EXHIBIT
10.5
STOCK PURCHASE AGREEMENT
BY AND AMONG
STAFF BUILDERS, INC.
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
and
CHELSEA COMPUTER CONSULTANTS, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT
("Agreement") is made and entered into as of the 24th day of
September, 1996 by and among STAFF BUILDERS, INC., a New
York corporation (the "Buyer"); and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Shareholders"), and Chelsea Computer
Consultants, Inc. ("CCC"), (herein collectively referred to as the
"Seller's").
BACKGROUND
WHEREAS, CCC has two-hundred (200) issued and
authorized shares of its common stock ("OLD SHARES"); and
WHEREAS, all of the Old Shares are owned by the
Shareholders; and
WHEREAS, CCC and the Shareholders are willing
to authorize an increase in the number of shares of CCC from two-
hundred (200) to one thousand (1,000) (said 800 additional shares to
be hereinafter referred to as ("NEW SHARES"). The Old Shares
plus the New Shares shall hereinafter be referred to as ("Stock"); and
WHEREAS, CCC and the Shareholders are willing
to issue a 190 of the New Shares to Buyer and Buyer is willing to
purchase such New Shares; and
WHEREAS, Sellers are willing to grant Buyer an
option to purchase an additional 61% of the Stock as more
particularly described herein; and
WHEREAS, If Buyer exercises its option to purchase
an additional 61%, Buyer is willing to ▇▇▇▇▇ ▇▇▇▇▇▇▇ an option to sell
to Buyer the remaining stock owned by Sellers; and
WHEREAS, the Sellers and the Buyer are prepared
to agree on a course of action in the event that Buyer does not
exercise its options; and
WHEREAS, the Buyer is willing to render consulting
services to CCC with respect to establishing a Franchise Program of
its employee staffing operations ("Franchise Program").
NOW, THEREFORE, for and in consideration of the
mutual agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, Sellers and
Buyer covenant, represent, warrant, stipulate and agree as follows:
ARTICLE 1. PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale of Shares. At the Closing (as
hereinafter defined), subject to the terms and conditions of this
Agreement, CCC agrees to sell, transfer, convey, deliver and assign
to Buyer all right, title and interest in 190 New Shares ("Buyer's
Stock"), free and clear of all liens and encumbrances, for the
consideration hereinafter set forth.
ARTICLE 2. CLOSING DATE; TRANSFER OF STOCK
2.1 Closing and Closing Date. The closing hereunder
(the "Closing") shall take place at such place and time and on such
date ("Closing Date") as may be agreed to in writing by Sellers and
Buyer but in no event later than fifteen (15) days from the date of
execution of this Agreement.
2.2 Transfer of Buyer's Stock. CCC shall, at the Closing
on the Closing Date, deliver to Buyer certificates for Buyer's Stock.
ARTICLE 3. PURCHASE PRICE FOR THE SHARES
3.1 Purchase Price for the Shares. The purchase price
(the "Purchase Price") for the Buyer's Stock payable by Buyer to
CCC at Closing shall be Two Million Dollars ($2,000,000).
ARTICLE 4. PURCHASE AND SALE OF ADDITIONAL SHARES
4.1 Exercise of First Option. Buyer is hereby granted
an option to purchase an additional 610 Shares of the of the Stock
("First Option"). These shares shall be purchased on a prorata
basis from each Shareholder. This option shall be exercisable on or
before the thirtieth (30th) day after Shareholder releases to Buyer
the certified financial data needed to calculate the Purchase Price.
The Purchase Price shall be sixty-one percent (61%) of seven (7)
times the adjusted pretax profits ("Adjusted Pretax Profits") for the
twelve months immediately subsequent to the Closing of this
Agreement. This option is conditioned upon Buyer's due diligence
investigation prior to exercise. Due diligence may be waived by
Buyer. Additionally, all the relevant Schedules of this Agreement
shall be updated, as of the date of exercise of the First Option.
The covenants and representations in this Agreement shall apply to
the acquisition of the stock under the First Option.
4.2 Calculation of Adjusted Pretax Profits. The
Adjusted Pretax Profits shall be calculated utilizing Generally
Accepted Accounting Principles ("GAAP"). CCC is and will continue
to treat the expenses connected with the hiring of employees as an
item which is amortized over a two (2) year period of time. The
Adjusted Pretax Profit shall be calculated by adjusting the Pretax
Profits by: 1) adding back any amount by which the principal's yearly
salaries exceed $616,000; 2) deducting any income from the Franchise
Program; and (3) adding any fees paid either directly or as consulting
fees for the Franchise Program.
4.3 Exercise of Second Option. Subject to the
exercise of the First Option, CCC and Shareholders are hereby
granted a further option to sell their remaining shares of CCC to
Buyer, with Buyer then required to purchase from Seller for twenty
percent (20%) of seven times the yearly Adjusted Pretax Profits,
determined before interest and taxes plus hard assets arrived at by
averaging the two years from the thirteen through thirty-six month
after the Closing of this Agreement ("Second Option"). This Second
Option shall be exercisable on of before the thirtieth day after CCC
releases the certified financial data needed to calculate the Purchase
Price. The Adjusted Pretax Profits shall be calculated utilizing the
method set forth in 4.2 above.
4.4 Repurchase Options. In the event Buyer does not
exercise its First Option: 1) CCC shall have the option ("First
Repurchase Option") (exercisable within 30 days of Buyer's non-
exercise of the First Option) to repurchase the 190 Buyer's Shares of
CCC's Stock for two million dollars ($2,000,000) payable upon
exercise of this First Repurchase Option; and 2) CCC shall have the
option ("Second Repurchase Option") (exercisable within 30 days of
Buyer's non-exercise of its First Option) to require Buyer to
purchase the Franchise Program from CCC including but not limited
to all contractual commitments, Franchise agreements, marketing
materials and good will for the sum of $2,000,000 payable upon
exercise of this Second Repurchase Option.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF
SELLER'S
Seller's hereby represent and warrant to Buyer both as of the
date hereof and the Closing Date as follows:
5.1 Organization of CCC; Good Standing; Qualifications;
Charter and By-Laws; Subsidiaries.
(a) CCC is a corporation, duly organized, and
is in good standing under the laws of the State of New York. Neither
the nature of its assets or business requires CCC to register to
conduct business in any other jurisdictions. CCC has the requisite
corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted. A true
and complete copy of the By-Laws and Articles of Incorporation of
CCC as currently in effect has been delivered to Buyer. CCC has no
subsidiaries and is not a partner in any partnership nor a participant
in any joint venture.
(b) The authorized capital stock of CCC
consists of 200 shares of common stock, no par value, all of which
shares are issued to Shareholders and are currently outstanding. The
shares of stock of CCC issued to Shareholders are all of the issued
and outstanding shares of CCC. The Old Shares has been duly
authorized and validly issued and are fully paid and nonassessable.
