UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): March 1,
2021
HIREQUEST,
INC.
(Exact
name of registrant as specified in its Charter)
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Delaware
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000-53088
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91-2079472
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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111
Springhall Drive, Goose Creek, SC
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29445
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(843)
723-7400
(Registrant’s
telephone number, including area code)
(Former
name, former address and former fiscal year, if changed since last
report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation
of the registrant under any of the following provisions
(see General Instruction A.2.
below):
☐ Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title of Each
Class
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Trading
Symbol(s)
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Name of Each
Exchange on Which Registered
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Common Stock,
$0.001 par value
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HQI
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The NASDAQ Stock
Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Introductory Note.
On
March 1, 2021, HQ Snelling Corporation (“HQ Snelling”),
a wholly-owned subsidiary of HireQuest, Inc. (the
“Company”) completed its acquisition of certain assets
and assumption of certain liabilities (the
“Transaction”) of Snelling Staffing, LLC, Snelling
Services, LLC, Snelling Employment, LLC, Snelling Medical Staffing,
LLC, and Snelling Investments, Inc. (collectively, the
“Sellers”) in accordance with the terms of the Asset
Purchase Agreement (the “Purchase Agreement”) dated
January 29, 2021 by and among HQ Snelling, the Sellers, Snelling
Holdings, LLC as Sellers’ Representative, and the Company
(solely in its capacity as guarantor of the obligations of HQ
Snelling). The assets acquired included the working capital of
Sellers, customer lists and agreements, and other items set forth
in the Purchase Agreement which was filed as Exhibit 2.1 to the
Company’s Form 8-K filed with the Securities and Exchange
Commission (“SEC”) on February 1, 2021 and which is
incorporated herein by reference, as amended by the First
Amendment, filed herewith as Exhibit 2.1 and incorporated herein by
reference.
The
various agreements described below were entered into in connection
with the Transaction.
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Purchase Agreement
On
March 1, 2021, HQ Snelling entered into the First Amendment to the
Purchase Agreement (the “First Amendment”) dated March
1, 2021 by and among the Sellers, HQ Snelling, and the Company.
Pursuant to the First Amendment, the Company agreed to advance $2.1
million to be paid to the Seller at Closing to be used to pay
accrued payroll liabilities that HQ Snelling assumed pursuant to
the Purchase Agreement.
The
foregoing description of the First Amendment does not purport to be
complete and is qualified in its entirety by reference to the First
Amendment, a copy of which is filed as Exhibit 2.1 hereto and is
incorporated herein by reference, and the Purchase Agreement the
full text of which was filed as Exhibit 2.1 to the Company’s
Form 8-K filed with the Securities and Exchange Commission
(“SEC”) on February 1, 2021 and which is incorporated
herein by reference.
Note Purchase Agreement
Also on
March 1, 2021, HQ Financial Corporation (“HQ
Financial”), a wholly-owned subsidiary of the Company,
entered into a definitive note purchase agreement (the “Note
Purchase Agreement”) with Bass Underwriters, Inc.
(“Bass”), whereby HQ Financial Corporation sold and
conveyed existing notes receivable due from Company franchisees to
Bass for their current principal value of approximately $5.3
million. Bass is a related party to the Company owned, in part, by
Richard Hermanns, Edward Jackson, and trusts they have established.
The transaction was reviewed and approved unanimously by all of the
disinterested members of the Company's board of directors. The Note
Purchase Agreement provides that Bass will have no recourse against
HQ Financial in the event of a default under any of the notes
subject to the agreement.
The
foregoing description of the Note Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Note Purchase Agreement, a copy of which is filed
as Exhibit 2.2 hereto and is incorporated herein by
reference.
Item 2.01 Completion of Acquisition or Disposition of
Assets.
The
description contained under the Introductory Note above is hereby
incorporated by reference into this Item 2.01. The description
contained in Item 1.01 under the heading “Note Purchase
Agreement” is incorporated by reference into this Item
2.01.
