U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED APRIL 30, 1998.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM ___ TO ___.
Commission file number 0-23144
PERSONNEL MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1671569
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1499 Windhorst Way, Suite 100
Greenwood, Indiana 46143
(Address of principal executive offices) (Zip Code)
(317) 888-4400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1994 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class Outstanding at June 12, 1998
Common Stock, without par value 2,048,771 shares
<PAGE> 2
PERSONNEL MANAGEMENT, INC.
INDEX
PART I - FINANCIAL INFORMATION
Item 1 - Consolidated Financial Statements
(Unaudited)
Condensed Consolidated Balance Sheets
at April 30, 1998 and October 31, 1997 3
Condensed Consolidated Statements of
Income for the three months ended
April 30, 1998 and 1997 4
Condensed Consolidated Statements of
Income for the six months ended
April 30, 1998 and 1997 5
Condensed Consolidated Statements of
Cash Flows for the six months ended
April 30, 1998 and 1997 6
Notes to Condensed Consolidated
Financial Statements 7-10
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11-14
Item 3 - Quantitative and Qualitative
Disclosures About Market Risk 14
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 14
Item 4 - Submission of Matters to a Vote of
Security Holders 15
Item 6 - Exhibits and Reports on Form 8-K 15
SIGNATURE 15
EXHIBIT INDEX 16
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
PERSONNEL MANAGEMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
April 30, October 31,
1998 1997
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 25,123 $ 182,980
Accounts receivable, net 8,624,700 10,004,512
Current portion of notes receivable - 72,211
Income taxes receivable 21,368 17,296
Prepaid expenses 232,468 180,126
Deferred tax asset 455,300 515,500
Other current assets 102,620 78,633
Total current assets 9,461,579 11,051,258
Property and equipment, net 1,600,214 1,300,637
Notes receivable, shareholder 573,378 552,600
Goodwill, net 11,141,373 7,219,984
Other 302,930 146,337
Total assets $23,079,474 $20,270,816
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Cash overdraft $ 1,087,873 $ 1,100,511
Bank line of credit 639,000 -
Accounts payable 304,602 331,661
Accrued compensation and benefits 1,990,924 2,536,924
Accrued workers' compensation claims 915,668 1,024,035
Income taxes payable - 125,228
Other current liabilities 185,303 236,803
Current portion of notes payable 781,492 532,732
Total current liabilities 5,904,862 5,887,894
Notes payable 5,296,093 3,349,987
Deferred tax liability 164,700 173,200
SHAREHOLDERS' EQUITY
Common stock 8,151,671 7,924,994
Retained earnings 3,562,148 2,934,741
Total shareholders' equity 11,713,819 10,859,735
Total liabilities and shareholders' equity $23,079,474 $20,270,816
See accompanying notes.
</TABLE>
<PAGE> 4
PERSONNEL MANAGEMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
Three months ended
April 30,
1998 1997
<S> <C> <C>
Revenues $20,886,349 $17,953,879
Cost of services 16,620,283 14,312,854
Gross margin 4,266,066 3,641,025
Operating expenses:
General and administrative 3,193,995 2,731,402
Selling 155,030 60,453
Amortization of goodwill 130,716 91,473
3,479,741 2,883,328
Income from operations 786,325 757,697
Interest expense, net (93,984) (48,042)
Income before income taxes 692,341 709,655
Income taxes 290,100 341,400
Net income $ 402,241 $ 368,255
Basic net income per share $ 0.20 $ 0.18
Diluted net income per share $ 0.19 $ 0.18
Weighted average shares outstanding:
Basic 2,048,771 2,020,156
Diluted 2,125,089 2,057,965
See accompanying notes.
</TABLE>
<PAGE> 5
PERSONNEL MANAGEMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
Six months ended
April 30,
1998 1997
<S> <C> <C>
Revenues $41,127,247 $34,580,304
Cost of services 32,955,713 27,700,281
Gross margin 8,171,534 6,880,023
Operating expenses:
General and administrative 6,351,240 5,426,516
Selling 330,161 142,639
Amortization of goodwill 237,119 182,946
6,918,520 5,752,101
Income from operations 1,253,014 1,127,922
Interest expense, net (161,707) (94,625)
Income before income taxes 1,091,307 1,033,297
Income taxes 463,900 496,700
Net income $ 627,407 $ 536,597
Basic net income per share $ 0.31 $ 0.27
Diluted net income per share $ 0.30 $ 0.26
Weighted average shares outstanding:
Basic 2,039,562 2,020,156
Diluted 2,114,548 2,045,288
See accompanying notes.
</TABLE>
<PAGE> 6
PERSONNEL MANAGEMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
Six months ended
April 30,
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 627,407 $ 536,597
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of goodwill 237,119 182,946
Depreciation 259,617 198,150
Deferred income taxes 51,700 (26,000)
Interest on shareholder loan (20,778) (11,464)
Changes in operating assets and
liabilities:
Accounts and notes receivable 1,452,023 84,704
Prepaid expenses and other assets (226,526) (195,204)
Accounts payable (27,059) (155,855)
Accrued liabilities and other payables (831,095) (331,036)
Net cash provided by operations 1,522,408 282,838
INVESTING ACTIVITIES:
Purchases of businesses and payments
under earnout provisions of
acquisition agreements (4,237,576) (563,251)
Purchases of property and equipment (490,594) (256,929)
Net cash used by investing activities (4,728,170) (820,180)
FINANCING ACTIVITIES:
Proceeds from exercises of stock options 175,280 -
Repayment of officer loan 51,397 -
Net change in bank overdrafts (12,638) 154,164
Proceeds from notes payable 1,041,600 -
Payments on notes payable (282,734) (186,488)
Net proceeds from line of credit 2,075,000 400,000
Net cash provided by financing activities 3,047,905 367,676
Decrease in cash (157,857) (169,666)
Cash at beginning of period 182,980 180,462
Cash at end of period $ 25,123 $ 10,796
See accompanying notes.
</TABLE>
<PAGE> 7
PERSONNEL MANAGEMENT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1998
(unaudited)
1. Basis of Presentation
The Company, pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC), has prepared the accompanying financial statements.
This Report on Form 10-Q should be read in conjunction with the Company's
financial statements and notes thereto for the year ended October 31, 1997
included in the Company's 1997 Annual Report to Shareholders. Certain
information and footnote disclosures which are normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to SEC rules and regulations. The
information reflects all normal and recurring adjustments which, in the opinion
of management, are necessary for a fair presentation of the financial position
of the Company and its results of operations for the interim periods set forth
herein. Especially because of the seasonality of the Company's business, the
results for the three and six months ended April 30, 1998 are not necessarily
indicative of the results to be expected for the full year. The financial
statements include the combined financial position, operations and cash flows
for Personnel Management, Inc. and its wholly-owned subsidiaries, hereafter
referred to as "the Company".
2. Net Income Per Share
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings per Share" during the current fiscal year. SFAS No. 128 replaced
the previously reported primary and fully diluted net income per share with
basic and diluted net income per share. Unlike primary net income per share,
basic net income per share excludes any dilutive effects of options and
warrants. In accordance with SFAS No. 128, net income per share for prior year
periods has been presented, and where necessary, restated. Previously reported
net income per share amounts were not materially affected by the adoption of
SFAS No. 128.
<PAGE> 8
The following tables set forth the computation of basic and diluted net income
per share:
<TABLE>
Three months ended
April 30,
1998 1997
<S> <C> <C>
Numerator for both basic and diluted
net income per share:
Net income $ 402,241 $ 368,255
Denominator:
Denominator for basic net income per
share - weighted-average shares 2,048,771 2,020,156
Effect of dilutive securities:
Employee stock options 61,213 34,441
Warrants 15,105 3,368
Dilutive potential common shares 76,318 37,809
Denominator for diluted net income per
share - adjusted weighted-average shares 2,125,089 2,057,965
Basic net income per share $ 0.20 $ 0.18
Diluted net income per share $ 0.19 $ 0.18
</TABLE>
<TABLE>
Six months ended
April 30,
1998 1997
<S> <C> <C>
Numerator for both basic and diluted
net income per share:
Net income $ 627,407 $ 536,597
Denominator:
Denominator for basic net income per
share - weighted-average shares 2,039,562 2,020,156
Effect of dilutive securities:
Employee stock options 61,285 23,476
Warrants 13,701 1,656
Dilutive potential common shares 74,986 25,132
Denominator for diluted net income per
share - adjusted weighted-average shares 2,114,548 2,045,288
Basic net income per share $ 0.31 $ 0.26
Diluted net income per share $ 0.30 $ 0.26
</TABLE>
<PAGE> 9
Options to purchase 14,425 and 19,919 shares of common stock at prices ranging
from $12.21 to $16.73 per share were outstanding during the three and six month
periods ended April 30, 1998, respectively, but were not included in the
computation of diluted net income per share. These options were excluded from
the computation of diluted net income per share because the options' exercise
price was greater than the average market price of the common shares and,
therefore, the effect would be antidilutive.