The Old Shares are owned by Shareholders free and clear of any
liens, claims, pledges or other encumbrances. The Old Shares have
not been issued in violation of any preemptive rights of shareholders
and there are no outstanding warrants, calls, options or other rights
or claims with respect to the Old Shares or the issuance or transfer
of the Old Shares. There are no shareholder agreements or voting
trust agreements or other agreements with respect to the Old Shares.
(c) With respect to the New Shares after the
issuance of the New Shares, the New Shares plus our Old Shares will
be all the authorized Shares of CCC. The New Shares will not be
owned by any person and will be free and clear of any liens, claims,
pledges or other encumbrances. The New Shares, when and if issued,
will not be in violation of any preemptive rights of shareholders and
there are no outstanding warrants, calls, options or other rights or
claims with respect to the New Shares or the issuance or transfer of
the New Shares. There are no shareholder agreements or voting
trust agreements or other agreements with respect to the New
Shares.
(d) At Closing, Shareholders shall transfer good
and valid title to the Buyer's Stock to Buyer, free and clear of any
liens, claims, pledges, rights or other encumbrances. There is no
outstanding right, subscription, warrant, call, unsatisfied preemptive
right, option or other agreement of any kind to purchase or otherwise
to receive from CCC or Shareholders any of the outstanding,
authorized but unissued, unauthorized or treasury shares of the
capital stock or any other security of any kind of CCC, and there is
no outstanding security of any kind convertible into such CCC capital
stock.
(e) The minute books of CCC contain true and
complete records of all meetings of the Board of Directors,
committees of the Board, and shareholders since the time of CCC's
incorporation and accurately reflect all transactions referred to in
such minutes and consents in lieu of meeting. The stock books and
ledgers of CCC are true and complete.
(f) The sale of the Stock by Sellers to Buyer is
exempt from registration under applicable federal and state Securities
laws.
5.2 Authority.
(a) Shareholders and CCC have full power and
have taken all actions necessary to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the
other Transaction Documents (as hereinafter defined) to which they
are a party constitute the legal, valid and binding obligation of them
enforceable against them in accordance with its terms, except to the
extent that such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, and similar laws
affecting creditors; rights generally, and (ii) equitable principles which
may limit the availability of certain equitable remedies (such as
specific performance) in certain instances. For purposes of this
Agreement, "Transaction Documents" shall mean this Agreement and
the Schedules hereto, each certificate delivered pursuant hereto, each
Exhibit hereto in executed form and all other documents and
agreements executed and delivered to Buyer pursuant hereto at the
Closing.
(b) Neither the execution or delivery of this
Agreement and the other Transaction Documents nor the
consummation of the transactions contemplated hereby will (i) except
for obtaining the required consents as set forth on Schedule 5.2 and
except for obtaining any consent where the failure to obtain such
consent would not materially or adversely affect the assets or the
financial condition of CCC, conflict with, constitute a breach,
violation or termination of any provision of any contracts and other
agreements to which Sellers or CCC is a party or by which any of
them is bound, (ii) conflict with or violate the Articles of
Incorporation or By-Laws, of CCC (iii) violate any statute, law,
regulation, judgment, rule, order or any other restriction of any kind
or character applicable to Sellers, except for any statute, law,
regulation, judgment, rule, order, license, permit or any other
restriction, where the violation thereof would not materially or
adversely effect the Stock, the assets or the financial condition of
CCC.
5.3 Approvals; Other Authorizations-Sellers. Except
as set forth on Schedule 5.3, no consent, waiver, authorization or
approval of, giving of notice to, or registration or filing or taking of
any other action in connection with, any governmental authority or of
any other person is necessary in connection with the execution and
delivery of this Agreement by Shareholders or CCC and the
consummation of the transactions contemplated hereby.
5.4 Approvals, Licenses and Other Authorizations CCC.
All licenses, permits and other governmental authorizations and
approvals of all federal, state and local governmental authorities
required or necessary for CCC to operate have been duly obtained
and are in full force and effect, except where the failure to do so
would not have a material adverse effect upon the financial condition
of CCC. To the Sellers' knowledge, the sale of the Stock and the
consummation of the transaction contemplated by this Agreement
and the other Transaction Documents will not result in the
termination or revocation of any license, permit or other
governmental authorizations of CCC. CCC has operated its business
in accordance with all applicable federal, state and local laws, rules
and regulations, except where noncompliance would not have a
material and adverse impact on the financial condition or operations
of CCC. There are no proceedings pending, or to the best of Sellers'
knowledge, threatened to restrict, revoke or modify such licenses,
permits or other governmental authorizations and approvals of CCC
or to the best of Sellers' knowledge, matters which could give rise to
such proceedings.
5.5 Financial Statements; Liabilities.
(a) Sellers have delivered to Buyer a copy of
the balance sheet of CCC as of June 30, 1996, and the related
statement of revenues and expenses, changes in fund balances and
statement of cash flows (the "Financial Statements") prepared by a
public accounting firm. The Financial Statements have been prepared
from the books and records of CCC on a consistent basis in
accordance with generally accepted accounting principles, as of the
date and for the period then ended. The Financial Statements are
based upon the books and records of CCC and fairly represent the
financial position of CCC and its results of operations for the period
then ended.
(b) Attached hereto as Schedule 5.5(b) is a true
and complete interim financial statements as of ,
(the "Interim Financial Statements"). Other than as disclosed in the
Financial statements, as supplemented, as of the Closing Date, by
Schedule 5.5(b), CCC has no outstanding liabilities as of the Closing
Date and CCC has no knowledge of any threatened claims, actions
or investigations which would result in the incurrence of any
additional liabilities by CCC, which would be likely to have a material
adverse effect on the Interim Financial Statements.
(c) To the Sellers knowledge, CCC has no
indebtedness, liability or obligation of any character whatsoever,
whether or not accrued, whether known or unknown, fixed or unfixed,
▇▇▇▇▇▇ or inchoate, liquidated or unliquidated, contingent or
otherwise, including without limitation liabilities for taxes, other
governmental charges or pending lawsuits, other than (i) liabilities
reflected in the Financial statements or Interim Financial Statements
or (ii) liabilities since the date of the Interim Financial Statements as
set forth in Schedule 5.5(c), or as otherwise permitted by this
Agreement, which would be likely to have a material adverse effect
on the Interim Financial Statements.
5.6 Absence of certain Events. Since June 30, CCC has
operated its business in the ordinary and normal course and there has
not been:
(a) any damage, destruction or loss, whether
covered by insurance or not, adversely affecting the assets and
properties of CCC;
(b) except as set forth in Schedule 5.6, any
increase or decrease in the compensation payable or to become
payable to any of CCC's officers or management employees or
material change in any insurance, pension or other benefit plan,
payment or arrangement made to, for or with any of CCC's officers
or management employees, any commission or bonus paid to any of
such officers or management employees or any amendment to any
employment agreement or benefit plan except in the ordinary course
of business consistent with past practices;
(c) any sale, assignment, transfer, lease or other
disposition of any asset of CCC, other than in the ordinary course
of business consistent with past practices;
(d) any acquisition of any assets, other than in
the ordinary course of business consistent with past practices;
(e) any transaction, contract or commitment
entered into which is not in the ordinary course of business and
consistent with past practices;
(f) any material adverse change in the assets,
business or financial condition of CCC;
(g) any amendment to the Articles of
Incorporation or By-Laws of CCC other than to increase the
Corporation's authorized common shares to 1,000 shares.
