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EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
by and among
STAFFMARK, INC.,
STAFFMARK ACQUISITION CORPORATION SIXTEEN,
STRUCTURED LOGIC COMPANY, INC.
and
STRUCTURED LOGIC SYSTEMS, INC.
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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.2. Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.3. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.4. Subsidiaries and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.5. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.6. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.7. Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.8. Labor and Employee Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.9. Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.10. Powers of Attorney; Absence of Limitations on Competition; Guarantees . . . . . . . . . . . . 8
SECTION 3.11. Significant Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.12. Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.13. Absence of Certain Changes; Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.14. Certain Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.15. Compliance with Law; Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.16. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.17. Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.18. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.19. Outstanding Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.20. Outstanding Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.21. Intellectual Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.22. Proprietary Information of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.23. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.24. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.25. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.26. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.27. Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.28. Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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SECTION 3.29. Securities Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.30. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE BUYERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.2. Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.3. No Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.4. The Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V. PRECLOSING COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.1. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.2. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.3. Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.4. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.5. Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.6. Obligations Concerning Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.7. Corporate Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.8. Notice of Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.9. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI. POSTCLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.1. PostClosing Covenants of the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.2. PostClosing Covenants of StaffMark and SAC . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VII. CONDITIONS TO THE BUYERS' OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.1. Representations and Warranties True; Satisfaction of Covenants . . . . . . . . . . . . . . . 20
SECTION 7.2. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.3. No Obstructive Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.4. Opinion of Counsel to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.5. Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.6. Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.7. Approval of the Buyers and Its Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.8. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.9. Indemnification Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.10. Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.11. Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.12. Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.13. Earnout Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.14. Purchase Price Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.15. Corporate Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.16. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VIII. CONDITIONS TO THE CORPORATION'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.1. Representations and Warranties True; Satisfaction of Covenants . . . . . . . . . . . . . . . 22
SECTION 8.2. Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.3. No Obstructive Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.4. Approval of the Corporation and Its Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 22
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SECTION 8.5. Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.6. Earnout Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.7. Opinion of Counsel to the Buyers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.8. Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IX. THE CLOSING AND CERTAIN CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.1. Time and Place of the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.2. Survival of Representations, Warranties and Covenants. . . . . . . . . . . . . . . . . . . . 23
SECTION 9.3. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE X. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.1. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 10.3. Other Termination Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.2. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.3. Modifications and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.4. Assignment/Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.5. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.7. Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.8. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.9. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.10. Headings and Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.11. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.12. Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.13. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 11.15. Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 11.16. Telecopy Execution and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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INDEX TO EXHIBITS
EXHIBIT A -- Form of the Xxxx of Sale and Assignment
EXHIBIT B -- Form of the Escrow Agreement
EXHIBIT C -- Form of the Earnout Agreement
EXHIBIT D -- Form of the Assumption Agreement
EXHIBIT E -- Form of the Indemnification Agreement
EXHIBIT F -- Form of the Noncompetition Agreement
INDEX TO SCHEDULES
Schedule 2.3 -- Excluded Assets
Schedule 2.6 -- Allocation of Purchase Price
Schedule 3.1 -- Organization and Qualification
Schedule 3.3 -- No Violations; Consents
Schedule 3.6 -- Financial Statements
Schedule 3.7 -- Absence of Undisclosed Liabilities
Schedule 3.8 -- Labor and Employee Relations
Schedule 3.8.1 -- Employees
Schedule 3.8.2 -- Consultants
Schedule 3.10 -- Powers of Attorney; Absence of Limitations on Competition; Guarantees
Schedule 3.11 -- Significant Customers
Schedule 3.13 -- No Adverse Change
Schedule 3.15 -- Compliance with Law; Licenses and Permits
Schedule 3.16 -- Employee Benefits
Schedule 3.17 -- Claims on Fixed Assets
Schedule 3.18 -- Insurance
Schedule 3.19 -- Contracts
Schedule 3.19.1 -- Notice of Contract Defaults
Schedule 3.19.2 -- Termination of Contracts
Schedule 3.19.3 -- Limitations on Contracts
Schedule 3.19.4 -- Contracts Requiring Consent of Other Party
Schedule 3.20 -- Leases
Schedule 3.21 -- Intellectual Properties
Schedule 3.22 -- Proprietary Information of Third Parties
Schedule 3.23 -- Transactions with Affiliates
Schedule 3.25 -- Litigation
Schedule 3.26 -- Environmental Matters
Schedule 3.27 -- Brokers
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is entered into this
___ day of November, 1997, by and among StaffMark, Inc., a Delaware corporation
("StaffMark"), StaffMark Acquisition Corporation Sixteen, a Delaware
corporation and wholly-owned subsidiary of StaffMark ("SAC" and collectively
with StaffMark, the "Buyers"), Structured Logic Company, Inc., a Delaware
corporation ("SLC") and Structured Logic Systems, Inc., a New York corporation
affiliated with SLC ("SLS" and collectively with SLC, the "Corporation").
StaffMark, SAC and the Corporation are sometimes referred to collectively as
the "Parties" and sometimes each entity is referred to herein separately as a
"Party".
RECITALS
WHEREAS, the Corporation is engaged in the business of providing
information technology consulting and staffing services (the "Business");
WHEREAS, the Corporation is the owner of all right, title and interest
in and to the assets described in Section 1.1 hereto, with such assets being
substantially all of the assets currently used by the Corporation in the
Business; and
WHEREAS, the Corporation desires to sell substantially all of its
assets to StaffMark and StaffMark desires to purchase, through SAC, the assets
from the Corporation, 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.
"ERISA Affiliate" means any entity that is, or at any time was, a
member of a controlled group, as defined in Section 412(n)(6)(B) of the
Code, that includes or included the Corporation or any predecessor to
the Corporation.
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"Knowledge" means all facts and information which are either within the
actual knowledge of the Corporation or of any officer, director,
employee or agent of the Corporation or that should have been known to
such persons in the exercise of reasonable care and after due inquiry.
