AGREEMENT FOR PURCHASE AND SALE OF ASSETS

 

This Agreement for Purchase and Sale of Assets (the “Agreement”), dated
effective as of July 31, 2015 (the “Effective Date”), is by and among Labor
Smart Inc, a Nevada corporation whose mailing address is 3270 Florence Road,
Suite 200, Powder Springs, Georgia 30127 (“Seller”); Harris Ventures, Inc., a
Georgia corporation whose mailing address is 2650 Holcomb Bridge Road, Suite
630, Alpharetta, Georgia 30022, or its assigns (“Buyer”); and Christopher Ryan
Schadel, whose home address is 375 Pine Bluff Drive, Dallas, Georgia 30157
(“Schadel”).

 

BACKGROUND INFORMATION

Seller is engaged in the business of providing on-demand temporary personnel and
labor to small and large businesses in a variety of industries, including,
without limitation, construction, manufacturing, production, hospitality,
events, restoration, warehousing, retail, demolition and landscaping
(collectively, the “Business”). Buyer desires to purchase only certain assets
from Seller (the assets to be acquired being hereinafter referred to as the
“Purchased Assets”). Seller is willing to sell the Purchased Assets to Buyer,
but only upon the terms and conditions hereinafter set forth. Accordingly, in
consideration of the mutual agreements contained in this Agreement, Seller,
Buyer and Schadel hereby agree as follows.

OPERATIVE PROVISIONS

1.                  Agreement to Sell and Purchase. Seller operates its business
from approximately thirty (30) branch offices located throughout the United
States. Buyer is only interested in acquiring the branch offices located at the
addresses set forth in Schedule 1 attached hereto (the “Branch Offices”).
Subject to the terms and conditions of this Agreement, at the closing referred
to in Section 2 hereof, Buyer shall acquire the Purchased Assets. The Purchased
Assets shall include only the following assets of Seller and shall not include
any accounts receivable of Seller:

a.                   Customer Lists. All right, title and interest of Seller in
and to the customer lists for each of the Branch Offices, the telephone and
facsimile numbers for each of the Branch Offices, the trade secrets and other
proprietary information of such Branch Offices (excluding all tradenames,
trademarks and service marks (and all applications therefor)) owned by Seller or
used in or necessary for the operation of the Business and any other assets
listed on Schedule 1(a) hereto (collectively, the “Proprietary Rights”);

b.                  Leases and Contracts. All right, title and interest of
Seller in and to certain leases for real or personal property, contracts
(expressly including unfilled purchase and sale orders and all rights under any
non-competition, non-solicitation or non-disclosure agreements or other
arrangements in favor of Seller), commitments, arrangements and understandings,
written or oral, pertaining to the operation of the Business at the Branch
Offices, listed or described on Schedule 1(b) hereto (collectively, the
“Contracts”);

c.                   Fixed Assets. All vans, vehicles, equipment, furniture,
fixtures, computer hardware, computer software and all other tangible personal
property of every kind and nature owned by Seller or used in or necessary for
the operation of the Business at the Branch Offices, including, but not limited
to, those assets listed on Schedule 1(c) hereto (collectively, the “Fixed
Assets”); and

d.                  Business Records. All files, correspondence, invoices and
other business records used in or necessary for the operation of the Business at
the Branch Offices, including, but not

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limited to, price lists, sales records, sales correspondence, credit records,
purchase orders and sales orders.

2.                  Closing. The consummation of the transactions contemplated
by this Agreement shall take place at a closing (the “Closing”) to be held at
10:00 am on August 8, 2015 (the “Closing Date”) at the offices of Buyer or at
such other time, date or place as the parties hereto may mutually agree. The
Closing may take place remotely, by exchange of documents and signatures by
email and overnight mail, as counsel to the parties may agree. At the Closing,
Seller shall deliver to Buyer such conveyances, bills of sale, assignments,
agreements and other documents, in form and substance satisfactory to Buyer’s
counsel, as may be reasonably requested by Buyer’s counsel to effect the sale
and transfer of the Purchased Assets and to consummate the transactions
contemplated by this Agreement and shall make such other deliveries specified in
or contemplated by this Agreement. When all such deliveries have been completed,
Buyer shall deliver to Seller a cashier’s check in accordance with Section 3
hereof.

