EXHIBIT 2.20
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AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF JULY 10, 1998
AMONG
WORK INTERNATIONAL CORPORATION,
1296209 ONTARIO INC.,
XXXX PLACEMENT SERVICES INC.
AND
THE STOCKHOLDERS OF
1165091 ONTARIO LIMITED
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as of
July 10, 1998, among WORK INTERNATIONAL CORPORATION, a Texas corporation
("WORK"), 1296209 ONTARIO INC., an Ontario corporation and a wholly owned
subsidiary of WORK ("Newco"), XXXX PLACEMENT SERVICES INC., an Ontario
corporation (the "Company"), and the persons listed on the signature pages of
this Agreement under the caption "Stockholders" (collectively, the
"Stockholders," and each of them, individually, a "Stockholder").
PRELIMINARY STATEMENTS
The parties to this Agreement wish to effect a business combination
pursuant to which:
(i) the Stockholders, who own 100% of the Capital Stock (as such
term is hereinafter defined) of 1165091 Ontario Limited, an Ontario
corporation which owns all the Capital Stock of the Company ("116
Limited"), will cause 116 Limited to amalgamate with the Company;
(ii) Newco will amalgamate with the Company on the terms and
subject to the conditions of this Agreement;
(iii) WORK, via mergers involving other WORK subsidiaries, will
acquire the stock of all or some of the entities other than the
Company identified in the accompanying Addendum I (each an "Other
Founding Company" and, collectively with the Company, the "Founding
Companies") under agreements similar to this Agreement entered into
among the Other Founding Companies, their stockholders, WORK and other
subsidiaries of WORK (collectively, the "Other Agreements");
(iv) WORK will effect a public offering of shares of its common
stock; and
(v) the Stockholders will receive the Merger Consideration (as
such term is hereinafter defined).
The respective boards of directors of WORK, Newco and the Company have
approved and adopted this Agreement to effect a transaction involving a transfer
of the nature described in Section 351 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
representations and undertakings contained in this Agreement, the parties to
this Agreement agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms have the meanings assigned to them below in this Section 1.01:
"Adjustment Date" means (a) if the Closing occurs on or before the
twentieth day of a month, the last day of the second month preceding the
date of the Closing and (b) if the Closing occurs after the twentieth day,
and on or before the last day, of a month, the last day of the month
preceding the date of the Closing.
"Agreement" means this Agreement, including the Disclosure Statement
relating to this Agreement and all attached Schedules, Annexes and
Exhibits, as each of them may be amended, modified or supplemented from
time to time under their provisions or the provisions of this Agreement.
"Amalgamation" means the amalgamation of Newco and the Company
pursuant to the provisions of the Business Corporation Act on the terms
contained in this Agreement. References in this Agreement and in the
Uniform Provisions to the "Merger" shall be deemed to be references to the
Amalgamation.
"Amalco" has the meaning specified in Section 2.03(b).
"Business Corporation Act" means the Ontario Business Corporation Act
and the Regulations thereto.
"CDN$" means dollars payable in the national currency of Canada.
"Ceiling Amount" means at any time CDN$8,554,667.
"Certificate of Amalgamation" means the articles or certificate of the
amalgamated Company, and references in this Agreement or in the Uniform
Provisions to the "Certificate of Merger" shall be deemed to be references
to the Certificate of Amalgamation.
"Closing" has the meaning specified in Section 7.01(a).
"Company Common Stock" means the common stock, no par value, of the
Company.
"Competition Act" means the Competition Act, R.S.C. C-34, and any
references in this Agreement or the Uniform Provisions to the HSR Act shall
be deemed to be a reference to the Competition Act.
"Counsel for the Company and the Stockholders" means Xxxxxx, Zener &
Waxman.
"Counsel for WORK and Newco" means Xxxxxx & Xxxxxx, L.L.P.
"Current Balance Sheet" means the unaudited balance sheet of the
Company at March 28, 1998, which is included in the Initial Financial
Statements.
"Current Balance Sheet Date" means March 28, 1998.
"Current Date" means any day during the 20-day period ending on the
date of the Closing.
"Designated Current Liabilities" means current liabilities of the
Company with respect to current accrued and current deferred income taxes.
"Disclosure Statement" means the written statement executed by the
Company and each of the Stockholders and delivered to WORK prior to the
execution and delivery of this Agreement, in which either (a) exceptions
are taken to certain of the representations and warranties made by the
Company and the Stockholders in this Agreement or (b) it is confirmed that
no exception is taken to that representation and warranty.
"Effective Time" has the meaning specified in Section 2.02.
"GAAP" means generally accepted accounting principles as set forth
from time to time in the handbook of the Canadian Institute of Chartered
Accountants and any references to GAAP in this Agreement or the Uniform
Provisions shall be deemed to be references to Canadian GAAP.
"Initial Financial Statements" means (a) the audited balance sheets of
the Company at December 27, 1997, December 28, 1996, and December 30, 1995,
and the related audited statements of income, shareholder's equity and
changes in financial position for each of the fifty-two week periods ended
on such dates, together with the related audit report of KPMG, and (b) the
Current Balance Sheet and the related unaudited statements of income,
shareholder's equity and changes in financial position for the thirteen-
week period ended on the Current Balance Sheet Date.
"Initial Calculation Date" means March 28, 1998.
"Long Term Debt" means indebtedness for borrowed money of the Company
with a maturity of one year or more and includes indebtedness incurred
under Capital Leases.
"Majority Stockholders" means any Stockholder or combination of
Stockholders who at the date of this Agreement own shares of Company Common
Stock representing more than two-thirds of the total number of shares of
Company Common Stock outstanding at the date of this Agreement.
"Merger" means the Amalgamation, and references to the "Merger" in
this Agreement and in the Uniform Provisions shall be deemed to be
references to the Amalgamation.
"Merger Consideration" has the meaning specified in Section 2.04.
"Newco" means 1296209 Ontario, Inc., an Ontario corporation.
"New Employment Agreements" means the Employment Agreements entered
into as of the date of this Agreement, between the Company and Xxxxxxx
Xxxxx and Xxxxxxx Xxxxx, respectively.
"Parties" means the parties to this Agreement.