"Liability" means any liability (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 Corporation consistent with past custom and practice (including
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 3.28
Agreed Value 2.4(d)
Agreement Preamble
Assignment Agreement 2.2(a)
Assumed Liabilities 2.5(a)
Assumption Agreement 2.5(a)
Balance Sheet 3.6
Balance Sheet Date 3.6
Benefit Plan 3.16
Breaching Party 9.3
Business Preamble
Buyers Preamble
Claims 2.1
Closing 9.1
Closing Date 9.1
Contracts 3.19
Corporation Preamble
Documents 3.2
Earnout Agreement 2.4(c)
Electronic Data 2.1(f)
Employee Information 2.1(d)
Employee Transfer Time 5.6
Employment Agreement 7.11
ERISA 3.16
Escrow Agreement 2.4(b)
Excluded Assets 2.3
Financial Statements 3.6
First Purchase Price Payment 2.4(a)
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GAAP 3.6
Indemnification Agreement 7.9
Intellectual Property 3.21
Leased Parcels 3.20
Leases 3.20
Mirror Plan 6.1(p)
Most Recent Financial Statements 3.6
Most Recent Fiscal Year End 3.6
Noncompetition Agreements 7.12
Parties Preamble
Party Preamble
Purchase Price 2.4
Purchase Price Certificate 2.4(a)
Records 2.1(e)
Related Person 3.22
SAC Preamble
Securities Act 3.29
Shares 2.4(a)
SLC Plan 6.1(p)
StaffMark Preamble
StaffMark Common Stock 2.4(a)
Substance or Substances 3.26
Tax or Taxes 3.24
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, the Corporation shall
transfer to SAC, 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 the Corporation or in which the Corporation 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 the Business, including, without limitation, 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, 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
Corporation relating to all of the foregoing items;
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(b) Name and Related Items. The names Structured Logic
Company, Inc. and any variant thereof, all copyrights, copyright
applications, trade names, trademarks, service marks and logos (whether
or not registered) related thereto; the Corporation's transferable
interest in the phone number (000) 000-0000, and the facsimile number
(000) 000-0000 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 the Corporation and its employees or consultants and
all rights thereunder and copies of all information for each employee
or consultant of the Corporation (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,
other than the corporate books and Tax returns, although, the Buyers
will be provided copies of these documents (collectively, the
"Records");
(f) Electronic Data. All rights of the Corporation 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
stockholder of the Corporation and/or the employees or consultants of
the Corporation on which appear the name "Structured Logic Company,
Inc.", 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) The Corporation shall transfer the Transferred Assets to
SAC pursuant to a Xxxx of Sale and Assignment the form of which is
attached hereto as Exhibit A, (the "Assignment Agreement"), and such
other documents and instruments relating thereto as the Buyers or its
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
Corporation 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
SAC and to confirm SAC's title to the Transferred Assets.
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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 Corporation the assets listed on Schedule 2.3 hereto (the
"Excluded Assets").
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 Buyers shall pay to
the Corporation an aggregate purchase price (the "Purchase Price") as follows:
(a) At the Closing, the Buyers shall deliver to the
Corporation: (i) the shares of StaffMark common stock, $.01 par value
(the "StaffMark Common Stock") set forth in the certificate delivered
by the Corporation herewith (the "Purchase Price Certificate"), based
on the Agreed Value (collectively, the "Shares"); and (ii) the amount
of cash set forth in the Purchase Price Certificate, said cash to be
payable in immediately available funds by wire transfer (the sum of the
values of items (i) and (ii) are collectively referred to as the "First
Purchase Price Payment");
(b) At the Closing, the Buyers shall deposit into escrow
with Mercantile Bank National Association, St. Louis, Missouri, the
number of the Shares equal to 10% of the First Purchase Price Payment
based on the Agreed Value, as further set forth in the Purchase Price
Certificate, pursuant to an escrow agreement, the form of which is
attached hereto as Exhibit B (the "Escrow Agreement");
(c) The Buyers shall pay to the Corporation the amount of
cash and StaffMark Common Stock pursuant to and in accordance with the
Earnout Agreement, the form of which is attached hereto as Exhibit C
(the "Earnout Agreement");
(d) For purposes of this Agreement, the term "Agreed Value"
shall mean the ten (10) day average for the last reported 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; and
(e) The Buyer shall pay the Corporation Two Million, Five
Hundred Thousand Dollars ($2,500,000) on or before January 5, 1998.
SECTION 2.5. Assumption of Liabilities. The only obligations and
liabilities to be assumed by SAC 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, the form of which is attached
hereto as Exhibit D (the "Assumption Agreement"); provided, however, that the
Assumed Liabilities shall exclude in each case any Liabilities or alleged
Liabilities: (i) relating to any Taxes or sales, use or transfer Taxes arising
in connection with the sale of the Transferred Assets; (ii) relating to any
tort, infringement, or violation of law (civil or criminal) by the Corporation
and any pending or threatened litigation matters arising from actions or lack
of action that occurred prior to the Closing Date; (iii) payable to any
affiliate of the Corporation, except as set forth on the Balance Sheet; (iv)
arising under the environmental laws or any Benefit Plan (except to the extent
any Benefit Plan is specifically assumed pursuant to Section 6.2(d); (v)
arising from or relating to the employment or termination of employment of any
employee or consultant of the Corporation by the Corporation at or prior to the
Closing Date; and (vi) relating to any prepayment penalty or other obligation
relating to the Corporation'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
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payment or performance of any Liabilities of the Corporation of any nature
whatsoever, which relate to the Corporation and the Business prior to the
Closing Date.