The
description of the effects of the Transaction does not purport to
be complete and is subject to, and qualified in its entirety by
reference to the full text of the Purchase Agreement which was
filed as Exhibit 2.1 to the Company’s Form 8-K filed with the
Securities and Exchange Commission (“SEC”) on February
1, 2021 and which is incorporated herein by reference, as amended
by the First Amendment, filed herewith as Exhibit 2.1 and
incorporated herein by reference.
Item 8.01 Other Events.
On
February 28, 2021, HQ Snelling entered into a License Agreement
(the “License Agreement”) with Lyneer Staffing
Solutions, Inc. (“Lyneer”) whereby, effective March 1,
2021, HQ Snelling licensed to Lyneer use of certain assets of the
Amherst and Albany, NY, Arlington Heights, IL, and Hayward, CA
offices (the "Assets") it had acquired from the Sellers for a
two-week period (the “Term”) in exchange for a fee of
$50,000. The parties entered into the License Agreement with the
express purpose of negotiating and finalizing an asset purchase
agreement between themselves for the Assets and agreed to use
commercially reasonable efforts to finalize the asset purchase
agreement during the Term.
On
March 2, 2021, the Company issued a press release announcing the
closing of the Transactions, a copy of which is furnished as
Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
First Amendment to
Asset Purchase Agreement dated March 1, 2021 by and among Snelling
Staffing, LLC, Snelling Services, LLC, Snelling Employment, LLC<
Snelling Medical Staffing, LLC, Snelling Investments, Inc.,
Snelling Holdings, LLC, HQ Snelling Corporation, and HireQuest,
Inc.
Cautionary Note Regarding Forward Looking
Statements.
This release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 including
statements regarding the acquisition of certain assets of Snelling
Staffing and the expected benefits from such transaction including
increased earnings and revenue and the effects of expanded scale.
In addition, the release attached hereto contains forward-looking
statements regarding potential asset sale transactions and the
effects of those transactions including expectations regarding
completion of these transactions and the potential execution and
effects of a trademark license agreement. All statements other than
statements of historical facts contained herein, including the
statements identified in the preceding sentences and other
statements regarding our future financial position and results of
operations, liquidity, business strategy, and plans and objectives
of management for future operations, are forward-looking
statements. The words “expect,”
“expectation,” “intend,”
“anticipate,” “will,”
“believe,” “may,” “estimate,”
“continue,” “should,” “plan,”
“could,” “target,” “potential,”
“is likely,” and similar expressions as they relate to
the company or Snelling Staffing, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on management’s expectations and
projections regarding future events, negotiations, and financial
trends that we believe may affect our financial condition,
operating performance, business strategy, and financial needs.
These forward-looking statements involve a number of risks and
uncertainties.
Important factors that could cause actual results to differ
materially from these forward-looking statements include: the
possibility that the asset sale transactions or trademark license
arrangement will not be executed or close including without
limitation, due to the failure of the parties to reach an
agreement; the possibility that the anticipated benefits of the
asset acquisition or asset sales will not be realized or will not
be realized within the expected time period; the risk that Snelling
Staffing’s business may not be integrated successfully; the
risk that disruption from the acquisition may make it more
difficult to maintain existing business and operational
relationships; and several other factors.
Further information on risks we face is detailed in our filings
with the Securities and Exchange Commission, including our Form
10-K for the fiscal year ended December 31, 2019, our quarterly
reports on Form 10-Q filed since that date, our current report on
Form 8-K filed with the SEC on February 1, 2021, and will be
contained in our SEC filings in connection with this acquisition.
Any forward-looking statement made by us herein speaks only as of
the date on which it is made. Factors or events that could cause
our actual results to differ may emerge from time to time, and it
is not possible for us to predict all of them. The Company
undertakes no obligations to publicly update any forward-looking
statements, whether as a result of new information, future
developments or otherwise, except as may otherwise be required by
law.
SIGNATURES
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, hereunto duly authorized.
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HIREQUEST,
INC.
