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DOCUMENT BOOK ACQUISITION OF ROSSAR HR, LLC BY THE RESOURCING SOLUTIONS GROUP, INC.

Asset Purchase Agreement

DOCUMENT BOOK   ACQUISITION OF    ROSSAR HR, LLC   BY   THE RESOURCING SOLUTIONS GROUP, INC. | Document Parties: PACEL CORP | THE RESOURCING SOLUTIONS GROUP, INC. | ROSSAR HR, LLC You are currently viewing:
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PACEL CORP | THE RESOURCING SOLUTIONS GROUP, INC. | ROSSAR HR, LLC

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Title: DOCUMENT BOOK ACQUISITION OF ROSSAR HR, LLC BY THE RESOURCING SOLUTIONS GROUP, INC.
Governing Law: Pennsylvania     Date: 1/6/2005
Law Firm: President Law Offices of Brian Nugent, P.A.; Payroll Dept: HP Pavilion 7850 PC    

DOCUMENT BOOK   ACQUISITION OF    ROSSAR HR, LLC   BY   THE RESOURCING SOLUTIONS GROUP, INC., Parties: pacel corp , the resourcing solutions group  inc. , rossar hr  llc
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                                                                    Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

                                  DOCUMENT BOOK

 

 

                                 ACQUISITION OF

                                

                                  ROSSAR HR, LLC

 

                                       BY

 

                      THE RESOURCING SOLUTIONS GROUP, INC.

 

 

                               September 21, 2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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                                TABLE OF CONTENTS

Document Title                                                            Tab No.

--------------------------------------------------------------------------------

 

 

Asset Purchase Agreement.....................................................   1

 

Exhibits to Asset Purchase Agreement:

-------------------------------------

 

Exhibit 1.4 Management Agreement.............................................   2

 

Exhibit 3.2 Promissory Note..................................................   3

 

Exhibit 4.3(b) Bill of Sale and Assignment...................................   4

 

Exhibit 4.3(c) Unemployment Certificate......................................   5

 

Exhibit 4.4(c) Assumption Agreement..........................................   6

 

Exhibit 4.4(d) Employment Agreement..........................................   7

 

Certificate of Resolutions of Rossar HR, LLC.................................   8

 

Unanimous Consent of Rossar HR,LLC...........................................   9

 

Certificate of Resolutions of The Resourcing Solutions Group, Inc............ 10

 

Unanimous Consent of The Resourcing Solutions Group, Inc..................... 11

 

Schedules to Asset Purchase Agreement........................................ 12

-------------------------------------

 

        1.1(b)           Furniture, fixtures and equipment

        1.1(c)           Real Property Leases

        1.1(d)           Computer Hardware and Software

        1.1(e)           Licenses, Including Software

        1.1(g)           Trade Names and Trademarks

         1.1(h)           Non-workers Compensation Deposits

        1.1(j)           Cash and Cash Equivalent Exceptions

        3.3              Purchase Price Allocation

        5.3              Noncontravention Exceptions

        5.4              Encumbrances and Liens

        5.5              Personal Property

        5.6              Customer Agreements

        5.7              Customer List

        5.10             Sellers' Jurisdictions

        5.11             Governmental Approvals and Filings Exceptions

         5.13             Material Changes, Events and Developments

        7.6(g)(iii)      Bank Accounts

 

 

 

 

 

 

 

 

 

 

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                            ASSET PURCHASE AGREEMENT

 

                                     between

 

                                  ROSSAR HR, LLC

                                     Seller,

 

 

 

                   Marcia J. Sartori and William R. Sartori II

 

 

                                       and

 

 

 

                      THE RESOURCING SOLUTIONS GROUP, INC.

                                       Buyer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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         This ASSET PURCHASE AGREEMENT is entered into as of September 21, 2004

(the "Purchase Agreement") by and between THE RESOURCING SOLUTIONS GROUP, INC.,

a Nevada corporation ("Buyer"), and ROSSAR HR, LLC, a Pennsylvania limited

liability company ("Seller"), and Marcia J. Sartori and William R. Sartori II

("Owners").

 

                                   WITNESSETH:

 

         WHEREAS, Seller operates a professional employer services business in

Coraopolis, Pennsylvania (the business referred to as the "Purchased Business");

and

 

         WHEREAS, the parties desire that Seller transfers, conveys and assigns

to Buyer those certain assets, properties and rights of the Purchased Business

as a going concern; and that Buyer purchase and acquire the same, upon the terms

set forth below;

 

         WHEREAS, the Owners collectively own one hundred percent (100%) of the

membership interests of Seller, and have agreed as part of the sale of the

Purchased Business to certain restrictive covenants in Article VII;

 

         NOW, THEREFORE, in consideration of the premises and the mutual

representations, warranties, covenants and agreements set forth below, the

parties agree as follows:

 

 

                                     ARTICLE I

                TRANSFER OF PURCHASED ASSETS AND RELATED MATTERS

 

         1.1       PURCHASED ASSETS. On the terms and subject to the conditions

of this Agreement, Seller shall transfer, convey and assign to Buyer, and Buyer

shall purchase and acquire from Seller the following assets, properties and

rights of Seller, effective as of the date provided in the Bill of Sale and

Assignment attached hereto as Exhibit 4.3(b):

 

                  (a)       all customers of the Purchased Business as named and

         described in Schedule 5.7 attached hereto;

 

                  (b)       all furniture, fixtures, and equipment used in the

         Purchased Business as set forth in Schedule 1.1(b);

 

                  (c)       all real property leases as set forth in Schedule

         1.1(c) attached hereto;

 

                  (d)       all computer hardware and software used in the

         business, including, but not limited to Accountix PEO Pro as described

         in Schedule 1.1(d) attached hereto;

 

                  (e)       all licenses used in the Purchased Business,

         including, but not limited to, software licenses, as described, in

         Schedule 1.1(e) attached hereto;

 

                  (f)       all customer contracts of Seller as of the Closing

         Date as described in Schedule 5.6 attached hereto;

 

 

 

 

 

                                        1

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                  (g)       the Trade Names and Trademarks (including Service

         Marks) of Seller used in the Purchased Business as described on

         Schedule 1.1(g) attached hereto; and

 

                  (h)       all non-workers compensation deposits relating to the

         Purchased Business as described in Schedule 1.1(h) attached hereto

 

                  (i)       all records and files, including, but not limited to,

         property records, purchasing and sales records, correspondence with

         suppliers and customers (both actual and prospective), personnel

         records, mailing lists, customer and vendor lists and records used

         exclusively in the Purchased Business.

