EXHIBIT 2
ACQUISITION AGREEMENT
dated as of
August 27, 1998
among
RANDSTAD HOLDING NV,
RANDSTAD US, L.P.
and
ACCUSTAFF INCORPORATED
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.....................................................1
ARTICLE 2
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale...............................................8
SECTION 2.02. Closing.........................................................8
SECTION 2.03. Closing Balance Sheet...........................................9
SECTION 2.04. Adjustment of Purchase Price...................................11
SECTION 2.05. Randstad Guarantee.............................................12
SECTION 2.06. Assignment of Contracts and Rights.............................12
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
SECTION 3.01. Corporate Existence and Power..................................13
SECTION 3.02. Corporate Authorization........................................13
SECTION 3.03. Governmental Authorization.....................................13
SECTION 3.04. Noncontravention...............................................14
SECTION 3.05. Capitalization.................................................14
SECTION 3.06. Ownership of Shares; Title to Strategix Assets.................15
SECTION 3.07. Subsidiaries...................................................15
SECTION 3.08. Financial Statements...........................................16
SECTION 3.09. Absence of Certain Changes.....................................17
SECTION 3.10. No Undisclosed Material Liabilities............................19
SECTION 3.11. Intercompany Accounts..........................................20
SECTION 3.12. Material Contracts.............................................20
SECTION 3.13. Litigation.....................................................22
SECTION 3.14. Compliance with Laws and Court Orders..........................22
SECTION 3.15. Properties.....................................................23
SECTION 3.16. Intellectual Property..........................................24
SECTION 3.17. Insurance Coverage.............................................24
SECTION 3.18. Licenses and Permits...........................................25
SECTION 3.19. Receivables....................................................25
SECTION 3.20. Accuracy of Information........................................26
SECTION 3.21. Investment Banking Fees........................................26
SECTION 3.22. Employees......................................................26
SECTION 3.23. Labor Matters..................................................26
SECTION 3.24. Employee Benefit Plans.........................................27
SECTION 3.25. Environmental Matters..........................................29
SECTION 3.26. Worker's Compensation Claims...................................30
SECTION 3.27. Year 2000 Compliance...........................................30
SECTION 3.28. Compliance with Franchise Laws.................................31
SECTION 3.29. [Intentionally Omitted]........................................31
SECTION 3.30. Earnouts.......................................................31
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF RANDSTAD AND BUYER
SECTION 4.01. Existence and Power............................................32
SECTION 4.02. Authorization..................................................32
SECTION 4.03. Governmental Authorization.....................................32
SECTION 4.04. Noncontravention...............................................32
SECTION 4.05. Purchase for Investment........................................32
SECTION 4.06. Litigation.....................................................32
SECTION 4.07. Finders' Fees..................................................32
SECTION 4.08. Buyer Financing................................................33
ARTICLE 5
COVENANTS OF SELLER
SECTION 5.01. Conduct of the Strategix Companies.............................33
SECTION 5.02. Access to Information; Confidentiality.........................35
SECTION 5.03. Notices of Certain Events......................................36
SECTION 5.04. Resignations...................................................36
SECTION 5.05. Competitive Relationships......................................36
SECTION 5.06. Payments Relating to Strategix Assets..........................38
SECTION 5.07. Change of Seller Name..........................................38
SECTION 5.08. Seller Convertible Notes.......................................38
SECTION 5.09. Subcontractor Agreements.......................................39
ARTICLE 6
COVENANTS OF BUYER
SECTION 6.01. Confidentiality................................................40
SECTION 6.02. Access.........................................................40
ARTICLE 7
COVENANTS OF BUYER AND SELLER
SECTION 7.01. Best Efforts; Further Assurances...............................40
SECTION 7.02. Certain Filings................................................41
SECTION 7.03. Public Announcements...........................................41
SECTION 7.04. Intercompany Accounts..........................................41
SECTION 7.05. Transition Services............................................41
SECTION 7.06. Joint Contracts................................................42
SECTION 7.07. Joint Leases...................................................43
SECTION 7.08. Seller Use of Certain Trademarks...............................43
SECTION 7.09. Earnout Payments...............................................44
ARTICLE 8
TAX MATTERS
SECTION 8.01. Tax Definitions................................................44
SECTION 8.02. Tax Representations............................................46
SECTION 8.03. Covenants......................................................47
SECTION 8.04. Termination of Existing Tax Sharing Agreements.................49
SECTION 8.05. Cooperation on Tax Matters.....................................49
SECTION 8.06. Tax Indemnification............................................49
SECTION 8.07. Purchase Price Adjustment and Interest.........................52
SECTION 8.08. Tax Refunds.....................................................52
SECTION 8.09. Survival.......................................................52
ARTICLE 9
EMPLOYEE BENEFITS
SECTION 9.01. 401(k) Plans, Profit Sharing Plans, Etc........................53
SECTION 9.02. Employee Stock Awards..........................................53
SECTION 9.03. Non-qualified Deferred Compensation............................54
SECTION 9.04. Cooperation....................................................54
SECTION 9.05. Certain Employment Arrangements................................54
ARTICLE 10
CONDITIONS TO CLOSING
SECTION 10.01. Conditions to Obligations of Buyer and Seller.................55
SECTION 10.02. Conditions to Obligation of Buyer.............................55
SECTION 10.03. Conditions to Obligation of Seller............................57
ARTICLE 11
SURVIVAL; INDEMNIFICATION
SECTION 11.01. Survival......................................................58
SECTION 11.02. Indemnification...............................................59
SECTION 11.03. Procedures....................................................60
ARTICLE 12
TERMINATION
SECTION 12.01. Grounds for Termination.......................................63
SECTION 12.02. Effect of Termination.........................................63
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Notices.......................................................63
SECTION 13.02. Amendments and Waivers........................................65
SECTION 13.03. Expenses......................................................66
SECTION 13.04. Successors and Assigns........................................66
SECTION 13.05. Governing Law.................................................66
SECTION 13.06. Jurisdiction..................................................66
SECTION 13.07. WAIVER OF JURY TRIAL..........................................66
SECTION 13.08. Counterparts; Third Party Beneficiaries.......................66
SECTION 13.09. Entire Agreement..............................................67
SECTION 13.10. Captions......................................................67
EXHIBITS AND SCHEDULES
EXHIBIT A -- Form of Assignment and Assumption Agreement
EXHIBIT B -- Form of Employee and Systems Support Agreement
EXHIBIT C -- Strategix Disclosure Memorandum
Schedule 3.08(b) -- Pro Forma Financial Statements
Schedule 10.02(e) -- Third Party Consents
Schedule 11.02(c) -- Indemnified Litigation
ACQUISITION AGREEMENT
AGREEMENT dated as of August 27, 1998 among Randstad Holding nv, a
corporation organized under the laws of The Netherlands ("Randstad"), Randstad
US, L.P., a Delaware limited partnership ("Buyer"), and AccuStaff Incorporated,
a Florida corporation ("Seller").
W I T N E S S E T H :
WHEREAS, Seller (or one or more of its wholly-owned subsidiaries) is the
record and beneficial owner of all of the Shares (as hereinafter defined) of the
Strategix Companies (as hereinafter defined);
WHEREAS, Seller (or one or more of its wholly-owned subsidiaries) is the
owner of certain assets used in the business of the Strategix Companies;
WHEREAS, Seller (or one or more of its wholly-owned subsidiaries) desires
to sell the Shares and such assets to Buyer, and Buyer desires to purchase the
Shares and such assets from Seller (or such subsidiary or subsidiaries), upon
the terms and subject to the conditions hereinafter set forth;
WHEREAS, Randstad has agreed to guarantee the obligations of Buyer under
this Agreement;
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION A.. Definitions. 1. The following terms, as used herein, have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person;
provided that neither any Strategix Company nor any Subsidiary shall be
considered an Affiliate of Seller.
"Balance Sheet" means the pro forma unaudited condensed consolidated
balance sheet of the Strategix Business set forth on Schedule 3.08(b).
"Balance Sheet Date" means March 31, 1998.
"Benefit Arrangement" means any material employment, severance or similar
contract or arrangement (whether or not written) or any plan, policy, fund,
program or contract or arrangement (whether or not written) providing for
compensation, bonus, profit-sharing, stock option, or other stock related rights
or other forms of incentive or deferred compensation, vacation benefits,
employee insurance coverage (including any self-insured arrangements), health or
medical benefits, disability benefits, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) that
(i) is not an Employee Plan, (ii) is entered into, maintained, administered or
contributed to, as the case may be, by Seller, any of its Affiliates or any
Strategix Company or any Subsidiary and (iii) covers any employee or former
employee of any Strategix Company or any Subsidiary or any other Transferred
Employee; provided that the term "Benefit Arrangement" shall not include any (x)
employment or similar contracts or arrangements that may be terminated with one
month or less notice and (y) severance or similar contracts or arrangements that
are made in connection with a waiver or release and which provide three months
or less compensation for employees or former employees whose annual base
compensation exceeds or exceeded $75,000, or six months or less compensation for
all other employees or former employees.
"Buyer Plan" means any "pension plan" (as defined in Section 3(2) of ERISA)
sponsored or maintained by Buyer, any Strategix Company or any of their
respective Affiliates.
"Closing Date" means the date of the Closing.
"Employee Option" means an option to purchase one or more shares of common
stock of Seller granted to a Transferred Employee under any plan or arrangement
of Seller, any of its Affiliates or any Strategix Company or any Subsidiary.
"Employee Plan" means any "employee benefit plan", as defined in Section
3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to by Seller, any of its Affiliates or
any Strategix Company or any Subsidiary and (iii) covers any employee or former
employee of any Strategix Company or any Subsidiary or any other Transferred
Employee.
"Employee Restricted Share" means a restricted share of common stock of
Seller granted to a Transferred Employee under any plan or arrangement of Seller
or any of its Affiliates.
"Environmental Laws" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit or governmental
restriction or requirement or any agreement with any governmental authority or
other third party, whether now or hereafter in effect, relating to human health
and safety, the environment or to pollutants, contaminants, wastes or chemicals
or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous
substances, wastes or materials.
"Environmental Permits" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by Environmental Laws and affecting, or
relating in any way to, the business of any Strategix Company or any Subsidiary
as currently conducted or to any Strategix Asset or Strategix Liability.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" of any entity means any other entity which, together with
such entity, would be treated as a single employer under Section 414 of the
Code.
"Fleet Credit Facility" means the Revolving Credit Agreement dated May 23,
1997 by and between Office Specialists, Inc. and Fleet National Bank.
"Form S-1" means the proposed (but unfiled) Amendment No. 2 to the
Registration Statement on Form S-1 of Strategix Solutions, Inc., a Delaware
corporation, reflecting certain corrections to Amendment No. 1 to such
Registration Statement filed with the Securities and Exchange Commission on July
20, 1998, a true and complete copy of both of which have been previously
provided to Buyer.
"Health Care Business" means the health care services business conducted or
previously conducted by Health Force Inc., a New York corporation, Health Force
Operating Corp., a New York corporation, Medi-Force, Inc., a New York
corporation, and Healthforce Company, a New York general partnership, whether or
not transferred or to be transferred by Seller or its Affiliates to CommuniCare
Health Services, Inc. and certain of its Affiliates pursuant to the Asset
Purchase Agreement dated as of March 30, 1998.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Indebtedness" of any Person means (i) all indebtedness of such Person for
borrowed money, (ii) all indebtedness of such Person evidenced by notes, bonds,
debentures or other similar instrument, (iii) all obligations of such Person for
the deferred purchase price of property or services that in accordance with
generally accepted accounting principles would be shown as a liability on the
balance sheet of such Person (other than trade accounts payable in the ordinary
course of business consistent with past practice), (iv) all capitalized lease
obligations of such Person, (v) all obligations, contingent or otherwise, of
such Person under acceptances, letters of credit or similar facilities, (vi) all
obligations of such Person under interest rate swap agreements, hedge agreements
or similar agreements, (vii) all Indebtedness of others referred to in clauses
(i) through (vi) above guaranteed directly or indirectly by such Person, and
(viii) all Indebtedness referred to in clauses (i) through (vi) above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
"Intellectual Property Right" means any trademark, service ▇▇▇▇, trade
name, mask work, invention, patent, trade secret, copyright, know-how (including
any registrations or applications for registration of any of the foregoing) or
any other similar type of proprietary intellectual property right, excluding in
each case any "off-the-shelf" software.
"Knowledge" means, with respect to matters relating to Seller, actual
knowledge of any of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇; provided that where "Knowledge" is used with respect to any particular
matter, such officers shall have made inquiry with those Persons as they have
considered appropriate in light of the subject matter involved.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any property or asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Material Adverse Effect" means a material adverse effect on the condition
(financial or otherwise), business (including the continued operation thereof in
accordance with past practices), assets or results of operations of the
Strategix Companies and the Subsidiaries, taken as a whole; provided that (i)
any action expressly contemplated to be taken pursuant to this Agreement, (ii)
any adverse development caused by any action of Buyer or Randstad that is not
permitted by or is in contravention of the covenants of this Agreement, (iii)
any changes in general market and economic conditions, (iv) any changes
affecting the staffing services industry generally and (v) any regulatory or
legislative changes affecting companies in general shall not be considered in
determining whether a Material Adverse Effect has occurred.
"Multiemployer Plan" means each Employee Plan that is a multiemployer plan,
as defined in Section 3(37) of ERISA.
"NationsBank Credit Facility" means the Fourth Amended and Restated
Revolving Credit Agreement dated May 23, 1997, by and among Seller, NationsBank,
N.A. (formerly NationsBank, N.A. (South)), as Lender and Agent, and the banks
party thereto.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Regulation S-X" means Regulation S-X promulgated by the United States
Securities and Exchange Commission.
"Seller Plan" means any "pension plan" (as defined in Section 3(2) of
ERISA) sponsored or maintained by Seller or any Affiliate of Seller, other than
any Strategix Company or a Subsidiary.
"Shares" means, collectively, all of the outstanding capital stock of each
Strategix Company.
"Strategix Assets" means the assets identified in Section 1.01(a) of the
Strategix Disclosure Memorandum.
"Strategix Business" means the business currently conducted by the
Strategix Companies and the Subsidiaries or utilizing the Strategix Assets and
the Strategix Liabilities, in each case, as described in the Form S-1 (but
excluding the assets and liabilities of the Health Care Business).
"Strategix Companies" means, collectively, each of the corporations listed
in Section 1.01(b) of the Strategix Disclosure Memorandum.
"Strategix Disclosure Memorandum" means the schedule delivered by Seller to
Buyer concurrently with the execution hereof setting forth exceptions to the
representations and warranties set forth in Article 3 and certain other
information called for in this Agreement, attached hereto as Exhibit C.
"Strategix Liabilities" means the liabilities identified in Section 1.01(c)
of the Strategix Disclosure Memorandum.
"Subsidiary" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by any Strategix Company.
"Transferred Employee" means any individual (other than a temporary
employee) whose employment duties and responsibilities as of the Closing Date
primarily relate to the Strategix Business.
"Title IV Plan" means an Employee Plan subject to Title IV of ERISA other
than any Multiemployer Plan.
2. Each of the following terms is defined in the Section set forth opposite
such term:
Term Section
AccuStaff Marks 7.08
Applicable Amount 5.08
Assumed Buyer Plan 9.01
Base Tangible Net Worth 2.04
Buyer Indemnitee 8.01
Career Horizons 5.08
Closing 2.02
Closing Balance Sheet 2.03
Closing Tangible Net Worth 2.03
Code 8.01
Combined Tax 8.01
Company Intellectual Property Rights 3.16
Company Securities 3.05
Competitive Business 5.05(b)(i)
Confidentiality Agreement 6.01
Convertible Notes 5.08
Damages 11.02
December Balance Sheet 2.03
Deferred Amount 9.03
Designated Seller Plan 9.01
Draft Assessment 3.27
Earnout Agreements 3.30
Federal Tax 8.01
Final Determination 8.01
Final Tangible Net Worth 2.04
Hourly Rate 7.05
Indemnified Person 11.03(a)(i)
Indemnifying Person 11.03(a)(i)
Indenture 5.08
Joint Contracts 7.06
Joint Leases 7.07
Loss 8.06
Modified Aggregate Deemed Sales Price 8.03
Noncompete Consideration 5.05
Non-Transferred Participants 9.01
Option 9.02
Permits 3.18
Permitted Liens 3.15
Post-Closing Tax Period 8.01
Pre-Closing Tax Period 8.01
Purchase Price 2.01
Returns 8.02
Section 338(h)(10) Election 8.03
Seller Group 8.01
Separate Company Taxes 2.03
Significant Employee 3.09
Stay Bonus Plan 9.02
Subcontractor Agreements 3.12
Subsidiary Securities 3.07
Tax 8.01
Tax Asset 8.01
Tax Sharing Agreements 8.01
Taxing Authority 8.01
Transition Period 7.05
Trustee 5.08
Worker's Compensation Claims 3.26
Year 2000 Compliant 3.27
ARTICLE II.
PURCHASE AND SALE
SECTION A.. Purchase and Sale. Upon the terms and subject to the conditions
of this Agreement, (i) Seller agrees to sell, or to cause one or more of its
wholly-owned subsidiaries to sell, to Buyer, and Buyer agrees to purchase from
Seller or such subsidiary or subsidiaries, the Shares at the Closing, (ii) Buyer
agrees to acquire, and Seller agrees to sell, convey, transfer, assign and
deliver, or cause to be sold, conveyed, transferred, assigned and delivered, to
Buyer (or if requested by Buyer, to one or more Strategix Companies or
Subsidiaries or any other Affiliate of Buyer), free and clear of all Liens,
other than Permitted Liens all of Seller's right, title and interest in, to and
under the Strategix Assets at the Closing and (iii) Buyer agrees to assume (or
to cause one or more Strategix Companies or Subsidiaries or any other Affiliate
of Buyer to assume), effective as of the Closing, the Strategix Liabilities. The
purchase price for the Shares and the Strategix Assets and the Strategix
Liabilities (the "Purchase Price") is Eight Hundred Fifty Million Dollars
($850,000,000) in cash. The Purchase Price shall be paid as provided in Section
2.02 and shall be subject to adjustment as provided in Section 2.04.
