MEMORANDUM OF UNDERSTANDING
This non-binding Memorandum of Understanding ("MOU") dated as of September 23,
1999 is by and among Fasturn, Inc., a Nevada corporation ("Fasturn"), and a
wholly-owned subsidiary of S. Cash Xxxxxxxxx ("Xxxxxxxxx" on behalf of himself
and certain other shareholders (the "Shareholders"), and Global Employment
Solutions, Inc. ("Global"), a Colorado corporation.
RECITALS
WHEREAS, Xxxxxxxxx, a director and a current owner of more than 10% of the
outstanding shares of common stock of Team America Corporation, no par value
("TEAM"), has expressed an interest to TEAM's management in purchasing all of
the outstanding capital stock of Team (the "Team Stock");
WHEREAS, Global also has an interest in purchasing all of the outstanding
TEAM Stock;
WHEREAS, prior to the consummation of the transactions contemplated hereby,
Xxxxxxxxx shall contribute all of the Team Stock owned by him to Fasturn; and
WHEREAS, the parties now desire to work together to jointly purchase and
operate TEAM pursuant to the terms more fully set forth below.
NOW THEREFORE, for and in consideration of the foregoing premises, the
parties hereto agree as follows:
1. PURCHASE OF TEAM. Global and Fasturn shall jointly prepare and submit a
mutually agreeable offer for Global's purchase (through a merger or otherwise,
the "Purchase") of all of the outstanding shares of TEAM Stock (the "Joint
Offer") to TEAM or its representatives no later than the close of business on
Tuesday, September 21, 1999. The purchase price in the Offer shall not exceed,
in aggregate, $7.75 per share (the "Per Share Purchase Price") without the prior
written consent of Global and Fasturn. Such Offer shall be subject to due
diligence; government approvals; compliance with applicable Securities and
Exchange Commission ("SEC") rules and regulations; receipt of financing
acceptable to Global and Fasturn; and the execution of a definitive purchase
agreement between Global and TEAM acceptable to Fasturn and incorporating the
terms hereof and other customary terms and conditions.
2. FINANCING OF PURCHASE. The parties acknowledge and agree that any Joint
Offer shall be subject to the receipt of debt and equity financing by Global on
terms acceptable to each party. Commitment letters for such financing shall be
secured by Global as part of the definitive agreement with Team.
3. CONTRIBUTION TO GLOBAL. Immediately after completion of the Purchase and
subject to the terms of a TRANSFER AND EXCHANGE AGREEMENT, Fasturn and the
Shareholders (whose identity and number of shares contributed will be
determined by Fasturn in its sole discretion but shall be subject to Global's
approval as to the number of persons and applicable law) will transfer at least
750,000
shares of TEAM Stock valued at the Per Share Purchase Price to Global in
exchange for 848,540 shares of Global's convertible preferred stock valued at a
price of $6.85 per share (the "Global Stock"). After such transfer and exchange
(the "Transfer"), Fasturn and the Shareholders will hold 848,540 shares of
Global Stock (valued at $6.85 each) and representing no less than [TBD]. All
Global Stock and options to purchase Global Stock shall be subject to the
existing agreements generally applicable to Global Stock between Global's
stockholders and to Global's credit agreements.
4. MANAGEMENT. Immediately upon consummation of the transactions contemplated
by paragraph 3, Global shall cause:
x. Xxxxxxxxx to be elected as a director and appointed Co-Chairman of the
Board of Directors of Global (the "Co-Chairman") for a term of no less than 2
years. For service as Co-Chairman, Xxxxxxxxx shall be paid $30,000 per year.
For his strategic oversight services regarding TEAM's California operations,
Xxxxxxxxx shall be paid $90,000 per year. Xxxxxxxxx shall be a consultant to,
and not an employee of, Global. Xxxxxxxxx may not be removed as a director
other than for cause. Removal as Chairman and as a consultant to Global shall
be as agreed upon in the definitive agreements.