(h) any issuance by CCC of any options or
rights of any commitment to pay dividends as to any of its capital
stock;
(i) any loan or advance by CCC to any
shareholder, director, officer, employee, agent, consultant or other
representative of CCC;
(j) any payment or commitment to pay
severance or termination pay to any officer, director, employee, agent,
consultant or representative of CCC;
(k) any debt or liability other than in the
ordinary course of business or as otherwise permitted pursuant to the
terms of this Agreement.
5.7 Title to and condition of Properties.
(a) Schedule 5.7 hereto contains a list of all
real property owned or leased by CCC, and a true and complete copy
of the deed therefor and each such lease with respect thereto has
been delivered to Buyer. Without limiting the generality of the
foregoing, as to leasehold estates leased by CCC, as lessee, CCC has
quiet and peaceable possession of each of the leased properties and
CCC has not pledged, assigned, mortgaged or otherwise encumbered
its leasehold interest in any such leasehold estate. All leases and
subleases to which CCC is a party are in full force and effect, and
there are no material defaults thereunder. With respect to such
leases, no default or event of default on the part of CCC, as lessee,
and to the knowledge of CCC, no default or event of default on the
part of the lessor, under the provisions of any of said leases, and no
event which with the giving of notice or passage of time, or both,
would constitute such default or event of default on the part of CCC,
or to the knowledge of CCC, on the part of any such lessor, has
occurred and is continuing unremedied or unwaived.
(b) CCC has good and valid title to all of its
assets and properties, including without limitation all leased real
estate of CCC, free and clear of all liens, security interests, and other
encumbrances, except as set forth on Schedule 5.7 hereto.
(c) The material assets of CCC including, but
not limited to, all machinery, equipment, furniture and fixtures are in
good operating condition and repair for assets of such age and type,
subject to ordinary wear and tear and the use to which such assets
have been employed.
(d) A list of all tangible personal property of
CCC is included on Schedule 5.7. Schedule 5.7 also contains a list of
all leases of personal property under which CCC is a lessee or lessor
involving tangible personal property requiring annual lease payments
or revenue in excess of $1,000 (true, accurate and complete copies of
which leases have been previously delivered to Buyer).
5.8 Intangible Properties. Schedule 5.8 hereto
contains a list of all patents and applications therefor, trademarks,
trademark registrations and applications therefor, trade names,
service marks, copyrights, copyright registrations and applications
therefor, owned or used by CCC.
5.9 Contracts and Commitments.
(a) To the extent not listed on
Schedule 5.7 hereto, Schedule 5.9 hereto lists all Material Contracts
(as hereinafter defined) to which CCC is a party or by which it is
bound. A true and complete copy of each Material Contract has
been delivered to Buyer. For purposes of this Agreement, the term
"Material Contract" means all leases, agreements, contracts and
commitments of CCC with annual payments or revenue of at least
$5,000. Each Material Contract is in full force and effect, and there
exists no default or event of default thereunder which would cause
the termination of such contract. CCC has not received any notice
that any person party to a Material Contract intends to cancel,
modify or terminate any Material Contract, and CCC has not given
any notice of cancellation, modification or termination of any
Material Contract. Each Material Contract is a valid and binding
agreement of CCC enforceable against CCC in accordance with its
terms, and no consent or approval of the other parties to any
Material Contract or any person pursuant to any Material Contract
is required for the transfer and sale of the Stock to Buyer, other than
the consents and approvals set forth on Schedule 5.9 hereto.
(b) As of the date hereof, CCC has not made
any other contract or agreement or granted any option to sell or
otherwise transfer any part of its assets or entered into any
understanding or agreement in principle respecting any such
transaction with anyone other than Buyer.
(c) As of the date hereof, neither the
Stockholders nor CCC have made any contract or agreement or
granted any option to sell or otherwise transfer the Stock or any part
thereof or entered into any understanding or agreement in principle
respecting any such transactions with anyone other than Buyer.
(d) CCC has no affiliates.
5.10 Tax Returns and Tax Audits.
(a) CCC, to the best of its knowledge and
belief, has filed with all appropriate governmental agencies all tax or
information returns and tax reports required to be filed prior to
Closing and has paid all federal, state and local income, franchise,
sales, property, excise, ad valorem, employment (including applicable
deposits of withholdings for FICA, FUTA, and other required
federal, state or municipal withholdings) or other taxes reflected on
such returns, and all interest, penalties, assessments or deficiencies
claimed to be due by any such taxing authority for all periods prior
to the current taxable period. No extensions of time to file any tax
returns of CCC have been requested that are currently effective.
(b) CCC is not a party to any pending or
threatened action or proceeding by any governmental taxing authority
for assessment or collection of taxes, and no claim for assessment or
collection of taxes has been asserted against CCC. CCC is not
involved with or aware of any pending audit or examination by any
governmental taxing authority for assessment or collection of taxes.
5.11 Insurance. Attached hereto as Schedule 5.11 is a list
and description of all general liability, director and officer, property
and casualty insurance policies currently in force providing coverage
on behalf of CCC including, without limitation, for the following:
malpractice or negligent or grossly negligent acts or omissions by
CCC or its employees or agents and for general liability of CCC,
general casualty and property damage and flood insurance. All of
such insurance is now in full force and effect and premiums with
respect to such policies have been paid to keep such insurance in full
force and effect through the dates set forth on Schedule 5.11. True
and complete copies of all such policies and any endorsements
thereof have been delivered to Buyer. There are no outstanding
unpaid claims for insurance with respect to the insurance policies of
CCC. Neither CCC nor Shareholders have received any notice of
cancellation or nonrenewal with respect to the insurance policies
providing coverage of CCC.
5.12 No Litigation, Adverse Events or Violations.
(a) Except as set forth on Schedule 5.12 hereto,
there is no action, suit, claim or other proceeding pending (i) against
CCC, or (ii) against Shareholders with respect to CCC. To the best
of Sellers' knowledge there is no action, suit, claim or other
proceeding (i) threatened against CCC, or (ii) threatened against
Shareholders with respect to CCC. There are no injunctions or
orders entered, pending or to the best of Sellers' knowledge,
threatened (i) against CCC, or (ii) against Shareholders with respect
to CCC.
(b) Except as set forth on Schedule 5.12, CCC,
to the best of its knowledge and belief, is in compliance with
applicable federal, state and local laws, relating or applicable to it
where the violation of or noncompliance with which would have a
material adverse effect on the financial condition or operations of
CCC.
(c) There are no actions, suits or claims or proceedings
pending or to the knowledge of Sellers, threatened that would give
rise to any right of indemnification on the part of any director or
officer of CCC or the heirs, executors or administrators of any such
director or officer, against CCC.