SECTION B.. Closing. The closing (the "Closing") of the purchase and sale
of the Shares, the acquisition of the Strategix Assets and the assumption of the
Strategix Liabilities hereunder shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, a. if the conditions set
forth in Article 10 have been satisfied, on September 30, 1998, and b. if the
conditions set forth in Article 10 have not been satisfied as of September 30,
1998, within 5 business days after satisfaction of such conditions, or at such
other time or place as Buyer and Seller may agree. At the Closing:
1. Buyer shall deliver to Seller $850,000,000 in immediately available
funds by wire transfer to an account of Seller with NationsBank, N.A.
designated by Seller, by notice to Buyer, not later than two business days
prior to the Closing Date (or if not so designated, then by certified or
official bank check payable in immediately available funds to the order of
Seller in such amount).
2. Seller shall deliver to Buyer certificates for the Shares duly
endorsed or accompanied by stock powers duly endorsed in blank, with any
required transfer stamps affixed thereto.
3. Seller and Buyer shall enter into an Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit A, and
Seller shall deliver to Buyer general warranty deeds, bills of sale,
endorsements, consents, assignments and other good and sufficient
instruments of conveyance and assignment as the parties and their
respective counsel shall deem reasonably necessary or appropriate to vest
in Buyer (or if requested by Buyer pursuant to Section 2.01, one or more
designees of Buyer) all right, title and interest in, to and under the
Strategix Assets.
4. Seller and Buyer shall enter into an Employee and Systems Support
Services Agreement substantially in the form attached hereto as Exhibit B.
SECTION C.. Closing Balance Sheet. 1. As promptly as practicable, but no
later than 60 days, after the Closing Date, Seller will cause to be prepared and
delivered to Buyer the Closing Balance Sheet, together with an unqualified
report of PricewaterhouseCoopers, LLP thereon, and a certificate based on such
Closing Balance Sheet setting forth Seller's calculation of Closing Tangible Net
Worth. The Closing Balance Sheet (the "Closing Balance Sheet") shall (w) fairly
present the consolidated financial position of the Strategix Business as at the
close of business on the Closing Date in accordance with generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the audited consolidated balance sheet of the Strategix Business
as of December 31, 1997 (the "December Balance Sheet") and the Balance Sheet (it
being understood and agreed that the Health Care Business shall be excluded from
the Closing Balance Sheet), (x) include line items substantially consistent with
those in the December Balance Sheet and the Balance Sheet, (y) be prepared in
accordance with accounting policies and practices consistent with those used in
the preparation of the December Balance Sheet and the Balance Sheet and (z)
reflect no changes in reserving practices, including without limitation such
practices with respect to establishment of reserves for bad debts or workers'
compensation claims; provided that the Closing Balance Sheet shall not include
any charge, accrual or reserve for federal or state income taxes of the
Strategix Business with respect to which a Strategix Company or Subsidiary is
included in a consolidated, combined or unitary tax return filed by Seller or
any of its Affiliates (other than a Strategix Company or Subsidiary), but shall
include charges, accruals and reserves for only those state income taxes or
other taxes of the Strategix Business for which a Strategix Company or
Subsidiary files either a separate tax return or a consolidated, combined or
unitary state income tax return that includes only one or more Strategix
Companies or Subsidiaries ("Separate Company Taxes"). "Closing Tangible Net
Worth" means (i) the consolidated stockholder's equity of the Strategix Business
as shown on the Closing Balance Sheet (prior to the payment or cancellation of
the intercompany debt of the Strategix Business as contemplated by Section 7.04
hereof) plus (ii) intercompany debt of the Strategix Business (prior to payment
or cancellation as contemplated by Section 7.04 hereof) less (iii) the aggregate
amount of goodwill and net deferred income tax assets (or, if there exists a net
deferred income tax liability, plus such net deferred income tax liability), it
being understood that in calculating Closing Tangible Net Worth, the parties
shall exclude the effect (including the Tax effect) of any act, event or
transaction occurring after the Closing and not in the ordinary course of
business of any Strategix Company or any Subsidiary (other than, for purposes of
the avoidance of doubt, any effect of the Section 338(h)(10) Election).
2. If Buyer disagrees with Seller's calculation of Closing Tangible Net
Worth delivered pursuant to Section 2.03(a), Buyer may, within 30 days after
delivery of the documents referred to in Section 2.03(a), deliver a notice to
Seller disagreeing with such calculation and setting forth Buyer's calculation
of such amount. Any such notice of disagreement shall specify those items or
amounts as to which Buyer disagrees, and Buyer shall be deemed to have agreed
with all other items and amounts contained in the Closing Balance Sheet and the
calculation of Closing Tangible Net Worth delivered pursuant to Section 2.03(a).
3. If a notice of disagreement shall be duly delivered pursuant to Section
2.03(b), Buyer and Seller shall, during the 15 days following such delivery, use
their best efforts to reach agreement on the disputed items or amounts in order
to determine, as may be required, the amount of Closing Tangible Net Worth,
which amount shall not be more than the amount thereof shown in Seller's
calculation delivered pursuant to Section 2.03(a) nor less than the amount
thereof shown in Buyer's calculation delivered pursuant to Section 2.03(b). If,
during such period, Buyer and Seller are unable to reach such agreement, they
shall promptly thereafter cause a southeastern office of a mutually acceptable
accounting firm of national standing with no material relationship to Seller or
Buyer to review this Agreement and the disputed items or amounts for the purpose
of calculating Closing Tangible Net Worth, such calculation to be completed
within 30 days. In making this calculation, such independent accountants shall
consider only those items or amounts in the Closing Balance Sheet or Seller's
calculation of Closing Tangible Net Worth as to which Buyer has disagreed. Such
independent accountants shall deliver to Buyer and Seller, as promptly as
practicable, a report setting forth this calculation. Such report shall be final
and binding upon Buyer and Seller. The cost of this review and report shall be
borne a. by Buyer if the difference between Final Tangible Net Worth and Buyer's
calculation of Closing Tangible Net Worth delivered pursuant to Section 2.03(b)
is greater than the difference between Final Tangible Net Worth and Seller's
calculation of Closing Tangible Net Worth delivered pursuant to Section 2.03(a),
b. by Seller if the first such difference is less than the second such
difference and c. otherwise equally by Buyer and Seller.
4. Buyer and Seller agree that they will, and agree to cause their
respective independent accountants and the Strategix Companies and each
Subsidiary to, cooperate and assist in the preparation of the Closing Balance
Sheet and the calculation of Closing Tangible Net Worth and in the conduct of
the audits and reviews referred to in this Section 2.03, including without
limitation, the making available to the extent necessary of books, records, work
papers and personnel.
SECTION D.. Adjustment of Purchase Price. 1. If Base Tangible Net Worth
exceeds Final Tangible Net Worth, Seller shall pay to Buyer, as an adjustment to
the Purchase Price, in the manner and with interest as provided in Section
2.04(b), the amount of such excess. If Final Tangible Net Worth exceeds Base
Tangible Net Worth, Buyer shall pay to Seller, in the manner and with interest
as provided in Section 2.04(b) , the amount of such excess. "Base Tangible Net
Worth" means $160,545,000, which number is calculated as follows (with all
numbers being as set forth on the Balance Sheet): (i) consolidated stockholder's
equity of $242,619,000, plus (ii) intercompany debt of the Strategix Business of
$98,874,000, plus (iii) the notes payable, long-term portion, of $24,410,000,
plus (iv) the notes payable, short-term portion, of $2,217,000, plus (v) an
agreed adjustment of $4,000,000 in respect of payments under certain Earnout
Agreements, minus (vi) the aggregate amount of goodwill of $193,655,000, minus
(vii) the net deferred income tax assets of $5,924,000, minus (viii) cash and
cash equivalents of $11,996,000. "Final Tangible Net Worth" means the Closing
Tangible Net Worth a. as shown in Seller's calculation delivered pursuant to
Section 2.03(a), if no notice of disagreement with respect thereto is duly
delivered pursuant to Section 2.03(b); or b. if such a notice of disagreement is
delivered, (1) as agreed by Buyer and Seller pursuant to Section 2.03(c) or (2)
in the absence of such agreement, as shown in the independent accountant's
calculation delivered pursuant to Section 2.03(c); provided that in no event
shall Final Tangible Net Worth be more than Seller's calculation of Closing
Tangible Net Worth delivered pursuant to Section 2.03(a) or less than Buyer's
calculation of Closing Tangible Net Worth delivered pursuant to Section 2.03(b).
2. Any payment pursuant to Section 2.04(a) shall be made at a mutually
convenient time and place within 5 days after the Final Tangible Net Worth has
been determined by delivery by Buyer or Seller, as the case may be, of
immediately available funds to the other party in accordance with such party's
instructions (which instructions shall be delivered to the Buyer or Seller, as
the case may be, not less than three business days prior to the date such
payment is to be made). The amount of any payment to be made pursuant to this
Section 2.04 shall bear interest from and including the Closing Date to but
excluding the date of payment at a rate per annum equal to the Prime Rate as
published in the Wall Street Journal, Eastern Edition, in effect from time to
time during the period from the Closing Date to the date of payment. Such
interest shall be payable at the same time as the payment to which it relates
and shall be calculated daily on the basis of a year of 365 days and the actual
number of days elapsed.
SECTION E.. Randstad Guarantee. Randstad hereby irrevocably guarantees the
obligations of Buyer pursuant to this Agreement. The liability of Randstad under
this Section shall be absolute and unconditional, shall be as principal and not
as a surety, and shall be binding upon Randstad and its successors and assigns
without regard to the insolvency, bankruptcy or reorganization of Buyer or
otherwise. Randstad hereby waives promptness, diligence, presentment, demand,
protest and notice of any kind as to such obligations and its guarantee thereof
and acceptance of or reliance on its obligations contained in this Section or
any other circumstance that would constitute an equitable or legal discharge of
Randstad's obligations under this Agreement.
SECTION F.. Assignment of Contracts and Rights. Anything in this Agreement
to the contrary notwithstanding, this Agreement shall not constitute an
agreement to assign any Strategix Asset or any claim or right or any benefit
arising thereunder or resulting therefrom if such assignment, without the
consent of a third party thereto, would constitute a breach or other
contravention of such Strategix Asset or in any way adversely affect the rights
of Buyer or Seller or their respective Affiliates thereunder. Seller and Buyer
will use their reasonable best efforts to obtain the consent of the other
parties to any such Strategix Asset or any claim or right or any benefit arising
thereunder for the assignment thereof to Buyer as Buyer reasonably may request.
If such consent is not obtained, or if an attempted assignment thereof would be
ineffective or would adversely affect the rights of Seller or its Affiliates
thereunder so that Buyer would not in fact receive all such rights, Seller and
Buyer will cooperate in a mutually agreeable arrangement under which Buyer would
obtain the benefits and assume the obligations thereunder in accordance with
this Agreement, including sub-contracting, sub-licensing or sub-leasing to
Buyer, or under which Seller would enforce for the benefit of Buyer, with Buyer
assuming Seller's obligations, any and all rights of Seller against a third
party thereto.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof and as of the
Closing Date as follows. Each item disclosed in any Section of the Strategix
Disclosure Memorandum shall be deemed disclosed for purposes of each other
Section of the Strategix Disclosure Memorandum to the extent (but only to the
extent) that a prudent business person would reasonably be expected to recognize
the relevance of such item to the disclosure required by such other Section
after review and inquiry.
SECTION A.. Corporate Existence and Power. Each of Seller and each
Strategix Company is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted. Each
Strategix Company is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where such qualification is necessary,
except for those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect. Seller has
heretofore made available to Buyer true and complete copies of the certificate
of incorporation and bylaws of Seller and each Strategix Company as currently in
effect.
SECTION B.. Corporate Authorization. The execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby are within Seller's corporate powers and have been duly
authorized by all necessary corporate action on the part of Seller and no other
corporate or other approval of Seller or its stockholders is required in
connection therewith. This Agreement constitutes a valid and binding agreement
of Seller.
SECTION C.. Governmental Authorization. The execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
governmental body, agency or official other than a. compliance with any
applicable requirements of the HSR Act; b. compliance with any applicable
requirements of the 1934 Act; and c. immaterial actions or consents which will
not adversely affect or delay the transactions contemplated hereby.
SECTION D.. Noncontravention. The execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) violate the certificate of incorporation or
bylaws of Seller or any of its Affiliates, any Strategix Company or any
Subsidiary, (ii) assuming compliance with the matters referred to in Section
3.03, violate any applicable material law, rule, regulation, judgment,
injunction, order or decree, (iii) require any consent or other action by any
Person under, constitute a default under, give rise to any right of any Person
to require Seller, any Strategix Company or any Subsidiary to purchase any
equity interest held by such Person, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Seller, any Strategix
Company or any Subsidiary or to a loss of any benefit to which Seller, any
Strategix Company or any Subsidiary is entitled under any provision of any
agreement or other instrument binding upon Seller, any Strategix Company or any
Subsidiary, with such exceptions, in the case of this clause (iii), as would
not, individually or in the aggregate, have a Material Adverse Effect or
materially adversely affect the transactions contemplated hereby and other than
as set forth on Section 3.04 of the Strategix Disclosure Memorandum, or (iv)
result in the creation or imposition of any Lien on (x) any asset of any
Strategix Company or any Subsidiary or (y) any Strategix Assets, other than, in
each case, Permitted Liens and other than, in the case of this clause (iv), as
set forth on Section 3.04 of the Strategix Disclosure Memorandum.
SECTION E.. Capitalization. 1. Section 3.05(a) of the Strategix Disclosure
Memorandum sets forth the authorized, issued and outstanding shares of each
class of capital stock of each of the Strategix Companies.
2. All outstanding shares of capital stock of each of the Strategix
Companies have been duly authorized and validly issued and are fully paid and
non-assessable. Except as set forth in this Section 3.05, there are no
outstanding a. shares of capital stock or voting securities of any Strategix
Company, b. securities of Seller, any Affiliate of Seller or any Strategix
Company convertible into or exchangeable for shares of capital stock or voting
securities of any Strategix Company or c. options or other rights to acquire
from Seller, any Affiliate of Seller or any Strategix Company, or other
obligations of Seller, any Affiliate of Seller or any Strategix Company to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of any Strategix Company
(the items in clauses 3.05(b)(i), 3.05(b)(ii) and 3.05(b)(iii) being referred to
collectively as the "Company Securities"). None of the issued and outstanding
shares of capital stock of any of the Strategix Companies was issued in
violation of any preemptive rights. There are no outstanding obligations of
Seller, any Affiliate of Seller or any Strategix Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Company Securities.
SECTION F.. Ownership of Shares; Title to Strategix Assets. 1. Seller, or
one of its wholly-owned subsidiaries, is the record and beneficial owner of all
of the Shares, free and clear of any Lien and any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of the Shares) other than the Lien granted in favor of NationsBank, N.A.
in connection with the NationsBank Credit Facility, which Lien will be
unconditionally released in full on or prior to the Closing, and will transfer
and deliver to Buyer (or at the election of Buyer pursuant to Section 2.01, one
or more designees of Buyer) at the Closing valid title to the Shares free and
clear of any Lien and any such limitation or restriction.
2. Except as set forth on Section 3.12(b) of the Strategix Disclosure
Memorandum, upon consummation of the transactions contemplated hereby, Buyer
(or, if requested by Buyer pursuant to Section 2.01, one or more designees of
Buyer) will have acquired good and marketable title in and to, or a valid
leasehold interest in, each of the Strategix Assets, free and clear of all
Liens, except Permitted Liens.
SECTION G.. Subsidiaries. 1. Each Subsidiary is a corporation or a limited
or general partnership duly incorporated or organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, has all corporate or partnership powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not, individually or in the aggregate, have a Material
Adverse Effect. All Subsidiaries and their respective jurisdictions of
incorporation or organization are identified on Section 3.07 of the Strategix
Disclosure Memorandum.
2. Except as disclosed in Section 3.07 of the Strategix Disclosure
Memorandum: a. all of the outstanding capital stock or other voting securities
or equity interests of each Subsidiary is owned by the Strategix Company
identified on Section 3.07 of the Strategix Disclosure Memorandum, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or equity interests)
other than the Lien granted in favor of NationsBank, N.A. in connection with the
NationsBank Credit Facility, which Lien will be unconditionally released in full
on or prior to the Closing, b. there are no outstanding (x) securities of
Seller, any Affiliate of Seller, any Strategix Company or any Subsidiary
convertible into or exchangeable for shares of capital stock or voting
securities or equity interests of any Subsidiary or (y) options or other rights
to acquire from Seller, any Affiliate of Seller, any Strategix Company or any
Subsidiary, or other obligations of Seller, any Affiliate of Seller, any
Strategix Company or any Subsidiary to issue, any capital stock, voting
securities or equity interests or securities convertible into or exchangeable
for capital stock or voting securities or equity interests of any Subsidiary
(the items in clauses 3.07(b)(ii)(x) and 3.07(b)(ii)(y) being referred to
collectively as the "Subsidiary Securities"), c. none of the issued and
outstanding shares of capital stock or equity interests of any Subsidiary was
issued in violation of any preemptive rights and d. there are no outstanding
obligations of Seller, any Affiliate of Seller, any Strategix Company or any
Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities.
SECTION H.. Financial Statements. 1. The audited consolidated balance
sheets as of December 31, 1996 and 1997 and the related audited consolidated
statements of income and cash flows for each of the years ended December 31,
1995, 1996 and 1997, the unaudited condensed statements of income and cash flows
for the three months ended March 31, 1997, the unaudited condensed consolidated
balance sheet as of March 31, 1998 and the related unaudited condensed
consolidated statements of income and cash flows for the three months ended
March 31, 1998, the pro forma unaudited consolidated statement of income for the
year ended December 31, 1997 and the pro forma unaudited condensed consolidated
balance sheet as of March 31, 1998 and the related pro forma unaudited condensed
consolidated statement of income for the three months ended March 31, 1998 of
the Strategix Business (defined to include, solely for purposes of this Section
3.08(a), except with respect to the pro forma unaudited condensed consolidated
statements of income for the year ended December 31, 1997 and the three months
ended March 31, 1998, the Health Care Business), all as set forth in the Form
S-1, fairly present, in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the notes thereto
and except that as provided therein certain pro forma adjustments have been
made, which pro forma adjustments have been made in accordance with Regulation
S- X), the consolidated financial position of the Strategix Business (as defined
above) as of the dates thereof and their consolidated results of operations and
cash flows for the periods then ended (subject to normal year-end adjustments in
the case of any unaudited condensed financial statements).