3.               Purchase Price and Payment. The purchase price to be paid by
Buyer to Seller in exchange for Buyer’s acquisition of the Purchased Assets
shall equal One Million Twenty-Five Thousand Dollars ($1,025,000.00) (the
“Purchase Price”) and shall be paid as follows: (a) One Hundred Thirty-Five
Thousand Dollars ($135,000.00) on the Effective Date; and (b) Eight Hundred
Ninety Thousand Dollars ($890,000.00) on August 12, 2015. The parties have
agreed to allocate the Purchase Price in the manner set forth on Schedule 3
attached hereto.

 

4.               No Assumption of Liabilities. Buyer shall not assume or be
responsible for any liability or obligation of Seller, including, but not
limited to, any payroll tax obligations or federal tax obligations of Seller.

 

5.               Representations and Warranties by Seller and Schadel. To induce
Buyer to enter into this Agreement, Seller and Schadel, jointly and severally,
represent and warrant as follows:

 

a.                   Organization and Standing of Seller. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada and has all requisite power and authority to own, operate
and lease its properties and to carry on the Business as now being conducted.
Seller has the power to sell, assign, transfer, convey and deliver the Purchased
Assets as contemplated by this Agreement.

 

b.                  Authorization. The execution, delivery and performance of
this Agreement by Seller and its consummation of the transactions contemplated
hereby have been duly authorized by Seller and Schadel, which authorization and
approval constitute all authorization necessary on the part of Seller. This
Agreement constitutes the legal, valid and binding obligation of Seller and
Schadel, enforceable in accordance with its terms.

 

c. Contracts. In connection with its operations of the Branch Offices, Seller
does not have any Contracts, except those listed and described in Schedule 1(b),
all of which were made in the usual and ordinary course of business. Seller has
delivered to Buyer correct and complete copies of all of the Contracts that are
in written form, and Schedule 1(b) contains a correct and complete description
of any Contracts that are not in written form. Seller has fulfilled, or taken
all action necessary to enable it to fulfill when due, all material obligations
under the Contracts. There has not occurred any material breach or default, or
any event which with the lapse of time or the election of any person, or both,
will become a material breach or default, under any Contract, and all Contracts
are legal, valid and binding and in full force and effect. Seller has no
unfilled customer sales orders for the Branch Offices, other than those set
forth on Schedule 1(b).

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d.                  Financial Statements. Seller has delivered to Buyer: (i) its
unaudited statement of operations for each of the Branch Offices for the six (6)
month period ending June 30, 2015; and (ii) its unaudited statement of
operations for the fiscal years ending December 31, 2014 and December 31, 2013,
copies of which are attached hereto as Schedule 5(d). Such financial statements
and notes fairly present the results of operations of the Branch Offices of
Seller for the periods referred to in such financial statements, all in
accordance with generally accepted accounting principles, subject, in the case
of interim financial statements, to normal recurring year-end adjustments (the
effect of which will not, individually or in the aggregate, be materially
adverse) and the absence of notes (that, if presented, would not differ
materially from those included in the annual statements).

e.                   Intentionally Omitted.

f.                   Pricing and Operating Information. Seller has delivered to
Buyer certain financial and operating information concerning the Business at the
Branch Offices, including, but not limited to, its standard costs for providing
its services, copies of which are attached hereto as Schedule 5(f). Current
average selling prices for its services, together with a gross profit schedule
detailing sales and overhead expenses, realized by Seller within its fiscal year
ending December 31, 2014 and the six (6) month period ending June 30, 2015, with
such results having been allocated as accurately as practicable on the basis of
currently available information, are attached hereto as Schedule 5(f). Such
pricing and operating information is, to the best knowledge of Seller and
Schadel, correct and complete in all material respects.

g.                   No Material Change in Business. Since December 31, 2014,
the Business at the Branch Offices has been operated in the ordinary course and
there has been no material adverse change in, or event or state of facts which
has affected or may affect, materially and adversely, the condition (financial
or otherwise) of the assets, liabilities, earnings or operations of the Business
at the Branch Offices.

h.                  Litigation. Except as disclosed on Schedule 5(h) hereto,
there are no claims, actions, suits, proceedings or investigations pending or,
to the best knowledge of Seller and Schadel, threatened against or affecting
Seller, the Business, the Branch Offices or Schadel before any foreign, federal,
state, local or other governmental authority or agency. Neither Seller nor
Schadel is in violation of any order or judgment of any court or governmental
authority with respect to the Business or the Branch Offices, and there is no
order, decree or judgment of any kind in existence enjoining or restraining
Seller or any of its officers, shareholders or employees from taking any action
of any kind with respect to the Business or the Branch Offices or requiring
Seller or any of its officers, shareholders or employees to take any action of
any kind with respect to the Business or the Branch Offices.