3. Acquisitions
On February 2, 1998, the Company acquired Summit Temporaries, Inc. ("Summit"), a
staffing firm based in Atlanta, Georgia, for $2,742,000. Summit provides
clerical and light industrial staffing services through four offices and has
annual revenues of approximately $6 million. The purchase price was paid with
$1,700,000 of cash, borrowed under the Company's line of credit, and $1,042,000
of sellers' notes payable. Notes payable consist of a $950,000 note payable in
16 equal quarterly installments of $59,000, plus accrued interest at 8.50%,
through February 2002; and a $100,000 non-interest bearing note discounted at
8.0%, payable in eight equal quarterly installments of $12,500 through February
2000. The Company recorded goodwill and other intangible assets of approximately
$2.9 million including estimated acquisition related costs of $160,000. Goodwill
and intangible assets related to this transaction are being amortized on a
straight-line basis over 30 years.
The Company acquired on April 13, 1998, the assets of Worldwide Business
Resources, Ltd. ("Worldwide"), a staffing firm based in Atlanta, Georgia with
annual revenues of approximately $2,500,000. Worldwide operated one office
providing clerical and light industrial staffing services. The business was
acquired for $900,000 and was paid with cash, borrowed under the Company's line
of credit with KeyBank N.A. The Company recorded goodwill and other intangible
assets of approximately $900,000 including estimated acquisition related costs
of $60,000. Goodwill and intangible assets related to this transaction are being
amortized on a straight-line basis over 30 years.
<PAGE> 10
4. Commitments and Contingencies
In the ordinary course of business, the Company may, from time to time, be
charged for allegations of discrimination or other employment related claims by
temporary employees. There are no cases of this nature pending or threatened,
individually or in the aggregate, that management believes will result in a
material loss.
In January 1997, the Company was named in a lawsuit by an insurance carrier
against certain Florida staffing companies acquired by the Company in 1994. The
plaintiff alleges breach of contract and tort causes of action for underpayment
of workers' compensation insurance premiums in the amount of $1,402,000 plus
unspecified damages. The Company denies the validity of the plaintiff's claims.
The agreement by which the Company acquired the staffing companies specifically
disclaims any obligation with regard to undisclosed liabilities of the acquired
staffing companies. Management regards as unlikely that the outcome of this
action will have a material adverse effect upon the Company's financial
condition or results of operations. Accordingly, no provision has been recorded
in the accompanying financial statements.
On December 12, 1997, the Company, its Chief Executive Officer and the Company's
former Chief Financial Officer were named defendants in a complaint filed by two
investors who are seeking damages for trading losses they claim they incurred in
1995 as a consequence of alleged misstatements. The plaintiffs seek damages of
approximately $600,000 plus interest, attorney's fees, punitive damages, and
treble damages. The Company intends to vigorously defend the lawsuit. Management
believes that any potential loss resulting from this action would be
substantially covered by insurance. Management regards as unlikely that the
outcome of this lawsuit will have a material adverse effect upon the Company's
financial condition or results of operations. Accordingly, no provision has been
recorded in the accompanying financial statements.
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in the
Company's 1997 Annual Report to Shareholders.
SELECTED INCOME STATEMENT COMPARISONS
REVENUES. For the three months ended April 30, 1998, revenues increased
$2,932,000 or 16.3% from $17,954,000 in fiscal 1997 to $20,886,000. Internal
revenue growth, which excludes acquired offices, was $894,000 or 5.0% over the
prior year period. In the Company's Southeastern US operations, internal revenue
growth was 8.5% while the Indiana/Kentucky operations experienced internal
revenue growth of 3.6%. This slowdown in the Indiana/Kentucky operations was the
result of cyclical decreases in demand for temporary employees at several major
customers.
For the six months ended April 30, 1998, revenues increased $6,547,000 or 18.9%
from $34,580,000 in fiscal 1997 to $41,127,000. Internal revenue growth, which
excludes acquired offices, was $3,619,000 or 10.5% over the prior year period.
Internal revenue growth during the six month period in the Company's
Southeastern US and Indiana/Kentucky operations was 7.8% and 11.5%,
respectively.
GROSS MARGIN. Gross margin is defined by the Company as revenues less the cost
of providing services, which includes hourly wages of temporary employees,
employer payroll taxes, benefits for temporary employees and workers'
compensation costs. Gross margin for the three months ended April 30, 1998, was
$4,266,000 or 20.4% of revenues. This compares to $3,641,000 or 20.3% of
revenues for the corresponding period in fiscal 1997. The increase in gross
margin of $625,000 or 17.2% was primarily due to increased revenues.
Gross margin for the six months ended April 30, 1998, was $8,172,000 or 19.9% of
revenues. This compares to $6,880,000 or 19.9% of revenues for the corresponding
period in fiscal 1997. The increase in gross margin of $1,292,000 or 18.8% was
due to increased revenues. Gross margin as a percent of revenues declined
slightly due primarily to the costs associated with the benefit program for
temporary employees that became effective in January 1997. These expenses were
offset by lower workers' compensation costs measured as a percent of revenues,
resulting in a stable gross margin as compared to the prior year period.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses ("SG&A") for the three months ended April 30, 1998 were
$3,349,000 or 16.0% of revenues compared to $2,792,000 or 15.6% of revenues in
the corresponding prior year period. The increase in SG&A expenses of $557,000
or 20.0% was primarily associated with expenses related to acquired branches and
offices opened within the last year which amounted to $446,000 or 80% of the
increase in SG&A expense.
<PAGE> 12
Selling, general and administrative expenses ("SG&A") for the six months ended
April 30, 1998 were $6,681,000 or 16.2% of revenues compared to $5,569,000 or
16.1% of revenues in the corresponding prior year period. The increase in SG&A
expenses of $1,112,000 or 20.0% was primarily associated with expenses related
to acquired branches and offices opened within the last year which amounted to
$692,000 or 62% of the increase in SG&A expense.
Increases in SG&A expense for both the three and six month periods were
associated with increased revenues, higher selling expenses related to an
increase in marketing efforts and sales staff, data processing expenses related
to converting all offices to common systems in fiscal 1997, and increased
professional fees. These increases in SG&A expense were offset by lower bad debt
expense.
AMORTIZATION OF GOODWILL. Goodwill represents the unamortized cost in excess of
fair value of net assets acquired and is being amortized on a straight-line
basis over 20 to 30 years. Goodwill amortization for the three and six months
ended April 30, 1998 increased $39,000 or 42.9% and $54,000 or 29.6%,
respectively, compared to the corresponding prior year periods. These increases
are a result of additional goodwill from acquisitions in the current and prior
fiscal years; and amortization of payments of additional purchase price under
earnout provisions of prior acquisition agreements.
INTEREST EXPENSE, NET. The increase of $46,000 or 95.6% and $67,000 or 70.9% in
interest expense, net of interest income, for the three and six months ended
April 30, 1998, respectively, compared to the prior year period was due
primarily to higher average borrowings used for the purchases of businesses in
the current year period.
INCOME TAXES. Income tax expense for the three and six months ended April 30,
1998 decreased $51,000 or 15.0% and $33,000 or 6.6%, respectively, compared to
the prior year period was primarily a result of a decrease in the effective
income tax rate. The effective income tax rate for the six months ended April
30, 1998 was 42.5% compared to 48.0% in the prior year.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $1,522,000 during the six months ended
April 30, 1998. Primary sources of operating cash flow were from net income and
related non-cash adjustments and the seasonal reduction in accounts receivable.
These sources of cash were partially offset by a reduction in accrued
liabilities and other payables. The primary use of cash during the period was
for the purchase of Summit and Worldwide totaling $3,843,000. Other uses of cash
were $283,000 for payments of notes payable, $395,000 for payments under earnout
provisions of acquisition agreements and $491,000 for capital expenditures. Net
borrowings under the line of credit of $2,075,000 and proceeds of $1,042,000
from sellers' notes payable related to the acquisition of Summit provided
sources of cash. Additional sources of cash included $175,000 from the exercise
of options to issue 19,853 common shares and $51,000 from the repayment of a
loan to a former officer of the Company.
<PAGE> 13
Total capitalization at April 30, 1998 was $18,430,000, comprised of $6,716,000
of debt and $11,714,000 of equity. Debt as a percentage of total capitalization
increased from 26.3% at October 31, 1997 to 36.4% at April 30, 1998.
The Company's bank credit facility provides the ability to borrow up to
$11,000,000 for general working capital purposes, acquisition financing and
letters of credit. The facility consists of a two year $8,500,000 revolving line
of credit and a five year $2,500,000 term loan. Borrowings under the line of
credit are subject to certain borrowing base requirements. Interest is charged
on the outstanding balance of the line of credit at rates reflecting the bank's
prime rate or the London Interbank Offered Rate (LIBOR) plus a margin of up to
2.75% depending upon certain financial ratios. The Company also pays fees of
1/8% on the unused portion of the line during the term of this agreement. The
line of credit terminates on January 31, 1999. Upon termination, borrowings for
acquisition financing under this line, up to $4,000,000, convert to a five year
term loan with terms and conditions substantially similar to the existing term
loan. At April 30, 1998, up to $3,161,000 of the $3,800,000 outstanding under
the line of credit could be converted to a new five year term loan. The
Company's availability under its line of credit facility as of April 30, 1998,
was approximately $2,700,000 at an interest rate of LIBOR plus 1.75%.
The existing term loan is payable in equal monthly principal installments of
$42,000 beginning February 1997. The term loan matures on January 31, 2002, and
bears interest at rates reflecting the bank's prime rate or LIBOR plus a margin
of up to 3.0% depending upon certain financial ratios. At April 30, 1998, the
interest rate was LIBOR plus 2.00%.
