EXHIBIT 2
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ASSET PURCHASE AGREEMENT
Dated February 2, 1998,
by and among
PMI XX XX,
SUMMIT TEMPORARIES, INC.,
XXXXXX X. XXXXXXX,
XXXX X. XXXXXXX,
and
XXXX X. XXXXXXX
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TABLE OF CONTENTS
Page
ARTICLE I Purchase and Sale 1
Section 1.1 Purchased Assets 1
Section 1.2 Excluded Assets 2
ARTICLE II Purchase Price 3
ARTICLE III Assumption of Liabilities 3
Section 3.1 Assumed Liabilities 3
Section 3.2 Excluded Liabilities 4
ARTICLE IV Closing and Effective Time 4
Section 4.1 Closing; Closing Date; Effective Time 4
Section 4.2 Closing Requirements 4
ARTICLE V Other Actions, Agreements and Covenants
of the Parties 5
Section 5.1 Assignment of Contracts 5
Section 5.2 Delivery of Property Received After
Effective Time 6
Section 5.3 Purchaser Appointed Attorney for Seller 6
Section 5.4 Execution of Further Documents;
Financial Statements 6
Section 5.5 Employment by Purchaser of Seller's Employees 7
Section 5.6 Noncompetition and Confidentiality Agreements 7
Section 5.7 IRS Form 8594 7
ARTICLE VI Representations and Warranties by Seller,
Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx 7
Section 6.1 Corporate Existence and Qualification 7
Section 6.2 Subsidiaries and Affiliates 8
Section 6.3 Financial Statements 8
Section 6.4 Events Subsequent to Date of Most Recent
Interim Balance Sheet Included in
Seller Financial Statements 8
Section 6.5 Undisclosed Liabilities 8
Section 6.6 Tax Returns 9
Section 6.7 Real Property 9
Section 6.8 Personal Property - Owned 9
Section 6.9 Personal Property - Leased 9
Section 6.10 Use and Condition of Property;
Environmental Concerns 10
Section 6.11 Restrictive Covenants 10
Section 6.12 Intellectual Property Rights 10
Section 6.13 No Breach, Default or Violation 10
Section 6.14 Litigation and Claims 11
Section 6.15 Material Contracts 11
Section 6.16 Validity of Purchased Contracts 11
Section 6.17 Powers of Attorney 11
Section 6.18 Employment Matters; Employee Benefit
Plans; ERISA Compliance 11
Section 6.19 Insurance 12
Section 6.20 Compliance With Laws; Licenses 12
Section 6.21 Authorization of Agreement 12
Section 6.22 All Material Information 13
Section 6.23 Material Adverse Contract 13
Section 6.24 Shareholders 13
Section 6.25 Consents of Third Parties 13
Section 6.26 Other Approvals 13
Section 6.27 Customer Relations 13
Section 6.28 Knowledge of Seller 14
ARTICLE VII Matters Regarding Securities 14
ARTICLE VIII Representations and Warranties by Purchaser 15
Section 8.1 Valid Existence and Qualification of Purchaser 15
Section 8.2 Authorization of Agreement by Purchaser 15
ARTICLE IX Indemnification 16
Section 9.1 Indemnification by Seller, Xxxxxxx, X.
Xxxxxxx and X. Xxxxxxx 16
Section 9.2 Right of Setoff 16
Section 9.3 Indemnification by Purchaser 16
Section 9.4 Survival of Covenants, Representations
and Warranties 17
Section 9.5 Payment and Settlement of Amounts Due 17
Section 9.6 Limitation on Indemnities 18
Section 9.7 Notice and Defense of Third Party Claims 18
Section 9.8 Rights of Setoff and Setoff Procedures 19
ARTICLE X Change of Names; Use of Names by Purchaser 21
ARTICLE XI Expenses of the Parties 21
ARTICLE XII Brokers' Commission 21
ARTICLE XIII Miscellaneous 22
Section 13.1 Waivers and Amendments 22
Section 13.2 Entire Agreement 22
Section 13.3 Headings 22
Section 13.4 Notices 22
Section 13.5 Severability 23
Section 13.6 Disclosures on Schedules 23
Section 13.7 Third Parties 23
Section 13.8 Counterparts 24
Section 13.9 Successors and Assigns 24
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 2nd day of February, 1998, effective as of 12:01 a.m. on February 2,
1998 (the "Effective Time"), by and among Summit Temporaries, Inc., a Georgia
corporation ("Seller"), Xxxxxx X. Xxxxxxx, a Georgia resident ("Xxxxxxx"), Xxxx
X. Xxxxxxx, a Georgia resident ("X. Xxxxxxx"), Xxxx X. Xxxxxxx, a Georgia
resident ("X. Xxxxxxx"), and PMI XX XX, an Indiana limited partnership
("Purchaser").
PRELIMINARY STATEMENT
Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, substantially all of the non-cash assets owned by Seller or used or
useful in the operations or business of Seller, on the terms and conditions
hereinafter set forth.
Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx are parties to this Agreement as the
sole shareholders of Seller.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and conditions hereinafter set forth, the parties hereto
agree as follows:
ARTICLE I
Purchase and Sale
Section 1.1. Purchased Assets. Seller agrees to and does hereby sell,
transfer, assign, convey and deliver to Purchaser, and Purchaser hereby agrees
to and does hereby purchase and acquire from Seller, free and clear of all
liens, encumbrances, claims, restrictions, security interests, obligations and
liabilities except as otherwise expressly provided herein, all of the assets
that are owned by Seller or that are used or useful by Seller in the operations
or business of Seller at the Effective Time except the Excluded Assets (as
hereinafter defined), including in the assets being purchased and sold
hereunder, without limiting the generality of the foregoing, the following
assets as the same shall exist at the Effective Time (which assets being
acquired are hereinafter collectively called the "Purchased Assets"):
1.1.1. all furniture, furnishings, fixtures, leasehold
improvements, equipment and other fixed assets, including, without
limitation, the assets listed on Schedule 1.1.1;
1.1.2. all of Seller's rights, title, and interest in and to all
software owned by Seller or licensed to Seller by third parties,
including all documentation, source codes, software modules and
enhancements and software in development;
1.1.3. all inventories including marketing materials (including
video tapes, brochures, and the like), spare parts and supplies;
1.1.4. all of Seller's rights under all leases, contracts
(including software license agreements and maintenance agreements),
agreements, and sales orders, including but not limited to those
leases, contracts, agreements, and sales orders listed on Schedule
1.1.4 (the "Purchased Contracts");
1.1.5. all prepaid and deferred items including prepaid rentals
and deposits;
1.1.6. all operating and financial data and information and books
and records relating to the Purchased Assets or the business or
operations of Seller (wherever located and in every format and media
whatsoever), including without limitation software databases, written
records, personnel files (but only as to personnel hired by Purchaser
and only with their knowledge), files, policies, customer lists,
mailing lists, supplier lists, credit information, correspondence,
designs, slogans, processes, know-how, trade secrets, and other
similar property;
1.1.7. all intellectual property rights of Seller, including
Seller's rights, title and interest in and to all United States and
foreign patents (including all reissues, divisions, continuations and
extensions thereof), patent applications, patent disclosures docketed,
copyrights, trademarks, trademark rights, trademark applications,
trade names, service marks, service xxxx rights, service xxxx
applications and licenses;
1.1.8. all registrations, permits, licenses, consents, approvals
and qualifications of Federal, State, local or other government
agencies relating to the business or operations of Seller or the
Purchased Assets;
1.1.9. all rights to warranties and guarantees or other claims
relating to any of the Purchased Assets, including without limitation
rights under agreements for the supply of equipment or leasehold
improvements;
1.1.10. all rights to the use of Seller's name "Summit
Temporaries, Inc." and derivatives thereof, all past corporate names
of Seller and all other names used or previously used by Seller or its
predecessors in its business; and
1.1.11. the goodwill relating to Seller's business.