 

                  (j)       Unless specifically described in Schedule 1.1(j), all

         cash and cash equivalents generated from the operation of the Purchased

         Business (i.e. amounts invoiced to customers).

 

For convenience of reference, the assets, properties and rights to be

transferred, conveyed and assigned to Buyer hereunder, exclusive of the Excluded

Assets, are herein collectively called "Purchased Assets".

 

The parties agree and acknowledge that Buyer is purchasing substantially all of

the assets of Seller by way of this Purchase Agreement.

 

         1.2       EXCLUDED ASSETS. Anything contained in Section 1.1 hereof to

the contrary notwithstanding, there are expressly excluded from the assets,

properties and rights to be transferred, conveyed and assigned to Buyer all

assets of Seller except those specifically conveyed to the Buyer as provided in

Section 1.1 including, but not limited to the following:

 

                   (a)       all notes receivable; and

 

                  (b)       all corporate records, including, but not limited to,

         corporate minute books, accounting records, payroll records and tax

         returns, provided, however, Buyer shall have reasonable access to all

         such corporate records of Seller prior to and after the closing Date;

         all amounts received by Seller after the Closing in respect to services

         provided by Seller prior to Closing; and

 

                  (c)       all assets not specifically included as a Purchased

         Asset, including, but not limited to, leases for personal property and

         contracts for insurance and contracts for services not described in

         Schedules 5.6 and 1.1(c)

 

For convenience of reference, the assets, properties and rights which are not to

be transferred, conveyed and assigned to Buyer hereunder are herein collectively

called "Excluded Assets".

 

         1.3       PASSAGE OF TITLE AND RISK OF LOSS. Legal and equitable title

and risk of loss with respect to the Purchased Assets will not pass to Buyer, as

a result of this Agreement, until such assets are transferred on the Effective

Date.

 

         1.4       MANAGEMENT AGREEMENT. The Parties shall execute a Management

Agreement effective as of the Closing Date substantially in the form as in

Exhibit 1.4 attached hereto.

 

 

 

                                        2

<PAGE>

                                   ARTICLE II

                        ASSUMPTION OF CERTAIN LIABILITIES

 

         2.1       ASSUMED OBLIGATIONS. At the closing, Buyer will assume the

following liabilities and obligations, and only the following liabilities and

obligations, of Seller:

 

         The liabilities and obligations arising after the Effective Date under

         those contracts, licenses, leases, and other written agreements set

         forth on Schedules 1.1(c) and (e) and Schedule 5.6.

 

For convenience of reference, the liabilities and obligations being assumed by

Buyer as stated above are herein collectively called the "Assumed Obligations".

 

Buyer shall also have an option to assume any personal property leases relating

to the Purchased Business at any time prior to December 31, 2004. To exercise

such an option, Buyer shall notify Seller in writing of its intent to assume a

lease and describe the lease.

 

         2.2       EXCLUDED OBLIGATIONS. Any other provision of this Agreement to

the contrary notwithstanding, Buyer does not assume any liability or obligation

of Seller not included in the Assumed Obligations, and Schedules 1.1(c) and (e)

and Schedule 5.6, including, but not limited to, the following:

 

                  (a)       any liabilities and obligations of Seller for

         Federal, state or local taxes, fines, interest or penalties (including,

         without limitation, franchise, income, personal, real property, sales,

         use, unemployment, gross receipts, excise, payroll, withholding or

         other taxes);

 

                  (b)       any claims, demands, liabilities or obligations of

         any nature whatsoever which arose or were incurred at or before the

         Effective Date, or which are based on any event that occurred or

         existed at or before the Effective Date, or which are based on services

         performed by Seller at or before the Effective Date, irrespective of

         when a claim or demand is made (including if the claim is made after

         Effective Date) irrespective of whether the liability or obligation

         becomes manifest, after the Effective Date, and regardless of whether

         or not set forth or otherwise disclosed on any Schedule attached hereto

         (whether or not required to be so set forth or disclosed), including,

         but not limited to, that certain claim by Envirotrol;

 

                  (c)       any actions, suits, claims, investigations or legal,

         administrative or arbitration proceedings pending or threatened against

         Seller;

 

                  (d)       any liabilities and obligations of Seller for amounts

         owed to any person affiliated with Seller, in his or her capacity as an

         owner of Seller;

 

                  (e)       any liabilities and obligations of Seller existing at

         the Closing under an employment agreement, written or verbal, or

         relating to in any way wages, commissions, bonuses, fees, expenses,

         accrued holiday, vacation and severance pay;

 

 

 

 

 

                                        3

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                  (f)       any liabilities or obligations for payments due or

         required to be made under any health, dental, vision, pension,

         retirement, savings or other compensation or employee benefit plan

         maintained by Seller or any other entity;

 

                  (g)        any liabilities and obligations of Seller under any

         contract, license, lease or other agreement which is not listed on

         Schedules 1.1(b)-(e) or Schedule 6.6 attached hereto;

 

                  (h)       any liabilities relating in any way to an injury to

         an employee of Seller;

 

                  (i)       any liability to pay any amounts under a contract or

         policy of insurance; and

 

                  (j)       any other liabilities and obligations of Seller not

         being specifically assumed by Buyer pursuant to Section 2.1 above.

 

For convenience of reference, the liabilities and obligations of Seller not

being assumed by Buyer as aforesaid are collectively called the "Excluded

Obligations". Seller shall take any and all commercially reasonable actions

which may be necessary to prevent any person, firm or governmental authority

from having recourse against the Purchased Business, any of the Purchased Assets

or against Buyer with respect to any Excluded Obligations.

 

 

                                    ARTICLE III

                                 PURCHASE PRICE

 

         3.1       PURCHASE PRICE. The aggregate consideration (the "Purchase

Price") to be paid to Seller for the Purchased Assets is valued at $272,000, to

be paid in accordance with Section 3.2 below.