2. The pro forma unaudited condensed consolidated balance sheet as of March
31, 1998 of the Strategix Business, attached hereto as Schedule 3.08(b), fairly
presents, in conformity with generally accepted accounting principles applied on
a consistent basis (except as may be indicated in the notes thereto and except
that as provided therein certain pro forma adjustments have been made, which pro
forma adjustments have been made in accordance with Regulation S- X), the
consolidated financial position of the Strategix Business as of March 31, 1998
(subject to normal year-end adjustments).
3. Except as set forth in Section 3.08(c) of the Strategix Disclosure
Memorandum, none of the Strategix Companies nor any of the Subsidiaries has
incurred, assumed or guaranteed any Indebtedness currently outstanding or
pursuant to which it is currently obligated, other than, in the case of a
guarantee by a Strategix Company or Subsidiary of Indebtedness of any other
Strategix Company or Subsidiary, as reflected on the Balance Sheet or on the pro
forma unaudited condensed consolidated statement of income for the three months
ended March 31, 1998 of the Strategix Business.
SECTION I.. Absence of Certain Changes. Except as set forth in Section 3.09
of the Strategix Disclosure Memorandum, since the Balance Sheet Date, the
Strategix Business has been conducted in the ordinary course consistent with
past practices and there has not been:
1. any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or could reasonably
be expected to have a Material Adverse Effect;
2. any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of any Strategix
Company, or any repurchase, redemption or other acquisition by any
Strategix Company or any Subsidiary of any outstanding shares of capital
stock or other securities of any Strategix Company or any Subsidiary;
3. any amendment of any material term of any outstanding security of
any Strategix Company or any Subsidiary;
4. any incurrence, assumption or guarantee by any Strategix Company or
any Subsidiary of any Indebtedness in excess of $100,000 in the aggregate
other than (i) intercompany loans incurred in the ordinary course of
business consistent with past practices and (ii) guarantees issued in
connection with the NationsBank Credit Facility, which guarantees shall be
unconditionally released in full on or prior to the Closing;
5. any creation or other incurrence of (i) any Lien on any shares of
capital stock of any Strategix Company or any Subsidiary or (ii) any Lien
in excess of $10,000 individually or $50,000 in the aggregate on any asset
of any Strategix Company or any Subsidiary or on any Strategix Asset, other
than, in each case, in the ordinary course of business consistent with past
practices (and other than, in the case of clause (i) and (ii), Liens
granted in connection with the NationsBank Credit Facility, which Liens
shall be unconditionally released in full on or prior to the Closing);
6. any making of any loan, advance or capital contributions to or
investment in any Person by any Strategix Company or any Subsidiary other
than a. advances in the ordinary course of the conduct of the Strategix
"private label" or franchising business consistent with past business
practices, which advances are secured, with respect to each such "private
label" branch or franchisee, by the related receivables of such branch or
franchisee, b. in the ordinary course of business consistent with past
practices in an amount not in excess of $100,000 in the aggregate and (iii)
intercompany loans among the Strategix Companies and the Subsidiaries made
in the ordinary course of business consistent with past practices;
7. any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of any Strategix
Company or any Subsidiary or any Strategix Assets or Strategix Liabilities
which, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect;
8. any transaction or commitment made, or any contract or agreement
entered into, by any Strategix Company or any Subsidiary relating to its
assets or business (including the acquisition or disposition of any assets)
or any relinquishment by any Strategix Company or any Subsidiary of any
contract or other right, or by the Seller or any of its Affiliates with
respect to the Strategix Assets or Strategix Liabilities, in each case
material to the Strategix Companies and the Subsidiaries, taken as a whole,
other than transactions and commitments in the ordinary course of business
consistent with past practices and those contemplated by this Agreement;
9. any change in any method of accounting or accounting practice by
any Strategix Company or any Subsidiary except for any such change after
the Balance Sheet Date required by reason of a concurrent change in
generally accepted accounting principles;
10. any a. employment, deferred compensation, severance, retirement or
other similar agreement entered into with any director or officer of any
Strategix Company or any Subsidiary or any employee of any Strategix
Company or any Subsidiary (or any employee who otherwise will or may become
a Transferred Employee) whose annual base compensation is in excess of
$75,000 per year (each such employee, a "Significant Employee") (or any
amendment to any such existing agreement), ▇. ▇▇▇▇▇ of any severance or
termination pay to any director or officer of any Strategix Company or any
Subsidiary or any Significant Employee in excess of $50,000 in the
aggregate, or c. change in compensation or other benefits payable to any
director or officer of any Strategix Company or any Subsidiary or any
Significant Employee pursuant to any severance or retirement plans or
policies thereof, other than, in each case, customary annual increases in
salary in the ordinary course of business consistent with past practices;
11. any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of any Strategix Company or any Subsidiary, which
employees were not subject to a collective bargaining agreement at the
Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages or
threats thereof by or with respect to any employees of any Strategix
Company or any Subsidiary;
12. any capital expenditures, or commitment for capital expenditures,
including additions or improvements to property, plant and equipment
relating to the Strategix Business which exceed $10,000 individually; or
13. any material acceleration or delay of the collection of accounts
or notes receivable or the payment of accounts or notes payable of the
Strategix Business.
SECTION J.. No Undisclosed Material Liabilities. There are no liabilities
relating to the Strategix Business of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than:
1. liabilities provided for in the Balance Sheet or disclosed in the
notes thereto other than trade accounts payable incurred in the ordinary
course of business consistent with past practices, obligations to employees
incurred in the ordinary course of business consistent with past practices
and other obligations incurred in the ordinary course of business
consistent with past practices, in each case incurred after the Balance
Sheet Date;
2. liabilities disclosed on the Strategix Disclosure Memorandum; and
3. other undisclosed liabilities which, individually or in the
aggregate, are not material to the Strategix Business, taken as a whole.
SECTION K.. Intercompany Accounts. Section 3.11 of the Strategix Disclosure
Memorandum sets forth the amount of intercompany balance as of the Balance Sheet
Date between Seller and its Affiliates, on the one hand, and the Strategix
Companies and the Subsidiaries, on the other hand. Since the Balance Sheet Date
there has not been any accrual of liability by any Strategix Company or any
Subsidiary to Seller or any of its Affiliates or other transaction between any
Strategix Company or any Subsidiary and Seller and any of its Affiliates, except
in the ordinary course of business of the Strategix Companies and the
Subsidiaries consistent with past practice, and thereafter, as provided in
Section 3.11 of the Strategix Disclosure Memorandum.
SECTION L.. Material Contracts. 1. Except as disclosed in Section 3.12 of
the Strategix Disclosure Memorandum, none of the Strategix Companies or any
Subsidiary (or, to the extent involving any of the Strategix Companies, the
Subsidiaries, the Strategix Assets or the Strategix Liabilities, the Seller or
its Affiliates) is a party to or bound by:
a. any lease (whether of real or personal property) providing for
annual rentals in excess of $50,000; provided that the parties understand
that such list is complete with respect to leases providing for annual
rentals in excess of $250,000 and substantially complete with respect to
all other leases, and that Seller shall update promptly such list after the
date hereof to correct any inadvertent omissions;
b. any agreement pursuant to which the Strategix Companies or the
Subsidiaries are committed to purchase materials, supplies, goods,
services, equipment or other assets providing for either annual or
aggregate payments by the Strategix Companies and the Subsidiaries of
$250,000 or more;
c. any partnership, joint venture or other similar agreement or
arrangement with one or more third parties;
d. any agreement pursuant to which any business was acquired or
disposed of (whether by merger, sale of stock, sale of assets or otherwise)
after January 1, 1995 other than agreements previously made available to
Buyer (and with respect to which a list of the relevant acquisitions or
dispositions is set forth on Section 3.12 of the Strategix Disclosure
Memorandum);
e. any agreement relating to Indebtedness, except any such agreement
relating to Indebtedness with an aggregate outstanding principal amount not
exceeding $100,000;
f. any license, franchise or similar agreement;
g. any agreement that limits the freedom of any Strategix Company or
any Subsidiary to compete in any line of business or with any Person or in
any area or which would so limit the freedom of any Strategix Company or
any Subsidiary after the Closing Date other than the license or franchise
agreements identified pursuant to clause (vi) above and except certain
agreements pursuant to which the Strategix Companies or the Subsidiaries
serve as subcontractor ("Subcontractor Agreements"), which agreements may
limit the Strategix Companies or the Subsidiaries from soliciting the
applicable contractor's clients;
h. any agreement that limits in any material way the freedom of Seller
or any Affiliate to own, operate, sell, transfer, pledge or otherwise
dispose of or encumber any Strategix Asset or which would so limit the
freedom of Buyer or its Affiliates after the Closing Date;
i. any agreement with (1) Seller or any of its Affiliates, (2) any
Person directly or indirectly owning, controlling or holding with power to
vote, 5% or more of the outstanding voting securities of Seller or any of
its Affiliates, (3) any Person 5% or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held with power
to vote by Seller or any of its Affiliates or (4) any director or officer
of Seller or any of its Affiliates or any "associates" or members of the
"immediate family" (as such terms are respectively defined in Rule 12b-2
and Rule 16a-1 of the ▇▇▇▇ ▇▇▇) of any such director or officer;
j. any material agreement between a Strategix Company or any
Subsidiary and any director, officer or employee of any Strategix Company
or any Subsidiary or Seller or any of its Affiliates or with any
"associate" or any member of the "immediate family" (as such terms are
respectively defined in Rules 12b-2 and 16a-1 of the ▇▇▇▇ ▇▇▇) of any such
director, officer or employee (other than as set forth in Section 3.24(e)
of the Strategix Disclosure Memorandum and other than agreements that are
excluded from the definition of "Benefit Arrangement" by the proviso
thereto); or
k. any other agreement, commitment, arrangement or plan not made in
the ordinary course of business that is material to the Strategix Companies
and the Subsidiaries, taken as a whole; it being understood that this
clause (xi) shall not require the disclosure of any agreement, commitment
or plan which, in the absence of a "materiality" qualifier or threshold
applicable thereto, would have been required to be disclosed pursuant to
clauses (i) through (x) hereof.
2. Except as set forth in Section 3.12(b) of the Strategix Disclosure
Memorandum, each agreement, contract, plan, lease, arrangement or commitment
disclosed in any Section of the Strategix Disclosure Memorandum or required to
be disclosed pursuant to this Section is a valid and binding agreement of Seller
or an Affiliate of Seller, a Strategix Company or a Subsidiary, as the case may
be, and is in full force and effect, and none of Seller, any Strategix Company,
any Subsidiary or, to the Knowledge of Seller, any other party thereto is in
default or breach in any material respect under the terms of any such agreement,
contract, plan, lease, arrangement or commitment, and, to the Knowledge of
Seller, no event or circumstance has occurred that, with notice or lapse of time
or both, would constitute any event of default that would be material
thereunder. True and complete copies of each such agreement, contract, plan,
lease, arrangement or commitment have been made available to Buyer.
SECTION M.. Litigation. Except as set forth in Section 3.13 of the
Strategix Disclosure Memorandum, there is no action, suit, investigation or
proceeding (or any basis therefor) pending against, or to the knowledge of
Seller, threatened against or affecting, Seller or its Affiliates (to the extent
involving the Strategix Business), any Strategix Company or any Subsidiary or
any of their respective properties or any Strategix Asset or otherwise affecting
the Strategix Business before any court or arbitrator or any governmental body,
agency or official a. which, individually or in the aggregate, if determined or
resolved adversely in accordance with the plaintiff's demands, could reasonably
be expected to have a Material Adverse Effect, b. involves damages in excess of
$500,000, c. which seeks injunctive relief or d. which in any manner challenges
or seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement.
SECTION N.. Compliance with Laws and Court Orders. Except as set forth in
Section 3.13 of the Strategix Disclosure Memorandum, none of the Strategix
Companies or any Subsidiary (or, to the extent involving the Strategix Business,
Seller or its Affiliates) is in violation of, and has not since January 1, 1997
violated, and to the knowledge of Seller is not under investigation with respect
to and has not been threatened to be charged with or given notice of any
violation of, any applicable law, rule, regulation, judgment, injunction, order
or decree, except for violations that have not had and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION O.. Properties. 1. Other than with respect to the Intellectual
Property Rights addressed in Section 3.16 and as set forth on Section 3.12(b) of
the Strategix Disclosure Memorandum, the Strategix Companies and the
Subsidiaries (and, with respect to the Strategix Assets, Seller or one of its
wholly-owned subsidiaries) have good and marketable, indefeasible, fee simple
title to, or in the case of leased property and assets have valid leasehold
interests in, all property and assets (whether real, personal, tangible or
intangible) reflected on the Balance Sheet or as described in the Form S-1
(except with respect to the Health Care Business) as part of the business of the
Strategix Companies or the Subsidiaries or acquired after the Balance Sheet
Date, except for obsolete assets disposed of since the Balance Sheet Date in the
ordinary course of business consistent with past practices. None of such
property or assets is subject to any Lien, except a. Liens disclosed on the
Balance Sheet; b. Liens for taxes not yet due or being contested in good faith
(Liens referred to in clauses (i) and (ii) are, collectively, the "Permitted
Liens"); c. Liens in favor of NationsBank, N.A. in connection with the
NationsBank Credit Facility, which Liens will be unconditionally released in
full on or prior to the Closing and d. Liens in favor of Fleet National Bank in
connection with the Fleet Credit Facility.
2. There are no developments affecting any such property or assets pending
or, to the Knowledge of Seller threatened, which might materially detract from
the value, materially interfere with any present or intended use or materially
adversely affect the marketability of any such property or assets.
3. To the Knowledge of Seller, there does not exist under any lease of real
property any default or any event which with notice or lapse of time or both
would constitute a default and no information has come to Seller's attention
which would cause it to believe that any such lease is not in good standing or
is not valid, binding or enforceable in accordance with its terms.
4. Except for certain systems, licenses and managerial support provided by
Seller from its Jacksonville headquarters (which Seller has agreed to make
available to Buyer following the closing pursuant to Section 7.05 hereof) and
the Joint Leases, the property and assets owned or leased by the Strategix
Companies and any Subsidiary, together with the Strategix Assets, constitute all
of the property and assets used or held for use in connection with the Strategix
Business and are adequate to conduct the Strategix Business as currently
conducted.
SECTION P.. Intellectual Property. 1. Section 3.16 of the Strategix
Disclosure Memorandum contains a list of all material Intellectual Property
Rights owned or licensed and used or held for use (x) by any Strategix Company
or any Subsidiary or (y) in connection with the Strategix Business, by Seller or
any of its Affiliates ("Company Intellectual Property Rights"), specifying as to
each, as applicable: a. the nature of such Intellectual Property Right, b. the
owner of such Intellectual Property Right, and c. with respect to federal
Intellectual Property Rights, the registration or application numbers relating
to such Intellectual Property Rights.
2. Section 3.16 of the Strategix Disclosure Memorandum sets forth a list of
all material licenses, sublicenses and other agreements (other than franchise
agreements identified pursuant to Section 3.12(a)(vi) hereof) to which any
Strategix Company, any Subsidiary, Seller or any Affiliate thereof is a party
and pursuant to which any Person is authorized to use any Company Intellectual
Property Right, including a. the identity of all parties thereto, b. a
description of the nature and subject matter thereof, c. the applicable royalty
and d. the term thereof.
3. a. Except as set forth in Section 3.16 of the Strategix Disclosure
Memorandum, since February 1, 1997, none of Seller, its Affiliates, any
Strategix Company or any Subsidiary has been a defendant in any action, suit,
investigation or proceeding relating to, or otherwise has Knowledge of, any
alleged claim of infringement of any Intellectual Property Right or any claim
that the use of any Company Intellectual Property infringes any right of any
other Person, and Seller has no Knowledge of any other such infringement by any
Strategix Company or any Subsidiary and b. Seller has no outstanding claim or
suit for, and has no Knowledge of, any continuing infringement by any other
Person of any Company Intellectual Property Rights. No Company Intellectual
Property Right is subject to any outstanding judgment, injunction, order, decree
or agreement restricting the use thereof by any Strategix Company or any
Subsidiary or restricting the licensing thereof by any Strategix Company or any
Subsidiary to any Person. Neither any Strategix Company nor any Subsidiary has
entered into any agreement to indemnify any other Person against any charge of
infringement of any Intellectual Property Right other than in connection with
any client contracts or franchise or licensing agreements.
SECTION Q.. Insurance Coverage. Seller has furnished to Buyer a list of,
and made available true and complete copies of, all insurance policies and
fidelity bonds relating to the assets, business, operations, employees, officers
or directors of the Strategix Companies, the Subsidiaries and to the Strategix
Assets. Except as set forth on Section 3.17 of the Strategix Disclosure
Memorandum, to the Knowledge of Seller, there is no material claim by Seller,
any Strategix Company or any Subsidiary pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds or in respect of which such underwriters
have reserved their rights. All premiums payable under all such policies and
bonds have been timely paid and the Seller, the Strategix Companies and the
Subsidiaries have otherwise complied in all material respects with the terms and
conditions of all such policies and bonds. Such policies and bonds are of the
type and in amounts customarily carried by Persons conducting businesses similar
to those of the Strategix Companies and the Subsidiaries. Seller does not know
of any threatened termination of, material premium increase (other than in the
ordinary course of business) with respect to, or material alteration of coverage
under, any of such policies or bonds. The Strategix Companies have adequately
reserved on the Balance Sheets in respect of any payments which may be required
under any self-insurance policies. All Worker's Compensation Claims incurred
prior to the Closing Date (including all incurred but not reported claims) are
either fully insured by a third-party insurer which is not an Affiliate of
Seller or are self-insured subject to an excess liability insurance policy
carried with a third-party insurer which is not an Affiliate of Seller and which
covers the full amount of Worker's Compensation Claims in excess of not less
than $350,000 per occurrence. To the best of Seller's Knowledge, since January
1, 1997 the Seller has had in place insurance policies and bonds with respect to
the Strategix Business appropriate and customary for such business.