Section 1.2. Excluded Assets. Seller is retaining and is not selling,
transferring, conveying, assigning or delivering to Purchaser the following
assets (hereinafter collectively called the "Excluded Assets"):
1.2.1. any cash and cash equivalents of Seller on hand or in bank
accounts at the Effective Time;
1.2.2. any marketable securities;
1.2.3. any deposits related to workers' compensation insurance;
1.2.4. all accounts receivable of Seller for work performed prior
to the Effective Time; and
1.2.5. all notes receivable of Seller at the Effective Time.
ARTICLE II
Purchase Price
The total purchase price for the Purchased Assets (the "Purchase
Price") shall be an amount determined and paid as follows:
(i) Purchaser shall pay $1,700,000 cash to Seller at Closing;
(ii) Purchaser shall deliver at Closing the following notes
issued by Purchaser (collectively, the "Notes" ): (x) a note in the
principal amount of $950,000, with interest payable at the rate of
8.5% per annum, with quarter-annual principal payments over the
four-year period commencing on the date of the Closing and with the
other terms and conditions as set forth in the form of the Promissory
Note attached as Exhibit A to this Agreement; and (y) a note in the
principal amount of $100,000 with quarter-annual principal payments
over the two-year period commencing on the date of the Closing and
with the other terms and conditions set forth in the form of the
Promissory Note attached as Exhibit B to this Agreement (collectively,
the "Notes"), which Notes shall be guaranteed by Personnel Management,
Inc., an Indiana corporation ("PMI"), as guarantor.
ARTICLE III
Assumption of Liabilities
Section 3.1. Assumed Liabilities. Purchaser hereby assumes and agrees
to pay, perform or discharge, to the extent not theretofore paid, performed or
discharged, (i) Seller's liabilities and obligations arising after the Effective
Time under those Purchased Contracts, if any, listed on Schedule 1.1.4, and (ii)
if Purchaser, in its sole discretion and at its option, elects in writing after
the Closing (as hereinafter defined) to assume liabilities or obligations of
Seller under any Purchased Contracts not listed on Schedule 1.1.4, then
Purchaser will assume and pay Seller's liabilities and obligations arising after
the Effective Time under each such nonlisted Purchased Contract that is
expressly assumed in writing by Purchaser, excluding with respect to clauses (i)
and (ii) any liability for default thereunder occurring prior to the Effective
Time and, with respect to liabilities for rent and taxes, excluding any
liability as to periods of time prior to the Effective Time.
Section 3.2. Excluded Liabilities. Except as otherwise expressly
provided in Section 3.1, Purchaser does not assume and shall not be liable for
any of the liabilities or obligations of Seller, including, without limitation,
Seller's liabilities or obligations which are known or unknown, fixed or
contingent, now existing or hereafter arising (which liabilities and obligations
not assumed by Purchaser are hereinafter referred to as the "Excluded
Liabilities").
ARTICLE IV
Closing and Effective Time
Section 4.1. Closing; Closing Date; Effective Time. The execution of this
Agreement and the taking of various actions in connection therewith as provided
herein with respect to the transactions contemplated hereby (the "Closing")
shall take place on February 2, 1998 (the "Closing Date"). As provided in the
preamble to this Agreement, the transactions contemplated hereby shall be
effective as of 12:01 a.m. (Indianapolis time) on February 2, 1998 (as
previously defined, the "Effective Time").
Section 4.2. Closing Requirements. Seller, Xxxxxxx, X. Xxxxxxx, X. Xxxxxxx
and/or Purchaser, as applicable, shall take the following actions ("Closing
Requirements") at or prior to the Closing:
4.2.1. Seller shall take such actions and execute and deliver
to Purchaser such bills of sale, certificates of title, endorsements,
assignments, or other instruments, with all documentary or transfer
taxes applicable thereto duly paid or provided for, as shall be
necessary to vest in Purchaser at the Effective Time good and
marketable title to the Purchased Assets, subject to no liens,
encumbrances, claims, restrictions, security interests, obligations,
liabilities or rights in any other party whatsoever, except for the
Assumed Liabilities.
4.2.2. Seller shall have delivered to Purchaser a certified
copy (certified by the Secretary of State of Georgia) of Seller's
Articles of Incorporation, including all amendments thereto and
restatements thereof.
4.2.3. Seller shall have delivered to Purchaser a certified
copy (certified by the Secretary or other appropriate officer of
Seller) of Seller's Bylaws, including all amendments thereto and
restatements thereof.
4.2.4. Seller shall have delivered to Purchaser certified
copies (certified by the Secretary or other appropriate officer of
Seller) of resolutions and/or consents setting forth the authorization
and approval of the Board of Directors and shareholders of Seller of
the execution, delivery and performance of this Agreement and all other
agreements, documents and transactions pertaining hereto or
contemplated hereby.
4.2.5. Each of Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx
shall have executed and delivered to Purchaser the Noncompetition and
Confidentiality Agreement (as hereinafter defined and substantially in
the form of Exhibit D hereto).
4.2.6. Seller and Purchaser shall have executed and delivered
to one another such assignment and assumption agreements as either of
them shall reasonably request relating to the assignment to and
assumption by Purchaser of the Purchased Contracts and the benefits and
obligations thereunder. Seller shall have obtained and shall provide to
Purchaser the written consent of any third party or parties required in
connection with the assignment of any of the Purchased Contracts.
4.2.7. Seller shall have delivered to Purchaser a certificate
of the Secretary of Seller certifying as to the incumbency of officers
and Directors of Seller, dated the date hereof.
4.2.8. Seller shall have delivered to Purchaser certificates
as of a current date evidencing the corporate existence of Seller in
Georgia.
4.2.9. Purchaser shall have delivered to Seller certified
copies (certified by the Secretary or other appropriate officer of PMI
Administration, Inc., the sole general partner of Purchaser) of
resolutions and/or consents setting forth the authorization and
approval of the Board of Directors of PMI Administration, Inc., as the
general partner of Purchaser, of the execution, delivery and
performance of this Agreement and all other agreements, documents and
transactions pertaining hereto or contemplated hereby.
4.2.10. Purchaser shall pay to Seller the cash and deliver to
Seller the Notes that constitute the Purchase Price.
4.2.11. Purchaser shall deliver to Seller a signed guaranty of
PMI with respect to Purchaser's obligations under the Notes and this
Agreement, which guaranty shall be substantially in the form attached
hereto as Exhibit C.
ARTICLE V
Other Actions, Agreements and Covenants of the Parties
Purchaser, Xxxxxxx, X. Xxxxxxx, X. Xxxxxxx and Seller covenant and agree as
follows:
Section 5.1. Assignment of Contracts. Seller hereby transfers and
assigns to Purchaser all of Seller's rights and benefits under the Purchased
Contracts. With respect to the Real Estate Leases (hereinafter defined),
Purchaser accepts the assignment of each of them subject to the conditions
subsequent that Seller shall, on or before March 2, 1998, provide to Purchaser
the written consent of the lessor under each of the Real Estate Leases to the
assignment thereof by Seller to Purchaser and that the lessor's security
interest provisions be deleted from the Wellington Square Shopping Center lease.
In the event any increase in rent or other charges is imposed by the lessor
under any of the Real Estate Leases in connection with the assignment thereof by
Seller to Purchaser, Seller shall pay to Purchaser, monthly as rent is payable
by Purchaser thereunder, the amount of any such increase that Purchaser is
required to pay on account of such assignment throughout the remaining term
thereof. Seller shall pay all fees, charges and other costs payable to any
lessor under any of the Real Estate Leases in connection with the assignment of
the Real Estate Leases by Seller to Purchaser. Subject to the conditions
subsequent to Purchaser's acceptance of assignment of the Real Estate Leases,
Purchaser shall pay and perform all obligations of the tenant under the Real
Estate Leases accruing and/or attributable to events or circumstances occurring
after the Effective Time, and Seller shall pay and perform all such obligations
accruing and/or attributable to events or circumstances occurring prior to the
Effective Time.