 

         3.2       PAYMENT OF PURCHASE PRICE. Unless otherwise stated below,

Buyer shall provide the following consideration to Seller for the Purchased

Assets on the Closing Date:

 

             Buyer will deliver to Marcia J. Sartori the following

 

             Promissory Note in the principal amount of $272,000 in the form as

             in Exhibit 3.2 attached hereto; and

 

         3.3       ALLOCATION. The Purchase Price will be allocated as set forth

on Schedule 3.3. The parties will use such allocation in reporting the

transaction for Federal and state tax purposes.

 

 

                               ARTICLE IV CLOSING

 

         4.1       CLOSING DATE. The closing for the consummation of the

transaction contemplated by this Agreement (the "Closing") will take place at

Pittsburgh, PA on September 2004, or on such other date and at such other time

or place as Buyer and Seller may mutually agree, but the

 

 

 

 

 

 

                                        4

<PAGE>

purchase, sale, and assignment of assets shall be effective as of 12:01 a.m. on

January 1, 2005 (the "Effective Date").

 

         4.2       SIMULTANEOUS ACTIONS. All actions to be taken and all

documents to be executed and delivered by the parties at the Closing will be

deemed to have been taken and executed simultaneously and no actions will be

deemed taken or any documents executed or delivered until all have been taken,

executed and delivered.

 

         4.3       DELIVERIES BY SELLER ON CLOSING DATE. On or before the Closing

Date, Seller will deliver to Buyer the following:

 

                  (a)       Closinq Certificate. An accurate certificate, dated

         the Closing Date, of Seller, satisfactory in form and substance to

         Buyer, certifying that:

 

                            (1)       the representations and warranties of Seller

                  contained in this Agreement are true and accurate on and as of

                  the Closing Date with the same force and effect as if made on

                  the Closing Date;

 

                           (2)       Seller has performed and complied with all

                  covenants, obligations and agreements to be performed or

                  complied with by them on or before the Closing Date pursuant

                   to this Agreement;

 

                           (3)       attached hereto are true and complete copies

                  of resolutions adopted by Seller' board of directors or

                  members, as applicable, approving this Agreement and the

                  transactions contemplated hereby; and

 

                           (4)       the incumbency and specimen signature of

                  each officer of Seller executing this Agreement and any other

                  document to be executed by Seller are as set forth in such

                  certificate; and

 

                  (b)       Instruments of Transfer. A duly executed bill of sale

         and general instrument of assignment, which bill of sale and assignment

         shall be in substantially the form of Exhibit 4.3(b) attached hereto.

 

                  (c)       Unemployment Certificate. Executed Certificate from

         Seller as required under Pennsylvania law stating that all unemployment

         contributions and obligations of Seller have been paid in full as of

         the Closing Date in substantially the form of Exhibit 4.3(c) attached

         hereto;

 

                  (d)       Employment Aqreement. A duly executed Employment

         Agreement by Marcia J. Sartori in the form of Exhibit 3.2 attached

         hereto; and

 

                  (e)       Management Agreement. A duly executed Management

         Agreement between Seller and Buyer in the form of Exhibit 1.4 attached

         hereto.

 

 

 

 

 

 

                                         5

<PAGE>

         4.4       DELIVERIES BY BUYER ON CLOSING DATE. On or before the Closing

Date, Buyer will have delivered to Seller the following:

 

                  (a)       Closing Certificate. An accurate certificate, dated

          the Closing Date, of a duly authorized officer of Buyer, satisfactory

         in form and substance to Seller, certifying that:

 

                           (1)       the representations and warranties of Buyer

                  contained in this Agreement are true and accurate on and as of

                  the Closing Date with the same force and effect as if made on

                  the Closing Date;

 

                           (2)       Buyer has performed and complied with all

                  covenants, obligations and agreements to be performed or

                  complied with by it on or before the Closing Date pursuant to

                  this Agreement;

 

                           (3)       attached hereto are true and complete copies

                   of resolutions adopted by Buyer's board of directors approving

                  this Agreement and the transactions contemplated hereby; and

 

                           (4)       the incumbency and specimen signature of

                  each officer of Buyer executing this Agreement and any other

                  document to be executed by Buyer are as set forth in such

                  certificate.

 

                  (b)       Delivery of Consideration. Buyer shall provide an

         executed Promissory Note as required by Section 3.2.

 

                  (c)       Assumption Agreement. A duly executed instrument of

         assumption whereby Buyer shall assume the Assumed Obligations as

         provided herein, which instrument of assumption shall be in

         substantially the form of Exhibit 4.4(c) attached hereto.

 

                  (d)       Employment Agreement. An Employment Agreement between

         Buyer and Marcia J. Sartori substantially in the form as set forth in

         Exhibit 4.4(d) attached hereto.

 

                  (e)       Life Insurance Policy. If Marcia J. Sartori is

         insurable with reasonable efforts, Buyer will purchase a level

         ten-year, term life insurance policy in the name of Marcia J. Sartori

          that will include a death benefit in an amount equal to $1,000,000 to a

         beneficiary of her choice. The Company will pay the annual premium for

         this policy in years 1-5. Marcia Sartori may elect to continue the

         policy beyond year five, but she will be solely responsible for paying

         the annual premium for years 6-10.

 

          4.5      POST-CLOSING DELIVERIES OF BUYER

 

                  Reaffirmation of Representations and Warranties. Buyer shall

provide representations and warranties as provided in Article VI herein that

shall be effective as of December 31, 2004.

 

 

 

 

 

 

 

                                        6

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                                    ARTICLE V

                    REPRESENTATIONS AND WARRANTIES OF SELLERS

 

         Seller represents and warrants to Buyer as follows:

 

         5.1       ORGANIZATIONAL MATTERS. Seller is a limited liability company

duly organized, validly existing and in good standing under the laws of the

Commonwealth of Pennsylvania.

 

          5.2       AUTHORITY. Seller has all requisite power and authority to:

own, lease and operate its respective properties; carry on the Purchased

Business as now being conducted; enter into this Agreement; perform its

respective obligations hereunder; and consummate the transactions contemplated

hereby. The execution, delivery and performance of this Agreement by Seller, and

the consummation of the transactions contemplated hereby, have been duly and

validly authorized by all necessary corporate action on the part of each of the

Seller. This Agreement has been duly and validly executed by each Seller, and is

a valid and binding obligation of each Seller, enforceable in accordance with

its terms.