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(Registrant)
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Date: March 2,
2021
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/s/ John McAnnar
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John
McAnnar
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Chief Legal
Officer
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FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This
First Amendment to Asset Purchase Agreement (this
“Amendment”) is
entered into as of March 1, 2021 by and among Snelling Staffing,
LLC, a Delaware limited liability company (“Snelling
Staffing”), Snelling Services, LLC, a Delaware limited
liability company (“Snelling
Services”), Snelling Employment, LLC, a Delaware
limited liability company (“Snelling
Employment”), Snelling Medical Staffing, LLC, a
Delaware limited liability company (“Snelling Medical
Staffing”), and Snelling Investments, Inc., a Texas
corporation (“Snelling
Investments”) (Snelling Staffing, Snelling Services,
Snelling Employment, Snelling Medical Staffing and Snelling
Investments are also referred to herein individually as a
“Seller” and
collectively as the “Sellers”),
Snelling Holdings, LLC, a Delaware limited liability company, in
its capacity as the Sellers’ Representative (the
“Sellers’
Representative”), HQ Snelling Corporation, a Delaware
corporation (“Buyer”), and
HireQuest, Inc., a Delaware corporation (“Parent”).
WHEREAS, Sellers, Buyer, Sellers’
Representative and Parent entered into that certain Asset Purchase
Agreement dated January 29, 2021 (the “Agreement”);
and
WHEREAS, the parties hereto desire to
amend the Agreement as set forth herein.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as
follows:
1. Capitalized Terms; References.
Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Agreement. All
references herein to Sections, Exhibits or Schedules shall mean
such Sections, Exhibits or Schedules set forth in the
Agreement.
2. Amendment. The Agreement is
hereby amended as follows:
a. Section 3.1(b) is hereby
amended and restated in its entirety as follows:
“(b) If
the Estimated Net Working Capital exceeds the Target Net Working
Capital (such excess, the “Estimated Buyer Working
Capital Escrow Amount”), the Purchase Price will be
increased at Closing by an amount equal to the Estimated Buyer
Working Capital Escrow Amount, and at Closing Buyer will pay, or
cause to be paid, the Estimated Buyer Working Capital Escrow
Amount to the Escrow
Agent to be held in escrow (as set forth in Sections 2.4(a), and
2.6(b)). In
addition to the Estimated Buyer Working Capital Escrow Amount, the
Buyer, at Closing, will fund $2,100,000 related to the Assumed
Payroll Liability, which the Sellers covenant and agree to use to
pay such Assumed Payroll Liability. To the extent any difference
exists between the estimated Assumed Payroll Liability of
$2,100,000 and the actual amount of the Assumed Payroll Liability
paid by the Seller, such amount will be trued-up following Closing
as set forth in footnote (1) to the Estimated Net Working Capital
worksheet delivered by Sellers’ Representative pursuant to
Section
3.1(a).”
b. A new Section 6.9(d) is hereby added
immediately following Section 6.9(c) and shall read
in its entirety as follows:
“(d) If
Buyer or any of its Affiliates (including Hire Quest, L.L.C.), or
any of their Representatives contracts with or engages a third
party for a novation with respect to any of Sellers’
workers’ compensation claims at any time within the
thirty-six (36) months following the Closing Date, Sellers will be
entitled to receive, and Buyer shall pay or shall cause its
Affiliate or Representative to pay, as applicable, fifty percent
(50%) of any amounts paid by or on behalf of the third party to
such Person, such amount to be paid at the closing of such
transaction (and in any event within five (5) Business Days
following receipt) by wire transfer of immediately available funds
in accordance with the wire transfer instructions designated in
writing by Sellers’ Representative (on behalf of Sellers).