Section 5.2. Delivery of Property Received After Effective Time. From
and after the Effective Time (i) Seller agrees that it will promptly transfer
and deliver to Purchaser any cash or other property, except Excluded Assets,
that Seller may receive from time to time after the Effective Time relating to
the Purchased Assets, and (ii) Purchaser agrees that it will transfer and
deliver to Seller any cash or other property that Purchaser may receive from
time to time after the Effective Time relating to the Excluded Assets.
Section 5.3. Purchaser Appointed Attorney for Seller. Seller agrees
that, effective as of the Effective Time, it hereby constitutes and appoints
Purchaser, its successors and assigns, the true and lawful agent and
attorney-in-fact of Seller in the name of Purchaser or in the name of Seller,
but for the benefit and at the expense of Purchaser, its successors and assigns,
(i) to institute and prosecute all proceedings which Purchaser may deem proper
to collect, assert or enforce any claim, right, title or interest of any kind in
or to the Purchased Assets; (ii) to defend or compromise any and all actions,
suits or proceedings in respect of any of the Purchased Assets, and to do all
such acts and things in relation thereto as Purchaser, its successors or
assigns, shall deem advisable; and (iii) to take all action which Purchaser, its
successors or assigns, may reasonably deem appropriate to provide for Purchaser,
its successors or assigns, the benefits of or under any of the Purchased Assets
where any required consent of another party to the sale or assignment thereof to
Purchaser pursuant to this Agreement shall not have been obtained. If Purchaser,
in the name of Seller, desires to institute and prosecute any action, suit or
proceeding, or take any other action pursuant to this Section 5.3, Purchaser
shall give Seller 10 days' prior written notice. Seller acknowledges that the
foregoing powers and agency are coupled with an interest and shall be
irrevocable. Purchaser shall be entitled to retain for its own account any
amounts collected pursuant to the foregoing powers and agency which is
attributable to its interest hereunder, including any amounts payable as
interest in respect thereof.
Section 5.4. Execution of Further Documents. After the Closing, upon
the reasonable request of Purchaser, Seller shall take such additional actions
and execute, acknowledge and deliver all such further documents and instruments,
including without limitation bills of sale, assignments, transfers, conveyances,
powers of attorney and assurances, as may be required to convey and transfer to
and vest in Purchaser and protect Purchaser's right, title and interest in and
to all of the Purchased Assets or as may be appropriate otherwise to carry out
the transactions contemplated by this Agreement.
Section 5.5. Employment by Purchaser of Seller's Employees. It is
understood and agreed that Purchaser is under no obligation to hire and provide
employment for any of Seller's existing employees, it being Seller's obligation
to terminate such employees, if such is necessary. Purchaser, however, presently
intends to hire some of Seller's existing employees as new hires, and Seller,
Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx shall use their reasonable efforts to aid
Purchaser in engaging such of Seller's agents and employees as are presently
engaged or employed by Seller as Purchaser shall in its sole discretion
determine. Purchaser does not intend to hire and provide employment for Xxxxxxx
(although he will perform consulting services as an independent contractor for
Purchaser for a period of time) or Xxxxxxxx Xxxxxxxxx, and neither of such
persons shall become employees of Purchaser and Seller shall be responsible for
whatever legal or contractual obligations may exist between Seller and such
persons. Each of Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx hereby waives the
right to enforce, and covenants that it or he will not enforce or attempt to
enforce, any agreement not to compete or disclose confidential or other
information or similar agreement or restriction made by or applicable to any
shareholder or employee of Summit that is employed by Purchaser and that would
be violated by the employment of such employee by Purchaser or the engagement by
such employee in the continuation of the business formerly conducted by Seller
on behalf of Purchaser.
Section 5.6. Noncompetition and Confidentiality Agreement. As
additional consideration for Purchaser's agreement to buy the Purchased Assets,
Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx shall each execute and deliver to
Purchaser at Closing an agreement not to compete with Purchaser for a term of
three years, commencing at the Effective Time, substantially in the form
attached hereto as Exhibit D (the "Noncompetition and Confidentiality
Agreement").
Section 5.7. IRS Form 8594. Seller and Purchaser agree that the
Purchase Price shall be allocated as set forth in Schedule 5.7 hereto, and that
neither party will report an allocation inconsistent therewith on Form 8594
subsequently filed with the Internal Revenue Service.
ARTICLE VI
Representations and Warranties by Seller
and Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx
To induce Purchaser to enter into this Agreement and to consummate the
transactions contemplated hereunder, Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx
make the following representations and warranties, each of which shall be deemed
to be independently material and relied upon by Purchaser regardless of any
investigation made or information obtained by Purchaser:
Section 6.1. Corporate Existence and Qualification. Seller (i) is a
corporation duly organized and validly existing under the laws of the State of
Georgia, (ii) has all requisite corporate power and authority to own its
properties and to carry on its business as it is now being conducted; and (iii)
is not required to be qualified to transact business as a foreign corporation in
any jurisdictions. Copies of Seller's Articles of Incorporation, certified by
the Georgia Secretary of State, and Bylaws, including all amendments thereto,
certified by the Secretary of Seller, have been delivered to Purchaser, and such
copies are true, complete and correct in every particular.
Section 6.2. Subsidiaries. Seller has no subsidiaries.
Section 6.3. Financial Statements. Attached hereto as Schedule 6.3 are
the unaudited Balance Sheet of Seller at December 31, 1997, and the related
unaudited Statement of Operations of Seller for its fiscal year then ended
(which Balance Sheet and Statement of Operations are herein collectively
referred to as the "Seller Financial Statements"), which have been prepared in
accordance with the accrual method of accounting and sound accounting principles
consistently applied with respect to prior periods. The Seller Financial
Statements present fairly the financial condition of Seller at the date
indicated and the results of operations of Seller for the period indicated.
Section 6.4. Events Subsequent to Date of Seller Financial Statements.
To the knowledge of Seller, and except for economic conditions applicable
generally to businesses of the type conducted by Seller, since December 31,
1997, (a) there have been no adverse changes in the condition of the assets,
liabilities, business, operations, prospects or properties of Seller, or in the
financial condition or earnings of Seller as shown in the Seller Financial
Statements, other than changes in the ordinary course of business of Seller
which, individually or in the aggregate, are not material, (b) Seller has not
entered into any material transaction, except for the transactions contemplated
by this Agreement, not in the usual and ordinary course of its business, (c)
Seller's assets, business, operations, prospects or properties have not been
adversely affected in any material way as a result of any fire, accident or
other casualty or by any act of God, (d) Seller has not sold, assigned,
transferred or otherwise disposed of (other than using expendable supplies), or
removed or permitted to be removed from any Real Estate (as hereinafter defined)
or any building or structure thereon, any assets of Seller or any assets used or
useful in its business or operations of the type that, but for such sale or
other event described above, would have been includable in the Purchased Assets;
and (e) Seller has not failed to use reasonable efforts or to act in good faith
(a) to preserve the assets and business of Seller, (b) to keep available the
services of Seller's present employees, agents and representatives, (c) to
preserve the goodwill of Seller's customers, suppliers, and all others having
business with Seller, (d) to conduct and operate Seller's business, and maintain
Seller's books, accounts and records, in the customary manner, in a prudent and
normal fashion, and in the ordinary course of business, or (e) to maintain the
Purchased Assets in the same condition as such assets were in as of December 31,
1997 and preserve Seller's physical properties, business premises, fixtures,
furniture and equipment, ordinary wear and tear excepted.
Section 6.5. Undisclosed Liabilities. Except as reflected on the Seller
Financial Statements, Seller has no material liabilities or obligations, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
and whether known or unknown, and there is no basis for any claim against Seller
for any such liabilities or obligations, except liabilities or obligations
incurred in the ordinary course of business of Seller since December 31, 1997,
including the Assumed Liabilities, none of which individually or in the
aggregate will have a material adverse effect upon the Purchased Assets or the
business or condition, financial or otherwise, of Seller.
