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Exhibit 2.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of September 1,
1998, among XXXXX ENTERPRISES, INCORPORATED, a Florida corporation ("Sykes"),
HEALTHPLAN SERVICES CORPORATION, a Delaware corporation ("HPS"), and SYKES
HEALTHPLAN SERVICES, INC., a Florida corporation (the "Company").
BACKGROUND
On December 18, 1997, Sykes and HPS formed a joint venture known as Sykes
HealthPlan Services, Inc. In exchange for Sykes' and HPS' capital contributions
to the Company, the Company issued to each of Sykes and HPS 5,000,000 shares of
common stock $.01 par value per share (the "Common Stock") of the Company. HPS
desires to sell to Xxxxx, and Xxxxx desires to purchase from HPS, all of HPS'
shares of Common Stock of the Company in accordance with the terms and subject
to the conditions of this Agreement. In consideration of the mutual covenants,
agreements, representations, and warranties set forth in this Agreement, the
parties agree as follows:
TERMS
1. ACQUISITION OF SHARES AND OTHER TRANSACTIONS.
1.1 Sale and Purchase of Shares of Common Stock. Upon the terms and subject
to the conditions contained in this Agreement, on the Closing Date (as defined
below) (i) HPS shall sell and transfer to Xxxxx, and Xxxxx shall purchase from
HPS, 5,000,000 shares of Common Stock of the Company (the "Shares"), which
represents all of the shares of Common Stock of the Company held by HPS, for the
Purchase Price (as defined below) and (ii) Sykes shall pay to HPS the Purchase
Price (as defined below).
1.2 Purchase Price.
(a) Amount. The purchase price for the Shares (the "Purchase Price") shall
be $30,555,000.
(b) Manner of Payment. Payment of the Purchase Price will be made at the
Closing (as defined below) by wire transfer in immediately available funds to an
account designated by HPS pursuant to written instructions of HPS delivered to
Sykes before the Closing Date.
1.3 Effective Date. The effective date of the transactions contemplated by
this Agreement will be September 1, 1998.
1.4 Accounting for IPO Expenses. The financial accounting effect of the
expenses incurred by the Company directly relating to its initial public
offering registration statement will be borne by Sykes.
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1.5 Shareholder Agreement. On the Closing Date, Sykes, HPS, and the Company
shall execute a Termination Agreement with respect to the Shareholder Agreement
dated December 18, 1997, among Sykes, HPS, and the Company (the "Shareholder
Agreement") to be effective upon the Closing. Each of HPS and Sykes confirm that
their respective rights and obligations under Section 6.1 "Non-Competition,
Confidentiality," "Section 13 "Resolution of Disputes," and Section 17.4 "Costs
of Litigation or Arbitration" of the Shareholder Agreement survive Closing and
the termination of the Shareholder Agreement; provided, however, that (a) for a
Change of Control (as defined below) of HPS that occurs on or before the first
annual anniversary of this Agreement, Section 6.1 shall terminate on the first
annual anniversary of this Agreement and (b) for a Change of Control of HPS that
occurs after the first annual anniversary of this Agreement, Section 6.1 shall
terminate upon such Change of Control. "Change of Control" shall mean, with
respect to HPS: (i) a sale of substantially all of the assets of HPS or (ii) any
merger or consolidation involving HPS that results in Xxxxx X. Xxxxxx, Xx.
beneficially owning a percentage of the surviving entity to such merger or
consolidation that is less than 50% of his percentage ownership interest in HPS
immediately preceding such merger or consolidation.
2. CLOSING OF TRANSACTION.
2.1 Time and Place of Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Xxxxx &
Xxxxxxx, 000 X. Xxxxx Xx., Xxxxx 0000, Xxxxx, Xxxxxxx, on the Closing Date.
"Closing Date" shall mean September 15, 1998, or such later date after the
satisfaction or waiver of all of the conditions of the respective parties set
forth in Articles 6 and 7 herein, or such other time and place or time as the
parties may mutually determine.
2.2 Actions at the Closing. At the Closing, (i) HPS shall deliver to Sykes
certificates evidencing the Shares accompanied by a duly executed stock transfer
power and (ii) Sykes will pay to HPS the Purchase Price.
2.3 Other Closing Deliveries.
(a) At the Closing, (i) HPS will deliver to Sykes documentation reasonably
satisfactory to it confirming the obligation of HPS to continue to outsource to
the Company all of HPS' care management services for HPS' customers; (ii) Sykes
will deliver to HPS certified resolutions of Sykes' board of directors approving
the execution of this Agreement and the transactions contemplated hereby; (iii)
HPS will deliver to Sykes certified resolutions of HPS' board of directors
approving the execution of this Agreement and the transactions contemplated
hereby; (iv) HPS will deliver to Sykes an opinion from counsel to HPS reasonably
satisfactory to Sykes relating to this Agreement and the transactions
contemplated hereby; (v) Sykes will deliver to HPS an opinion from counsel to
Sykes reasonably satisfactory to HPS relating to this Agreement and the
transactions contemplated hereby; (vi) HPS will deliver to Sykes resignations,
effective on or before the Closing, of Xxxxx X. Xxxxxx, Xx. and Xxxxxxx X.
Xxxxxxx as directors of the Company; (vii) Sykes will deliver to HPS
documentation reasonably satisfactory to HPS releasing HPS from its guaranty of
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the Company's obligations under the Company's Credit Agreement with NationsBank,
N.A.; and (viii) Sykes and HPS will deliver to each other a Termination
Agreement with respect to the Shareholder Agreement as set forth in Section 1.5
hereof.
3. REPRESENTATIONS AND WARRANTIES OF SYKES.
Sykes represents and warrants to HPS the following, as of the execution
date of this Agreement and as of the Closing Date:
3.1 Organization and Authority. Sykes is a corporation duly organized and
in active status under the laws of the State of Florida, and has full corporate
power and authority to execute and deliver this Agreement, to carry out its
obligations under this Agreement, and to effect the transactions contemplated by
this Agreement.
3.2 Authorization, Consents, and Validity. The execution, delivery, and
performance of this Agreement by Sykes (a) have been duly authorized by all
requisite corporate action of Sykes, (b) except for compliance with the
Shareholder Agreement, does not require any consent, license, approval, waiver,
or authorization from any governmental authority or any other person, and (c)
will not conflict with the articles of incorporation or bylaws of Sykes. This
Agreement has been duly and validly executed by Sykes and is a valid and legally
binding obligation of Sykes, enforceable against it in accordance with its
terms, except to the extent limited by bankruptcy, reorganization, insolvency,
moratorium, and similar laws of general application affecting the rights and
remedies of creditors and by general equity principles.
3.3 Brokers. All negotiations relating to this Agreement and the
transactions contemplated hereunder have been carried on by Sykes without the
use of any broker, finder, underwriter, or other intermediary whereby such party
would have a valid claim against Sykes, HPS, or the Company for a brokerage
commission, finder's fee, or other similar payment.
3.4 Investment Intent. Sykes acknowledges that the Shares will be acquired
for its own account and without any view to the distribution of any part thereof
without registration under the Securities Act and any applicable state
securities laws. Sykes understands that the Shares may not be sold, transferred
or otherwise disposed of without registration under the Securities Act and
applicable state securities laws, unless exemptions from registration under
those laws are available. Sykes represents that it has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Shares, and has the ability to bear
the economic risks of such investment. Sykes further acknowledges that, through
its ownership interest and board of directors participation in connection with
the Company, Sykes has had access to such financial and other information from
the Company as Sykes deems necessary or appropriate to evaluate the merits of
its investment in the Shares.
3.5 Shareholder Agreement. Sykes is not aware of any claim of HPS or Sykes
against the other party for damages arising out of acts or omissions of such
other party for a breach of the Shareholder Agreement or that are outside the
scope of the Shareholder Agreement.
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4. REPRESENTATIONS AND WARRANTIES OF HPS.
HPS represents and warrants to Sykes the following, as of the execution
date of this Agreement and as of the Closing Date:
4.1 Organization and Authority. HPS is a corporation duly organized and
validly existing in good standing under the laws of the State of Delaware, and
has full corporate power and authority to execute and deliver this Agreement, to
carry out its obligations under this Agreement, and to effect the transactions
contemplated by this Agreement.