SECTION 2.6. Allocation of Purchase Price. The consideration paid by
the Buyers and the Assumed Liabilities assumed by SAC pursuant to Sections 2.4
and 2.5 above shall be allocated among the Transferred Assets purchased
hereunder in accordance with Section 1060 of the Code and as set forth in
Schedule 2.6 attached hereto. The Corporation 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 CORPORATION
As an inducement to the Buyers to enter into this Agreement and to
consummate the transactions contemplated hereby, the Corporation represents and
warrants to the Buyers as follows:
SECTION 3.1. Organization and Qualification. The Corporation is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Corporation is duly qualified or otherwise
authorized to transact business and, except as noted on Schedule 3.1 is in good
standing as a foreign corporation 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 Corporation has made available to the Buyers complete and
correct copies of its Articles of Incorporation and By-laws as currently in
effect.
SECTION 3.2. Corporate Power and Authority. The Corporation has the
corporate power and authority to own and hold its properties and to carry on
its business as now conducted, including the right to use the name Structured
Logic Company, Inc., and any fictitious names currently being used in the
geographic area presently served by it. The Corporation: (a) has 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 Corporation and constitutes a valid and
binding obligation of the Corporation, enforceable against the Corporation in
accordance with their terms.
SECTION 3.3. No Violation. Except as set forth on Schedule 3.3,
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
Corporation will: (i) violate, conflict with or result in any breach of the
Articles of Incorporation or By-laws of the Corporation or any trust agreement,
judgment, decree, injunction, order, writ, statute, rule or regulation
applicable to the Corporation; (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
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obligations of the Corporation under any law, statute, rule, regulation or any
judgment, decree, order, governmental permit, license or order applicable to
the Corporation or any of the terms, conditions or provisions of any material
mortgage, indenture, note, license, Contract or other instrument or obligation
related to the Corporation or to the Corporation'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
Corporation; 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.
SECTION 3.4. Subsidiaries and Investments. The Corporation has no
subsidiaries and does not own, directly or indirectly, any capital stock or
other equity or ownership or proprietary interest in any other corporation,
partnership, association, trust, joint venture or other entity.
SECTION 3.5. Books and Records. The Corporation does not have any of
its 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
Corporation. The Employee Information, the Records, and the Electronic Records
are materially true and correct and accurately reflect the operations of the
Business and have been maintained consistent with past practices.
SECTION 3.6. Financial Statements. The Corporation has previously
furnished to the Buyers, and attached hereto as Schedule 3.6 are the following
financial statements (collectively, the "Financial Statements"): (a) audited
balance sheets and statements of income, changes in stockholders' equity, and
cash flow as of and for the fiscal years ended December 31, 1994, December 31,
1995 and December 31, 1996 (the "Most Recent Fiscal Year End") for the
Corporation; and (b) the unaudited balance sheet of the Corporation (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 (such interim financial statements are hereinafter referred to as the
"Most Recent Financial Statements"). All of 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 the
Corporation; provided, however, that the Most Recent Financial Statements are
subject to normal year-end adjustments (which will not be material in the
aggregate) and lack footnotes and other presentation items. Such books and
records are complete and correct in all material respects, accurately reflect
all transactions of the Corporation, and have been made available to the Buyers
for examination. The Financial Statements fairly present the financial
position of the Corporation as of the dates thereof and the results of its
operations for the periods ended on the dates thereof. Since the Balance Sheet
Date and except as set forth on Schedule 3.6: (i) there has been no change in
the assets, Liabilities or financial condition of the Business of the
Corporation 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 Corporation 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 the Corporation related to the Corporation, 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
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thereon or in respect thereof, to the extent such items are required to be
reflected on such Balance Sheet under GAAP.
SECTION 3.7. 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 3.7, the Corporation has no Liabilities or
obligations of any nature whatsoever due or to become due, accrued,
absolute, contingent or otherwise, except for Liabilities incurred
since the date thereof in the Ordinary Course of Business or which are
immaterial, if outside the Ordinary Course of Business.
(b) The Corporation 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 or consultants for all periods ending
prior to the Closing Date have been properly paid or accrued on the
Balance Sheet.
(c) The Corporation is not bound by any agreement, or
subject to any charter or other corporate 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 3.8. Labor and Employee Relations.
(a) Schedule 3.8 sets forth a list of each collective
bargaining agreement to which the Corporation is a party and any
collective bargaining agreement which pertains to employees or
consultants of the Corporation, as well as a list of employment
agreements with key employees of the Corporation and a summary of
agreements with consultants and independent contractors of the
Corporation. Schedule 3.8.1 sets forth a complete list of the base
salary and any bonuses or commissions for the prior year and the
current fiscal year paid by the Corporation for each corporate or
administrative employee and each consultant utilized in connection with
the operation of the Business. Schedule 3.8.2 sets forth a list of
each consultant of the Corporation and such consultant's gross pay
rate, all benefits and billing rates.
(b) No labor organization or group of employees or
consultants of the Corporation has made a pending demand for
recognition or certification, and there are no representation
proceedings presently pending or threatened with the National Labor
Relations Board or any other federal, state, or other governmental
agency or authority involving employees or consultants of the
Corporation. There are no other organizing activities involving the
Corporation presently being conducted or threatened by any labor
organization or group of employees or consultants of the Corporation.
(c) There are no strikes, work stoppages, slowdowns,
lockouts, labor disputes or material grievances pending or threatened
against the Corporation, and there have been no actual or threatened
material labor disputes or work stoppages within the last three (3)
years. Except as set forth on Schedule 3.8, there are no unfair labor
practice charges or complaints pending or threatened by or on behalf of
any employee, consultant or group of employees or consultant of the
Corporation.
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(d) There are no complaints, charges or claims pending or,
threatened against the Corporation 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 Corporation of any individual.
(e) Except as set forth in Schedule 3.8(e), the Corporation
has been and is in substantial compliance with all laws, regulations
and orders relating to the employment of the employees or consultants
of the Corporation, 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 3.9. Real Property. The Corporation owns no real property.