"Pro Rata Share" means for each Stockholder the fraction expressed as
a percentage and set forth in Schedule 2.04, (a) the numerator of which is
the number of shares of outstanding Company Common Stock owned by that
Stockholder, as set forth in Schedule 2.04, and (b) the denominator of
which is the total number of shares of outstanding Company Common Stock
owned by all Stockholders, as set forth in Schedule 2.04.
"Responsible Officer" means Xxxxxxx Xxxxx.
"Restricted Period" has the meaning specified in Section 11.02.
"Staffing Industry" means the business of providing temporary
personnel staffing, personnel placement, staff leasing, professional
employer organization and training and business solutions.
"Surviving Corporation" means Amalco.
"Tax Act" means the Income Tax Act (Canada) as amended from time to
time.
"Territory" has the meaning specified in Section 10.01.
"Threshold Amount" means 2% of the Ceiling Amount.
"Transfer Taxes" has the meaning specified in Section 11.07.
"Uniform Provisions" means the Uniform Provisions for the Acquisition
of Founding Companies attached as Annex 1 to this Agreement.
"WORK" means Work International Corporation, a Texas corporation.
"WORK Acquisition Candidate" means any Entity engaged in the Staffing
Industry and which shall have been called on by any of the Company, WORK or
a Subsidiary of the Company or WORK in connection with the possible
acquisition by any of them of that Entity or with respect to which any of
them has made an acquisition analysis.
"Working Capital" means (a) current assets of the Company minus (b)
the sum of (i) the product of current liabilities of the Company (other
than Designated Current
Liabilities) multiplied by 1.25 and (ii) the product of the Designated
Current Liabilities multiplied by 1.00.
Section 1.02. Definitions in Uniform Provisions. Capitalized terms used
in this Agreement but not defined in this Section 1.01 have the meanings
assigned to them in the Preliminary Statements or in Article I of the Uniform
Provisions (the text of which is by this reference incorporated in this
Agreement), as the case may be. For purposes hereof, the words "United States"
used in the definition of the term "GAAP" in Article I of the Uniform Provisions
shall be deemed to say "Canada."
ARTICLE II
THE AMALGAMATION AND RELATED MATTERS
Section 2.01. Certificate of Amalgamation. On the terms and subject to
the conditions of this Agreement and the Amalgamation Agreement, Newco and the
Company will cause a Certificate of Amalgamation to be duly executed and
delivered on or promptly after the date of the Closing to the Ministry of
Consumer and Commercial Relations.
Section 2.02. The Effective Time. The effective time of the Merger (the
"Effective Time") will be the time on the IPO Closing Date which the Certificate
of Merger specifies or, if the Certificate of Merger does not specify another
time, 8:00 a.m., central time, on the IPO Closing Date.
Section 2.03. Certain Effects of the Amalgamation. At and as of the
Effective Time:
(a) Newco and XXXX hereby agreed to amalgamate and continue as one
corporation under the provisions of the Business Corporation Act upon the
terms and conditions hereinafter set out.
(b) The name of the corporation continuing as a result of the
Amalgamation ("Amalco") shall be XXXX Placement Services Inc.
(c) The registered office of Amalco is 00 Xxxx Xxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxx, X0X 0X0.
(d) The authorized capital of Amalco shall consist of an unlimited
number of common shares.
(e) After the Amalgamation, but subject to the rights of Dissenting
Shareholders, if any, under section 185 of the Business Corporation Act, no
share of Amalco shall be transferred without either:
(i) the consent of the directors of Amalco expressed by a
resolution passed at a meeting of the directors or by an instrument or
instruments in writing signed by all of the directors; or
(ii) the consent of the holders of the issued and outstanding
common shares of Amalco entitled to vote expressed by a resolution
passed at a meeting of the shareholders of Amalco or by an instrument
or instruments in writing signed by all of the holders of all such
shares.
(f) There shall be no restrictions on the business which Amalco is
authorized to carry on.
(g) The by-laws of Amalco shall, so far as applicable, be the by-laws
of Newco until repealed, amended, altered or added to.
(h) Subject to the provisions of the Business Corporation Act, without
limiting the borrowing powers of Amalco as set forth in the Business
Corporation Act, the directors of Amalco may, from time to time, with or
without the authority of any by-law or the authorization of the
shareholders:
(i) borrow money upon the credit of Amalco, including by way of
overdraft;
(ii) issue, reissue, sell or pledge bonds, debentures, notes or
other evidences of indebtedness or guarantees of Amalco whether
secured or unsecured; and
(iii) charge, mortgage, hypothecate, pledge or otherwise create
a security interest in the undertaking or in all or any currently
owned or subsequently acquired real or personal, movable or immovable
property of Amalco, including book debts, rights, powers and
franchises, to secure any such bonds, debentures, notes or other
evidences of indebtedness or guarantees of any other present or future
indebtedness or liability of Amalco.
The foregoing powers or any of them may be exercised time to time by the
directors of Amalco and, subject to the Business Corporation Act, may be
delegated from time to time by them to any one or more persons whether or
not directors or officers of Amalco with or without the authority of any
by-law to that effect.
(i) The number of directors of Amalco shall be not less than one (1)
and note more than ten (10). The number of the first directors, until
changed in accordance with the Act, shall be three.
(j) The first directors of Amalco shall be as set forth on Schedule
2.03 and shall hold office until the first annual meeting of Amalco or
until their successors are elected or appointed.
(k) The amount to be added to the stated capital account maintained in
respect of the common shares of Amalco in connection with the issue of the
common shares of
Amalco pursuant to Section 2.04(b) shall be equal to the stated capital of
the issued and outstanding shares of Newco.
Section 2.04. Effect of the Amalgamation on Capital Stock. As of the
Effective Time, as a result of the Amalgamation and without any action on the
part of any holder thereof:
(a) the shares of Capital Stock of the Company issued and outstanding
immediately prior to the Effective Time will (i) be converted into the
right to receive, without interest, on surrender of the certificate
evidencing those shares the amount of cash and the number of shares of WORK
Common Stock set forth or determined as provided in Schedule 2.04 (the
"Merger Consideration"); (ii) cease to be outstanding and to exist, and
(iii) be canceled and retired; and
(b) each share of Newco Common Stock issued and outstanding
immediately prior to the Effective Time will be converted into one share of
Common Stock of Amalco, and the shares of Common Stock of Amalco issued on
such conversion will constitute all the issued and outstanding shares of
Capital Stock of Amalco.