i.                    Intentionally Omitted.

j.                    Condition of Assets; Maintenance; Title. The Fixed Assets
have been maintained in good condition and repair, subject to normal wear and
tear which does not materially adversely affect their use in the operation of
the Branch Offices, and are suitable for their intended uses. Except as set
forth on Schedule 5(j), Seller has good and marketable title to all of the
Purchased Assets, including, but not limited to, the Proprietary Rights, the
Contracts and the Fixed Assets, free and clear of all liens, assignments,
security interests, claims, mortgages, encumbrances or charges of any kind or
nature (collectively, the “Liens”). Buyer will acquire good and marketable title
to all of the Purchased Assets free and clear of all Liens.

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k.                  Infringement. Seller is the sole and exclusive owner of, and
has the sole exclusive right to use, all Proprietary Rights used in or necessary
for the operation of the Business at the Branch Offices, all of which are listed
on Schedule 1(a) hereto. The Proprietary Rights are valid and enforceable and
are free and clear of any liens, charges, encumbrances or claims of any nature.
None of the Proprietary Rights nor the operation of the Business infringes upon
the proprietary rights of others, and no claims of such infringement have been
made or are pending, and there is no basis for any such claims.

l.                    Customers. Set forth on Schedule 5(l) hereto is a complete
customer list, showing past and current customers of Seller at the Branch
Offices, the dollar volume of business done with each customer (for the fiscal
years ending December 31, 2013 and December 31, 2014 and the six (6) month
period ending June 30, 2015) and the name and contact information for the person
with whom Seller did business with for each of the customers.

m.                Employees. Set forth on Schedule 5(m) is a complete list of
each employee at the Branch Offices during 2014 and 2015, together with such
employee’s (i) name, (ii) job title, (iii) date of commencement of employment or
engagement, (iv) current compensation paid or payable and any change in
compensation since January 1, 2014, (v) sick or vacation leave that is accrued
but unused, and (vi) whether or not such employee is party to a non-competition,
non-solicitation or non-disclosure agreement or arrangement. Each employee of
each Branch Office is a citizen of the United States or is otherwise authorized
to work in the United States.

n.                  Absence of Undisclosed Liabilities. Except as set forth on
Schedule 5(n), Seller has no liabilities or obligations of any nature, whether
accrued, absolute, contingent or otherwise, that would impact the Branch
Offices, and neither Seller nor Schadel knows or has any reason to know of any
basis for the assertion of any such liability or obligation.

o.                  Disclosure. Neither this Agreement, nor any other document,
certificate or statement furnished to Buyer by or on behalf of Seller or Schadel
in connection with the transactions contemplated hereby, within the actual
knowledge of Seller or Schadel, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading; and there is no fact which
materially adversely affects, or in the future may (so far as Seller or Schadel
can now reasonably foresee) materially adversely affect the assets, business,
operations or prospects of Seller which has not been set forth herein or in a
schedule or statement furnished to Buyer.

6.                  Further Assurances. Seller and Schadel agree that, at any
time and from time to time after the Closing Date, they will execute and deliver
to Buyer such further conveyances, assignments and other written assurances as
Buyer may reasonably request in order to vest and confirm in Buyer, or its
assignee, title to the Purchased Assets to be transferred, assigned and conveyed
hereunder. Following the Closing Date, Seller will provide without charge such
explanations, descriptions and general information as Buyer may reasonably
request with respect to the Purchased Assets.

7.                  Access to Books and Records; Future Litigation. Without the
written consent of Buyer, on the one hand, or Seller and Schadel, on the other
hand, for a period of five (5) years from the Closing Date, Seller or Buyer,
respectively, will not destroy or otherwise dispose of any records relating to
the Purchased Assets without first advising the other party(ies) hereto and
offering to surrender them to such other party(ies), and Buyer, Seller and
Schadel shall each have reasonable access to such records during normal business
hours for any proper purpose.