Section 6.6. Tax Returns. Seller has filed with the appropriate
agencies all tax returns and tax reports required by law to be filed by or with
respect to Seller and has paid all taxes due, specifically including all returns
and taxes with respect to employment matters, and to the knowledge of Seller (i)
no audit of any federal, state, county or municipal returns or other tax returns
filed by Seller is in progress, pending or threatened, (ii) there are no unpaid
taxes which are or will become a lien or charge on any of the Purchased Assets
or for which Purchaser may be liable and there are no known or proposed
deficiency assessments in respect of any Federal, State, county, municipal or
other tax return filed by Seller which might adversely affect the Purchased
Assets or Seller's business or for which Purchaser may be liable; and (iii)
there are no taxes, penalties or interest assessed against, due and/or unpaid by
Seller with respect to the Purchased Assets or Seller's business.
Section 6.7. Real Property.
6.7.1. Set forth in Schedule 6.7.1 is a list of the addresses
of each parcel of real property leased or otherwise used by Seller (the
"Real Estate"). Seller has furnished to Purchaser a true and complete
copy of each lease of any Real Estate of which Seller is the lessee or
the lessor (herein referred to as the "Real Estate Leases"), and a
description of the type of use of each such parcel. Seller owns no real
property and has not agreed or committed to purchase any real property.
6.7.2. All Real Estate Leases are in full force and effect and
there exists thereunder no event of default or event which, with the
giving of notice or passage of time or both, would constitute an event
of default by any party thereto. ll of the Real Estate Leases are
assignable to Purchaser only with the consent of the lessors
thereunder. Except as otherwise disclosed on Schedule 6.7.1, Seller has
obtained written consents from the lessors to such assignment to
Purchaser with respect to each of the Real Estate Leases. There are no
delinquencies or alleged delinquencies in the payment of rents or other
amounts owed any landlords under any of the Real Estate Leases.
Section 6.8. Personal Property - Owned. Except as otherwise disclosed
on Schedule 1.4.4, (a) Seller has good and marketable title to all personal
property included in the Purchased Assets reflected on the Seller Financial
Statements (except any sold since the date thereof in the ordinary course of
business), free and clear of all mortgages, liens, security interests, charges,
claims, restrictions and other encumbrances of every kind, and (b) the personal
property included in the Purchased Assets utilized in Seller's business is owned
by Seller and may be used for such purposes without conflict with the rights of
others.
Section 6.9. Personal Property - Leased. Seller has disclosed in
Schedule 1.1.4 all leases under which Seller leases personal property from
others. Seller has furnished Purchaser with a true and complete copy of all such
leases. The property described in such leases is presently used by Seller as
lessee under the terms of such leases and such leases are in full force and
effect, and no defaults exist under such leases and there exists no event which,
with the giving of notice or passage of time or both, would constitute a default
under such leases. All of such leases are assignable to Purchaser hereunder, and
Seller shall obtain all necessary consents to such assignment.
Section 6.10. Use and Condition of Property; Environmental Concerns.
6.10.1. There are and have been no material violations by
Seller of, and Seller has not received notice of any violation of, any
law, statute, ordinance, regulation, order, rule, judgment, writ,
injunction, decree, permit, registration or other requirement relating
or applicable to the Real Estate or any of Seller's property, assets,
business or operations or the Purchased Assets, including without
limitation violations relating to pollution control or environmental
contamination. To the best of Seller's knowledge, but without
independent investigation, there are no orders, rulings, decrees,
injunctions, judgments or writs of any federal, state or local
government or of any court, department, commission, board, bureau,
agency or other instrumentality thereof known to Seller outstanding
against, or relating or applicable to, Seller or its properties,
business or operations or the Real Estate.
6.10.2. There are no existing facts or circumstances, to
Seller's knowledge, that Seller reasonably believes could form the
basis for the assertion of any claim against Seller in respect of the
business, operations, activities or properties of Seller or the Real
Estate relating to environmental matters.
6.10.3. There are no environmental operating or other similar
environmental permits or authorizations required for the operation of
Seller's business or the Purchased Assets.
Section 6.11. Restrictive Covenants. Except for the Noncompetition and
Confidentiality Agreement and a shareholders agreement among Xxxxxxx, X.
Xxxxxxx, X. Xxxxxxx and Seller, none of Xxxxxxx, X. Xxxxxxx, X. Xxxxxxx or
Seller is subject to any agreements not to compete or similar restrictive
covenants.
Section 6.12. Intellectual Property Rights. There are no patents, patent
applications, inventions, discoveries, trade secrets or other intellectual
property relating to or used in the business of Seller developed by Xxxxxxx, X.
Xxxxxxx, X. Xxxxxxx or any of the other employees of Seller or any other party
to which Seller has or may have a right of ownership or a right of use which
have not been assigned to Seller.
Section 6.13. No Breach, Default or Violation. Seller is not in default
under or in breach or violation of the provisions of any franchise or license,
any provision of its Articles of Incorporation or Bylaws, any promissory note,
indenture or any evidence of indebtedness or security therefor, or any lease,
contract, purchase or other commitment or any other agreement by which it is
bound, which individually or in the aggregate may result in a material adverse
effect on its business or condition, financial or otherwise, or the Purchased
Assets.
Section 6.14. Litigation and Claims. There is no action, suit, legal or
administrative proceeding, arbitration, investigation or other proceeding or
claim pending or, to the knowledge of Seller threatened, against or affecting
Seller, and Seller is not a party plaintiff in any action, suit, arbitration or
proceeding. No unsatisfied judgment, order or decree has been entered and
remains pending or in effect as to Seller.
Section 6.15. Material Contracts. Other than employment agreements and the
Purchased Contracts listed on Schedule 1.1.4,, there are no material contracts,
agreements, commitments, licenses or other arrangements to which Seller is or
was subject or by which Seller is or was bound, oral or written, expressed or
implied, including without limitation all agreements and instruments relating to
purchase orders or commitments, supply or requirements contracts, agreements
with sales agents or representatives, and franchise or license agreements, that
were material in connection with Seller's business operations during the year
1997 and that are not terminable without financial payment or penalty by reason
thereof on 30 days' notice or less.
Section 6.16. Validity of Purchased Contracts. Each Purchased Contract
other than the Real Estate Leases may be assigned to Purchaser without any
restriction, required consent or other approval (except for such consents or
approvals that Seller has obtained), is in full force and effect and constitutes
the valid, legal and binding obligations of Seller and the other parties
thereto, enforceable in accordance with its terms except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or similar laws now or hereafter in effect relating to creditors' rights, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought; Seller is not in
default and to the best knowledge of Seller no other party thereto is in default
(and no event has occurred which with notice or lapse of time or both would
become a default) or has an accrued right of termination thereunder; and no such
contract requiring the purchase by Seller of equipment, furniture, fixtures,
operating supplies or other properties or services is for a quantity in excess
of the normal requirements of Seller's business or at a price in excess of the
generally prevailing price for the item to be purchased.
Section 6.17. Powers of Attorney. There are no outstanding powers of
attorney granted by Seller with respect to its business or operations or the
Purchased Assets.
Section 6.18. Employment Matters; Employee Benefit Plans.
6.18.1. Seller has no employment agreements with its employees
other than pursuant to a written agreement in the form attached hereto
as Schedule 6.18. The hours worked by, payments made to and the working
conditions of the employees of Seller have not been in violation of the
Fair Labor Standards Act or any other applicable federal, state or
local laws, orders or regulations relating to the payment of wages,
conditions of employment, the employment of minors or similar matters;
the practices of Seller in respect to the hiring, working conditions,
promotion, discharge, discipline and rates of pay of its employees have
not been in violation of any federal, state or local laws, executive
orders or regulations, including but not limited to those prohibiting
discrimination for any reason; and there are not as of the date of this
Agreement and there will not be as of the Closing Date any labor
troubles of any kind or nature pending or threatened against Seller.