Each holder of a certificate representing shares of Capital Stock of the Company
immediately prior to the Effective Time will, as of the Effective Time and
thereafter, cease to have any rights respecting those shares other than the
right to receive, without interest, the Merger Consideration and the additional
cash, if any, owing with respect to those shares as provided in Section 2.06.
Section 2.05. Delivery, Exchange and Payment.
(a) At or after the Effective Time: (i) each Stockholder, as the
holder of certificates representing shares of Capital Stock of the Company,
will, on surrender of his certificates to WORK (or any agent which may be
appointed by WORK for purposes of this Section 2.05), receive, and WORK
will pay and issue to each Stockholder, in each case subject to the
provisions of Section 2.06, the Merger Consideration; and (ii) until any
certificate representing Capital Stock of the Company has been surrendered
and replaced pursuant to this Section 2.05, that certificate will, for all
purposes, be deemed to evidence ownership of the number of whole shares of
WORK Common Stock, and the right to receive cash, included in the Merger
Consideration payable in respect of that certificate pursuant to Section
2.04. All shares of WORK Common Stock issuable in the Merger will be
deemed for all purposes to have been issued by WORK at the Effective Time.
All cash included in the Merger Consideration shall be paid, at WORK's
option, by (a) WORK's company check or checks, (b) one or more wire
transfers to accounts designated by the respective Stockholders at least
five Business Days before the IPO Closing Date, or (c) certified or
official bank check or checks.
(b) Each Stockholder will deliver to WORK (or any agent that may be
appointed by WORK for purposes of this Section 2.05), on or before the IPO
Closing Date, the certificates representing Capital Stock of the Company
owned by the Stockholder, duly endorsed in blank by him, or accompanied by
stock powers duly executed by him in blank, and with all necessary transfer
tax and other revenue stamps, acquired at his expense, affixed
and canceled. Each Stockholder shall cure any deficiencies in the
endorsement of the certificates or other documents of conveyance
respecting, or in the stock powers accompanying, the certificates
representing Capital Stock of the Company delivered by him.
(c) No dividends (or interest) or other distributions declared or
earned after the Effective Time with respect to WORK Common Stock and
payable to the holders of record thereof after the Effective Time will be
paid to the holder of any unsurrendered certificates representing shares of
Capital Stock of the Company for which shares of WORK Common Stock have
been issued in the Merger until the unsurrendered certificates are
surrendered as provided herein, but (i) on such surrender, WORK will cause
to be paid, to the Person in whose name the certificates representing such
shares of WORK Common Stock shall then be issued, the amount of dividends
or other distributions previously paid with respect to such whole shares of
WORK Common Stock with a record date, or which have accrued, subsequent to
the Effective Time, but prior to surrender, and the amount of any cash
payable to such Person for and in lieu of fractional shares pursuant to
Section 2.06 and (ii) at the appropriate payment date or as soon as
practicable thereafter, WORK will cause to be paid to that Person the
amount of dividends or other distributions with a record date, or which
have been accrued, subsequent to the Effective Time, but which are not
payable until a date subsequent to surrender, which are payable with
respect to such number of whole shares of WORK Common Stock, subject in all
cases to any applicable escheat laws. No interest will be payable with
respect to the payment of such dividends or other distributions (or cash
for and in lieu of fractional shares) on surrender of outstanding
certificates.
Section 2.06. Fractional Shares. Notwithstanding any other provision of
this Article II, no fractional shares of WORK Common Stock will be issued, and
any Stockholder otherwise entitled to receive a fractional share of WORK Common
Stock but for this Section 2.06 will instead be entitled to receive a cash
payment for and in lieu thereof in the amount (rounded to the nearest whole
dollar) equal to that Person's fractional interest in a share of WORK Common
Stock multiplied by $12.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Each Stockholder, severally as to himself or herself only, represents and
warrants to, and agrees with, WORK that the representations and warranties
contained in Article III of the Uniform Provisions (the text of which Article
hereby is incorporated herein by this reference) are true and correct, and the
agreements set forth therein are hereby agreed to.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE STOCKHOLDERS
The Company and each Stockholder jointly and severally represent and
warrant to, and agree with, WORK that the representations and warranties
contained in Article IV of the Uniform
Provisions (the text of which Article hereby is incorporated herein by this
reference) are true and correct, and the agreements set forth therein are hereby
agreed to.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF WORK AND NEWCO
WORK and Newco jointly and severally represent and warrant to, and agree
with, the Company and each Stockholder that the representations and warranties
contained in Article V of the Uniform Provisions (the text of which Article
hereby is incorporated herein by this reference) are true and correct, and the
agreements set forth therein are hereby agreed to.
ARTICLE VI
COVENANTS EXTENDING TO THE EFFECTIVE TIME
Until the Effective Time, subject to the waiver provisions of Section
11.05, each Party will comply with each covenant for which provision is made in
Article VI of the Uniform Provisions (the text of which Article VI is hereby
incorporated herein by this reference) to be performed or observed by that
Party.
ARTICLE VII
THE CLOSING AND CONDITIONS TO CLOSING AND CONSUMMATION
Section 7.01. The Closing and Conditions to Closing.
(a) The Closing. On or before the IPO Pricing Date, the Parties will
take all actions necessary to (i) effect the Merger on the IPO Closing Date
(including, as permitted by the Business Corporation Act, (A) the execution
of a Certificate of Amalgamation meeting the requirements of the Business
Corporation Act and providing that the Merger will become effective on the
IPO Closing Date and (B) the filing of the Certificate of Amalgamation with
the Ministry of Consumer and Commercial Relations, (ii) verify the
existence and ownership of the certificates evidencing the Capital Stock of
the Company to be exchanged for the Merger Consideration pursuant to
Section 2.05, and (iii) satisfy the document delivery requirements to which
the obligations of the Parties to effect the Merger and the other
transactions contemplated hereby are conditioned by the provisions of this
Article VII (all those actions collectively being the "Closing"). The
Closing will take place at the offices of Xxxxxx & Xxxxxx, L.L.P., 000
Xxxxxxxxx, Xxxxxxx, Xxxxx at 10:00 a.m., Houston time, or at such later
time on the IPO Pricing Date as WORK shall specify by written notice to
Xxxxxxx Xxxxx. The actions taken at the Closing will not include the
completion of either the Merger or the delivery of the Capital Stock of the
Company or the Merger Consideration pursuant to Section 2.05. Instead, on
the IPO Closing Date, the Certificate of Amalgamation will become effective
pursuant to Section 2.02, and all transactions contemplated by this
Agreement to be closed or completed on or before the IPO Closing Date,
including the surrender of the Capital Stock of the Company in exchange for
the Merger Consideration will be closed or completed, as the case may be.
