtained as soon as possible after the Physical Closing Date.
10) Employee Claims. On or after the Physical Closing Date, Seller
hereby agrees and covenants that in the event the Purchaser receive
employee claims attributable in all or in part to the employment of
such employee or former employee of Seller prior to the Physical
Closing Date, Seller agrees to undertake the defense of such claims
and to hold the Purchaser harmless from any adverse consequences.
Such claims could include, without limitation, claims asserted by
any union representing Seller's employees, claims before an
administrative agency such as the EEOC, NLRB, or state human rights
department or commission, or any other claims asserted against the
Purchaser, or its officers, agents, attorneys, employees, parent or
assigns in any way arising out of or relating to the employment of
such employees or their termination by Seller.
11) Employee Bonuses. Following the Closing Date, Seller agrees to
pay any and all amounts owed by Seller to the key employees with
respect to incentive and/or bonus
13
plans, agreements or arrangements that existed with such persons on
or before the Closing Date.
(b) Post-Closing Covenants of the Purchaser.
1) Employees and Consultants. Following the Closing Date, the
employees of Seller shall cease to be employees of Seller and,
except as otherwise determined by Purchaser, each in its sole
discretion, shall become employees of Purchaser or an affiliate of
the Purchaser on an employment at will basis. Notwithstanding the
foregoing, the Purchaser will have no liability to Seller if for any
reason: (i) the Purchaser decide not to offer employment to any of
Seller's employees (other than employees subject to employment
agreements as required by this Agreement); (ii) any of the employees
do not accept Purchaser's offer of employment; or (iii) any of the
employees (other than employees subject to the employment
agreements) accept employment with Purchaser, but such employment is
terminated for any reason after the Closing Date.
11. Competition and Trade Secrets. Seller shall enter into a Non-Compete
Agreement with Purchaser in the form attached hereto as Exhibit "L".
12. Indemnification.
(a) Indemnity by Purchaser.
1) Purchaser agrees to indemnify, defend and hold Seller, its
successors and assigns, harmless from, against and with respect to
every loss, damage, liability, cost, penalty, and expense including
reasonable attorney's fees which includes paralegal or other support
staff, charges, bankruptcy and appellate fees and court costs that
are incurred by Seller and are directly attributable to (i) the
operation of the Business and/or the Sale Assets by Purchaser on or
after the Closing Date; or (ii) any breach of any representation,
warranty or covenant of Purchaser in this Agreement or any document
executed pursuant hereto; or (iii) any failure of Purchaser to
satisfy any liability assumed by Purchaser in or pursuant to this
Agreement or any document executed pursuant hereto; or (iv) any
action, suit, proceeding, demand or other incident to enforcing this
indemnity provision (a "Purchaser's Indemnified Loss").
2) All rights and remedies granted to Purchaser in this Agreement
are cumulative and not exclusive of all other rights and remedies
which Purchase may have at law or in equity, and Purchaser may
exercise all or any of such rights at any one or more times without
being deemed to have waived any or all other rights and remedies
which Purchaser may have in the matter.
(b) Indemnity by Seller.
1) Seller agrees to indemnify, defend and hold Purchaser, its
successors and assigns, harmless from, against and with respect to
every loss, damage, liability, cost, penalty, and expense including
reasonable attorney's fees which includes paralegal or other support
staff, charges, bankruptcy and appellate fees and court costs that
are incurred by Purchaser and are directly attributable to (i) the
operation of the Business and/or the Sale
14
Assets by Seller prior to the Closing Date; or (ii) any breach of
any representation, warranty or covenant of Seller in this Agreement
or any document executed pursuant hereto; or (iii) any failure of
Seller to satisfy any liability assumed by Seller in or pursuant to
this Agreement or any document executed pursuant hereto; or (iv) any
action, suit, proceeding, demand or other act incident to enforcing
this indemnity provision (a "Seller's Indemnified Loss").
2) All rights and remedies granted to Seller in this Agreement are
cumulative and not exclusive of all other rights and remedies which
Seller may have at law or in equity, and Seller may exercise all or
any of such rights at any one or more times without being deemed to
have waived any or all other rights and remedies which Seller may
have in the matter.
(c) Claims Procedure. A party claiming indemnity (the "Indemnitee")
shall notify the other (the "Indemnitor") of either the incurrence
of an Indemnified Loss or the existence of any known facts that, if
not corrected, could constitute an Indemnified Loss within the time
limits allowed herein. The Indemnitor shall have thirty (30) days
following the date of receipt of such notice to notify the
Indemnitee of any objection it has to the validity or amount of the
Indemnitee's claim. If the parties have not resolved such claim
within such time, either party may commence legal action to
determine the claim. The Indemnitor shall have the right at its sole
option to undertake the defense or settlement of any claim that
might lead to an Indemnified Loss, provided that the Indemnitor
shall expressly agree to satisfy any Indemnified Loss that may
result from such claim. The notice shall describe the Indemnified
Loss in reasonable detail, and shall indicate the amount (estimated
if necessary) of the Indemnified Loss that has been or may be
suffered by the Indemnitee. The notice shall describe the
Indemnified Loss in reasonable detail, and shall indicate the amount
(estimated if necessary) of the Indemnified Loss that has been or
may be suffered by the Indemnitee.
(d) Set-Off. If Seller elects to dispute, rather than settle or pay, all
or any portion of Purchaser's claim for indemnity, Purchaser shall
have the further right to withhold payment of amounts then or
thereafter due or to become due to Seller under the Seller Notes,
but only to the extent of the amount of the Indemnified Loss, until
such time as a final judgment is rendered in the matter. Purchaser
shall thereon immediately pay Seller the amount (if any) by which
the amounts withheld or offset under the Seller Notes exceed
Seller's aggregate liability to Purchaser on account of an
Indemnified Loss (together with interest on such excess amount from
the date of set-off at the Wall Street Journal Prime Rate as is
reported from time to time plus 2%), as determined pursuant to such
final judgment or settlement entered into in connection with such
Indemnified Loss if Indemnitor does not elect to defend this matter.
(e) Survival of Representations, etc. The respective representations,
warranties, agreements and covenants of Seller and Purchaser herein
contained shall survive the Closing for a period of four (4) years
from the Closing Date.
13. Expenses. Seller and Purchaser shall each pay their respective costs and
expenses incurred or to be incurred by each of them in negotiating and preparing
this Agreement and in closing and carrying out the transactions contemplated by
this Agreement.
15
14. Taxes. Seller shall pay all personal property taxes and sales or transfer
taxes, if any, payable in connection with the sale, transfer, delivery, and
assignment to be made to the Purchaser hereunder.
15. Termination. Notwithstanding anything contained in this Agreement to the
contrary, this Agreement can be terminated, and the transactions contemplated by
it abandoned by mutual agreement of all the parties in writing.
16. Default.
(a) Default by Seller. In the event that prior to the Financial Closing
Seller breaches any of the provisions of this Agreement or fails to
perform any covenants hereunder, Purchaser may elect to either
terminate this Agreement, in which event Purchaser and Seller will
be relieved of all further obligations hereunder, or to specifically
enforce the performance of this Agreement by Seller.
(b) Default by Purchaser. In the event that prior to the Financial
Closing Purchaser breaches any of the provisions of this Agreement
or fails to perform any covenants hereunder, resulting in the
failure to close this transaction, Seller shall elect to either
terminate this Agreement, in which event Purchaser and Seller may be
relieved of all further obligations hereunder, or to specifically
enforce the performance of this Agreement by Purchaser.
17. Assignment. Purchaser may assign this Agreement and the rights and interests
of Purchaser thereunder without the written consent of Seller so long as such
assignment is to an affiliated entity under common ownership and control. Any
permitted assignment hereunder shall not serve to release Purchaser or any
guarantor from any of its obligations or duties pursuant to this Agreement.