SECTION 3.10 Powers of Attorney; Absence of Limitations on
Competition; Guarantees. Except as set forth in Schedule 3.10: (i) no power of
attorney or similar authorization given by the Corporation presently is in
effect or outstanding as to any of the Transferred Assets; (ii) no contract or
agreement to which the Corporation is a party or is bound or to which the
Corporation's properties or assets is subject limits the freedom of the
Corporation to compete in any line of business or with any Person; and (iii)
the Corporation is 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 3.11. Significant Customers. Set forth on Schedule 3.11 is a
true and correct list of the Corporation's ten largest customers for the last
fiscal year and the most recent nine (9)-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 3.11 has terminated, reduced, or
threatened to terminate or reduce, its request for services of the Corporation
during the period covered by such schedule or prior to the Closing Date.
SECTION 3.12. 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 Corporation of this Agreement.
SECTION 3.13. Absence of Certain Changes; Conduct of Business. Except
as set forth on Schedule 3.13, during the period from the Balance Sheet Date to
and including the date of this Agreement:
(a) the Corporation has not canceled any indebtedness owing
to it or any claims that it 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 its assets or permitted any of its assets to be
subjected to any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind;
(b) the Corporation has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, of the Corporation
except in the Ordinary Course of Business;
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(c) the Corporation has not made any changes in the types,
nature, composition or quality of the services of the Business and
there has not been any adverse change in the sales, revenue or net
income of the Business;
(d) the Corporation has not entered into any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases and licenses) involving more than $5,000 or outside
the Ordinary Course of Business;
(e) no Person (including the Corporation) has accelerated,
terminated, modified, or canceled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) to which the Corporation is a party or by which it is bound
involving more than $5,000 or outside the Ordinary Course of Business;
(f) the Corporation has not allowed any Claims to be imposed
upon any of its assets, tangible or intangible outside the Ordinary
Course of Business;
(g) the Corporation has not made any capital expenditure (or
series of related capital expenditures) either involving more than
$25,000 or outside the Ordinary Course of Business;
(h) the Corporation has not made any capital investment in,
any loan to, or any acquisition of the securities or assets of, any
other Person;
(i) the Corporation has 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 $25,000 or outside the Ordinary
Course of Business;
(j) the Corporation has not delayed or postponed the payment
of accounts payable and other liabilities outside the Ordinary Course
of Business;
(k) the Corporation has not canceled, compromised, waived,
or released any right or claim (or series of related rights and claims)
either involving more than $25,000 or outside the Ordinary Course of
Business;
(l) the Corporation has not granted any license or
sublicense of any rights under or with respect to any patents,
trademarks or copyrights;
(m) the Corporation has not accelerated collection of
accounts receivables through special inducements or outside the
Ordinary Course of Business;
(n) the Corporation has not issued, sold or otherwise
disposed of any of its capital stock, or granted any options, warrants,
or other rights to purchase or obtain (including upon conversion,
exchange or exercise) any of its capital stock;
(o) the Corporation has not declared, set aside, or paid any
dividend or made any distribution with respect to its stockholders
(whether in cash or in kind) or redeemed, purchased, or otherwise
acquired any of its capital stock;
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(p) the Corporation has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its
property;
(q) the Corporation has not made any loan to, or entered
into any other transaction with, any of its stockholders, directors,
officers, employees or consultants outside the Ordinary Course of
Business;
(r) the Corporation has not entered into any employment
contract written or oral, or modified the terms of any existing such
contract or agreement outside the Ordinary Course of Business;
(s) the Corporation has not granted any increase in the base
compensation of any of its directors, officers, employees or
consultants other than increases in compensation in the Ordinary Course
of Business;
(t) the Corporation has not adopted, amended, modified or
terminated any bonus, profit sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of its directors,
officers, employees or consultants (or taken any such action with
respect to any other Benefit Plan);
(u) the Corporation has not made any other change in
employment terms for any of its directors, officers, employees or
consultants; and
(v) the Corporation has not agreed, whether or not in
writing, to do any of the foregoing.
SECTION 3.14. Certain Practices. Neither the Corporation, nor any of
its officers, directors, shareholders, 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 Corporation 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 3.15. Compliance with Law; Licenses and Permits. Except as
set forth on Schedule 3.15, the Corporation has substantially complied with all
laws, ordinances, legal requirements, rules, regulations and orders applicable
to it, its operations, properties, assets, products and services. Except as
set forth on Schedule 3.15, there is no existing law, rule, regulation or
order, whether federal, state or local, which would prohibit or restrict the
Buyers from conducting the Business in the manner heretofore conducted by the
Corporation in any jurisdiction in which the Business is now conducted. The
Corporation possesses all franchises, permits, licenses, certificates and
consents required from any governmental or regulatory authority in order for
the Corporation to carry on its business as currently conducted and to own
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and operate its 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 3.15 hereto.
SECTION 3.16. Employee Benefits. Schedule 3.16 lists all defined
benefit plans, defined contribution plans, welfare plans, compensation plans,
medical insurance and other employee benefit plans and programs maintained or
contributed to, or formerly maintained or contributed to by the Corporation or
any predecessor or ERISA Affiliates ("Benefit Plans"). Except as provided in
Schedule 3.16, as respects all Benefits Plans: (a) no Benefit Plan is or has
been subject to Title IV of ERISA; (b) no Benefit Plan provides for medical
benefits, life insurance or other similar benefits to retirees or their
families; (c) no Benefit Plan that provides welfare benefits is self-funded;
(d) the Corporation has not effected a termination or partial termination of
any Benefit Plan or participation in any Benefit Plan within the last five (5)
years; (e) no disabled current or former employee claims or receives or is
entitled to receive disability, pension, health, welfare or life insurance
benefits from the Corporation;(f) all Benefit Plans may be terminated or
modified by the Corporation in its discretion without penalty or premium; and
(g) all Benefit Plans have been operated in accordance with their terms and all
applicable laws, and each Benefit Plan intended to qualify under Section 401(a)
of the Code so qualifies.
SECTION 3.17. Fixed Assets. Except as shown on Schedule 3.17, the
Corporation has 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.