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8.                  Covenant Not to Compete. Seller and each of its affiliates
agree that, for a period of five (5) years after the Closing (except for any
Branch Office located in South Carolina, in which case the restrictive period
shall be three (3) years), neither it nor any of its affiliates will, directly
or indirectly, own, manage, operate or control, or participate in the ownership,
management, operation or control of, or become associated as an employee,
director, manager, officer, advisor, agent, consultant, principal, partner,
shareholder, member, independent contractor with or lender to, any person or
entity engaged in or aiding others to engage in the Business located or
operating anywhere within a forty (40) mile radius of any Branch Office. The
parties hereto specifically acknowledge and agree that this covenant shall be
construed as an agreement independent of any other provision herein and further
agree that the remedy at law for any breach of the foregoing will be inadequate
and that Buyer, in addition to any other relief available to it, shall be
entitled to temporary and permanent injunctive relief without the necessity of
proving actual damage. In the event that any portion of the covenants contained
in this Section 8 or in Section 9 are held by a court of law to be unenforceable
with respect either to its duration, geographical area, customer base or
employee base, for whatever reason, it shall be considered divisible both as to
time, geographical area, customer base and employee base, so that each month of
the specified period shall be deemed a separate period of time, each state
within the defined area a separate geographical area, and each employee and
customer a separate person, resulting in an intended requirement that the
longest lesser period of time, largest lesser geographical area and largest
lesser customer and employee base found by such court to be a reasonable
restriction shall remain an effective restrictive covenant, specifically
enforceable against Seller.

9.                  Prohibited Activities. Seller developed trade secrets and
other confidential information which Seller is selling to Buyer. Seller
acknowledges that such trade secrets and other confidential information have
been and will be of central importance to the business of Buyer and that
disclosure of it to, or its use by, others could cause substantial loss to
Buyer. Seller also recognizes that Buyer acquired Seller’s goodwill at the
Branch Offices and that there is a danger that this goodwill, a proprietary
asset of Buyer, could be damaged by Seller. Accordingly, Seller agrees as
follows:

a.                   Non-Solicitation of Customers and Employees. Seller and
each of its affiliates will not, at any time during the five (5) year period
following the Closing Date (except for any Branch Office located in South
Carolina, in which case the restrictive period shall be three (3) years),
directly or indirectly: (i) solicit for employment, employ or be involved with
the employment of any person who, at the time of such solicitation or
employment, is employed, or was employed within the preceding twelve (12)
months, by Buyer or any affiliate thereof at any of the Branch Offices; (ii)
whether for its own account or for the account of any other person, solicit,
divert or endeavor to entice away from Buyer or any affiliate thereof, or
otherwise engage in any activity intended to terminate, disrupt or interfere
with, Buyer’s or any of its affiliate’s relationships with clients at the Branch
Offices or otherwise adversely affect Buyer’s or any of its affiliate’s
relationships with clients at the Branch Offices or other business relationships
of Buyer or any affiliate thereof at the Branch Offices; or (iii) publish or
make any statement critical of Buyer, or its affiliates, or any of their
respective employees, agents, consultants, owners or shareholders, or in any way
adversely affect or otherwise malign the business or reputation of any of the
foregoing persons.

b.                  Unauthorized Disclosure. Seller agrees that it will keep
Buyer’s trade secrets and other confidential information confidential and will
not disclose or furnish to any other person or, directly or indirectly, use for
its own account or the account of any other person, any trade secrets and other
confidential information, no matter from where or in what manner it may have
acquired such trade secrets and other confidential information, and Seller shall
retain all such trade secrets and other confidential information in trust for
the benefit of Buyer. This confidentiality covenant has no geographical or
territorial restriction.

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10.              Non-Solicitation by Buyer. Buyer agrees that Buyer will not
solicit any customer set forth on Schedule 5(l) attached hereto in any area
located outside the forty (40) mile radius of any Branch Office provided that
such customer is not or was not a customer of Buyer prior to the Effective Date.