4.2 Authorization, Consents, and Validity. The execution, delivery, and
performance of this Agreement by HPS (a) have been duly authorized by all
requisite corporate action of HPS, (b) except for compliance with the
Shareholder Agreement, does not require any consent, license, approval, waiver,
or authorization from any governmental authority or any other person, and (c)
will not conflict with the certificate of incorporation or bylaws of HPS. This
Agreement has been duly and validly executed by HPS and is a valid and legally
binding obligation of HPS, enforceable against it in accordance with its terms,
except to the extent limited by bankruptcy, reorganization, insolvency,
moratorium, and similar laws of general application affecting the rights and
remedies of creditors and by general equity principles.
4.3 Brokers. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried on by HPS without the use of
any broker, finder, underwriter, or other intermediary whereby such party would
have a valid claim against Sykes, HPS, or the Company for a brokerage
commission, finder's fee, or other similar payment.
4.4 Ownership of Shares. The Shares are owned beneficially and of record by
HPS, free and clear of any lien, mortgage, pledge, encumbrance, security
interest, and (other than the Shareholder Agreement) restriction on transfer.
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4.5 Relationship with the Company. Attached to Disclosure Schedule 4.5 are
all written contracts or other agreements between the Company and HPS or any
affiliate of HPS ("Affiliate") (as that term is defined in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended). Set forth on Disclosure Schedule
4.5 is a description of the terms and conditions of any oral contracts or other
agreements between the Company and HPS or any Affiliate of HPS. Except as set
forth on Disclosure Schedule 4.5, neither HPS nor any Affiliate of HPS is or has
been involved in any business arrangement or relationship with the Company. With
respect to each contract and other agreement listed in or attached to Disclosure
Schedule 4.5, to HPS' knowledge, (i) the contract or agreement is legal, valid,
binding, enforceable, and in full force and effect, (ii) except as otherwise
agreed to by the parties, the contract or agreement will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated by this Agreement,
(iii) neither party is in breach or default, and no event has occurred that,
with notice or lapse of time, would constitute a breach or default, or permit
termination, modification, or acceleration, under such contract or agreement
(and the Company represents that it is not aware of any such breach, default, or
event), and (iv) neither party has repudiated any provision of such contract or
agreement.
4.6 Shareholder Agreement. HPS is not aware of any claim of HPS or Sykes
against the other party for damages arising out of acts or omissions of such
other party for a breach of the Shareholder Agreement or that are outside the
scope of the Shareholder Agreement.
4.7 Acquisition Negotiations. As of the date of this Agreement and as of
the Closing, HPS is not engaged in any discussions or negotiations with any
third party regarding a sale of all or substantially all of the assets of HPS or
a merger or other consolidation involving HPS.
5. ADDITIONAL AGREEMENTS.
5.1 Public Announcements. Neither Sykes, HPS, nor the Company shall,
without the consent of the other parties, which consent may be withheld for any
or no reason, make or cause to be made any public announcement or issue any
press release with respect to this Agreement or the transactions contemplated
hereby; provided that the foregoing shall not preclude communications or
disclosures necessary to (a) in the opinion of such party's counsel, comply with
applicable law or (b) comply with accounting and Securities and Exchange
Commission disclosure obligations, in which case (a) or (b) each other party
shall be advised and the parties shall use their respective best efforts to
cause a mutually agreeable release or announcement to be issued.
5.2 Access to Books and Records. Following the Closing, upon two business
days advance notice, Sykes shall cause the Company to provide HPS with
reasonable access during normal business hours to such books and records of the
Company and with such cooperation, assistance, and access to personnel of the
Company as HPS may reasonably request for the purpose of permitting HPS to
obtain any information that is reasonably necessary in connection with HPS'
responsibilities with respect to taxes or otherwise as may be required by law.
Sykes agrees to cause the Company to retain all material records or other
documents relating to tax matters of the Company and its members for taxable
periods thorough the Closing Date until six months after the expiration of the
longest applicable statute of limitations or for such longer period as may be
reasonably requested by HPS.
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5.3 Mutual Release. Each of Sykes, HPS, and the Company does hereby fully,
irrevocably, and unconditionally release and forever discharge the other parties
and its affiliates, and such other party's and its affiliates, successors,
assigns, directors, officers, employees, and agents (collectively, the "Released
Parties"), of and from any and all obligations, debts, causes of action, suits,
controversies, damages, and any and all claims, demands, and liabilities
whatsoever, both in law and at equity, known or unknown, that such party has as
of the date hereof or will have as of the Closing Date or may ever have had as
of or prior to the date hereof against the Released Parties arising out of the
Shareholder Agreement, dated December 18, 1997, and the transactions
contemplated thereby or related thereto, including any claims arising out of
Sykes' and HPS's joint ownership of the Company. Notwithstanding the foregoing,
this release (a) shall not be applicable if this Agreement is terminated
pursuant to Section 8 and (b) shall not relieve Sykes or HPS from any of the
covenants and obligations pursuant to the agreements set forth herein or the
agreements between HPS and the Company set forth on Disclosure Schedule 4.5.
6. CONDITIONS PRECEDENT TO SYKES' OBLIGATIONS.
Sykes' obligations under this Agreement are subject to the fulfillment of
the following conditions, each of which must be satisfied before or at the
Closing, unless waived by Sykes:
6.1 Representations and Warranties True at Closing. The representations and
warranties of HPS contained in this Agreement shall be true at and as of the
time of Closing as though such representations and warranties were made at and
as of such time.
6.2 Performance of Obligations. HPS must have performed every agreement and
obligation required by this Agreement to be performed by it.
6.3 Outsourcing Agreement. Receipt by Sykes of documentation reasonably
satisfactory to it confirming the obligation of HPS to continue to outsource to
the Company all of HPS' care management services for HPS' customers.
6.4 Board Approval. The board of directors of HPS shall have approved the
execution of this Agreement and the transactions contemplated hereby.
6.5 Opinion. Sykes shall have received from counsel to HPS an opinion
reasonably satisfactory to Sykes relating to this Agreement and the transactions
contemplated hereby.
6.6 Board Resignations. Sykes shall have received the resignations,
effective on or before the Closing, of Xxxxx X. Xxxxxx, Xx. and Xxxxxxx X.
Xxxxxxx as directors of the Company.
6.7 Due Diligence. The satisfaction of Sykes with the results of its due
diligence investigation of the Company.
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7. CONDITIONS PRECEDENT TO HPS' OBLIGATIONS.
HPS' obligations under this Agreement are subject to the fulfillment of the
following conditions, each of which must be satisfied before or at the Closing,
unless waived by HPS:
7.1 Representations and Warranties True at Closing. The representations and
warranties of Sykes contained in this Agreement shall be true at and as of the
time of Closing as though such representations and warranties were made at and
as of such time.
7.2 Performance of Obligations. Sykes must have performed every agreement
and obligation required by this Agreement to be performed by it.
7.3 Release from NationsBank Line of Credit. Receipt by HPS of a release in
form and substance reasonably satisfactory to it from its guaranty of the
Company's obligations under the Credit Agreement dated as of March 27, 1998,
between the Company and NationsBank, N.A., as amended.
7.4 Board Approval. The board of directors of Sykes shall have approved the
execution of this Agreement and the transactions contemplated hereby.
7.5 Opinion. HPS shall have received from counsel to Sykes an opinion
reasonably satisfactory to HPS relating to this Agreement and the transactions
contemplated hereby.
8. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.
8.1 Survival of Representations. All representations and warranties made by
any party in this Agreement or pursuant hereto shall survive the Closing until
the expiration of any applicable statutes of limitations including any
extensions thereof.
8.2 Agreement to Indemnify.
(a) Sykes and the Company agree to indemnify, defend, and hold harmless HPS
and its affiliates, successors, assigns, directors, officers, employees, and
agents from and against any and all claims, actions, suits, proceedings,
liabilities, obligations, losses, and damages, amounts paid in settlement,
interest, costs and expenses (including reasonable attorney's fees, court costs
and other out-of-pocket expenses) incurred or suffered by HPS (collectively, the
"Losses") by reason of, resulting from, or in connection with (i) a breach of
any representation or warranty of Sykes or the Company contained in or made
pursuant to this Agreement; and (ii) a breach of any agreement or covenant, or
any failure of Sykes or the Company to perform any of its obligations in this
Agreement.
(b) HPS agrees to indemnify, defend, and hold harmless Sykes and the
Company and their affiliates, successors, assigns, directors, officers,
employees, and agents from and against any and all Losses by reason of,
resulting from, or in connection with (i) a breach of any representation or
warranty of HPS contained in or made pursuant to this Agreement; and (ii) a
breach of any agreement or covenant, or any failure of HPS to perform any of its
obligations in this Agreement.
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9. TERMINATION AND WAIVER.
9.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date by:
(a) Conditions Not Satisfied. (i) Sykes if any of the conditions set forth
in Section 6 are not satisfied by the Closing Date and are not waived by Sykes;
(ii) HPS if any of the conditions set forth in Section 7 are not satisfied by
the Closing Date and are not waived by HPS; or
(b) Time. Sykes or HPS if the Closing shall not have occurred on or before
September 30, 1998.
9.2 Waiver or Amendment of Agreement. Any term or condition of this
Agreement may be waived or amended at any time prior to the Closing Date by any
party hereto which is entitled to the benefits thereof, by action taken by its
duly authorized representative, whether before or after the action of such
party; provided, however, that such action shall be evidenced by written
instrument duly executed on behalf of such party. The failure of either party to
enforce at any time any provision of this Agreement shall not be construed to be
a waiver of such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of such party thereafter to enforce
each and every such provision.
10. MISCELLANEOUS PROVISIONS.
10.1 Expenses. Each party to this Agreement will bear all the fees, costs
and expenses which are incurred by it in connection with the transactions
contemplated hereby, whether or not such transactions are consummated. In any
legal proceeding arising out of this Agreement, the losing party shall reimburse
the prevailing party, on demand, for all costs incurred by the prevailing party
in enforcing, defending, or prosecuting any claim arising out of this Agreement,
including all reasonable attorneys' fees and costs.
10.2 Governing Law and Venue. The validity, construction, enforcement, and
interpretation of this Agreement are governed by the laws of the State of
Florida and the federal laws of the United States of America, excluding the laws
of those jurisdictions pertaining to resolution of conflicts with laws of other
jurisdictions. Each party to this Agreement (a) consents to the personal
jurisdiction of the state and federal courts having jurisdiction in Hillsborough
County, Florida, (b) stipulates that the proper, exclusive, and convenient venue
for any legal proceeding arising out of this Agreement is Hillsborough County,
Florida, for state court proceedings, and the Middle District of Florida, Tampa
Division, for federal district court proceedings, and (c) waives any defense,
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whether asserted by a motion or pleading, that Hillsborough County, Florida, or
the Middle District of Florida, Tampa Division, is an improper or inconvenient
venue.
10.3 Complete Agreement. This Agreement records the final, complete, and
exclusive understanding among the parties regarding the subjects addressed in it
and supersedes any prior or contemporaneous agreement, understanding, or
representation, oral or written, by any of them.
10.4 Rights of Third Parties. Nothing in this Agreement, whether express or
implied, is intended or should be construed to confer or grant to any person,
except Sykes, HPS, and the Company, any claim, right, remedy, or privilege
under, or because of, this Agreement or any provision of it.
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10.5 Execution and Effectiveness. The parties may execute this Agreement in
counterparts. Each executed counterpart will be considered an original document,
and all executed counterparts, together, will constitute the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.
XXXXX ENTERPRISES, INCORPORATED
By: ________________________________
Name: ______________________________
Title:______________________________
Date:_______________________________
HEALTHPLAN SERVICES CORPORATION
By: ________________________________
Name: ______________________________
Title: _____________________________
Date: ______________________________
SYKES HEALTHPLAN SERVICES, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
Date: ______________________________