During the period from the Closing to the IPO Closing Date, this Agreement
may be terminated by the parties only pursuant to Section 12.01 (b).
(b) Incorporation by Reference. The text of Article VII of the
Uniform Provisions hereby is incorporated herein by this reference.
ARTICLE VIII
COVENANTS FOLLOWING THE EFFECTIVE TIME
From and after the Effective Time, subject to the waiver provisions of
Section 11.05, each Party (other than the Company) will comply with each
covenant for which provision is made in Article VIII of the Uniform Provisions
(the text of which Article hereby is incorporated herein by this reference) to
be performed or observed by that Party.
ARTICLE IX
INDEMNIFICATION
The text of Article IX of the Uniform Provisions hereby is incorporated
herein by this reference.
ARTICLE X
LIMITATIONS ON COMPETITION
Section 10.01. Prohibited Activities. Each Stockholder severally agrees
that he will not during the period beginning on the date hereof and ending on
the second anniversary of the IPO Closing Date, directly or indirectly, for any
reason, for his own account or on behalf of or together with any other Person:
(a) engage as an officer, director or in any other managerial capacity
or as an owner, co-owner or other investor of or in, whether as an
employee, independent contractor, consultant or advisor, in any business in
the Staffing Industry in competition with the Company, any Company
Subsidiary or WORK or any Subsidiary of WORK (WORK and its Subsidiaries
collectively being called "WORK" for purposes of this Article X) within any
territory surrounding any office or facility (each a "facility") in which
any of the Company or the Company Subsidiaries was engaged in business on
the date hereof or immediately prior to the Effective Time (for purposes of
this Article X, the territory surrounding a facility shall be the area
located within 50 miles of the facility, all of such locations being herein
collectively called the "Territory");
(b) call on any natural Person who is at that time employed by the
Company, any Company Subsidiary or WORK with the purpose or intent of
attracting that person from the employ of the Company, any Company
Subsidiary or WORK, provided that a Stockholder may call on and hire any of
his Immediate Family Members;
(c) call on any Person that at that time is, or at any time within one
year prior to that time was, a customer of the Company, any Company
Subsidiary or WORK within the Territory, (i) for the purpose of soliciting
or selling any product or service in competition with the Company, any
Company Subsidiary or WORK within the Territory and (ii) with the knowledge
of the customer relationship; or
(d) call on any WORK Acquisition Candidate, with the knowledge of that
Person's status as a WORK Acquisition Candidate, for the purpose of
acquiring that Person or arranging the acquisition of that Person by any
Person other than WORK.
Notwithstanding the foregoing, any Stockholder may own and hold as a passive
investment up to 1% of a class of the outstanding Capital Stock of a competing
Entity if that class of Capital Stock is publicly traded.
Section 10.02. Damages. Because of the difficulty of measuring economic
losses to WORK as a result of any breach by a Stockholder of his covenants in
Section 10.01, and because of the immediate and irreparable damage that could be
caused to WORK for which it would have no other adequate remedy, each
Stockholder agrees that WORK may enforce the provisions of Section 10.01 by
injunctions and restraining orders against the Stockholder if he breaches any of
those provisions.
Section 10.03. Reasonable Restraint. The Parties each agree that Sections
10.01 and 10.02 impose a reasonable restraint on the Stockholders in light of
the activities and business of WORK on the date hereof, the current business
plans of WORK and the investment by each Stockholder in WORK as a result of the
Merger.
Section 10.04. Severability; Reformation. The covenants in this Article X
are severable and separate. The unenforceability of any specific covenant in
this Article X is not intended by any Party to, and shall not, affect the
provisions of any other covenant in this Article X. If any court of competent
jurisdiction determines that the scope, time or territorial restrictions set
forth in Section 10.01 are unreasonable as applied to any Stockholder, the
Parties, including the Stockholder in question, acknowledge their mutual
intention and agreement that those restrictions be enforced to the fullest
extent the court deems reasonable, and thereby shall be reformed to that extent
as applied to that Stockholder and any other Stockholder similarly situated.
Section 10.05. Independent Covenant. All the covenants in this Article X
are intended by each Party to, and shall, be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of any Stockholder against WORK, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by WORK of any covenant in this Article X. It is specifically agreed that the
period specified in Section 10.01 shall be computed in the case of each
Stockholder by excluding from that computation any time during which that
Stockholder is in violation of any provision of Section 10.01. The covenants
contained in this Article X shall not be affected by any breach of any other
provision of this Agreement by any Party.
Section 10.06. Materiality. The Company and each Stockholder, severally
and not jointly with any other Person, hereby agree that this Article X is a
material and substantial part of the transactions contemplated by this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
Section 11.01. Treatment of Confidential Information.
(a) Each of the Company and the Stockholders, severally and not
jointly with any other Person, acknowledges that it has or may have had in
the past, currently has and in the future may have access to Confidential
Information of the Company and the Company Subsidiaries, the Other Founding
Companies and their Subsidiaries and WORK and its Subsidiaries. Each of
the Company and the Stockholders, severally and not jointly with any other
Person, agrees that it will keep confidential all such Confidential
Information furnished to it and, except with the specific prior written
consent of WORK will not disclose such Confidential Information to any
Person except (a) Representatives of WORK, (b) its own Representatives,
provided that these Representatives (other than counsel) agree to the
confidentiality provisions of this Section 11.01; and provided, further,
that Confidential Information shall not include (i) such information which
becomes known to the public generally through no fault of any Stockholder,
(ii) information required to be disclosed by
law or the order of any governmental authority under color of law,
provided, that prior to disclosing any information pursuant to this clause
(ii), each Stockholder shall, if possible, give prior written notice
thereof to WORK and provide WORK with the opportunity to contest such
disclosure, or (iii) the disclosing party reasonably believes that such
disclosure is required in connection with the defense of a lawsuit against
the disclosing party. In the event of a breach or threatened breach by any
Stockholder of the provisions of this Section 11.01 with respect to any
Confidential Information, WORK shall be entitled to an injunction
restraining such Stockholder from disclosing, in whole or in part, that
Confidential Information. Nothing herein shall be construed as prohibiting
WORK from pursuing any other available remedy for such breach or threatened
breach, including the recovery of damages.