11.Deliverables.

a.                   Bill of Sale. At the Closing, Seller shall deliver or
caused to be delivered to Buyer a bill of sale and assignment in the form
attached hereto as Schedule 11(a), pursuant to which Seller has transferred and
assigned the Purchased Assets, duly executed by Seller.

b.                  Releases. At the Closing, Seller shall deliver or caused to
be delivered to Buyer written evidence of release of all Liens in and upon any
of the Purchased Assets, including, without limitation, any and all Liens held
by Transfac Capital, Inc, and/or its assignee, and the Internal Revenue Service.
Payment of the Purchase Price by Buyer to Seller shall constitute
acknowledgement by Buyer that the requirements of this Section 11(b) have been
satisfied.

c.                   Execution of Subleases. At the Closing, Seller shall
deliver or caused to be delivered to Buyer a sublease agreement in form and
substance acceptable to Buyer in its sole and absolute discretion for the Branch
Offices located in Augusta, Georgia; Charleston, South Carolina; Columbia, South
Carolina; and Greenville, South Carolina.

d.                  Confidentiality, Non-Solicitation and Non-Competition
Agreements. At the Closing, Seller shall deliver or caused to be delivered to
Buyer a confidentiality, non-solicitation and non-competition agreement in the
form attached hereto as Schedule 11(d) executed by Schadel and Jim Sawyer.

e.                   Closing Certificate. At the Closing, Seller shall deliver
to Buyer a certificate, dated the Closing Date and signed by Seller, stating
that the representations and warranties of Seller in this Agreement are true in
all material respects at and as of the Closing Date as though such
representations and warranties had been made at and as of the Closing Date, and
that Seller has performed in all material respects all covenants and agreements
on its part required to be performed, and Seller is not in default under any
provision of this Agreement.

12.Indemnification.

a.                   General Indemnification. Subject to the terms and
conditions of Section 12(b) below, Seller and Schadel, jointly and severally,
shall indemnify, defend and hold Buyer (and any successor in interest) harmless
against and in respect of all actions, suits, losses, liabilities, damages,
deficiencies, claims, demands, costs and expenses (including attorneys’ fees and
costs of investigation) which may arise after the Closing out of (i) the failure
of any representation or warranty of Seller or Schadel contained in this
Agreement or any document related to the transactions contemplated by this
Agreement to be true and correct when made or deemed made under the terms
hereof; (ii) the breach of any covenant or agreement of Seller or Schadel
contained in this Agreement or any document related to the transactions
contemplated by this Agreement; (iii) any asset not included in the Purchased
Assets; (iv) any liability of Seller or Schadel; or (v) any claim, liability or
obligation based upon, resulting from, relating to or arising out of the
Business, operations, properties, assets or obligations of Seller conducted,
existing or arising on or prior to the Closing Date. Interest on any
indemnification payment shall accrue at an annual rate of twelve percent (12%)
from the date such loss, liability, damage or expense is paid by Buyer to the
date of its satisfaction by the indemnifying party. The indemnification provided
for in this Section 12 is in addition to any other right, remedy or power herein

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specifically granted and now or hereafter existing in equity, at law, by virtue
of statute, by agreement or otherwise.

b.                  Conditions of Indemnification. With respect to any actual or
potential claim, any written demand, the commencement of any action or
occurrence of any other event which involves any matter or related series of
matters against which Buyer is indemnified by Seller and Schadel (each a
“Claim”):

1.                  Within thirty (30) days (or such longer period as shall not
materially prejudice the rights of Seller and Schadel) after any of Buyer’s
executive officers first receives a written document presenting a Claim, or, if
such Claim does not involve a third party Claim, after any of Buyer’s executive
officers first has actual knowledge of such Claim, Buyer shall give notice to
Seller and Schadel of such Claim, stating in reasonable detail the amount
involved, if known, together with a copy of any written documentation furnished
to Buyer.

2.                  If the Claim involves a third party Claim, then Seller and
Schadel shall have the right, at their expense and ultimate liability,
regardless of the outcome, to engage counsel of their choice (subject to the
right of Buyer to review each such choice and, if dissatisfied for substantive
reasons, to require Seller and Schadel to seek alternative counsel), to
litigate, defend, settle or otherwise attempt to resolve such Claim, except that
Buyer may fully participate, at Buyer’s own cost, in such defense, settlement or
other resolution. Buyer, Seller and Schadel will fully cooperate with each other
and their respective counsel, as applicable, in connection with any such
litigation, defense, settlement or other resolution.

13.              Survival of Warranties. All representations and warranties in
this Agreement shall survive for a period of three (3) years following the
Closing Date, notwithstanding any investigation by or on behalf of any party.

14.              Brokerage Fees. Neither Seller, Schadel nor Buyer retained a
broker in connection with the sale of the Purchased Assets to Buyer. Seller and
Schadel will indemnify and hold Buyer harmless from any claim made by a broker
claiming that it is owed a commission from Buyer as a result of the transactions
contemplated by this Agreement.