SECTION 3.18. Insurance. Schedule 3.18 lists the insurance coverage
carried by the Corporation, 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 3.18, the Corporation: (i) has not failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion; (ii) has not received notice of cancellation or nonrenewal of any such
policy or binder; (iii) is not aware of any threatened or proposed cancellation
or nonrenewal of any such policy or binder; (iv) has not received notice of any
insurance premiums which will be materially increased in the future; and (v) is
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.
SECTION 3.19. Outstanding Contracts. Except as set forth on Schedule
3.19, the Corporation has delivered or made available to the Buyers true,
correct and complete copies of all of the existing contracts, agreements,
personal property, leases, commitments, licenses and franchises relating to the
Corporation (collectively the "Contracts"). All of the Contracts and the
agreement referenced on Schedule 3.19 are 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 3.19.1, the Corporation and each other party thereto have
materially performed all the obligations required to be performed by it, 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 Corporation has no present
expectation or intention of not fully performing all its obligations under each
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of the Contracts, and the Corporation is not aware of any breach or anticipated
breach by the other party to any of the Contracts to which the Corporation is a
party. Except as set forth on Schedule 3.19.2, 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 Corporation is 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 3.19.3, there
exists no actual or, threatened termination, cancellation or limitation of the
business relationship of the Corporation by any party to any of the Contracts.
Except as set forth on Schedule 3.19.4, none of the Contracts requires the
consent of the other party thereto for the assignment of such Contract to the
Buyers and, upon such assignment at Closing as contemplated by this Agreement,
Buyers shall have all of the rights of the Corporation thereunder.
SECTION 3.20. Outstanding Leases. Schedule 3.20 sets forth a
description of each agreement by which the Corporation leases each parcel of
real property (the "Leased Parcels") used in connection with the Business
(collectively, the "Leases"). The Corporation has delivered or made available
to the Buyers true, correct and complete copies of all of the Leases specified
on Schedule 3.20. 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 3.20, the Corporation
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 Corporation has no present expectation or intention of not fully performing
all its obligations under each of the Leases, and the Corporation is not aware
of any breach or anticipated breach by the other party to any of the Leases.
Except as set forth on Schedule 3.20, 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 Corporation is 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 termination, cancellation, or limitation
of the business relationship of the Corporation with any party to any of the
Leases.
SECTION 3.21. Intellectual Properties. The Corporation owns 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 used by the Corporation in the operation of the Business
(collectively the "Intellectual Property"). Except as set forth on Schedule
3.21 and except for commercial software licensed for use on personal computers,
the Corporation owns the entire right, title and interest in and to the
Intellectual Property, trade secrets and technology used in the operation of
its Business and each item constituting part of the Intellectual Property which
is owned by the Corporation has been, to the extent indicated in Schedule 3.21,
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 3.21 and such registrations, filings
and issuances remain in full force and effect. There are no pending or
threatened 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 Corporation for infringement of 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
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or applications, trade secrets or other confidential proprietary information.
No Person is infringing the Intellectual Property.
SECTION 3.22. Proprietary Information of Third Parties. Except as
disclosed on Schedule 3.22, no third party has claimed (in writing) that any
Person employed by or consulting with the Corporation ("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 information from the Corporation
which suggests that such a claim might be contemplated. Except as disclosed on
Schedule 3.22, to the Knowledge of the Corporation, 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
Corporation, and the Corporation has no reason to believe there will be any
such employment or violation.
SECTION 3.23. Transactions with Affiliates. Except as disclosed on
Schedule 3.23, no stockholder, director, or officer of the Corporation, or
member of the family of any such person, or any corporation, 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 the Corporation, 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 that
survives the Closing.
SECTION 3.24. Taxes. All federal, state, local and foreign Tax
returns and Tax reports required to be filed by the Corporation 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. Except as set
forth on Schedule 3.7, all Taxes which have become due or payable or are
required to be collected by the Corporation for 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 the
Balance Sheet in accordance with GAAP or the Corporation's books and records on
or prior to the Closing Date. All deposits required by law to be made by the
Corporation with respect to employees' withholding Taxes have been duly made,
and as of the Closing Date all such deposits due will have been made. The
Corporation has delivered to the Buyers true and complete copies of all of the
Corporation's state and federal income Tax returns for the fiscal periods ended
December, 1996, 1995 and 1994 and all reports and results of income Tax audits,
if any, related thereto. No examination of any Tax return of the Corporation
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 Corporation is 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
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personal property taxes, assessments, environmental taxes, transfer taxes,
Pension Benefit Guaranty Corporation premiums and other governmental charges,
and other similar obligations).
SECTION 3.25. Litigation. Except as set forth on Schedule 3.25, there
is no: (i) action, suit, claim, proceeding or investigation pending or
threatened against or affecting the Corporation (whether or not the Corporation
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 Corporation; or (iii) governmental inquiry
pending or threatened against or involving the Corporation, and there is no
basis for any of the foregoing. The Corporation has not received any opinion
or memorandum or legal advice from legal counsel to the effect that it is
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 Corporation. There are no outstanding orders, writs,
judgments, injunctions or decrees served upon the Corporation by any court,
governmental agency or arbitration tribunal against the Corporation. To the
knowledge of the Corporation, 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 Corporation or the transactions contemplated hereby.
The Corporation is not in default with respect to any order, writ, injunction
or decree known to or served upon it 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 3.25,
there is no action or suit by the Corporation pending or threatened against
others.
SECTION 3.26. Environmental Matters. The Corporation is in 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 3.26, there
are no past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans of the Corporation or the Corporation's
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 3.26,
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.
SECTION 3.27. Broker's or Finder's Fees. Except as set forth on
Schedule 3.27, no agent, broker, person or firm acting on behalf of the
Corporation is, or will be, entitled to any commission or broker's or finder's
fees from the Corporation or from any person controlling, controlled by or
under common control with the Corporation in connection with any of the
transactions contemplated herein.