18. Press Release. No press release is to be made concerning the negotiation of
this Agreement nor the sale of the Business prior to Closing without the prior
consent of both parties to this Agreement.
19. Return of Documents. In the event that a Closing does not occur, any
documents or copies of same exchanged between the parties are to be returned to
the party providing such documents and Confidentiality Agreements executed by
the parties shall continue in accordance with their terms.
20. Miscellaneous.
(a) Entire Agreement. This Agreement, together with the Exhibits hereto
and the documents to be delivered pursuant hereto, supersedes all
other agreements, understandings, representations and warranties
between the parties, either oral or written, constitutes the entire
agreement of the parties with respect to the subject matter hereof,
and may be amended only by an instrument in writing executed by all
parties hereto.
16
(b) Binding Effect. This Agreement, and the covenants herein contained,
will be binding upon, and inure to the benefit of, the parties
hereto and their respective successors, assigns, and legal
representatives.
(c) Notices. Whenever any party shall be required to give notice or
demand to another party according to the provisions of this
Agreement, such notice or demand shall be deemed sufficient and
effective on deposit in the United States mails, postage prepaid,
certified, return receipt requested, and addressed:
In the case of Purchaser to:
Stratus Services Group, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: J. Xxxx Xxxxxxx, Esq., General Counsel
In the case of Seller to:
Xxxx X. Xxxx, Xx.
000 Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx X. Xxxx, Esq.
103 Xxxxxx Building
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Any party may change the address to which such notices are to be
addressed by giving the other party notice in the manner herein set
forth.
(d) Paragraph Headings. Paragraph headings throughout this Agreement are
for the convenience of the parties and do not constitute a part
hereof.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all of
which will constitute one instrument.
(f) Construction. Unless the context clearly otherwise requires: the use
of the singular will include the plural and the use of the plural
will include the singular, and the use of any gender will include
the other two genders.
(g) No Waiver. The failure of any party to insist upon strict
performance of a covenant or of any obligation hereunder will not be
a waiver of that party's right to demand strict compliance therewith
in the future, nor will the same be construed as a novation of this
Agreement.
(h) Severability. If a covenant or provision provided in this Agreement
is deemed to be contrary to law, that covenant or provision will be
deemed separable from the remaining covenants and provisions of this
Agreement, and will not affect the validity, interpretation, or
effect of the other provisions of either this Agreement or any
agreement
17
executed pursuant to it or the application of that covenant or
provision to their circumstances not contrary to law.
(i) Computation of Time. Whenever the last day for the exercise of any
privilege or the discharge of any duty hereunder falls upon
Saturday, Sunday, or any public or legal holiday, whether state or
federal, the party having the privilege or duty will have until 5:00
p.m. Eastern Standard Time on the next succeeding regular business
day to exercise the privilege or discharge the duty.
(j) Interpretation. No provision of this Agreement will be construed
against or interpreted to the disadvantage of any party by any court
or other governmental or judicial authority by reason of such party
having or being deemed to have structured or dictated such
provision.
(k) Governing Law. This Agreement and the obligations of the parties
hereunder will be interpreted, construed, and enforced in accordance
with the Laws of the State of Delaware, and the parties hereto
specifically consent to the jurisdiction and venue of the
appropriate state or federal courts located in New Castle County,
Delaware.
(l) Attorneys' Fees. In the event a lawsuit is brought by either party
to enforce the terms hereof, or for any dispute arising out of this
transaction, the party prevailing in any such lawsuit shall be
entitled to recover from the losing party its costs and expenses
thereof, including its legal fees in a reasonable amount.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the date set forth above.
PURCHASER: SELLER:
STRATUS SERVICES GROUP, INC. B & R EMPLOYMENT Inc.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxx X. Xxxx, Xx.
Title: CEO Title: President
18
Exhibit 2.2
LIST OF ASSETS
1. ACER Pentium 133 mg with 32 RAM
2. ACER Pentium 133mg with 32 RAM
3. ACER Pentium 50mg with 32 RAM
4. Epson Stylus 600 color printer
5. Epson Stylus 600 color printer
6. The name B & R Employment Inc.
7. The customer lists and data base of B & R Employment Inc.
8. The applicant data base of B & R Employment Inc.
Exhibit 2.2
MONTHLY RENTAL AGREEMENT
THIS AGREEMENT, entered into this 1st day of January, 1999, by and between
XXXXXX XXXXXX, 0000 Xxxxxx Xxx, Xxxxxxxxxx, Xxxxxxxx 00000 hereinafter Lessor,
and STRATUS SERVICES GROUP, INC., 000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxx
Xxxxxx 00000 hereinafter Lessee.
WITNESSETH: That for an in consideration of the payment of the rents and
the performance of the covenants contained on the part of Lessee, said Lessor
does hereby demise and let unto Lessee, and Lessee hires from Lessor those
premises located at: 0000 Xxxxxxxx Xxxx., Xxxxxx, Xxxxxxxx 00000 for a tenancy
from month-to-month commencing on the 1st day of January, 1999, and at a monthly
rental of One Thousand, Five Hundred Seventy-Five Dollars ($1,575) per month,
payable monthly in advance on the 1st day of each and every month, on the
following TERMS AND CONDITIONS:
1. Purpose. The said premises shall be used for lawful business purposes
only.
2. Ordinances and Statutes. Lessee shall comply with all statutes,
ordinances and requirements of all municipal, state and federal authorities now
in force, or which may hereafter be in force, pertaining to the use of the
premises.
3. Repairs or Alterations. Lessee shall be responsible for damages caused
by his negligence and that of employees or invitees. Lessee shall not paint,
paper or otherwise redecorate or make alterations to the premises without the
prior written consent of Lessor. All alterations, additions, or improvements
made to the premises with the consent of Lessor shall become the property of
Lessor and shall remain upon and be surrendered with the premises.
4. Upkeep of Premises. Lessee shall keep and maintain the premises in a
clean and sanitary condition at all times, and upon the termination of the
tenancy shall surrender the premises to Lessor in as good condition as when
received, ordinary wear and damage by the elements excepted.
5. Assignment and Subletting. Lessee shall not assign this Agreement or
sublet any portion of the premises without prior written consent of Lessor.
6. Utilities. No obligations.
7. Default. If Lessee shall fail to pay rent when due, or perform any term
hereof, after not less than three (3) days written notice of such default given
in the manner required by law, Lessor, at his option, may terminate all rights
of Lessee hereunder, unless Lessee, within said time, shall cure such default.
If Lessee abandons or vacates the property, while in default of the payment of
rent, Lessor may consider any property left on the premises to be abandoned and
may dispose of the same in any manner allowed by law.
8. Security. No security deposit required.
9. Right of Entry. Lessor reserves the right to enter the demised premises
at all reasonable hours for the purpose of inspection, and whenever necessary to
make repairs and alterations to the demised premises. Lessee hereby grants
permission to Lessor to show the demised premises to prospective purchasers,
mortgagees, tenants, workmen, or contractors at the reasonable hours of the day.
Exhibit 2.2
10. Deposit Refunds. The balance of all deposits shall be refunded within
two (2) weeks from date possession is delivered to Lessor, together with a
statement showing any charges made against such deposits by Lessor.
11. Termination. This Agreement and the tenancy hereby granted may be
terminated at any time by either party hereto by giving to the other party not
less than one full month's prior notice in writing.
12. Attorney's Fees. The prevailing party in an action brought for the
recovery of rent or other moneys due or to become due under this lease or by
reason of a breach of any covenant herein contained or for the recovery of the
possession of said premises, or to compel the performance of anything agreed to
be done herein, or to recover for damages to said property, or to enjoin any act
contrary to the provision hereof, shall be awarded all of the costs in
connection therewith, including, but not by way of limitation, reasonable
attorney's fees.
13. Additional Terms and Conditions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate the day and year first above written.