Nothing in this Agreement shall be interpreted to require Buyer or
any of its Affiliates to actively search for or entertain such
third-party novation opportunities or engage in any
negotiations with any such third party.”
c. Section 9.9 is hereby amended
and restated in its entirety as follows:
“9.9 Release
of Indemnity Escrow Account. On the date that is ninety (90)
days following the Closing Date, Buyer and Sellers’
Representative shall jointly instruct the Escrow Agent to disburse
to the Sellers’ Representative (for further distribution to
the Sellers in accordance with the provisions of Schedule I hereto) from the
Indemnity Escrow Account $125,000 by wire transfer of immediately
available funds in accordance with the wire transfer instructions
designated in writing by Sellers’ Representative. On the
Interim Indemnity Escrow Release Date, Buyer and Sellers’
Representative shall jointly instruct the Escrow Agent to disburse
to the Sellers’ Representative (for further distribution to
the Sellers in accordance with the provisions of Schedule I hereto) from the
Indemnity Escrow Account the Interim Indemnity Escrow Release
Amount by wire transfer of immediately available funds in
accordance with the wire transfer instructions designated in
writing by Sellers’ Representative. On the Final Indemnity
Escrow Release Date, Buyer and Sellers’ Representative shall
jointly instruct the Escrow Agent to disburse to the Sellers’
Representative (for further distribution to the Sellers in
accordance with the provisions of Schedule I hereto) from the
Indemnity Escrow Account the Final Indemnity Escrow Amount by wire
transfer of immediately available funds in accordance with the wire
transfer instructions designated in writing by Sellers’
Representative.”
d. The definition of
“Current Liabilities” in Exhibit A is hereby amended and
restated as follows:
“
‘Current
Liabilities’ means (a) as of the Effective Time, the
current liabilities of the Sellers that are included in the Assumed
Liabilities and included in the line items set forth on
Exhibit B hereto
under the heading “Current Liabilities” calculated in a
manner consistent with the Accounting Methodology, and (b) all
amounts applied by Seacoast Business Funding to any balance owed by
Sellers as a result of dishonoring payments or otherwise pursuant
to that certain letter dated February 26, 2021 from Seacoast
Business Funding, a Division of Seacoast National Bank to Snelling
Staffing, LLC to which certain Sellers and Hire Quest, L.L.C. are
signatories other than such amounts resulting from dishonored
payments arising out of accounts other than Excluded
Receivables.”
e. The definition of
“Interim Indemnity Escrow Release Amount” in
Exhibit A is hereby
amended and restated as follows:
“
‘Interim
Indemnity Escrow Release Amount’ means, as of the
Interim Indemnity Escrow Release Date, an amount equal to One
Hundred Twenty-Five Thousand Dollars ($125,000), reduced, but not
below $0, by the amount of any claims made by Buyer Indemnified
Parties against the Indemnity Escrow Account that are pending and
unresolved as of the Interim Indemnity Escrow Release Date in
accordance with this Agreement and the Escrow
Agreement.”
f. Schedule I is hereby amended
and restated in its entirety by Schedule I attached to this
Amendment.
g. Schedule II is hereby amended
and restated in its entirety by Schedule II attached to this
Amendment.
3. No Other Changes. Except as
expressly provided in this Amendment, the Agreement shall remain in
full force and effect upon its original terms. This Amendment and
the Agreement constitute an integrated agreement with respect to
the subject matter hereof and thereof. This Amendment may be
amended, modified and supplemented only in accordance with the
terms of the Agreement.
4. Governing Law. This Amendment
will be construed and interpreted and the rights of the parties
governed by the internal laws of the State of Texas, without regard
to any conflict of law or choice of law principles that would apply
the substantive law of another jurisdiction.
5. Counterparts. This Amendment
may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together will constitute one
and the same instrument.
[Signature
Page Follows]
IN WITNESS WHEREOF, the parties hereto
have duly executed this Amendment as of the date first written
above.
THE
SELLERS:
SNELLING STAFFING,
LLC
Title:
Authorized Person
SNELLING SERVICES,
LLC
Title:
Authorized Person
SNELLING
EMPLOYMENT, LLC
Title:
Authorized Person
SNELLING MEDICAL
STAFFING, LLC
Title:
Authorized Person
SNELLING
INVESTMENTS, INC.
Title:
Authorized Person
SELLERS’
REPRESENTATIVE:
SNELLING HOLDINGS,
LLC
Title:
Authorized Person
BUYER:
HQ
SNELLING CORPORATION
Title:
Secretary
PARENT:
HIREQUEST,
INC.