SECTION R.. Licenses and Permits. Section 3.18 of the Strategix Disclosure
Memorandum correctly describes each license, permit, certificate, approval or
other similar authorization (or where appropriate, the category into which a
group of such licenses, permits, certificates, approvals or other similar
authorizations fall) material to the operation or ownership of the assets or
business of the Strategix Business (the "Permits") together with the name of the
government agency or entity issuing such Permit. Except as set forth on Section
3.18 of the Strategix Disclosure Memorandum, a. the Permits are valid and in
full force and effect, b. neither any Strategix Company nor any Subsidiary (nor,
with respect to the Strategix Assets and the Strategix Liabilities, the Seller)
is in default under, and no condition exists that with notice or lapse of time
or both would constitute a default under, the Permits and c. none of the Permits
will be terminated or impaired or become terminable, in whole or in part, as a
result of the transactions contemplated hereby.
SECTION S.. Receivables. All accounts, notes receivable and other
receivables (other than receivables collected since the Balance Sheet Date)
reflected on the Balance Sheet are, and all accounts and notes receivable
arising from or otherwise relating to the business of the Strategix Companies,
the Subsidiaries and the Strategix Assets as of the Closing Date will be, valid,
genuine and collectible in the aggregate amount thereof in the ordinary course
of business, subject to normal and customary trade discounts, less any reserves
for doubtful accounts recorded on the Balance Sheet. All accounts, notes
receivable and other receivables arising out of or relating to such business of
the Strategix Companies, the Subsidiaries and the Strategix Assets as of the
Balance Sheet Date have been included in the Balance Sheet, and all accounts,
notes receivable and other receivables arising out of or relating to the
Business as of the Closing Date will be included in the Closing Balance Sheet,
in accordance with generally accepted accounting principles applied on a
consistent basis.
SECTION T.. Accuracy of Information. All of the agreements made available
to Buyer in connection with this Agreement are true and complete copies of such
agreements. As of the date hereof, the Form S-1 does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading.
SECTION U.. Investment Banking Fees. Except for ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., whose
fees will be paid by Seller, there is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Seller, any Strategix Company or any Subsidiary who might be entitled to any
fee or commission in connection with the transactions contemplated by this
Agreement.
SECTION V.. Employees. Section 3.22 of the Strategix Disclosure Memorandum
sets forth a true and complete list as of a recent date of the names, titles,
annual salaries and other compensation of all officers of the Strategix
Companies and the Subsidiaries and all other Transferred Employees; provided
that such list shall not include the Jacksonville-based employees whose status
as employees of Buyer or Seller has not yet been clarified by the parties. None
of the officers or other key employees of the Strategix Companies and the
Subsidiaries has indicated to Seller, the Strategix Companies or the
Subsidiaries that he or she intends to resign or retire as a result of the
transactions contemplated by this Agreement or otherwise within one year after
the Closing Date.
SECTION W.. Labor Matters. Except as set forth in Section 3.23 and Section
3.13 of the Strategix Disclosure Memorandum, each Strategix Company and each
Subsidiary, and with respect to any Transferred Employee or any temporary
employees not employed by a Strategix Company or a Subsidiary, the Seller, is in
substantial compliance in all material respects with all currently applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, and are not engaged in any unfair labor
practice. There is no unfair labor practice complaint pending or, to the
knowledge of Seller, threatened against any Strategix Company or any Subsidiary,
and with respect to any Transferred Employee or any temporary employees not
employed by a Strategix Company or a Subsidiary, the Seller, before the National
Labor Relations Board.
SECTION X.. Employee Benefit Plans. 1. Section 3.24 of the Strategix
Disclosure Memorandum identifies each Employee Plan. Seller has made available
to Buyer copies of the Employee Plans (and, if applicable, related trust
agreements) maintained by a Strategix Company or a Subsidiary, and all
amendments thereto and written interpretations thereof together with the three
most recent annual reports (Form 5500 including, if applicable, Schedule B
thereto) and, as applicable, the most recent actuarial valuation report prepared
in connection with any Employee Plan. Seller has made available to Buyer copies
of all Employee Plans, and all amendments thereto, maintained by Seller or its
Affiliates (other than the Strategix Companies and the Subsidiaries) as
reasonably requested by Buyer.
2. To the best of Seller's Knowledge, at no time has any Strategix Company
or any Subsidiary (i) sponsored, maintained, contributed to or been required to
contribute to any plan subject to Title IV of ERISA or the minimum funding
requirements of Section 412 of the Code; (ii) contributed to or been required to
contribute to any Multiemployer Plan; or (iii) incurred any withdrawal liability
to any Multiemployer Plan. No Strategix Company, nor any Subsidiary or ERISA
Affiliate thereof has incurred or could reasonably be expected to incur any
material liability under Title IV of ERISA or the minimum funding requirements
of Section 412 of the Code (other than for PBGC insurance premiums or plan
benefits, in each case payable in the ordinary course).
3. To the best of Seller's Knowledge, no transaction prohibited by Section
406 of ERISA or Section 4975 of the Code has occurred with respect to any
employee benefit plan or arrangement which is covered by Title I of ERISA, which
transaction has or will cause any Strategix Company or any of the Subsidiaries
to incur any liability under ERISA, the Code or otherwise, excluding
transactions effected pursuant to and in compliance with a statutory or
administrative exemption.
4. Each Employee Plan that is intended to be qualified under Section 401(a)
of the Code has applied for or received a favorable determination letter from
the Internal Revenue Service and Seller has no knowledge of any facts or
circumstances that could reasonably be expected to result in the denial or
revocation thereof. Each Employee Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Code so as not to result in any liability of any Strategix Company
or any Subsidiary for a failure to so comply.
5. Section 3.24 of the Strategix Disclosure Memorandum identifies each
Benefit Arrangement. Seller has furnished to Buyer copies or descriptions of
each Benefit Arrangement (and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof. Each Benefit Arrangement
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable statutes, orders, rules and
regulations and has been maintained in good standing with applicable regulatory
authorities so as not to result in any liability of any Strategix Company or any
Subsidiary for a failure to so comply.
6. Except as set forth in Section 3.24 of the Strategix Disclosure
Memorandum, neither any Strategix Company nor any Subsidiary has any material
current or projected liability in respect of post-employment or post-retirement
health or medical or life insurance benefits for retired, former or current
employees of any Strategix Company or any Subsidiary, except those required to
avoid excise tax under Section 4980B of the Code.
7. Except as set forth in Section 3.24 of the Strategix Disclosure
Memorandum, all contributions and payments accrued under each Employee Plan and
Benefit Arrangement, determined in accordance with prior funding and accrual
practices, as adjusted to include proportional accruals for the last payroll
period ending immediately prior to the Closing Date, will be discharged and paid
on or prior to the Closing Date except to the extent a. reflected as a liability
on the Closing Balance Sheet or b. retained by Seller. Except as set forth in
Section 3.24 of the Strategix Disclosure Memorandum, there has been no amendment
to, written interpretation of or announcement (whether or not written) by Seller
or any of its Affiliates or any Strategix Company or any Subsidiary relating to,
or change in employee participation or coverage under, any Employee Plan or
Benefit Arrangement that would increase materially the expense to any Strategix
Company, any Subsidiary or Buyer or any of Buyer's Affiliates of maintaining
such Employee Plan or Benefit Arrangement above the level of the expense
incurred in respect thereof for the most recent fiscal year ended prior to the
date hereof.
8. Except as set forth in Section 3.24 of the Strategix Disclosure
Memorandum, there is no contract, plan or arrangement (written or otherwise)
covering any employee or former employee of any Strategix Company or any
Subsidiary or any Transferred Employee that, individually or collectively, could
give rise to the payment by any Strategix Company or any Subsidiary or Buyer or
any of Buyer's Affiliates of any amount that would not be deductible pursuant to
the terms of Section 280G of the Code.
9. There has been no failure of a group health plan (as defined in Section
5000(b)(1) of the Code) maintained by a Strategix Company or any Subsidiary to
meet the requirements of Code Section 4980B(f) with respect to a qualified
beneficiary (as defined in Section 4980B(g)). Neither any Strategix Company nor
any of the Subsidiaries has contributed to a nonconforming group health plan (as
defined in Section 5000(c)) and no ERISA Affiliate of any Strategix Company or
any of its Subsidiaries has incurred a tax under Section 5000(a) which is or
could become a liability of any Strategix Company or any of the Subsidiaries.
10. Except as disclosed in Section 3.24 of the Strategix Disclosure
Memorandum, no Transferred Employee will become entitled to any bonus,
retirement, severance, job security or similar benefit or enhanced such benefit
(including acceleration of vesting or exercise of an incentive award) as the
direct and sole result of the transactions contemplated hereby and no
Transferred Employee will become entitled to any enhanced severance protections
or benefits as a result of the transactions contemplated hereby.
11. To the extent applicable, Seller and its Affiliates have complied with
all requirements under the Workers Adjustment and Retraining Notification Act of
1988, as amended, and any similar state or local law, rule or regulation.
SECTION Y.. Environmental Matters. 1. Except as disclosed on Section 3.25
of the Strategix Disclosure Memorandum,
a. no notice, notification, demand, request for information, citation,
summons or order has been received, no complaint has been filed, no penalty
has been assessed and no investigation, action, claim, suit, proceeding or
review is pending, or to the Knowledge of Seller, threatened by any
governmental entity or other Person with respect to any matters relating to
any Strategix Company, any Subsidiary or the Strategix Assets or the
Strategix Liabilities and relating to or arising out of any Environmental
Law;
b. each of the Strategix Companies and the Subsidiaries and, with
respect to the Strategix Assets and the Strategix Liabilities, the Seller,
has been and is in compliance in all material respects with all applicable
Environmental Laws, and possesses and is in compliance with all
Environmental Permits required under such laws for the conduct of the
Strategix Business; and
c. there are and have been no conditions at any property owned,
operated or otherwise used by the Strategix Companies or the Subsidiaries
or, with respect to the Strategix Assets and the Strategix Liabilities, the
Seller, now or in the past, that would reasonably be expected to give rise
to any liability of the Strategix Companies or the Subsidiaries or, with
respect to the Strategix Assets and the Strategix Liabilities, the Seller,
under any Environmental Law.
2. There has been no environmental investigation, study, audit, test,
review or other analysis conducted of which Seller has Knowledge in relation to
the Strategix Assets or the Strategix Liabilities or the current or prior
business of any Strategix Company or any Subsidiary or any property or facility
now or previously owned, leased or operated by any Strategix Company or any
Subsidiary which has not been delivered to Buyer at least ten days prior to the
date hereof.
SECTION Z.. Worker's Compensation Claims. Seller has made available to
Buyer a true, correct and complete list of all claims or pending claims for
workers' compensation submitted or expected to be submitted by any employee of
any Strategix Company or any Subsidiary with respect to services performed on
behalf of such Strategix Company or Subsidiary determined by Seller based on
information provided by its third party administrators (the "Worker's
Compensation Claims").
SECTION AA.. Year 2000 Compliance. PricewaterhouseCoopers LLP has provided
Seller with a draft assessment (the "Draft Assessment") of the computer hardware
and software of Seller and its Affiliates as they relate to being Year 2000
Compliant. Seller has provided to Buyer a true and complete copy of the sections
of the Draft Assessment relating to the Strategix Companies and the
Subsidiaries. Based on the Draft Assessment, Seller has developed a plan for the
computer hardware and software of the Strategix Companies and the Subsidiaries
to be Year 2000 Compliant by December 31, 1998, and Seller estimates that the
aggregate cost of implementing this plan above and beyond what has already been
incurred and what Seller estimates that it would otherwise incur in the ordinary
course of business will not exceed $500,000, it being understood that this is
only Seller's good faith estimate and is not intended to be a basis for
liability or indemnification hereunder absent a material misrepresentation. As
promptly as reasonably practicable after the date of this Agreement, Seller will
review the Draft Assessment with its audit committee so that
PricewaterhouseCoopers LLP can finalize the Draft Assessment. Seller will
provide a true and complete copy of the sections of the final assessment
relating to the Strategix Companies and the Subsidiaries to Buyer as promptly as
reasonably practicable after the date of this Agreement (and in any event prior
to September 20, 1998). For purposes of this Agreement, an item of computer
hardware or software will be considered "Year 2000 Compliant" if it is able
accurately to process (including without limitation calculate, compare and
sequence) date and time data from, into and between the years 1999 and 2000 and
any other years in the 20th and 21st centuries.
SECTION BB.. Compliance with Franchise Laws. Except as disclosed in,
Section 3.28 of the Strategix Disclosure Memorandum, Seller and its Affiliates
and the Strategix Companies and the Subsidiaries have complied and are in
compliance with all applicable laws in connection with their franchised offices,
including, without limitation, all applicable state, federal and local laws
relating to franchising and licensing except for violations that have not had
and could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
SECTION CC.. [Intentionally Omitted].
SECTION DD.. Earnouts. Section 3.30 of the Strategix Disclosure Memorandum
sets forth a. each agreement containing an earnout or similar provision or
otherwise providing for a contingent payment by or to any Strategix Company or
any Subsidiary in respect of the Strategix Business or otherwise included in the
Strategix Liabilities that has not been satisfied in full as of the date hereof
(the "Earnout Agreements") and b. a schedule of the amounts that Seller
currently estimates will come due under the Earnout Agreements. There is no
claim or dispute or, to the Knowledge of Seller, any basis for any such claim or
dispute, under any Earnout Agreement. All payments under each Earnout Agreement
have been paid when due in accordance with the terms of such Earnout Agreement.
The Schedule referred to in clause (ii) hereof was prepared using the Seller's
good faith estimates with respect to the Earnout Agreements and is not intended
to be a basis for liability or indemnification hereunder absent a material
misrepresentation.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF RANDSTAD AND BUYER
Randstad and Buyer represent and warrant to Seller as of the date hereof
and as of the Closing Date that:
SECTION A.. Existence and Power. Randstad is a corporation duly
incorporated and validly existing under the laws of The Netherlands, and Buyer
is a limited partnership duly organized, validly existing and in good standing
under the laws of Delaware. Each such Person has all powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.
SECTION B.. Authorization. The execution, delivery and performance by
Randstad and Buyer of this Agreement and the consummation of the transactions
contemplated hereby are within the powers of each of Randstad and Buyer and have
been duly authorized by all necessary action on the part of each of Randstad and
Buyer. This Agreement constitutes a valid and binding agreement of Randstad and
Buyer.
SECTION C.. Governmental Authorization. The execution, delivery and
performance by Randstad and Buyer of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency or official other than (i) compliance
with the applicable requirements of the HSR Act and (ii) any other requirements
the obtaining or filing of which will not affect in any material way the
consummation of the transaction contemplated hereby.
SECTION D.. Noncontravention. The execution, delivery and performance by
Randstad and Buyer of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) violate the articles of association
of Randstad or the partnership agreement of Buyer or (ii) assuming compliance
with the matters referred to in Section 4.03, violate any applicable material
law, rule, regulation, judgment, injunction, order or decree.
SECTION E.. Purchase for Investment. Buyer is purchasing the Shares for
investment for its own account and not with a view to, or for sale in connection
with, any distribution thereof.
SECTION F.. Litigation. As of the date of this Agreement, there is no
action, suit, investigation or proceeding pending against, or to the knowledge
of Buyer threatened against or affecting, Buyer before any court or arbitrator
or any governmental body, agency or official which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement.
SECTION G.. Finders' Fees. Except for ▇.▇. ▇▇▇▇▇▇ Securities, Inc., whose
fees will be paid by Buyer, there is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Buyer who might be entitled to any fee or commission from Seller or any of
its Affiliates upon consummation of the transactions contemplated by this
Agreement.
SECTION H.. Buyer Financing. On or prior to Closing, Buyer will have
sufficient funds or have in place capital commitments to provide sufficient
funds to purchase the Shares and the Strategix Assets and Strategix Liabilities
on the terms and conditions contained in this Agreement. From time to time at
Seller's request Buyer will update Seller as to the status of its financing.
ARTICLE V.
COVENANTS OF SELLER
Seller agrees that:
SECTION A.. Conduct of the Strategix Companies. Except as set forth in
Section 5.01 of the Strategix Disclosure Memorandum, from the date hereof until
the Closing Date, Seller shall cause the Strategix Companies and the
Subsidiaries (and to the extent it or they own Strategix Assets or Strategix
Liabilities, shall or shall cause each of its Affiliates) to conduct the
Strategix Business in the ordinary course consistent with past practice and to
use its reasonable best efforts to preserve intact its business organizations
and material relationships with third parties and to keep available the services
of its present officers and employees. Without limiting the generality of the
foregoing, except as expressly required by this Agreement and except with the
prior written consent of Buyer (it being understood that Buyer shall consider in
good faith whether to grant consent with respect to any matter based on the
benefits to the Strategix Business), from the date hereof until the Closing
Date, Seller with respect to the Strategix Business will not and will not permit
any Affiliate or any Strategix Company or any Subsidiary to:
1. adopt or propose any change in its certificate of incorporation or
bylaws;
2. issue or agree to issue any additional shares of capital stock of
any class or series, or any securities convertible into or exchangeable for
shares of its capital stock or issue any options, warrants or other rights
to acquire any shares of its capital stock;
3. declare, set aside, make or pay any dividend or other distribution
payable with respect to any of its capital stock;
4. merge or consolidate with any other Person or acquire a material
amount of assets from any other Person;
5. sell, lease, license or otherwise dispose of any assets or property
except a. pursuant to existing contracts or commitments and b. in the
ordinary course consistent with past practice; or
6. incur, assume or guarantee any Indebtedness in excess of $100,000
in the aggregate other than as described in Section 3.09(d) and other than
borrowings in the ordinary course under the Fleet Credit Facility;
7. enter into any agreement relating to the acquisition of assets or
property in an amount in excess of $10,000 individually;
8. (i) cancel any debts or waive any claims or rights, except in the
ordinary course of business consistent with past practice, or (ii) make any
loans or advances to any Person other than as described in Section 3.09(f);
9. accelerate or delay the collection of accounts or notes receivable
or the payment of accounts or notes payable or otherwise operate the
Strategix Business in a manner that would artificially affect the
computation of any adjustments pursuant to Section 2.04;
10. enter into any agreement with any of Seller or its respective
Affiliates;
11. except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
practices, methods or principles used by it; or
12. agree or commit to do any of the foregoing.