SECTION 3.28. Accounts Receivable and Employee Loans. All accounts
receivable of the Corporation that are reflected on the Balance Sheet on the
Balance Sheet Date or on the accounting records of the Corporation 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 the Corporation as of the Closing Date
(which reserves are adequate and
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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 the Corporation for collection and the Buyers shall
have the right to make a claim in accordance with the Indemnification Agreement
and the Escrow Agreement; however, the Corporation 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. All employee
loans are collectible without any contest, claim, or right of set-off.
SECTION 3.29. Securities Exemptions. The Shares constituting a
portion of the Purchase Price are being issued to the Corporation for its own
account, for investment purposes only and, other than with respect to the
possible distribution to the Corporation's stockholders and key employees, the
Corporation has 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 thereunder. The Corporation is an accredited investor as that
term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.
SECTION 3.30. Disclosure. All Documents delivered or to be delivered
by the Corporation and all Documents delivered or to be delivered on behalf of
the Corporation by its 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 Corporation herein or therein, in light of the
circumstances in which made, not misleading. There is no fact which adversely
affects the business, prospects or financial condition of the Corporation or
its properties or assets, which has not been set forth in the Documents.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE BUYERS
As an inducement to the Corporation to enter into this Agreement and to
consummate the transactions contemplated hereby, StaffMark and SAC, jointly and
severally, represent and warrant to the Corporation as follows:
SECTION 4.1. Organization. Each of StaffMark and SAC 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
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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 material
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 Corporation will contain a restrictive legend in substantially
the following form:
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.
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SECTION 5.2. Best Efforts. The Corporation and the Buyers shall each
use its 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 SAC's ownership and the Corporation's Business after the
Closing Date. Prior to the Closing Date, the Corporation will use commercially
reasonable efforts to preserve its relationships with its employees,
consultants, customers, and others having business relationships with the
Corporation.
SECTION 5.3. Investigations. The Corporation shall give the Buyers
and its 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 Corporation's
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 Corporation.
SECTION 5.4. Distributions. Prior to the Closing, the Corporation
shall pay no dividends, distributions, consulting fees or management fees to
the stockholder(s) of the Corporation, except with respect to the Excluded
Assets. Prior to the Closing, the Corporation shall not increase management
compensation policies or plans, and shall conduct no transactions with, or
transfer anything of value, directly or indirectly, to the Corporation's
stockholders, except with respect to the Excluded Assets.
SECTION 5.5. Corporate Matters. During the period from the date of
this Agreement to the Closing, the Corporation will not: (i) amend its articles
of incorporation or bylaws; (ii) issue any shares of its capital stock; (iii)
issue or create any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional shares of its
capital stock of any class might be directly or indirectly authorized, issued
or transferred from treasury; (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.
SECTION 5.6. Obligations Concerning Employees. The Corporation will
be responsible for all Liabilities associated with the employees and
consultants which relate to the period prior to midnight on the Closing Date
(the "Employee Transfer Time"). On the Closing Date, the Corporation 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 Corporation to the employees or consultants of the Corporation prior to the
Closing Date.
SECTION 5.7. Corporate Name. On the Closing Date, the Corporation
shall change its corporate name such that the new name of Corporation is not
similar to the existing name and otherwise is not likely to be confused with
its present names so as to make the Corporation's name available to the Buyers.
SECTION 5.8. Notice of Developments. The Corporation 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.
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SECTION 5.9. Exclusivity. The Corporation will not: (i) solicit,
initiate, or encourage the submission of any proposal or offer from any person
relating to the acquisition of any capital stock or other voting securities, or
any substantial portion of the assets, of the Corporation (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 Corporation 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 Corporation.
(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 Corporation 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 Corporation 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 Corporation from maintaining the same business relationships with
the Buyers after the Closing as it maintained with the Corporation
prior to the Closing. The Corporation will refer all customer
inquiries relating to the Business to the Buyers from and after the
Closing.
(c) Tax Returns. The Corporation 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. The Corporation shall be
responsible for the payment of all Taxes due or assessed which relate
to the operations of the Business for all periods up to and including
the Closing Date.
(d) Dissolution. Subsequent to the Closing, the Corporation
will not dissolve or otherwise terminate its existence on or before
December 26, 1997.
(e) Nondisclosure of Confidential Information. The
Corporation recognizes and acknowledges that it has 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 StaffMark considers to be valuable, special and
unique property of StaffMark. Following the Closing, the Corporation
agrees that it will not disclose, and that it will use reasonable
efforts to prevent disclosure by any other Person of, any such
confidential information to any Person, except to authorized
representatives of StaffMark. The Corporation recognizes and agrees
that violation of any of the agreements contained in this Section
6.1(e) will cause irreparable damage or injury to StaffMark, the exact
amount of which may be impossible to ascertain, and that, for such
reason, among others, StaffMark shall be entitled to seek an
injunction, restraining any further violation
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of such agreements. Such rights to any injunction shall be in addition
to, and not in limitation of, any other rights and remedies StaffMark
may have against the Corporation or its stockholder.
(f) Payment of Liabilities. Following the Closing Date,
except for the Assumed Liabilities, the Corporation shall pay and
satisfy in full all of its other obligations and Liabilities, of any
nature whatsoever, which accrue prior or subsequent to the Closing
Date.
(g) Insurance. Following the Closing Date, the Corporation
shall, if requested by the Buyers, assign to the Buyers or its
designated affiliates the Corporation's 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 Corporation and is otherwise not prejudicial to the
Corporation.
(h) Employee Records. Following the Closing Date, unless
prohibited by law, the Corporation shall make available to the Buyers
all personnel records, including without limitation names, Social
Security numbers, dates of hire by the Corporation, dates of birth,
number of hours worked each calendar year, and salary histories, for
all the Corporation's employees and consultants. The Corporation 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 Corporation's employees and consultants
who become employees or 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 Corporation
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 Corporation and their respective beneficiaries and
dependents.