Signed in the presence of:
/s/ J. Xxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- --------------------------
Witness Lessee
-------------------------- --------------------------
Witness Lessor
MONTHLY RENTAL AGREEMENT
THIS AGREEMENT, entered into this 1st day of January, 1999, by and between
XXXX XXXXXX, 0000 Xxxxxxxx Xxx, Xxxxxxxx, Xxxxxxxx 00000 hereinafter Lessor, and
STRATUS SERVICES GROUP, INC., 000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx
00000 hereinafter Lessee.
WITNESSETH: That for an in consideration of the payment of the rents and
the performance of the covenants contained on the part of Lessee, said Lessor
does hereby demise and let unto Lessee, and Lessee hires from Lessor those
premises located at: 000 X. Xxxxxxxxxx Xx., Xxxxx, Xxxxxxxx 00000 for a tenancy
from month-to-month commencing on the 1st day of January, 1999, and at a monthly
rental of Three Hundred Fifty Dollars ($350) per month, payable monthly in
advance on the 1st day of each and every month, on the following TERMS AND
CONDITIONS:
1. Purpose. The said premises shall be used for lawful business purposes
only.
2. Ordinances and Statutes. Lessee shall comply with all statutes,
ordinances and requirements of all municipal, state and federal authorities now
in force, or which may hereafter be in force, pertaining to the use of the
premises.
3. Repairs or Alterations. Lessee shall be responsible for damages caused
by his negligence and that of employees or invitees. Lessee shall not paint,
paper or otherwise redecorate or make alterations to the premises without the
prior written consent of Lessor. All alterations, additions, or improvements
made to the premises with the consent of Lessor shall become the property of
Lessor and shall remain upon and be surrendered with the premises.
4. Upkeep of Premises. Lessee shall keep and maintain the premises in a
clean and sanitary condition at all times, and upon the termination of the
tenancy shall surrender the premises to Lessor in as good condition as when
received, ordinary wear and damage by the elements excepted.
5. Assignment and Subletting. Lessee shall not assign this Agreement or
sublet any portion of the premises without prior written consent of Lessor.
6. Utilities. No obligations.
7. Default. If Lessee shall fail to pay rent when due, or perform any term
hereof, after not less than three (3) days written notice of such default given
in the manner required by law, Lessor, at his option, may terminate all rights
of Lessee hereunder, unless Lessee, within said time, shall cure such default.
If Lessee abandons or vacates the property, while in default of the payment of
rent, Lessor may consider any property left on the premises to be abandoned and
may dispose of the same in any manner allowed by law.
8. Security. The security deposit in the amount of Three Hundred Dollars
($300) shall secure the performance of Lessee's obligations hereunder. Lessor
may, but shall not be obligated to, apply all or portions of said deposit on
account of Lessee's obligations hereunder. Any balance remaining upon
termination shall be returned to Lessee. Lessee shall not have the right to
apply the security deposit in payment of the last month's rent.
9. Right of Entry. Lessor reserves the right to enter the demised premises
at all reasonable hours for the purpose of inspection, and whenever necessary to
make repairs and alterations to the demised
premises. Lessee hereby grants permission to Lessor to show the demised premises
to prospective purchasers, mortgagees, tenants, workmen, or contractors at the
reasonable hours of the day.
10. Deposit Refunds. The balance of all deposits shall be refunded within
two (2) weeks from date possession is delivered to Lessor, together with a
statement showing any charges made against such deposits by Lessor.
11. Termination. This Agreement and the tenancy hereby granted may be
terminated at any time by either party hereto by giving to the other party not
less than one full month's prior notice in writing.
12. Attorney's Fees. The prevailing party in an action brought for the
recovery of rent or other moneys due or to become due under this lease or by
reason of a breach of any covenant herein contained or for the recovery of the
possession of said premises, or to compel the performance of anything agreed to
be done herein, or to recover for damages to said property, or to enjoin any act
contrary to the provision hereof, shall be awarded all of the costs in
connection therewith, including, but not by way of limitation, reasonable
attorney's fees.
13. Additional Terms and Conditions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate the day and year first above written.
Signed in the presence of:
/s/ J. Xxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- --------------------------
Witness Lessee
-------------------------- --------------------------
Witness Lessor
Exhibit 2.2
MONTHLY RENTAL AGREEMENT
THIS AGREEMENT, entered into this 1st day of January, 1999, by and between
XXXX X. XXXX, XX., Xxxx Xxxxxx Xxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000 hereinafter
Lessor, and STRATUS SERVICES GROUP, INC., 000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
Xxx Xxxxxx 00000 hereinafter Lessee.
WITNESSETH: That for an in consideration of the payment of the rents and
the performance of the covenants contained on the part of Lessee, said Lessor
does hereby demise and let unto Lessee, and Lessee hires from Lessor those
premises located at: 000 Xxxxx Xxxxxxxx Xxx., Xxxxxxxxxx, Xxxxxxxx 00000 for a
tenancy from month-to-month commencing on the 1st day of January, 1999, and at a
monthly rental of One Thousand, Two Hundred Dollars ($1,200) per month, payable
monthly in advance on the 1st day of each and every month, on the following
TERMS AND CONDITIONS:
1. Purpose. The said premises shall be used for lawful business purposes
only.
2. Ordinances and Statutes. Lessee shall comply with all statutes,
ordinances and requirements of all municipal, state and federal authorities now
in force, or which may hereafter be in force, pertaining to the use of the
premises.
3. Repairs or Alterations. Lessee shall be responsible for damages caused
by his negligence and that of employees or invitees. Lessee shall not paint,
paper or otherwise redecorate or make alterations to the premises without the
prior written consent of Lessor. All alterations, additions, or improvements
made to the premises with the consent of Lessor shall become the property of
Lessor and shall remain upon and be surrendered with the premises.
4. Upkeep of Premises. Lessee shall keep and maintain the premises in a
clean and sanitary condition at all times, and upon the termination of the
tenancy shall surrender the premises to Lessor in as good condition as when
received, ordinary wear and damage by the elements excepted.
5. Assignment and Subletting. Lessee shall not assign this Agreement or
sublet any portion of the premises without prior written consent of Lessor.
6. Utilities. Lessee shall be responsible for the payment of all utilities
and property taxes
7. Default. If Lessee shall fail to pay rent when due, or perform any term
hereof, after not less than three (3) days written notice of such default given
in the manner required by law, Lessor, at his option, may terminate all rights
of Lessee hereunder, unless Lessee, within said time, shall cure such default.
If Lessee abandons or vacates the property, while in default of the payment of
rent, Lessor may consider any property left on the premises to be abandoned and
may dispose of the same in any manner allowed by law.
8. Security. No security deposit required.
9. Right of Entry. Lessor reserves the right to enter the demised premises
at all reasonable hours for the purpose of inspection, and whenever necessary to
make repairs and alterations to the demised premises. Lessee hereby grants
permission to Lessor to show the demised premises to prospective purchasers,
mortgagees, tenants, workmen, or contractors at the reasonable hours of the day.
Exhibit 2.2
10. Deposit Refunds. The balance of all deposits shall be refunded within
two (2) weeks from date possession is delivered to Lessor, together with a
statement showing any charges made against such deposits by Lessor.
11. Termination. This Agreement and the tenancy hereby granted may be
terminated at any time by either party hereto by giving to the other party not
less than one full month's prior notice in writing.
12. Attorney's Fees. The prevailing party in an action brought for the
recovery of rent or other moneys due or to become due under this lease or by
reason of a breach of any covenant herein contained or for the recovery of the
possession of said premises, or to compel the performance of anything agreed to
be done herein, or to recover for damages to said property, or to enjoin any act
contrary to the provision hereof, shall be awarded all of the costs in
connection therewith, including, but not by way of limitation, reasonable
attorney's fees.
13. Additional Terms and Conditions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate the day and year first above written.
Signed in the presence of:
/s/ J. Xxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- --------------------------
Witness Lessee
/s/ Xxxx X. Xxxx, Xx.
-------------------------- --------------------------
Witness Lessor
Exhibit 2.2
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment made as of the 1st day of January, 1999, by and between B
& R EMPLOYMENT INC. ("Assignor") and STRATUS SERVICES GROUP, INC. ("Assignee").
WITNESSETH:
WHEREAS, this Assignment is being delivered pursuant to the terms of the
Asset Purchase Agreement dated as of January 4, 1999, (the "Asset Purchase
Agreement"), by and among Assignor, Assignee, Company, Individual(s) or any
other parties to the Contracts, by which Assignor is selling all or
substantially all of its operating assets to Assignee; and
WHEREAS, in connection with the sale of such assets and pursuant to the
terms of the ASSET PURCHASE AGREEMENT, Assignor has agreed to assign to
Assignee, for good and valuable consideration, all of the interests, rights and
property of Assignor described below;
NOW, THEREFORE, Assignor, in consideration of the mutual representation,
warranties, covenants and agreements contained herein and in the ASSET PURCHASE
AGREEMENT and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and accepted, does hereby grant, bargain, sell,
assign, convey, transfer, set over and confirm unto Assignee, its successors and
assigns forever, the agreements, employment agreements, non-competition
agreements, and all other agreements, oral or written, listed on Schedule "a"
hereto (the "Contracts").
TO HAVE AND TO HOLD, all of the Contracts hereby conveyed, transferred and
assigned unto Assignee, its successors and assigns, forever.
A. Covenants, Representations and Warranties of Assignor. Assignor hereby
covenants and warrants as of the date hereof the following:
1. Assignor is the sole and absolute owner of the Contracts and
has full legal right to transfer such Contracts. All of the
Contracts are free of any security interest, lien or other
encumbrance.
2. All of the Contracts and relationships described above and
transferred hereunder are valid and in good standing and,
except for the performance obligations thereunder, there are
no outstanding duties or obligations with respect thereto,
except that Assignor has no knowledge that any such Contracts
are valid, binding and enforceable agreements of other parties
to such Contracts.
3. As between Assignor and Assignee, pursuant to the execution of
this Assignment, Assignor hereby releases all of its employees
who are parties to the Contracts (the "Employees") from all
covenants and agreements against solicitation of customers,
competition and disclosure of information made by the
Employees in favor of Assignor, whether pursuant to the terms
of the Contracts or otherwise, and Assignor agrees to waive
any and all rights to which it would otherwise be entitled,
whether by contract, statutory or common law or otherwise, to
prevent or in any way restrict the Employees from being
employed by and carrying out duties on behalf of Assignee,
whether such duties are similar to the duties carried out by
the Employees on behalf of Assignor prior to the execution of
this Assignment or otherwise.
B. Covenants of Assignee. Assignee hereby covenants and agrees to assume,
observe and discharge the performance obligations, duties and liabilities of
Assignor associated with the Contracts
Exhibit 2.2
from and after the date hereof, subject to any limitations contained in the
Contracts or in the ASSET PURCHASE AGREEMENT. Except as specifically described
herein or in the ASSET PURCHASE AGREEMENT, Assignee in no way whatsoever assumes
any obligation, duty or other liability of Assignor, whether under the Contracts
or otherwise. Notwithstanding anything above to the contrary, Assignee in no way
whatsoever assumes any obligation, duty or other liability of Assignor or any
other party arising under or pursuant to the Contracts from events occurring
prior to the date hereof.
This Assignment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
CONFLICT-OF-LAWS RULES AS APPLIED IN DELAWARE.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to
be executed and delivered by its respective officers thereunto duly authorized,
as of the day and year first written above.
ASSIGNOR:
B & R EMPLOYMENT INC.
ATTEST: By: /s/ Xxxx Xxxx, Xx.
--------------------------------
/s/ Xxxx Xxxx, Xx. Name: Xxxx Xxxx, Xx.
---------------------- Title: Chairman and Chief Executive
Secretary
ASSIGNEE:
STRATUS SERVICES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: CEO
Exhibit 2.2
Schedule "a"
Contract/Customer Listing
A&H Metals Inc. A&R Fence Accurate Builders
Xxxxxx Transfer Inc. Advance Construction Xxxxx Xxxxxxx
Xxxxxx Xxxxx All-Clean American Minerals Inc.
American Roof Tops AMS Contracting Anchor Construction
Xxxxxxxx & Xxxxxxx Apex Piping Systems, Inc. Aqua Terra
Aramark Approved Equipment Co. Art Floor
Atlantic Aviation Atlas Welding Auto Net
Automations B&K Rentals XX Xxxxxxxx
B&R Services Xxxxxxxxx Paving & Contract Bath Kitchen & Tile
Bllenheim Homes XX Xxxxxxx Tile Brand Scaffolding
Xxxxxxx Contractors Brian's Commercial Moving, Inc. Brick Doctor
Xxxxxx Armored Car Service Broweski Xxxxx Industrial
C&D Contractors C&R Antonnini Inc. Camdel Liquors
Camdel Metals Inc. Cancer Center of Bayhealth Can-Do Construction
Capital Health Care Capital Office Products Capitol Cleaners & Laundry
Carpet Connection
Xxxxxx Homes Car Wash of Prices Corner Castle Construction of DE, Inc.
Carriage House Builders Xxxxx Electric
Catholic Charities Chamber Masonry
Xxxxxxx X. Xxxxxx Davan Construction Chimes of DE
China Box Chartwell Homes Inc. Circuit City
Clean Air Technology Chrisitana Xxxxxx Construction Coastal Funding
Colonial Construction Xxxxxxx Xxxxxxxx Construction Composites
Concrete Technology Commonwealth Management Connectiv Services Inc.
Construction Alliance Group Confi-Shred Xxxxxxx Xxx Works
Xxxxxx Construction Co., Inc. Construction Concepts Corps Construction
Corrision Control Corp. Corporate Express Cover Deck
Xxxxx Contracting County Enterprises Custom Iron Shop
D&K Construction Curbs Etc., Inc. Daisy Construction
Xxxxxx X Xxxxx Inc. DA Conoman Co., Inc. Xxxx Xxxxxx & Sons, Inc.
Data Place Inc. XX Xxxxxxxx
Xxxxx Xxxx Del Homes
DDP Contracting Co., Inc. Xxxxx X Xxxxx Heating Delaware Brick
Del-Mar Concrete Xxxxxxxx Electric Delaware Site Excavating
Delaware Xxxxx Delaware Boiler Xxxxxxxx Electric
Delaware Park Denisio General Construction
Delaware Tree Co.
Delmarva Roofing & Coating Delaware Valley Builders Diamond Spring Water
Devcon Services Deltronics Dimension Interior
Xxxxx Construction Division of Visually Impaired
Dimo Corporation Diamond Materials Dover Downs
Disabitano Construction Drywall Contractors
Xxxxxxx Construction Diversfield Educational System Eagle Limousine Inc.
Dover Furniture East Coast Stainless
E&E Industrial Service Xxxxxxxxx Electric Co.
Eastern Insulation Xx. Xxxx Xxxxxx
Eastern State Const. Eagle Electric
Elite Cleaning East Coast Plumbing
Exhibit 2.2
Schedule "a" (Con't)
Contract/Customer Listing
Enterprise Flasher Eisco Electricia General Corp.
Evco Plumbing Elliot & Sons Co., Inc. EMR Services Inc.
Fiducks Ind. Services Erectix Erco
Floor Buffs Exce Installation Ltd. XX Xxxxxxxx
Fran's Builders First State Construction Xxx Xxx
Furniture Barn Xxxxx Xxxxxxxxxx Xxxxx Xxxxxx
Xxxxxxx Paint Frame Masters Free Flow Packing
Xxxxxx Construction Genesis Eldercare Xxxxxx Development
Xxxxx Custom Carpentry Global Construction GP Industries
Happy Harrys Greggo & Xxxxxxx Halco Fence
Xxxxxx & Xxxxxx Hands On Health Hanover Foods
Heritage Electric Harmony Construction Xxxx Construction
Hoboken Floor Haven's Steel Xxxxxx Construction
Home Waste Xxxxxx & Xxxxxxx Construction HHK Inc.