(b) Because of the difficulty of measuring economic losses as a result
of the breach of the foregoing covenants in Section 11.01(a), and because
of the immediate and irreparable damage that would be caused to WORK for
which it would have no other adequate remedy, each of the Company and the
Stockholders agrees that WORK may enforce the provisions of Section
11.01(a) by injunctions and restraining orders against each of them who
breaches any of those provisions.
(c) The obligations of WORK set forth in Section 6.01(d) are
incorporated in this Section 11.01 by this reference.
(d) The obligations of the parties under this Section 11.01 shall
survive the termination of this Agreement.
Section 11.02. Restrictions on Transfers of WORK Common Stock.
(a) During the one-year period ending on the first anniversary of the
IPO Closing Date (the "Restricted Period"), no Stockholder voluntarily
will: (i) sell, assign, exchange, transfer, encumber, pledge, distribute,
appoint or otherwise dispose of (A) any shares of WORK Common Stock
received by any Stockholder in the Merger or (B) any interest in (including
any option to buy or sell) any such shares of WORK Common Stock, in whole
or in part, and WORK will have no obligation to, and shall not, treat any
such attempted transfer as effective for any purpose; or (ii) engage in any
transaction, whether or not with respect to any shares of WORK Common Stock
or any interest therein, the intent or effect of which is to reduce the
risk of owning the shares of WORK Common Stock acquired pursuant to Section
2.04 (including, for example engaging in put, call, short-sale, straddle or
similar market transactions); provided, however, that this Section 11.02
shall not restrict any transfer of WORK Common Stock acquired by a
Stockholder pursuant to Section 2.04 to any of that Stockholder's Related
Persons who agree in writing to be bound by the provisions of Section 11.01
and this Section 11.02. The certificates evidencing the WORK Common Stock
delivered to each Stockholder pursuant to Section 2.05 will bear a legend
substantially in the form set forth below:
EXCEPT PURSUANT TO THE TERMS OF THE AGREEMENT AND PLAN OF
REORGANIZATION AMONG THE ISSUER, THE HOLDER OF THIS CERTIFICATE AND
THE
OTHER PARTIES THERETO, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE VOLUNTARILY SOLD, ASSIGNED, EXCHANGED, TRANSFERRED, ENCUMBERED,
PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE DISPOSED OF, AND THE
ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED VOLUNTARY
SALE, ASSIGNMENT, EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE,
DISTRIBUTION, APPOINTMENT OR OTHER DISPOSITION OF ANY OF THOSE SHARES,
DURING THE PERIOD ENDING ON [DATE THAT IS THE FIRST ANNIVERSARY OF THE
IPO CLOSING DATE] (THE "RESTRICTED PERIOD"). ON THE WRITTEN REQUEST OF
THE HOLDER OF THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE THIS
RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH THE TRANSFER AGENT)
AFTER THE EXPIRATION OF THE RESTRICTED PERIOD.
(b) Each Stockholder, severally and not jointly with any other Person,
(i) acknowledges that the shares of WORK Common Stock to be delivered to
him pursuant to Section 2.04 (A) have not been and, except pursuant to the
Registration Rights Agreement, if applicable, will not be registered under
the Securities Act and therefore may not be resold by him without
compliance with the Securities Act and (B) will, as a result of their
restrictions on transferability which are imposed by this Agreement during
the Restricted Period, have a value materially less at the Effective Time
than the value of then freely tradeable shares of WORK Common Stock, and
(ii) covenants that none of the shares of WORK Common Stock issued to him
pursuant to Section 2.04 will be offered, sold, assigned, pledged,
hypothecated, transferred or otherwise disposed of except after full
compliance with all the applicable provisions of the Securities Act and the
rules and regulations of the SEC and applicable state securities laws and
regulations. All certificates evidencing shares of WORK Common Stock
issued pursuant to Section 2.04 will bear the following legend in addition
to the legend prescribed by Section 11.02(a):
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED
IF THE HOLDER HEREOF COMPLIES WITH THAT ACT AND OTHER APPLICABLE
SECURITIES LAWS.
In addition, certificates evidencing shares of WORK Common Stock issued to
each Stockholder pursuant to Section 2.04 will bear any legend required by
(i) the securities or blue sky laws of the state in which that Stockholder
resides or (ii) the Underwriter in connection with any agreement of that
Stockholder with the Underwriter to the effect set forth in Section
11.02(a).
Section 11.03. Brokers and Agents. The Stockholders jointly and severally
represent and warrant to WORK that the Company is not directly or indirectly
obligated to pay any broker or similar agent in connection with the transactions
contemplated hereby and agree, without regard to the Threshold Amount
limitations set forth in Article IX, to indemnify WORK against all Damage Claims
arising out of claims for any and all fees and commissions of brokers or similar
agents employed or promised payment by the Company.
Section 11.04. Assignment; No Third Party Beneficiaries. This Agreement
and the rights of its Parties may not be assigned (except by operation of law)
and shall be binding on and inure to the benefit of the Parties, the successors
of WORK, and the heirs and legal representatives of the Stockholders (and, in
the case of any trust, the successor trustees of the trust). Neither this
Agreement nor any other Transaction Document is intended, or shall be construed,
deemed or interpreted, to confer on any Person not a party hereto or thereto any
rights or remedies hereunder or thereunder, except as provided in Section
6.05(b) or 11.14, in Article IX, or as otherwise provided expressly herein or
therein.
Section 11.05. Entire Agreement; Amendment; Waivers. This Agreement and
the documents delivered pursuant to it constitute the entire agreement and
understanding among the Parties and supersede all prior agreements and
understandings, both written and oral, relating to the subject matter of this
Agreement. This Agreement may be amended, modified or supplemented, and any
right hereunder may be waived, if, but only if, the amendment, modification,
supplement or waiver is in writing and signed by the Majority Stockholders, the
Company and WORK. The waiver of any of the terms and conditions of this
Agreement shall not be construed or interpreted as, or deemed to be, a waiver of
any of its other term or conditions.