(i) Bulk Transfer Compliance. Following the Closing Date,
the Corporation shall pay any and all Claims resulting from the
assertion of any claim made against the Transferred Assets or the
Buyers by any creditor of the Corporation pursuant to any bulk sales
statutes, or any other applicable law related to bulk sales, other than
any Claims relating to the Assumed Liabilities.
(j) Corporate Name. From and after the Closing, Corporation
shall not use the words making up its existing name (or any existing
trade names) or similar names in connection with any business.
(k) Consents. Following the Closing, the Corporation will
use its best efforts to obtain any consents not previously obtained as
soon as possible after the Closing Date.
(l) Employee Claims. On or after the Closing Date, the
Corporation hereby agrees and covenants that in the event the Buyers
receive employee or consultant claims attributable in all or in part to
the employment of such employee or consultant or former employee or
consultant of the Corporation prior to the Closing Date, the
Corporation agrees to undertake the defense of such claims. Such
claims could include, without limitation, claims asserted by any union
representing the Corporation's employees or claims before an
administrative agency such as the EEOC or NLRB 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
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Corporation; provided, however, that the Buyers will provide the
Corporation prompt notice of any such Claim in as much detail as is
reasonably possible.
(m) Employee Bonuses. Following the Closing Date, the
Corporation agrees to pay any and all amounts owed by the Corporation
to the key employees with respect to incentive and/or bonus plans,
agreements or arrangements that existed with such persons on or before
the Closing Date to the extent that any such items are not a part of
the Assumed Liabilities.
(n) Licenses of the Corporation. Following the Closing
Date, the Corporation will obtain qualifications or licenses necessary
to do business in the states listed on Schedule 3.1, such that the
Corporation will be in good standing as a foreign corporation in such
states.
(o) Relocation Costs. The Corporation will pay fifty
percent (50%) of any costs incurred (other than rent increases) if any
landlord of the Corporation terminates its lease with the Corporation
as a result of this Agreement and the transactions contemplated hereby.
(p) 401(k) Plan and Other Employee Benefit Matters. Prior
to the Closing, the Corporation shall: (i) terminate the Structured
Logic Company, Inc. 401(k) Plan and Trust (the "SLC Plan") and fully
vest all participants in their account balances thereunder; and (ii)
adopt a plan that is intended to qualify under Section 401(a) of the
Code which is substantially identical to the SLC Plan (the "Mirror
Plan"). Following the Closing, the Corporation shall: (i) take such
action as may be necessary so that distributions from the SLC Plan
qualify as "eligible rollover distributions" within the meaning of
Section 402(c)(4) of the Code; (ii) obtain a favorable determination
letter from the Internal Revenue Service with respect to the
termination of the SLC Plan; (iii) make all required filings with
governmental authorities with respect to the SLC Plan; and (iv) after
completion of the actions contemplated by clauses (i) through (iii) in
this Sentence distribute all assets of the SLC Plan to participants in
accordance with the terms of the SLC Plan and applicable law. As soon
as possible following the Closing, the Corporation will make all
filings required with respect to any Benefit Plans, including but not
limited to the SLC Plan, with the appropriate governmental authorities.
(q) Disability and Insurance Policies. As soon as possible
following the Closing, the Corporation will terminate all of the
insurance and disability policies listed on Schedule 3.16.
SECTION 6.2 Post-Closing Covenants of StaffMark and SAC.
(a) Employees and Consultants. Following the Closing Date,
the employees and consultants of the Corporation shall cease to be
employees and consultants of the Corporation and, except as otherwise
determined by SAC in its sole discretion, shall become employees and
consultants of SAC or an affiliate of the Buyers on an employment at
will basis. Notwithstanding the foregoing, the Buyers will have no
Liability to the Corporation if for any reason; (i) the Buyers decide
not to offer employment to any of the Corporation's employees or
consultants (other than employees or consultants subject to employment
agreements as required by this Agreement); (ii) any of the employees or
consultants do not accept SAC's offer of employment; or (iii) any of
the employees or consultants (other than
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employees subject to the employment agreements) accept employment with
SAC, 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 Corporation, other than the
stockholders of the Corporation, non-qualified stock options to
purchase an aggregate of 50,000 shares of StaffMark Common Stock at an
exercise price equal to the closing sales price of the StaffMark Common
Stock as of the Closing Date. Such options shall be granted pursuant
to and subject to the terms of the StaffMark, Inc. 1996 Stock Option
Plan, to such persons and in such amounts (subject to a maximum of
50,000 shares) as have been agreed upon between the Corporation and
StaffMark.
(c) Relocation Costs. The Buyers will pay fifty percent
(50%) of any costs incurred (other than rent increases) if any landlord
of the Corporation terminates its lease with the Corporation as a
result of this Agreement and the transactions contemplated hereby.
(d) The Mirror Plan. As of the Closing, SAC or an affiliate
of the Buyers shall assume sponsorship of the Mirror Plan. Upon
completion of the actions contemplated by clauses (i) through (iii) in
the second sentence of Section 6.1(p) to the satisfaction of SAC or an
affiliate of the Buyers, SAC or an affiliate of the Buyers shall cause
the Mirror Plan (or any other qualified plan that covers former
participants of the SLC Plan) to accept rollover contributions from the
SLC Plan on behalf of participants then actively employed by SAC or an
affiliate of the Buyers. Nothing contained herein shall prevent SAC or
an affiliate of the Buyers from amending, terminating or merging the
Mirror Plan at any time after the Closing.
ARTICLE VII. CONDITIONS TO THE BUYERS' 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 Corporation
in Article III 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; the Corporation 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 President of the Corporation 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 Business 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 3.15 shall have been transferred to SAC.
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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 Corporation. The Buyers shall
have received an opinion from counsel to the Corporation, dated as of the
Closing Date, in form and substance reasonably satisfactory to the Buyers.