Seller will not, and will not permit any Affiliate or any Strategix Company or
any Subsidiary to, (i) take or agree or commit to take any action that would
make any representation or warranty of Seller hereunder inaccurate in any
respect at, or as of any time prior to, the Closing Date or (ii) omit or agree
or commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time.
SECTION B.. Access to Information; Confidentiality. 1. From the date hereof
until the Closing Date, Seller will a. give, and will cause its Affiliates and
each Strategix Company and each Subsidiary to give, Buyer, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access, upon reasonable notice and during normal business hours, to the offices,
properties, books and records of the Strategix Companies and the Subsidiaries
and to the books and records of Seller relating to the Strategix Companies, the
Subsidiaries, and the Strategix Assets and the Strategix Liabilities, b.
furnish, and will cause each Strategix Company and each Subsidiary to furnish,
to Buyer, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information relating
to any Strategix Company, any Subsidiary, any Strategix Asset or any Strategix
Liabilities as such Persons may reasonably request and c. instruct the
employees, counsel and financial advisors of Seller, each Strategix Company and
each Subsidiary to cooperate with Buyer in its investigation of the Strategix
Companies, the Subsidiaries, the Strategix Assets and the Strategix Liabilities.
Buyer shall not, and shall cause its counsel, financial advisors, auditors and
other authorized representatives not to, interfere in any material respect with
the conduct of the business of the Strategix Companies and the Subsidiaries and
shall coordinate its review of the Strategix Companies, the Subsidiaries, the
Strategix Assets and the Strategix Liabilities through ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Except as provided in the next
sentence, no investigation by Buyer or other information received by Buyer shall
operate as a waiver or otherwise affect any representation, warranty or
agreement given or made by Seller hereunder. Each of Buyer and Seller will
cooperate in good faith to advise the other party promptly if it learns of any
material breach of any representation or warranty of either party set forth in
this Agreement; it being understood that if any of ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇. or ▇▇▇▇▇ ▇▇▇▇▇, with respect to Buyer, and any of ▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, with respect to
Seller, have actual knowledge of breach of any representation or warranty by the
other party and Buyer or Seller, as the case may be, deliberately fails to
notify the other party of that breach, then that party will not be entitled to
indemnification for such breach of representation or warranty pursuant to
Article 11 hereof.
2. After the Closing, Seller and its Affiliates will hold, and will use
their reasonable best efforts to cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all documents and information concerning the
Strategix Companies, the Subsidiaries and the Strategix Assets, except to the
extent that such information can be shown to have been a. in the public domain
through no fault of Seller or its Affiliates or b. later lawfully acquired by
Seller from sources other than those related to its prior ownership of the
Strategix Companies, the Subsidiaries and the Strategix Assets.
3. On and after the Closing Date, Seller will afford promptly to Buyer and
its agents reasonable access, during normal business hours and upon reasonable
notice, to its books of account, financial and other records (including, without
limitation, accountant's work papers), information, employees and auditors to
the extent necessary or useful for Buyer in connection with any audit,
investigation, dispute or litigation or any other reasonable business purpose
relating to the Strategix Companies, the Subsidiaries or the Strategix Assets;
provided that any such access by Buyer shall not unreasonably interfere with the
conduct of the business of Seller or its Affiliates.
SECTION C.. Notices of Certain Events. Seller shall promptly notify Buyer
of:
1. any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
2. any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
3. any actions, suits, claims, investigations or proceedings commenced
or, to its knowledge threatened against, relating to or involving or
otherwise affecting any Strategix Company, any Subsidiary, the Strategix
Assets or the Strategix Liabilities that, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to
Section 3.13 or that relate to the consummation of the transactions
contemplated by this Agreement.
SECTION D.. Resignations. Seller will deliver to Buyer the resignations of
all officers and directors of each Strategix Company and each Subsidiary who are
not Transferred Employees who will be officers, directors or employees of Buyer
or any of its Affiliates after the Closing Date from their positions with any
Strategix Company or any Subsidiary at or prior to the Closing Date.
SECTION E.. Competitive Relationships. 1. For a period of the three full
years from the Closing Date, (i) Buyer agrees that, to the extent it cannot or
elects not to provide the "high-end" services provided by Seller or its
Affiliates, and to the extent consistent with its client needs, it will view
Seller as its preferred contractor with respect to the provision of such
services to its clients which desire such services and (ii) Seller agrees that,
to the extent it cannot or elects not to provide office clerical or light
industrial staffing services, and to the extent consistent with its client
needs, it will view Buyer as its preferred contractor with respect to the
provision of such services to clients which desire such services. The parties
expect that they will be able to prepare joint responses to client requests for
proposals and that they will be able to leverage each other's strength and
expertise aggressively to develop their respective businesses.
2. a. For a period of three full years from the Closing Date, neither
Seller nor any of its Affiliates (excluding, for purposes hereof, any officers,
directors or employees) shall engage, either directly or indirectly, as a
principal or for its own account or solely or jointly with others, or as
stockholders in any corporation or joint stock association, in any business that
competes anywhere in the United States with the office clerical and light
industrial staffing business of the Strategix Companies and the Subsidiaries as
it exists on the Closing Date (the "Competitive Business"); provided that
nothing herein shall prohibit (A) Seller from engaging in the Competitive
Business so long as Seller does not derive more than 10% of its total annual
revenues from such business, (B) the conduct by Seller of any business other
than the Competitive Business (including but not limited to any business
currently being performed by Seller's professional and information technology
divisions), (C) the solicitation of any and all customers of the Strategix
Companies and the Subsidiaries for the provision of any and all services other
than Competitive Business services, or (D) the acquisition by Seller or its
Affiliates (excluding, for purposes hereof, any officers, directors or
employees) of any Person whose revenues from the provision of Competitive
Business services do not exceed 30% of such Person's total annual revenues;
provided that (x) if, following such acquisition, the total amount of revenues
derived by Seller from Competitive Business services increases to more than 10%
of Seller's total annual revenues, Buyer shall have the right as promptly as
reasonably practicable to acquire all of such Competitive Business so acquired
on terms not less favorable than the terms on which Seller or its Affiliates
could sell such business to a bona fide third party and (y) if, following such
acquisition, the total amount of revenues derived by Seller from Competitive
Business services is 10% or less of Seller's total annual revenues, Seller has
the right to retain such business, but if in the future Seller or its Affiliates
elect at any time to sell or otherwise dispose of all or any portion of such
business alone or as part of a larger transaction, Buyer shall have the right to
acquire all of such business so acquired on terms not less favorable than the
terms on which Seller or its Affiliates could sell such business to a bona fide
third party.
b. For a period of one full year from the Closing Date, neither Seller
nor any of its Affiliates shall hire, solicit or induce any Transferred
Employee to become an employee of Seller or any of its Affiliates; provided
that this clause (ii) shall not apply to any Transferred Employee no longer
employed by Buyer or any of its Affiliates.
c. Nothing contained herein shall prohibit Seller from selling its
remaining businesses to any Person which may compete with the Competitive
Business.
3. If any provision contained in this Section shall for any reason be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Section, but this
Section shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. It is the intention of the parties
that if any of the restrictions or covenants contained herein is held to cover a
geographic area or to be for a length of time which is not permitted by
applicable law, or in any way construed to be too broad or to any extent
invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this Section to provide for a covenant having the maximum enforceable
geographic area, time period and other provisions (not greater than those
contained herein) as shall be valid and enforceable under such applicable law.
Seller acknowledges that Buyer would be irreparably harmed by any breach of this
Section and that there would be no adequate remedy at law or in damages to
compensate Buyer for any such breach. Seller agrees that Buyer shall be entitled
to injunctive relief requiring specific performance by Seller of this Section,
and Seller consents to the entry thereof.
SECTION F.. Payments Relating to Strategix Assets. From and after the
Closing Date, Seller will promptly pay to Buyer (or a designee of Buyer) when
received all monies received by Seller under any Strategix Asset or any claim or
right or any benefit arising thereunder.
SECTION G.. Change of Seller Name. Other than pursuant to Section 7.08 of
this Agreement, after the Closing Date, Seller and its Affiliates will not make
any use of the names listed on Section 5.07 of the Strategix Disclosure
Memorandum without the prior written consent of Buyer.
SECTION H.. Seller Convertible Notes. Seller acknowledges and agrees that
Seller and its Affiliates have, and after the consummation of the transactions
contemplated hereby will continue to have, full responsibility for all
obligations for, or arising out of or in connection with, the 7% Convertible
Senior Notes Due 2002 in the original aggregate principal amount of $86,250,000
(the "Convertible Notes") issued by Career Horizons, Inc., a Delaware
corporation that is (and after the consummation of the transactions contemplated
hereby will continue to be) a wholly-owned subsidiary of Seller ("Career
Horizons"), such Convertible Notes having been issued under that certain
Indenture dated as of October 19, 1995, as amended by that certain First
Supplemental Indenture dated as of October 19, 1995, by that certain Second
Supplemental Indenture dated as of November 13, 1996, and by that certain Third
Supplemental Indenture dated as of November 14, 1996 (as so amended, the
"Indenture") between Career Horizons and The Chase Manhattan Bank (formerly
known as Chemical Bank) (the "Trustee"). Seller acknowledges and affirms that it
has unconditionally guaranteed repayment of the Convertible Notes and that the
conversion rights granted to the holders of the Convertible Notes pursuant to
the Indenture relate solely to the right to convert into common stock of Seller.
Seller agrees that, on or before September 3, 1998, it will exercise its rights
under the Indenture to call the Convertible Notes for redemption in full on the
first date on which such redemption call is permitted, namely, November 1, 1998.
The notice of redemption will be irrevocable and unconditional. On or prior to
the Closing Date and until the Convertible Notes have been either (x) fully
redeemed at the principal amount thereof (together with any premium and accrued
interest required under the Indenture) or (y) fully converted into common stock
of Seller pursuant to the terms of the Indenture, Seller will either: (i)
arrange for the issuance of an irrevocable letter of credit satisfactory in form
and substance to Buyer issued by NationsBank N.A. (or another money center bank
of comparable credit quality) in favor of the Trustee with a face amount not
less than the aggregate amount (the "Applicable Amount") necessary to pay the
Convertible Notes in full (including all premiums and accrued interest due
thereunder) in accordance with the terms of the Indenture, (ii) deposit with the
Trustee the Applicable Amount into a segregated account that is pledged to the
holders of the Convertible Notes pursuant to arrangements satisfactory in form
and substance to Buyer, or (iii) enter into other comparable arrangements
satisfactory in form and substance to Buyer.
SECTION I.. Subcontractor Agreements. As promptly as practicable after the
date hereof, Seller shall make inquiry of its branch offices (or the regional or
area managers for such offices) or shall make other reasonable efforts to
obtain, and shall provide to Buyer copies of, any Subcontractor Agreements
containing provisions which limit any of the Strategix Companies or any of the
Subsidiaries from doing business with certain Persons in Tennessee or Georgia.
ARTICLE VI.
COVENANTS OF BUYER
Buyer agrees that:
SECTION A.. Confidentiality. All information provided to Buyer pursuant to
Section 5.02 hereof shall be held by Buyer prior to Closing in accordance with
and subject to the terms of the Confidentiality Agreement dated as of July 21,
1998 between Strategix Solutions, Inc. and Randstad Staffing Services, L.P. (the
"Confidentiality Agreement").
SECTION B.. Access. Buyer will cause each Strategix Company and each
Subsidiary, on and after the Closing Date, to afford promptly to Seller and its
agents reasonable access, upon reasonable notice and during normal business
hours, to their properties, books, records, employees and auditors to the extent
necessary to permit Seller to determine any matter relating to its rights and
obligations hereunder or to any period ending on or before the Closing Date;
provided that any such access by Seller shall not interfere in any material
respect with the conduct of the business of Buyer. Seller will hold, and will
use its reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning each
Strategix Company or any Subsidiary provided to it pursuant to this Section.
ARTICLE VII.
COVENANTS OF BUYER AND SELLER
Buyer and Seller agree that:
SECTION A.. Best Efforts; Further Assurances. Subject to the terms and
conditions of this Agreement, Buyer and Seller will use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Seller and Buyer
agree, and Seller, prior to the Closing, and Buyer, after the Closing, agree to
cause each Strategix Company and each Subsidiary, to execute and deliver such
other documents, certificates, agreements and other writings and to take such
other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement and to
vest in Buyer (or if so requested by Buyer pursuant to Section 2.01, any
designee of Buyer) good and marketable title to the Strategix Assets.
SECTION B.. Certain Filings. Seller and Buyer shall cooperate with one
another (i) in determining whether any action by or in respect of, or filing
with, any governmental body, agency, official or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (ii) in taking such actions or
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such actions, consents, approvals or waivers.
SECTION C.. Public Announcements. The parties will not issue any press
release or make any public statement with respect to this Agreement or the
transactions contemplated hereby without the consent of each other party hereto,
except as may be required by applicable law or any listing agreement with any
national securities exchange, in which event the parties shall consult with one
another prior to making any such required press release or public statement.
SECTION D.. Intercompany Accounts. All intercompany account balances as of
the Closing between Seller or its Affiliates, on the one hand, and any Strategix
Company or any Subsidiary, on the other hand, shall be paid in cash or cancelled
as of the Closing Date.
SECTION E.. Transition Services. If Buyer or Seller requires administrative
services from the other party hereto for the conduct of its business during the
twelve month period following the Closing (the "Transition Period"), such other
party agrees to provide such services. Financial services, accounts payable,
purchasing, facilities management, payroll processing and billing services,
including credit and collections, cash applications and help desk support, shall
be provided at a cost equal to 1.5% of billed revenue of the branches receiving
such services. Administrative services (other than services described in the
immediately preceding sentence and other than, with respect to Buyer, services
provided pursuant to the Employee and Systems Support Services Agreement) will
be provided at a per hour cost equal to (i) the annual base compensation of the
employee providing such services divided by 2,080 (the "Hourly Rate") plus (ii)
20% of the Hourly Rate; provided that neither party shall charge for the
services of its executive officers. For purposes of this Section,
"administrative services" means financial, treasury, accounting, tax, audit,
management information services and other related services; and other similar
administrative services currently provided to any of the Strategix Companies or
any of the Subsidiaries by Seller or its Affiliates, in the case of Buyer, or
provided by the Strategix Companies or any of the Subsidiaries, to Seller or its
Affiliates, in the case of Seller. Notwithstanding the foregoing, in no event
shall either party be required to provide professional services or advice to the
other party without the party receiving such professional services or advice
providing indemnification for any liability, loss, cost or expense incurred by
the party providing such service other than the providing party's gross
negligence, willful misconduct or illegal acts.
SECTION F.. Joint Contracts. 1. Set forth in Section 7.06 of the Strategix
Disclosure Memorandum is a list of the top twenty arrangements (by revenues) as
of December 31, 1997 and each other significant arrangement pursuant to which
the counterparty thereto receives both the services currently provided by the
Strategix Companies or the Subsidiaries and the "high-end" services provided by
Seller or its Affiliates other than the Strategix Companies or the Subsidiaries
(the "Joint Contracts"). Section 7.06 of the Strategix Disclosure Memorandum
also sets forth revenues allocable to the Strategix Business under each of the
top twenty Joint Contracts.
2. From and after the Closing, Seller and Buyer agree to use their
reasonable best efforts to service any Joint Contracts with the intent to
preserve each party's relationship with the third party to such Joint Contracts,
and, to the extent possible (and unless otherwise agreed by Seller and Buyer),
to negotiate with such third party to separate the burden and the benefit of the
Joint Contract such that Seller (or one of its Affiliates) provides
non-Strategix Business services and receives payment therefor under one contract
with such third party and Buyer (or one of its Affiliates) provides the
Strategix Business services and receives payment therefor under a second
contract with such third party.
3. From and after the Closing, (i) Seller will promptly pay or cause to be
paid to Buyer when received all monies received by Seller or its Affiliates
pursuant to any Joint Contract to the extent that such monies relate to services
provided by the Strategix Companies or the Subsidiaries or otherwise relate to
the Strategix Business and (ii) Buyer will promptly pay, or cause to be paid, to
Seller when received all monies received by Buyer or its Affiliates pursuant to
any Joint Contract to the extent that such monies relate to the services
provided by the Seller or its Affiliates other than through the Strategix
Companies or the Subsidiaries or otherwise through the Strategix Business.
4. From and after the date of this Agreement until the Closing Date, unless
Buyer shall have agreed in advance in writing, Seller will not, and will cause
the Strategix Companies and the Subsidiaries not to, enter into any Joint
Contract, and will use its reasonable best efforts to cause any third party
which might have entered into a joint contract to enter into a. a contract with
Seller (or one of its Affiliates) for the provision of non-Strategix Business
services and b. a contract with a Strategix Company or any Subsidiary for the
provision of Strategix Business services.
SECTION G.. Joint Leases. 1. Set forth in Section 7.07 of the Strategix
Disclosure Memorandum is a list of the leases as of December 31, 1997 pursuant
to which the landlord currently rents premises that are used by both the
Strategix Companies or the Subsidiaries and by Seller or its Affiliates other
than the Strategix Companies or the Subsidiaries. Such leases and any other
shared leases shall be collectively referred to as the "Joint Leases."