Title:
Secretary
NOTE
PURCHASE AGREEMENT
between
HQ
FINANCIAL COPRORATION, as Issuer
and
BASS
UNDERWRITERS, INC., as Purchaser
dated
as of March 1, 2021
AGREEMENT
This
NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of March 1, 2021,
is entered into between HQ FINANCIAL CORPORATION, a Delaware
corporation (the "Issuer")
and BASS UNDERWRITERS, INC., a Florida corporation (the
"Purchaser").
Recitals
WHEREAS, Issuer has
issued and is the holder of thirty-five (35) notes, (the
"Notes"), in an aggregate
principal face amount of $5,261,110.89, as of the Closing Date, as
depicted in Exhibit A, which
is attached hereto; and
WHEREAS, the
Purchaser is willing, on the terms and subject to the conditions
hereinafter set forth, to purchase the Notes in an aggregate
outstanding amount, and at the Purchase Price set forth in Section
1.01(b); and
WHEREAS, the Issuer
intends to pledge all collateral it has received to secure the
Notes (the “Collateral”) to the Purchaser;
and
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties hereto agree as
follows:
PURCHASE
AND SALE OF NOTES
Section
1.01
Purchase
and Sale of Notes.
(a) Purchase and Sale of Notes on the
Closing Date. Subject to the terms and conditions set forth
herein, on the Closing Date, the Issuer hereby agrees to sell to
the Purchaser and the Purchaser agrees to acquire from the Issuer,
free and clear of all Liens, the Notes in the aggregate initial
principal face amount of $5,261,110.89. The Issuer will not be
obligated to deliver any of the Notes to be delivered hereunder
except upon payment in full of the Purchase Price specified in
Section 1.01(b) hereof, for all of the Notes to be purchased as
provided herein.
(b) Purchase Price. The Notes will
be purchased at a price equal to 100% of the principal amount
thereof, payable on the Closing Date (the "Purchase Price").
(c) Payment of Purchase Price; Delivery of
Notes. Delivery of the Notes and payment therefor shall be
made at the offices of Purchaser, 6951 West Sunrise Blvd.,
Plantation, FL 33313 at 12:01 A.M., Eastern time, on the Closing
Date, or at such other time or place on the same or such other
date, not later than the three (3) business day thereafter, as the
Purchaser and the Issuer may agree upon in writing.
(d) Mechanics. The Notes shall be
delivered by the Issuer to the Purchaser at its headquarters upon
payment by the Purchaser of the Purchase Price specified in Section
1.01(b).
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Section 2.01 Representations and Warranties of
the Issuer. The Issuer represents and warrants to, and
agrees with, the Purchaser that, as of the Closing
Date:
(a) Organization and Status. The
Issuer is duly organized and validly existing and in good standing
under the laws of its respective jurisdiction of
organization.
(b) Due Authorization and
Enforceability. It has the full right, power, and authority
to execute, deliver, and perform this Agreement and to undertake
all of the transactions contemplated hereby and thereby and has
taken all necessary action to authorize the execution, delivery,
and performance by it of this Agreement. When executed by all
parties, as applicable, and delivered, this Agreement will
constitute a legal, valid, and binding agreement, enforceable
against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium, and other laws of general
applicability relating to or affecting creditors rights generally,
and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law).
(c) No Consent. No consent,
license, approval, authorization or order of, or filing or
registration with, any court or governmental agency is required for
the issuance and sale of Notes or the execution, delivery, and
performance by it of its obligations under this
Agreement.
(d) No Conflict. The execution,
delivery, and performance of this Agreement do not, as of the
Closing Date, violate any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets,
or any contractual restriction binding on or affecting it or any of
its assets.
(e) Taxes. All taxes and other
governmental charges due in connection with the execution and
delivery of this Agreement and the transactions contemplated
hereby, and the execution, delivery, and sale of the Notes have
been or will be paid at or before the Closing Date.