5.13 Labor Agreements. CCC is not and has never been
a party to and is not bound by any collective bargaining agreement.
5.14 Employee Benefit Plans.
(a) Except as set forth on Schedule 5.14 hereto,
CCC does not have any Benefit Plans, as defined in paragraph (l)
below, nor has CCC maintained or contributed to any Benefit Plans
subject to Title IV of ERISA.
(b) All persons who participate in the
operations of each Benefit Plan (including but not limited to the
members of any plan committee, all plan fiduciaries, all plan
administrators, CCC, its Board of Directors, and all relevant
employees of the CCC) act and have always acted with respect to
each Benefit Plan in all material respects in accordance with the
requirements of all applicable laws [including but not limited to the
Employee Retirement Income Security Act of 1974, as amended, and
any rules and regulations promulgated thereunder ("ERISA") and the
Internal Revenue Code of 1986, as amended, and any rules and
regulations promulgated thereunder (the "Code",) and in accordance
with the terms and conditions of each such Benefit Plan.
(c) All Benefit Plans are now, and have always
been established, maintained and operated in all material respects in
accordance with all applicable laws (including but not limited to
ERISA and the Code) and in accordance with the terms and
conditions of each such Plan.
(d) Except as set forth on Schedule 5.14, all
returns, reports, disclosure statements and elections required to be
made under all applicable laws (including but not limited to ERISA
and the Code) with respect to the Benefit Plans have been timely and
accurately filed, delivered, or made.
(e) With respect to any of the Benefit Plans, no
reportable events (within the meaning of ERISA and the Code,
respectively), prohibited transactions (within the meaning of Section
4975 of the Code) or party-in-interest transactions (within the
meaning of Section 406 of ERISA) have occurred.
(f) Except as described in Schedule 5.14 hereto
and except with respect to income taxes on benefits paid or provided,
no income, excise or other tax or penalty (federal or state) has been
waived or excused, has been paid or is owed by any person (including
but not limited to any Benefit Plan, any plan fiduciary and CCC) with
respect to the operations of, or any transactions with respect to, any
Benefit Plan. No action has been taken, nor has there been any
failure to take any action, nor is any action or failure to take action
contemplated, that would subject any person or entity to any liability
for any tax or penalty in connection with any Benefit Plan (including
but not limited to any tax or penalty for the failure to withhold
income taxes in connection with fringe benefits).
(g) Except as set forth on Schedule 5.14, all
contributions required to be made to or with respect to each Benefit
Plan have been completely and timely made.
(h) All benefits or other payments required to
be made under or by any Benefit Plan have been completely and
timely paid.
(i) There has been no merger, consolidation or
transfer of assets or liabilities (including but not limited to a split up
or split off) with respect to any Benefit Plan.
(j) There are no actions, suits or claims (other
than routine claims for benefits) pending or threatened against the
Benefit Plans or their assets, or arising out of such Benefit Plans,
including but not limited to any action, suit or claim by or on behalf
of the Benefit Plans or by any employee of CCC alleging a breach or
breaches of fiduciary duties or violations of applicable state or federal
law which could result in liability on the part of either CCC or the
Benefit Plans under ERISA or any other law, and, to CCC's best
knowledge, no facts exist which could give rise to any such actions,
suits or claims.
(k) Sellers have delivered to Buyer true and
complete copies of all current and prior material documents,
including all amendments thereto, with respect to each of the Benefit
Plans set forth in Schedule 5.14 hereto, and Sellers hereby agrees to
transfer to Buyer, upon Closing, all records in connection with each
Benefit Plan to be assumed by Buyer hereunder. All such records
shall accurately state the history of each participant and beneficiary
in connection with each Benefit Plan and accurately state the benefits
earned by and/or owed to each such person under each Benefit Plan.
(l) For purposes of this Section 5.14, the term
"Benefit Plan" includes but is not limited to (i) pension, retirement,
profit sharing, stock bonus, and nonqualified deferred compensation
plans, (ii) disability, medical, dental, worker's compensation, health
insurance, life insurance, and incentive plans, (iii) vacation benefits
and fringe benefits, (iv) any other employee benefit plan as such term
is defined in Section 3(3) of ERISA, and (v) any cafeteria plan,
accident and health plan (including self-insured medical
reimbursement plan), or dependent care assistance program (as such
terms are defined in Sections 125, 105 and 129, respectively of the
Code).
(m) CCC, to the best of its knowledge and
belief, has complied in all material respects with the continuation
coverage requirements of Section 4980B of the Code which applies
to any employees of CCC prior to the Closing.
(n) With respect to CCC 401-K's Profit-Sharing
Plan (the "401(k)Plan"): (i) such Plan which is intended to qualify as
a tax-qualified retirement plan under Code 401(a) Sellers have no
reason to believe that it cannot receive a favorable determination
letter from the Internal Revenue Service as to qualification of such
Plan; and the trust thereunder is exempt from tax pursuant to Code
5501(a), (ii) no event has occurred that will or could give rise to the
disqualification of the Plan or loss of the Tax-exempt status of the
trust created thereunder under the aforesaid Sections of the Code,
(iii) no event has occurred that will or could subject the Plan to tax
under Section 511 of the Code, and (iv) all contributions have been
made to the Plan in a complete and timely fashion pursuant to the
applicable provisions of the Code with respect to all plan years.
5.15 Trade Names. CCC does not conduct business
under any name other than those listed on Schedule 5.15. Sellers
have no knowledge that any trade name listed in Schedule 5.15 is
subject to any infringement claim.
5.16 Accounts Receivable and Notes Receivable. All
accounts receivable and notes receivable of CCC represent and
constitute bona fide indebtedness owing to CCC in the amounts
indicated in the Financial Statements and the Interim Financial
Statements of CCC, with no known setoffs (other than CCC's
customary allowances for uncollectible accounts and contractual
adjustments as indicated thereon and adjusted for estimated recovery
of bad debt). Neither CCC nor any of its respective officers,
directors, employees or agents, on behalf of or for the benefit of
Sellers, directly or indirectly, have (i) offered or paid any amount to,
or made any financial arrangements with, any of Sellers' past or
present customers or potential customers in order to obtain business
from such customers, other than standard pricing or discount
arrangements consistent with proper business practices, (ii) given, or
agreed to give, or is aware that there has been made, or that there
is an agreement to make any gift or gratuitous payment of any kind,
nature or description (whether in money, property or services) to any
past or present customer, supplier, source of financing, landlord, sub-
tenant, license or anyone else at any time, (iii) or agreed to make, or
is aware that there is any agreement to make any political
contribution or any contributions, payment or gifts of their respective
funds or property to or for the private use of any governmental
official, employee or agent where either the payment or the purpose
of such contribution, payment or gift related to the business of Sellers
and is illegal under the laws of the United States, any state thereof
or any other jurisdiction (foreign or domestic), or (iv) made, or
agreed to make, or is aware that there have been, or that there is any
agreement to make, any payments to any person with the intention
or understanding that any part of such payment was to be used
directly or indirectly for the benefit of any past or present customer,
employee, supplier or landlord of Sellers, or for any purpose other
than that reflected in the documents supporting the payments.
