Exhibit 99.2 Management Agreement executed October 31, 2002
MANAGEMENT AGREEMENT
This Management Agreement (the "AGREEMENT") is entered into this 31st
day of October 2002 (the "EFFECTIVE DATE") by and between Staff America, Inc..
(the "PEO"), and The Cura Group III, Inc., a Florida corporation (the
"MANAGER").
BACKGROUND
WHEREAS, the PEO provides professional employer organization services,
including staffing, payroll and insurance services (the "BUSINESS") to customers
within the states set forth on Exhibit A hereto (the "CUSTOMER BASE");
WHEREAS, Manager and an affiliate of PEO have entered into that certain
stock purchase agreement of even date and attached hereto as Exhibit B (the
"STOCK PURCHASE AGREEMENT"), pursuant to which PEO's affiliate shall sell all of
the issued and outstanding shares of PEO (the "Shares").
WHEREAS, in accordance with the terms of the Stock Purchase Agreement,
PEO and Manager will not consummate the purchase and sale of the Shares until
such time as adjustments for the purchase price of the Shares have been made;
WHEREAS, PEO wishes to provide for the most effective and efficient
management of certain aspects of the Business until the closing of the
transaction contemplated by the Stock Purchase Agreement, or until such time as
this Agreement is otherwise terminated pursuant to the provisions herein;
WHEREAS, PEO desires that Manager serve as exclusive manager and
operator of PEO's business on an interim basis, pending the consummation of the
transaction contemplated by the Stock Purchase Agreement; and
WHEREAS, Manager has agreed to manage certain aspects of the Business
upon the terms and conditions herein contained;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the parties agree as
follows:
1. MANAGEMENT RESPONSIBILITIES.
(a) Commencing on the Effective Date of the Stock Purchase Agreement and until
the termination of this Agreement as herein provided, Manager shall manage
the servicing of PEO's Customer Base and Business consisting of payroll
administration, workers' compensation coverage, customer service and
support, billing and other related endeavors, in such manner as the parties
may agree from time to time. Manager shall manage the Business in
accordance with all applicable rules, regulations and laws and with the
same care and regard as it manages its own affairs and business, providing
PEO's customers with the same level of priority, service and attention as
Manager provides to its own customers.
(b) Commencing on the Effective Date of the Stock Purchase Agreement and until
the termination of this Agreement as herein provided, PEO will transition
the PEO's Customer Base into Manager's workers' compensation insurance
policy, in such manner as the parties may agree.
(c) Manager shall consult with PEO from time to time regarding all material
operating procedures and decisions affecting PEO's Customer Base and
Business, and shall implement all reasonable requests of PEO.
(d) PEO shall bear all costs and expenses incurred after the date hereof in
fulfilling its obligations under this Agreement, including but not limited
to salaries, payroll taxes, billing and other ordinary and necessary
expenses to service the PEO's Customer Base. All customer accounts,
information, documents, customer lists and records, and any other
materials, tangible or intangible, transferred or given to, or managed by,
Manager under this Agreement shall be become the property of the Manager
upon the closing of the Stock Purchase Agreement.
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2. MAINTENANCE OF SEGREGATED ACCOUNTS, RECORDS, ETC.
(a) All management functions performed by Manager under this Agreement
shall be for the joint benefit of PEO and Manager, and until the
consummation of the Stock Purchase Agreement, Manager shall take all
reasonable steps to maintain PEO's distinct identity, using PEO's
letterhead in all xxxxxxxx and other correspondence on behalf of PEO,
maintaining accurate and separate accounting books and records of
operations (including billing summaries) respecting any of the
Business managed under this Agreement, and following such other
procedures as the parties may mutually agree upon from time to time.
All correspondence, notices or other communications to customers,
employees or the public with respect to the Business must receive
prior approval from Manager.
3. INSURANCE.
(a) All certificates for Workers' Compensation Insurance shall be
issued under the Manager's policy with Continental Casualty & Assurance Company
("CNA") under the insured's name of "The Cura Group III, Inc., d/b/a/
StaffAmerica" and shall be issued under StaffAmerica's tax identification
number.
(b) PEO shall make timely payments of all weekly manual premium charges
to Midwest Merger Management, LLC, a Kentucky limited liability company, based
upon thirty-one percent (31%) of the estimated annual manual premium of
thirty-seven million dollars.
4. REPORTS.
(a) PEO shall provide Manager with the following daily reports: cash
reports; and first reports of injury.
(b) PEO shall provide Manager with the following weekly reports: aged
accounts receivable; and aged accounts payable.
5. LICENSE OF MARKS.
PEO hereby grants to Manager a royalty-free, exclusive license to use
the any of PEO's tradenames, trademarks and servicemarks (the "Marks") in
connection with the Business and servicing PEO's Customer Base until the
termination of this Agreement or the consummation of the Stock Purchase
Agreement at which time the Marks shall be the property of the Manager.
6. TERMINATION OF AGREEMENT.
(a) This Agreement shall terminate on the Closing of the transactions
contemplated by the Stock Purchase Agreement as provided therein; provided,
however, that in the event the parties to the Stock Purchase Agreement do not
close as therein provided within one hundred and fifty days (150) days of the
date of this Agreement, this Agreement may be terminated at the sole option of
the Manager.