Xxxxxxxxx acknowledges that in the event any director has any interest in any
transaction with Global, such director shall recuse himself from discussions
over such transaction. Global acknowledges that it intends to divest its
current Internet application business (i.e. HR Library and Career Magazine) and
to explore Internet enablement for Global's PEO business.
b. Xxxxx Xxxxxxxx ("Xxxxxxxx") to be elected as a director of Global for a
term of no less than 2 years.
c. Promptly following the Purchase, a special committee of Global's Board
of Directors to be established with responsibility for subsequent PEO
acquisitions by Global. Such committee shall consist of 2 designees of KRG
Capital, LLC, Xxx Xxxxxxxx, Xxxxxxxxx and Xxxxxxxx. 4 of the 5 members of the
committee must approve any subsequent PEO acquisition, which approval would then
be sent to Global's Board of Directors for approval. Subject to their continued
service as a director, neither Xxxxxxxxx nor Xxxxxxxx shall be removed from such
committee for 2 years.
d. Global to take all actions necessary, including amending the Global
Certificate of Incorporation or bylaws, to limit the number of directors on the
Global Board of Directors to nine (9) prior to a public offering.
x. Xxxxxxxx to be appointed a senior officer of Global and President of
the PEO Division of Global for a term of no less than three (3) years, subject
to the terms of an EMPLOYMENT AGREEMENT between Global and Xxxxxxxx. Global
shall either honor Xxxxxxxx'x existing employment agreement with Team or enter
into a new Employment Agreement which is mutually acceptable to Global and
Xxxxxxxx.
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5. OPTIONS. Global's capital structure as of the date hereof is as set forth
on EXHIBIT A. Based on such capital structure, following the Transfer, up to
[TBD] percent of the outstanding Global Stock (I.E. [TBD] shares) shall be
subject to options to certain Global executives granted by Global's Board of
Directors. Xxxxxxxxx and Xxxxxxxx shall be granted options to purchase up to
[TBD] shares of Global Stock on the date of the Transfer at a purchase price of
[TBD] per share. Such options shall be subject to the terms of Global's stock
option plan, a STOCK OPTION AGREEMENT and the other documents governing Global
Stock.
6. UNWIND IN EVENT OF UNSUCCESSFUL OFFER. In the event that the Offer is not
accepted by TEAM and no acceptable alternative agreement between the parties and
TEAM can be reached within three months of the date hereof or either party
elects to terminate this MOU for any reason whatsoever, this MOU shall terminate
and be of no further force and effect. If the Offer is not accepted or this MOU
is terminated, no transfer or exchange of TEAM Stock and Global Stock will occur
between Fasturn and the Shareholders and Global, and no other the other
transactions contemplated hereby shall be implemented.
7. SALE OF GLOBAL STOCK. After the Transfer, the Global Stock issued to
Fasturn and the Shareholders shall be entitled to the same redemption rights as
the existing preferred stockholders of Global have generally. Such redemption
rights shall be co-terminous with such rights of the preferred stockholders.
8. TRANSACTION FEE. Global shall cause KRG to pay to Fasturn one half of any
and all fees earned by KRG in connection with the Offer and Purchase. In no
event, however, shall pay Fasturn less than $200,000.
9. CONSTRUCTION. This MOU has been negotiated by the parties and their
respective counsel and will be fairly interpreted in accordance with its terms
and without any strict construction in favor or against any of the parties.
10. PUBLICITY. No party shall issue any press release or make any public
announcement relating to the subject matter of this MOU without the prior
written consent of the other parties; provided, however, that any party may make
any public disclosure it believes in good faith is required by applicable law
concerning its securities or under the Securities Exchange Act of 1934, as
amended, in which case the party disclosing information shall advise the other
party prior to such disclosure.