 

         5.3       NON-CONTRAVENTION. Except as stated in Schedule 5.3, neither

the execution, delivery and performance of this Agreement by Seller, nor the

consummation by Seller of the transactions contemplated hereby nor compliance by

Seller with any of the provisions hereof will:

 

                  (a)       conflict with or result in a breach of any provision

         of, as applicable, the Articles of Organization or Operating Agreement

         of Seller;

 

                  (b)       as of the Closing Date, cause a default (or give rise

         to any right of termination, cancellation, or acceleration) under any

         of the terms of any note, bond, lease, mortgage, indenture, license,

         warranty or other instrument or agreement to which Seller is a party,

         or by which Seller or any of its assets are or may be bound or

         benefited; or

 

                  (c)       violate any law, statute, rule or regulation or

         order, writ, judgment, injunction or decree applicable to Seller or any

         of its respective assets.

 

No consent or approval by, or any notification or filing with, and no permit, or

authorization of, any public body or authority is required in connection with

the execution, delivery, and performance by Seller or the consummation by Seller

of the transactions contemplated by this Agreement.

 

         5.4       TITLE TO ASSETS.

 

                  (a)       Seller has good and marketable title to (or a valid

         leasehold interest in) all of the Purchased Business and each of the

         Purchased Assets, free and clear of all mortgages, liens, pledges,

         charges, security interests, rights of way, options, rights of first

         refusal, conditions, restrictions or encumbrances of any kind or

         character, whether or not relating to the extension of credit or the

         borrowing of money (collectively, "Encumbrances"), except for the

         Encumbrances set forth on Schedule 5.4, and liens for taxes and

         governmental charges incurred in the ordinary course of business for

         Seller's services not yet due and payable.

 

 

                                        7

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                  (b)       The Purchased Assets include all assets and

         properties and all rights that Seller believes are necessary to carry

         on the Purchased Business as presently conducted by Seller. Seller has

         complete and unrestricted power and the unqualified right to sell,

         convey, assign, transfer and deliver the Purchased Assets (subject to

         obtaining any consents or waivers of third parties disclosed on

         Schedule 5.4 and required in connection with such sale, conveyance,

         assignment, transfer and delivery of the Purchased Assets or any part

         thereof). The instruments of transfer, conveyance and assignment

         executed and delivered by Seller to Buyer at the Closing will be valid

         and binding obligations of Seller, enforceable in accordance with their

         respective terms, except in each case to the extent limited by

         application of general principles of equity and by bankruptcy,

         insolvency, debtor relief, and similar laws of general application

         affecting the enforcement of creditors' rights and debtors'

         obligations, and sufficient to transfer, convey and assign to Buyer all

         of Seller's interest in and to the Purchased Assets, and sufficient to

         vest in Buyer the full right, power and authority to conduct the

         Purchased Business as presently conducted.

 

         5.5       PERSONAL PROPERTY. Schedule 5.5 attached hereto contains a

summary and brief description of all material tangible personal properties and

assets of the Purchased Business. All such personal property is in good

operating condition and repair (excepting normal wear and tear), is adequate and

suitable for the uses for which intended by Seller in the ordinary course of the

Purchased Business, and there does not exist any condition which interferes in

any material way with the use or economic value thereof.

 

         5.6       AGREEMENTS. Schedule 5.6 attached hereto sets forth a true,

complete and correct list of all Customer Agreements to which and of the Seller

were a party as of the Closing Date.

 

         5.7       CUSTOMERS. Schedule 5.7 attached hereto contains a true and

complete list of the customers of the Purchased Business as of the Closing Date.

 

         5.8       BROKERS. Neither Seller, nor any of its officers, directors,

employees or members, has employed any broker or finder in connection with the

transactions contemplated by this Agreement. Seller shall indemnify, defend and

hold Buyer harmless from any and all claims or losses relating to brokerage

fees, commissions or finder's fees owed or claimed to be owed to any broker or

finder engaged or claimed to be engaged by Seller.

 

         5.9       BENEFIT PLANS/ERISA. Seller is not a party to, and is not a

sponsor, administrator or fiduciary of any employee benefit plan, including, but

not limited to, an employee benefit plan defined in Section 3(3) of the Employee

Retirement Income Security Act of 1974, as amended ("ERISA") which is maintained

or contributed to by the Company or any organization which is a member of a

controlled group of organizations within the meaning of Code Sections 414(b),

(c), (m) or (o) of which any of the Sellers is a member (the "Controlled Group")

or under which any of the Sellers or any member of the Controlled Group has any

liability or contingent liability ("Benefit Plans"), and which cover any

employee of the Seller.

 

         5.10      JURISDICTIONS. Seller are duly authorized, qualified, and if

required by state law, licensed to transact the Purchased Business in the states

listed on Schedule 5.10 attached

 

 

 

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hereto. Seller is current on all reports, fees, and licensing required by the

states listed on Schedule 5.10.

 

         5.11      GOVERNMENTAL APPROVALS AND FILINGS. Except as set forth in

Schedule 5.11, Seller has no Knowledge of any required consent, approval or

action of, filing with or notice to any Governmental or Regulatory Authority on

the part of the Seller is required in connection with the execution, delivery

and performance of this Agreement or any of the Related Agreements or the

consummation of the transactions contemplated hereby or thereby.

 

         5.12      ABSENCE OF CHANGES. Except for the execution and delivery of

this Agreement and the transactions to take place pursuant hereto on or prior to

the Closing Date, since August 30, 2004, and except as set forth in Schedule

5.13 and particular to the business that the Company is in (i.e. not involving

the general economy), there has not been any change, event or development which,

individually or together with other such events, could reasonably be expected to

have a Material Adverse Effect on the Seller or the Purchased Business. Without

limiting the foregoing, except as set forth in Schedule 5.13, there has not

occurred between August 30, 2004 and the Closing Date:

 

                  (a)       any physical damage, destruction or other casualty

         loss (not covered by insurance) affecting the Purchased Business in an

         amount exceeding $10,000 individually or $20,000 in the aggregate;

 

                  (b)       any write-off or write-down, or any determination to

         write off or write down in an amount exceeding $10,000 individually or

         $20,000 in the aggregate;

 

                  (c)       any re-negotiation of a service agreement between the

         Seller and a major customer or any monetary condition contained therein

         that would exceed $10,000;

 

                  (d)       any incurrence of a Lien (other than a Permitted

         Lien) in excess of $10,000 on any of the Company's property;

 

                  (e)       any (i) amendment of the organizational documents of

         the Seller, (ii) re-capitalization, reorganization, liquidation or

         dissolution of the Seller or (iii) merger or other business combination

         involving the Seller;

 

                  (f)       any entering into, or material amendment,

         modification, termination (partial or complete) or granting of a waiver

         under or giving any consent with respect to any Contract or any License

         that in the aggregate exceed $10,000;

 

                   (g)       any commencement or termination by the Seller of any

         line of business;

 

                  (h)       any other material transaction involving or

         development affecting the Purchased Business outside the ordinary

         course of business, consistent with past practice;

 

                  (i)       any entering into a Contract or committing to do or

         engage in any of the foregoing after the date hereof;

 

 

 

 

 

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                   (j)       any termination of a material service agreement

         between the Company and a client of the Seller;

 

                  (k)       a termination of an insurance contract or policy of

         the Seller that the Seller is unable to replace within a reasonable

         time; or

 

                  (l)       any distributions to equity holders of the Seller or

         any payments to employees in excess of such employees base compensation

         or to any other persons other than in the ordinary course of business.

 

         5.13      TAXES.

 

                  (a)       All Tax Returns required to be filed by or on behalf

         of the Seller have been duly filed on a timely basis and such Tax

         Returns are true, complete and correct. All Taxes owed by the, Seller

         have been paid in full (whether or not shown on or reportable on such

         Tax Returns).

 

                  (b)       All payroll taxes of the Seller have been paid and/or

         held in trust awaiting payment for all payroll processed by the Seller

         through the date of Closing.

 

                  (c)       None of the Purchased Assets is subject to any Lien

         arising in connection with any failure or alleged failure to pay any

         Tax.

 

          5.14      COMPLIANCE WITH LAWS AND ORDERS. Seller has not at any time

within the last five (5) years, received any notice of a violation of or in

default under any Law, assigned License or Order.

 

In the event that Seller fails to comply with any of the requirements of Article

V, Buyer, in its sole discretion, shall be entitled to terminate the Purchase

Agreement and all other agreements relating thereto, and/or offset any losses,

costs, expenses, and liabilities caused by such non-compliance from the

Promissory Note.

 

                                   ARTICLE VI

                     REPRESENTATIONS AND WARRANTIES OF BUYER

 

         Buyer hereby represents and warrants to Seller as follows:

 

         6.1       ORGANIZATIONAL MATTERS. Buyer is a corporation duly organized,

validly existing and in good standing under the laws of the State of Nevada.

 

         6.2       AUTHORITY. Buyer has all requisite corporate power and

authority to enter into this Agreement, to perform its obligations hereunder and

to consummate the transactions contemplated hereby. The execution, delivery and

performance of this Agreement and the consummation of the transactions

contemplated hereby, have been duly and validly authorized by all necessary

corporate action on the part of Buyer. This Agreement has been duly and validly

executed and delivered by Buyer, and is a valid and binding obligation of Buyer,

enforceable in accordance with its terms.

 

 

 

 

 

 

                                       10

<PAGE>

         6.3       NON-CONTRAVENTION. Neither the execution, delivery and

performance of this Agreement by Buyer, nor the consummation by Buyer of the

transactions contemplated hereby, nor compliance by Buyer with any of the

provisions hereof will:

 

                  (a)       conflict with or result in a breach of any provision

         of the Articles of Incorporation or Bylaws of Buyer;

 

                  (b)       cause a default (or give rise to any right of

         termination, cancellation or acceleration) under any of the terms of

         any agreement, instrument or obligation to which Buyer is a party, or

         by which any of its properties or assets may be bound, in each case

         excluding the Purchased Assets as to which no representation or

         warranty is made by Buyer; or

 

                  (c)       violate any statute, rule or regulation or judgment,

         order, writ, injunction or decree of any court, administrative agency

         or governmental body, in each case applicable to Buyer or any of its

          assets.

 

No consent or approval by, or any notification or filing with, and no permit, or

authorization of, any public body or authority is required in connection with

the execution, delivery, and performance by Buyer or the consummation by Buyer

of the transactions contemplated by this Agreement.

 

         6.4       BROKERS. Buyer has engaged Sugarhill Financial Services, LLP

("Sugarhill"), and agreed to pay a fee to Sugarhill upon the completion of the

transaction that is the subject of this Agreement. Neither Buyer nor its

officers, directors, employees or members, has employed any other broker or

finder in connection with the transactions contemplated by this Agreement. Buyer

shall indemnify, defend and hold Seller harmless from any and all claims or

losses relating to brokerage fees, commissions or finder's fees owed or claimed

to be owed to any broker or finder engaged or claimed to be engaged by Buyer.

 

 

                                   ARTICLE VII

                              COVENANTS OF SELLERS

 

           Seller hereby covenants and agrees with Buyer as follows:

 

         7.1       ACCESS TO PROPERTIES AND RECORDS. Seller will give to Buyer

and to its counsel, accountants, and other representatives reasonable access

during normal business hours to its properties, personnel, books, tax returns,

contracts, commitments and records and the right to make copies thereof. Seller

will furnish to Buyer and such representatives all such additional documents and

financial and other information concerning the Purchased Business as Buyer or

its representatives may from time to time reasonably request and permit Buyer

and such representatives to examine all records and working papers relating to

the preparation, review and audits of the financial statements and tax returns

relating to the Purchased Business.

 

         7.2       APPROVALS. Seller will use all reasonable effort to obtain in

writing prior to the Closing Date all approvals, consents and waivers required

to be obtained by Seller in order to

 

 

 

 

 

                                        11

<PAGE>

effectuate the transactions contemplated hereby, and Seller shall obtain all

such approvals, consents, and waivers prior to the Effective Date.

 

         7.3       FURTHER ASSURANCES. Seller will at any time and from time to

time after the Closing, upon the request of Buyer, do, execute, acknowledge and

deliver, and cause to be done, executed, acknowledged or delivered, all such

further acts, deeds, assignments, transfers, conveyances, powers of attorney or

assurances as may be required for the better transferring, assigning, conveying,

granting, assuring and confirming to Buyer, or for aiding and assisting in the

collection of or reducing to possession by Buyer, of the Purchased Assets, or to

vest in Buyer good, valid and marketable title to the Purchased Assets and

otherwise to consummate the transactions contemplated by this Agreement.

 

         7.4       RESTRICTIVE COVENANTS.

 

                  (a)       COVENANT NOT TO COMPETE. Seller, and its respective

          successors, assigns, affiliates, and subsidiaries, and Marcia J.

         Sartori, individually, and William R. Sartori II, individually, shall

         not, for a period of two years from the Closing Date, for any reason,

         directly or indirectly, engage in any business or venture that is

         similar to, or competes with, the business of Buyer within the

         Commonwealth of Pennsylvania, and the states of Maryland, Ohio, West

         Virginia, and any other state in which Seller conducted business prior

         to the Closing Date.

 

                  (b)       COVENANT NOT TO SOLICIT OR SELL TO CUSTOMERS. In

         addition to the restrictions described in paragraph 7.4(a), Seller and

         its successors, assigns, subsidiaries or affiliates, Marcia J. Sartori,

         individually, and William R. Sartori II, individually, shall not, for a

         period of two years from the Closing Date, for any reason, directly or

         indirectly, sell, offer or solicit Competitive Services, (as defined in

         paragraph 7.4 (d)), to any current or former customer, or prospective

         customer of the Seller, its subsidiaries, affiliates or franchisees,

         without the prior written consent of the Buyer.

 

                  (c)        COVENANT NOT TO INTERFERE. Seller and its successors,

         assigns, subsidiaries or affiliates, and Marcia J. Sartori,

         individually, and William R. Sartori II, individually, shall not,

         during the two year period immediately following the Closing Date, for

         any reason, employ or attempt to employ any employee of Buyer (as of

         the Closing Date) or any former employee of Seller, or otherwise

         encourage or attempt to encourage any such person to leave their

          respective employment.

 

                  (d)       DEFINITIONS. References to "former" customers shall

         mean a person that was a customer of the Seller during the twelve (12)

         month period prior to the Closing Date and references to "prospective"

         customers shall mean a person to whom the Seller has made a

         presentation within the twelve (12) month period prior to the Closing

         Date. The Term "Competitive Services" shall include employee leasing

         services, payroll outsourcing, human resources advice and outsourcing,

         temporary staffing services, "temp to hire" assignments, or what is

         commonly referred to as payrolling.

 

                  (e)       Divisibility OF COVENANT PERIOD. If any portion of

         the restrictive covenants contained herein is held to be unreasonable,

         arbitrary or against public policy, each covenant shall be considered

         divisible as to time, customer base and personnel,

 

                                        12

<PAGE>

         such that each month within the specified period shall be deemed a

         separate period of time, each customer shall be deemed a separate

         customer, resulting in an intended requirement that the duration of

         time and lesser time and largest lesser customer base and personnel

         base determined not to be unreasonable, arbitrary or against public

         policy shall remain effective and be specifically enforceable against

         the Seller.

 

                   (f)       COVENANT INDEPENDENT. Each restrictive covenant set

         forth in this Agreement shall be construed as a covenant independent of

         any other covenant or provision of this Agreement or any other

         agreement which the Seller or the Sartoris may have, whether fully

         performed or executory, and the existence of any claim or cause of

         action by the Seller against the Buyer, whether predicated upon another

         covenant or provision of this Agreement or otherwise, shall not

         constitute a defense to the enforcement by the Buyer of such

         restrictive covenant.

 

                  (g)       ASSIGNABILITY; SURVIVAL OF COVENANTS. All restrictive

         covenants contained in this Agreement shall be fully assignable to any

         successor or transferee of the Buyer with the written consent of the

         Seller, which consent shall not be unreasonably withheld.

         Notwithstanding this restriction on assignment, Buyer may assign the

         restrictive covenants contained herein to an affiliate of Buyer without

         the prior, written consent of any party to this Agreement. In the event

         of such an assignment, the parties agree and understand that the

         restrictive covenants shall be enforceable only to the extent as they

         would apply prior to any assignment.

 

In the event that Seller violates a restrictive covenant described in Section

7.4, Buyer must provide Seller with notice of such violation and give Seller a

10 day cure period which if not resolved after such cure period to the

satisfaction of Buyer, Buyer, in its sole discretion, shall be entitled to

terminate the Purchase Agreement and all other agreements relating thereto

and/or offset any losses, costs, expenses, and liabilities caused by such

non-compliance from the Promissory Note.

 

         7.5       CONDUCT AND TRANSACTIONS PRIOR TO THE EFFECTIVE DATE. From and

after the Closing Date until the Effective Date, except to the extent stated in

this Agreement or otherwise consented to in writing by Buyer:

 

                  (a)       In accordance with the terms and conditions of the

         Management Agreement, Seller will not manage the Purchased Business

         after the Closing Date. Seller also agrees not take any actions

         regarding the Purchased Business that would be contrary to the manner

         that Seller presently conducts the Purchased Business, or otherwise

         damaging to the Purchase Business. Seller agrees that it will not take

          or cause any action that would be harmful to the Purchased Business,

         including, but not limited to, any actions directed towards its

         employees, representatives and agents of the Purchased Business. Seller

         shall not take or omit to take any action which causes, or which is

         likely to cause, any deterioration of its present business or

         relationships with suppliers or customers.

 

                  (b)       Subject to the terms and conditions of the Management

          Agreement, Seller will maintain the Purchased Assets in substantially

         the same condition and repair as such properties and assets are

         maintained as of the date hereof, ordinary wear and

 

                                       13

<PAGE>

         tear excepted, and shall take all reasonable steps necessary to

         maintain and protect the Purchased Business.

 

                  (c)       Seller shall cooperate fully with Buyer to keep the

         Purchased Assets insured to the same extent as insured on the date

         hereof.