2. From and after the Closing, Seller and Buyer agree to use their
reasonable best efforts to service any Joint Lease with the intent to preserve
each party's relationship with the landlord to such Joint Lease, and, to the
extent possible (and unless otherwise agreed by Seller and Buyer), to negotiate
with such landlord to separate the burden and the benefit of the Joint Leases
such that Seller (or one of its Affiliates) pays for such portion of the
premises covered by such lease where non-Strategix Business services are
provided and Buyer (or one of its Affiliates) pays for such portion of the
premises covered by such lease where Strategix Business services are provided.
3. Pending the separation of the Joint Leases as contemplated by Section
7.07(b), Seller or its Affiliates (if such entity is the named lessee on the
Joint Lease) or one of the Strategix Companies or a Subsidiary (if such entity
is the named lessee) will enter into mutually satisfactory arrangements to
sublease (or otherwise make available to the other party) the space currently
used by that other party at a cost and on terms as equivalent as reasonably
possible to the current cost and terms of the Joint Lease to that other party.
4. From and after the date of this Agreement until the Closing Date unless
Buyer shall have agreed in advance in writing, Seller will not, and will cause
the Strategix Companies and the Subsidiaries not to, enter into any Joint Lease.
SECTION H.. Seller Use of Certain Trademarks. Buyer and Seller agree that
Seller shall have the non-exclusive right to use the names and marks "AccuStaff"
and "AccuStaff Incorporated" and certain building-related logos and other
paraphernalia related thereto (collectively, the "AccuStaff Marks") in each case
solely in connection with the signage of Seller's headquarters office building
located at One Independent Drive, Jacksonville, Florida and in a manner
consistent with its current use of such marks in connection therewith during the
period from the Closing Date until the earlier of (i) the date on which the
signage containing the "AccuStaff" name shall have been removed from such
building, it being understood that Seller shall remove or cause to be removed
such signage as promptly as practicable, and (ii) the end of the ninth calendar
month thereafter. The right to the use of the AccuStaff Marks granted pursuant
to this Agreement may not be transferred or assigned.
SECTION I.. Earnout Payments. Seller agrees that all payments shown as due
in the third quarter of 1998 on the schedule identified in clause (ii) of
Section 3.30 shall either (i) be paid by Seller on or prior to the Closing or
(ii) be fully reflected as liabilities on the Closing Balance Sheet.
ARTICLE VIII.
TAX MATTERS
SECTION A.. Tax Definitions. The following terms, as used herein, have the
following meanings:
"Buyer Indemnitee" means Buyer, any of its Affiliates and, effective upon
the Closing, the Strategix Companies and their Subsidiaries.
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Tax" means any income or franchise Tax payable to any state,
local or foreign taxing jurisdiction in which any Strategix Company or any
Subsidiary has filed or will file a Return with a member of the Seller Group on
a consolidated, combined or unitary basis with respect to such Tax.
"Federal Tax" means any Tax imposed under Subtitle A of the Code.
"Final Determination" shall mean (i) with respect to Federal Taxes, a
"determination" as defined in Section 1313(a) of the Code or execution of an
Internal Revenue Service Form 870AD and, with respect to Taxes other than
Federal Taxes, any final determination of liability in respect of a Tax that,
under applicable law, is not subject to further appeal, review or modification
through proceedings or otherwise (including the expiration of a statute of
limitations or a period for the filing of claims for refunds, amended returns or
appeals from adverse determinations) or (ii) the payment of Tax by Buyer, Seller
or any of their Affiliates, whichever is responsible for payment of such Tax
under applicable law, with respect to any item disallowed or adjusted by a
Taxing Authority, provided that such responsible party determines that no action
should be taken to recoup such payment and the other party agrees.
"Post-Closing Tax Period" means any Tax period beginning after the Closing
Date; and, with respect to a Tax period that begins on or before the Closing
Date and ends thereafter, the portion of such Tax period beginning after the
Closing Date.
"Pre-Closing Tax Period" means any Tax period ending on or before the
Closing Date; and, with respect to a Tax period that begins on or before the
Closing Date and ends thereafter, the portion of such Tax period ending on the
Closing Date.
"Section 338(h)(10) Election" is defined in Section 8.03(b).
"Seller Group" means, with respect to Federal Taxes, the affiliated group
of corporations (as defined in Section 1504(a) of the Code) of which Seller is a
member, and with respect to Taxes other than Federal Taxes, the consolidated,
combined or unitary group of which Seller or any of its Affiliates (other than
the Strategix Companies and their Subsidiaries), and any Strategix Company or
any Subsidiary, are members.
"Tax" means (i) any tax, governmental fee or other like assessment or
charge of any kind whatsoever (including, but not limited to, withholding on
amounts paid to or by any Person), together with any interest, penalty, addition
to tax or additional amount imposed by any governmental authority (a "Taxing
Authority") responsible for the imposition of any such tax (domestic or
foreign), (ii) liability of any Strategix Company or any Subsidiary for the
payment of any amount of the type described in (i) as a result of being a member
of an affiliated, consolidated, combined or unitary group, or being a party to
any agreement or arrangement as a result of which liability of any Strategix
Company or any Subsidiary to a Taxing Authority is determined or taken into
account with reference to the liability of any other Person, and (iii) liability
of any Strategix Company or any Subsidiary for the payment of any amount as a
result of being party to any Tax Sharing Agreement or with respect to the
payment of any amount of the type described in (i) or (ii) as a result of any
express or implied obligation (including, but not limited to, an indemnification
obligation).
"Tax Asset" means any net operating loss, net capital loss, investment tax
credit, foreign tax credit, charitable deduction or any other credit or tax
attribute which could reduce Taxes (including without limitation deductions and
credits related to alternative minimum Taxes).
"Tax Sharing Agreements" means all existing Tax sharing agreements or
arrangements (whether or not written) binding any Strategix Company or any
Subsidiary that provide for the allocation, apportionment, sharing or assignment
of any Tax liability or benefit, or the transfer or assignment of income,
revenues, receipts, or gains for the principal purpose of determining any
person's tax liability.
SECTION B.. Tax Representations. Seller represents and warrants to Buyer as
of the date hereof and as of the Closing Date that, except as set forth in the
Balance Sheet (including the notes thereto) or on Section 8.02 of the Strategix
Disclosure Memorandum, a. all Tax returns, statements, reports and forms
(including estimated tax or information returns and reports) required to be
filed with any Taxing Authority with respect to any Pre-Closing Tax Period by or
on behalf of any Strategix Company or any Subsidiary (collectively, the
"Returns"), have been filed when due in accordance with all applicable laws; b.
as of the time of filing, the Returns correctly reflected the facts regarding
the income, business, assets, operations, activities and status of the Strategix
Companies, their Subsidiaries and any other information required to be shown
therein; c. all Taxes shown as due and payable on the Returns that have been
filed have been timely paid, or withheld and remitted to the appropriate Taxing
Authority; d. the charges, accruals and reserves for Separate Company Taxes with
respect to the Strategix Companies and their Subsidiaries for any Pre-Closing
Tax Period (including any Pre-Closing Tax Period for which no Return has yet
been filed) reflected on the books of the Strategix Companies and their
Subsidiaries (excluding any provision for deferred income taxes) are adequate to
cover such Taxes; e. all Returns filed with respect to Tax years of the
Strategix Companies and their Subsidiaries through the Tax year ended June 30,
1994 have been examined and closed or are Returns with respect to which the
applicable period for assessment under applicable law, after giving effect to
extensions or waivers, has expired; f. neither any Strategix Company nor any
Subsidiary is delinquent in the payment of any Tax or has requested any
extension of time within which to file any Return (other than such extensions as
do not require the consent of the relevant taxing authority) and has not yet
filed such Return; g. neither any Strategix Company nor any Subsidiary (or any
member of any affiliated, consolidated, combined or unitary group of which any
Strategix Company or any Subsidiary is or has been a member) has granted any
extension or waiver of the statute of limitations period applicable to any
Return, which period (after giving effect to such extension or waiver) has not
yet expired; h. there is no claim, audit, action, suit, proceeding, or
investigation now pending or threatened against or with respect to any Strategix
Company, any Subsidiary or any member of the Seller Group in respect of any Tax
or Tax Asset; i. there are no requests for rulings or determinations in respect
of any Tax or Tax Asset pending between any Strategix Company or any Subsidiary
and any Taxing Authority; j. neither any Strategix Company nor any Subsidiary
owns any interest in real property in the State of New York or in any other
jurisdiction in which a Tax is imposed on the transfer of a controlling interest
in an entity that owns any interest in real property; k. neither any Strategix
Company nor any Subsidiary owns any material property subject to a lease that is
not a "true" lease for federal income tax purposes; l. neither Seller nor any
Strategix Company or any Subsidiary, nor any other person on behalf of any
Strategix Company or any Subsidiary, has entered into nor will it enter into any
agreement or consent pursuant to Section 341(f) of the Code; m. there are no
liens for Taxes upon the assets of any Strategix Company or any Subsidiary, or
any of the Strategix Assets except liens for current Taxes not yet due; n.
neither any Strategix Company nor any Subsidiary has been a member of an
affiliated, consolidated, combined or unitary group other than one of which
Seller was the common parent; o. neither any Strategix Company nor any
Subsidiary is currently under any contractual obligation to pay any amounts of
the type described in clause (ii) or (iii) of the definition of "Tax"; p. a
protective carryover election has been filed in connection with each transaction
consummated by any Strategix Company or any Subsidiary prior to January 20, 1994
that constituted a "qualified stock purchase" within the meaning of Section 338
of the Code; q. all information set forth in the notes to the Balance Sheet
relating to Tax matters is true and complete in all material respects; r. during
the five-year period ending on the date hereof, neither Seller nor any Strategix
Company, any Subsidiary or any Affiliate of Seller has made or changed any tax
election, changed any annual tax accounting period, or adopted or changed any
method of tax accounting (to the extent that any such action may materially
affect any Strategix Company or any Subsidiary); s. neither any Strategix
Company nor any Subsidiary is a party to any understanding or arrangement
described in Section 6111(d)(2) of the Code; t. neither any Strategix Company
nor any Subsidiary will be required to include for a Post-Closing Tax Period
taxable income attributable to income economically realized in a Pre-Closing Tax
Period, including any income that would be includible in a Post-Closing Period
as a result of the installment method or the look-back method (as defined in
Section 460(b) of the Code); and u. each Strategix Company and each Subsidiary
have withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party, and complied with all information
reporting and backup withholding requirements.
SECTION C.. Covenants. 1. Seller agrees to make a timely, effective and
irrevocable election under Section 338(h)(10) of the Code and under any
comparable statutes in any other jurisdiction with respect to each Strategix
Company and each of their Subsidiaries (the "Section 338(h)(10) Election"), and
to file such election in accordance with applicable regulations. The Section
338(h)(10) Election shall properly reflect the price allocation (as hereinafter
defined). Prior to the Closing Date, Seller and Buyer shall negotiate in good
faith to agree on the allocation and the methodology for such allocation of the
modified ADSP (as such term is defined in Treasury Regulations Section
1.338(h)(10)-1) (the "Modified Aggregate Deemed Sales Price") of the assets of
the Strategix Companies and their Subsidiaries in accordance with the Treasury
regulations promulgated under Section 338(h)(10). If within 90 days after the
Closing Date, Buyer and Seller have failed to reach agreement on such
allocation, Buyer and Seller agree to retain (at their shared cost and expense)
within 15 days independent accountants of nationally recognized standing
reasonably satisfactory to Buyer and Seller (who shall not have any material
relationship with Buyer or Seller), who shall conclusively determine such
allocation within a reasonable period of time after being retained. Seller and
Buyer agree to act in accordance with the price allocation as so determined
pursuant to this Section 8.03(a) in the preparation, filing and audit of any Tax
return.
2. Without the prior written consent of Buyer, neither Seller nor any
Strategix Company, any Subsidiary or any Affiliate of Seller shall, to the
extent it may affect or relate to any Strategix Company or any Subsidiary, make
or change any tax election (other than the Section 338(h)(10) Election), change
any annual tax accounting period, adopt or change any method of tax accounting,
file any amended Return, enter into any closing agreement, settle any Tax claim
or assessment, surrender any right to claim a Tax refund, consent to any
extension or waiver of the limitations period applicable to any Tax claim or
assessment or take or omit to take any other action, if any such action or
omission would have the effect of materially increasing the Tax liability or
reducing any Tax Asset of any Strategix Company, any Subsidiary, Buyer or any
Affiliate of Buyer.
3. Seller will file or cause to be filed when due all Returns relating to
any Strategix Company or any of their Subsidiaries required to be filed after
the date hereof and on or before the Closing Date in accordance with all
applicable laws. As of the time of filing, all such Returns will correctly
reflect the facts regarding the income, business, assets, operations, activities
and status of the Strategix Companies, the Subsidiaries and any other
information required to be shown therein.
4. Seller shall include the Strategix Companies and their Subsidiaries in
its consolidated Federal Tax return and in any Combined Tax Return through the
close of business on the Closing Date.
5. Neither any Strategix Company nor any Subsidiary shall reserve any
amount for or make any payment of Taxes to any person or any Taxing Authority,
except for such Taxes as are due or payable or have been properly estimated in
accordance with applicable law as applied in a manner consistent with past
practice of Seller.
6. All transfer, documentary, sales, use, stamp, registration, value added
and other such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement (including any real property transfer tax and any
similar Tax) shall be paid by Seller when due, and Seller will, at its own
expense, file all necessary Tax returns and other documentation with respect to
all such Taxes and fees, and, if required by applicable law, Buyer will, and
will cause its Affiliates to, join in the execution of any such Tax returns and
other documentation.
SECTION D.. Termination of Existing Tax Sharing Agreements. Any and all
existing Tax Sharing Agreements to which any Strategix Company or any Subsidiary
is a party with Seller or any of its Affiliates (other than any Strategix
Company and its Subsidiaries) shall be terminated as of the date hereof. After
the date hereof, neither any Strategix Company nor any Subsidiary shall have any
further rights or liabilities thereunder. This Agreement shall be the sole Tax
sharing agreement relating to any Strategix Company or any Subsidiary for all
Pre-Closing Tax Periods.
SECTION E.. Cooperation on Tax Matters. 1. Buyer and Seller shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the preparation and filing of any Tax return, statement, report
or form (including any report required pursuant to Section 6043 of the Code and
all Treasury Regulations promulgated thereunder), any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include the retention
and (upon the other party's request) the provision of records and information
which are reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. Each
Strategix Company and Seller agree a. to retain all books and records with
respect to Tax matters pertinent to the Strategix Companies and the Subsidiaries
relating to any Pre-Closing Tax Period, and to abide by all record retention
agreements entered into with any Taxing Authority, and b. to give the other
party reasonable written notice prior to destroying or discarding any such books
and records and, if the other party so requests, such Strategix Company or
Seller, as the case may be, shall allow the other party to take possession of
such books and records.
2. Buyer and Seller further agree, upon request, to use all reasonable
efforts to obtain any certificate or other document from any governmental
authority or customer of any Strategix Company or any Subsidiary or any other
person as may be necessary to mitigate, reduce or eliminate any Tax that could
be imposed (including but not limited to with respect to the transactions
contemplated hereby).
SECTION F.. Tax Indemnification. 1. Seller hereby indemnifies each Buyer
Indemnitee against and agrees to hold each Buyer Indemnitee harmless from,
without duplication, any (v) Tax of any Strategix Company or any Subsidiary or
relating to any Strategix Asset described in clause (i) of the definition of Tax
related to a Pre-Closing Tax Period, (w) Tax described in clause (ii) or (iii)
of the definition of Tax, (x) Tax of any Strategix Company or any Subsidiary or
relating to any Strategix Asset incurred as a result of the Section 338(h)(10)
Election, (y) Tax of any Strategix Company or any Subsidiary or relating to any
Strategix Asset resulting from a breach of the provisions of Section 8.02 or
8.03, and (z) liabilities, costs, expenses (including, without limitation,
reasonable expenses of investigation and attorneys' fees and expenses), losses,
damages, assessments, settlements or judgments arising out of or incident to the
imposition, assessment or assertion of any Tax described in (v), (w), (x), (y)
or (z) and any liability as transferee (the sum of (v), (w), (x), (y), and (z)
being referred to herein as a "Loss"); provided that Seller shall have no
liability for the payment of any Loss to the extent that such Tax is reflected
as a liability on the Closing Balance Sheet prepared in accordance with Section
2.03(a) (excluding any provision for deferred income taxes). Seller's liability
with respect to any claim for indemnity under this Section 8.06(a) shall be
reduced by (or Seller shall be reimbursed on account of) the tax benefit
actually realized by the Buyer Indemnitees as a result of the payment of the
Loss upon which such Indemnity Claim is based, and shall include any tax
detriment actually suffered by the Buyer Indemnitees as a result of the payment
of such Loss or the receipt of an indemnity payment in respect thereof,
determined so that payment by Seller of such indemnity claim, as adjusted to
give effect to any such tax benefit or detriment, will make the Buyer
Indemnitees as economically whole as is reasonably practical with respect to the
Loss upon which such indemnity claim is based.
2. For purposes of this Section, in the case of any Taxes that are imposed
on a periodic basis and are payable for a Tax period that includes (but does not
end on) the Closing Date, the portion of such Tax related to a Pre-Closing Tax
Period shall (x) in the case of any Taxes, other than gross receipts, sales or
use Taxes and Taxes based upon or related to income, be deemed to be the amount
of such Tax for the entire Tax period multiplied by a fraction the numerator of
which is the number of days in the Tax period ending on and including the
Closing Date and the denominator of which is the number of days in the entire
Tax period, and (y) in the case of any Tax based upon or related to income and
any gross receipts, sales or use Tax, be deemed equal to the amount which would
be payable if the relevant Tax period ended on and included the Closing Date.
The portion of any credits relating to a Tax period that begins before and ends
after the Closing Date shall be determined as though the relevant Tax period
ended on and included the Closing Date. All determinations necessary to give
effect to the foregoing allocations shall be made in a manner consistent with
prior practice of the Strategix Companies and the Subsidiaries. In the case of
an interest in an entity that is fiscally transparent for Tax purposes, items
shall be deemed to flow through on a daily basis rather than at the close of the
entity's Tax year.