Sellers' notes payable related to the acquisition of Summit consist of a
$950,000 note payable in 16 equal quarterly installments of $59,000, plus
accrued interest at 8.50%, through February 2002; and a $100,000 non-interest
bearing note discounted at 8.0%, payable in eight equal quarterly installments
of $12,500 through February 2000.
The acquisition of Summit and Worldwide caused the Company to violate the
minimum level of tangible net worth covenant under its bank credit facility. The
bank has waived the violation of this debt covenant. Future acquisitions that
cause the Company's tangible net worth to decrease require bank approval. No
other restrictions have been placed on the Company's ability to borrow under the
terms of the credit agreement.
Currently, the Company is not in negotiations to renew its bank line of credit
that terminates in January 1999. The Company believes it has a favorable
relationship with its bank and at the appropriate time, management believes a
new line of credit is expected to be arranged with terms and conditions similar
to the existing line of credit.
<PAGE> 14
Management believes that cash provided by operations, augmented by borrowings
for working capital and acquisition purposes under the bank credit facility,
will be adequate to satisfy the Company's acquisition, capital expenditure and
operating cash requirements during fiscal 1998.
YEAR 2000 COMPLIANCE
The Year 2000 issue arises with computer software that has been designed without
considering the impact of the upcoming change in the century and, therefore,
cannot distinguish between years such as 1900 and 2000. The Company has
developed its Year 2000 compliance plan and has determined its primary exposure
to the Year 2000 issue is with the software used to manage its staffing, payroll
and billing functions. The vendor of the software used by the Company to manage
these functions has informed the Company that it is evaluating the software to
determine what modifications will be needed to address Year 2000 issues. The
vendor has assured the Company that such evaluation and any modifications will
be completed by early 1999. The Company does not anticipate that the cost of
resolving any Year 2000 issues will be material to its financial condition or
results of operations. If, however, Year 2000 issues are not resolved in a
timely manner or require substantial expenditures, the Company's business,
financial condition and/or results of operations could be adversely affected.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
This item is currently not applicable to the Company.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There were no material developments during the three months ended April 30,
1998, in certain investor litigation to which the Company is a party that was
first described in Item 1 of the Company's Form 10-K for the year ended October
31, 1997 and its quarterly report on Form 10-Q for the three months ended
January 31, 1998.
<PAGE> 15
Item 4. Submission of Matters to a Vote of Security Holders
Submission of Matters to a Vote of Security Holders as filed in Item 4 of the
Company's quarterly report on Form 10-Q for the three months ended January 31,
1998, is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed in the Exhibit Index on page 16 (which Exhibit Index is
incorporated herein by reference) are filed as part of this report.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed by the Company during the three months
ended April 30, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PERSONNEL MANAGEMENT, INC.
Dated: June 15, 1998 By: /s/ Robert R. Millard
--------------------------
Robert R. Millard, Vice
President of Finance and
Administration (Principal
Financial Officer and
Authorized Signatory)
<PAGE> 16
EXHIBIT INDEX
Exhibit No. Description of Exhibit
2.1 Asset Purchase Agreement, dated
February 2, 1998, by and among
PMI LP II, Summit Temporaries, Inc.,
Leslie A. Barnett, Gary F. Nichols,
and Lyle D. Nichols. The copy of
this exhibit filed as Exhibit 2 to
the Registrant's Quarterly Report
on Form 10Q for the three months
ended January 31, 1998 is
incorporated herein by reference.
2.2 Asset Purchase Agreement, dated April
13, 1998, by and among PMI
LP II, Worldwide Business Resources,
Ltd., E. James Grethe,
Victoria Grethe and Lisa Paonessa.
10.1 Schedule of Options
Granted Under 1994 Director
Stock Option Plan
27 Financial Data Schedule
<PAGE>
EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
dated April 13, 1998,
among and between
PMI LP II,
WORLDWIDE BUSINESS RESOURCES, LTD.,
E. JAMES GRETHE,
VICTORIA GRETHE
and
LISA PAONESSA
----------------------------------------------------
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of this 13th day of April, 1998, effective as of 12:01 a.m. on April 13,
1998 (the "Effective Time"), by and among Worldwide Business Resources, Ltd., a
Georgia corporation ("Seller"), E. James Grethe, Victoria Grethe and Lisa
Paonessa, each a Georgia resident (each a "Shareholder" and collectively, the
"Shareholders"), and PMI LP II, an Indiana limited partnership ("Purchaser").
PRELIMINARY STATEMENT
Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, substantially all of the non-cash assets owned by Seller or used or
useful in the operations or business of Seller, on the terms and conditions
hereinafter set forth.
Shareholders own all of the outstanding capital stock, and are parties
to this Agreement as the shareholders, of Seller.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and conditions hereinafter set forth, the parties hereto
agree as follows:
ARTICLE I
Purchase and Sale
Section 1.1. Purchased Assets. Seller agrees to and does hereby sell,
transfer, assign, convey and deliver to Purchaser, and Purchaser hereby agrees
to and does hereby purchase and acquire from Seller, free and clear of all
liens, encumbrances, claims, restrictions, security interests, obligations and
liabilities except as otherwise expressly provided herein, all of the assets
that are owned by Seller or that are used or useful by Seller in the operations
or business of Seller at the Effective Time except the Excluded Assets (as
hereinafter defined), including in the assets being purchased and sold
hereunder, without limiting the generality of the foregoing, the following
assets as the same shall exist at the Effective Time (which assets being
acquired are hereinafter collectively called the "Purchased Assets"):
1.1.1. all furniture, furnishings, fixtures, leasehold
improvements, equipment and other fixed assets, including, without
limitation, the assets listed on Schedule 1.1.1;
1.1.2. all of Seller's rights, title, and interest in and to
all software owned by Seller or licensed to Seller by third parties,
including all documentation, source codes, software modules and
enhancements and software in development;
1.1.3. all inventories including marketing materials (including
video tapes, brochures, and the like), spare parts and supplies;
1.1.4. all of Seller's rights under all leases, contracts
(including software license agreements and maintenance agreements),
agreements, and sales orders, including but not limited to those
leases, contracts, agreements, and sales orders listed on Schedule
1.1.4 (the "Purchased Contracts");
<PAGE>
1.1.5. all prepaid and deferred items including prepaid rentals
and deposits;
1.1.6. copies of all operating and financial data and
information and books and records relating to the Purchased Assets or
the business or operations of Seller (wherever located and in every
format and media whatsoever), including without limitation software
databases, written records, personnel files (but only as to personnel
hired by Purchaser and only with their knowledge), files, policies,
customer lists, mailing lists, supplier lists, credit information,
correspondence, designs, slogans, processes, know-how, trade secrets,
and other similar property;
1.1.7. all intellectual property rights of Seller, including
Seller's rights, title and interest in and to all United States and
foreign patents (including all reissues, divisions, continuations and
extensions thereof), patent applications, patent disclosures docketed,
copyrights, trademarks, trademark rights, trademark applications, trade
names, service marks, service mark rights, service mark applications
and licenses;
1.1.8. all registrations, permits, licenses, consents,
approvals and qualifications of Federal, State, local or other
government agencies relating to the business or operations of Seller or
the Purchased Assets;
1.1.9. all rights to warranties and guarantees or other claims
relating to any of the Purchased Assets, including without limitation
rights under agreements for the supply of equipment or leasehold
improvements;
1.1.10. all rights to the use of Seller's name "Worldwide
Business Resources, Ltd." all past corporate names of Seller and all
other names used or previously used by Seller or its predecessors in
its business, including the assumed name "Worldwide Staffing
Resources"; and
1.1.11. the goodwill relating to Seller's business.
Section 1.2. Excluded Assets. Seller is retaining and is not selling,
transferring, conveying, assigning or delivering to Purchaser the following
assets (hereinafter collectively called the "Excluded Assets"):
1.2.1. any cash and cash equivalents of Seller on hand or in
bank accounts at the Effective Time;
1.2.2. all accounts receivable of Seller for work performed
prior to the Effective Time; and
1.2.3. all notes receivable of Seller at the Effective Time.
<PAGE>
ARTICLE II
Purchase Price
Section 2.1. Purchase Price. The total purchase price for the Purchased
Assets (the "Purchase Price") is the sum of Nine Hundred Thousand Dollars
($900,000).
Section 2.2. Payment. Purchaser shall pay the Purchase Price to Seller at
Closing by wire transfer to the trust account of Seller's counsel, Gambrell &
Stolz, L.L.P., of Atlanta, Georgia, pursuant to wiring instructions provided to
Purchaser by Seller.
ARTICLE III
Assumption of Liabilities
Section 3.1. Assumed Liabilities. Purchaser hereby assumes and agrees to
pay, perform or discharge, to the extent not theretofore paid, performed or
discharged, (i) Seller's liabilities and obligations arising after the Effective
Time under those Purchased Contracts, if any, listed on Schedule 1.1.4; and (ii)
if Purchaser, in its sole discretion and at its option, elects in writing after
the Closing (as hereinafter defined) to assume liabilities or obligations of
Seller under any Purchased Contracts not listed on Schedule 1.1.4, Seller's
liabilities and obligations arising after the Effective Time under each such
nonlisted Purchased Contract that is expressly assumed in writing by Purchaser,
excluding with respect to clauses (i) and (ii) any liability for default
thereunder occurring prior to the Effective Time and, with respect to
liabilities for rent and taxes, excluding any liability as to periods of time
prior to the Effective Time.