6.18.2. Seller does not maintain and has not at any time
within the past five years maintained, and has no liability to any
current employee with respect to, any employee benefit or other plans
that provide retirement, disability, health or other benefits to any of
Seller's employees (collectively, all such plans and practices are the
"Plans"), including all such Plans that are either an "employee pension
benefit plan" or an "employee welfare benefit plan" as such terms are
defined in the Employee Retirement Income Security Act of 1974
(together with all regulations of the Internal Revenue Service, the
United States Department of Labor and the Pension Benefit Guaranty
Corporation thereunder, "ERISA").
Section 6.19. Insurance. Schedule 6.18 is a true, correct and complete
list of all fire, theft, casualty, liability and other insurance policies
insuring Seller and all insurance policies maintained for any of its employees,
specifying the type of coverage, the amount of coverage, the premium, the
insurer and the expiration date of each such policy. Seller is not in default
with respect to any provisions of any such policy, nor has Seller failed to give
any material notice or present any material claim known to Seller under any such
policy in due and timely fashion.
Section 6.20. Compliance with Laws; Licenses. To Seller's knowledge the
business and operations of Seller are and have been in compliance in all
material respects with all applicable laws, rules and regulations of all
authorities, and Seller has obtained all licenses, permits, bonds, insurance and
the like and have made all registrations which are required for such compliance.
A list of all states in which Seller is licensed or registered as an employment
agency, employment leasing agency or similar business, and a copy of each
license or registration listed, is attached hereto as Schedule 6.20.
Section 6.21. Authorization of Agreement. The execution, delivery and
performance of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby have been duly and effectively authorized by
all requisite corporate and other action and this Agreement constitutes a legal,
valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms, except as may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by equitable principles. Neither the execution, performance
or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) violate, conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the creation of a lien or encumbrance on any of the
Purchased Assets pursuant to any of the terms, conditions, or provisions of the
Articles of Incorporation or Bylaws of Seller or any note, bond, mortgage,
indenture, deed of trust, license, agreement, or other instrument or obligation
to which Seller is a party or is bound, or (ii) violate any law, rule,
regulation, order, writ, injunction, decree or statute applicable to the
business or operations of Seller or the Purchased Assets.
Section 6.22. All Material Information. No representation or warranty
made by Seller in this Agreement or any Schedule delivered pursuant to this
Agreement (or any statement made to Purchaser by or on behalf of Seller in
connection with the transactions contemplated by this Agreement) contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation, warranty or statement, in light of the
circumstances when made, not misleading. Seller has no knowledge of any existing
or threatened occurrence, event or development which, as far as can be
reasonably foreseen on the basis of information currently available to Seller,
has or would have a material adverse effect upon the business, operations,
prospects, property, assets or financial condition of Seller or the Purchased
Assets.
Section 6.23. Material Adverse Contracts. Seller is not a party to any
contract, agreement or arrangement, oral or written, express or implied,
whatsoever which could materially adversely affect the use or operation of the
Purchased Assets by Purchaser or which could materially adversely affect the
value or prevent or hinder the sale of the Purchased Assets.
Section 6.24. Shareholders. The persons listed in Schedule 6.24
constitute all of the beneficial and record holders of all of the issued and
outstanding shares of capital stock of Seller, each owning that number of shares
listed in Schedule 6.24.
Section 6.25. Consents of Third Parties. Except as otherwise provided
on Schedule 6.7.1, all necessary consents or approvals of third parties to the
transfer and assignment of the Purchased Assets (including the Purchased
Contracts), the absence of which would adversely affect Purchaser's rights
hereunder or thereunder or its utilization of the Purchased Assets or the
conduct of the related businesses, have been obtained (and shown by evidence
satisfactory to Purchaser), including without limitation the consents and
approvals referred to in this Agreement.
Section 6.26. Other Approvals. All necessary consents, approvals,
authorizations or other official actions of all governmental authorities, the
absence of which would materially affect Purchaser's rights hereunder or to the
utilization of the Purchased Assets or conduct of the related business, have
been duly and validly issued or granted and the period for objection, stay or
imposition of any other impediment to the transactions contemplated hereby by
any such governmental authority has expired.
Section 6.27. Customer Relations. Except as disclosed on Schedule 6.27,
(a) Seller has no actual knowledge that any person or organization that has been
a material customer of Seller during all or any portion of the period of time
encompassed by the Seller Financial Statements intends or is likely not to be a
material customer of Purchaser within the twelve month period following the
Effective Time, and (b) Seller has no knowledge of any facts, circumstances or
conditions (other than general economic conditions applicable generally to
Seller's customers) that, either individually or in the aggregate, would cause a
reasonable person to believe that any such material customer of Seller will not,
or likely will not, be a material customer of Purchaser during the twelve month
period following the Effective Time.
Section 6.28. Knowledge of Seller. With respect to representations and
warranties herein that are made or qualified as being made "to the knowledge of
Seller" or words of similar import, it is understood and agreed that (a) a
person has "knowledge" of a particular matter or fact if such person (i) is
actually aware of such matter or fact or (ii) is actually aware of information
that would cause a prudent person to conclude that such matter or fact is likely
to be true or exist, and (b) matters within the knowledge of any of Xxxxxxx, X.
Xxxxxxx or X. Xxxxxxx or any of the directors, officers or employees of Seller
shall be considered to be within the knowledge of Seller.
ARTICLE VII
Matters Regarding Securities
To induce Purchaser to enter into this Agreement, each of Seller,
Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx hereby acknowledges that he has been advised
by Purchaser that the promissory notes to be received by Seller in partial
payment of the Purchase Price pursuant to this Agreement (the "Securities") have
not been registered under the Securities Act of 1933, as amended (the "1933
Act"), or under the securities laws of the State of Indiana or the State of
Georgia or any other state (collectively, "State Law"), and are being issued
pursuant to this Agreement in reliance upon certain exemptions from such
registration available under the 1933 Act and under applicable State Law
(collectively, the "Exemptions"). In connection with such Exemptions, each of
Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx severally represents and warrants
that each of the following statements is true and complete as of the date of
this Agreement:
(a) Seller has been provided with, and has made available to each
shareholder of Seller, a copy of the 1997 annual report on
Form 10-K (the "Form 10-K") of Personnel Management, Inc., the
guarantor of the Securities. The opportunity has been made
available to Seller and each of the shareholders of Seller at
a reasonable time prior to the execution and delivery of this
Agreement to ask questions and receive answers from Personnel
Management, Inc., Purchaser and their officers concerning the
terms and conditions of the Securities and the matters
disclosed in the Form 10-K.
(b) With respect to each shareholder of Seller, such shareholder
and Seller represent and warrant that such shareholder's net
worth (joint with spouse of applicable), which includes such
shareholder's ownership in Seller, exceeds one million
dollars, and that such shareholder has been advised by
Purchaser that this information will be relied upon by
Purchaser in establishing the availability of the Exemptions
and that Purchaser and Personnel Management, Inc. may be
damaged if, by reason of the inaccuracy of such information,
the Exemptions are lost in whole or in part.
(c) It is understood (based upon advice from Purchaser) that the
Securities are subject to restrictions on transferability and
may not be sold, assigned, transferred or pledged except upon
compliance with the provisions of the 1933 Act and State Law,
and that each document evidencing the Securities shall include
a legend detailing such restrictions on transfer.
(d) The Securities are being acquired by Seller for investment for
its own account (not as a nominee or agent for others) and not
with the view to, or for resale in connection with, any
distribution thereof.
ARTICLE VIII
Representations and Warranties by Purchaser
To induce Seller to enter into this Agreement and consummate the
transactions contemplated hereunder, Purchaser makes the following
representations, warranties, covenants and agreements, each of which shall be
deemed to be independently material and relied upon by Seller, regardless of any
investigation made or information obtained by Seller:
Section 8.1. Valid Existence and Qualification of Purchaser. Purchaser
is a limited partnership duly organized and validly existing under the laws of
the State of Indiana, has been admitted to transact business in the State of
Georgia as a foreign limited partnership, and has all requisite partnership
power and authority to acquire and own the Purchased Assets, to assume, pay,
perform and discharge the Assumed Liabilities, and to perform its obligations
under this Agreement.
Section 8.2. Authorization of Agreement by Purchaser. The execution,
delivery and performance of this Agreement by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby have been authorized by all
requisite partnership and other action and this Agreement constitutes a legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except as may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by equitable principles. Neither the execution, performance
or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) violate, conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, any of the terms, conditions, or provisions of the Partnership
Agreement of Purchaser or any note, bond, mortgage, indenture, deed of trust,
license, agreement, or other instrument or obligation to which Purchaser is a
party or is bound, or (ii) violate any law, rule, regulation, order, writ,
injunction, decree or statute applicable to Purchaser.
ARTICLE IX
Indemnification
Section 9.1. Indemnification by Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx.
Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx hereby jointly and severally covenant
and agree to indemnify Purchaser and its successors and assigns against and hold
them harmless from any and all liabilities, losses, deficiencies, damages,
expenses and costs (including, without limitation, reasonable counsel fees and
costs and expenses incurred in the investigation, defense or settlement of any
claims covered by this indemnity or that would, if successfully asserted by the
claimant, be covered by this indemnity, or incurred in connection with
successfully asserting, proving and collecting indemnity payments pursuant to
this Article IX with respect to matters not involving defense of third-party
claims) accruing from or arising at any time as a result of or out of:
9.1.1. Any inaccuracies in or breaches of the representations,
warranties, covenants, obligations or agreements made or to be
complied with or performed by Xxxxxxx, X. Xxxxxxx, X. Xxxxxxx or
Seller pursuant to this Agreement or in any agreement, schedule,
certificate or instrument delivered by or on behalf of Xxxxxxx, X.
Xxxxxxx, X. Xxxxxxx or Seller pursuant hereto, including without
limitation the Noncompetition and Confidentiality Agreements;
9.1.2. Any and all of Seller's liabilities other than the Assumed
Liabilities;
9.1.3. Any claims for brokerage commissions or placement or
finders' fees in connection with the transactions contemplated by this
Agreement insofar as such claims shall be alleged to be based on
arrangements made by or on behalf of Seller;
9.1.4. Any operations or business conducted, commitment made,
service rendered or condition existing or any action taken or omitted
by or on behalf of Seller on or prior to the Effective Time, except
for liabilities expressly assumed by Purchaser pursuant to Section 3.1
hereof; and
Section 9.2. Right of Setoff. Subject to the provisions of Section 9.8,
Purchaser shall have the right to setoff any amounts with respect to which
Purchaser is entitled to indemnification pursuant to Section 9.1 against any
amounts not yet paid under the Notes. The exercise of such right of setoff by
Purchaser in good faith, whether or not ultimately determined to be justified,
will not constitute an event of default under the Notes. Neither the exercise
nor the failure to exercise such right of setoff will constitute an election of
remedies or limit Purchaser in any manner in the enforcement of any other
remedies that may be available to Purchaser.
Section 9.3. Indemnification by Purchaser. Purchaser shall indemnify
Seller, Xxxxxxx, X. Xxxxxxx, X. Xxxxxxx and their respective successors and
assigns against and hold them harmless from any and all liabilities, losses,
deficiencies, damages, expenses and costs (including, without limitation,
reasonable counsel fees and costs and expenses incurred in the investigation,
defense or settlement of any claims covered by this indemnity or incurred in
connection with successfully asserting, proving and collecting indemnity
payments pursuant to this Article IX with respect to matters not involving
defense of third-party claims) accruing from or arising at any time as a result
of or out of:
9.3.1. Any claims for brokerage commissions or placement or
finders' fees in connection with the transactions contemplated by this
Agreement insofar as such claims shall be alleged to be based on
arrangements made by or on behalf of Purchaser.
9.3.2. Any failure of Purchaser to pay, discharge or perform the
Assumed Liabilities;
9.3.3. Any liabilities asserted by any third party arising out of
any act or failure to act by Purchaser after the Effective Time,
except Excluded Liabilities and liabilities as to which Seller is
obligated to indemnify Purchaser pursuant to Section 9.1; and
9.3.4. Any inaccuracies in or breaches of the representations,
warranties, covenants, obligations or agreements made or to be
complied with or performed by Purchaser pursuant to this Agreement.
Section 9.4. Survival of Covenants, Representations and Warranties.
Subject to the proviso clause below, each of the covenants, representations and
warranties contained herein or in any agreement, schedule, certificate or
instrument delivered pursuant hereto shall survive the Closing and remain in
full force and effect, regardless of any investigation made by or on behalf of
any party hereto, until but not after 11:59 p.m. (Indianapolis time) on the date
that is two years from the date of this Agreement; provided, however, that the
representations and warranties contained in Sections 6.6, 6.8 and 6.10 shall
survive indefinitely regardless of any investigation made by or on behalf of any
party hereto.
Section 9.5. Payment and Settlement of Amounts Due.
9.5.1. Any amount due to Purchaser from Seller, Xxxxxxx, X.
Xxxxxxx and/or X. Xxxxxxx pursuant to any of the provisions of this
Article IX shall be paid to Purchaser by Seller, Xxxxxxx, X. Xxxxxxx
and/or X. Xxxxxxx within 10 days of demand therefor. If such amounts
are not paid to Purchaser when due, Purchaser shall be entitled, in
addition to all other available remedies, to offset such amounts
against amounts otherwise payable to Seller pursuant to Section 9.2.
9.5.2. Any amount due to Seller, Xxxxxxx, X. Xxxxxxx and/or X.
Xxxxxxx from Purchaser pursuant to any of the provisions of this
Article IX shall be paid to Seller, Xxxxxxx, X. Xxxxxxx and/or X.
Xxxxxxx by Purchaser within 10 days of demand therefor.
9.5.3. Any amounts not paid when due pursuant to the provisions
of this Section 9.5 shall bear interest from the date of demand at the
rate of 15 percent per annum.
Section 9.6. Limitation on Indemnities.The obligations of Purchaser,
Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx with respect to payments made with
respect to obligations to indemnify a person or entity under Section 9.1 or
Section 9.3, and the corresponding rights of such person or entity to be
indemnified thereunder (which obligations and corresponding rights are referred
to herein as the "Indemnities"), are subject, as applicable, to the following
limitations:
(a) The maximum amount of aggregate Indemnities that
Seller, Xxxxxxx, X. Xxxxxxx and X. Xxxxxxx
collectively shall be obligated to pay under this
Article IX shall be $2,750,000.
(b) The maximum amount of aggregate Indemnities that
Purchaser shall be obligated to pay under this
Article IX shall be $500,000.
Section 9.7. Notice and Defense of Third Party Claims.
(a) If any third party shall notify any party hereto that is
or may be entitled to indemnification hereunder (an "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may
give rise to a claim for indemnification under this Article IX against
any of the parties who are or may be obligated to provide
indemnification to the Indemnified Party with respect thereto
(collectively, the parties who are or may be obligated to provide
indemnification are the "Indemnifying Parties"), then the Indemnified
Party shall promptly notify in writing each of the Indemnifying Parties
of the Third Party Claim; provided, however, that no delay on the part
of the Indemnified Party in notifying the Indemnifying Parties shall
relieve the Indemnifying Parties from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Parties are thereby
prejudiced; and provided, further, that only one such notification need
be provided to the Indemnifying Parties with respect to a Third Party
Claim regardless of the number of Indemnified Parties involved.