15.              Right of First Refusal. Seller grants Buyer a right of first
refusal to purchase the other branch offices of Seller and/or any of its
affiliates, except for those branch offices located in Tulsa, Oklahoma and
Indianapolis, Indiana (the “Other Branch Offices”).  Seller shall not sell,
assign or otherwise transfer any of the Other Branch Offices or any interest
therein or agree to do so, unless (i) Seller shall provide written notice to
Buyer of Seller’s intention to sell, assign or otherwise transfer such Other
Branch Office accompanied by a genuine written summary of the terms and
conditions (the “Term Sheet”) pursuant to which such sale, assignment or
transfer is to occur, (ii) Buyer fails, within three (3) business days of
Buyer’s receipt of the notice described in clause (i) above, to give written
notice (the “Purchase Notice”) to Seller that Buyer agrees to purchase such
Other Branch Office at the same price and on the same terms and conditions as
are set forth in the Term Sheet, and (iii) provided Buyer fails to exercise
Buyer’s right of first refusal as described in clause (ii) above, such Other
Branch Office is sold, assigned or transferred in conformity with the terms of
the Term Sheet without change in price, terms of payment, nature of
consideration or description of property to be sold, assigned or transferred. 
In the event Buyer exercises its right of first refusal set forth in this
Section 15, the closing of the sale and purchase of the Other Branch Office
shall occur within thirty (30) days after the date of the Purchase Notice. For
purposes of this Section 15, if Seller is an entity or the Other Branch Office
is owned by an

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affiliated entity of Seller, then the prohibition on the sale, transfer or
assignment of the Other Branch Office shall also apply to the equity interests
of Seller or such affiliate (i.e., the owners of Seller or such affiliate, as
applicable, holding any equity interest in Seller or such affiliate, as
applicable, cannot transfer any such equity interest, nor can Seller or such
affiliate, as applicable, issue additional equity interests, without first
complying with the terms of this Section 15).

16.              Accounts Receivable. From and after the Closing, if Buyer or
any of its affiliates receives or collects mail or any funds relating to any
accounts receivable of Seller related to the Branch Offices, Buyer or its
affiliate shall remit such mail or funds to Seller promptly after its receipt
thereof.

17.              Preservation of Books and Records. After the Closing Date,
Buyer shall preserve and retain the corporate, accounting, legal, auditing, tax
and other books and records of the Branch Offices acquired by Buyer pursuant to
the terms of this Agreement and make such books and records available to Seller
and its officers, employees and agents upon reasonable notice and at reasonable
times, it being understood that Seller shall be entitled to make copies of any
books and records transferred to Buyer pursuant to the terms of this Agreement.
Notwithstanding the foregoing, nothing herein shall preclude Buyer from
destroying the books and records acquired pursuant to the terms of this
Agreement in accordance with Buyer’s record retention policies, and under no
circumstance will Buyer have any liability to Seller for any breach of Buyer’s
obligations under this Section 17.

18.              Prorations. If applicable, any tangible personal property
taxes, assessments and any pre-paid expenses for the year in which the Closing
occurs shall be pro-rated or reimbursed between Seller and Buyer as of the
Closing Date. If the amount of such taxes and assessments for the current year
cannot be ascertained, rates, millages and assessed valuations of the previous
year, with known changes, shall be used and such taxes and assessments shall be
re-prorated and readjusted upon the request of either party after the tax bill
for the year of Closing is received. All charges for utilities, telephone and
other similar expenses shall be prorated between the Seller and Buyer as of
Closing.

19.Miscellaneous.

a. Correspondence. Seller authorizes and empowers Buyer after the Closing: (i)
to open all mail and other communications addressed to the Business which are
received by Buyer and (ii) to deal with the contents of such communications in a
proper manner. Seller will promptly deliver to Buyer the original of any mail or
other communication received by Seller pertaining to the operations of the
Business after the Closing Date or the Purchased Assets and any monies, checks
or other instruments of payment to which Buyer is entitled. Buyer will promptly
deliver to Seller the original of any mail or other communication received by
Buyer pertaining to the operation of the Business prior to the Closing Date and
any monies, checks or other instruments of payment to which Seller is entitled.