Section 3.2. Excluded Liabilities. Except as otherwise expressly provided
in Section 3.1, Purchaser does not assume and shall not be liable for any of the
liabilities or obligations of Seller, including, without limitation, Seller's
liabilities or obligations which are known or unknown, fixed or contingent, now
existing or hereafter arising (which liabilities and obligations not assumed by
Purchaser are hereinafter referred to as the "Excluded Liabilities").
ARTICLE IV
Closing and Effective Time
Section 4.1. Closing; Closing Date; Effective Time. The execution of this
Agreement and the taking of various actions in connection therewith as provided
herein with respect to the transactions contemplated hereby (the "Closing")
shall commence on April 13, 1998 (the "Closing Date"), and shall continue on
April 14, 1998, if necessary, until completed in accordance with the terms
hereof. The Closing shall be conducted by exchanging signed signature pages of
the transaction documents by facsimile (followed by overnight delivery of signed
original counterparts) and wiring of the Purchase Price upon receipt of such
signed pages by facsimile. As provided in the preamble to this Agreement, the
transactions contemplated hereby shall be effective as of 12:01 a.m. (Atlanta
time) on April 13, 1998 (as previously defined, the "Effective Time").
Section 4.2. Closing Requirements. Seller, the Shareholders and Purchaser
shall take the following actions ("Closing Requirements") at or prior to the
Closing:
<PAGE>
4.2.1. Seller shall take such actions and execute and deliver
to Purchaser such bills of sale, certificates of title, endorsements,
assignments, or other instruments, with all documentary or transfer
taxes applicable thereto duly paid or provided for, as shall be
necessary to vest in Purchaser at the Effective Time good and
marketable title to the Purchased Assets, subject to no liens,
encumbrances, claims, restrictions, security interests, obligations,
liabilities or rights in any other party whatsoever, except for the
Assumed Liabilities.
4.2.2. Seller shall have delivered to Purchaser a certified
copy (certified by the Secretary of State of Georgia) of Seller's
Articles of Incorporation, including all amendments thereto and
restatements thereof.
4.2.3. Seller shall have delivered to Purchaser a certified
copy (certified by the Secretary or other appropriate officer of
Seller) of Seller's Bylaws, including all amendments thereto and
restatements thereof.
4.2.4. Seller shall have delivered to Purchaser certified
copies (certified by the Secretary or other appropriate officer of
Seller) of resolutions and/or consents setting forth the authorization
and approval of the Board of Directors and shareholders of Seller of
the execution, delivery and performance of this Agreement and all other
agreements, documents and transactions pertaining hereto or
contemplated hereby.
4.2.5. Seller and the Shareholders shall have executed and
delivered to Purchaser the Noncompetition and Confidentiality
Agreements (as hereinafter defined and in the form of Exhibit A
hereto).
4.2.6. Seller shall have delivered to Purchaser a certificate
of the Secretary of Seller certifying as to the incumbency of officers
and Directors of Seller, dated the date hereof.
4.2.7. Seller shall have delivered to Purchaser certificates
as of a current date evidencing the corporate existence of and
compliance with all reporting requirements by Seller in Georgia.
4.2.8. Purchaser shall have delivered to Seller certified
copies (certified by the Secretary or other appropriate officer of PMI
Administration, Inc., the sole general partner of Purchaser) of
resolutions and/or consents setting forth the authorization and
approval of the Board of Directors of PMI Administration, Inc. as
general partner of Purchaser of the execution, delivery and performance
of this Agreement and all other agreements, documents and transactions
pertaining hereto or contemplated hereby.
<PAGE>
ARTICLE V
Other Actions, Agreements and Covenants of the Parties
Purchaser, the Shareholders and Seller covenant and agree as follows:
Section 5.1. Assignment of Contracts. Seller hereby transfers and assigns
to Purchaser all of Seller's rights and benefits under the Purchased Contracts.
Section 5.2. Delivery of Property Received After Effective Time; Mutual
Access to Information; Use of Office Space. From and after the Effective Time
(i) Seller agrees that it will promptly transfer and deliver to Purchaser any
cash or other property that Seller may receive from time to time after the
Effective Time relating to the Purchased Assets, and (ii) Purchaser agrees that
it will transfer and deliver to Seller any cash or other property that Purchaser
may receive from time to time after the Effective Time relating to the Excluded
Assets. In that regard, each of Seller and Purchaser shall have access at all
reasonable times to, and shall be entitled to examine and inspect, upon
reasonable advance notice, all relevant books and records of the other party for
the purpose of determining compliance of such other party with its obligations
under this Section 5.2, specifically including, without limitation, the mutual
obligations of Purchaser and Seller to turn over and account to one another for
all accounts receivable or other sums collected from customers or otherwise by
either party that, under the terms of this Agreement, belong to or are intended
to remain the property of the other party. Further in that regard, Seller hereby
designates E. James Grethe as its representative and authorized agent for all
purposes of administering, enforcing and complying with this Section 5.2, and
Purchaser hereby agrees that E. James Grethe shall, in his capacity as Seller's
representative and agent, continue to have access to and the use of his personal
office space in the premises in which Seller's business has been conducted
immediately prior to the Effective Time until the earlier of (a) June 30, 1998,
or (b) the collection of all accounts receivable of Seller relating to its
business conducted prior to the Effective Time. In this regard, each of
Purchaser and Seller recognize that a period of transition and cooperation is
required in order to effect the change of ownership of the business operations
that have been conducted by Seller with as little disruption as possible, while
at the same time preserving for the benefit of Seller those accounts receivable
and other business assets of Seller that are not included in the Purchased
Assets, and Seller and Purchaser agree to cooperate with one another and to use
their respective reasonable efforts following the Effective Time to accomplish
such objectives.
<PAGE>
Section 5.3. Purchaser Appointed Attorney for Seller. Seller agrees that,
effective as of the Effective Time, it hereby constitutes and appoints
Purchaser, its successors and assigns, the true and lawful agent and
attorney-in-fact of Seller in the name of Purchaser or in the name of Seller,
but for the benefit and at the expense of Purchaser, its successors and assigns,
(i) to institute and prosecute all proceedings which Purchaser may deem proper
in order to collect, assert or enforce any claim, right, title or interest of
any kind in or to the Purchased Assets; (ii) to defend or compromise any and all
actions, suits or proceedings in respect of any of the Purchased Assets, and to
do all such acts and things in relation thereto as Purchaser, its successors or
assigns, shall deem advisable; and (iii) to take all action which Purchaser, its
successors or assigns, may reasonably deem appropriate in order to provide for
Purchaser, its successors or assigns, the benefits of or under any of the
Purchased Assets where any required consent of another party to the sale or
assignment thereof to Purchaser pursuant to this Agreement shall not have been
obtained. If Purchaser, in the name of Seller, desires to institute and
prosecute any action, suit or proceeding, or take any other action pursuant to
this Section 5.3, Purchaser shall give Seller 10 days' prior written notice.
Seller acknowledges that the foregoing powers and agency are coupled with an
interest and shall be irrevocable. Purchaser shall be entitled to retain for its
own account any amounts collected pursuant to the foregoing powers and agency
which is attributable to its interest hereunder, including any amounts payable
as interest in respect thereof.
Section 5.4. Execution of Further Documents; Financial Statements. After
the Closing, upon the reasonable request of Purchaser, Seller shall take such
additional actions and execute, acknowledge and deliver all such further
documents and instruments, including without limitation bills of sale,
assignments, transfers, conveyances, powers of attorney and assurances, as may
be required to convey and transfer to and vest in Purchaser and protect
Purchaser's right, title and interest in and to all of the Purchased Assets or
as may be appropriate otherwise to carry out the transactions contemplated by
this Agreement.
Section 5.5. Employment by Purchaser of Seller's Employees. It is
understood and agreed that Purchaser is under no obligation to hire and provide
employment for any of Seller's existing employees, it being Seller's obligation
to terminate such employees, if such is necessary. Purchaser, however, presently
intends to hire some of Seller's existing employees as new hires, and Seller
shall use their reasonable efforts to aid Purchaser in engaging such of Seller's
agents and employees as are presently engaged or employed by Seller as Purchaser
shall in its sole discretion determine. For a period of three years from and
after the Effective Time, neither Seller nor any of the Shareholders shall,
directly or indirectly, solicit the employment of any person presently employed
by Seller who becomes employed by Purchaser.
Section 5.6. Noncompetition and Confidentiality Agreements. As additional
consideration for Purchaser's agreement to buy the Purchased Assets, Seller and
the Shareholders shall each execute and deliver to Purchaser at Closing an
agreement or agreements not to compete with Purchaser for a term of three years,
commencing at the Effective Time, substantially in the form attached hereto as
Exhibit A (whether in one or more separate documents or counterparts, the
"Noncompetition and Confidentiality Agreements").
<PAGE>
Section 5.7. IRS Form 8594. Seller and Purchaser agree that the Purchase
Price shall be allocated as set forth in Schedule 5.7 hereto, and that neither
party will report an allocation inconsistent therewith on Form 8594 subsequently
filed with the Internal Revenue Service.