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(b) Manager may, in its sole discretion, immediately terminate this
Agreement, prior to the end of its term, by giving PEO thirty (30) days' written
notice thereof.
7. COVENANTS.
(a) PEO and Manager shall each (i) promptly provide to the other party
copies of all notices, demands or other official notifications
received regarding the customer base, (ii) timely execute all
reasonable documents as may be necessary to comply with all statutes,
ordinances, rules and regulations relating to the ownership, use or
exploitation of the customer base, (iii) cooperate with each other
with respect to the making of all regulatory filings, and (iv) give
prompt notice to the other of any event having a material adverse
effect on the customer base or the Business.
(b) Other than provided in the Stock Purchase Agreement, PEO shall not (i)
modify, amend or otherwise alter, or sell, remove, transfer, convey,
assign or otherwise dispose of, or lease or encumber any of the
assets, customer base or Business, or (ii) otherwise take any action
that could reasonably be expected to have a material adverse effect on
the assets, customer base or the Business.
(c) PEO shall not open any new bank accounts without prior written
approval from Manager.
(d) PEO shall not obtain or attempt to obtain, without prior written
approval from Manager, a new or addition Federal employee
identification number.
(e) PEO shall not receive, by acquisition or assignment, any new business
without prior written approval from Manager.
(f) PEO shall not incur any capital expenditures without prior written
approval from Manager.
(g) PEO shall not make any distributions to employees, shareholders,
directors or officers without prior written approval from Manager.
(h) PEO shall not declare a dividend on any of its securities without
prior written approval from Manager.
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8. INSPECTION. At all times at reasonable hours and upon reasonable notice,
each party shall have the right to review, inspect and duplicate all
relevant business records of the other relating hereto.
9. NO AGENCY. PEO hereby authorizes Manager to prepare, execute, and make such
filings with any governmental or regulatory authority on behalf of PEO as
shall be necessary and/or appropriate for the purpose of carrying out
Manager's duties as described herein. Except as otherwise provided herein,
Manager is, and shall remain, an independent contractor acting solely for
its own account. PEO shall have no authority, express or implied, to act as
agent of Manager for any purpose.
10. TRANSITION. In connection with the Closing under the Stock Purchase
Agreement, PEO shall cooperate with PEO in all reasonable respects to
effectuate a smooth transfer of customers and transition of the Business to
PEO. In the event a Closing does not occur under the Stock Purchase
Agreement, PEO shall, at its sole cost upon PEO's request, cooperate with
PEO to effectuate a smooth transfer of PEO's customers and transition of
the Business to any purchaser of PEO's customers and Business or any other
designee of PEO, including, without limitation, making such mailings to
customers, transfer of and customer records and computerized data and doing
such other things as PEO may reasonably request from time to time.
11. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given when
received if delivered in person or by courier, telegraph, telex or by
facsimile transmission or mailed by certified mail, postage pre-paid
addressed as follows:
(a) If to the Manager, addressed as follows:
The Cura Group II, Inc.
0000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx
Attn: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Levy Boonshoft & Xxxxxxxx, PC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
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If to the PEO, addressed as follows:
StaffAmerica, Inc.
0000 Xxxxxxxx Xxxx - Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
with a copy to:
12. INDEMNITY. Each party shall indemnify and hold harmless the other party
from and against any and all losses, liabilities, costs and expenses
(including reasonable attorneys fees) arising out of, or incurred as a
result of, the indemnifying party's breach of any provisions of, or failure
to perform its obligations under this Agreement. This provision shall
survive termination of this Agreement.
13. ENTIRE AGREEMENT, AMENDMENT; EFFECT OF WAIVERS. This Agreement sets forth
the entire agreement and understanding of the parties in respect of the
transactions contemplated hereby and supersedes all prior agreements,
arrangements and understanding relating to the subject matter hereof
between Manager and PEO. This Agreement may be amended or modified only by
a written instrument executed by Manager and PEO (to the extent such change
relates to it) or by their respective successors and assigns. No waiver by
PEO or Manager of any default, breach or violation or a series of defaults,
breaches or violations of this Agreement shall constitute a waiver of any
subsequent default, breach or violation or waiver of any of the terms of
this Agreement.
14. ANNOUNCEMENTS. All announcements of any kind relating to this Agreement,
including to PEO's customers, employees and the public, must receive prior
written approval from Manager, excluding those which Manager, or its
parent, may be required to file with the Securities and Exchange
Commission.
15. GENERAL. This Agreement: (i) shall be governed by, construed and enforced
in accordance with the laws of the State of Florida without regard to the
choice of law principles thereof; (ii) shall inure to the benefit of and be
binding upon the successors and assigns of PEO and Manager, nothing in this
Agreement, expressed or implied, being intended or confer upon any other
person any rights or remedies hereunder; provided, that, except as
otherwise provided herein, neither party hereto may assign its rights or
obligations hereunder without the prior written consent of the other party
hereto, and provided, further, that no assignment shall relieve the
assignor of its liability hereunder; and (iii) may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. The Section
and other headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year first above written.
THE CURA GROUP III, INC. STAFFAMERICA, INC.
By: /s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxxx Xxxxxxxxxxx
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Xxxxx X. Xxxxxx, President Xxxxxxx Xxxxxxxxxxx, President
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