11. GOVERNING LAW. This MOU will be construed and interpreted in accordance
with and governed by the laws of the State of Colorado without giving effect to
any choice or conflict of law provision or rule that would cause the application
of the laws of any jurisdiction other than the State of Colorado.
12. AMENDMENTS. This MOU may be modified only by written amendment executed by
each of the parties hereto.
13. SEVERABILITY. If any provision of this MOU will be held to be illegal,
invalid or
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unenforceable, the parties agree that such provision will be enforced to the
maximum extent permissible so as to effect the intent of the parties, and the
validity, legality and enforceability of the remaining provisions of this MOU
will not in any way be affected or impaired thereby.
14. COUNTERPARTS. This MOU may be executed in two or more counterparts, each
of which will be binding as of the date first written above, and all of which
will constitute one in the same instrument.
15. ENTIRE AGREEMENT. The provisions of this MOU and the documents referred to
herein set forth the entire agreement and understanding among the parties as to
the subject matter hereof, and supersede all prior agreements, oral or written,
and all other prior communications among the parties relating to the subject
matter hereof. This MOU contemplates further agreements (including, a Transfer
and Exchange Agreement, a Consulting Agreement, an Employment Agreement and a
Stock Option Agreement) between the parties and the parties agree to cooperate
with each other to negotiate any an all such agreements in good faith. Although
this is a non-binding MOU, the parties understand that upon the execution of
this MOU, they shall be contractually bound to proceed in good faith and no
party shall do anything which tends to deprive the other of the benefits of this
MOU.
16. NON-BINDING AGREEMENT. Notwithstanding anything contained in this MOU to
the contrary, this is a non-binding MOU. This MOU may be terminated at any time
by either party for any reason whatsoever. Neither party shall have any
obligation to consummate the transactions contemplated hereby until such time,
if any, as the definitive agreements contemplated hereby are executed by the
parties. The parties acknowledge that Global's obligations will be expressly
conditioned upon (i) receipt of Global's board approval, (ii) to the extent
required, Global stockholder approval, and (iii) satisfactory completion of
Global' due diligence of Team, Xxxxxxxxx and Fasturn. The parties also
acknowledge that Fasturn's and Xxxxxxxxx'x obligations will be expressly
conditioned upon Xxxxxxxxx'x satisfactory completion of due diligence of Global,
including without limitation the terms of Global's existing stockholder
arrangements.
17. EXPENSES. Except as otherwise provided in this MOU if transactions
contemplated hereby or thereby are consummated, all costs and expenses
(including the fees and expense of any attorneys and accounts or other
intermediaries) incurred in connection with the transactions contemplated by
this MOU will be paid by Global.
18. NOTICES. All notices that are required or permitted hereunder will be in
writing and will be sufficient if personally delivered or sent by facsimile
message or nationally recognized courier service. Any notices will be deemed
given upon the earlier of the date when received at, or the business day after
the business day it was sent by a nationally recognized courier service, or the
day after the date when sent by facsimile to, the address or facsimile number
set forth below, unless such address or facsimile number is changed by notice to
the other parties, and will be delivered by hand or courier service, mailed or
sent by telegraph or communications equipment of the sending party as follows:
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Global:
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxx Xxxxxxxx
(000) 000-0000 (facsimile)
(000) 000-0000
with a copy to:
KRG Capital, LLC
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
(000) 000-0000 (facsimile)
(000) 000-0000
Fasturn and Xxxxxxxxx:
Xxxxxx Xxxxxxxxx
0000 Xx. Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
000-000-0000 (facsimile)
000-000-0000
19. RELATIONSHIP OF THE PARTIES. Nothing contained in this Agreement will be
deemed to create a partnership among the parties or any of their affiliates.
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IN WITNESS WHEREOF, the parties hereto have set their signatures below.
FASTURN, INC.
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By:
Its:
XXXXXX XXXX XXXXXXXXX
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GLOBAL EMPLOYMENT SOLUTIONS, INC.
-------------------------------------
By:
Its:
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