Section 5.8. COBRA and Other Compliance. Seller will honor all rights, if
any, of employees or former employees of Seller to continuation under Seller's
health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"). Seller will comply in all material respects with all laws and
regulations which are applicable to Seller relating to any of Seller's
employees.
ARTICLE VI
Representations and Warranties by Seller and the Shareholders
In order to induce Purchaser to enter into this Agreement and to consummate
the transactions contemplated hereunder, Seller and the Shareholders make the
following representations, warranties, covenants and agreements, each of which
shall be deemed to be independently material and relied upon by Purchaser
regardless of any investigation made or information obtained by Purchaser:
Section 6.1. Corporate Existence and Qualification. Seller (i) is a
corporation duly organized and validly existing under the laws of the State of
Georgia, (ii) has all requisite corporate power and authority to own its
properties and to carry on its business as it is now being conducted; and (iii)
is not required to be qualified to transact business as a foreign corporation in
any jurisdictions. Copies of Seller's Articles of Incorporation, certified by
the Georgia Secretary of State, and Bylaws, including all amendments thereto,
certified by the Secretary of Seller, have been delivered to Purchaser, and such
copies are true, complete and correct in every particular.
Section 6.2. Subsidiaries and Affiliates. Seller has no subsidiaries and
has no investment of any kind in any other corporation, joint venture, limited
liability company, partnership or other entity.
Section 6.3. Financial Statements. Attached hereto as Schedule 6.3 are
Balance Sheets for Seller at December 31, 1997 and related Statements of Income
and Retained Earnings of Seller for its fiscal year then ended (which balance
sheets and statements are herein collectively referred to as the "Seller
Financial Statements"). The Seller Financial Statements (i) are complete, true
and correct in all material respects, (ii) have been prepared in accordance with
generally accepted accounting principles maintained and applied on a basis
consistent with prior periods, and (iii) present fairly the financial position
of Seller at the date indicated and the results of operations of Seller for the
period indicated. Whenever references are made throughout this Agreement to
financial statements, it will be understood that all notes and exhibits thereto
are included therein.
<PAGE>
Section 6.4. Events Subsequent to Date of Most Recent Balance Sheet
Included in Seller Financial Statements. Since December 31, 1997, there have
been no adverse changes in the condition of the assets, liabilities, business,
operations, prospects or properties of Seller, or in the financial condition or
earnings of Seller as shown in the Seller Financial Statements, other than
changes in the ordinary course of business of Seller which, individually or in
the aggregate, are not material, and Seller has not entered into any material
transaction not in the usual and ordinary course of its business, and Seller's
assets, business, operations, prospects or properties have not been adversely
affected in any material way as a result of any fire, accident or other casualty
or by any act of God. Without limiting the generality of the foregoing, since
December 31, 1997:
6.4.1. Seller has not done (or failed to do, as the case may
be) any of the following:
(i) sold, assigned, transferred or otherwise
disposed of, or removed or permitted to be removed from any
Real Estate (as hereinafter defined) or any building or
structure thereon, any assets of Seller or any assets used or
useful in its business or operations of the type that, but for
such sale or other event described above, would have been
includable in the Purchased Assets;
(ii) waived or canceled any rights of value
or amended, modified, altered, terminated, canceled or allowed
to expire (to the extent renewable) any lease, contract,
agreement or understanding;
(iii) made, accrued or become liable for any
bonus, profit sharing or incentive payment or, directly or
indirectly, increased or granted an increase in the rate of
compensation or any benefit payable or to become payable by
Seller to its employees, except for those payments,
liabilities or increases made, incurred or payable in the
ordinary course of business;
(iv) taken or permitted any act or omission
constituting a breach or default under any contract,
indenture, agreement or understanding by which Seller or its
properties is or was bound;
(v) failed to use reasonable efforts or to
act in good faith (a) to preserve the assets and business of
Seller, (b) to keep available the services of Seller's present
employees, agents and representatives, (c) to preserve the
goodwill of Seller's customers, suppliers, and all others
having business with Seller, (d) to conduct and operate
Seller's business, and maintain Seller's books, accounts and
records, in the customary manner, in a prudent and normal
fashion, and in the ordinary course of business, or (e) to
maintain the Purchased Assets in the same condition as such
assets were in as of December 31, 1997 and preserve Seller's
physical properties, business premises, fixtures, furniture
and equipment, ordinary wear and tear excepted;
(vi) made any material changes in the scope
or nature of any of Seller's business activities or engaged,
directly or indirectly, in a business substantially different
from Seller's business on the date hereof;
(vii) made any disclosure regarding the
transactions contemplated by this Agreement without the prior
approval of Purchaser;
(viii) failed to maintain in effect (a)
sufficient insurance to insure the Purchased Assets to their
full insurable value, and (b) liability insurance prudent and
appropriate for entities of the size, scope and nature of
Seller's business; or
(ix) to their Knowledge, failed to duly
comply in all material respects with all laws, regulations,
permits, permissions or authorizations which are applicable to
Seller or to the conduct of Seller's business.
<PAGE>
6.4.2. Seller has conducted its business and kept its records
in a manner consistent with its practices at the time and during the
periods reflected in the Seller Financial Statements without material
change of practices, policies or procedures, including without
limitation practices in connection with the treatment of expenses,
receivables and reserves in respect thereof, and selling and purchasing
policies.
Section 6.5. Undisclosed Liabilities. To their Knowledge, except as
reflected on the Seller Financial Statements, Seller has no liabilities or
obligations, whether accrued, absolute, contingent or otherwise, and whether due
or to become due, and whether known or unknown, and there is no basis for any
claim against Seller for any such liabilities or obligations, except liabilities
or obligations incurred in the ordinary course of business of Seller since
December 31, 1997, including the Assumed Liabilities, none of which individually
or in the aggregate will have a material adverse effect upon the Purchased
Assets or the business or condition, financial or otherwise, of Seller.
Section 6.6. Tax Returns. Seller has filed with the appropriate agencies
all tax returns and tax reports required by law to be filed by or with respect
to Seller and has paid all taxes due, specifically including all returns and
taxes with respect to employment matters, and (i) no audit of any federal,
state, county or municipal returns or other tax returns filed by Seller is in
progress or pending or threatened, (ii) there are no unpaid taxes which are or
will become a lien or charge on any of the Purchased Assets or for which
Purchaser may be liable and there are no known or proposed deficiency
assessments in respect of any Federal, State, county, municipal or other tax
return filed by Seller which might adversely affect the Purchased Assets or
Seller's business or for which Purchaser may be liable; and (iii) there are no
taxes, penalties or interest assessed against, due and/or unpaid by Seller with
respect to the Purchased Assets or Seller's business.
Section 6.7. Real Property.
6.7.1. Set forth in Schedule 6.7.1 is a list of the addresses
of each parcel of real property leased or otherwise used by Seller (the
"Real Estate"). Seller has furnished to Purchaser a legal description
of each such parcel, true and complete copies of each lease of any Real
Estate of which Seller is the lessee or the lessor (herein referred to
as the "Real Estate Leases"), and a description of the type of use of
each such parcel. Seller owns no real property and has not agreed or
committed to purchase any real property.
6.7.2. All Real Estate Leases are in full force and effect and
there exists thereunder no event of default or event which, with the
giving of notice or passage of time or both, would constitute an event
of default by any party thereto, and all of the Real Estate Leases are
assignable to Purchaser hereunder, and Seller has obtained any
necessary consents to such assignment. There are no delinquencies or
alleged delinquencies in the payment of rents or other amounts owed any
landlords under any of the Real Estate Leases.
6.7.3. To the best of Seller's Knowledge all of the buildings
and improvements on the property covered by the Real Estate Leases
comply with any federal, state and local laws, ordinances and
regulations and insurance requirements applicable to said buildings and
improvements.
<PAGE>
Section 6.8. Personal Property - Owned. Seller has good and marketable
title to all personal property reflected on the Seller Financial Statements
(except any sold since the date thereof in the ordinary course of business),
free and clear of all mortgages, liens, security interests, charges, claims,
restrictions and other encumbrances of every kind. The personal property
utilized in Seller's business is owned by Seller and may be used for such
purposes without conflict with the rights of others.
Section 6.9. Personal Property - Leased. Seller has disclosed in Schedule
1.1.4 all leases under which Seller leases personal property from others. Seller
has furnished Purchaser with a true and complete copy of all such leases. The
property described in such leases is presently used by Seller as lessee under
the terms of such leases and such leases are in full force and effect, and no
defaults exist under such leases and there exists no event which, with the
giving of notice or passage of time or both, would constitute a default under
such leases. All of such leases are assignable to Purchaser hereunder, and
Seller shall obtain all necessary consents to such assignment.
Section 6.10. Use and Condition of Property; Environmental Concerns.
6.10.1. There are and have been no violations by Seller of,
and Seller has not received notice of any violation of, any law,
statute, ordinance, regulation, order, rule, judgment, writ,
injunction, decree, permit, registration or other requirement relating
or applicable to the Real Estate or any of Seller's property, assets,
business or operations or the Purchased Assets, including without
limitation violations relating to pollution control or environmental
contamination. To the best of Seller's knowledge there are no orders,
rulings, decrees, injunctions, judgments or writs of any federal, state
or local government or of any court, department, commission, board,
bureau, agency or other instrumentality thereof known to Seller
outstanding against, or relating or applicable to, Seller or its
properties, business or operations or the Real Estate.