5.17 Licenses and Permits. Set forth on Schedule 5.17 is
a true and complete listing of, all material licenses, permits,
certificates of need and approvals from any governmental authority
required for the operation of CCC's business as conducted at present.
Each such license, permit, certificate of need and approval held by
CCC is in full force and effect, CCC is in compliance with all of its
obligations with respect thereto, and to the best knowledge of Sellers,
no event has occurred which permits or with the giving of notice or
the passage of time or both would permit, the revocation or
termination of any thereof, except as set forth on Schedule 5.17
hereto. The sale of the Stock and the consummation of the
transactions contemplated by this Agreement will not result in the
termination or revocation of any such license, permit, certificate of
need or approval by which CCC is bound or to which CCC is subject.
The Closing of this Agreement is contingent upon the continuation
of any such license, permit, certificate of need or approval.
5.18 Directors, Officers and Employees. Set forth on
Schedule 5.18 is a true and compete list of the directors and officers
of CCC and each employee of CCC, together with the current
position of each such employee and the current amount of salaries
and bonuses of each such employee. Schedule 5.18 also sets forth
whether CCC has entered into a written employment agreement with
any such person, and a true and complete copy of each such
employment agreement has been delivered to Buyer.
5.19 Discharge Fees. Sellers have not, directly or
indirectly, retained any financial advisor, broker, agent or finder or
paid or agreed to pay any financial advisor, broker, agent or finder
on account of this Agreement or the transaction contemplated
thereby.
5.20 No Adverse Action. There are no actions, suits,
claims or other proceedings pending or, to the best of Sellers'
knowledge, threatened or injunctions or orders entered, pending or,
to the best of Sellers' knowledge, threatened against Shareholders or
CCC, to restrain or prohibit the consummation of the transactions
contemplated hereby.
5.21 Full Disclosure. Sellers have disclosed to Buyer all
material facts relating to CCC and its operations and has not omitted
to disclose to Buyer any material fact relating to CCC, or its
operations necessary to make the statements made herein not
misleading.
5.22 Severance Pay. The Closing of the transaction
contemplated hereunder shall not result in any severance obligations
with respect to employees of CCC.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF
BUYER
Buyer represents and warrants to Sellers, both as of the date
hereof and as of the Closing Date, as follows:
6.1 Organization of Buyer; Good Standing.
Buyer is a corporation, duly organized, validly existing and in good
standing under the laws of the State of New York. Buyer has the
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and as
contemplated subsequent to the execution of this Agreement.
6.2 Authority.
(a) Buyer has full corporate power and has
taken all action necessary to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the
other Transaction Documents to which Buyer is a party constitute
legal, valid and binding obligations of Buyer enforceable against
Buyer in accordance with its terms, except to the extent that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and similar laws affecting creditors;
rights generally, and (ii) equitable principles which may limit the
availability of certain equitable remedies (such as specific
performance) in certain instances.
(b) Neither the execution or delivery of this Agreement
and the other Transaction Documents nor the consummation of the
transactions contemplated hereby will (i) except for obtaining any
consent, where the failure to obtain such consent would not
materially or adversely affect the assets or the financial condition of
Buyer, conflict with, constitute a breach, violation or termination of
any provision of any contracts and other agreements to which Buyer
is a party or by which it is bound, (ii) conflict with or violate the
Articles of Incorporation or By-Laws of Buyer, or (iii) violate any
law, regulation, judgment, rule, order or any other restriction of any
kind or character applicable to Buyer or any of its properties or
assets, the violation of which could have a material adverse effect on
the financial condition or business operations of Buyer.
6.3 No Adverse Action. There are no actions, suits,
claims or other proceedings pending or, to the best of Buyer's
knowledge, threatened or injunctions or orders entered, pending or,
to the best of Buyer's knowledge, threatened against Buyer, to
restrain or prohibit the consummation of the transactions
contemplated hereby.
6.4 Access; Restriction on Stock. Buyer represents that
it has had and Sellers represent that it has given access to the books
and records generally of CCC, and all of the material agreements,
licenses, permits, contracts, properties and assets of CCC. Buyer has
knowledge and experience in financial and business matters and
investments of this type and is capable of evaluating the merits and
risks of investment in the Stock. Buyer has the financial ability to
bear the risk of investment in the stock and is acquiring the Stock
solely for investment with no present intention to resell. Buyer is
aware that the Stock is not registered under the Securities Act of
1933, as amended (the "Securities Act"), or under any state securities
laws and must be held indefinitely unless it is registered under the
Securities Act or is exempt from registration under the Securities Act.
Buyer will not further transfer the Stock without compliance with the
registration and other provisions of all applicable securities laws.
ARTICLE 7. COVENANTS AND AGREEMENTS OF SELLERS
7.1 Actions Pending Closing. From the date
hereof to the Closing, except as otherwise contemplated by this
Agreement, Sellers covenants and agrees as follows:
(a) CCC will be operated in the usual
and ordinary manner consistent with past practices and will preserve
its present business organization intact, and preserve its present
relationships with persons having business dealings with it and to take
such actions as are necessary and to cause the transition of such
business operations and employee and other relationships to Buyer
as of the Closing Date, as contemplated by this Agreement.
(b) CCC will not, without Buyer's
consent, increase or decrease the compensation payable or to become
payable by CCC to any officer or employee of CCC, or make any
change in any insurance, pension or other employee benefit plan, pay
any commission or bonus to any of such officers or employees, other
than in the normal course of business consistent with existing
personnel policies, nor will CCC amend any employment agreement
between CCC and any employee of CCC.
(c) Except as otherwise provided
herein, CCC will not (i) mortgage, pledge, create or permit to exist
any lien or security interest against any of its assets, except for the
liens and security interests set forth on Schedule 7.1 hereto and
except for liens securing property acquired by CCC in the ordinary
course of business and as otherwise permitted pursuant to this
Agreement (the "Permitted Exceptions"); (ii) fail to maintain its
assets in the usual and ordinary course of business consistent with
past practices; (iii) sell, assign, transfer, lease or otherwise dispose of
any of its assets or acquire any assets or any interest therein, except
in each case in the usual and ordinary course of business; (iv)
terminate, modify or change any of the Material Contracts; and (v)
enter into any transaction, contract or commitment obligating CCC
in excess of $5,000 which is not in the usual and ordinary course of
CCC's business.
(d) All assets of CCC will be used,
operated, maintained and repaired in the usual and ordinary course
of CCC's business consistent with past practices.
(e) Neither Shareholders nor CCC will
permit any insurance policy naming it as a beneficiary or a loss
payable payee covering any of its assets or its operations to be
canceled, terminated or modified or any of the coverage thereunder
to lapse unless simultaneously with such termination or cancellation,
replacement policies, reasonably satisfactory to Buyer, providing
substantially the same coverage are in full force and effect.
(f) CCC will timely file (including all
applicable extensions) all tax returns and reports required to be filed
prior to Closing with any federal, state or local governments or
governmental agencies.