Section 11.06. Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be an original, but all of which together will
constitute one and the same instrument.
Section 11.07. Expenses. Whether or not the transactions contemplated
hereby are consummated, (a) WORK will pay the fees, expenses and disbursements
of WORK and Newco and their Representatives which are incurred in connection
with the subject matter of this Agreement and any amendments to this Agreement
including all costs and expenses incurred in the performance of and compliance
with all conditions to be performed by WORK and Newco under this Agreement,
including the costs of preparing the Registration Statement, (b) WORK will pay
up to a maximum of $25,000 in the aggregate of the fees, expenses and
disbursements of Xxxxxxxxx and Xxxxxxxxx, L.L.P., counsel to the Founding
Companies, incurred in connection with the subject matter of this Agreement, and
(c) the Stockholders will pay from personal funds, and not from funds of the
Company or any Company Subsidiary, (i) all sales, use, transfer and other
similar taxes and fees (collectively, "Transfer Taxes") incurred in connection
with the transactions contemplated hereby, and (ii) the fees, expenses and
disbursements of Counsel for the Company and the Stockholders incurred in
connection with the subject matter of this Agreement and the Registration
Statement on or before the IPO Closing Date. The Stockholders will file all
necessary documentation and Returns with respect to all Transfer Taxes. In
addition, each Stockholder acknowledges that he, and not the Company, WORK or
Amalco, will pay all Taxes due upon receipt of the consideration payable to the
Stockholder pursuant to Article II.
Section 11.08. Notices. All notices required or permitted hereunder shall
be in writing, and shall be deemed to be delivered and received (a) if
personally delivered or if delivered by telex, telegram, facsimile or courier
service, when actually received by the Party to whom notice is sent or (b) if
delivered by mail (whether actually received or not), at the close of business
on the third Business Day next following the day when placed in the mail,
postage prepaid, certified or registered, addressed to the appropriate Party or
Parties, at the address of such Party set forth below
(or at such other address as such party may designate by written notice to all
other Parties in accordance herewith):
(i) if to WORK or Newco, addressed to it at:
Work International Corporation
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxx X. Xxxxxxxx
Vice President and Chief Acquisitions Officer
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice for purposes of this
Agreement) to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Xx.
Telecopy No.: (000) 000-0000
(ii) if to the Stockholders, addressed to them at their
respective addresses set forth in Schedule 2.04; and
(iii) if to the Company, addressed to it at:
00 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Attn: President
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice for purposes of this
Agreement) to:
Xxxxxx, Zener & Waxman
0000 Xxxxxxxx Xxx. X.
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Attn: Xxxxx Xxxxxx
Telecopy No.: (000) 000-0000
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE, WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICTS OF LAW PROVISIONS THEREOF: PROVIDED, HOWEVER, THAT: (A) ARTICLE X
AND THE RIGHTS AND OBLIGATIONS THEREUNDER OF THE PARTIES WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE [PROVINCE
OF ONTARIO] WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF AND (B)
MATTERS
PERTAINING SOLELY TO THE LEGALITY AND EFFECTUATION OF THE MERGER SHALL BE
GOVERNED BY THE BUSINESS CORPORATION ACT.
Section 11.10. Exercise of Rights and Remedies. Except as otherwise
provided herein, no delay or omission in the exercise of any right, power or
remedy accruing to any Party as a result of any breach or default hereunder by
any other Party shall impair any such right, power or remedy, nor shall it be
construed, deemed or interpreted as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any waiver of any single breach or default be construed, deemed or
interpreted as a waiver of any other breach or default hereunder occurring
before or after that waiver.
Section 11.11. Time. Time is of the essence in the performance of this
Agreement in all respects.
Section 11.12. Reformation and Severability. If any provision of this
Agreement is invalid, illegal or unenforceable, that provision shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the Parties as
expressed herein, and if such a modification is not possible, that provision
shall be severed from this Agreement, and in either case the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
Section 11.13. Remedies Cumulative. Except as otherwise provided in
Section 9.06, no right, remedy or election given by any term of this Agreement
shall be deemed exclusive, but each shall be cumulative with all other rights,
remedies and elections available at law or in equity.
Section 11.14. Respecting the IPO. Each of the Company and the
Stockholders acknowledges and agrees that: (a) no firm commitment, binding
agreement or promise or other assurance of any kind, whether express or implied,
oral or written, exists at the date hereof that the Registration Statement will
become effective or that the IPO will occur at a particular price or within a
particular range of prices or occur at all; (b) neither WORK or any of its
Representatives nor any prospective underwriters in the IPO will have any
liability to the Company, the Stockholders or any of their respective Affiliates
or associates for any failure of (i) the Registration Statement to become
effective (provided, however, that WORK will use its reasonable best efforts to
cause the Registration Statement to become effective prior to September 30,
1998) or (ii) the IPO to occur at a particular price or within a particular
range of prices or to occur at all; and (c) the decision of Stockholders to
enter into this Agreement, or to vote in favor of or consent to the Merger, has
been or will be made independent of, and without reliance on, any statements,
opinions or other communications of, or due diligence investigations that have
been or will be made or performed by, any prospective underwriter relative to
WORK or the IPO. The Underwriter shall have no obligation to any of the Company
and the Stockholders with respect to any disclosure contained in the
Registration Statement except for written information concerning the Underwriter
furnished to the Company by or on behalf of the Underwriter specifically for
inclusion in the Registration Statement.
Section 11.15. Consents.
(a) The Stockholders, as the owners and holders of all the Capital
Stock of the Company, hereby consent to and approve the Merger and the plan
of merger contemplated by this Agreement pursuant to Sections 174, 175,
and 176 of the Business Corporation Act.
(b) WORK hereby consents to and approves the Merger and the plan of
merger contemplated by this Agreement pursuant to Sections 174, 175, and
176 of the Business Corporation Act.
Section 11.16. Repayment of Obligations. On or before the IPO Closing
Date, each of the Stockholders shall repay the entire unpaid amount of all
notes, advances and other payment obligations owed by such Stockholder to the
Company.
Section 11.17. Litigation Matters. The Stockholders covenant and agree
that they, jointly and severally, will indemnify each WORK Indemnified Party
against, and hold each WORK Indemnified Party harmless from and in respect of,
all Damages that arise from, are based on or relate or otherwise are
attributable to the litigation described in Section 4.12 of the Disclosure
Statement, to the same extent as if such matters were WORK Indemnified Losses
except that such indemnification shall be without regard to the Threshold Amount
limitation on indemnification contained in the first sentence of Section
9.06(a).
Section 11.18. Guaranty of Certain Obligations. Xxxxxxx Xxxxx and
Xxxxxxx Xxxxx hereby agree that they shall be liable for, and obligated to
perform, each representation, warranty, covenant, indemnity obligation and each
other agreement and undertaking hereunder of Xxxxxxx Xxxxxxx and Xxxxxx Xxxxx.
The obligations hereunder of Xxxxxxx Xxxxx and Xxxxxxx Xxxxx shall in all
respects be joint and several, and any right or obligation which any Party would
be entitled to enforce against either such Person may be enforced directly
against the other.
Section 11.19. 116 Limited Amalgamation. The Stockholders own 100% of the
Capital Stock of 116 Limited. 116 Limited is a holding company which owns 100%
of the Capital Stock of the Company but has no other assets or operations and
has no liabilities. On or before the date of the Closing, the Stockholders
covenant and agree to cause 116 Limited to amalgamate with the Company with the
result that the Stockholders will own 100% of the Capital Stock of the Company
in accordance with the information contained in Schedules 2.04 and 3.02. All
the representations, warranties, covenants and agreements contained herein, in
the Uniform Provisions, the Schedules and the Disclosure Statement have been
made on the basis that the amalgamation by 116 Limited with the Company, has
been accomplished, and the Stockholders undertake and agree to cause that
amalgamation to occur as herein set forth.
ARTICLE XII
TERMINATION
Section 12.01. Termination of This Agreement.
(a) This Agreement may be terminated at any time prior to the Closing
solely:
(i) by the mutual written consent of WORK and the Company;
(ii) by the Majority Stockholders or the Company, on the one
hand, or by WORK, on the other hand, if the transactions contemplated
by this Agreement to take place at the Closing shall not have been
consummated by September 30, 1998, unless the failure of such
transactions to be consummated results from the willful failure of the
Party (or in the case of the Stockholders and the Company, any of
them) seeking to terminate this Agreement to perform or adhere to any
agreement required hereby to be performed or adhered to by that Party
prior to or at the Closing or thereafter on the IPO Closing Date;
provided, however, that the date September 30, 1998, set forth above
shall be extended to October 31, 1998, unless, on or before September
15, 1998, Founding Companies which are to receive a majority of the
initial merger consideration (valuing shares of WORK Common Stock at
$12 per share) to be received by all the Founding Companies on the IPO
Closing Date notify WORK that they have elected not to extend such
date beyond September 30, 1998;
(iii) by the Majority Stockholders or the Company, on the one
hand, or by WORK, on the other hand, if a material breach or default
shall be made by the other Party (or in the case of the Stockholders
and the Company, any of them) in the observance or in the due and
timely performance of any of the covenants, agreements or conditions
contained herein and such breach or default continues for fifteen days
after written notice from the Majority Stockholders or the Company, on
the one hand, or from WORK on the other hand; or
(iv) by WORK if it is entitled to do so as provided in Section
6.06.
(b) This Agreement may be terminated after the Closing solely:
(i) by WORK or the Company if the Underwriting Agreement is
terminated pursuant to its terms after the Closing and prior to the
consummation of the IPO; or
(ii) automatically and without action on the part of any party
hereto if the IPO is not consummated within 15 Business Days after the
date of the Closing.
Section 12.02. Liabilities in Event of Termination. If this Agreement is
terminated pursuant to Section 12.01, there shall be no liability or obligation
on the part of any Party except (a) as provided in Section 11.07, or (b) to the
extent that such liability is based on the breach by that Party of any of its or
his representations, warranties or covenants set forth in of this Agreement.
[SIGNATURE PAGE FOLLOWS.]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
WORK INTERNATIONAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxx, Vice President and
Chief Acquisitions Officer
1296209 ONTARIO INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxx, President and
Chief Acquisitions Officer
XXXX PLACEMENT SERVICES INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------
Xxxxxxx Xxxxx, President
STOCKHOLDERS:
/s/ Xxxxxxx Xxxxx
-----------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
-----------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxx
-----------------------------
Xxxxxx Xxxxx
ADDENDUM 1
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Addendum which are defined in the
captioned Agreement to which this is an Addendum are used herein as therein
defined.
B. The Founding Companies are:
1. Absolutely Professional Staffing, Inc.
2. Botal Associates, Inc.
3. AIM Staffing, Inc.
4. Access Staffing, Inc.
5. Benetemps, Inc.
6. The Xxxxxxx Companies Consolidated, Inc.
7. Contract Health Professionals Inc.
8. Core Personnel, Inc.
9. Core Personnel of Arlington, Inc.
10. CoreLink Staffing Services, Inc.
11. Law Pros Legal Placement Services, Inc.
12. Law Resources, Inc.
13. Professional Consulting Network, Inc.
14. Xxxxx Xxxxxx Associates, Inc.
15. Xxxxx Xxxxxx Consulting Group, Inc.
16. Sparks Personnel Services, Inc.
17. Sparks Associates, Inc.
18. Customer Care Solutions, LLC
19. Task Management, Inc.
20. XXXX Placement Services Inc.
21. WSi Personnel Services, Inc.
SCHEDULE 2.03
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.03 are used
herein as therein defined.
B. The directors of Amalco immediately after the Effective Time are as
follows:
Xxxxxx Xxxxx
X. Xxxxxxxx French
Xxxxxxx Xxxxx
C. The officers of Amalco immediately following the Effective Time are as
follows:
President Xxxxxxx Xxxxx
Vice President Xxxxxxx Xxxxx
Vice President Xxxxxx Xxxxxxx
Controller Xxxxxxx Xxxxx
Vice President and Assistant Secretary Xxxxx X. Xxxxxxxx
Vice President and Assistant Secretary Xxxx X. Xxxx
SCHEDULE 2.04
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.04 are used
herein as therein defined.
B. The name and address of each Stockholder are as follows:
Name Address
------ ---------
Xxxxxxx Xxxxx 00 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Xxxxxxx Xxxxx 00 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Xxxxxxx Xxxxxxx 0000 Xxxx Xxxxxx Xxxxxxx
Xxxxxxxxxx, XX XXX 00000
Xxxxxx Xxxxx 000 Xxxx 00 Xxxxxx, Xx. 00
Xxx Xxxx, XX 00000
C. The aggregate Merger Consideration shall be comprised of (i) an amount
of cash equal to CDN$2,000,000, as adjusted pursuant to paragraph D below, and
(ii) 382,356 shares of WORK Common Stock, which shall be payable and issuable to
the Stockholders as follows:
(a) the 500 Company Class A Special Shares and 1,000 Class B Special
Shares held by Xxxxxxx Xxxxx immediately prior to the Effective Time will
be converted into the right to receive, without interest, on surrender of
the certificate evidencing those shares the amount of cash equal to CDN
$1,000,000, plus 50% of any positive adjustment, and minus 50% of any
negative adjustment, to the cash portion of the Merger Consideration to be
made pursuant to paragraph D below;
(b) the 500 Company Class A Special Shares and 1,000 Class B Special
Shares held by Xxxxxxx Xxxxx immediately prior to the Effective Time will
be converted into the right to receive, without interest, on surrender of
the certificate evidencing those shares the amount of cash equal to CDN
$1,000,000, plus 50% of any positive adjustment, and minus 50% of any
negative adjustment, to the cash portion of the Merger Consideration to be
made pursuant to paragraph D below; and
(c) the 50 shares of Capital Stock of the Company held by each of
Xxxxxxx Xxxxxxx and Xxxxxx Xxxxx immediately prior to the Effective Time
will be converted into the right to receive, without interest, on surrender
of the certificate evidencing those shares, 191,178 shares of WORK Common
Stock, being 50% each of the WORK Common Stock which constitutes a portion
of the Merger Consideration.
D. The cash portion of the Merger Consideration will be subject to
adjustment based upon changes in Working Capital and Long Term Debt between the
Initial Calculation Date and the Adjustment Date as follows: (i) the cash
portion of the Merger Consideration will be increased for any positive change,
and decreased for any negative change, in the Company's Working Capital between
the Initial Calculation Date and the Adjustment Date and (ii) the cash portion
of the Merger Consideration will be increased for any decrease, and decreased
for any increase, in the amount of Long Term Debt, between the Initial
Calculation Date and the Adjustment Date.
E. The Pro Rata Shares of the Stockholders are as follows:
Pro Rata
Name Share
---- --------
Xxxxxxx Xxxxx 25%
Xxxxx Xxxxx 25%
Xxxxxxx Xxxxxxx 25%
Xxxxxx Xxxxx 25%
----
100%
SCHEDULE 3.01
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.01 are used
herein as therein defined.
B. Each Stockholder is an "accredited investor" as defined in Securities
Act Rule 501(a).
SCHEDULE 3.02
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.02 are used
herein as therein defined.
B. The following table sets forth the ownership of the Company's Capital
Stock:
NUMBER OF
NAME CLASS SHARES OWNED
---- ----- ------------
Xxxxxxx Xxxxxxx Common 50
Xxxxxx Xxxxx Common 50
Xxxxxxx Xxxxx Class A Special Shares 500
Xxxxxxx Xxxxx Class A Special Shares 500
Xxxxxxx Xxxxx Class B Special Shares 1,000
Xxxxxxx Xxxxx Class B Special Shares 1,000
C. No exception is taken to the representations and warranties made in
Section 3.02 of the captioned Agreement.
SCHEDULE 3.07
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.07 are used
herein as therein defined.
B. The Stockholders are, alone or with one or more other Persons, the
controlling Affiliate of the following Entity, business or trade (other than the
Company and the Company Subsidiaries, if the Stockholder is an Affiliate of the
Company) that is (a) engaged in any line of business which is the same as or
similar to any line of business in which the Company or any Company Subsidiary
is engaged or (b) is, or has within the three year period ending on the date of
the captioned Agreement, engaged in any transaction with the Company or any
Company Subsidiary except for (i) transactions in the ordinary course of
business of the Company or that Company Subsidiary and (ii) any single
transaction (or series of related transactions) involving property or services
having a value, or the payment of money, of less than $10,000:
None.
SCHEDULE 4.07
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.07 are used
herein as therein defined.
B. Set forth below are the authorized Capital Stock of the Company, the
number of shares of Capital Stock of each class or series which are issued and
now outstanding, whether any shares of Capital Stock of the Company are held by
the Company as treasury shares, and whether any Derivative Securities of the
Company are outstanding:
No. of Shares No. of Derivative
No. of Shares Issued and No. of Treasury Shares
Class Authorized Outstanding Shares Outstanding
----- ------------- ------------- --------------- -----------------
Common Shares 1,000,000 100 None None
Class A Special Shares 1,000,000 1,000 None None
Class B Special Shares 1,000,000 2,000 None None
SCHEDULE 4.11
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.11 are used
herein as therein defined.
B. The following Related Party Agreements will be permitted to continue
in effect past the date of the Closing in accordance with their terms, subject
to the following provisions of this Schedule:
The New Employment Agreements.
SCHEDULE 4.28
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.28 are used
herein as therein defined.
B. The Company has not made, and there is not now in effect, an election
with the IRS to be taxed as an S corporation within the meaning of Section 1361
of the Code.
SCHEDULE 6.02
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.02 are used
herein as therein defined.
B. No exception is taken to the covenants contained in Section 6.02.
SCHEDULE 6.03
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.03 are used
herein as therein defined.
B. The Company and the Company Subsidiaries may make the following
Restricted Payments prior to the Effective Time:
None.
SCHEDULE 6.10
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.10 are used
herein as therein defined.
B. The Company will make all arrangements and take all such actions as
are necessary and satisfactory to WORK to dispose, prior to the Effective Time,
of the following assets in the manner indicated below:
None
SCHEDULE 8.04
to the
Agreement and Plan of Reorganization
dated as of July 10, 1998
among
Work International Corporation
1296209 Ontario Inc.
XXXX Placement Services Inc.
and
the Stockholders Named Therein
A. Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 8.04 are used
herein as therein defined.
B. At or within 120 days following the Effective Time, WORK will cause
the following Stockholder Guarantees to be terminated:
None.