3. Upon payment by any Buyer Indemnitee of any Loss, Seller shall discharge
its obligation to indemnify the Buyer Indemnitee against such Loss by paying to
Buyer an amount equal to the amount of such Loss; provided, however, that if
Buyer provides Seller with written notice of a Loss at least 30 days prior to
the date on which the relevant Loss is required to be paid by any Buyer
Indemnitee, Seller shall discharge its obligation to indemnify the Buyer
Indemnitee against such Loss by paying an amount equal to the amount of such
Loss to the relevant Taxing Authority or Buyer, as directed by Buyer.
4. Any payment pursuant to this Section 8.06 shall be made not later than
30 days after receipt by Seller of written notice from Buyer in accordance with
the proviso in Section 8.06(c) or stating that any Loss has been incurred by a
Buyer Indemnitee and the amount thereof and of the indemnity payment requested.
The payment by a Buyer Indemnitee of any Loss shall not relieve Seller of its
obligation under this Section 8.06.
5. Buyer agrees to give prompt notice to Seller of any Loss or the
assertion of any claim, or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought hereunder which Buyer deems to be
within the ambit of this Section 8.06 (specifying with reasonable particularity
the basis therefor) and will give Seller such information with respect thereto
as Seller may reasonably request. Seller may, at its own expense, (i)
participate in and, (ii) except in the case of claims that relate to Taxes
described in Section 8.06(b), upon notice to Buyer, assume the defense of any
such suit, action or proceeding (including any Tax audit); provided that (i)
Seller's counsel is reasonably satisfactory to Buyer, (ii) Seller shall
thereafter consult with Buyer upon Buyer's reasonable request for such
consultation from time to time with respect to such suit, action or proceeding
(including any Tax audit) and (iii) Seller shall not, without Buyer's consent
(which consent shall not be unreasonably withheld), agree to any settlement with
respect to any Tax if such settlement could materially adversely affect the Tax
liability with respect to any Post-Closing Tax Period of Buyer, any of its
Affiliates or, upon the Closing, any Strategix Company or any Subsidiary. If
Seller assumes such defense, (i) Buyer shall have the right (but not the duty)
to participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by Seller and (ii) Seller shall not assert
that the Loss, or any portion thereof, with respect to which Buyer seeks
indemnification is not within the ambit of this Section 8.06. If Seller elects
not to assume such defense, Buyer may pay, compromise or contest the Tax at
issue. Seller shall be liable for the fees and expenses of counsel employed by
Buyer for any period during which Seller has not assumed the defense thereof.
Whether or not Seller chooses to defend or prosecute any claim, all of the
parties hereto shall cooperate in the defense or prosecution thereof.
6. Seller shall not be liable under this Section 8.06 with respect to any
Tax resulting from a claim or demand the defense of which Seller was not offered
the opportunity to assume as provided under Section 8.06(e) to the extent
Seller's liability under this Section is adversely affected as a result thereof.
No investigation by Buyer or any of its Affiliates at or prior to the Closing
Date shall relieve Seller of any liability under this Section 8.06.
7. Any claim of any Buyer Indemnitee (other than Buyer) under this Section
may be made and enforced by Buyer on behalf of such Buyer Indemnitee.
SECTION G.. Purchase Price Adjustment and Interest. Any amount paid by
Seller under Section 8.06 will be treated by the parties as an adjustment to the
Purchase Price unless otherwise required by law. Any payment required to be made
by Seller under Section 8.06 that is not made when due shall bear interest at
the rate per annum determined, from time to time, under the provision of Section
6621(a)(2) of the Code for each day until paid.
SECTION H.. Tax Refunds. Except to the extent (i) shown or reflected as an
asset on the Closing Balance Sheet, (ii) in respect of Taxes reflected as a
liability on the Closing Balance Sheet, or (iii) in respect of Taxes paid by a
Buyer Indemnitee and with respect to which no Buyer Indemnitee has been
indemnified by Seller, any Tax refunds relating to a Pre-Closing Tax Period of
any Strategix Company or Subsidiary that are actually received by Buyer, any
Strategix Company or any Subsidiary shall be for the account of Seller. Buyer
shall pay over to Seller any such refund, net of any liability for Taxes
attributable to the receipt of such refund, within five business days after
receipt thereof by Buyer or the relevant Strategix Company or Subsidiary. All
Tax refunds received by Buyer, any Strategix Company or any Subsidiary that are
not described in the preceding sentence shall be solely for the account of
Buyer.
SECTION I.. Survival. Notwithstanding anything in this Agreement to the
contrary, the provisions of this Article 8 shall survive for the full period of
all applicable statutes of limitations (giving effect to any waiver, mitigation
or extension thereof).
ARTICLE IX.
EMPLOYEE BENEFITS
SECTION A.. 401(k) Plans, Profit Sharing Plans, Etc. Prior to the Closing,
Seller shall take, and shall cause its Affiliates to take all actions necessary
for the transfer to, and assumption by, a Strategix Company designated by Buyer
of sponsorship of the AccuStaff Incorporated Employee Savings and Profit Sharing
Plan and Trust, the Office Specialists 401(k) Plan and the Office Specialists
Flexible Staff 401(k) Plan ("Assumed Buyer Plans") and to provide for the
transfer from such Assumed Buyer Plans to a Seller Plan or Seller Plans
designated by Seller ("Designated Seller Plan") of all assets and liabilities of
such Assumed Buyer Plans relating to any participants therein who are not
Transferred Employees ("Non-Transferred Participants"). After the Closing and to
the extent necessary to effectuate the foregoing, Buyer shall take, and shall
cause its Affiliates to take, all actions necessary for such transfer to the
Designated Seller Plan of such assets and liabilities relating to
Non-Transferred Participants. Seller hereby indemnifies each Buyer Indemnitee
against, and agrees to hold each Buyer Indemnitee harmless from, any liabilities
relating to the Assumed Buyer Plan benefits of Non-Transferred Employees.
SECTION B.. Employee Stock Awards. Prior to the Closing Date, Seller shall
take, or cause to be taken, all actions necessary to provide that with respect
to each option (an "Option") to purchase shares of common stock of Seller which
has been granted to any Transferred Employee under any plan, agreement or
arrangement of Seller, (i) the portion of such Option which is vested and
exercisable as of the Closing Date shall remain outstanding and exercisable for
the period commencing on the Closing Date and ending on the ninetieth day
following the Closing Date and (ii) the portion of such Option which is not
exercisable as of the Closing Date shall be canceled effective as of the
Closing. Effective as of the Closing Date, Buyer shall adopt a nonqualified
deferred compensation plan (the "Stay Bonus Plan") in a form determined by
Buyer, providing for the payment of certain bonus amounts to certain Transferred
Employees, subject to such Transferred Employees' continued employment with the
Strategix Business during specified periods following the Closing Date. The
terms of the Stay Bonus Plan, including the Transferred Employees entitled to
receive bonuses, the amount of each bonus and the requisite period of employment
for each Transferred Employee, shall be established by Buyer. On the Closing
Date, Seller shall pay to Buyer, or to such other Person designated by Buyer,
$3,600,000 in cash in respect of Buyer's obligations under the Stay Bonus Plan.
On or after the Closing Date, Buyer may provide such additional bonuses for
Transferred Employees under the Stay Bonus Plan as Buyer may determine. Without
in any way limiting Buyer's right to determine the terms and conditions of the
Stay Bonus Plan, it is understood that the amounts payable under the Stay Bonus
Plan are designed in part to compensate Transferred Employees for the unvested
Options canceled as a result of the Closing. Without limiting anything contained
in Section 13.08, nothing contained in this Section 9.02 is intended to confer
on any Transferred Employee any third party rights or remedies.
SECTION C.. Non-qualified Deferred Compensation. Effective as of the
Closing, Buyer shall assume liability for, and Seller shall transfer to a trust
established and designated by Buyer, a cash amount equal to the full amount of
the benefit accrued by each Transferred Employee as of the Closing Date under
all nonqualified deferred compensation plans sponsored or maintained by Seller
or any of its Affiliates (the "Deferred Amount"). Seller shall indemnify each
Buyer Indemnitee against, and agrees to hold each Buyer Indemnitee harmless
from, any liabilities arising from Seller's failure to transfer the Deferred
Amount to such trust. Buyer shall indemnify each member of the Seller Group
against, and shall hold each member of the Seller Group harmless from, liability
in respect of the Deferred Amount to the extent transferred to such trust and
additional credits thereto.
SECTION D.. Cooperation. Seller and Buyer shall cooperate and shall cause
their respective Affiliates to cooperate and shall cause the sharing of all
reasonably necessary information, to carry out the agreements set forth in this
Article 9.
SECTION E.. Certain Employment Arrangements. Prior to the Closing Date,
Buyer will negotiate in good faith with ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ with respect to
his employment with Buyer. Buyer agrees to offer ▇▇. ▇▇▇▇▇▇ an employment
arrangement providing for base compensation, bonus and insurance coverage
substantially equivalent to his current base salary, bonus and insurance
arrangements as described in the Form S-1 and with other terms of such
employment to be negotiated between Buyer and ▇▇. ▇▇▇▇▇▇. Buyer also agrees to
negotiate in good faith with Messrs. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, offering base compensation and incentive compensation
terms substantially equivalent to that described in the Form S-1 or severance in
an amount equal to one year's base salary and any applicable pro rata incentive
bonus. Buyer and Seller agree that, if Buyer fails to reach such an agreement
with any of such executives, Buyer will only be responsible for severance for
such executive in an amount equal to one year's base salary and a pro rata
portion of such executive's bonus in the amounts described in the Form S-1
(plus, in the case of ▇▇. ▇▇▇▇▇▇, insurance coverage equivalent to his current
insurance coverage described in the Form S-1).
ARTICLE X.
CONDITIONS TO CLOSING
SECTION A.. Conditions to Obligations of Buyer and Seller. The obligations
of Buyer and Seller to consummate the Closing are subject to the satisfaction of
the following conditions:
1. Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been terminated.
2. No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Closing.
SECTION B.. Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the Closing is subject to the satisfaction of the following further
conditions:
1. a. Seller shall have performed in all material respects all of its
obligations hereunder required to be performed by it on or prior to the
Closing Date, b. the representations and warranties of Seller contained in
this Agreement and in any certificate delivered by Seller pursuant hereto
(x) that are qualified by materiality or Material Adverse Effect shall be
true at and as of the Closing Date, as if made at and as of such date
(except to the extent a representation or warranty relates to a specific
date, in which case such representation or warranty shall be true at and as
of such date), and (y) all other such representations and warranties shall
be true at and as of the Closing Date, as if made at and as of such date
(except to the extent a representation or warranty relates to a specific
date, in which case such representation or warranty shall be true at and as
of such date), with only such exceptions as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect and
c. Buyer shall have received a certificate signed by the chief executive
officer and the chief financial officer of Seller to the foregoing effect.
2. There shall not be threatened, instituted or pending any action or
proceeding by any court, government or governmental authority or agency,
domestic or foreign, other than the application of the waiting period
provisions of the HSR Act to the purchase of the Shares or the Strategix
Assets, a. seeking to restrain, prohibit or otherwise interfere with the
ownership or operation by Buyer or any of its Affiliates of all or any
material portion of the business or assets of any Strategix Company or any
Subsidiary or of Buyer or any of their Affiliates or to compel Buyer or any
of its Affiliates to dispose of all or any material portion of the business
or assets of any Strategix Company or any Subsidiary or of Buyer or any of
their Affiliates, b. seeking to impose or confirm limitations on the
ability of Buyer or any of its Affiliates effectively to exercise full
rights of ownership of the Shares or the Strategix Assets, including
without limitation, the right to vote any Shares acquired or owned by
Seller or any of its Affiliates on all matters properly presented to the
stockholders of any Strategix Company or c. seeking to require divestiture
by Buyer or any of its Affiliates of any Shares.
3. Buyer shall have received a. an opinion of LeBoeuf, Lamb, ▇▇▇▇▇▇
and ▇▇▇▇▇▇, L.L.P., counsel to Seller, dated the Closing Date to the effect
specified in Sections 3.01, 3.02, 3.03, 3.04(i) and (ii), 3.05 and 3.07, b.
an opinion of ▇▇▇▇ ▇. ▇▇▇▇, Esq., General Counsel of the Seller, to the
effect specified in Section 3.04(iii) and (iv), and c. an opinion of Arent,
Fox, Kintner, ▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC, to the effect that the execution,
delivery and performance by Buyer of the Employee and Systems Support
Services Agreement and the consummation of the transactions contemplated
thereby require no action by or in respect of, or filing with, any New York
health care regulatory body, agency or official. In rendering the opinions
described in clauses (i) and (ii) hereof, such counsel may rely upon
certificates of public officers, and as to matters governed by the laws of
jurisdictions other than New York, Florida or the federal laws of the
United States of America, upon opinions of counsel reasonably satisfactory
to Buyer, and, as to matters of fact, upon certificates of officers of
Seller, the Strategix Companies or any Subsidiary, copies of which opinions
and certificates shall be contemporaneously delivered to Buyer.
4. Seller shall have received all consents, authorizations or
approvals from the governmental agencies referred to in Section 3.03, in
each case in form and substance reasonably satisfactory to Buyer, and no
such consent, authorization or approval shall have been revoked.
5. Seller shall have received the third party consents set forth in
Schedule 10.02(e), in each case in form and substance reasonably
satisfactory to Buyer, and no such consent shall have been revoked.
6. Buyer shall have received all documents it may reasonably request
relating to the existence of Seller, the Strategix Companies and the
Subsidiaries and the authority of Seller to enter into and perform this
Agreement, all in form and substance reasonably satisfactory to Buyer.
7. Seller shall have delivered a certification or certifications to
the effect that Seller, and each of its Affiliates that transfers Shares or
Strategix Assets or Strategix Liabilities that includes a "United States
real property interest" within the meaning of Section 897 of the Code, is
not a "foreign person" as defined in Section 1445 of the Code.
8. Seller shall have executed an effective, irrevocable election under
Section 338(h)(10) of the Code in form and substance satisfactory to Buyer
and Seller shall have delivered all documents in connection therewith as
Buyer may reasonably request.
9. Since the date of this Agreement, there shall not have been any
event, occurrence, development or state of circumstances which,
individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect.
SECTION C.. Conditions to Obligation of Seller. The obligation of Seller to
consummate the Closing is subject to the satisfaction of the following further
conditions:
1. a. Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by it on or prior to the
Closing Date, b. the representations and warranties of Buyer contained in
this Agreement and in any certificate delivered by Buyer pursuant hereto
(x) that are qualified by materiality or Material Adverse Effect shall be
true at and as of the Closing Date, as if made at and as of such date
(except to the extent a representation or warranty relates to a specific
date, in which case such representation or warranty shall be true at and as
of such date), and (y) all other such representations and warranties shall
be true at and as of the Closing Date, as if made at and as of such date
(except to the extent a representation or warranty relates to a specific
date, in which case such representation or warranty shall be true at and as
of such date), with only such exceptions as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect and
c. Seller shall have received a certificate signed by the Chairman of Buyer
to the foregoing effect.
2. Seller shall have received a. an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to Buyer, dated the Closing Date to the effect specified in the
first sentence of Section 4.01, Section 4.02, Section 4.03 and Section 4.04
as such Sections relate to the Buyer and b. an opinion of Rein ▇.
▇▇▇▇▇▇▇▇▇▇, General Counsel of Randstad, to the effect specified in Section
4.01, Section 4.02, Section 4.03 and Section 4.04 as such Sections relate
to Randstad. In rendering such opinion, such counsel may rely upon
certificates of public officers, and as to matters governed by the laws of
jurisdictions other than New York, Delaware or the federal laws of the
United States of America, in the case of the opinion provided pursuant to
clause (i), or other than The Netherlands, in the case of the opinion
provided pursuant to clause (ii), upon opinions of counsel reasonably
satisfactory to Seller, and, as to matters of fact, upon certificates of
officers of Buyer or Randstad, copies of which opinions and certificates
shall be contemporaneously delivered to Seller.
3. Buyer shall have received all consents, authorizations or approvals
from governmental agencies referred to in Section 4.03, in each case in
form and substance reasonably satisfactory to Seller, and no such consent,
authorization or approval shall have been revoked.
4. Seller shall have received all documents it may reasonably request
relating to the existence of Buyer and the authority of Buyer to enter into
and perform this Agreement, all in form and substance reasonably
satisfactory to Seller.
ARTICLE XI.
SURVIVAL; INDEMNIFICATION
SECTION A.. Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any certificate delivered pursuant
hereto or in connection herewith shall survive the Closing until April 30, 2000;
provided that the representations and warranties contained in Sections 3.05,
3.06, 3.07(b) and 3.25 and in Article 8 shall survive until expiration of the
statute of limitations applicable to the matters covered thereby (giving effect
to any waiver, mitigation or extension thereof). Notwithstanding the preceding
sentence, any representation or warranty in respect of which indemnity may be
sought under this Agreement shall survive the time at which it would otherwise
terminate pursuant to the preceding sentence, if notice of the inaccuracy or
breach thereof giving rise to such right of indemnity shall have been given to
the party against whom such indemnity may be sought prior to such time. The
covenants and agreements contained in this Agreement shall survive a. for the
period specified in or with respect to any such covenant or agreement and b.
with respect to any covenant or agreement that does not expressly provide that
it is to terminate on a specified date, indefinitely.