6.10.2. There are no facts or circumstances that Seller
reasonably believes could form the basis for the assertion of any claim
against Seller in respect of the business, operations, activities or
properties of Seller or the Real Estate relating to environmental
matters.
6.10.3. There are no environmental operating or other similar
environmental permits or authorizations required for the operation of
Seller's business or the Purchased Assets.
Section 6.11. Restrictive Covenants. Except for the Noncompetition and
Confidentiality Agreements, none of the Shareholders and Seller is subject to
any agreements not to compete or similar restrictive covenants.
<PAGE>
Section 6.12. Intellectual Property Rights. There are no patents, patent
applications, inventions, discoveries, trade secrets or other intellectual
property relating to or used in the business of Seller developed by any of the
employees of Seller or any other party to which Seller has or may have a right
of ownership or a right of use which have not been assigned to Seller.
Section 6.13. Necessary Property. The Purchased Assets and the Excluded
Assets constitute all of the property necessary for the conduct of the
operations and business of Seller in the manner and to the extent conducted
during all periods reflected in the Seller Financial Statements.
Section 6.14. No Breach, Default or Violation. Seller is not in default
under or in breach or violation of the provisions of any franchise or license,
any provision of its Articles of Incorporation or Bylaws, any promissory note,
indenture or any evidence of indebtedness or security therefor, or any lease,
contract, purchase or other commitment or any other agreement by which it is
bound, which individually or in the aggregate may result in a material adverse
effect on its business or condition, financial or otherwise, or the Purchased
Assets.
Section 6.15. Litigation and Claims. Except as disclosed on Schedule 6.15,
there is no action, suit, legal or administrative proceeding, arbitration,
investigation or other proceeding or claim pending or, to the best knowledge of
Seller threatened, against or affecting the Purchased Assets, and Seller is not
a party plaintiff in any action, suit, arbitration or proceeding. No unsatisfied
judgment, order or decree has been entered and remains pending or in effect as
to Seller.
Section 6.16. Material Contracts. Except as set forth on Schedule 1.1.4,
there are no material contracts, agreements, commitments, licenses, permits,
plans, instruments and binding arrangements to which Seller is subject or by
which Seller is bound, oral or written, expressed or implied, including without
limitation all agreements and instruments relating to purchase orders or
commitments, supply or requirements contracts, employment agreements, agreements
with sales agents or representatives, and franchise or license agreements. For
the purposes of this Section 6.16, "material" shall not include any contract,
agreement or commitment which (i) does not involve future commitments in excess
of $10,000 as to any single contract or $50,000 in the aggregate as to all such
contracts or (ii) may be terminated without premium or penalty on 30 days' or
less notice.
Section 6.17. Validity of Purchased Contracts. Each Purchased Contract may
be assigned to Purchaser without any restriction, required consent or other
approval (except for such consents or approvals that Seller has obtained), is in
full force and effect and constitutes the valid, legal and binding obligations
of Seller and the other parties thereto, enforceable in accordance with its
terms except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought;
Seller is not in default and to the best knowledge of Seller no other party
thereto is in default (and no event has occurred which with notice or lapse of
time or both would become a default) or has an accrued right of termination
thereunder; and no such contract requiring the purchase by Seller of equipment,
furniture, fixtures, operating supplies or other properties or services is for a
quantity in excess of the normal requirements of Seller's business or at a price
in excess of the generally prevailing price for the item to be purchased.
<PAGE>
Section 6.18. Powers of Attorney. There are no outstanding powers of
attorney granted by Seller with respect to its business or operations or the
Purchased Assets.
Section 6.19. Insurance. Schedule 6.19 is a true, correct and complete list
of all fire, theft, casualty, liability and other insurance policies insuring
Seller and all insurance policies maintained for any of its employees,
specifying the type of coverage, the amount of coverage, the premium, the
insurer and the expiration date of each such policy. Seller is not in default
with respect to any provisions of any such policy, nor has Seller failed to give
any material notice or present any material claim known to Seller under any such
policy in due and timely fashion.
Section 6.20. Employment Matters; Employee Benefit Plans; ERISA Compliance.
6.20.1. None of the employees of Seller is employed pursuant
to a written agreement and all such employees may be terminated at
will. The hours worked by, payments made to and the working conditions
of the employees of Seller have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state or local laws,
orders or regulations relating to the payment of wages, conditions of
employment, the employment of minors or similar matters; the practices
of Seller in respect to the hiring, working conditions, promotion,
discharge, discipline and rates of pay of its employees have not been
in violation of any federal, state or local laws, executive orders or
regulations, including but not limited to those prohibiting
discrimination for any reason; and there are not as of the date of this
Agreement and there will not be as of the Closing Date any labor
troubles of any kind or nature pending or threatened against Seller.
6.20.2. Schedule 6.20 contains a list of all current and
former employee benefit plans and practices maintained by Seller within
the past five years (whether funded or unfunded, insured or uninsured)
that provide retirement, disability, health or other benefits
(collectively, all such plans and practices are the "Plans"), including
all such Plans that are either an "employee pension benefit plan" or an
"employee welfare benefit plan" as such terms are defined in the
Employee Retirement Income Security Act of 1974 (together with all
regulations of the Internal Revenue Service, the United States
Department of Labor and the Pension Benefit Guaranty Corporation
thereunder, "ERISA"), along with a notation thereon of "current" as to
all such Plans currently maintained by Seller and the date of
termination thereof as to all Plans that have been terminated.
6.20.3. In connection with the administration of the Plans
(and each of them) Seller has (i) timely filed all reports and other
documents that Seller was required by ERISA to file with the Internal
Revenue Service, the United States Department of Labor or the Pension
Benefit Guaranty Corporation, (ii) timely furnished to all plan
participants and beneficiaries all reports and documents that Seller
was required by ERISA to furnish to them, and (iii) complied in all
other respects with ERISA and other applicable law and regulations.
Seller has not been notified or accused of any violation of ERISA or
other applicable law or regulation with respect to any of the Plans,
and Seller has no liability with respect to any of the Plans for any
funding deficiency, excise or other taxes, penalties, fines, interest
or other expense or damages of any kind whatsoever.
<PAGE>
Section 6.21. Guaranties. There are no contracts or commitments by Seller
guaranteeing the payment or performance by persons or entities other than Seller
or whereby, except for the endorsement of checks in the regular and ordinary
course of its business, Seller in any way is or will be liable with respect to
obligations of any other person or entity, and no other person or entity has
guaranteed or otherwise become contingently liable with respect to any
indebtedness or obligations of Seller.
Section 6.22. Compliance with Laws; Licenses. The business and operations
of Seller are and have been in compliance in all material respects with all
applicable laws, rules and regulations of all authorities, and Seller has
obtained all licenses, permits, bonds, insurance and the like and have made all
registrations which are required for such compliance. A list of all states in
which Seller is licensed or registered as an employment agency, employment
leasing agency or similar business, and a copy of each license or registration
listed, is attached hereto as Schedule 6.22.
Section 6.23. Authorization of Agreement. The execution, delivery and
performance of this Agreement by Seller and the consummation by Seller of the
transactions contemplated hereby have been duly and effectively authorized by
all requisite corporate and other action and this Agreement constitutes a legal,
valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms, except as may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by equitable principles. Neither the execution, performance
or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) violate, conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the creation of a lien or encumbrance on any of the
Purchased Assets pursuant to any of the terms, conditions, or provisions of the
Articles of Incorporation or Bylaws of Seller or any note, bond, mortgage,
indenture, deed of trust, license, agreement, or other instrument or obligation
to which Seller is a party or is bound, or (ii) violate any law, rule,
regulation, order, writ, injunction, decree or statute applicable to the
business or operations of Seller or the Purchased Assets.
Section 6.24. All Material Information. No representation or warranty
made by Seller in this Agreement or any Schedule delivered pursuant to this
Agreement (or any statement made to Purchaser by or on behalf of Seller in
connection with the transactions contemplated by this Agreement) contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation, warranty or statement, in light of the
circumstances when made, not misleading. Seller has no Knowledge of any existing
or threatened occurrence, event or development which, as far as can be
reasonably foreseen on the basis of information currently available to Seller,
has or would have a material adverse effect upon the business, operations,
prospects, property, assets or financial condition of Seller or the Purchased
Assets.
<PAGE>
Section 6.25. Material Adverse Contracts. Seller is not a party to any
contract, agreement or arrangement, oral or written, express or implied,
whatsoever which could materially adversely affect the use or operation of the
Purchased Assets by Purchaser or which could materially adversely affect the
value or prevent or hinder the sale of the Purchased Assets.
Section 6.26. Copies of Documents. True, correct and complete copies of the
leases, contracts and all other documents contained, listed or referred to in
this Agreement or in the Schedules to this Agreement have been delivered to
Purchaser prior to the execution of this Agreement.
Section 6.27. Shareholders. The persons listed in Schedule 6.27 constitute
all of the beneficial and record holders of all of the issued and outstanding
shares of capital stock of Seller, each owning that number of shares listed in
Schedule 6.27 free and clear of any options, warrants, restrictions, pledges,
liens, encumbrances, claims, restrictions and security interests.
Section 6.28. Consents of Third Parties. All necessary consents or
approvals of third parties to the transfer and assignment of the Purchased
Assets, the absence of which would adversely affect Purchaser's rights hereunder
or its utilization of the Purchased Assets or the conduct of the related
businesses, have been obtained (and shown by evidence satisfactory to
Purchaser), including without limitation the consents and approvals referred to
in this Agreement.