(f) Solvency and Conduct of
Business. On and immediately after the Closing Date, the
Issuer (after giving effect to the issuance of the Notes and to the
other transactions related thereto as described in the Time of Sale
Package and the Final Offering Circular) will be
Solvent.
Section
2.02
Representations
and Warranties of Purchaser.
The
Purchaser represents and warrants to, and agrees with, the Issuer,
as of the Closing Date:
(a) Due authorization. It is duly
authorized and possesses the requisite corporate or company power
to enter into this Agreement.No action. There is no action,
suit, or proceeding pending against or, to the knowledge of the
Purchaser, threatened against or affecting, the Purchaser before
any court or arbitrator or any government body, agency, or official
which could reasonably be expected to materially adversely affect
the ability of the Purchaser to perform its obligations under this
Agreement.
ARTICLE
III
CONDITIONS
PRECEDENT
Section 3.01 Conditions to Purchase. The
following shall be conditions precedent to the obligation of the
Purchaser to purchase the Notes on the Closing Date:
(a) Representations and Warranties.
The representations and warranties of the Issuer set forth or
referred to in Section 2.01 hereof shall be true and correct in all
material respects on the Closing Date as though made on and as of
the Closing Date (except for representations and warranties which
relate to a specific date, which shall be true and correct as of
such date).
(b) No Default. No event which
itself or with the giving of notice or lapse of time, or both,
would constitute an event of default hereunder shall have occurred
and be continuing on the Closing Date.
(c) Closing Deliverables. The
Purchaser shall have received on the Closing Date the following
items, each of which shall be in form and substance satisfactory to
the Purchaser: (i) an Officer's Certificate of the Issuer
confirming the satisfaction of the conditions set forth in clauses
(a) and (b) of this Section 3.01; (ii) resolutions of the Board of
Directors or such other similar decision-making committee (or an
authorized committee thereof), as applicable, of the Issuer with
respect to its authorization to enter into and perform its
obligations under this Agreement; and (iii) the Notes.
ARTICLE
IV
LIMITED
RECOURSE
Section
4.01
Non-Recourse
Obligation; Non-Petition By Purchaser
(a)
No Recourse. The
Purchaser acknowledges that, notwithstanding any other provisions
of this Agreement, no recourse shall be had for the payment of any
amount owing in respect of or arising in connection with this
Agreement against any asset of the Issuer or against any officer,
director, employee, shareholder, administrator, or incorporator of
the Issuer. This provision shall survive the termination of this
Agreement for any reason.
ARTICLE
V
MISCELLANEOUS
Section
5.01
Miscellaneous
Provisions.
(a) Notices. All notices and other
communications provided for herein shall be made in writing and
mailed by certified or registered mail, delivered by hand or
overnight courier service, or sent by facsimile as
follows:
Edward
Jackson President
6951
West Sunrise Blvd.
Plantation, FL
33313
John D.
McAnnar
Chief
Legal Officer
111
Springhall Drive Goose Creek, SC 29445
Notices
mailed by certified or registered mail or sent by hand or overnight
courier service shall be deemed to have been given when received.
Notices sent by facsimile during the recipient's normal business
hours shall be deemed to have been given when sent (and if sent
after normal business hours shall be deemed to have been given at
the opening of the recipient's business on the next business day).
Any party hereto may change the address or facsimile number for
receipt of communications by giving written notice to the
others.
(b) Electronic Communications.
Notices and other communications hereunder may be sent by
electronic communication (including email and internet or intranet
websites) in accordance with procedures agreed by the parties
except to the extent that any party notifies the other party hereto
that it is incapable of receiving notices by electronic
communication.
(c) No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
either party to this Agreement, any right, remedy, power, or
privilege under this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy,
power, or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power,
or privilege under this Agreement. The rights, remedies, powers,
and privileges herein provided are cumulative and not exclusive of
any rights, remedies, powers, and privileges provided by
law.
(d) Survival of
Representations and Warranties. All representations and warranties
made under this Agreement (or in any amendment, modification, or
supplement hereto) and in any certificate delivered pursuant to
this Agreement shall survive the execution and delivery of this
Agreement.