IPI Inc. Home Care Medical Home Detailing
International petroleum Corp. Xxxxxxx Const. Hunter Construction
XX Xxxxxxxx Company, Inc. Ingelside Homes, Inc. Insite Inc.
JDL Concrete J&H Manufacturing XX Xxxxxx Inc.
Xxxxx X. Xxxx & Sons JT Construction JC Penney
Xxxxx Xxxxxxxx XX Xxxxx & Sons, Inc. Xxxxxx & Son
JDH Construction Xxxxx Xxxxxx, Inc. Xxxxx Xxxxxx
Xxxxxx Xxxxx Movers Xxxxx Xxxxxx Associate
Krapt Can Do It Xxxx X. Xxxxxx Carpentry Xxxx Xxxxxxxxx
Larlhan Contracting, Inc. Xxxxxx & Xxxxxx Inc. Knights Carpet
Life Tek L&W Insurance Lanes Moving
Xxxxxx Landscaping Lehigh Valley Safety
MJH Construction Lowes Home Centers, Inc. Lums Pond Animal Hospital
Manor Care Health Services
Xxxxx Painting Magnees Co. Martruder Construction
XxXxxxxxx Plumbing Medical Management
Xxxxxxxxxx Inn Xxxxx Corporation Merry Maids
Metal Masters XxXxxxxxx Painting Midway
Midway Mechanical Merit Mechanical Company, LLC Xxxx Xxxx
Miken Builders Metro Form Electric Co., Inc. Xxxxxx Construction
Mobile Dredging & Plumbing Xxxx Xxxxx Electrician Inc. Mortgage Reduction Services
Xxxxxx'x Flooring MSA Promotion Group
MPI Construction Modern Equipment Rental X. Xxxxxx & Associates
Xxxxxx Construction NC Builders
Nanticoke Homes Mr. Sign Newark Day Nursery
New Castle Development Multi-Technologies Nurses & Kids
Noradex Nassau Trailer X'Xxxxxx & Sons
NVR Day Nursery New Castle Hot Mix Orzada Landscaping
Oak Construction Xxxxxxx Associates, Inc. Xxxx X. Xxxxxx
Pace Electric XX Xxxxxx & Sons
Office Movers
Xxxxxx Construction
Exhibit 2.2
Schedule "a" (Con't)
Contract/Customer Listing
Pawnee Penn Fiber Xxxxxx
Xxxxxxxxx Xxxxxxx Construction Pulte Homes Master Builder
Quality Heating & Air Quality Kitchen Corp. Quarker City Motor Part
Exhibit 2.2
Schedule "a" (Con't)
Contract/Customer Listing
R&R Trucking R Julian Enterprises RE Xxxxxxx
RIMSI Corp. Xxxxx Xxxxxxxxxxx RC Fabricators
Rehoboth Outlets Reliable Mechanical Rescar
Xxxxxx X. Xxxxx Rons Home Improvement Xxxxxxxx Contracting
Xxxxx Rudders XX Xxxxxxxx Saddletree Landscaping
Xxxxxx Pool & Spa Services Xxxxxx Quality Roofing Schalbach-Lubeca
Xxxxxxxx'x Roofing Xxxxx Xxxxxxx Contractor LLC Sears Outlet Store
Service Master of Newark Service Unlimited Shamrock Tree
Shureline Construction Xxxxxx Xxxxxxxx Sobieski
Spacecon Spevco, Inc. Square One Electric
Xxxxxx Expo Services Staff Management Steel Works
Storhouse Furniture, Inc. Strate Shows Sweeten Contracting
SW Day Construction Swydells Egg Farm T-Netx
Tatnall School Xxxxxx Builders Xxxxxx'x of Delaware
Xxxxxxxx Corp of Delaware Xxxxx Xxxxxxxx & Xxxxx Xxxxx & Xxxxx
Toll Bros./Willowdale Crs. Toll Bros, Cobblestone Xxxx Xxxxxx
Xxxxxxxx Inc. Tri State Delivery Triangle Fasteners
Triad Construction U of D Maintenance US Filter/Xxxxx
Ultra Clean Technology United Way of Delaware Unity Construction
Xxxxxxx Electric Venture Care LLC VFL Technology Corp.
Xxxxxx Xxxxxxx Construction Village at Fox Point Xxxxxx
Xxxxxx Landscaping Xxxxxx Xxxxx Waste Management
Water Edge Omni Way Xxxxxx Construction Wesco Construction
Westminster Village White Oak Builders Xxxxxxx Xxxxxx
Xxxxxxxxx Roofing Xxxxxxx X. Xxxxxx Willington Construction
Wilm Movers & Storage Wilmington Glass Wohlsen Construction
World Wide Express WRDX Xxxxx Electric
Wyoming Concrete Zack Excavating Xxxxxxx Builders
Exhibit 2.2
LIST OF PAYABLES
None.
Exhibit 2.2
SELLER NOTE #1
PROMISORY NOTE
$1,610,000
January 4, 1999
FOR VALUE RECEIVED, and without defalcation, STRATUS SERVICES GROUP, INC.,
a Delaware corporation with its principal offices at 000 Xxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xxx Xxxxxx 00000 (the "Maker") promises to pay to B & R EMPLOYMENT
INC., a Delaware corporation with its principal offices at 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Payee"), the principal amount of One
Million, Six Hundred Ten Thousand Dollars ($1,610,000) with nine percent (9%)
interest, as further provided in this Note.
1. Seller Note: This Note is the Seller Note #1 as defined in the Asset
Purchase Agreement dated January 4, 1999 (the "Asset Purchase Agreement") by and
among Maker and Payee. Any adjustment shall be evidenced by an amendment
executed by the Maker and the Payee which shall be attached hereto and form a
part hereof, but the failure to execute and attach such amendment shall not
affect the validity or enforceability of such adjustment.
2. Payments. This Note is due and payable in full on June 1, 1999. An
initial payment of Four Hundred Thousand Dollars ($400,000) shall be paid
according to the provisions of Section 3(a)(1) of the Asset Purchase Agreement
and credited against the outstanding balance on March 31, 1999.
3. Defaults. Each of the following events shall be a Default hereunder:
(a) Any petition or other proceeding is filed by or against the
Maker under any provision of the Unite States Bankruptcy Code or under any
similar insolvency law, which, if filed against any such entity, is not
dismissed within ninety (90) days following written notice from Payee.
(b) The maker or any guarantor or surety for the obligations of the
Maker breaches any of its obligations under the Asset Purchase Agreement
or any document executed pursuant thereto, and such breach remains uncured
for fifteen (15) days following written notice from Payee.
Upon Default, the entire unpaid principal balance of this Note shall become
immediately due and payable. Thereupon, the Payee may pursue any and all
remedies legally available to it to collect such unpaid balance, and the Maker
shall pay all reasonable costs and expenses of such collection, including the
reasonable fees for attorneys and their disbursements.
4. Setoff. The amounts payable under this Note are subject to setoff in
accordance with the provisions of Sections 9(b) and 12(d) of the Asset Purchase
Agreement.
5. Successors. This Note shall be binding upon and inure to the benefit of
the Maker, the Payee, and their respective successors and assigns.
6. Waivers. The Maker and all guarantors and sureties waive presentment,
demand, protest, stay of execution, and the benefit of all exemption laws now or
hereafter in effect.
Exhibit 2.2
7. Severability. The invalidity or unenforceability of any provision of
this Note shall in no event affect the enforceability or validity of any other
provision.