Section 6.29. Other Approvals. All necessary consents, approvals,
authorizations or other official actions of all governmental authorities, the
absence of which would materially affect Purchaser's rights hereunder or to the
utilization of the Purchased Assets or conduct of the related business, have
been duly and validly issued or granted and the period for objection, stay or
imposition of any other impediment to the transactions contemplated hereby by
any such governmental authority has expired.
Section 6.30. Customer Relations. Seller has no Knowledge that any person
or organization that has been a material customer of Seller during all or any
portion of the period of time encompassed by the Seller Financial Statements
intends or is likely not to be a material customer of Purchaser within the
twelve month period following the Effective Time, and Seller has no Knowledge of
any facts, circumstances or conditions (other than general economic conditions
applicable generally to Seller's customers) that, either individually or in the
aggregate, would cause a reasonable person to believe that any such material
customer of Seller will not, or likely will not, be a material customer of
Purchaser during the twelve month period following the Effective Time.
Section 6.31. Knowledge. As used as a capitalized defined term herein, the
term "Knowledge" means the actual knowledge of the person or entity in question,
and the Knowledge of Seller includes the Knowledge of all Shareholders,
Directors and officers of Seller.
<PAGE>
ARTICLE VII
Representations and Warranties by Purchaser
In order to induce Seller to enter into this Agreement and consummate the
transactions contemplated hereunder, Purchaser makes the following
representations, warranties, covenants and agreements, each of which shall be
deemed to be independently material and relied upon by Seller, regardless of any
investigation made or information obtained by Seller:
Section 7.1. Valid Existence and Qualification of Purchaser. Purchaser is a
limited partnership duly organized and validly existing under the laws of the
State of Indiana, has been admitted to transact business in the state of Georgia
as a foreign limited partnership, and has all requisite partnership power and
authority to acquire and own the Purchased Assets, to assume, pay, perform and
discharge the Assumed Liabilities, and to perform its obligations under this
Agreement.
Section 7.2. Authorization of Agreement by Purchaser. The execution,
delivery and performance of this Agreement by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby have been authorized by all
requisite partnership and other action and this Agreement constitutes a legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except as may be affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by equitable principles. Neither the execution, performance
or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) violate, conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, any of the terms, conditions, or provisions of the Partnership
Agreement of Purchaser or any note, bond, mortgage, indenture, deed of trust,
license, agreement, or other instrument or obligation to which Purchaser is a
party or is bound, or (ii) violate any law, rule, regulation, order, writ,
injunction, decree or statute applicable to Purchaser.
ARTICLE VIII
Indemnification
Section 8.1. Indemnification by Seller and the Shareholders. Seller and the
Shareholders, jointly and severally, hereby covenant and agree to indemnify
Purchaser and its successors and assigns against and hold them harmless from any
and all liabilities, losses, deficiencies, damages, expenses and costs
(including, without limitation, reasonable counsel fees and costs and expenses
incurred in the investigation, defense or settlement of any claims covered by
this indemnity or incurred in connection with successfully asserting, proving
and collecting indemnity payments pursuant to this Article VIII with respect to
matters not involving defense of third-party claims) accruing from or arising at
any time as a result of or out of:
<PAGE>
8.1.1. Any inaccuracies in or breaches of the representations,
warranties, covenants, obligations or agreements made or to be complied
with or performed by the Shareholders or Seller pursuant to this
Agreement or in any agreement, schedule, certificate or instrument
delivered by or on behalf of the Shareholders or Seller pursuant
hereto, including without limitation the Noncompetition and
Confidentiality Agreements;
8.1.2. Any and all of Seller's liabilities other than the
Assumed Liabilities;
8.1.3. Any claims for brokerage commissions or placement or
finders' fees in connection with the transactions contemplated by this
Agreement, insofar as such claims shall be alleged to be based on
arrangements made by or on behalf of Seller, other than the brokerage
commissions payable by Purchaser in accordance with Article XI; and
8.1.4. Any operations or business conducted, commitment made,
service rendered or condition existing or any action taken or omitted
by or on behalf of Seller on or prior to the Effective Time, except for
liabilities expressly assumed by Purchaser pursuant to Section 3.1
hereof.
Section 8.2. Indemnification by Purchaser. Purchaser shall indemnify Seller
and the Shareholders and their respective successors and assigns against and
hold them harmless from any and all liabilities, losses, deficiencies, damages,
expenses and costs (including, without limitation, reasonable counsel fees and
costs and expenses incurred in the investigation, defense or settlement of any
claims covered by this indemnity or incurred in connection with successfully
asserting, proving and collecting indemnity payments pursuant to this Article
VIII with respect to matters not involving defense of third-party claims)
accruing from or arising at any time as a result of or out of:
8.2.1. Any claims for brokerage commissions or placement or
finders' fees in connection with the transactions contemplated by this
Agreement insofar as such claims shall be alleged to be based on
arrangements made by or on behalf of Purchaser;
8.2.2. Any failure of Purchaser to pay, discharge or perform
the Assumed Liabilities;
8.2.3. Any liabilities asserted by any third party arising out
of any act or failure to act by Purchaser after the Effective Time,
except Excluded Liabilities and liabilities as to which Seller is
obligated to indemnify Purchaser pursuant to Section 8.1; and
8.2.4. Any inaccuracies in or breaches of the representations,
warranties, covenants, obligations or agreements made or to be complied
with or performed by Purchaser pursuant to this Agreement.
<PAGE>
Section 8.3. Survival of Covenants, Representations and Warranties. Each of
the covenants, representations and warranties contained herein or in any
agreement, schedule, certificate or instrument delivered pursuant hereto shall
survive the Closing and remain in full force and effect indefinitely, regardless
of any investigation made by or on behalf of any party hereto.
Section 8.4. Payment and Settlement of Amounts Due.
8.4.1. Any amount due to Purchaser from Seller and/or any of
the Shareholders pursuant to any of the provisions of this Article VIII
shall be paid to Purchaser by Seller and/or the Shareholders within 10
days of demand therefor. If such amounts are not paid to Purchaser when
due, Purchaser shall be entitled, in addition to all other available
remedies, to offset such amounts against amounts otherwise payable to
Seller pursuant to Section 2.1.
8.4.2. Any amount due to Seller and/or any of the Shareholders
from Purchaser pursuant to any of the provisions of this Article VIII
shall be paid to Seller and/or the Shareholders by Purchaser within 10
days of demand therefor.
8.4.3. Any amounts not paid when due pursuant to the
provisions of this Section 8.4 shall bear interest from the date of
demand at the rate of 15 percent per annum.
ARTICLE IX
Change of Names; Use of Names by Purchaser
As soon as practicable after the Effective Time Seller shall change its
corporate name to a name other than, and not similar to, the name "Worldwide
Business Resources, Ltd.," and shall file appropriate documents reflecting such
name change in Georgia and in each state where qualified to do business as a
foreign corporation. Seller shall coordinate any such name change and the
filings in connection therewith with Purchaser and its counsel in order to
ensure that Purchaser obtains all rights to the name in all jurisdictions in
which Seller has used such name. From and after the Effective Time Purchaser
shall have full right, power and authority to use, and Seller hereby consents to
the use by Purchaser or Purchaser's designee of, the name "Worldwide Business
Resources, Ltd.", and the name "Worldwide Staffing Resources" and any
abbreviations or combinations thereof, all past corporate names of Seller and
other names used or previously used by Seller or its predecessors in their
businesses, and any word or trade name used by Seller prior to the Effective
Time in the conduct of its business, without restriction or adverse claim of
Seller, any of its affiliates, or any person claiming by, through or under
Seller. After the Effective Time, Seller shall not use any such name without
Purchaser's written consent, except that Seller may continue to collect its
accounts receivable under its corporate and assumed business names specified
above.
<PAGE>
ARTICLE X
Expenses of the Parties
Each party shall pay its expenses, including the expenses of its legal and
accounting representatives, in connection with the origin, negotiation,
execution and performance of this Agreement, except as otherwise provided
herein. Purchaser shall pay any and all sales and transfer taxes with respect to
the transactions contemplated hereby. Seller shall pay any and all federal and
state income or other taxes attributable to Seller arising as a result of the
transactions contemplated hereby.
ARTICLE XI
Brokers' Commission
The parties hereby agree and represent and warrant to each other that there
are no claims for brokerage commissions, or placement or finders' fees in
connection with the transactions contemplated by this Agreement, except for
brokerage commissions payable to International Business Consultants, Inc., a
broker engaged by Seller, whose commission of $85,000 with respect to the
transaction effected by this Agreement shall be paid $45,000 by Purchaser and
$40,000 by Seller.
ARTICLE XII
Miscellaneous
Section 12.1. Waivers and Amendments. This Agreement may be amended or
modified, and its terms or conditions may be waived, only by a written
instrument executed by the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by any party of the breach of any
term or condition contained in this Agreement in any one or more instances shall
be deemed to be, or construed as, a further or continuing waiver of any breach,
or a waiver of the breach of any other term or condition contained herein. The
parties reserve the right to amend or modify this Agreement, or waive the terms
or conditions hereof, without the consent of any third person (natural or
otherwise).