(e) Governing
Law. This Agreement and any
claim, controversy, dispute, or cause of action (whether in
contract or tort or otherwise) based upon, arising out of,
or relating to this Agreement and the transactions contemplated
hereby shall be governed by, and construed in accordance with, the
laws of the State of South Carolina without regard to its conflict
of laws principles.
(f) Submission to Jurisdiction.
Each party hereto hereby irrevocably and unconditionally agrees
that it will not commence any action, litigation, or proceeding of
any kind whatsoever, whether in law or equity, or whether in
contract or tort or otherwise, in any way relating to this
Agreement or the transactions contemplated hereby, in any forum
other than the courts of the State of South Carolina sitting in
Berkeley County and any appellate court thereof, and each of the
parties hereto irrevocably and unconditionally submits to the
exclusive jurisdiction of such courts and agrees that any such
action, litigation, or proceeding may be brought in any such South
Carolina State court. Each of the parties hereto agrees that a
final judgment in any such action, litigation, or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(g) Waiver of Venue. Each party
hereto irrevocably and unconditionally waives, to the fullest
extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of venue of any action or
proceeding arising out of or relating to this Agreement in any such
court referred to in subsection (f) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, the defense of an inconvenient forum
to the maintenance of such action or proceeding in any such
court.
(h) Waiver of Jury Trial. EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER
BASED ON CONTRACT, TORT, OR ANY OTHER THEORY. EACH PARTY HERETO (A)
CERTIFIES THAT NO AGENT, ATTORNEY, REPRESENTATIVE, OR ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PERSON WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT
OF LITIGATION, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
(i) Counterparts; Integration;
Effectiveness. This Agreement and any amendments, waivers,
consents, or supplements hereto may be executed in counterparts
(and by different parties hereto in different counterparts), each
of which shall constitute an original, but all taken together shall
constitute a single contract. This Agreement constitutes the entire
contract between the parties relating to the subject matter hereof
and supersedes any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as
provided in Section 3.01, this Agreement shall become effective
when it shall have been executed by the parties hereto and when the
Issuer shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns.
(j) Electronic Execution. The words
“execution,” “signed,”
“signature,” and words of similar import in this
Agreement shall be deemed to include electronic or digital
signatures or the keeping of records in electronic form, each of
which shall be of the same effect, validity, and enforceability as
manually executed signatures or a paper-based recordkeeping system,
as the case may be, to the extent and as provided for under
applicable law, including the Electronic Signatures in Global and
National Commerce Act of 2000 (15 U.S.C. § 7001 et seq.) or
any other similar state laws based on the Uniform Electronic
Transactions Act. Delivery of an executed counterpart of a
signature page to this Agreement in electronic format shall be
effective as delivery of a manually executed counterpart of this
Agreement.
(k) Headings. The headings in this
Agreement are for reference only and shall not affect the
interpretation of this Agreement.
(l) Severability. If any term or
provision of this Agreement is invalid, illegal, or unenforceable
in any jurisdiction, such invalidity, illegality, or
unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or
provision in any other jurisdiction. Upon such determination that
any term or other provision is invalid, illegal, or unenforceable,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that
the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective
officers thereunto duly authorized.
HQ
Financial Corporation
By:
Richard F.
Hermanns
Name:
Richard F. Hermanns
Title:
Chief Executive Officer
Bass
Underwriters, Inc.
By:
Edward
Jackson
Name:
Edward Jackson
Title:
President
HireQuest, Inc. Closes Acquisition of Snelling
Staffing
Expands Franchise Opportunity to Include Traditional Commercial
Staffing
GOOSE CREEK, South Carolina – March 2, 2021 – HireQuest,
Inc. (Nasdaq: HQI), a national franchisor of on-demand and
temporary staffing services, today announced that its subsidiary,
HQ Snelling Corporation, has closed the acquisition of certain
assets of Snelling Staffing (https://www.snelling.com/),
a 67-year-old staffing company headquartered in Richardson, Texas,
for approximately $17.3 million before working capital
adjustments.