SECTION B.. Indemnification. 1. Seller hereby indemnifies Buyer and its
Affiliates and, effective at the Closing, without duplication, each Strategix
Company and each Subsidiary against and agrees to hold each of them harmless
from any and all damage, loss, liability and expense (including, without
limitation, reasonable expenses of investigation and reasonable attorneys' fees
and expenses in connection with any action, suit or proceeding) ("Damages")
incurred or suffered by Buyer, any Affiliate of Buyer, any Strategix Company or
any Subsidiary arising out of any misrepresentation or breach of warranty,
covenant or agreement made or to be performed by Seller pursuant to this
Agreement (other than pursuant to Article 8); provided that with respect to any
claim for Damages for any misrepresentation or breach of warranty (other than a
claim for Damages for a misrepresentation or breach of warranty contained in
Sections 3.05, 3.06, 3.07(b), 3.21 or 3.25, as to which the limitations set
forth in clauses (x), (y) and (z) below shall not apply), (x) Seller shall not
be liable under this Section 11.02(a) if the amount of Damages for such claim is
less than $50,000 (for purposes hereof, any series of claims arising from the
same or substantially related facts or circumstances shall be treated as one
claim), (y) Seller shall not be liable under this Section 11.02(a) unless the
aggregate amount of Damages with respect to all such claims for breach of such
representations and warranties exceeds $8,500,000 and then only to the extent of
the aggregate Damages in excess of $8,500,000, and (z) the maximum aggregate
liability of Seller for such Damages shall not exceed $127,500,000.
2. Buyer hereby indemnifies Seller and its Affiliates against and agrees to
hold each of them harmless from any and all Damages incurred or suffered by
Seller or any of its Affiliates arising out of any misrepresentation or breach
of warranty, covenant or agreement made or to be performed by Buyer pursuant to
this Agreement (other than pursuant to Article 8); provided that with respect to
any claim for Damages for any misrepresentation or breach of warranty (other
than a claim for Damages for a misrepresentation or breach of warranty contained
in Section 4.05 or 4.07, as to which the limitations set forth in clauses (x),
(y) and (z) below shall not apply), (x) Buyer shall not be liable under this
Section 11.02(b) for a claim if the amount of Damages for such claim is less
than $50,000 (for purposes hereof, any series of claims arising out of the same
or substantially related facts or circumstances shall be treated as one claim),
(y) Buyer shall not be liable under this Section 11.02(b) unless the aggregate
amount of Damages with respect to all such claims for breach of such
representations and warranties exceeds $8,500,000 and then only to the extent of
the aggregate Damages in excess of $8,500,000 and (z) the maximum aggregate
liability of Buyer for such Damages shall not exceed $127,500,000.
3. Notwithstanding anything to the contrary in this Agreement, Seller
agrees to indemnify Buyer and each of its Affiliates, including, effective at
the Closing, without duplication, each Strategix Company and each Subsidiary,
from and against all Damages incurred or suffered by Buyer or any of such
Affiliates which relate to or arise out of (i) any assets, liabilities,
properties or businesses of Seller or any of Seller's subsidiaries that are not
a part of the Strategix Business, including, without limitation, the Health Care
Business, (ii) the litigation listed on Schedule 11.02(c) or (iii) any Damages
related to or resulting from any earnout or similar payment obligation related
to the Strategix Business other than in respect of the Earnout Agreements to
which earnout payments identified in Section 3.30 of the Strategix Disclosure
Memorandum relate, in each case without regard to whether such Damages relate to
events, occurrences or circumstances occurring or existing, or whether such
Damages are asserted, before, on or after the Closing Date.
4. Notwithstanding anything to the contrary in this Agreement, Buyer agrees
to indemnify Seller and its Affiliates from and against all Damages incurred or
suffered by Seller or any of such Affiliates which relate to or arise out of (i)
any failure by Buyer to make payments when due on or after the Closing Date
required by the Earnout Agreements or (ii) any breach after the Closing Date by
Buyer (or, effective as of the Closing, any Strategix Company or any Subsidiary)
of any lease or contractual obligation of a Strategix Company or a Subsidiary or
that is a Strategix Asset or Strategix Liability which results in a liability of
Seller or its Affiliates under any guaranty of such lease or other contractual
obligation by Seller or such Affiliates, but in the case of clause (ii), only to
the extent (x) that such Damages relate to events, occurrences or circumstances
arising after the Closing Date or (y) of the amount of any liability reflected
on the Closing Balance Sheet in respect of such lease or obligation (together
with any Damages incurred by Seller as a result of Buyer's failure to satisfy
such liability).
SECTION C.. Procedures. 1. a. Upon any Person entitled to be indemnified
under this Article 11 (the "Indemnified Person") becoming aware of a fact,
condition or event for which it is entitled to indemnification under this
Article 11, the Indemnified Person will as promptly as reasonably practicable
notify the Person from whom indemnification is sought (the "Indemnifying
Person") in writing of such fact, condition or event, but in any event within
sixty days after such Indemnified Person has actual knowledge of the facts
constituting the basis for indemnification; provided that the failure to provide
such notice shall not affect the Indemnified Person's right to indemnification
hereunder except to the extent that the Indemnifying Person is actually
prejudiced thereby. If such fact, condition or event is the assertion of a claim
by a third party, the Indemnifying Person will be entitled to participate in or
take charge of the defense against such claim; provided that the Indemnifying
Person and their counsel shall proceed with diligence and in good faith with
respect thereto and provided that if the Indemnifying Person elects to take
charge of such defense, the Indemnifying Person's counsel shall be approved by
the Indemnified Person, which consent shall not be unreasonably withheld.
Notwithstanding the Indemnifying Person's election to assume the defense or
investigation of such claim, the Indemnified Person shall have the right to
employ separate counsel and to participate in the defense or investigation of
such claim, action or proceeding, and the Indemnifying Person shall bear the
expense of such separate counsel, if (x) in the written opinion of counsel to
the Indemnified Person reasonably satisfactory to the Indemnifying Person, use
of counsel of the Indemnifying Person's choice would be expected to give rise to
a conflict of interest, (y) the Indemnifying Person shall not have employed
counsel to represent the Indemnified Person within a reasonable time after
notice of the assertion of any such claim or institution of any such action or
proceeding, or (z) the Indemnifying Person shall authorize the Indemnified
Person in writing to employ separate counsel at the expense of the Indemnifying
Person. An Indemnifying Person who is not entitled to, or elects not to, assume
the defense of a claim will be obligated to pay the fees and expenses of not
more than one counsel for all Indemnified Persons with respect to such claim,
unless in the written opinion of counsel to the Indemnified Person reasonably
satisfactory to the Indemnifying Person, use of one counsel would be expected to
give rise to a conflict of interest between such Indemnified Person and any
other such Indemnified Persons with respect to such claim, in which event the
Indemnifying Person shall be obligated to pay the fees and expenses of one
additional counsel.
b. Neither the Indemnified Person nor the Indemnifying Person shall make
any settlement of any claim which would give rise to liability on the part of
the Indemnifying Person under this Article 11 without the prior written consent
of the other, which consent shall not be unreasonably withheld, provided that an
Indemnified Person shall not be required to consent to any settlement involving
the imposition of equitable remedies or involving the imposition of any material
obligations on such Indemnified Person other than financial obligations for
which such Indemnified Person will be indemnified hereunder. No Indemnified
Person will be required to consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to the Indemnified Person of an unconditional release
from all liability in respect to such claim or litigation. Whenever the
Indemnified Person or the Indemnifying Person receives a firm offer to settle a
claim for which indemnification is sought under this Article 11, it shall
promptly notify the other of such offer. If -- the Indemnifying Person refuses
to accept such offer within thirty Business Days after receipt of such offer (or
of notice thereof), such claim shall continue to be contested and, if such claim
is within the scope of the Indemnifying Person's indemnity contained in this
Article 11, the -- Indemnified Person shall be indemnified pursuant to the terms
hereof. If the Indemnifying Person notifies the Indemnified Person in writing
that the Indemnifying Person desires to accept such offer, but the Indemnified
Person refuses to accept such offer within thirty Business Days after receipt of
such notice, the Indemnified Person may continue to contest such claim and, in
such event, the total maximum liability of the Indemnifying Person to indemnify
or otherwise reimburse the Indemnified Person hereunder with respect to such
claim shall be limited to and shall not exceed the amount of such offer, plus
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees and disbursements) to the date of notice that the Indemnifying Person
desires to accept such offer, provided that this sentence shall not apply to any
settlement of any claim involving the imposition of equitable remedies or to any
settlement imposing any material obligations on such Indemnified Person other
than financial obligations for which such Indemnified Person will be indemnified
hereunder.
2. Exclusive Remedy. This Article 11 shall provide the sole and exclusive
remedy for any and all Damages sustained or incurred by any Indemnified Person,
except for Damages sustained or incurred by Indemnified Person as a result of
fraud by Indemnifying Person.
3. Tax Effect and Insurance. The Liability of the Indemnifying Persons with
respect to any claim for indemnification under this Article 11 shall be reduced
by the tax benefit actually realized and any insurance proceeds received by the
Indemnified Persons as a result of any Damages upon which such claim is based,
and shall include any tax detriment actually suffered by the Indemnified Persons
as a result of such Damages or the receipt of an indemnity payment in respect
thereof. The amount of any such tax benefit or detriment shall be determined by
taking into account the effect, if any and to the extent determinable, of timing
differences resulting from the acceleration or deferral of items of gain or loss
resulting from such Damages and shall otherwise be determined so that payment by
the Indemnifying Persons of the claim, as adjusted to give effect to any such
tax benefit or detriment, will make the Indemnified Person as economically whole
as is reasonably practical with respect to the Damages upon which the claim is
based.
4. Subrogation. Upon payment in full of any claim for indemnification under
this Article 11, whether such payment is effected by set-off or otherwise, or
the payment of any judgment or settlement with respect to a third party claim,
the Indemnifying Persons shall be subrogated to the extent of such payment to
the rights of the Indemnified Person against any person or entity with respect
to the subject matter of such third party claim.
ARTICLE XII.
TERMINATION
SECTION A.. Grounds for Termination. This Agreement may be terminated at
any time prior to the Closing:
1. by mutual written agreement of Seller and Buyer;
2. by either Seller or Buyer if the Closing shall not have been
consummated on or before October 31, 1998; or
3. by either Seller or Buyer if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses 12.01(b) or
12.01(c) shall give notice of such termination to the other party.
SECTION B.. Effect of Termination. If this Agreement is terminated as
permitted by Section 12.01, such termination shall be without liability of
either party (or any stockholder, director, officer, employee, agent, consultant
or representative of such party) to the other party to this Agreement; provided
that if such termination shall result from the (i) willful failure of either
party to fulfill a condition to the performance of the obligations of the other
party, (ii) failure to perform a covenant of this Agreement or (iii) breach by
either party hereto of any representation or warranty or agreement contained
herein, such party shall be fully liable for any and all Damages incurred or
suffered by the other party as a result of such failure or breach. The
provisions of Sections 6.01, 13.03, 13.05, 13.06 and 13.07 shall survive any
termination hereof pursuant to Section 12.01.
ARTICLE XIII.
MISCELLANEOUS
SECTION A.. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission) and shall
be given,
if to Randstad, to:
Randstad Holding nv
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇
The Netherlands
Attention: Rein ▇. ▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇-▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
NationsBank Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Buyer, to:
Randstad US, L.P.
c/o Randstad Staffing Services, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
NationsBank Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Seller, to:
AccuStaff Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
SECTION B.. Amendments and Waivers. 1. Any provision of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to this Agreement, or in
the case of a waiver, by the party against whom the waiver is to be effective.
2. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION C.. Expenses. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
SECTION D.. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Buyer may transfer
or assign, in whole or from time to time in part, to one or more of its
Affiliates, the right to purchase all or a portion of the Shares or the
Strategix Assets, but no such transfer or assignment will relieve Buyer of its
obligations hereunder.
SECTION E.. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of such state.
SECTION F.. Jurisdiction. Except as otherwise expressly provided in this
Agreement, the parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in the Borough of Manhattan, New
York City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 13.01 shall be deemed
effective service of process on such party.
SECTION G.. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION H.. Counterparts; Third Party Beneficiaries. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder including, without limitation,
Section 9.02 hereof.
SECTION I.. Entire Agreement. This Agreement (together with the Exhibits
and Schedules attached hereto), the Confidentiality Agreement and the Employee
and Systems Support Services Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, both oral and written, between the
parties with respect to the subject matter hereof and thereof.
SECTION J.. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
RANDSTAD HOLDING NV
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
RANDSTAD US, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
ACCUSTAFF INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
EXECUTION COPY
AMENDMENT NO. 1 TO ACQUISITION AGREEMENT
AMENDMENT No. 1 dated as of September 3, 1998 to the Acquisition Agreement
dated as of August 27, 1998 (as amended, the "Agreement") among Randstad Holding
nv, a corporation organized under the laws of The Netherlands, Randstad US,
L.P., a Delaware limited corporation and AccuStaff Incorporated, a Florida
corporation.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into the Agreement; and
WHEREAS, the parties hereto desire to amend further the Agreement to make
certain changes as hereinafter provided;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each capitalized term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
SECTION 2. Amendment of Section 5.08. Section 5.08 of the Agreement is
amended by replacing the words "September 3, 1998" in the third sentence of that
Section with "September 11, 1998".
SECTION 3. Governing Law. This Amendment No. 1 shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of law rules of such state.
SECTION 4. Counterparts; Effectiveness. This Amendment No. 1 may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment No. 1 shall become effective as of the date hereof when each of
the parties hereto shall have received duly executed counterparts hereof signed
by each of the other parties hereto. No provision of this Amendment or the
Agreement is intended to confer upon any Person other than the parties hereto
any rights or remedies hereunder or thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed by their respective authorized officers as of the day and year
first above written.
RANDSTAD HOLDING NV
By /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
RANDSTAD US, L.P.
By /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
Name ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
ACCUSTAFF INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President,
Secretary and
General Counsel
EXECUTION COPY
AMENDMENT NO. 2 TO ACQUISITION AGREEMENT
AMENDMENT No. 2 dated as of September 11, 1998 to the Acquisition Agreement
dated as of August 27, 1998 (as amended, the "Agreement") among Randstad Holding
nv, a corporation organized under the laws of The Netherlands, Randstad US,
L.P., a Delaware limited corporation and AccuStaff Incorporated, a Florida
corporation.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into the Agreement; and
WHEREAS, the parties hereto desire to amend further the Agreement to make
certain changes as hereinafter provided;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each capitalized term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement.
SECTION 2. Amendment of Section 5.08. Section 5.08 of the Agreement is
amended by replacing the words "September 11, 1998" in the third sentence of
that Section with "the earlier of (i) October 1, 1998 or (ii) the Closing
Date".
SECTION 3. Governing Law. This Amendment No. 2 shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of law rules of such state.
SECTION 4. Counterparts; Effectiveness. This Amendment No. 2 may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment No. 2 shall become effective as of the date hereof when each of
the parties hereto shall have received duly executed counterparts hereof signed
by each of the other parties hereto. No provision of this Amendment or the
Agreement is intended to confer upon any Person other than the parties hereto
any rights or remedies hereunder or thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed by their respective authorized officers as of the day and year
first above written.
RANDSTAD HOLDING NV
By /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
RANDSTAD US, L.P.
By /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
Name ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
ACCUSTAFF INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President,
Secretary and
General Counsel
AccuStaff Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Ladies and Gentlemen:
Reference is hereby made to the Acquisition Agreement dated as of August
27, 1998 (the "Agreement") among AccuStaff Incorporated, a Florida corporation
(the "Seller"), Randstad US, L.P., a Delaware limited partnership ("Buyer"), and
Randstad Holding nv, a corporation organized under the laws of The Netherlands,
as amended from time to time. Capitalized terms used herein without definition
have the meanings set forth in the Agreement.
In consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Effective Date of Transfer of Strategix Business. Subject to paragraph 3
hereof, the parties hereto agree that notwithstanding anything to the contrary
set forth in the Agreement, the Closing of the purchase and sale of the Shares,
the acquisition of the Strategix Assets and the assumption of the Strategix
Liabilities pursuant to Section 2.01 and Section 2.02 of the Agreement shall be
deemed to have occurred at 11:59 pm, Eastern Time, on September 27, 1998 (the
"Effective Time"). Subject to paragraph 3 hereof, it is understood that,
notwithstanding anything to the contrary in the Agreement, upon the completion
of the Closing, the Strategix Business will be deemed to have been operated for
the benefit and at the risk of Buyer from the Effective Time. Accordingly,
subject to paragraph 3 hereof, upon completion of the Closing and without in any
way altering the obligations of the parties as set forth in the Agreement,
including without limitation Seller's obligation to have complied with Section
5.01 of the Agreement through the date hereof, all profits and losses of and
transactions effected with respect to, the Strategix Business from and after the
Effective Time shall be for the account of Buyer with the same effect as if the
Closing had taken place at the Effective Time.
2. Closing Balance Sheet. Subject to paragraph 3 hereof, the parties hereby
agree that notwithstanding anything to the contrary set forth in the Agreement,
the Closing Balance Sheet shall be prepared as if the Closing had occurred at
the Effective Time.
3. Exception for Tax Matters. Notwithstanding anything to the contrary set
forth herein, the parties hereto agree that (i) for purposes of Article 8 of the
Agreement, the Closing shall be deemed to have occurred on the date hereof and
not at or as of the Effective Time, and (ii) they shall treat the Closing as
having occurred on the date hereof, and not at or as of the Effective Time, for
all tax purposes and shall file all tax returns, statements, reports and forms
in accordance with such treatment.
4. Miscellaneous. The provisions of Sections 13.01, 13.02, 13.03, 13.04,
13.05, 13.06, 13.07, 13.08 and 13.10 of the Agreement are incorporated in their
entirety herein by reference, except (i) for the phrase "except that Buyer may
transfer or assign, in whole or from time to time in part, to one or more of its
Affiliates the right to purchase all or a portion of the Shares or the Strategix
Assets, but no such transfer or assignment will relieve Buyer of its obligations
hereunder" appearing at the end of Section 13.04 and (ii) that, as incorporated
herein for use in this Letter Agreement, the term "Agreement" in such provisions
shall be deemed to refer to this Letter Agreement.
If the foregoing accurately summarizes our agreement with respect to the
matters contemplated by this Letter Agreement, please sign and return to us the
enclosed copy of this Letter Agreement. This Letter Agreement may be signed in
counterparts, each of which shall be deemed an original.
RANDSTAD HOLDING NV
By: /s/ ▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
RANDSTAD US, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇
Title: Attorney-in-Fact
Accepted and agreed to as of the date set forth above:
ACCUSTAFF INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer