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ASSET PURCHASE AGREEMENT
by and among
STAFFMARK, INC.,
STAFFMARK ACQUISITION CORPORATION THIRTEEN,
STAFFMARK ACQUISITION CORPORATION FOURTEEN
and
EMJAY CAREERS, L.P.
and
EMJAY CONTRACTS, L.P.
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TABLE OF CONTENTS
PAGE
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INDEX TO EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.1. Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2. Instruments of Conveyance and Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Consideration for the Transferred Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5. Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.6. Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.2. Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.3. Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.4. No Violation; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.5. Subsidiaries and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.6. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.7. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.8. Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.9. Labor and Employee Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.10. Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.11 Powers of Attorney; Absence of Limitations on Competition; Guarantees . . . . . . . . . . . . . 9
SECTION 3.12. Significant Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.13. Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.14. Absence of Certain Changes; Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.15. Certain Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.16. Compliance with Law; Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.17. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.18. Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.19. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.20. Outstanding Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.21. Outstanding Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.22. Intellectual Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.23. Proprietary Information of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.24. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.25. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.26. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.27. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.28. Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.29. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.30. Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.31. Continued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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SECTION 3.32. Protection of Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.33. Securities Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2. Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3. Validity, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.4. The Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE V. PRE-CLOSING COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.1. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.2. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.3. Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.4. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.5. Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.6. Obligations Concerning Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.7. Corporate Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.8. Notice of Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.9. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI. POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.1. Post-Closing Covenants of the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.2 Post-Closing Covenants of StaffMark, SAC13 and SAC14 . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VII. CONDITIONS TO THE BUYER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7.1. Representations and Warranties True; Satisfaction of Covenants . . . . . . . . . . . . . . . 23
SECTION 7.2. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.3. No Obstructive Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.4. Opinion of Counsel to the Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.5. Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.6. Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.7. Approval of the Buyers and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.8. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.9. Indemnification Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.10. Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.11. Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.12. Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.13. Earnout Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.14. Purchase Price Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.15. Corporate Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.16. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VIII. CONDITIONS TO THE SELLERS' OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.1. Representations and Warranties True; Satisfaction of Covenants . . . . . . . . . . . . . . . 25
SECTION 8.2. Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.3. No Obstructive Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.4. Approval of the Sellers and Its Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.5. Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.6. Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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SECTION 8.7. Earnout Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.8. Opinion of Counsel to Buyers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 8.9. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IX. THE CLOSING AND CERTAIN CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9.1. Time and Place of the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9.2. Survival of Representations, Warranties and Covenants. . . . . . . . . . . . . . . . . . . . 26
SECTION 9.3. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9.4. Recoupment Under the Earnout Agreement and/or the Covenant
Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE X. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10.1. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10.3. Other Termination Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 11.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 11.2. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11.3. Modifications and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11.4. Assignment/Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11.5. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11.7. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11.8. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 11.9. Headings and Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.10. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.11. Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.12. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.14. Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11.15. Telecopy Execution and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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INDEX TO EXHIBITS
EXHIBIT A -- Xxxx of Sale and Assignment
EXHIBIT B -- Escrow Agreement
EXHIBIT C -- Earnout Agreement
EXHIBIT D -- Assumption Agreement
EXHIBIT E -- Indemnification Agreement
INDEX TO SCHEDULES
Schedule 2.1 -- Schedule of Assets
Schedule 2.3 -- Excluded Assets
Schedule 2.6 -- Allocation of Purchase Price
Schedule 3.1 -- Organization and Qualification
Schedule 3.3 -- Ownership of the Corporation
Schedule 3.4 -- No Violations; Consents
Schedule 3.7 -- Financial Statements
Schedule 3.8 -- Absence of Undisclosed Liabilities
Schedule 3.9 -- Labor and Employee Relations
Schedule 3.9.1 -- Employee Compensation
Schedule 3.9.2 -- Consultant Compensation
Schedule 3.11 -- Powers of Attorney; Absence of Limitations on
Competition; Guarantees
Schedule 3.12 -- Significant Customers
Schedule 3.14 -- No Adverse Change
Schedule 3.16 -- Compliance with Law; Licenses and Permits
Schedule 3.17 -- Employee Benefits
Schedule 3.18 -- Claims on Fixed Assets
Schedule 3.19 -- Insurance
Schedule 3.20 -- Contracts
Schedule 3.20.1 -- Notice of Contract Defaults
Schedule 3.20.2 -- Termination of Contracts
Schedule 3.20.3 -- Limitations on Contracts
Schedule 3.20.4 -- Contracts Requiring Consent of Other Party
Schedule 3.21 -- Leases
Schedule 3.22 -- Intellectual Properties
Schedule 3.23 -- Proprietary Information of Third Parties
Schedule 3.24 -- Transactions with Affiliates
Schedule 3.25 -- Taxes
Schedule 3.26 -- Litigation
Schedule 3.27 -- Environmental Matters
Schedule 3.28 -- Brokers
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is entered into this
4th day of November, 1997, by and among StaffMark, Inc., a Delaware corporation
("StaffMark"), StaffMark Acquisition Corporation Thirteen ("SAC13"), StaffMark
Acquisition Corporation Fourteen ("SAC14"), each a Delaware corporation and
wholly-owned subsidiary of StaffMark (SAC13 and SAC14 collectively with
StaffMark, the "Buyers"), EMJAY Careers, L. P. ("EMJAY Careers") and EMJAY
Contracts, L.P. ("EMJAY Contracts"), each a Texas limited partnership (EMJAY
Careers and EMJAY Contracts are sometimes referred to individually as a
"Seller" and collectively as the "Sellers"). XxxxxXxxx, XXX00, XXX00, EMJAY
Careers and EMJAY Contracts are sometimes referred to collectively as the
"Parties" and sometimes each entity is referred to herein separately as a
"Party".
RECITALS
WHEREAS, EMJAY Careers conducts information technology permanent
placements and EMJAY Contracts provides information technology contract
staffing services, including but not limited to, programmers and network
support services (individually for each Seller, the "Business" and
collectively, the "Businesses");
WHEREAS, the Sellers are the owners of all right, title and interest in
and to the assets described in Section 2.1 hereto, with such assets being
substantially all of the assets currently used by the Sellers in the
Businesses; and
WHEREAS, EMJAY Careers desires to sell substantially all of its assets
to StaffMark and StaffMark desires to purchase, through SAC13, the assets from
EMJAY Careers and EMJAY Contracts desires to sell substantially all of its
assets to StaffMark and StaffMark desires to purchase, through SAC14, the
assets from EMJAY Contracts, all pursuant to this Agreement as hereinafter
provided.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
(a) The following terms have meanings set forth below:
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions,
judgments, special notices, records of decision(s), orders, decrees,
rulings, damages, dues, penalties, fines, costs, amounts paid in
settlement, Liabilities, obligations, taxes, liens, losses, expenses,
and fees, including court costs and reasonable attorneys' fees and
expenses.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Employee Leasing Agreement" means that certain leasing agreement that
SAC13 and EMJAY Careers and SAC14 and EMJAY Contracts may enter into
(but are not required to so enter into) covering employees of the
Sellers for the payroll periods of the Sellers ending December 31,
1997.
"Knowledge" means actual knowledge after reasonable investigation and
due inquiry.
"Liability" or "Liabilities" means any liability or liabilities
(whether known or unknown, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due).
"Ordinary Course of Business" means the Ordinary Course of Business of
the Sellers consistent with past custom and practice (including with
respect to quantity and frequency).
"Person" means an individual, a general partnership, a limited
partnership, a corporation, a limited liability company, a limited
liability partnership, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization, or a governmental
entity.
(b) The following terms have the meanings defined for such
terms in the Sections set forth below:
Term Section
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Accounts Receivable 3.31
Agreed Value 2.4(d)
Agreement Preamble
Assignment Agreement 2.2(a)
Assumed Liabilities 2.5(a)
Assumption Agreement 2.5(a)
Balance Sheet 3.7
Balance Sheet Date 3.7
Benefit Plan 3.16
Breaching Party 9.3
Businesses Recital
Buyers Preamble
Claims 2.1
Closing 9.1
Closing Date 9.1
Contracts 3.20
Documents 3.2
Earnout Agreements 2.4(c)
Electronic Data 2.1(f)
EMJAY Careers Purchase Price Certificate 2.4(b)
EMJAY Careers Shares 2.4(b)
EMJAY Contracts Purchase Price Certificate 2.4(a)
EMJAY Contracts Shares 2.4(a)
Employee Information 2.1(d)
Employee Transfer Time 6.1(g)
Employment Agreement 7.11
ERISA 3.17(l)
2
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Escrow Agreement 2.4(b)
Excluded Assets 2.3
Financial Statements 3.7
GAAP 3.7
Indemnification Agreement 7.9
Intellectual Property 3.22
Leased Parcels 3.21
Leases 3.21
Most Recent Fiscal Year End 3.7
Noncompetition Agreements 7.12
Parties Preamble
Party Preamble
Post-Closing Adjustment 6.2(c)
Purchase Price 2.4
Re-calculated Adjusted EBIT 6.2(c)
Records 2.1(e)
Related Person 3.23
SAC13 Preamble
SAC14 Preamble
Securities Act 3.34
Seller(s) Preamble
Shares 2.4
StaffMark Preamble
StaffMark Common Stock 2.4(a)
Substance or Substances 3.28
Tax or Taxes 3.26
Transferred Assets 2.1
WARN 3.8(e)
ARTICLE II. PURCHASE AND SALE OF ASSETS
SECTION 2.1. Transfer of Assets. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, EMJAY Careers shall
transfer to SAC13 and EMJAY Contracts shall transfer to SAC14, free and clear
of all claims, charges, pledges, liens, contracts, rights, options, security
interests, mortgages, encumbrances and restrictions whatsoever (collectively,
"Claims"), all of the assets, properties and rights owned by EMJAY Careers and
EMJAY Contracts, respectively, or in which such Seller has any right or
interest of every type and description, real, personal and mixed, tangible and
intangible, confirmed or contingent (other than the Excluded Assets) relating
to its Business, including, without limitation, the assets listed on Schedule
2.1 and the following:
(a) Generally. Cash (other than the amount of cash
reflected on Schedule 2.3), accounts receivable, business agreements,
property, equipment, inventory, goodwill, supplier lists, customer
lists, prepaid insurance, licenses and permits, processes, service
marks, trade secrets, computers and computer equipment, files and other
records (other than corporate record books), systems and processes,
security deposits, memberships, contracts, leasehold interests,
leasehold and other improvements, machines, machinery, equipment,
furniture, fixtures, supplies, all rights and claims under insurance
policies and other contracts of whatever nature, and all causes of
action, claims and demands by the Seller relating to all of such
Seller's Transferred Assets;
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(b) Name and Related Items. The names EMJAY, EMJAY Careers,
EMJAY Contracts, EMJAY Employment Services, EMJAY Computer Careers and
EMJAY Contract Services, as applicable and any variants thereof, all
copyrights, copyright applications, trade names, trademarks, service
marks and logos (whether or not registered) related thereto; the phone
numbers of the Sellers and the facsimile numbers of the Sellers and
other phone and facsimile numbers for the Business existing as of the
Closing;
(c) Agreements and Contracts. All orders, bids, quotations,
contracts, and other agreements with or related to past, present and
prospective clients of the Business and all amendments, updates,
customer files, lists, records, studies, surveys, reports,
correspondence and other similar materials related to the foregoing;
(d) Employee Agreements and Information. All employment,
nondisclosure, noncompetition and nonsolicitation agreements and
contracts between such Seller and its employees and/or consultants or
independent contractors and all rights thereunder and copies of all
information for each employee, consultant or independent contractor of
such Seller (collectively, the "Employee Information");
(e) Records. All books, records, lists and reports,
including but not limited to, resumes and resume files, related to the
Business whether or not currently being utilized by such Business
(collectively, the "Records");
(f) Electronic Data. All rights of such Seller in all
electronic information and data related to the Business wherever
located (collectively, the "Electronic Data"); and
(g) Additional Information. All sales, advertising and
promotional literature and materials, advertising and advertising copy
and other similar materials on which solely appears the name and such
other materials which are currently in the possession of the owners of
the Sellers and/or the employees of the Seller on which appear the
name EMJAY, or any form thereof.
All of the foregoing assets shall be referred to collectively as the
"Transferred Assets".
SECTION 2.2. Instruments of Conveyance and Transfer.
(a) EMJAY Careers shall transfer its Transferred Assets to
SAC13 and EMJAY Contracts shall transfer its Transferred Assets to
SAC14 pursuant to a Xxxx of Sale and Assignment as executed and
delivered by the Parties at Closing and attached hereto as Exhibit A,
(the "Assignment Agreement"), and such other documents and instruments
relating thereto as the Buyers or their counsel may reasonably request.
(b) At any time and from time to time after the Closing
Date, at the request of the Buyers, without further consideration, the
Sellers shall execute and deliver such other instruments of sale,
transfer, conveyance, assignment and confirmation as may be reasonably
requested in order to more effectively transfer, convey and assign to
SAC13 and SAC14 and to confirm SAC13's and SAC14's title to the
Transferred Assets.
SECTION 2.3. Excluded Assets. Notwithstanding any provision of this
Agreement to the contrary, there shall be excluded from the Transferred Assets
and retained by the Sellers the assets listed on Schedule 2.3 hereto (the
"Excluded Assets").
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SECTION 2.4 Consideration for the Transferred Assets. In
consideration for the transfer of the Transferred Assets, upon the terms and
subject to the conditions set forth in this Agreement, the Buyer shall pay to
the Sellers an aggregate purchase price (the "Purchase Price") as follows:
(a) At the Closing, the Buyers shall deliver to EMJAY
Contracts: (i) the shares of StaffMark common stock, $.01 par value
(the "StaffMark Common Stock") set forth in the certificate delivered
by EMJAY Contracts herewith (the "EMJAY Contracts Purchase Price
Certificate"), based on the Agreed Value (the "EMJAY Contracts
Shares"); and (ii) the amount of cash set forth in the Purchase Price
Certificate, said cash to be deposited into escrow pursuant to an
escrow agreement (the "Cash Escrow Agreement") and held until January
2, 1998, at which time said cash and all proceeds thereof shall be
delivered to the Sellers; and
(b) At the Closing, the Buyers shall deliver to EMJAY
Careers: (i) the shares of StaffMark Common Stock set forth in the
certificate delivered by EMJAY Careers herewith (the "EMJAY Careers
Purchase Price Certificate"), based on the Agreed Value (the "EMJAY
Careers Shares" and collectively with the EMJAY Contracts Shares, the
"Shares"); and (ii) the amount of cash set forth in the Purchase Price
Certificate, said cash to be deposited into escrow pursuant to an
escrow agreement (the "Cash Escrow Agreement") and held until January
2, 1998, at which time said cash and all proceeds thereof shall be
delivered to the Sellers; and
(c) At the Closing, EMJAY Contracts shall deposit into
escrow with Mercantile Bank National Association, St. Louis, Missouri,
an amount of the EMJAY Contracts Shares equal to 10% of the Purchase
Price allocable to EMJAY Contracts, as further set forth in the EMJAY
Contracts Purchase Price Certificate, and pursuant to the "Escrow
Agreement" as executed and delivered by the Parties at Closing and
attached hereto as Exhibit B; and
(d) At the Closing, EMJAY Careers shall deposit into escrow
with Mercantile Bank National Association, St. Louis, Missouri, an
amount of the Shares equal to 10% of the Purchase Price allocable to
EMJAY Careers, as further set forth in the EMJAY Careers Purchase
Price Certificate, and pursuant to the "Escrow Agreement" as executed
and delivered by the Parties at Closing and attached hereto as Exhibit
B; and
(e) Buyers shall pay to the Sellers the earnout amounts
pursuant to and in accordance with the "Earnout Agreements" as executed
and delivered by the Parties at Closing and attached hereto as Exhibit
C; and
(f) The Buyers shall pay to the Sellers the Post-Closing
Adjustment, if any, pursuant to Section 6.2(c) hereof.
For purposes of this Agreement, the term "Agreed Value" shall
mean the twenty (20) day average for the last reported closing sale
price of the StaffMark Common Stock as reported on the Nasdaq Stock
Market's National Market ending on the last business day immediately
preceding the date of this Agreement as reported in The Wall Street
Journal.
SECTION 2.5. Assumption of Liabilities.
(a) The only obligations and liabilities to be assumed by
the Buyers in connection with its acquisition of the Transferred Assets
(the "Assumed Liabilities") are the obligations reflected in or on an
exhibit to the Assumption Agreement as executed and delivered by the
Parties at Closing
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and attached hereto as Exhibit D (the "Assumption Agreement");
provided, however, that the Assumed Liabilities shall exclude in each
case any Liabilities or alleged Liabilities: (a) relating to any taxes
or sales, use or transfer Taxes arising in connection with the sale of
the Transferred Assets; (b) relating to any tort, infringement, or
violation of law (civil or criminal) by the Sellers and any pending or
threatened litigation matters; (c) payable to any affiliate of the
Sellers; (d) arising under the environmental laws or any Benefit Plan;
(e) relating to any overtime compensation owing to the Sellers's
employees through the Closing Date; (f) arising from or relating to the
termination of any employee or consultant of the Sellers by the Sellers
at or prior to the Closing Date; (g) relating to any failure by the
Sellers to file any Form 5500 required to be filed prior to the Closing
Date in connection with any Employee Plan; and (h) relating to any
prepayment penalty or other obligation relating to the Sellers's debt
not shown on the Balance Sheet. Except as expressly set forth in the
Assumption Agreement, the Buyers shall not assume or become liable for
the payment or performance of any Liabilities or alleged Liabilities of
the Sellers.
SECTION 2.6. Allocation of Purchase Price. The consideration paid
and the liabilities assumed by the Buyers pursuant to Sections 2.4 and 2.5
above shall be allocated among the Sellers and the Transferred Assets purchased
hereunder in accordance with Section 1060 of the Code and as set forth in
Schedule 2.6 attached hereto. The Sellers and the Buyers each hereby covenant
and agree that none of them will take a position on any income tax return,
before any governmental agency, or in any judicial proceeding that is in any
way inconsistent with the allocation set forth on Schedule 2.6. The Parties
agree to make all filings required under Section 1060 of the Code consistent
with the allocation of such consideration as set forth on Schedule 2.6. Each
Party shall duly and timely file Form 8594 with its appropriate tax returns.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As an inducement to the Buyers to enter into this Agreement and to
consummate the transactions contemplated hereby, EMJAY Careers and EMJAY
Contracts, jointly and severally, represent and warrant to the Buyers as
follows:
SECTION 3.1. Organization and Qualification. Each Seller is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Texas. The Sellers are duly qualified or otherwise
authorized to transact business and are in good standing as a foreign entity in
the states set forth on Schedule 3.1 attached hereto, which are all states in
which either the ownership or use of its properties, or the nature of the
activities conducted by it, requires such qualification. The Sellers have made
available to the Buyers complete and correct copies of their partnership
agreements as currently in effect.
SECTION 3.2. Power and Authority. The Sellers have the power and
authority to own and hold their properties and to carry on their business as
now conducted, including the right to use the name EMJAY, and any fictitious
names currently being used in the geographic area presently served by it. The
Sellers: (a) have the full power and authority to execute, deliver and perform
this Agreement, the Exhibits and the Schedules hereto and the other documents
and instruments contemplated hereby (collectively the Exhibits and Schedules
hereto and the other documents and instruments contemplated hereby shall
constitute the "Documents") and to consummate the transactions contemplated
hereby and thereby; and (b) this Agreement and the other Documents have been
duly and validly executed and delivered by the Sellers and constitute valid and
binding obligations of the Sellers, enforceable against the Sellers in
accordance with their terms and each of the Documents, when executed and
delivered by the Sellers will constitute a valid and binding obligation of the
Sellers, enforceable against the Sellers in accordance with its terms.
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SECTION 3.3. Partnership Interests. The Sellers have partnership
interests as follows: the Sellers are each owned by EMJAY, L.P., a Texas
limited partnership, which is owned by EMJAY Employment Services, Inc., a Texas
corporation as the corporate general partner and Xxxx Xxxxxx and Xxxxx Xxxx as
the limited partners. All partnership interests have been so issued in full
compliance with all federal and state securities laws. The Sellers have no
other evidence of ownership outstanding other than the partnership interests
possessed by the Sellers' general and limited partners. Except as set forth in
this Agreement or on Schedule 3.3, there are no outstanding subscriptions,
options, warrants, rights, calls, commitments, conversion rights, rights of
exchange, plans or other agreements of any character providing for the
purchase, issuance, transfer or sale of any of the equity of the Sellers or
other evidence of ownership in the Sellers. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Sellers. There are no voting trusts, proxies or
other agreements or understandings with respect to the partnership interests of
the Sellers.
SECTION 3.4. No Violation; Consents. Except as set forth on Schedule
3.4, neither the execution and delivery of this Agreement or the other
Documents, the consummation of the transactions contemplated hereby or thereby,
nor the performance of this Agreement or the other Documents and such other
agreements in compliance with the terms and conditions hereof and thereof by
the Sellers will: (i) violate, conflict with or result in any breach of the
partnership agreement of the Sellers or any trust agreement, judgment, decree,
injunction, order, writ, statute, rule or regulation applicable to the Sellers;
(ii) violate, conflict with or result in a breach, default or termination (or
give rise to any right of termination, cancellation or acceleration) of the
maturity of any payment date of any of the obligations of the Sellers under any
law, statute, rule, regulation or any judgment, decree, order, governmental
permit, license or order applicable to the Sellers or any of the terms,
conditions or provisions of any mortgage, indenture, note, license, Contract or
other instrument or obligation related to the Sellers or to the Sellers's
ability to consummate the transactions contemplated hereby or thereby, except
for such defaults (or rights of termination, cancellation or acceleration) as
to which requisite waivers or consents have been obtained in writing and
provided to the Buyers; (iii) result in the creation of any Claims upon the
Transferred Assets of the Sellers; or (iv) require the consent, waiver,
authorization or approval of any federal, state or local government or
governmental department, agency, board, commission, bureau, instrumentality, or
public or self-regulatory body or authority, or of any other Person, entity or
organization. The Sellers will give any required notices to third parties, and
the Sellers will obtain any third party consents required to be obtained due to
the consummation of the transactions contemplated hereby.
SECTION 3.5. Subsidiaries and Investments. The Sellers have no
subsidiaries and do not own, directly or indirectly, any capital stock or other
equity or ownership or proprietary interest in any other Sellers, partnership,
association, trust, joint venture or other entity.
SECTION 3.6. Books and Records. The minute books of the Sellers,
which have been and will be made available to the Buyers and their
representatives, contain accurate records of all meetings of and actions or
written consents by the partners of the Sellers set forth in such minute books.
The Sellers do not have any of their records, systems, controls, data or
information recorded, stored, maintained, operated or otherwise wholly or
partly dependent upon or held by any means (including electronic, mechanical or
photographic process whether computerized or not) which (including all means of
access thereto and therefrom) are not under the exclusive ownership and direct
control of the Sellers. The Employee Information, the Records, and the
Electronic Records are materially true and correct and accurately reflect the
operations of the Businesses and have been maintained consistent with past
practices.
SECTION 3.7. Financial Statements. Each Seller has previously
furnished to the Buyers, and attached hereto as Schedule 3.7 are, the compiled
balance sheet of each of EMJAY Careers and
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EMJAY Contracts as of December 31, 1996 (the "Most Recent Fiscal Year End"),
the related statements of income and expenses for the fiscal year then ended,
and the compiled balance sheet of each Seller (the "Balance Sheet") as of
September 30, 1997, (the "Balance Sheet Date") and the related statements of
income and the expenses for the nine (9) months then ended. All such financial
statements (the "Financial Statements") have been prepared in accordance with
generally accepted accounting principles ("GAAP") on a consistent basis and
were prepared from the books and records of each Seller. Such books and
records are complete and correct in all material respects, accurately reflect
all transactions of each Seller, and have been made available to the Buyers for
examination. The Financial Statements fairly present the financial position of
each Seller as of the dates thereof and the results of its operations for the
periods ended on the dates thereof. Since the Balance Sheet Date: (i) there
has been no material change in the assets, Liabilities or financial condition
of the Businesses of the Sellers from that reflected in its Balance Sheet
outside the Ordinary Course of Business; and (ii) none of the business,
prospects, financial condition, operations, property or affairs of the Sellers
has been materially adversely affected by any occurrence or development,
individually or in the aggregate, whether or not insured against. The Balance
Sheet reflects, as of the Balance Sheet Date, all Liabilities, debts, and
obligations of any nature of each Seller related to each Seller, whether
accrued, absolute, contingent, or otherwise, and whether due, or to become due,
including, but not limited to, liabilities, debts, or obligations on account of
Taxes or other governmental charges or penalties, interest or fines thereon or
in respect thereof, to the extent such items are required to be reflected on
such Balance Sheet under GAAP. The Sellers have disclosed to the Buyers all
material facts relating to the preparation of the Financial Statements.
SECTION 3.8. Absence of Undisclosed Liabilities.
(a) Except as and to the extent of the amounts specifically
reflected or reserved against in its Balance Sheet or except as set
forth on Schedule 3.8, each Seller has no Liabilities or obligations of
any nature whatsoever due or to become due, accrued, absolute,
contingent or otherwise, except for Liabilities and obligations
incurred since the date thereof in the Ordinary Course of Business.
(b) Each Seller maintains an adequate worker's compensation
reserve on its Balance Sheet in accordance with GAAP or has adequate
coverage under a full-premium policy and represents and warrants there
is no unrecorded Liability for which the Buyers will be liable. All
referral fees and commissions due to employees for all periods ending
prior to the Closing Date have been properly paid or accrued on each
Seller's Balance Sheet.
(c) The Sellers are not bound by any agreement, or subject
to any partnership restriction or any legal requirement, which has, or
in the future can reasonably be expected to have, a material adverse
effect on the Transferred Assets.
SECTION 3.9. Labor and Employee Relations.
(a) Schedule 3.9 sets forth a list of each employment or
collective bargaining agreement to which the Sellers are a party and
any other employment or collective bargaining agreement which pertains
to employees or consultants of the Sellers. Schedule 3.9.1 hereto sets
forth a true and complete list of the names and current base salary and
any bonus or commission for the prior and current fiscal year paid by
the Sellers to each corporate or administrative employee utilized in
connection with the operation of the Businesses. Schedule 3.9.2 sets
forth a list of each consultant of the Sellers and such consultant's
gross pay rate, all benefits, billing rate and length of current (or
future) engagement.
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(b) No labor organization or group of employees or
consultants of the Sellers have made a pending demand for recognition
or certification, and there are no representation proceedings presently
pending or threatened (in writing to the Sellers) with the National
Labor Relations Board or any other federal, state, or other
governmental agency or authority involving employees or consultants of
the Sellers. There are no other organizing activities involving the
Sellers presently being conducted or threatened (in writing to the
Sellers) by any labor organization or group of employees or consultants
of the Sellers.
(c) There are no strikes, work stoppages, slowdowns,
lockouts, labor disputes or material grievances pending or threatened
(in writing to the Sellers) against the Sellers, and there have been no
actual or threatened material labor disputes or work stoppages within
the last three (3) years. There are no unfair labor practice charges
or complaints pending or threatened (in writing to the Sellers) by or
on behalf of any employee, consultant or group of employees or
consultants of the Sellers.
(d) There are no complaints, charges or claims pending or,
threatened against the Sellers by any federal, state or other
governmental agency or authority based on, arising out of, in
connection with, or otherwise relating to the employment or termination
of employment by the Sellers of any individual.
(e) The Sellers have been and are in substantial compliance
with all laws, regulations and orders relating to the employment of the
employees or consultants of the Sellers, including but not limited to
all such laws, regulations and orders relating to wages, hours, the
Workers Adjustment and Restraining Notification Act, 29 U.S.C. Section
151 et seq. ("WARN"), the National Labor Relations Act, as amended, 29
U.S.C. Section 151 et. seq., and any comparable state or local laws or
regulations, equal employment opportunity discrimination laws or
regulations, civil rights laws or regulations safety and health laws or
regulations, workers' compensation laws or regulations and the
collection and payment of withholding and/or social security taxes.
SECTION 3.10. Real Property. The Sellers own no real property.
SECTION 3.11 Powers of Attorney; Absence of Limitations on
Competition; Guarantees. Except as set forth in Schedule 3.11: (i) no power of
attorney or similar authorization given by the Sellers presently is in effect
or outstanding as to any of the Transferred Assets; (ii) no contract or
agreement to which the Sellers are a party or are bound or to which the
Sellers' properties or assets are subject limits the freedom of the Sellers to
compete in any line of business or with any Person; and (iii) the Sellers are
not a party to or bound by any guarantee of any debt or obligation of any other
Person which relates to the Transferred Assets.
SECTION 3.12. Significant Customers. Set forth on Schedule 3.12 is a
true and correct list of each Seller's ten largest customers for the last
fiscal year and the most recent nine-month period ending September 30, 1997,
together with the amount of services attributable to such customers expressed
in dollars and as a percentage of total sales and services. None of the
customers identified on Schedule 3.12 has terminated, reduced, or threatened
(in writing to the Sellers) to terminate or reduce, its request for services of
such Seller during the period covered by such schedule or prior to the Closing
Date.
SECTION 3.13. Governmental Approvals. No registration or filing with,
or consent or approval of or other action by, any federal, state or other
governmental agency or instrumentality is or will be necessary for the valid
execution, delivery and performance by the Sellers of this Agreement.
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SECTION 3.14. Absence of Certain Changes; Conduct of Business. Except
as set forth on Schedule 3.14, during the period from the Most Recent Fiscal
Year End to and including the date of this Agreement:
(a) the Sellers have not canceled any indebtedness owing to
them or any claims that they might have possessed, waived any material
rights of substantial value or sold, leased, encumbered, transferred,
or otherwise disposed of, or agreed to sell, lease, encumber, or
otherwise dispose of their assets or permitted any of their assets to
be subjected to any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind.
(b) the Sellers have not sold, leased, transferred, or
assigned any of their assets, tangible or intangible, of the Sellers
except in the Ordinary Course of Business;
(c) the Sellers have not made any material changes in the
types, nature, composition or quality of the services of the Businesses
and there has not been any material adverse change in the sales,
revenue or net income of the Businesses;
(d) the Sellers have not entered into any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases and licenses) involving more than $10,000 or outside
the Ordinary Course of Business;
(e) no party (including the Sellers) has accelerated,
terminated, modified, or canceled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) to which the Sellers are a party or by which they are bound
involving more than $10,000 or outside the Ordinary Course of Business;
(f) the Sellers have not allowed any Claims to be imposed
upon any of their assets, tangible or intangible outside the Ordinary
Course of Business;
(g) the Sellers have not made any capital expenditure (or
series of related capital expenditures) either involving more than
$10,000 or outside the Ordinary Course of Business;
(h) the Sellers have not made any capital investment in, any
loan to, or any acquisition of the securities or assets of, any other
Person;
(i) the Sellers have not issued, or agreed to issue, any
note, bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized lease
obligation either involving more than $2,000 or outside the Ordinary
Course of Business;
(j) the Sellers have not delayed or postponed the payment of
accounts payable and other liabilities outside the Ordinary Course of
Business;
(k) the Sellers have not canceled, compromised, waived, or
released any right or claim (or series of related rights and claims)
either involving more than $3,000 or outside the Ordinary Course of
Business;
(l) the Sellers have not granted any license or sublicense
of any rights under or with respect to any patents, trademarks or
copyrights;
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(m) the Sellers have not accelerated collection of accounts
receivables through special inducements or outside the Ordinary Course
of Business;
(n) the Sellers have not issued, sold or otherwise disposed
of any of their partnership interests, or granted any rights to
purchase or obtain (including upon conversion, exchange or exercise)
any of their partnership interests;
(o) the Sellers have not declared, set aside, or paid any
dividend or made any distribution with respect to their partners;
(p) the Sellers have not experienced any damage,
destruction, or loss (whether or not covered by insurance) to their
property;
(q) the Sellers have not made any loan to, or entered into
any other transaction with, any of its partners, managers or employees
outside the Ordinary Course of Business;
(r) the Sellers have not entered into any employment
contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement;
(s) the Sellers have not granted any increase in the base
compensation of any of their partners, managers or employees other than
increases in compensation in the Ordinary Course of Business;
(t) the Sellers have not adopted, amended, modified or
terminated any bonus, profit sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of their partners,
managers or employees (or taken any such action with respect to any
other Employee Benefit Plan);
(u) the Sellers have not made any other change in employment
terms for any of partners, managers or employees; or
(v) the Sellers have not agreed, whether or not in writing,
to do any of the foregoing.
SECTION 3.15. Certain Practices. Neither the Sellers, nor any of its
partners, managers or employees or consultants have, directly or indirectly,
used any corporate funds for unlawful contributions, gifts, entertainment, or
other unlawful expenses relating to political activity; made any unlawful
payment to foreign or domestic political activity; made any unlawful payment to
foreign or domestic government officials or employees or consultants or to
foreign or domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; established or maintained any unlawful or unrecorded fund of corporate
monies or other assets; made any false or fictitious entry on the books or
records of the Sellers or any subsidiary; made any bribe, rebate, payoff,
influence payment, kickback, or other unlawful payment; or made any bribe,
kickback, or other payment of a similar or comparable nature, whether lawful or
not, to any person or entity, private or public, regardless of form, whether in
money, business or to obtain special concessions, or to pay for favorable
treatment for business secured or for special concessions already obtained.
SECTION 3.16. Compliance with Law; Licenses and Permits. Except as
set forth on Schedule 3.16, the Sellers have substantially complied with all
laws, ordinances, legal requirements, rules, regulations and orders applicable
to them, their operations, properties, assets, products and services.
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Except as set forth on Schedule 3.16, there is no existing law, rule,
regulation or order, whether federal, state or local, which would prohibit or
restrict the Buyers from conducting the Businesses in the manner heretofore
conducted by the Sellers in any jurisdiction in which the Businesses are now
conducted. The Sellers possess all franchises, permits, licenses, certificates
and consents required from any governmental or regulatory authority in order
for the Sellers to carry on their business as currently conducted and to own
and operate their properties and assets as now owned and operated. All of such
licenses and permits are in full force and effect and true and correct copies
of all such licenses and permits are included in Schedule 3.16 hereto.
SECTION 3.17. Employee Benefits. Schedule 3.17 briefly describes all
defined benefit plans, defined contribution plans, welfare plans, compensation
plans, medical insurance and other employee benefit plans and programs
maintained or formerly maintained by the Sellers or any predecessor or former
affiliates ("Benefit Plans"). As respects all Benefits Plans: (a) there are no
funding deficiencies (determined on a plan termination basis); (b) no
Reportable Event, as defined by the Employee Retirement Income Security Act
("ERISA"), has occurred during the last two (2) years; (c) no Benefit Plan is a
Multiemployer Plan (as defined in Section 4001 of ERISA); (d) no Benefit Plan
provides for medical benefits, life insurance or other similar benefits to
retirees or their families; (e) no Benefit Plan is self- funded except to the
extent indicated in Schedule 3.17; (f) the Sellers have not effected a
termination or partial termination of any Benefit Plan or participation in any
Benefit Plan within the last five (5) years; (g) no disabled current or former
employee claims or receives or is entitled to receive disability, pension,
health, welfare or life insurance benefits from the Sellers; and (h) all
Benefit Plans may be terminated or modified by the Sellers in its discretion
without penalty or premium.
SECTION 3.18. Fixed Assets. Except as shown on Schedule 3.18, the
Sellers have good and marketable title to all of the Transferred Assets, free
and clear of all claims, liens, mortgages, charges and encumbrances. All of
the Transferred Assets, whether owned or leased, are adequate and usable for
the purposes for which they are currently used, are in good operating condition
and repair and have been properly maintained, ordinary wear and tear excepted.
SECTION 3.19. Insurance. Schedule 3.19 lists the insurance coverage
carried by each Seller, which insurance will remain in full force and effect
with respect to all events occurring prior to the Closing Date. The Buyers
have been provided with an accurate list of all insurance loss runs or worker's
compensation claims received for the past three policy years. Except as set
forth on Schedule 3.19, the Sellers: (i) have not failed to give any notice or
present any claim under any such policy or binder in due and timely fashion;
(ii) have not received notice of cancellation or nonrenewal of any such policy
or binder; (iii) are not aware of any threatened or proposed cancellation or
nonrenewal of any such policy or binder; (iv) have not received notice of any
insurance premiums which will be materially increased in the future; and (v)
are not aware of any insurance premiums which will be materially increased in
the future. There are no outstanding claims under any such policy which have
gone unpaid for more than 45 days, or as to which the insurer has disclaimed
liability (in writing to the Sellers).
SECTION 3.20. Outstanding Contracts. Schedule 3.20 sets forth a
description of all existing contracts, agreements, personal property, leases,
commitments, licenses and franchises, whether written or oral in excess of
$7,500 individually, relating to the Sellers (collectively "Contracts"). The
Sellers have delivered or made available to the Buyers true, correct and
complete copies of all of the Contracts specified on Schedule 3.20 which are in
writing, and such schedule sets forth a complete description of all Contracts
which are not in writing. All of the Contracts are in full force and effect
and enforceable in accordance with their terms, except to the extent that the
enforceability thereof may be subject to or affected by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, or other laws
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relating to or affecting the rights of creditors generally. Except as set
forth on Schedule 3.20.1, the Sellers and each other party thereto have
materially performed all the obligations required to be performed by them, have
received no notice of default and are not in default (with due notice of lapse
of time or both) under any of the Contracts. The Sellers have no present
expectation or intention of not fully performing all of their obligations under
each of the Contracts, and the Sellers are not aware of any breach or
anticipated breach (in writing to the Sellers) by the other party to any of the
Contracts to which the Sellers are a party. Except as set forth on Schedule
3.20.2, none of the Contracts has been terminated; no notice has been given by
any party thereto of any alleged default by any party thereunder; and the
Sellers are not aware of any intention or right of any party to declare another
party to any of the Contracts to be in default. Except as set forth on
Schedule 3.20.3, there exists no actual or, threatened (in writing to the
Sellers) termination, cancellation or limitation of the business relationship
of the Sellers by any party to any of the Contracts. Except as set forth on
Schedule 3.20.4, none of the Contracts requires the consent of the other party
thereto for the assignment of such Contract to SAC13 and SAC14, as applicable
and, upon such assignment at Closing as contemplated by this Agreement, SAC13
or SAC14, as applicable shall have all of the rights of the Sellers thereunder.
SECTION 3.21 Outstanding Leases. Schedule 3.21 sets forth a
description of each agreement by which the Sellers lease each parcel of real
property (the "Leased Parcels") used in connection with the Businesses
(collectively, the "Leases"). The Sellers have delivered or made available to
the Buyers true, correct and complete copies of all of the Leases specified on
Schedule 3.21. All rents due under the Leases have been paid. Each of the
Leases is in full force and effect and enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be subject to
or affected by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, or other laws relating to or affecting the rights
of creditors generally. Except as set forth on Schedule 3.21, the Sellers and
each other party to the Leases have performed all the obligations required to
be performed by them, have received no notice of default and are not in default
(with due notice or lapse of time or both) under any of the Leases. The
Sellers have no present expectation or intention of not fully performing all of
their obligations under each of the Leases, and the Sellers are not aware of
any breach or anticipated breach (in writing to the Sellers) by the other party
to any of the Leases. Except as set forth on Schedule 3.21, none of the Leases
has been terminated; no notice has been given by any party thereto of any
alleged default by any party thereunder; and the Sellers are not aware of any
intention or right of any party to declare another party to any of the Leases
to be in default. There exists no actual or threatened (in writing to the
Sellers) termination, cancellation, or limitation of the business relationship
of the Sellers with any party to any of the Leases.
SECTION 3.22. Intellectual Properties. Schedule 3.22 contains an
accurate and complete list of all domestic and foreign letters, patent,
patents, patent applications, patent licenses, software licenses and know-how
licenses, trade names, trademarks, copyrights, unpatented inventions, service
marks, trademark registrations and applications, service xxxx registrations and
applications and copyright registrations and applications, trade secrets or
other confidential proprietary information owned or used by the Sellers in the
operation of the Businesses (collectively the "Intellectual Property"). Except
as set forth on Schedule 3.22 and except for commercial software licensed for
use on personal computers, the Sellers own the entire right, title and interest
in and to the Intellectual Property, trade secrets and technology used in the
operation of their Businesses and each item constituting part of the
Intellectual Property which is owned by the Sellers have been, to the extent
indicated in Schedule 3.22, duly registered with, filed in or issued by, as the
case may be, the United States Patent and Trademark office or such other
government entities, domestic or foreign as are indicated in Schedule 3.22 and
such registrations, filings and issuances remain in full force and effect.
There are no pending or threatened (in writing to the Sellers) proceedings or
litigation or other adverse claims affecting or with respect to the
Intellectual Property. There is no reasonable basis upon which a claim may be
asserted against the Sellers for infringement of
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any domestic or foreign letters patent, patents, patent applications, patent
licenses and know-how licenses, trade names, trademark registrations and
applications, common law trademarks, service marks, service xxxx registrations
or applications copyrights, copyright registrations or applications, trade
secrets or other confidential proprietary information. To the best of Sellers'
Knowledge no Person is infringing the Intellectual Property.
SECTION 3.23. Proprietary Information of Third Parties. Except as
disclosed on Schedule 3.23, no third party has claimed (in writing to the
Sellers) or has reason to claim that any Person employed by or consulting with
the Sellers ("Related Person") has: (i) violated or may be violating any of the
terms or conditions of such person's employment, noncompetition or
nondisclosure agreement with such third party; (ii) disclosed or may be
disclosing or utilized or may be utilizing any trade secret or proprietary
information or documentation of such third party; or (iii) interfered or may be
interfering in the employment relationship between such third party and any of
its present or former employees or consultants. No third party has requested
(in writing to the Sellers) information from the Sellers which suggests that
such a claim might be contemplated. Except as disclosed on Schedule 3.23 and
to the best of Sellers' Knowledge, no Related Person has employed or proposes
to employ any trade secret or any information or documentation proprietary to
any former employer and, no Related Person has violated any confidential
relationship which such person may have had with any third party, in connection
with the development, or sale of any service of the Sellers, and the Sellers
have no reason to believe there will be any such employment or violation.
SECTION 3.24. Transactions with Affiliates. Except as disclosed on
Schedule 3.24, no partner or manager of the Sellers, or member of the family of
any such person, or any Sellers, partnership, trust or other entity in which
any such person, or any member of the family of any such person, has a
beneficial interest greater than 5% or is an officer, director, trustee,
partner or holder of any equity interest greater than 5%, is a party to any
transaction with either Seller, including any contract, agreement or other
arrangement providing for the employment of, furnishing of services by, rental
of real or personal property from, or otherwise requiring payments or involving
other obligations to any such person or firm.
SECTION 3.25. Taxes. All federal, state, local and foreign Tax
returns and Tax reports required to be filed by each Seller on or before the
date hereof have been timely filed with the appropriate governmental agencies
in all jurisdictions in which such returns and reports are required to be filed
and all amounts shown as owing thereon have been paid. All Taxes which have
become due or payable or are required to be collected by each Seller or are
otherwise attributable to any periods ending on or before the Closing Date and
all interest and penalties thereon, whether disputed or not, have been paid or
will be paid in full or adequately reflected on each Seller's Balance Sheet in
accordance with GAAP on or prior to the Closing Date. All deposits required by
law to be made by each Seller with respect to employees' withholding taxes have
been duly made, and as of the Closing Date all such deposits due will have been
made. Each Seller has delivered to the Buyers true and complete copies of all
of such Seller's state and federal income tax returns for the fiscal periods
ended December, 1996 and 1995 and all reports and results of income tax audits,
if any, related thereto. No examination of any tax return of either Seller is
currently in progress. There are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any such tax
return.
"Tax" or "Taxes" means all taxes, including any interest, penalties or
other additions to tax, which the Sellers are required to pay, withhold or
collect (including without limitation all income taxes, payroll and employee
withholding taxes, unemployment insurance, social security taxes, welfare
taxes, sales and use taxes, excise taxes, franchise taxes, gross receipts
taxes, business license taxes, real and personal
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property taxes, assessments, environmental taxes, transfer taxes, Pension
Benefit Guaranty Sellers premiums and other governmental charges, and other
similar obligations).
SECTION 3.26. Litigation. Except as set forth on Schedule 3.26, there
is no: (i) action, suit, claim, proceeding or investigation pending or
threatened (in writing to the Sellers) against or affecting the Sellers
(whether or not a Seller is a party or prospective party thereto), at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign; (ii) arbitration proceeding pending relating to the Sellers; or (iii)
governmental inquiry pending or threatened against or involving the Sellers,
and there is no basis for any of the foregoing. The Sellers have not received
any opinion or memorandum or legal advice from legal counsel to the effect that
they are exposed, from a legal standpoint, to any Liability or disadvantage
which may be material to the business, prospects, financial condition,
operations, property or affairs of the Sellers. There are no outstanding
orders, writs, judgments, injunctions or decrees served upon the Sellers by any
court, governmental agency or arbitration tribunal against the Sellers. There
are no facts or circumstances which are reasonably anticipated to result in
institution of any action, suit, claim or legal, administrative or arbitration
proceeding or investigation against, involving or affecting the Sellers or the
transactions contemplated hereby. The Sellers are not in default with respect
to any order, writ, injunction or decree known to or served upon them from any
court or of any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign.
Except as disclosed on Schedule 3.26, there is no action or suit by the Sellers
pending or threatened against others.
SECTION 3.27. Environmental Matters. The Sellers and to the best of
the Seller's Knowledge all Leased Parcels are in substantial compliance with
all applicable laws, rules, regulations, orders, ordinances, judgments and
decrees of all governmental authorities with respect to all environmental
statutes, rules and regulations. Except as set forth on Schedule 3.27, there
are no past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans of the Sellers or the Sellers'
predecessors, either collectively, individually or severally, which may
interfere with or prevent continued compliance with, or which may give rise to
any common law or legal Liability or otherwise form the basis of any claim,
action, suit, proceeding, hearing, or investigation, based on or related to the
disposal, storage, handling, manufacture, processing, distribution, use,
treatment or transport, or the emission, discharge, release or threatened
release into the environment, of any substance. As used in this Section 3.27,
the term "Substance" or "Substances" shall mean any pollutant, hazardous
substance, hazardous material, hazardous waste or toxic waste, as defined in
any presently enacted federal, state or local statute or any regulation that
has been promulgated pursuant thereto. No part of any of the Leased Parcels
has been listed or proposed for listing (in writing to the Sellers) on the
National Priorities List established by the United States Environmental
Protection Agency, or any other such list by any federal, state or local
authorities.
SECTION 3.28. Broker's or Finder's Fees. Except as set forth on
Schedule 3.28, no agent, broker, person or firm acting on behalf of the Sellers
are, or will be, entitled to any commission or broker's or finder's fees from
either Seller or from any person controlling, controlled by or under common
control with the Sellers in connection with any of the transactions
contemplated herein.
SECTION 3.29. Disclosure. All Documents delivered or to be delivered
by the Sellers and all Documents delivered or to be delivered on behalf of the
Sellers by their agents, in connection with this Agreement and the transactions
contemplated hereby are true, complete and correct in all material respects.
Neither this Agreement, nor any of the other Documents contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements made by the Sellers herein or therein, in light of
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the circumstances in which made, not misleading. There is no fact which
materially adversely affects the business, prospects or financial condition of
a Seller or its properties or assets, which has not been set forth in the
Documents.
SECTION 3.30. Accounts Receivable. All accounts receivable of each
Seller that are reflected on each Seller's Balance Sheet on the Balance Sheet
Date or on the accounting records of such Seller as of the Closing Date
(collectively, the "Accounts Receivable") represent or will represent valid
obligations arising from sales actually made or services actually performed in
the Ordinary Course of Business. Unless paid prior to the Closing Date, the
Accounts Receivable are or will be as of the Closing Date current and
collectible net of the respective reserves shown on the Balance Sheet or on the
accounting records of such Seller as of the Closing Date (which reserves are
adequate and calculated consistent with past practice and, in the case of the
reserve as of the Closing Date, will not represent a greater percentage of the
Accounts Receivable as of the Closing Date than the reserve reflected in the
Balance Sheet represented of the Accounts Receivable reflected therein and will
not represent a material adverse change in the composition of such Accounts
Receivable in terms of aging.) Subject to such reserves, each of the Accounts
Receivable either has been or will be collected in full, without any set-off,
within one hundred twenty (120) days after the day on which it first becomes
due and payable. After such 120-day period, the Buyers shall re-assign any
uncollectible account to such Seller for collection and the Buyers shall have
the right to make a claim in accordance with the Indemnification Agreement and
the Escrow Agreement; however, such Seller shall not have a right to dispute
such claim for the balance of such uncollectible account. There is no contest,
claim, or right of set-off, other than returns in the Ordinary Course of
Business, under any contract with any obligor of any Accounts Receivable
relating to the amount or validity of such Accounts Receivable.
SECTION 3.31. Continued Operations. The Sellers shall continue to
conduct their operations and business activities in the Ordinary Course of
Business through the Closing Date. The Sellers shall not engage in any
distribution or sales of assets outside the Ordinary Course of Business, issue,
redeem or pay distributions with respect to any partner, declare any bonuses or
salary increases, or otherwise engage in any transaction outside the Ordinary
Course of Business prior to the Closing Date, without the prior approval of the
Buyer. Except with regard to the Excluded Assets, the Sellers shall not enter
into any contractual arrangements, purchase any capital assets, incur
additional indebtedness prior to the Closing Date, or sell, lease or dispose of
any asset, or mortgage, pledge, or allow the imposition of any lien or other
encumbrance on any asset, without the prior approval of the Buyers. The
Sellers shall immediately notify the Buyers of any changes in the status of any
customer accounting for more than 5% of the Sellers's annual revenues,
including a change in terms, the loss of such a customer, the addition of such
a new customer, or other similar changes.
SECTION 3.32. Protection of Creditors. The transfer to SAC13 and
SAC14 by the Sellers of the Transferred Assets does not and will not constitute
a fraudulent transfer or fraudulent conveyance under any applicable state or
federal law or regulation or under any similar laws relating to creditors'
rights generally. To the best of the Sellers' Knowledge the Purchase Price
constitutes fair and adequate consideration for the Transferred Assets. The
Sellers have not entered into this Agreement or made any transfer or incurred
any obligations hereunder or in connection herewith, with actual intent to
disturb, hinder, delay or defraud either present or future creditors or other
persons.
SECTION 3.33. Securities Exemptions. The Shares constituting a
portion of the Purchase Price are being issued to the Sellers for their own
account, for investment purposes only and, other than with respect to the
possible distribution to the Sellers' partners, the Sellers have no present
intention of distributing, selling or otherwise disposing of such Shares in
connection with a distribution within the meaning of the Securities Act of
1933, as amended, (the " Securities Act") and the rules and regulations
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thereunder. The Sellers are accredited investors as that term is defined in
Rule 501(a) of Regulation D promulgated under the Securities Act.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to the Sellers to enter into this Agreement and to
consummate the transactions contemplated hereby, StaffMark, SAC13 and SAC14,
jointly and severally, represent and warrant to the Sellers as follows:
SECTION 4.1. Organization. Each of StaffMark, SAC13 and SAC14 are
duly organized, validly existing and in good standing under the laws of the
State of Delaware and are duly qualified to transact business as a foreign
Corporation in each jurisdiction where the conduct of its business requires
each of them to be so qualified.
SECTION 4.2. Corporate Power and Authority. The Buyers have the
corporate power and authority to execute, deliver and perform this Agreement
and the other Documents to which it is a party. The execution, delivery and
performance of the Agreement and the transactions contemplated hereby have been
duly authorized and approved by all necessary corporate action of each of the
Buyers. This Agreement constitutes the legal, valid and binding obligation of
the Buyers enforceable against each of the Buyers in accordance with its terms
and each of the Documents, when executed by either of the Buyers that is a
party thereto, will constitute a valid and binding obligation of such party,
enforceable against such party in accordance with its terms.
SECTION 4.3. No Violation. Neither the execution and delivery by
either of the Buyers of this Agreement and any Documents to which such Buyer is
a party, nor the consummation by either of the Buyers of the transactions
contemplated hereby or thereby, nor the performance by either of the Buyers of
this Agreement or the Documents in compliance with the terms and conditions
hereof and thereof will: (i) violate, conflict with or result in any breach of
the certificate of incorporation or bylaws of either Buyers, or any trust
agreement, judgment, decree, injunction, order, writ, statute, rule or
regulation applicable to either Buyer; (ii) violate, conflict with or result in
a breach, default or termination (or give rise to any right of termination,
cancellation or acceleration) of the maturity of any payment date or any of the
obligations of either Buyer under any law, statute, rule, regulation or any
judgment, decree, order, governmental permit, license or order applicable to
either Buyer or any of the terms, conditions or provisions of any mortgage,
indenture, note, license, agreement or other instrument or obligation related
to either Buyer or to either Buyer's ability to consummate the transactions
contemplated hereby or thereby to which either Buyer is a party, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained in writing and except
for any such default that would not result in an adverse effect on its
business; or (iii) require the consent, waiver, authorization or approval of
any federal, state or local government or governmental department, agency,
board, commission, bureau, instrumentality, or public or self-regulatory body
or authority, or of any other Person, entity or organization.
SECTION 4.4. The Shares. The Shares when delivered hereunder will be
duly authorized, validly issued, and fully paid and nonassessable and will be
free and clear of any Claims, except for any transfer restrictions imposed by
the state and federal securities laws. The Shares will be issued pursuant to
Section 4(2) of the Securities Act. Certificates representing the Shares
issued to the Sellers will contain a restrictive legend in substantially the
following form:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, DISTRIBUTED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF: (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER THE ACT OR THE AVAILABILITY OF AN EXEMPTION
THEREFROM; OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO STAFFMARK, INC.
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.
ARTICLE V. PRE-CLOSING COVENANTS AND AGREEMENTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
SECTION 5.1. Cooperation. Each of the Parties hereto shall use its
best efforts in good faith to perform and fulfill all conditions and
obligations to be fulfilled or performed by it hereunder to the end that the
transactions contemplated hereby will be fully and timely consummated.
SECTION 5.2. Best Efforts. The Sellers and the Buyers shall each use
their best efforts to procure upon reasonable terms and conditions all consents
and approvals, completion of all filings, all registrations and certificates,
and satisfaction of all other requirements prescribed by law which are
necessary for the consummation of the transactions contemplated by this
Agreement and SAC13 and SAC14's ownership and the Sellers' Businesses after the
Closing Date. Prior to the Closing Date, the Sellers will use commercially
reasonable efforts to preserve their relationships with their employees,
consultants, customers, and others having business relationships with the
Sellers.
SECTION 5.3. Investigations. The Sellers shall give the Buyers and
their employees, accountants, attorneys and other authorized representatives
full access during all reasonable times to all the premises, properties, books
and records, and furnish the Buyers with such financial and operating data,
analyses and other information of any kind respecting the Sellers' business and
properties as the Buyers shall from time to time request. Any investigation
shall be conducted in a manner which does not unreasonably interfere with
business operations of the Sellers.
SECTION 5.4. Distributions. Prior to the Closing, the Sellers shall
pay no dividends, distributions, consulting fees or management fees to the
partner(s) of the Sellers, except with respect to the Excluded Assets. Prior
to the Closing, the Sellers shall not increase management compensation policies
or plans, and shall conduct no transactions with, or transfer anything of
value, directly or indirectly, to the Sellers' partners, except with respect to
the Excluded Assets.
SECTION 5.5. Partnership Matters. During the period from the date of
this Agreement to the Closing, the Sellers will not: (i) amend their
partnership agreements; (ii) issue any partnership units; (iii) issue or create
any warrants, obligations, subscriptions, options, convertible securities, or
other commitments under which any additional partnership units might be
directly or indirectly authorized, issued or transferred; (iv) otherwise engage
in any practice, take any action, or enter into any transaction of the sort
described in Section 3.14 above; or (v) agree to do any of the acts listed
above.
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SECTION 5.6. Obligations Concerning Employees. Each Seller will be
responsible for all Liabilities associated with the employees and consultants
of such Seller which relate to the period prior to midnight on the Closing Date
(the "Employee Transfer Time"). On the Closing Date, each Seller agrees to
provide the Buyers with the register for the most recent payroll period which
register shall contain a true and complete list of the FICA wages and FICA
withholdings as of the date of such register related to compensation paid by
the Sellers to the employees or consultants of the Sellers prior to the Closing
Date.
SECTION 5.7. Business Name. On the Closing Date, each Seller shall
change its business name such that the new name of each Seller is not similar
to the existing name and otherwise is not likely to be confused with its
present names so as to make each Seller's name available to the Buyers.
SECTION 5.8. Notice of Developments. The Sellers will give prompt
written notice to the Buyers of any material adverse development causing a
breach of any of the representations and warranties in Article III above.
SECTION 5.9. Exclusivity. The Sellers will not: (i) solicit,
initiate, or encourage the submission of any proposal or offer from any person
relating to the acquisition of any partnership interests or any substantial
portion of the assets, of the Sellers (including any acquisition structured as
a merger, consolidation, or share exchange); or (ii) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any person to do or seek any of the foregoing. The Sellers will
notify the Buyers immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.
ARTICLE VI. POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the
Closing.
SECTION 6.1. Post-Closing Covenants of the Sellers.
(a) General. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of
this Agreement, the Sellers will take such further action (including
the execution and delivery of such further instruments and documents)
as any other Party may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefor).
(b) Transition. The Sellers will not take any action that
is designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of the
Sellers from maintaining the same business relationships with the
Buyers after the Closing as it maintained with the Sellers prior to the
Closing. The Sellers will refer all customer inquiries relating to the
Businesses to the Buyers from and after the Closing.
(c) Tax Returns. Each Seller shall cause to be prepared and
filed, at its sole expense all of its required Tax returns for all Tax
periods ending prior to the Closing Date. Each Seller shall be
responsible for the payment of, all Taxes due or assessed which relate
to the operations of such Seller's business for all periods up to and
including the Closing Date.
(d) Dissolution. Subsequent to the Closing, the Sellers
will not dissolve or otherwise terminate their existence for at least
twelve (12) months following the Closing.
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(e) Nondisclosure of Confidential Information. The Sellers
recognize and acknowledge that they have and will have access to
certain confidential information of the Buyers (including, but not
limited to, list of customers, and costs and financial information)
that the Buyers consider to be valuable, special and unique property of
the Buyers. Following the Closing, the Sellers agree that they will
not disclose, and that they will use reasonable efforts to prevent
disclosure by any other Person of, any such confidential information to
any Person, except to authorized representatives of the Buyers. The
Sellers recognize and agree that violation of any of the agreements
contained in this Section 6.1(e) will cause irreparable damage or
injury to the Buyers, the exact amount of which may be impossible to
ascertain, and that, for such reason, among others, the Buyers shall be
entitled to seek an injunction, restraining any further violation of
such agreements. Such rights to any injunction shall be in addition
to, and not in limitation of, any other rights and remedies the Buyers
may have against the Sellers or their partners.
(f) Payment of Liabilities. Following the Closing Date,
except for the Assumed Liabilities, the Sellers shall pay and satisfy
in full all of their other obligations and liabilities, of any nature
whatsoever, which accrue prior or subsequent to the Closing Date.
(g) Insurance. Following the Closing Date, the Sellers
shall, if requested by the Buyers, assign to the Buyers or its
designated affiliates the Sellers' unemployment insurance and worker's
compensation experience ratings and take such steps as the Buyers shall
reasonably request to effect such assignment, if such assignment is
permitted and does not result in any cost, expense or penalty to the
Sellers and is otherwise not prejudicial to the Sellers.
(h) Employee Records. Following the Closing Date, unless
prohibited by law, each Seller shall make available to the Buyers all
personnel records, including without limitation names, Social Security
numbers, dates of hire by such Seller, dates of birth, number of hours
worked each calendar year, and salary histories, for all of such
Seller's employees and consultants. The Sellers and the Buyers shall
also cooperate, both before and after the Closing Date, in exchanging
information, including pertinent employment records, benefit
information, salary and compensation records, financial statements and
other data, and in taking other action respecting the interests of the
Sellers' employees and consultants who become employees and consultants
of the Buyers at or shortly following the Closing Date, and their
respective beneficiaries and dependents, in each of the employee
benefit plans of the Sellers and any plans established by the Buyers,
so as to secure an orderly and effective transition of the benefit
arrangements for such employees or consultants of the Sellers and their
respective beneficiaries and dependents.
(i) Bulk Transfer Compliance. Following the Closing Date,
the Sellers resulting from the assertion of any claim made against the
Transferred Assets or the Buyers by any creditor of the Sellers
pursuant to any bulk sales statutes, or any other applicable law
related to bulk sales.
(j) Business Name. From and after the Closing, the Sellers
shall not use the words making up their existing name (or any existing
trade names) or similar names in connection with any business.
(k) Consents. Following the Closing, the Sellers shall use
all reasonable efforts to obtain any consents not previously obtained
as soon as possible after the Closing Date or otherwise obtain for the
Buyers the practical benefit of such property or rights and with
respect to leases for all of the offices of the Sellers, the Sellers
shall obtain the consents of landlords not previously obtained as soon
as possible after the Closing Date.
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(l) Employee Claims. On or after the Closing Date, the
Sellers hereby agree and covenant that in the event the Buyers receive
employee claims attributable in all or in part to the employment of
such employee or consultant or former employee or consultant of the
Sellers prior to the Closing Date, the Sellers agree to undertake the
defense of such claims. Such claims could include, without limitation,
claims asserted by the union representing the Sellers' employees, or
claims before an administrative agency such as the EEOC or NLRB, or any
other claims asserted against the Buyers, or its officers, agents,
attorneys, employees, parent or assigns in any way arising out of or
relating to the employment of such employees or their termination by
the Sellers.
(m) Employee Bonuses. Following the Closing Date, the
Sellers agree to pay any and all amounts owed by the Sellers to
employees or consultants with respect to incentive and/or bonus plans,
agreements or arrangements that existed with such persons on or before
the Closing Date, unless such obligations are specifically assumed by
the Buyers pursuant to the Assumption Agreement.
(n) Covenant Not to Compete. For a period of four (4) years
from and after the Closing Date, each Seller and its affiliates will
not directly or indirectly: (i) engage or participate in any way, as an
owner, officer, partner, member, employee, consultant, agent,
independent contractor, board member, stockholder or otherwise, in any
activities involving permanent, contractual and/or temporary personnel
services or information technology staffing services competitive with
or directly or indirectly related to the Businesses anywhere within the
States of the United States that StaffMark or any of its subsidiaries
currently conduct their businesses or where the Sellers previously
conducted the Businesses; (ii) solicit or otherwise encourage any
officer, employee, consultant, agent or independent contractor of
SAC13, SAC14, StaffMark, or the subsidiaries of StaffMark to terminate
or alter his or her employee, agent or independent contractor
relationship with Sellers, SAC13, SAC14, StaffMark, or its
subsidiaries; or (iii) disturb or interfere with, in any way, as an
owner, officer, partner, member, employee, consultant, agent,
independent contractor, board member, stockholder or otherwise the
business relationships now existing or hereafter developed between
SAC13, SAC14 or StaffMark and any of its customers, suppliers or other
parties, or in any such capacity solicit orders from any customers of
SAC13, SAC14, StaffMark, or any of its subsidiaries; provided, however,
that no owner of less than 5% of the outstanding stock of any
publicly-traded company shall be deemed to engage solely by reason
thereof in any of its businesses. If the final judgment of a court of
competent jurisdiction declares that any term or provision of this is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(o) Post-Closing Adjustment/Escrow. In the event the Buyers
are required to deliver a Post-Closing Adjustment (as such term is
defined in Section 6.2(c) hereof) in excess of $500,000 to the Sellers
in the aggregate, the Sellers shall place cash equivalent to ten
percent (10%) of such Post-Closing Adjustment in a six-month escrow
pursuant to an escrow agreement in substantially similar form as the
Escrow Agreement delivered herewith.
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SECTION 6.2 Post-Closing Covenants of StaffMark, SAC13 and SAC14.
(a) Employees and Consultants. Following the Closing Date
or the expiration of the Employee Leasing Agreement, if executed by the
Parties, the employees and consultants of the Sellers shall cease to be
employees and consultants of the Sellers and, except as otherwise
determined by SAC13 or SAC14 in its sole discretion, shall become
employees and consultants of SAC13 or SAC14, as applicable, or an
affiliate of the Buyers on an employment at will basis.
Notwithstanding the foregoing, the Buyers will have no Liability to the
Sellers if for any reason: (i) SAC13 or SAC14 decides not to offer
employment to any of the Sellers' employees or consultants (other than
employees subject to employment agreements as required by this
Agreement); (ii) any of the employees or consultants do not accept
SAC13's or SAC14's offer of employment; or (iii) any of the employees
and consultants (other than employees subject to the employment
agreements) accept employment with SAC13 or SAC14, but such employment
is terminated for any reason after the Closing Date.
(b) Employee Stock Options. As of the Closing Date,
StaffMark shall grant employees of the Sellers, other than Xxxx Xxxxxx,
non-qualified stock options to purchase an aggregate of 28,000 shares
of StaffMark common stock, par value $.01 per share, of which 6,500
shall be granted to Xxxxx Xxxx. Such options shall be granted pursuant
to and subject to the terms of the StaffMark, Inc. 1996 Stock Option
Plan.
(c) Post-Closing Adjustment. On or before the tenth day
following the receipt of the balance sheet as of October 31, 1997 and
the income statement for the month then ended for each of EMJAY
Contracts and EMJAY Careers, StaffMark shall re-calculate the EMJAY
Contracts Adjusted EBIT and EMJAY Careers Adjusted EBIT (as such terms
are defined in the EMJAY Contracts Purchase Price Certificate and the
EMJAY Careers Purchase Price Certificate, respectively), based on the
twelve (12) months ended October 31, 1997, and excluding the month of
October 1996 and the first billing and related payroll period for
November 1996 (the "Re-calculated Adjusted EBIT"). In the event the
respective Re-calculated Adjusted EBIT is greater than the Adjusted
EBIT used in such purchase price certificate, the Buyers shall pay cash
to EMJAY Contracts or EMJAY Careers, as applicable, equal to (x) the
difference between the Re-calculated Adjusted EBIT used in such
purchase price certificate minus the Adjusted EBIT multiplied by (y)
the multiple factor used in the appropriate Seller's purchase price
certificate (collectively, the "Post-Closing Adjustment"). Ten percent
(10%) of such amount shall be placed in escrow pursuant to Section
6.1(o) hereof.
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ARTICLE VII. CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligation of the Buyers to consummate the transactions
contemplated hereby is subject to the satisfaction, on or before the Closing
Date, of the following conditions, each of which may be waived (in writing) by
the Buyers in their sole discretion:
SECTION 7.1. Representations and Warranties True; Satisfaction of
Covenants. All of the representations and warranties made by the Sellers in
Article III of this Agreement shall be materially true and correct on and as of
the Closing Date as though such representations and warranties were made on and
as of the Closing Date, except to the extent such representations and
warranties are expressly made as of an earlier specified date; the Sellers
shall have performed and complied with all covenants and conditions required by
this Agreement to be performed or complied with by it prior to or at the
Closing Date. The general partner of each Seller shall deliver a certificate
to the Buyers to the effect that each of the above conditions are satisfied in
all respects.
SECTION 7.2. Consents. All requisite governmental approvals and
consents of third parties required to be received to prevent any license,
permit, Contract or agreement relating to the Businesses from terminating prior
to its scheduled termination, as a result of the consummation of the
transactions contemplated hereby, shall have been obtained and all permits
listed on Schedule 3.16 shall have been transferred to the Buyers.
SECTION 7.3. No Obstructive Proceeding. No suit, action or other
proceeding shall have been instituted by any governmental authority or third
party to restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement.
SECTION 7.4. Opinion of Counsel to the Sellers. The Buyers shall
have received an opinion from counsel to each Seller, dated as of the Closing
Date, in form and substance reasonably satisfactory to the Buyers.
SECTION 7.5. Closing Documents. Each Seller shall have delivered all
of the Schedules, resolutions, certificates, documents and instruments required
by this Agreement to be delivered by each Seller.
SECTION 7.6. Due Diligence. The Buyers shall have completed their
due diligence review of the Sellers and the Businesses, and the results of such
review shall have been satisfactory to the Buyers in their sole discretion.
SECTION 7.7. Approval of the Buyers and Counsel. All actions,
proceedings, consents, instruments and documents required to be delivered by,
or at the direction of, each Seller hereunder or incident to its performance
hereunder, and all other related matters, shall be reasonably satisfactory as
to form and substance to the Buyers and their counsel.
SECTION 7.8. No Material Adverse Change. From the date of this
Agreement through the Closing Date: (i) there shall have been no material
adverse change in the assets, liabilities, or financial condition of the
business of either Seller from that reflected in such Seller's Balance Sheet
outside the Ordinary Course of Business; and (ii) none of the business,
financial condition, operations, property, or affairs of either Seller shall
have been materially adversely affected by any occurrence or development,
individually or in the aggregate, whether or not insured against.
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SECTION 7.9. Indemnification Agreement. The Buyers shall have
received a counterpart executed copy of an "Indemnification Agreement" from the
Sellers and the Sellers' owner and its general and limited partners
satisfactory to the Buyers as attached hereto as Exhibit E.
SECTION 7.10. Escrow Agreement. The Buyers shall have received a
counterpart executed copy of the Escrow Agreement from the Sellers and the
Sellers' owner and its general and limited partners.
SECTION 7.11. Employment Agreements. The Buyers shall have received a
counterpart executed copy of employment agreements with Xxxx Xxxxxx and Xxxxx
Xxxx satisfactory to the Buyers (the "Employment Agreements").
SECTION 7.12. Noncompetition Agreement. The Buyers shall have received
a counterpart executed copy of "Noncompetition Agreements" from the Sellers'
owner and general and limited partners satisfactory to the Buyers.
SECTION 7.13. Earnout Agreements. The Buyers shall have received a
counterpart executed copies of the Earnout Agreements from the Sellers and its
owners.
SECTION 7.14. Purchase Price Certificate. The Buyers shall have
received a counterpart copy of the executed EMJAY Contracts Purchase Price
Certificate and the EMJAY Careers Purchase Price Certificate.
SECTION 7.15. Business Name. The Sellers shall have delivered a
corporate name change resolution and form to change the name of each Seller as
set forth in Section 5.7.
SECTION 7.16. Additional Agreements. The Sellers shall have entered
into such additional agreements as may reasonably be required to be entered
into by such parties on or before the Closing.
ARTICLE VIII. CONDITIONS TO THE SELLERS' OBLIGATIONS
The obligation of the Sellers to consummate the other transactions
contemplated hereby is subject to the satisfaction, on or before the Closing
Date, of the following conditions, each of which may be waived by the Sellers
in writing in their sole discretion:
SECTION 8.1. Representations and Warranties True; Satisfaction of
Covenants. All of the representations and warranties made by SAC13, SAC14 and
StaffMark in Article IV of this Agreement shall be true and correct on and as
of the Closing Date as though such representations and warranties were made on
and as of the Closing Date, except to the extent such representations and
warranties are expressly made as of an earlier specified date. SAC13, SAC14
and StaffMark shall have performed and complied with all covenants and
conditions required by this Agreement to be performed or complied with by them
prior to or at the Closing Date. An executive officer of each of SAC13, SAC14
and StaffMark shall deliver a certificate to the Sellers to the effect that
each of the above conditions are satisfied in all respects.
SECTION 8.2. Closing Documents. SAC13, SAC14 and StaffMark shall
have delivered all of the Schedules, resolutions, certificates, documents and
instruments required by this Agreement.
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SECTION 8.3. No Obstructive Proceeding. No suit, action or other
proceeding shall have been instituted by any governmental authority or third
party to restrain, enjoin or otherwise prevent or question the legality of the
consummation of the transactions contemplated by this Agreement.
SECTION 8.4. Approval of the Sellers and Its Counsel. All actions,
proceedings, consents, instruments and documents required to be delivered by,
or at the direction of, the Buyers hereunder or incident to its performance
hereunder, and all other related matters, shall be reasonably satisfactory as
to form and substance to the Sellers and their counsel.
SECTION 8.5. Employment Agreements. The Buyers shall have executed
and delivered the Employment Agreements.
SECTION 8.6. Earnout Agreements. The Buyers shall have delivered a
counterpart executed copy of the Earnout Agreements.
SECTION 8.7. Opinion of Counsel to the Buyers. The Sellers shall
have received an opinion of the general counsel of StaffMark dated as of the
Closing Date, in form and substance reasonably satisfactory to the Sellers.
SECTION 8.8. Additional Agreements. The Buyers and Affiliates shall
have entered into such additional agreements as may reasonably be required to
be entered into by such parties on or before the Closing.