(g) CCC shall not make or institute any
methods of collection, credit, billing, management, accounting or
operation which are not in the usual and customary course of its
business, consistent with CCC's past practices.
(h) CCC shall not transfer any of its
assets, other than in the ordinary course of business. Sellers shall not
transfer any of the Stock. Sellers shall not pledge, create or permit to
exist any lien, claim or other encumbrance against any of the Stock
nor issue any options, warrants or other rights with respect thereto.
(i) With respect to any Material
Contracts of CCC which, in accordance with their terms, will expire
prior to the Closing Date, CCC shall use good faith efforts to extend
such Material Contracts; provided, however, that in the event any
such extension would require payment of rentals or other
compensation by CCC in excess of that currently paid or would
require CCC to agree to terms which are materially and adversely
different from the present terms of such Material Contract, then
CCC shall not extend such Material Contract without obtaining
Buyer's prior written consent to such terms and extension.
(j) Except with respect to the increase
in the number of authorized shares to 1,000 as previously referred
herein, from the date hereof, through and including the Closing Date,
CCC shall not amend its Articles of Incorporation or By-Laws
without the Buyer's prior written consent.
(k) Shareholders and CCC will operate
CCC and its business through the Closing Date so that the
representations and warranties of Sellers made to Buyer in this
Agreement shall be true and correct at Closing Date as if made on
the Closing Date (except for representations and warranties made in
Sections 5.1, 5.5, 5.16 and 5.17 with respect to Financial Statements
and other financial information of CCC which expressly relate to an
earlier date or time, which representations shall be true and correct
on and as of the specific date or times referred to therein); provided
however that Shareholders and CCC shall promptly upon discovery
disclose to Buyer any information contained in the Schedules to this
Agreement which, because of an event occurring after the date
hereof, is incomplete or is no longer correct as of all times after the
date hereof until the Closing Date; provided, however, that none of
such disclosures shall be deemed to modify, amend or supplement the
representations and warranties of Sellers in the Schedules hereto,
unless Buyer shall have consented thereto in writing.
7.2 Consents. Sellers shall use good faith efforts
and cooperate with Buyer in obtaining all necessary consents required
for the transfer of the Buyers' Stock to Buyer.
ARTICLE 8. COVENANTS AND AGREEMENTS OF BUYER
Buyer hereby covenants and agrees with Sellers as follows:
8.1 Consents. From and after the date hereof
Buyer shall use good faith efforts and cooperate with Sellers in
obtaining all necessary consents required for the transfer of the Stock
to Buyer.
8.2 Post-Closing Access to Information. Sellers
and Buyer acknowledge that subsequent to Closing each party may
need access to information or documents in the control or possession
of the other party for the purposes of concluding the transactions
herein contemplated, audits, compliance with governmental
requirements and regulations, and the prosecution or defense of third
party claims. Accordingly, Sellers and Buyer agree that after Closing
each will make reasonably available to the other's agents,
independent auditors and/or governmental agencies upon written
request and at the expense of the requesting party such documents
and information as may be available relating to the Stock of CCC for
periods prior and subsequent to Closing to the extent necessary to
facilitate concluding the transactions herein contemplated, audits,
compliance with governmental requirements and regulations and the
prosecution or defense of claims.
ARTICLE 9. CONDITIONS TO BUYER'S OBLIGATION TO
CLOSE
Each and every obligation of Buyer to be performed at or
before the Closing hereunder is subject to the satisfaction on or prior
to the Closing Date of the conditions set forth below, any one or
more of which may be waived by Buyer.
9.1 Compliance with Agreement. Shareholders
and CCC shall have performed all of their obligations and
agreements, and complied, in all material respects, with all covenants,
warranties and conditions contained in this Agreement which are
required to be performed or complied with by them on or prior to
the Closing Date, and Sellers shall have delivered a certificate to such
effect to Buyer at Closing.
9.2 Representations and Warranties. The
representations and warranties of Sellers contained in this Agreement
and the other Transaction Documents shall be true, complete and
correct, in all material respects, on and as of the date made and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made or given on the
Closing Date, and Sellers shall have delivered a certificate to such
effect to Buyer at Closing.
9.3 Approvals and Consents. The material
consents, approvals and waivers as set forth on Schedule 9.3 hereto
necessary in order to consummate the transactions contemplated
hereby shall have been obtained.
9.4 No Litigation. No action or proceeding
before a court or any other governmental agency or body shall have
been instituted or threatened to restrain or prohibit the transactions
herein contemplated or which would prohibit Buyer's purchase of the
Stock.
9.5 No Material Adverse Change. No event or
condition resulting in a materially adverse change in the financial
condition of CCC or its assets shall have occurred and be continuing.
9.6 Opinion of Counsel. Buyer shall have
received an opinion of Sellers' legal counsel, dated the Closing Date,
substantially in the form of Exhibit I hereto.
9.7 Employment and Noncompetition
Agreements. Buyer shall have received the Employment Agreements
executed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ substantially in
the form of Exhibit II hereto. Each such Employment shall be in
full force and effect and constitute a legal, valid and binding
obligation of the parties executing same and enforceable against them
in accordance with its terms.
9.8 Deliveries. Buyer shall have received from Sellers
all of the other documents required to be delivered by them pursuant
to Section l2.l(a) of this Agreement.
9.9 Primary Lender Approval. Buyer shall
receive from Buyer's Primary Lender approval of this Agreement
and all transactions contemplated herein.
ARTICLE 10. CONDITIONS TO SELLERS' OBLIGATION TO
CLOSE
Each and every obligation of Sellers to be performed at or
before the Closing hereunder is subject to the satisfaction on or prior
to the Closing Date of the conditions set forth below, any one or
more of which may be waived by Sellers:
10.1 Compliance with Agreement. Buyer shall
have performed all of its obligations and agreements and complied,
in all material respects, with all covenants, warranties and conditions
contained in this Agreement which are required to be performed or
complied with by Buyer on or prior to the Closing Date, and the
President of the Buyer shall have delivered a certificate to such effect
to Sellers on the Closing Date.
10.2 Representations and Warranties. The
representations and warranties of Buyer contained in this Agreement
and the other Transaction Documents shall be true, complete and
correct, in all material respects, on and as of the date made and as
of the Closing Date with the same force and effect as though such
representations and warranties had been given on the Closing Date,
and the President of Buyer shall have delivered a certificate to such
effect to Sellers at Closing.
10.3 Approvals and Consents. The material
consents, approvals and waivers as set forth on Schedule 10.3 hereto
necessary in order to consummate the transactions contemplated
hereby shall have been obtained.
10.4 No Litigation. No action or proceeding
before a court or any other governmental agency or body shall have
been instituted or threatened to restrain or prohibit the transactions
herein contemplated or which would prohibit Buyer's purchase of the
Stock.
10.5 Deliveries. Sellers shall receive from Buyer all of the
other documents required to be delivered by Buyer pursuant to
Section l2.l(b) of this Agreement.