8. Governing Law; Jurisdiction. This Note is intended to be performed in
the State of Delaware and shall be construed and enforced in accordance with the
laws of the State of Delaware, not including the law of conflict of laws. The
parties irrevocably (a) agree that any suit, action or proceeding for the
enforcement of this Agreement shall be brought only in the courts of original
jurisdiction of New Castle County, Delaware or in the United States District
Court for the Third Circuit, (b) consent to the jurisdiction of each such court,
and to service of process on them by mail, at their addresses shown above, and
(c) irrevocably waive any objection to the laying of the venue of any such suit,
action or legal proceeding in any such court.
IN WITNESS WHEREOF and intending to be legally bound, the Maker has
executed this Note the day and year first above written by its duly authorized
officer.
STRATUS SERVICES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name:
Title: CEO
Attest:
By: /s/ J. Xxxx Xxxxxxx, Esq.
---------------------------------
Name:
Title: Secretary & General Counsel
Exhibit 2.2
SELLER NOTE #2
PROMISORY NOTE
$270,000
January 4, 1999
FOR VALUE RECEIVED, and without defalcation, STRATUS SERVICES GROUP, INC.,
a Delaware corporation with its principal offices at 000 Xxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xxx Xxxxxx 00000 (the "Maker") promises to pay to B & R EMPLOYMENT
INC., a Delaware corporation with its principal offices at 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Payee"), the principal amount of Two
Hundred Seventy Thousand Dollars ($270,000) with ten percent (10%) interest, as
further provided in this Note.
1. Seller Note: This Note is the Seller Note as defined in the Asset
Purchase Agreement dated January 4, 1999 (the "Asset Purchase Agreement") by and
among Maker and Payee. Any adjustment shall be evidenced by an amendment
executed by the Maker and the Payee which shall be attached hereto and form a
part hereof, but the failure to execute and attach such amendment shall not
affect the validity or enforceability of such adjustment.
2. Payments. This Note is due and payable in installments as follows.
(a) Maker shall pay Payee Two Hundred Seventy Thousand Dollars
($270,000) in eight (8) equal installments of Thirty-Seven Thousand, Six
Hundred Fifty-Six Dollars and Eighteen Cents ($37,656.18) beginning ninety
(90) days after the Financial Closing (as defined in the Asset Purchase
Agreement).
3. Defaults. Each of the following events shall be a Default hereunder:
(a) The Maker fails to make a payment, when due, of any installment
under this Note and such failure remains uncured for fifteen (15) days
following written notice from Payee.
(b) Any petition or other proceeding is filed by or against the
Maker under any provision of the Unite States Bankruptcy Code or under any
similar insolvency law, which, if filed against any such entity, is not
dismissed within ninety (90) days following written notice from Payee.
(c) The maker or any guarantor or surety for the obligations of the
Maker breaches any of its obligations under the Asset Purchase Agreement
or any document executed pursuant thereto, and such breach remains uncured
for fifteen (15) days following written notice from Payee.
On any Default, the entire unpaid principal balance of this Note shall become
immediately due and payable. Thereupon, the Payee may pursue any and all
remedies legally available to it to collect such unpaid balance, and the Maker
shall pay all reasonable costs and expenses of such collection, including the
reasonable fees for attorneys and their disbursements.
4. Setoff. The amounts payable under this Note are subject to setoff in
accordance with the provisions of Sections 9(b) and 12(d) of the Asset Purchase
Agreement. In the event Purchaser makes
Exhibit 2.2
payments contemplated in Section 9(b) of the Asset Purchase Agreement, said
payment amounts shall be credited against the next payment due.
5. Successors. This Note shall be binding upon and inure to the benefit of
the Maker, the Payee, and their respective successors and assigns.
6. Waivers. The Maker and all guarantors and sureties waive presentment,
demand, protest, stay of execution, and the benefit of all exemption laws now or
hereafter in effect.
7. Severability. The invalidity or unenforceability of any provision of
this Note shall in no event affect the enforceability or validity of any other
provision.
8. Governing Law; Jurisdiction. This Note is intended to be performed in
the State of Delaware and shall be construed and enforced in accordance with the
laws of the State of Delaware, not including the law of conflict of laws. The
parties irrevocably (a) agree that any suit, action or proceeding for the
enforcement of this Agreement shall be brought only in the courts of original
jurisdiction of New Castle County, Delaware or in the United States District
Court for the Third Circuit, (b) consent to the jurisdiction of each such court,
and to service of process on them by mail, at their addresses shown above, and
(c) irrevocably waive any objection to the laying of the venue of any such suit,
action or legal proceeding in any such court.
IN WITNESS WHEREOF and intending to be legally bound, the Maker has
executed this Note the day and year first above written by its duly authorized
officer.
STRATUS SERVICES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name:
Title: CEO
Attest:
By: /s/ J. Xxxx Xxxxxxx, Esq.
---------------------------------
Name:
Title: Secretary & General Counsel
Exhibit 2.2
SECURITY INTEREST, ETC. LISTING
None Existing.
Exhibit 2.2
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS, that B & R EMPLOYMENT INC. a Delaware
corporation (hereinafter referred to as the "Seller"), for and in consideration
of the sum of Ten Dollars ($10.00) and other good and valuable consideration,
receipt of which is hereby acknowledged, does hereby and by these presents
grants, bargains, sells, transfers, assigns, and delivers to STRATUS SERVICES
GROUP, INC., a Delaware company (hereinafter referred to as "Buyer"), its
successors and assigns, the assets, properties, business rights of every kind
and description, real, personal or mixed, tangible or intangible, wherever
located as the same shall exist on this date, which are described in Exhibit "A"
attached hereto and made a part hereof.
TO HAVE AND TO HOLD UNTO Buyer, its successors and assigns forever, and
Seller does hereby covenant to and with Buyer, its successors and assigns that
Seller is the lawful owner of all right, title and interest in all of the
assets, properties and rights, tangible and intangible, granted, bargained,
sold, transferred, assigned and delivered to Buyer hereunder; that such assets,
properties and rights are free from all encumbrances; that Seller has the right
to sell and transfer the same as aforesaid; that Seller warrants and covenants
to defend this sale and transfer against the claims and demands of all persons
or entities whomsoever; and that Seller will execute and deliver to Buyer such
further documents and instruments as may be required for the further assurance
to Buyer of the benefits contemplated hereby.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale on this 31st day
of December, 1998.
WITNESSES:
B & R EMPLOYMENT INC.
By: /s/ Xxxx X. Xxxx, Xx.
------------------------
Its: President
STRATUS SERVICES GROUP, INC.
By: /s/ Xxxx X. Xxxx, Xx.
------------------------
Its: Secretary & General Counsel
CLOSING STATEMENT
Seller: B & R Employment Inc.
Buyer: Stratus Services Group, Inc.
Date: ____________________________
Purchase Price: $_________________
Plus Additional Amounts Due
From Buyer (See attached listing) $_________________
TOTAL DUE SELLER FROM BUYER $_________________
Less Amounts paid by or on behalf
Of Buyer (See attached listing $_________________
TOTAL AMOUNT DUE SELLER FROM BUYER $_________________
The undersigned have read, agree to and authorize the disbursement of funds in
accordance with this Closing Statement.
B & R EMPLOYMENT INC. STRATUS SERVICES GROUP, INC.
By: _________________________ By: _________________________
Name: _______________________ Name: _______________________
Title: ______________________ Title: ______________________
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into by
and between XXXX X. XXXX, XX. ("Employee") and STRATUS SERVICES GROUP, INC., a
Delaware company ("Company"), to be effective upon the occurrence of the events
described in Paragraph 21 below.
Recitals:
A. Employee and the Company desire to enter into an agreement to set forth
the terms and conditions of Employee's employment with the Company.