SECTION 7.5. Closing Documents. The Corporation shall have delivered
all of the Schedules, resolutions, certificates, documents and instruments
required by this Agreement to be delivered by the Corporation.
SECTION 7.6. Due Diligence. The Buyers shall have completed its due
diligence review of the Corporation and the Business, and the results of such
review shall have been satisfactory to the Buyers in its sole discretion.
SECTION 7.7. Approval of the Buyers and Its Counsel. All actions,
proceedings, consents, instruments and documents required to be delivered by,
or at the direction of, the Corporation 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 its 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 the Corporation from that reflected in the Balance Sheet outside
the Ordinary Course of Business, and (ii) none of the business, financial
condition, operations, property, or affairs of the Corporation shall have been
materially adversely affected by any occurrence or development, individually or
in the aggregate, whether or not insured against.
SECTION 7.9. Indemnification Agreement. The Buyers shall have
received a counterpart executed copy of the "Indemnification Agreement" from
the Corporation and the Corporation's stockholder in substantially the form of
Exhibit E attached hereto.
SECTION 7.10. Escrow Agreement. The Buyers shall have received a
counterpart executed copy of the Escrow Agreement from the Corporation and the
Corporation's stockholders.
SECTION 7.11. Employment Agreements. The Buyers shall have received a
counterpart executed copy of employment agreements with Xxxx Xxxxxx, Xxx Xxxxxx
and the key employees of the Corporation, satisfactory to the Buyers (the
"Employment Agreements").
SECTION 7.12. Noncompetition Agreement. The Buyers shall have received
a counterpart executed copy of the "Noncompetition Agreements" in the form of
Exhibit F attached hereto from the Corporation's stockholders.
SECTION 7.13. Earnout Agreement. The Buyers shall have received a
counterpart executed copy of the Earnout Agreement from the Corporation.
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SECTION 7.14. Purchase Price Certificate. The Buyers shall have
received a counterpart executed copy of the Purchase Price Certificate from the
Corporation.
SECTION 7.15. Corporate Name. The Corporation shall have delivered a
corporate name change resolution and form to change the name of the Corporation
as set forth in Section 5.7.
SECTION 7.16. Additional Agreements. The Corporation shall have
entered into such additional agreements as may reasonably be required to be
entered into by such Party on or before the Closing.
ARTICLE VIII. CONDITIONS TO THE CORPORATION'S OBLIGATIONS
The obligation of the Corporation 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
Corporation (in writing) in its sole discretion:
SECTION 8.1. Representations and Warranties True; Satisfaction of
Covenants. All of the representations and warranties made by the Buyers 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. The Buyers 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. An executive officer of the Buyers shall deliver a certificate to the
Corporation to the effect that each of the above conditions are satisfied in
all respects.
SECTION 8.2. Closing Documents. The Buyers shall have delivered all
of the Schedules, resolutions, certificates, documents and instruments required
by this Agreement.
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 Corporation 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 Corporation and its counsel.
SECTION 8.5. Employment Agreements. The Buyers shall have delivered
executed counterparts of the Employment Agreements satisfactory to the
Corporation.
SECTION 8.6. Earnout Agreement. The Corporation shall have delivered
a counterpart executed copy of the Earnout Agreement.
SECTION 8.7. Opinion of Counsel to the Buyers. The Corporation shall
have received an opinion of counsel to the Buyers, dated as of the Closing
Date, in form and substance reasonably satisfactory to the Corporation.
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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 Xxxxxx, Xxxxx & Bockius LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Phone: (000) 000-0000; Fax: (212)
000-0000, on November 10, 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 Corporation 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 to the Corporation the
various certificates, instruments and documents referred to in Article VIII;
and (iii) the Buyers will deliver to the Corporation and the escrow agent the
respective portions of the First Purchase Price Payment 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
Section 3.24 shall survive for the full period of the statute of limitations
applicable to the matters described in such section. 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 any 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 Corporation 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 Corporation has 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 its 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
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reasonably be expected to have a material adverse effect on the
Corporation; or (iv) if the Closing shall not have occurred on or
before November 16, 1997;
(c) The Corporation may terminate this Agreement any time
prior to the Closing; (i) in the event the Buyers 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 the Buyers but such event shall not include
any effects or changes on the price of the Buyers' common stock; or
(iii) if the Closing shall not have occurred on or before November 16,
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 its 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 Corporation 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 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.
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.
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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 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
If to the Corporation:
Structured Logic Company, Inc.
Attention: Xxxx Xxxxxx, President
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxxx, Xxxxxxx & Xxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (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
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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 its 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 Delaware 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 Delaware.
SECTION 11.7. Submission to Jurisdiction. Each of the Parties submits
to jurisdiction of any state or federal court sitting in the State of Delaware
in any action or proceeding arising out of or relating to this Agreement, other
than those relating to any arbitration proceeding concerning indemnification
claims relating to the Indemnification Agreement and/or the Escrow Agreement
subsequent to the Closing. Each of the Parties waives any defense of
inconvenient forum to the maintenance of any such action or proceeding so
brought and waives any bond, surety, or other security that might be required
of any other Party with respect thereto.
SECTION 11.8. 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 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 11.9. 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
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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 11.10. 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 11.11. 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 11.12. 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 11.13. Publicity. Except by the mutual agreement between the
Corporation 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 11.14. 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 11.15. Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
SECTION 11.16. 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.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Buyers and the Corporation 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 SIXTEEN
By: /s/ XXXXXX X. XXXXX III
------------------------------------------
Xxxxxx X. Xxxxx III
Executive Vice President
THE CORPORATION
STRUCTURED LOGIC COMPANY, INC.
By: /s/ XXXX XXXXXX
------------------------------------------
Xxxx Xxxxxx
President
STRUCTURED LOGIC SYSTEMS, INC.
By: /s/ XXXX XXXXXX
------------------------------------------
Xxxx Xxxxxx
Vice President
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