ARTICLE IX. THE CLOSING AND CERTAIN CLOSING DELIVERIES
SECTION 9.1. Time and Place of the Closing. Upon the terms and
subject to the satisfaction or waiver of the conditions contained in this
Agreement, the closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Xxxxx, Knight & Xxxxxxxx, 0000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, on November 4, 1997, or on
such other place, date and time as may be mutually agreed upon by the parties
(the "Closing Date"). The transactions contemplated by this Agreement shall be
effective for accounting purposes as of 12:01 A.M. (CDT) on October 1, 1997.
At the Closing: (i) the Sellers will deliver to the Buyers the various
certificates, instruments and documents referred to in Article VII and any
other certificates and documents reasonably requested by the Buyers; (ii) the
Buyers will deliver the various certificates, instruments and documents
referred to in Article VIII; and (iii) the Buyers will deliver to the Sellers
and the escrow agent the respective portions of the Purchase Price required to
be paid at the Closing pursuant to and in accordance with this Agreement.
SECTION 9.2. Survival of Representations, Warranties and Covenants.
All of the representations and warranties of the parties contained in this
Agreement shall survive for two (2) years following the Closing Date; except,
that, the survivability periods as to the representations and warranties in
Sections 3.17, 3.25 and 3.27, respectively, shall survive for the full period
of the statute of limitations applicable to the matters described in such
sections. Certain covenants of the Parties in this Agreement are post-closing
covenants and shall survive the Closing Date for the time periods so indicated
in each such section.
SECTION 9.3. Remedies. In the event that a Party (the "Breaching
Party") breaches or in the event any third party alleges facts that, if true,
would mean that the Breaching Party has breached any
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provision of this Agreement, then the other Party may exercise all of its
remedies under this Agreement. The Breaching Party shall be liable to the
other Party for any Adverse Consequences the other Party suffers resulting
from, arising out of, relating to, or caused by any such breach or alleged
breach.
ARTICLE X. TERMINATION
SECTION 10.1. Termination of Agreement. The Parties may terminate
this Agreement as provided below:
(a) The Buyers and the Sellers may terminate this Agreement
by mutual written consent at any time prior to the Closing;
(b) The Buyers may terminate this Agreement at any time
prior to the Closing: (i) in the event the Sellers have breached any
representation, warranty, or covenant contained in this Agreement in
any material respect; (ii) in the event that the Buyers are not
satisfied with their business, legal, accounting, environmental, labor,
employee matters, operational or financial due diligence; (iii) if
there is discovered or should there occur any event or condition which
could reasonably be expected to have a material adverse effect on
either Seller; or (iv) if the Closing shall not have occurred on or
before November 15, 1997;
(c) The Sellers may terminate this Agreement any time prior
to the Closing: (i) in the event SAC13, SAC14 or StaffMark have
breached any representation, warranty or covenant contained in this
Agreement in any material respect; (ii) if there is discovered or
should there occur any event or condition which could reasonably be
expected to have a material adverse effect on SAC13, SAC14 or StaffMark
but such event shall not include any effects or changes of the price of
the StaffMark's common stock; or (iii) if the Closing shall not have
occurred on or before November 15, 1997;
(d) The Buyers may terminate this Agreement if a
governmental authority adopts, enters, enacts or issues a final and
nonappealable order, or adopts, enacts, enforces, or holds applicable
to the Agreement a law, or a suit, action, or proceeding is threatened
or pending before a governmental authority, that directly or
indirectly: (i) declares this Agreement to be illegal; (ii) permanently
enjoins, restrains or otherwise prohibits the acquisition of the
Transferred Assets by the Buyers pursuant to this Agreement or the
transactions contemplated hereby; (iii) prohibits the ownership or
operation by the Buyers (or any of their affiliates) of all or a
material portion of the Transferred Assets; or (iv) compels the Buyers
(or any of their affiliates) to segregate or dispose of all or a
material portion of the Transferred Assets; or
(e) The Sellers may terminate this Agreement if a
governmental authority adopts, enters, enacts or issues a final and
nonappealable order, or adopts, enacts, enforces or holds applicable to
this Agreement a law or a suit, action or proceeding is threatened (in
writing) or pending before a governmental authority that directly or
indirectly: (i) declares the Agreement to be illegal; or (ii)
permanently enjoins, restrains, or otherwise prohibits this Agreement
or the transactions contemplated hereby.
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Termination of this Agreement by any Party pursuant to clauses (b) or (c) above
will be valid only if a notice of termination, signed by or on behalf of the
Party electing the termination, is given to the other Party to this Agreement.
Termination of this Agreement in accordance with clause (a) above will be
effective as of the date specified in the Parties' written agreement of
termination. Termination of this Agreement in accordance with clauses (d) or
(e) above will be effective on the effective date of the law or order that
makes the Agreement illegal or permanently enjoins, restrains, or prohibits
consummation of the Agreement, ownership of the Transferred Assets.
SECTION 10.2. Effect of Termination. If this Agreement is terminated
in accordance with the provisions of Section 10.1, a Party will not have any
further right, Liability or obligation with respect to the other Party.
SECTION 10.3. Other Termination Matters. The confidentiality
provisions contained in Section 6.1(e) of this Agreement shall survive
termination pursuant to Section 10.1 above for a period of one (1) year
following any such termination date.
ARTICLE XI. MISCELLANEOUS
SECTION 11.1. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving Party's address set forth below or to such other address as a Party
may designate by notice hereunder, and shall be either: (i) delivered by hand;
(ii) sent by recognized overnight courier; (iii) made by telecopy or facsimile
transmission; or (iv) sent by registered or certified mail, return receipt
requested, postage prepaid.
If to the Buyers:
StaffMark, Inc.
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Chief Financial Officer
Phone: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx,
Executive Vice President - General Counsel
Phone: (000) 000-0000
Fax No.: (000) 000-0000
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If to the Sellers:
Xxxx Xxxxxx
000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
With a copy to:
L. Xxx Xxxxxx
Xxxxx, Knight & Xxxxxxxx, L.L.P.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Fax No.: (000) 000-0000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given: (i) if by hand, at the time of the delivery thereof
to the receiving Party at the address of such Party set forth above; (ii) if
sent by overnight courier, on the next business day following the day such
notice is delivered to the courier service; (iii) if made by telecopy or
facsimile transmission, at the time that receipt thereof has been acknowledged
by electronic confirmation or otherwise; or (iv) if sent by registered or
certified mail, on the fifth business day following the day such mailing is
sent. The address of any party herein may be changed at any time by written
notice to the other Party given in accordance with this Section 11.1.
SECTION 11.2. Entire Agreement. This Agreement and the Documents
embody the entire agreement and understanding between the Parties hereto with
respect to the subject matter hereof and supersede all prior oral or written
agreements and understandings relating to the subject matter hereof.
SECTION 11.3. Modifications and Amendments. The terms and provisions
of this Agreement may be modified or amended only by written agreement executed
by all Parties hereto.
SECTION 11.4. Assignment/Binding Effect. Neither this Agreement, nor
any right or obligation hereunder, may be assigned by any of the Parties hereto
without the prior written consent of the other Parties; provided, however, the
Buyers may assign their rights (but not their obligations) hereunder to a
wholly-owned subsidiary formed for the purpose of owning and operating the
Business. This Agreement shall be binding upon, and inure to the benefit of,
the representatives, successors and permitted assigns.
SECTION 11.5. Parties in Interest. Nothing in this Agreement, express
or implied, is intended to confer upon any other Person any rights or remedies
of any nature whatsoever under or by reason of this Agreement. Nothing in this
Agreement shall be construed to create any rights or obligations except among
the Parties hereto, and no Person shall be regarded as a third-party
beneficiary of this Agreement.
SECTION 11.6. Governing Law. This Agreement and the rights and
obligations of the Parties hereunder shall be construed in accordance with and
governed by the internal laws of the State of Texas.
SECTION 11.7. Severability. In the event that any tribunal of
competent jurisdiction shall finally determine that any provision, or any
portion thereof, contained in this Agreement shall be void or
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unenforceable in any respect, then such provision shall be deemed limited to
the extent that such tribunal determines it enforceable, and as so limited
shall remain in full force and effect. In the event that such tribunal shall
determine any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
SECTION 11.8. Interpretation. The Parties hereto acknowledge and
agree that: (i) the rule of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (ii) the terms and provisions of this
Agreement shall be construed fairly as to all Parties hereto and not in favor
of or against any party, regardless of which Party was generally responsible
for the preparation of this Agreement.
SECTION 11.9. Headings and Captions. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only
and shall in no way modify, or affect, or be considered in construing or
interpreting the meaning or construction of any of the terms or provisions
hereof.
SECTION 11.10. Expenses. Each Party shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or
others engaged by such Party) incurred in connection with this Agreement and
the transactions contemplated hereby whether or not the transactions
contemplated hereby are consummated.
SECTION 11.11. Gender. All pronouns and any variation thereof shall be
deemed to refer to the masculine, feminine, neuter, singular, or plural as the
identity of the person or entity or the context may require.
SECTION 11.12. Publicity. Except by the mutual agreement between the
Sellers and StaffMark, no Party shall issue any press release or otherwise make
any public statement with respect to the execution of, or the transactions
contemplated by, this Agreement except as may be required by law, rule or
regulation.
SECTION 11.13. Counterparts. This Agreement may be executed in one or
more counterparts, and by different Parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
SECTION 11.14. Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
SECTION 11.15. Telecopy Execution and Delivery. A facsimile telecopy
or other reproduction of this Agreement may be executed by one or more parties
hereto, and an executed copy of this Agreement may be delivered by one or more
Parties hereto by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen, and such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any Party hereto, all Parties
hereto agree to execute an original of this Agreement as well as any facsimile,
telecopy or other reproduction thereof.
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IN WITNESS WHEREOF, the Buyers and the Sellers have each caused this
Agreement to be executed by their respective duly authorized officers all as of
the day and year first above written.
THE BUYERS:
STAFFMARK, INC.
By: /s/ XXXXXX X. XXXXX III
---------------------------------------------
Xxxxxx X. Xxxxx III
Executive Vice President
STAFFMARK ACQUISITION CORPORATION THIRTEEN
By: /s/ XXXXXX X. XXXXX III
---------------------------------------------
Xxxxxx X. Xxxxx III, Vice President
STAFFMARK ACQUISITION CORPORATION FOURTEEN
By: /s/ XXXXXX X. XXXXX III
---------------------------------------------
Xxxxxx X. Xxxxx III, Vice President
SELLERS:
EMJAY CAREERS, L.P.
/s/ XXXX XXXXXX
-------------------------------------------------
By: EMJAY Employment Services, Inc.,
corporate general partner
Xxxx Xxxxxx, President
EMJAY CONTRACTS, L.P.
/s/ XXXX XXXXXX
-------------------------------------------------
By: EMJAY Employment Services, Inc.,
corporate general partner
Xxxx Xxxxxx, President
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