 

                  (d)       Seller shall not take any action or omit to take any

         action that could cause (with or without the giving of notice or the

         passage of time or both) the breach, default, acceleration, amendment,

         termination or waiver of or under the Purchase Agreement or the

         imposition of any lien, encumbrance, mortgage or other claim or charge

         against the Purchased Assets.

 

                  (e)       Seller will maintain its books, accounts and records

         in accordance with good business practice and generally accepted

         accounting principles consistently applied.

 

                  (f)       Seller shall not take any action that would cause its

         representations and warranties set forth herein not to be true and

         correct at and as of the Closing Date as if made at and as of such

         time.

 

                  (g)       Seller shall not do any of the following without the

          prior written, consent of the President of TRSG:

 

                           (1)       other than as approved by Buyer pursuant to

                  the Management Agreement, and for amounts due to Worksite

                  Employees by contract, make any distributions or payments to

                  any person of funds from the operations of the Purchased

                  Business;

 

                           (2)       Open or close any bank accounts relating to

                  the Purchased Business;

 

                           (3)       Withdraw any funds from any bank account

                  listed on Schedule 7.6(g)(iii) attached hereto;

 

                           (4)       Enter into a contract relating in any way to

                  the Purchased Business;

 

                           (5)       Hire any employee without the prior, written

                  approval of Gary Musselman, President of Buyer;

 

                           (6)       Other than as required to process and

                  deliver payroll to Worksite employees pursuant to a client

                  invoice for which the client has provided funds for such

                  payroll, transfer any funds from a bank account of the

                  Purchased Business, or Seller in any manner whatsoever,

                  including, but not limited to, via check, draft, money order,

                  wire, or ACH;

 

                  (h)       Seller shall continue to employ all employees who

         work at a client location who are subject to a written agreement

         between Seller and a client ("Worksite Employee"). Although Seller will

         outsource operational tasks to Buyer pursuant to the Management

         Agreement, Seller shall continue to be responsible to process the

         payroll of

 

                                       14

<PAGE>

        all Worksite Employees, collect and remit payroll taxes of the Worksite

        Employees, and comply with all terms and conditions of all client

        contracts, all subject to the terms and conditions of the Management

        Agreement; or

 

                  (i)       Cause or allow any of the Purchased Assets to become

         encumbered or subject to any lien or security interest of any kind.

 

In the event that Seller fails to comply with any of the requirements of Section

7.5, Buyer must provide Seller with notice of such violation and give Seller a

10 day cure period which if not resolved after such cure period, Buyer, in its

sole discretion, shall be entitled to terminate the Purchase Agreement and all

other agreements relating thereto and/or offset any losses, costs, expenses, and

liabilities caused by such non-compliance from the Promissory Note.

 

 

                                  ARTICLE VIII

                                COVENANTS OF BUYER

 

         8.1       CONFIDENTIALITY; RETURN OF DOCUMENTS. Unless and until the

transactions contemplated by this Agreement are consummated on the Closing Date

(or other date mutually agreed upon by the parties hereto), Buyer will keep in

confidence all proprietary and financial information of Seller including

information concerning its customers, and will not, except to the extent

required by law, financing and securities disclosure requirement or to the

extent any such information is otherwise publicly available or received from a

third party not affiliated with Seller, without the prior written consent of

Seller, reveal any such financial or proprietary information to any third party

other than affiliates or representatives of Buyer and potential lenders,

investors and other providers of funds each of whom shall agree to be bound by

the same restrictions with respect to confidentiality imposed on Buyer

hereunder. If the transactions contemplated by this Agreement are not

consummated, Buyer will return to Seller, at Seller' request, all documents

supplied to Buyer by Seller and notes derived therefrom, pursuant to the

provisions of this Agreement.

 

         8.2       FUNDING ADVANCES TO SELLER PRIOR TO EFFECTIVE DATE. In the

event that, based on the performance of the Purchased Business between the

Closing Date and the Effective Date, Seller experiences a net loss from

revenues, Buyer agrees to provide funds, the amount to be in the sole discretion

of Buyer, to cover any such losses.

 

 

                                   ARTICLE IX

                                 INDEMNIFICATION

 

         9.1       INDEMNIFICATION.

 

                  (a)       Seller Indemnity. Seller will indemnify, defend and

         save Buyer harmless from, against, for and in respect of the following:

 

                           (1)       any and all liabilities and obligations of

                  Seller (whether absolute, accrued, contingent or otherwise and

                  whether a contractual, tax or any other type

 

 

 

 

 

                                       15

<PAGE>

                  of liability, obligation or claim) not specifically assumed by

                  Buyer pursuant to this Agreement and the Assumption Agreement;

 

                           (2)        any damages, losses, obligations,

                  liabilities, claims, actions or causes of action sustained or

                  suffered by Buyer and arising from a breach of any material

                  representation or warranty of Seller contained in or made

                  pursuant to this Agreement (including the Schedules and

                  Exhibits attached hereto), or in any certificate, instrument

                  or agreement delivered by Seller pursuant hereto or in

                   connection with the transactions contemplated hereby;

 

                           (3)       any damages, losses, obligations,

                  liabilities, claims, actions or causes of action sustained or

                  suffered by Buyer and arising from a breach of any material

                  covenant or agreement of Seller contained in or made pursuant

                  to this Agreement; and

 

                           (4)       all reasonable costs and expenses

                  (including, without limitation, reasonable attorneys',

                  accountants', and other professional fees and expenses)

                  incurred by Buyer in connection with any action, suit,

                  proceeding, demand, investigation, assessment or judgment

                  incident to any of the matters indemnified against under this

                  Section 9.2(a).

 

                  (b)       Buyer's Indemnity. Buyer will indemnify, defend and

         save Seller harmless from, against, for and in respect of the

         following:

 

                           (1)       any liabilities or obligations of Seller

                  assumed by Buyer pursuant to this Agreement and the Assumption

                  Agreement;

 

                           (2)       any damages, losses, obligations,

                  liabilities, claims, actions or causes of action sustained or

                  suffered by Seller and arising from a breach of any

                  representation or warranty of Buyer contained in or made

                  pursuant to this Agreement or in any certificate, instrument

                  or agreement delivered by it pursuant hereto or in connection

                  with the transactions contemplated hereby;

 

                           (3)       any damages, losses, obligations,

                  liabilities, claims, actions or causes of action sustained or

                  suffered by Seller and arising from a breach of any covenant

                  or agreement of Buyer contained in or made pursuant to this

                  Agreement; and

 

                           (4)       all reasonable costs and expenses

                  (including, without limitation, reasonable attorneys',

                  accountants', and other professional fees and expenses)

                  incurred by Seller in connection with any action, suit,

                  proceeding, demand, investigation assessment or judgment

                  incident to any of the matters indemnified against under this

                   Section 9.2(b).