B. Employee and the Company acknowledge the receipt and adequacy of the
consideration for this Agreement, including the premises and covenants in this
Agreement, the employment of Employee by the Company, and other good and
valuable considerations.
Agreements:
1. Definitions. For purposes of this Agreement, the following terms,
including both the singular and the plural, shall have the meanings assigned to
them below, as follows:
(a) "Affiliate" means any corporation or business entity that either
controls or is controlled by the Company or is controlled by the shareholders
that control the Company. For the purpose of this definition, "control" means
the ownership, either directly or through an unbroken chain of control, of more
than sixty percent (60%) of the equity interest or combined voting or management
rights of an entity.
(b) "Confidential Information" means all confidential information
and trade secrets of the Company, including, without limitation, the following:
the identity, written lists, or descriptions of any customers, referral sources
or Organizations; financial statements, cost reports, or other financial
information; contract proposals or bidding information; business plans; training
and operations methods and manuals; personnel records; fee structures; and
management systems, policies or procedures, including related forms and manuals.
"Confidential Information" shall not include any information or knowledge which:
(a) is now available or hereafter becomes available to the public without breach
by Employee of the terms stated in this Agreement; (b) is disclosed to Employee
by a third party who is not under any obligation of secrecy or confidentiality;
(c) a party is compelled to disclose; or (d) is now or hereafter becomes
generally known in the industry of the Company.
(c) "Employment Period" means the period during which Employee is
employed pursuant to this Agreement.
(d) "Initial Term" means three (3) years from the effective date of
this Agreement, unless sooner terminated as provided by the terms of this
Agreement.
(e) "Organization" means any organization that has contracted with
the Company for the performance of Services.
(f) "Practice of Services" means the practice, or administration of
the practice, of Services.
(g) "Purchaser" means any individual or entity that purchases all or
substantially all the capital stock of the Company or its successor or assign.
(h) "Renewal Term" means each period for which this Agreement is
renewed pursuant to the provisions in Paragraph 7.
(i) "Services" means the temporary placement of general support
staff and related personnel services.
(j) "Trade Area" means a seventy-five (75) mile radius from any
office of the Company and any other Affiliate of the Company engaged in
providing Services.
2. Employment. The Company hereby employs Employee and Employee hereby
accepts such employment by the Company for the Initial Term on the terms and
conditions set forth in this Agreement. After the expiration of the Initial
Term, either the Company or Employee may terminate this Agreement with or
without cause (as hereinafter defined) on at least thirty (30) days advance
written notice to the other party. Upon termination of Employee's employment
with the Company pursuant to the terms contained in this Agreement, the Company
shall have no further liability to Employee with respect to this Agreement
except for compensation, fringe benefits and perquisites accrued and unpaid on
the date of such termination and except as otherwise specifically set forth
herein. Upon termination of this Agreement by Employee pursuant to the terms in
this Agreement, Employee shall have no further liability to the Company with
respect to this Agreement except for the covenants of the Employee which survive
the term of this Agreement and except as specifically set forth herein.
3. Duties and Place of Employment. Employee agrees to serve as Regional
Director of the Company, shall perform the duties, if so requested, which are
consistent therewith and shall undertake and perform such additional or other
duties which are commensurate with such position. Such services are to be
performed at the locations in Wilmington, Newark and Dover, Delaware.
4. Time and Efforts Devoted. Employee shall, during the period of his
employment by the Company, devote substantially all of his business time, energy
and best efforts to the business and affairs of the Company, and not engage,
directly or indirectly, in any other business or businesses without the consent
of the Company. Nothing contained herein shall preclude Employee from managing
his personal finances.
2
5. Compensation.
(a) During the Initial Term, Employee's base compensation shall be
One Hundred Twenty Thousand ($120,000) per year, payable in regular bi-weekly
intervals.
(b) During any Renewal Term, Employee shall receive compensation
adjustments as mutually determined by the Company and Employee from time to
time.
(c) During the Initial Term and any Renewal Term, Employee shall
receive the fringe benefits and perquisites set forth in Paragraph 6 below and
such other perquisites as the management of the Company may determine from time
to time.
6. Benefits and Perquisites. During the Initial Term, Employee shall be
entitled to the following benefits and perquisites:
(a) Payment of reasonable travel and other business expenses in
accordance with the Company's applicable policies, provided Employee properly
accounts therefor in accordance with such policies.
(b) Vacations (minimum of four (4) weeks per calendar year),
holidays and sick leave in accordance with the Company's current policies.
(c) All other specific and applicable employee benefits such as,
without limitation, group family medical and dental and participation in pension
and/or profit sharing plans all as granted in accordance with the Company's
policies.
7. Term. After expiration of the Initial Term, the Company and Employee
mutually agree to extend the term of this Agreement on terms and conditions
mutually acceptable to Employee and the Company.
8. Termination.
(a) By Employee. After the expiration of the Initial Term, Employee
may terminate his employment at any time during the Employment Period by giving
thirty (30) days prior notice of termination to the Company, with our without
cause.
(b) By the Company. Notwithstanding anything to the contrary
otherwise contained in this Agreement, the Company may terminate Employee's
employment with cause (as defined below) during the Initial Term by giving
thirty (30) days prior notice of termination to Employee. After the expiration
of the Initial Term, the Company may terminate Employee's employment at any time
during the Employment Period by giving thirty (30) days prior notice of
termination to the Employee, with our without cause. For purposes of termination
by the Company with cause, the term "cause" shall mean the occurrence of any of
the following events:
(i) Employee shall be determined by the CEO of Company to have
refused to diligently perform the material duties assigned to Employee
under this
3
Agreement or otherwise to have breached any term or provision contained
herein and not to have remedied the situation within fifteen (15) days
following receipt of written notice from the Company;
(ii) Employee shall be determined by the CEO of Company to
have refused to abide by the Company's written policies, rules, procedures
or directives and not to have remedied the situation within fifteen (15)
days following receipt of written notice for the Company;
(iii) Employee shall be determined by the CEO of Company to
have become "permanently disabled." For purposes hereof, the term
"permanently disabled" shall mean a condition (certified by two licensed
physicians, one selected by the Company and one by Employee) rendering
Employee unable to perform his responsibilities under this Agreement for a
period of at least six (6) months; or
(iv) Employee shall have been convicted of a felony or
Employee shall be determined by the CEO of Company to be guilty of fraud
or dishonesty in connection with the performance of his duties hereunder.
In making the determinations described above, the CEO of Company shall act
in good faith.
(c) Termination without cause by Employee. At Employee's election,
the Company shall be deemed to have terminated Employee's employment without
cause at anytime during the Initial Term if:
(i) failure by the Company to obtain the assumption and
agreement to perform this Agreement by any successor; or
(ii) repudiation by the Company of any material obligation of
the Company under Paragraph 5 and 6 hereof and the failure by the Company
to cure the same within thirty (30) days after receipt of written notice.
In the event that the Company terminates Employee's employment during the
Initial Term without cause, Employee shall continue to be entitled to receive
the base compensation under Paragraph 5(a) above for a period of three (3)
months.
(d) Automatic Termination. Employee's employment shall automatically
terminate on the death of the Employee.
9. Confidential Information and Goodwill. Employee acknowledges and agrees
as follows:
(a) As a necessary function of Employee's employment, Employee will
have access to and utilize Confidential Information which is unique, has been
acquired, developed and
4
effectively applied by the Company, and constitutes a valuable and essential
asset of the Company's business.
(b) The Company's relationship with its employees and the
recognition of the Company in the temporary personnel field as a provider of
efficient and effective Services are valuable and essential elements of the
goodwill of the Company, a portion of which goodwill is allocable to each
business location.
(c) The restrictive covenants and agreements contained in Paragraph
10 are reasonable for the protection of the legitimate business interests of the
Company, including, without limitation, its Confidential Information and
goodwill; and constitute a material inducement to the Company to enter into this
Agreement.