Section 12.2. Entire Agreement. This Agreement (and the Schedules and
Exhibits hereto which are hereby incorporated and made a part hereof) and all
certificates, agreements, documents and instruments delivered contemporaneously
and in connection herewith constitute the entire understanding of the parties
relative to the subject matter hereof and supersede all prior agreements and
undertakings between or among any of the parties relating to the subject matter
hereof. Any reference herein to this Agreement shall be deemed to include the
Schedules and Exhibits hereto.
<PAGE>
Section 12.3. Headings. The table of contents and descriptive headings in
this Agreement and on the Schedules and Exhibits are inserted for convenience
only and shall not constitute a part of, nor affect the meaning or
interpretation of, this Agreement or any section or subsection hereof.
Section 12.4. Notices. Any notice, election or demand to be given hereunder
to any of the parties by another shall be in writing and personally delivered or
sent by prepaid same day or overnight courier or registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If to Purchaser, Don R. Taylor, President
addressed to: PMI Administration, Inc.
1499 Windhorst Way, Suite 100
Greenwood, IN 46143
With a copy to: David B. Millard, Esq.
Leagre Chandler & Millard
9100 Keystone Crossing, Suite 800
Indianapolis, IN 46240
If to Seller, E. James Grethe or
Victoria Grethe, 965 Edgewater Drive
addressed to: Atlanta, GA 30328
If to Lisa Paonessa, 313 Wynfield Trace
addressed to: Norcross, GA 30092
With a copy (with respect Gary A. Barnes, Esq.
to Seller or the Shareholders) to: Gambrell & Stolz, L.L.P.
SunTrust Plaza, Suite 4300
303 Peachtree Street, N.E.
Atlanta, GA 30308
Any party may change the address to which notices are to be sent to it by giving
written notice of such change of address to the other parties in the manner
herein provided for giving notice.
Section 12.5. Severability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein. Should any particular covenant in this Agreement be
held unreasonable or unenforceable for any reason, including without limitation
the time period, geographical area, or scope of activity covered by such
covenant, then such covenant shall be given effect and enforced to whatever
extent would be reasonable and enforceable.
<PAGE>
Section 12.6. Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of Indiana.
Section 12.7. Consent to Jurisdiction. Each party hereto hereby
irrevocably:
12.7.1. consents to any suit, action or proceeding with
respect to this Agreement being brought in the Circuit or Superior
Court of the State of Indiana in Johnson County and in the United
States District Court for the Southern District of Indiana;
12.7.2. waives to the fullest extent permitted by the law
governing this Agreement any objection that it might have now or
hereafter to the laying of the venue of any such suit, action or
proceeding under Section 12.7.1 above in any such court and any claim
that any such suit, action or proceeding under Section 12.7.1 above has
been brought in an inconvenient forum;
12.7.3. acknowledges the competence of any such court, submits
to the jurisdiction of any such court in any such suit, action or
proceeding and agrees that the final judgment in any such suit, action
or proceeding brought in such court shall be conclusive and binding
upon such party and may be enforced in the courts of the jurisdiction
in which such party's principal office or principal residence is
located, subject to any provision of the law of such jurisdiction of
general applicability relating to enforcement proceedings, or in any of
the courts specified in Section 12.7.1, a certified or exemplified copy
of which shall be conclusive evidence of the fact and of the amount of
such party's obligation; provided, that service of process is effected
upon such party in the manner specified below or as otherwise permitted
by law; and
12.7.4. to the extent that such party has or hereafter may
acquire any immunity from jurisdiction of any such court or from any
legal process therein, waives such immunity, to the fullest extent
permitted by law, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any
claim that (i) such party is not personally subject to the jurisdiction
of the above-named courts, (ii) such party is immune from any legal
process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with
respect to such party or the property of such party or (iii) this
Agreement or the subject matter hereof may not be enforced in or by
such courts.
Section 12.8. Third Parties. Except as otherwise provided herein, nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or entity other than the parties hereto and their respective
successors or assigns, any rights or remedies under or by reason of this
Agreement.
<PAGE>
Section 12.9. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original.
Section 12.10. Successors and Assigns. All the terms, covenants, and
conditions of this Agreement shall be binding upon, and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PMI LP II, an Indiana Limited Partnership
By: PMI ADMINISTRATION, INC.,
its General Partner
By /s/ Don R. Taylor
Don R. Taylor, President
PURCHASER
WORLDWIDE BUSINESS RESOURCES, LTD.,
a Georgia corporation
By /s/ E. James Grethe
E. James Grethe, President
SELLER
/s/ E. James Grethe
E. James Grethe, Individually
SHAREHOLDER
/s/ Victoria Grethe
Victoria Grethe, Individually
SHAREHOLDER
/s/ Lisa Paonessa
Lisa Paonessa, Individually
SHAREHOLDER
<PAGE>
EXHIBIT 10.1
<TABLE>
SCHEDULE OF OPTIONS GRANTED
UNDER 1994 DIRECTOR STOCK OPTION PLAN
(THROUGH APRIL 30, 1998)
Number of Date of Option Option
Grantee Options Granted* Grant Price* Period
<S> <C> <C> <C> <C>
Joseph C. Cook, Jr. 550 1/31/95 $12.09 1/30/2000
1,100 4/30/95 16.73 4/29/2000
550 7/31/95 13.75 7/30/2000
1,100 10/31/95 9.08 10/30/2000
825 01/31/96 5.90 1/30/2001
550 04/30/96 8.75 04/29/2001
550 07/31/96 6.98 07/30/2001
550 10/31/96 7.63 10/30/2001
550 1/31/97 9.45 1/30/2002
550 4/30/97 9.88 4/29/2002
550 7/31/97 9.63 7/30/2002
550 10/31/97 11.74 10/30/2002
1,100 1/31/98 11.79 1/30/2003
550 4/30/98 13.60 4/29/2003
David L. Swider 825 1/31/95 $ 9.95 1/30/2000
(for the quarter
ended 10/31/94)
1,100 1/31/95 12.09 1/30/2000
1,100 4/30/95 16.73 4/29/2000
550 7/31/95 13.75 7/30/2000
1,100 10/31/95 9.08 10/30/2000
1,100 01/31/96 5.90 01/30/2001
1,100 04/30/96 8.75 04/29/2001
825 07/31/96 6.98 07/30/2001
825 10/31/96 7.63 10/30/2001
825 1/31/97 9.45 1/30/2002
550 4/30/97 9.88 4/29/2002
825 7/31/97 9.63 7/30/2002
825 10/31/97 11.74 10/30/2002
1,650 1/31/98 11.79 1/30/2003
550 4/30/98 13.60 4/29/2003
Richard L. VonDerHaar 825 1/31/95 $ 9.95 1/30/2000
(for the quarter
ended 10/31/94)
1,100 1/31/95 12.09 1/30/2000
1,100 4/30/95 16.73 4/29/2000
550 7/31/95 13.75 7/30/2000
1,100 10/31/95 9.08 10/30/2000
1,100 01/31/96 5.90 01/30/2001
550 04/30/96 8.75 04/29/2001
825 07/31/96 6.98 07/30/2001
825 10/31/96 7.63 10/30/2001
825 1/31/97 9.45 1/30/2002
550 4/30/97 9.88 4/29/2002
825 7/31/97 9.63 7/30/2002
825 10/31/97 11.74 10/30/2002
1,650 1/31/98 11.79 1/30/2003
550 4/30/98 13.60 4/29/2003
Max K. DeJonge 550 10/31/95 $ 9.08 10/30/2000
550 01/31/96 5.90 01/30/2001
550 04/30/96 8.75 04/29/2001
550 07/31/96 6.98 07/30/2001
550 10/31/96 7.63 10/30/2001
550 1/31/97 9.45 1/30/2002
550 4/30/97 9.88 4/29/2002
550 7/31/97 9.63 7/30/2002
550 10/31/97 11.74 10/30/2002
550 1/31/98 11.79 1/30/2003
550 4/30/98 13.60 4/29/2003
</TABLE>
*All grants prior to April 24, 1995 retroactively adjusted for ten percent stock
dividend paid on that date.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FILER'S QUARTERLY REPORT ON FORM 10-Q FOR
THE FISCAL QUARTER ENDED APRIL 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000916606
<NAME> PERSONNEL MANAGEMENT, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> APR-30-1998
<CASH> 25,123
<SECURITIES> 0
<RECEIVABLES> 8,717,912
<ALLOWANCES> 93,212
<INVENTORY> 0
<CURRENT-ASSETS> 9,461,579
<PP&E> 3,258,009
<DEPRECIATION> 1,657,795
<TOTAL-ASSETS> 23,079,474
<CURRENT-LIABILITIES> 5,904,862
<BONDS> 5,296,093
0
0
<COMMON> 8,151,671
<OTHER-SE> 3,562,148
<TOTAL-LIABILITY-AND-EQUITY> 23,079,474
<SALES> 20,886,349
<TOTAL-REVENUES> 20,886,349
<CGS> 16,620,283
<TOTAL-COSTS> 16,620,283
<OTHER-EXPENSES> 3,343,184
<LOSS-PROVISION> (18,473)
<INTEREST-EXPENSE> 110,502
<INCOME-PRETAX> 692,341
<INCOME-TAX> 290,100
<INCOME-CONTINUING> 402,241
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 402,241
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.19
</TABLE>