“With
this milestone acquisition, HireQuest has established a compelling
second franchise opportunity in commercial staffing, utilizing one
of the more recognized names in the industry,” commented Rick
Hermanns, HireQuest’s President and Chief Executive Officer.
“We now have two complimentary national networks, our
traditional on-demand labor offering and now Snelling’s
commercial staffing.”
At
close, HireQuest acquired 47 Snelling locations that generated $87
million in system sales for 2020. As part of its standard
integration process, HireQuest has determined that it is in its
strategic interest to sell certain Snelling locations to third
parties. The company is currently in negotiations regarding these
locations and expects to complete the transactions in the coming
weeks. It is HireQuest’s expectation that certain of the
branches being sold will be operated under a trademark license
agreement resulting in continued royalty revenues to
HireQuest.
HireQuest
funded this acquisition with existing cash on hand and a draw on
its existing line of credit.
About HireQuest
HireQuest,
Inc. is a nationwide franchisor that provides on-demand labor and
commercial staffing solutions in the light industrial, blue-collar,
and commercial segments of the staffing industry for HireQuest
Direct, HireQuest, and Snelling franchised offices across the
United States. Through its national network of over 180
franchisee-owned offices in more than 30 states and the District of
Columbia, HireQuest provides employment for approximately 80,000
individuals annually that work for thousands of customers in
numerous industries including construction, light industrial,
manufacturing, hospitality, clerical, travel, and event services.
For more information, visit www.hirequest.com.
Important Cautions Regarding Forward-Looking
Statements
This release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 including
statements regarding the acquisition of certain assets of Snelling
Staffing and the expected benefits from such transaction including
increased earnings and revenue and the effects of expanded scale.
In addition, this release contains forward-looking statements
regarding potential asset sale transactions and the effects of
those transactions including expectations regarding completion of
these transactions and the potential execution and effects of a
trademark license agreement. All statements other than statements
of historical facts contained herein, including the statements
identified in the preceding sentences and other statements
regarding our future financial position and results of operations,
liquidity, business strategy, and plans and objectives of
management for future operations, are forward-looking statements.
The words “expect,” “expectation,”
“intend,” “anticipate,” “will,”
“believe,” “may,” “estimate,”
“continue,” “should,” “plan,”
“could,” “target,” “potential,”
“is likely,” and similar expressions as they relate to
the company or Snelling Staffing, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on management’s expectations and
projections regarding future events, negoatiations, and financial
trends that we believe may affect our financial condition,
operating performance, business strategy, and financial needs.
These forward-looking statements involve a number of risks and
uncertainties.
Important factors that could cause actual results to differ
materially from these forward-looking statements include: the
possibility that the asset sale transactions or trademark license
arrangement will not be executed or close including without
limitation, due to the failure of the parties to reach an
agreement; the possibility that the anticipated benefits of the
asset acquisition or asset sales will not be realized or will not
be realized within the expected time period; the risk that Snelling
Staffing’s business may not be integrated successfully; the
risk that disruption from the acquisition may make it more
difficult to maintain existing business and operational
relationships; and several other factors.
Further information on risks we face is detailed in our filings
with the Securities and Exchange Commission, including our Form
10-K for the fiscal year ended December 31, 2019, our quarterly
reports on Form 10-Q filed since that date, our current report on
Form 8-K filed with the SEC on February 1, 2021,and will be
contained in our SEC filings in connection with this acquisition.
Any forward-looking statement made by us herein speaks only as of
the date on which it is made. Factors or events that could cause
our actual results to differ may emerge from time to time, and it
is not possible for us to predict all of them. The Company
undertakes no obligations to publicly update any forward-looking
statements, whether as a result of new information, future
developments or otherwise, except as may otherwise be required by
law.
Company
Contact:
HireQuest,
Inc.
Cory
Smith, CFO
(800)
835-6755
Email:
Cssmith@hirequest.com
Investor
Relations Contact:
Hayden
IR
Brett
Maas
(646)
536-7331
Email:
brett@haydenir.com