 

         9.2       THIRD PARTY Claims. With respect to claims resulting from

assertion of liability by third parties, the obligations and liabilities of the

party responsible for indemnification (the "Indemnifying Party") hereunder with

respect to indemnification claims by the party entitled to indemnification (the

"Indemnified Party") will be subject to the following terms and conditions:

 

                                       16

<PAGE>

                  (a)       The Indemnified Party will give prompt written notice

         to the Indemnifying Party of any assertion of liability by a third

         party which might give rise to a claim by the Indemnified Party against

         the Indemnifying Party based on the indemnity agreements contained in

         Section 9.2 hereof, stating the nature and basis of said assertion and

         the amount thereof, to the extent known.

 

                  (b)       If any action, suit or proceeding is brought against

         the Indemnified Party, with respect to which the Indemnifying Party may

         have liability under the indemnity agreement contained in Section 9.2

         hereof, the action, suit or proceeding will, upon the written agreement

         of the Indemnifying Party that it is obligated to indemnify under the

         indemnity agreement contained in Section 9.2 hereof, be defended

         (including all proceedings on appeal or for review which counsel for

         the defendant shall deem appropriate) by the Indemnifying Party at the

         expense of the Indemnifying Party. The Indemnified Party will have the

         right to select legal counsel in any such case, and the fees and

         expenses of such counsel will be at the expense of the Indemnifying

         Counsel. If the Indemnifying Party does not agree, promptly after the

         notice to it provided in subsection (a) above, that it is obligated to

         indemnify under the indemnity agreement contained in Section 9.2

         hereof, that such Indemnified Party reasonably concludes that such

         action, suit or proceeding involves to a significant extent matters

         beyond the scope of the indemnity agreement contained in Section 9.2

         hereof, or that there may be defenses available to it which are

         different from or additional to those available to the Indemnifying

         Party, the Indemnifying Party will not have the right to direct the

         defense of such action, suit or proceeding on behalf of the Indemnified

          Party and that portion of such fees and expenses reasonably related to

         matters covered by the indemnity agreement contained in Section 9.2

         hereof will be borne by the Indemnifying Party. The Indemnified Party

         will be kept fully informed of such action, suit or proceeding at all

         stages thereof whether or not it is so represented. The Indemnifying

         Party will make available to the Indemnified Party and its attorneys

         and accountants all books and records of the Indemnifying Party

         relating to such proceedings or litigation and the parties hereto agree

         to render to each other such assistance as they may reasonably require

         of each other in order to ensure the proper and adequate defense of any

         such action, suit or proceeding.

 

                  (c)       The Indemnifying Party will not make any settlement

         of any claims without the written consent of the Indemnified Party,

         provided, that if the Indemnified Party fails to consent to a

         settlement of any claim, demand, suit or cause of action described in

         this Section 9.3, the Indemnifying Party's obligation to indemnify an

         award of damages shall in no event exceed the amount that the

          Indemnifying Party would have been required to indemnify for had such

         settlement offer been accepted by the Indemnified Party.

 

 

                                    ARTICLE X

                                  MISCELLANEOUS

 

         10.1       EXPENSES; TRANSFER TAXES. All fees, costs and expenses

incurred by Seller in connection with, relating to or arising out of the

execution, delivery and performance of this Agreement and the consummation of

the transactions contemplated hereby, including, without limitation, legal and

accounting fees and expenses, will be borne by Seller. All fees and expenses

 

                                       17

<PAGE>

incurred by Buyer in connection with this Agreement will be borne by Buyer. All

registration, recording or transfer taxes which may be payable in connection

with the transactions contemplated by this Agreement will be paid by Buyer.

 

         10.2      PARTIES IN INTEREST. This Agreement is not assignable by

either Buyer or Seller without the prior written consent of the other, except

that without relieving Buyer of any of its obligations under this Agreement,

Buyer may assign this Agreement to any subsidiary or affiliate of Buyer. Subject

to the foregoing, this Agreement will be binding upon, inure to the benefit of,

and be enforceable by, the respective successors, heirs, legal representatives,

and assigns of the parties hereto. This Agreement constitutes an agreement among

the parties hereto and none of the agreements, covenants, representations or

warranties contained herein is for the benefit of any third party not a party to

this Agreement.

 

         10.3      ENTIRE AGREEMENT; AMENDMENTS. This Agreement (including the

Schedules and Exhibits attached hereto) contains the entire understanding of the

parties with respect to its subject matter. This Agreement supersedes all prior

agreements and understandings between the parties with respect to the subject

matter hereof. This Agreement may be amended only by a written instrument duly

executed by the parties, and any condition to a party's obligations hereunder

may only be waived in writing by such party.

 

         10.4      HEADINQS. The article and section headings contained in this

Agreement are for reference purposes only and will not affect in any way the

meaning or interpretation of this Agreement.

 

         10.5      NOTICES. All notices, claims, certificates, requests, demands

and other communications hereunder will be in writing and shall be deemed given

if delivered personally, if mailed (by registered or certified mail, return

receipt requested and postage prepaid), if sent by reputable overnight courier

service for next business day delivery, or if sent by facsimile transmission, as

follows:

 

 

IF TO SELLER:                                    WITH A COPY TO:             

Marcia J. Sartori                                Joseph F. Weis, Esq.        

YourStaff SolutionsTM 615 Fifth Avenue           Lynch Weis, LLC             

Suite 200                                        101 Smith Drive             

Coraopolis, PA 15108                             Cranberry Twp., PA 16066    

                                                                           

IF TO BUYER:                                     WITH COPY TO:               

Gary Musselman                                    Brian Nugent, Esq.          

Asmara Services II, In


 
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