10. Protection of Confidential Information and Goodwill. Employee
covenants and agrees, except in Employee's capacity as an employee of the
Company, as follows:
(a) At all times following execution of this Agreement, Employee
shall not use or disclose any Confidential Information for any reason
whatsoever, other than at the direction of the Company.
(b) During the Employment Period and for a period of two (2) years
thereafter, Employee shall not (i) directly or indirectly induce any customer of
the Company or any Affiliate to patronize any business which provides services
in the Trade Area in competition with the Company or any Affiliate; (ii)
canvass, solicit or accept any business of the type conducted by the Company or
any Affiliate in the Trade Area from any customer of the Company or any
Affiliate; (iii) directly or indirectly request or advise any customer of the
Company or any Affiliate to withdraw, curtail or cancel such customer's business
with the Company or any Affiliate; or (iv) directly or indirectly disclose to
any other person, firm or corporation the names or addresses of the customers of
the Company or any Affiliate.
(c) During the Employment Period for a period of one (1) year
thereafter, Employee shall not solicit, recruit, or employ, directly or
indirectly, any person employed by the Company at any time within one (1) year
period immediately preceding such solicitation, recruitment, or employment.
11. Property of the Company. Employee agrees that, upon the termination of
this Agreement, Employee will immediately surrender to the Company all of the
Company's property, including, without limitation, equipment, funds, lists,
manuals, books, or records (including all copies of the foregoing) in the
possession of, or provided to, Employee.
12. Arbitration With Respect To Certain Matters. Except with respect to
paragraph 10 above, which is expressly excluded herefrom, the parties agree to
submit to arbitration, in accordance with these provisions, any claim or
controversy arising from or related to the alleged breach of this agreement. The
parties further agree that the arbitration process agreed upon herein shall be
the exclusive means for resolving all disputes made subject to arbitration
herein, but that no arbitrator shall have authority to expand the scope of these
5
arbitration provisions. Any arbitration hereunder shall be conducted under the
model employment procedures of the American Arbitration Association (AAA).
Either party may invoke arbitration procedures herein by written notice for
arbitration containing a statement of the matter to be arbitrated. The parties
shall then have fourteen (14) days in which they may identify a mutually
agreeable, neutral arbitrator. After the fourteen (14) day period has expired,
the parties shall prepare and submit to the AAA a joint submission, with each
party to contribute half of the appropriate administrative fee. In the event the
parties cannot agree upon a neutral arbitrator within fourteen (14) days after
written notice for arbitration is received, their joint submission to the AAA
shall request a panel of nine arbitrators who are practicing attorneys with a
professional experience in the field of labor and/or employment law, and the
parties shall attempt to select an arbitrator from the panel according to AAA
procedures. Unless otherwise agreed by the parties, the arbitration hearing
shall take place in _________, at a place designated by the AAA. All arbitration
procedures hereunder shall be confidential. Each party shall be responsible for
its costs incurred in any arbitration, and the arbitrator shall not have
authority to include all or any portion of said costs in an award, regardless of
which party prevails. The arbitrator may include equitable relief. Any
arbitration awarded shall be accompanied by a written statement containing a
summary of the issues in controversy, a description of the award, and an
explanation of the reasons for the award. It is understood and agreed by the
parties that their agreements herein concerning arbitration do not otherwise
alter the terms and conditions of employee's employment as provided by this
agreement.
13. Remedies-Court Action. With respect to each breach or threatened
breach of Paragraph 10 of this Agreement and without waiver of any right or
remedy which the Company may elect to pursue with respect thereto, all remedies
available at law or in equity, including specific performance and injunctive
relief, may be pursued by the Company at any time. The agreements and covenants
contained in Paragraph 10 shall not be held invalid or unenforceable because of
the scope of the geographic area or actions subject thereto or restrictions
imposed thereby, or the period of time within which such agreement or covenant
is operative, but any judgement of a court of competent jurisdiction may reform
or define the maximum geographic area and actions subject to and restricted by
Paragraph 10 and the period of time during which such agreement or covenant is
enforceable.
14. Captions and Number. The captions of the paragraphs of this Agreement
have been inserted for convenience of reference only and shall not affect the
interpretation of this Agreement. Whenever it appears appropriate from the
context, each term stated in either the singular or plural shall include both
the singular and the plural.
15. Severability. If any provision of this Agreement is held to be
unenforceable, such provision shall be fully severable and the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the severance of such provision from this Agreement. In addition,
in lieu of such severed provision, a provision shall be added automatically
which is as similar in terms to the severed provision as possible and
enforceable, if such reformation is allowable under applicable law.
6
16. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other party except for an assignment by the
Company to any Affiliate or Purchaser, but no such assignment shall relieve the
Company from its obligations hereunder.
17. Separate Agreements. This Agreement shall be deemed to consist of a
series of separate covenants. Should a determination be made by a court of
competent jurisdiction that the character, duration, or geographical scope of
any provision of this Agreement is unreasonable in light of the circumstances as
they then exist, then it is the intention and the agreement of the Company and
Employee that this Agreement shall be construed by the court in such a manner as
to impose only those restrictions on the conduct of Employee which are
reasonable in light of the circumstances as they then exist and as are necessary
to assure the Company of the intended benefit of this Agreement. If, in any
judicial proceeding, a court shall refuse to enforce all of the separate
covenants deemed included herein because, taken together, they are more
extensive than necessary to assure the Company of the intended benefit of this
Agreement, then it is expressly understood and agreed by the Company and
Employee that those covenants which, if eliminated, would permit the remaining
separate covenants to be enforced in such proceeding, shall, for the purpose of
such proceeding, be deemed eliminated from the provisions hereof.
18. Policies, Regulations and Guidelines for Employees. The Company my
issue policies, rules, regulations, guidelines, procedures, or other
informational material, whether in the form of handbooks, memoranda, or
otherwise, relating to the Company's employees. These materials are general
guidelines for Employee's information and shall not be construed to alter,
modify or amend this Agreement for any purpose whatsoever.
19. Amendment. No amendment of this Agreement shall be valid unless made
in writing and signed by the Company and the Employee.
20. Entire Agreement. Except for that certain Non-Competition and
Confidentiality Agreement of even date herewith by and between the Company and
Employee, this Agreement contains the entire agreement and understanding between
the Company and Employee with respect to Employee's employment with the Company,
including, without limitation, all existing employment agreements, bonus
programs, severance arrangements or other employee arrangements between Company
and Employee. No representations, inducements, or agreements have been made to
induce either Employee or the Company to enter into this Agreement which are not
expressly set forth herein. This Agreement is the sole source of rights and
duties as between the Company and Employee relating to Employee's employment.
21. Conditional Agreement. This Agreement and all of the rights, duties
and obligations of the Company and Employee contained herein are expressly
conditioned upon the closing of that certain Asset Purchase Agreement dated as
of January 1, 1999, among the Company and the shareholders of B & R, Inc.
becoming effective (the "Closing"). In the event of Closing, the date thereof
shall be the effective date of this Agreement.
22. Law Governing. This agreement and all issues relating to its validity,
interpretation, and performance shall be governed by and interpreted under the
laws of the state of Delaware.
7
23. Indemnification. The Employee shall be indemnified by the Company to
the maximum extent permitted by the law of Delaware, the state of the Company's
incorporation, and the law of the state of incorporation of any subsidiary of
the Company of which the Employee is a director or an officer or employee, as
the same may be in effect from time to time.
EXECUTED on the 31st day of December, 1998, but effective for all purposes
as of the effective date referred to in Section 21 hereof.
WITNESS EMPLOYEE
/s/ Xxxx X. Xxxx, Xx.
-------------------------------- --------------------------------
Name: XXXX X. XXXX, XX.
Address:
000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
WITNESS STRATUS SERVICES GROUP, INC.
/s/ J. Xxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------- --------------------------------
Name: Name:
Title: CEO
Address:
8