ARTICLE 11. TERMINATION
11.1 Termination Prior to the Closing Date
Notwithstanding anything herein to the contrary, this
Agreement may be terminated at any time:
(i) On or
prior to the Closing Date by
mutual written consent of
Buyer and Sellers.
(ii) By Buyer, if the conditions specified in
Article 9 have not been satisfied or waived by Buyer as of
the Closing Date;
(iii) By Sellers, if the conditions specified in
Article 10 have not been satisfied or waived by Sellers as
of the Closing Date;
(iv) By Buyer or Sellers, on November 4, 1996, if
the Closing has not occurred by such date;
(v) At the election of the Sellers prior to
the Closing Date, if the Buyer has breached any
representation, warranty, covenant or agreement contained
in this Agreement;
(vi) At the election of the Buyer prior to
the Closing Date, if the Sellers have breached any
representation, warranty, covenant or agreement contained
in this Agreement;
(vii) At the election of the Sellers or the Buyer,
if any legal proceeding is commenced or threatened by any
court or governmental agency directed against the
consummation of the Closing or any other transaction
contemplated under this Agreement; or
In the event of the termination of this Agreement
pursuant to this Section 11.1 this Agreement shall
automatically terminate and be of no further force and
effect, and there shall be no liability hereunder (except if
termination occurs pursuant to clauses (v) or (vi) above).
ARTICLE 12. DELIVERIES AT AND AFTER CLOSING
12.1 Deliveries at Closing.
(a) At Closing, Sellers shall deliver to
Buyer:
(i) certificates for the Buyers' Stock.
(ii) certificates, dated the Closing Date,
required to be delivered by CCC and Shareholders to
Buyer pursuant to Sections 9.1 and 9.2 hereof;
(iii) a Certificate of an authorized officer
of CCC certifying: (a) as to CCC's Articles of
Incorporation (as certified by the Secretary of the State of
Arkansas) and By-Laws, and attaching a true and complete
copy of each thereto; and (b) that all necessary corporate
action by the Board of Directors of CCC has been taken to
authorize the consummation of the transactions provided
for in this Agreement. Such certificate shall attach or set
forth verbatim the resolutions adopted by the Board of
Directors of CCC;
(iv) with respect to CCC, good standing
certificate and franchise tax clearance letter from the
State of New York;
(v) the opinion of Sellers' counsel
required pursuant to Section 9.6 hereof;
(vi) the Employment Agreements
required pursuant to Section 9.7 hereof;
(vii) An incumbency certificate
with respect to the Directors and Officers of CCC, as
certified by an authorized officer of CCC.
(viii) A Shareholder Agreement
executed by all Shareholders in the form annexed hereto
as Exhibit III. (IX) A Consulting Agreement in the form
annexed hereto as Exhibit IV.
(b) At Closing, Buyer shall
deliver to Sellers:
(i) certificates, dated the Closing Date
required to be delivered by Buyer to Sellers pursuant to
Sections 10.1 and 10.2 thereof;
(ii) a certificate of an authorized
officer of Buyer certifying that all necessary corporate
action by the Board of Directors of Buyer has been taken
to authorize the consummation of the transactions
provided for in this Agreement. Such certificate shall
attach or set forth verbatim the resolutions adopted by
the Board of Directors of Buyer;
ARTICLE 13. INDEMNIFICATION
13.1 Sellers' Indemnity of Buyer.
(a) Sellers shall indemnify Buyer and
hold it harmless from and against:
(i) any and all damages, expenses
and losses suffered, paid or incurred, or to be
suffered, paid or incurred in the future, by Buyer
arising out of (a) any inaccuracies in or any breach
of any representation, covenant, agreement or warranty
on the part of Sellers herein contained or in any other
Transaction Document, (b) any breach of representation
by a Director or Officer of CCC of the representations
made in the Resignation and Certification of such
Director or Officer; and (c) any claim against CCC of
a Director or Officer of CCC who fails to deliver at
Closing to Buyer a Resignation and Certification;
and
(ii) any and all reasonable costs
and expenses of Buyer related to clause (i) above including
reasonable attorney's fees in connection with the
prosecution, defense or appeal of any suit or action in
connection therewith.
(All of such items described in paragraphs (i) and
(ii) above are collectively referred to hereinafter as the
"Buyer's Loss.")
(b) Whenever it shall come to the
attention of Buyer that it has suffered or incurred, or may
suffer or incur, any Buyer's Loss, Buyer shall give prompt
written notice to Sellers of such anticipated or actual loss,
damage, cost or expense, and Buyer will permit Sellers, at
Sellers' option and expense, to conduct the defense against
any such claims or actions, and will cooperate with Sellers
in such defense in such manner as Sellers may reasonably
request. If Sellers elect not to, or fail to, defend against
such claims or actions, Buyer shall have the right to
defend against such claims or actions at Sellers' expense.
If Buyer shall defend against such claim or action at
Sellers' expense, Buyer agrees that it will not settle or
permit the settlement of any matter giving rise to any
Buyer's Loss without the prior written consent of Sellers
(which consent will not be unreasonably withheld).
(c) Buyer's right to assert a claim against Sellers
for indemnification pursuant to this Section 13.1 shall
survive the Closing.
(d) It is expressly agreed that Buyer shall not be
entitled to any indemnification from Sellers whether
pursuant to this Section 13.1 or otherwise arising out of
the sale of the Stock to Buyer or the transaction
contemplated by this Agreement, in excess of an aggregate
maximum amount equal to the Purchase Price paid to
Sellers.
(e) It is further agreed that Sellers' liability
shall be joint and several.
13.2 Buyer's Indemnity of Sellers.
(a) Buyer shall indemnify Sellers and hold them
harmless from and against:
(i) any and all damages,
expenses and losses suffered, paid or incurred, or to be
suffered, paid or incurred in the future, by Sellers arising
out of any inaccuracies in or breach of any representation,
covenant, agreement or warranty on the part of Buyer
herein contained or in any other Transaction Document;
(ii) any and all reasonable costs and
expenses of Sellers related to clause (i) above including
reasonable attorney's fees in connection with the
prosecution, defense or appeal of any suit or action in
connection therewith.
(All of such items described in paragraphs (i) and
(ii) above are collectively referred to hereinafter as the
"Sellers' Loss.")
(b) Whenever it shall come to the
attention of Sellers that it has suffered or incurred, or
may suffer or incur, any Sellers' Loss, Sellers shall give
prompt written notice to Buyer of such anticipated or
actual loss, damage, cost or expense, and Sellers will
permit Buyer, at Buyer's option and expense, to conduct
the defense against any such claims or actions, and will
cooperate with Buyer in such defense in such manner as
Buyer may reasonably request. If Buyer elects not to, or
fails to, defend against such claims or actions, Sellers shall
have the right to defend against such claims or actions at
Buyer's expense. If Sellers shall defend against such claim
or actions at Buyer's expense Sellers agree that it will not
settle or permit the
settlement of any matter giving rise to any Sellers' Loss
without the prior written consent of Buyer (which consent
will not be unreasonably withheld).