(b) The Indemnifying Parties shall have the right, at their
own expense, to defend the Indemnified Party against the Third Party
Claim with counsel of their choice reasonably satisfactory to the
Indemnified Party so long as: (i) the Indemnifying Parties notify the
Indemnified Party in writing within 15 days after the Indemnified Party
has given notice of the Third Party Claim that the Indemnifying Parties
will undertake to defend the Indemnified Party with respect to such
Third Party Claim at the expense of the Indemnifying Parties; (ii) the
Indemnifying Parties provide the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying
Parties will have the financial resources to defend against the Third
Party Claim and fulfill their indemnification obligations hereunder;
(iii) the Third Party Claim involves only money damages and does not
seek an injunction or other equitable relief; (iv) settlement of, or an
adverse judgment with respect to, the Third Party Claim is not, in the
good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing
business interests of the Indemnified Party; and (v) the Indemnifying
Parties conduct the defense of the Third Party Claim actively and
diligently.
(c) So long as the Indemnifying Parties are conducting the
defense of the Third Party Claim in accordance with Section 9.7(b), (i)
the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim,
(ii) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Parties,
which consent shall not be unreasonably withheld, and (iii) the
Indemnifying Parties will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without
the prior written consent of the Indemnified Party, which consent shall
not be unreasonably withheld.
(d) In the event the Indemnifying Parties fail or cease to
satisfy any of the conditions of Section 9.7(b), (i) the Indemnified
Party may defend against, and consent to the entry of any judgment or
enter into any settlement with respect to, the Third Party Claim in any
manner it reasonably may deem appropriate without consulting with, or
obtaining the consent of, any of the Indemnifying Parties in connection
therewith; (ii) the Indemnifying Parties will reimburse the Indemnified
Party promptly for the costs, including, without limitation, reasonable
attorneys' fees, of defending against the Third Party Claim; and (iii)
the Indemnifying Parties will remain responsible for any Indemnity owed
to any Indemnified Party relating in any manner to such Third Party
Claim.
Section 9.8. Rights of Setoff and Setoff Procedures.
(a) With respect to the exercise by Purchaser of any right of
setoff against the Notes in accordance with Section 9.2 or otherwise
(an "Indemnity Setoff"), the procedures set forth in this Section 9.8
shall govern the rights and obligations of Seller and Purchaser
relating to such Indemnity Setoff.
(b) With respect to any Indemnities as to which the liability
of Seller or any other party obligated to indemnify Purchaser
(collectively, the "Indemnitors") and the extent of such liability have
been established by either (i) the written acknowledgment, agreement or
confirmation of Seller with respect thereto, or (ii) the judgment or
award of any court or arbitrator having jurisdiction, then in any such
case Purchaser shall be entitled to make an Indemnity Setoff against
the Notes with respect to such liability as a matter of right without
advance notice thereof to the Indemnitors; provided, however, that
written notice of the making of such Indemnity Setoff, describing in
reasonable detail the relevant factual circumstances, shall be given to
the Indemnitors at the time such Indemnity Setoff is made.
(c) With respect to an Indemnity Setoff to be made other than
pursuant to Section 9.8(b), Purchaser shall give written notice to the
Indemnitors of the intention to make an Indemnity Setoff (the "Setoff
Notice") at least 15 days prior to the date as of which such Indemnity
Setoff is intended to be made (the "Setoff Date"). The Setoff Notice
shall describe in reasonable detail the factual circumstances relating
to the claimed Indemnities as to which an Indemnity Setoff is to be
made (including the amount thereof) and the obligation of the Purchaser
against which the Indemnity Setoff will be applied. If Purchaser does
not receive written notice from any of the Indemnitors prior to the
Setoff Date that the intended Indemnity Setoff is disputed by the
Indemnitors, Purchaser may make the intended Indemnity Setoff in
accordance with the description thereof in the Setoff Notice and shall
give written notice to the Indemnitors that such Indemnity Setoff has
been made. If Purchaser does receive written notice prior to the Setoff
Date that an intended Indemnity Setoff is disputed by the Indemnitors,
Purchaser may elect to make such Indemnity Setoff in escrow pursuant to
Section 9.8(d) or may, without waiving any rights to recover the
Indemnities as to which an Indemnity Setoff was intended or to make a
further claim for an Indemnity Setoff with respect thereto, and without
being otherwise adversely affected with respect thereto, take no
further action with respect to such Indemnity Setoff as to which a
Setoff Notice was given to the Indemnitors.
(d) With respect to an intended Indemnity Setoff that is
disputed by the Indemnitors in accordance with Section 9.8(c),
Purchaser may effect such Indemnity Setoff by delivering the funds that
are the intended subject of such Indemnity Setoff to a commercial bank
maintaining an office in Atlanta, Georgia (the "Bank"), to be held by
the Bank pending the resolution of such dispute pursuant to this
Section 9.8(d). The Indemnitors and Purchaser shall execute and deliver
to one another and the Bank an appropriate Escrow Agreement whereby the
Bank agrees to receive and distribute such funds as provided herein. A
disputed Indemnity Setoff as to which Purchaser deposits the funds with
the Bank shall be resolved by submitting the matter to a court of
competent jurisdiction or, if mutually agreeable by the parties, to
arbitration. The Bank shall distribute all funds held by it pursuant to
the Escrow Agreement in accordance with the decision or award made in
such court or arbitration proceeding.
(e) All earnings on funds held by the Bank shall be reported
as taxable income of Purchaser. Upon resolution of a dispute as to the
entitlement of Purchaser to effect an Indemnity Setoff with respect to
any funds paid to the Bank by Purchaser, the Bank shall pay over to the
Indemnitors all earnings (including earnings on earnings) on funds
received by the Bank that are paid by the Bank to the Indemnitors
pursuant to the court or arbitration decision or award; provided,
however, earnings on escrowed sums otherwise payable under the Notes
shall be in lieu of accrued interest on such sums under the Notes after
the date such sums were paid by Purchaser to the Bank (payment to the
Bank shall be considered as the payment of such sums to the Indemnitors
for purposes of the Notes and calculating the balances thereof).
(f) Payment of any funds to the Bank by Purchaser pursuant to
this Section 9.8 shall, for purposes of determining the performance by
Purchaser of its obligations under this Agreement and the Notes, be
deemed to constitute performance to the same extent as if such funds
had been paid or delivered to Seller rather than the Bank.
ARTICLE X
Change of Names; Use of Names by Purchaser
As soon as is reasonably possible after the Effective Xxxx Xxxxxx shall
change its corporate name to a name other than, and not similar to, the name
"Summit Temporaries, Inc.," and shall file appropriate documents reflecting such
name change in Georgia and in each state where qualified to do business as a
foreign corporation and furnish a copy of all such filings to Purchaser;
provided, however, that Seller may continue to use such name for a reasonable
period, not to exceed ninety days from the date of this Agreement, solely for
the purpose of facilitating the collection of accounts and notes receivable.
Seller shall coordinate any such name change and the filings in connection
therewith with Purchaser and its counsel in to ensure that Purchaser obtains all
rights to the name in all jurisdictions in which Seller has used such name. From
and after the Effective Time Purchaser shall have full right, power and
authority to use, and Seller hereby consents to the use by Purchaser or
Purchaser's designee of, the name "Summit Temporaries, Inc.," and any
abbreviations or combinations thereof, all past corporate names of Seller and
other names used or previously used by Seller or its predecessors in their
businesses, and any word or trade name used by Seller prior to the Effective
Time in the conduct of its business, without restriction or adverse claim of
Seller, any of its affiliates, or any person claiming by, through or under
Seller. After the Effective Time, Seller shall not use any such name without
Purchaser's written consent.
ARTICLE XI
Expenses of the Parties
Each party shall pay its expenses, including the expenses of its legal
and accounting representatives, in connection with the origin, negotiation,
execution and performance of this Agreement, except as otherwise provided
herein. Purchaser shall pay any and all sales and transfer taxes with respect to
the transactions contemplated hereby. Seller shall pay any and all federal and
state income or other taxes attributable to Seller arising as a result of the
transactions contemplated hereby.