b. Assignability. Seller and Schadel may not assign this Agreement nor may they
assign any rights that they have to amounts due under this Agreement or any
other agreement referenced herein. Conversely, this Agreement shall be
assignable by Buyer without the prior written consent of Seller or Schadel,
including, without limitation, any and all restrictive covenants contained
herein. Seller and Schadel acknowledge and expressly agree that all aspects of
this Agreement may be assigned by Buyer without its or his consent, and Seller
and Schadel agree to be bound by the terms of this Agreement, including, but not
limited to, the restrictive covenants contained herein on non-competition. This
Agreement shall inure to the benefit of and be enforceable by the successors and
assigns of Buyer, including any successor or assign to all or substantially all
of the business and/or assets of Buyer, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock or otherwise.

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c. Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing (including facsimile
transmission or similar writing) addressed:

If to Buyer to:

The address set forth for Buyer in the preamble to this Agreement.

with a copy to:

Joseph A. Probasco

Bush Ross, P.A.

1801 North Highland Avenue

Tampa, Florida 33602

Telecopier No. (813) 223-9620

E-Mail: jprobasco@bushross.com

 

If to Seller or Schadel to:

The address set forth for Seller or Schadel in the preamble to this Agreement.

Each notice, request, demand or other communication shall be effective and
deemed to have been received (i) if given by facsimile, when such facsimile is
transmitted to the facsimile number specified above and confirmation is
received, (ii) if given by mail, the earlier of actual receipt or seventy-two
(72) hours after such communication is deposited in the mails with registered
first class postage prepaid, addressed as aforesaid, (iii) if given by an
overnight courier service of national recognition, the business day following
the business day of deposit with such service, together with a proper airbill
affixed, addressed as aforesaid and shipping charges prepaid or prearranged, or
(iv) if given by any other means, when delivered to the aforesaid address.
Either party may change the address to which notices are to be delivered to it
by giving written notice of such other address to the other party.

d. Severability; Amendments; Captions. The invalidity or unenforceability of any
provision herein shall not offset the validity or enforceability of any other
provision hereof. This Agreement shall not be modified, amended or terminated
except by written agreement of both parties. Captions appearing in this
Agreement are for convenience only and shall not be deemed to explain, limit or
amplify the provisions hereof.

e. Application of Georgia Law; Venue. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of Georgia. Venue for any legal action which may be brought
thereunder shall be deemed to lie in Atlanta, Georgia.

f. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

g. Legal Fees. If a legal action is initiated by any party to this Agreement
against another, arising out of or relating to the alleged performance or
non-performance of any right or obligation established hereunder, or any dispute
concerning the same, any and all fees, costs and

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expenses reasonably incurred by each successful party or his or its legal
counsel in investigating, preparing for, prosecuting, defending against, or
providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of and shall be paid
or reimbursed by the unsuccessful party.

h. Jurisdiction. Seller and Schadel irrevocably (i) submit to the exclusive
jurisdiction of  the state and federal courts within Atlanta, Georgia for the
purpose of any suit, action or other proceeding arising out of this Agreement or
any of the agreements or transactions contemplated hereby (each, a
“Proceeding”), (ii) agree that all claims in respect of any Proceeding shall
only be heard and determined in any such court, (iii) waive, to the fullest
extent permitted by law, any  right to challenge the jurisdiction of any such
court or from any legal process therein, (iv) agree not to commence any
Proceeding other than in such courts, and (v) waive, to the fullest extent
permitted by law, any claim that such Proceeding is brought in an inconvenient
forum. 

i. Definition. The term “affiliate”, when used in this Agreement means, as to
any specified person, any other person that directly or indirectly controls, or
is under common control with, or is controlled by, such specified person and, if
such other person is an individual, any member of the immediate family of such
individual. As used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) and
“immediate family” shall mean any parent, child, grandchild, spouse or sibling.

[Signature page to follow]

 

 

 

 

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This Agreement has been executed by the parties hereto the day and year first
above written.

SELLER:

Labor Smart Inc

 

 

 

/s/

By: C. Ryan Schadel

Its: President

 

 

 

BUYER:

Harris Ventures, Inc.

 

 

 

/s/

By: Samuel C. Harris

Its: Chief Operating Officer

 

 

 

Schadel:

 

 

 

/s/

C. Ryan Schadel, in his

individual capacity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature page to Agreement for Purchase and Sale of Assets]