(c) Sellers' right to assert a claim against Buyer
for indemnification pursuant to this Section 13.2 shall
survive the Closing.
ARTICLE 14. MISCELLANEOUS
14.1 Survival. Notwithstanding any right of the
Buyer to fully investigate the business and operations of
CCC or the Stock, the Buyer shall be entitled to rely fully
on the representations, warranties, covenants and
agreements of Shareholders and CCC contained in this
Agreement and the other Transaction Documents. The
representations, warranties, covenants and agreements
made by the parties herein shall survive the Closing. This
Section 14.1 is not intended to create any rights in any
third party beneficiaries.
14.2 Notices. Any notice, request, consent,
exercise or non-exercise of an option, or communication
under this Agreement shall be effective only if it is in
writing and personally delivered or sent by a nationally
recognized overnight delivery service, with delivery
confirmed, or telexed or telecopied, with receipt
confirmed (provided that if telexed or telecopied, with a
copy also send by regular United States mail), or deposited
in the United States mail, with postage prepaid thereon,
certified or registered mail, return receipt requested,
addressed as follows:
If to Sellers: Chelsea Computer Consultants, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
If to Buyer: Staff Builders, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Chief Executive officer
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To Staff Builders,Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Silver
Vice President & General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other persons and/or addresses as shall be
furnished in writing by any party to the other party, and
shall be deemed to have been given as of the date when so
personally delivered, or the next day when delivered
during business hours to such overnight delivery service
properly addressed or when receipt of a telex or telecopy
is confirmed, or upon the earlier to occur of receipt or
five (5) business days after mailed as provided above, as
the case may be, unless the sending party has actual
knowledge that such notice was not received by the
intended recipient.
14.3 Parties in Interest and Assignment.
(a) This Agreement is binding upon and is for
the benefit of the parties hereto and their respective
successors and assigns.
(b) Neither this Agreement nor any of the
rights (except the right to receipt of any payment) or
duties of any party hereto may be transferred or assigned
to any person except by a written agreement executed by
all of the parties hereto; provided, however, that Buyer
may assign its rights or delegate its duties hereunder to a
wholly owned subsidiary of Buyer.
(c) It is expressly agreed that this Agreement is
not intended to create any rights in respect of any third
party beneficiaries.
14.4 Modification. This Agreement may not be
amended or modified except by writing signed by an the
parties or authorized officer of all of the parties hereto.
No waiver of the performance or breach of, or default
under, any condition or obligation hereof shall be deemed
to be a waiver of any other performance, or breach of, or
default under the same or any other condition or
obligation of this Agreement.
14.5 Entire Agreement. This Agreement,
together with those related agreements contemplated by
this Agreement, embodies the entire agreement between
the parties hereto and cancels and supersedes all previous
agreements and understandings relating to the subject
matter of this Agreement, written or oral, between the
parties hereto. There are no agreements, representations,
or warranties between the parties other than those set
forth or provided herein.
14.6 Execution in Multiple Counterparts. This
Agreement may be executed in multiple counterparts, each
of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
14.7 Headings. The headings contained in this
Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
14.8 Governing Law. This Agreement shall be
governed by and construed, interpreted and enforced in
accordance with the laws of the State of New York
applicable to agreements made and to be performed
entirely within such state, including all matters of
enforcement, validity and performance. All litigation
brought or held on the basis of this Agreement shall be
brought and held in the appropriate state or federal court
for Nassau County, New York.
14.9 Schedules. All of the Schedules and Exhibits
attached hereto are incorporated herein and made a part
of this Agreement by this reference thereto.
14.10 Severability. In case 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, the invalidity or illegality or unenforceability
shall not affect any other provision and this Agreement
shall be construed as if the invalid, illegal or
unenforceable provision had never been contained in it.
14.11 Certain Post Closing Matters. Following the
Closing, each party agrees to cooperate with the other and
shall take such actions, deliver such documents to Buyer
and execute such documents as may reasonably be
requested in order to carry out the purpose of this
Agreement and the other Transaction
Documents.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
STAFF BUILDERS, INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
CHELSEA COMPUTER
CONSULTANTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LIST OF SCHEDULES AND EXHIBITS TO STOCK PURCHASE AGREEMENT
BY AND AMONG STAFF BUILDERS, INC. AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ AND
CHELSEA COMPUTER CONSULTANTS, INC.
SCHEDULE TITLE
5.2 SCHEDULE OF REQUIRED CONSENTS
5.3 SCHEDULE OF REQUIRED APPROVALS
OR AUTHORIZATIONS
5.5(b) INTERIM FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 1997
5.5(c) SCHEDULE OF LIABILITIES OTHER THAN
THOSE REFLECTED IN THE INTERIM
FINANCIAL STATEMENTS
5.6 SCHEDULE OF CHANGE IN COMPENSATION
5.7 SCHEDULE OF REAL PROPERTY OWNED
AND REAL AND PERSONAL PROPERTY
LEASED
5.8 SCHEDULE OF INTANGIBLE PROPERTY
5.9 SCHEDULE OF MATERIAL CONTRACTS
5.11 SCHEDULE OF INSURANCE POLICIES
5.12 SCHEDULE OF LITIGATION
5.14 SCHEDULE OF BENEFIT PLANS
5.15 SCHEDULE OF OTHER NAMES USED BY
CHELSEA COMPUTER CONSULTANTS, INC.
5.17 SCHEDULE OF LICENSES OR PERMITS
5.18 SCHEDULE OF DIRECTORS, OFFICERS
AND EMPLOYEES
(PAGE 2)
SCHEDULE TITLE
7.1 SCHEDULE OF OTHER LIENS AND
SECURITIES INTERESTS
9.3 SCHEDULE OF SHAREHOLDERS CONSENTS
10.3 SCHEDULE OF OTHER REQUIRED
APPROVALS AND CONSENTS
EXHIBIT 1 OPINION LETTER OF SELLERS' COUNSEL
EXHIBIT 2 EMPLOYMENT AGREEMENT BY AND
BETWEEN CHELSEA COMPUTER
CONSULTANTS, INC. AND ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
AND CHELSEA COMPUTER
CONSULTANTS, INC. AND ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
EXHIBIT 3 SHAREHOLDERS AGREEMENT
EXHIBIT 4 CONSULTING AGREEMENT
EXHIBIT 4.3A AMENDMENT NO. 1 TO EMPLOYMENT
AGREEMENT BY AND BETWEEN CHELSEA
COMPUTER CONSULTANTS, INC. AND
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
EXHIBIT 4.3B AMENDMENT NO. 1 TO EMPLOYMENT
AGREEMENT BY AND BETWEEN CHELSEA
COMPUTER CONSULTANTS, INC. AND
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT 4.4 AMENDMENT NO. 1 TO SHAREHOLDERS
AGREEMENT BY AND AMONG CHELSEA
COMPUTER CONSULTANTS, INC.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ AND STAFF BUILDERS, INC.
*The Company agrees to furnish supplementally a copy of any omitted
schedule to the Commission upon request.