ARTICLE XII
Brokers' Commission
The parties hereby agree and represent and warrant to each other that
there are no claims for brokerage commissions, or placement or finders' fees, in
connection with the transactions contemplated by this Agreement, except for
those payable to Xxxxx Xxxxxx, which shall be paid by Purchaser.
ARTICLE XIII
Miscellaneous
Section 13.1. Waivers and Amendments. This Agreement may be amended or
modified, and its terms or conditions may be waived, only by a written
instrument executed by the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by any party of the breach of any
term or condition contained in this Agreement in any one or more instances shall
be deemed to be, or construed as, a further or continuing waiver of any breach,
or a waiver of the breach of any other term or condition contained herein. The
parties reserve the right to amend or modify this Agreement, or waive the terms
or conditions hereof, without the consent of any third person (natural or
otherwise).
Section 13.2. Entire Agreement. This Agreement (and the Schedules and
Exhibits hereto which are hereby incorporated and made a part hereof) and all
certificates, agreements, documents and instruments delivered contemporaneously
and in connection herewith constitute the entire understanding of the parties
relative to the subject matter hereof and supersede all prior agreements and
undertakings between or among any of the parties relating to the subject matter
hereof. Any reference herein to this Agreement shall be deemed to include the
Schedules and Exhibits hereto.
Section 13.3. Headings. The table of contents and descriptive headings
in this Agreement and on the Schedules and Exhibits are inserted for convenience
only and shall not constitute a part of, nor affect the meaning or
interpretation of, this Agreement or any section or subsection hereof.
Section 13.4. Notices. Any notice, election or demand to be given
hereunder to any of the parties by another shall be in writing and personally
delivered or sent by prepaid same day or overnight courier or registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Purchaser, PMI XX XX
addressed to: c/o Personnel Management, Inc.
0000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attn: President
With a copy to: Leagre Xxxxxxxx & Xxxxxxx
0000 Xxxxxxxx Xxxxxxxx, Xxxxx 000
Xxx 00000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxxx
If to Seller, Summit Temporaries, Inc.
addressed to: c/o Xxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
If to Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx
addressed to: 000 Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
If to Xxxx X. Xxxxxxx, Xxxx X. Xxxxxxx
addressed to: 0000 Xxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
If to Xxxx Xxxxxxx, Xxxx X. Xxxxxxx
addressed to: 000 Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
With a copy, as to Xxxxxx X. Xxxxxx, Xx.
any of Seller, Xxxxxx X. Suite 1190
Xxxxxxx, Xxxx X. Xxxxxxx 0000 X. Xxxxxxxxx Xxxxxx, X.X.
or Xxxx Xxxxxxx, to: Xxxxxxx, Xxxxxxx 00000-0000
Any party may change the address to which notices are to be sent to it by giving
written notice of such change of address to the other parties in the manner
herein provided for giving notice.
Section 13.5. Severability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein. Should any particular covenant in this Agreement be
held unreasonable or unenforceable for any reason, including without limitation
the time period, geographical area, or scope of activity covered by such
covenant, then such covenant shall be given effect and enforced to whatever
extent would be reasonable and enforceable.
Section 13.6. Disclosures on Schedules. Facts disclosed on any Schedule to
this Agreement shall be considered as disclosed for purposes of all of the
representations and warranties contained in Article VI.
Section 13.7. Third Parties. Except as otherwise provided herein, nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or entity other than the parties hereto and their respective
successors or assigns, any rights or remedies under or by reason of this
Agreement.
Section 13.8. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original.
Section 13.9. Successors and Assigns. All the terms, covenants, and
conditions of this Agreement shall be binding upon, and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PMI XX XX, an Indiana Limited Partnership
By: PMI ADMINISTRATION, INC.,
its General Partner
By: /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx, President
SUMMIT TEMPORARIES, INC.
By /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, President
Attest:
By /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Secretary
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Individually
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Individually
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Individually
STATE OF INDIANA )
) SS:
COUNTY OF XXXXXXX )
Before me, a Notary Public in and for said County and State, on the 9th day
of February, 1998, personally appeared Xxx X. Xxxxxx, the President of PMI
Administration, Inc., sole General Partner of PMI XX XX, who acknowledged the
execution of the above and foregoing Asset Purchase Agreement for and on behalf
of such corporation.
WITNESS my hand and Notarial Seal.
/s/ Xxxxxxx X. Xxxxxxxx
NOTARY PUBLIC, a Resident of
Shelby County, Indiana
Xxxxxxx X. Xxxxxxxx
My Commission Expires: Name Printed
0-0-00
XXXXX XX XXXXXXX )
) SS:
COUNTY OF XXXXXX )
Before me, a Notary Public in and for said County and State, on the 12th
day of February, 1998, personally appeared Xxxx X. Xxxxxxx, the President of
Summit Temporaries, Inc., who acknowledged the execution of the above and
foregoing Asset Purchase Agreement for and on behalf of such corporation.
WITNESS my hand and Notarial Seal.
/s/ Xxxxx X. Xxxxxxxx
NOTARY PUBLIC, a Resident of
Paulding County, Georgia
Xxxxx X. Xxxxxxxx
My Commission Expires: Name Printed
0-0-00
XXXXX XX XXXXXXX )
) SS:
COUNTY OF XXXXXX )
Before me, a Notary Public in and for said County and State, on the 12th
day of February, 1998, personally appeared Xxxxxx X. Xxxxxxx, who acknowledged
the execution of the above and foregoing Asset Purchase Agreement to be his
voluntary act and deed.
WITNESS my hand and Notarial Seal.
/s/ Xxxxx X. Xxxxxxxx
NOTARY PUBLIC, a Resident of
Paulding County, Georgia
Xxxxx X. Xxxxxxxx
My Commission Expires: Name Printed
0-0-00
XXXXX XX XXXXXXX )
) SS:
COUNTY OF XXXXXX )
Before me, a Notary Public in and for said County and State, on the 12th
day of February, 1998, personally appeared Xxxx X. Xxxxxxx, who acknowledged the
execution of the above and foregoing Asset Purchase Agreement to be his
voluntary act and deed.
WITNESS my hand and Notarial Seal.
/s/ Xxxxx X. Xxxxxxxx
NOTARY PUBLIC, a Resident of
Paulding County, Georgia
Xxxxx X. Xxxxxxxx
My Commission Expires: Name Printed
0-0-00
XXXXX XX XXXXXXX )
) SS:
COUNTY OF XXXXXX )
Before me, a Notary Public in and for said County and State, on the 12th
day of February, 1998, personally appeared Xxxx X. Xxxxxxx, who acknowledged the
execution of the above and foregoing Asset Purchase Agreement to be his
voluntary act and deed.
WITNESS my hand and Notarial Seal.
/s/ Xxxxx X. Xxxxxxxx
NOTARY PUBLIC, a Resident of
Paulding County, Georgia
Xxxxx X. Xxxxxxxx
My Commission Expires: Name Printed
1-2-99
LIST OF SCHEDULES TO
ASSET PURCHASE AGREEMENT
Schedule 1.1.1 Fixed Assets
Schedule 1.1.4 Purchased Contracts
Schedule 5.7 Allocation of Purchase Price
Schedule 6.3 Seller Financial Statements
Schedule 6.7.1 Real Property -- Leased
Schedule 6.18 Employee Contract Form
Schedule 6.19 Insurance
Schedule 6.20 Licenses
Schedule 6.24 Shareholders
Schedule 6.27 Customer Relations
LIST OF EXHIBITS TO
ASSET PURCHASE AGREEMENT
Exhibit A -- Note in Principal Amount of $950,000 (Article II)
Exhibit B -- Note in Principal Amount of $100,000 (Article II)
Exhibit C -- Form of Guaranty
Exhibit D -- Form of Noncompetition and Confidentiality Agreement
(Section 5.6)
