SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
-----------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
ACT OF 1934
For the transition period from _______________ to ___________
Commission File Number 000-23147
OUTSOURCE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Florida 65-0675628
- ------- ----------
(State or jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
1144 East Newport Center Drive, Deerfield Beach, Florida 33442
- -------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 418-6200
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, par
value $.001 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting and non-voting Common Stock held
by nonaffiliates as of March 31, 2000 was approximately $5.9 million (based upon
the closing sale price of $1.625 per share on the NASDAQ Stock Market(R) on
March 31, 2000).
As of March 31, 2000, a total of 8,657,913 shares of the Registrant's
Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Definitive Proxy Statement for the 2000
Annual Meeting of Shareholders are incorporated by reference in Part III.
<PAGE>
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(c) The following exhibits are filed herewith:
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
2.1 Amended and Restated Agreement Among Shareholders dated February 21,
1997(1)
2.2 Articles of Share Exchange among Outsource International, Inc., Capital
Staffing Fund, Inc., Outsource Franchising, Inc., Synadyne I, Inc.,
Synadyne II, Inc., Synadyne III, Inc., Synadyne IV, Inc., Synadyne V,
Inc., Employees Insurance Services, Inc. and Outsource International of
America, Inc. dated February 21, 1997(1)
3.1 Amended and Restated Articles of Incorporation of the Company(2)
3.2 Amended and Restated Bylaws of the Company(3)
4.3 Shareholder Protection Rights Agreement(3)
4.6 Warrant Dated February 21, 1997 Issued to Triumph-Connecticut Limited
Partnership(1)
4.7 Warrant Dated February 21, 1997 Issued to Bachow Investment Partners
III, L.P.(1)
4.8 Warrant Dated February 21, 1997 Issued to State Street Bank and Trust
Company of Connecticut, N.A., as Escrow Agent(1)
9 Voting Trust Agreement among Outsource International, Inc., Richard J.
Williams and Paul M. Burrell, as Trustees, and certain shareholders of
Outsource International, Inc. dated as of February 21, 1997(1)
10.1 Securities Purchase Agreement among Triumph-Connecticut Limited
Partnership, Bachow Investment Partners III, L.P., Outsource
International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc. and Outsource International of America, Inc. dated as of
February 21, 1997(1)
10.2 Escrow Agreement Among State Street Bank and Trust Company of
Connecticut, N.A., certain shareholders of Outsource International,
Inc., and Outsource International, Inc. dated as of February 21,
1997(1)
<PAGE>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
10.3 Registration Rights Agreement among Outsource International, Inc.,
Triumph-Connecticut Limited Partnership, Bachow Investment Partners
III, L.P., and shareholders of Outsource International, Inc. dated as
of February 21, 1997(1)
10.4 Agreement among Shareholders and Investors in Outsource International,
Inc. dated as of February 21, 1997(1)
10.7 Asset Purchase Agreement among Standby Personnel of Colorado Springs,
Inc., Adrian Walker and Outsource International, Inc. dated as of
February 24, 1997(1)
10.8 Asset Purchase Agreement between Staff Management Services, Inc. and
Outsource International, Inc. dated as of March 3, 1997(1)
10.9 Asset Purchase Agreement between Superior Temporaries, Inc. and
Outsource International, Inc. dated as of March 3, 1997(1)
10.10 Asset Purchase Agreement among Stand-By, Inc., Carlene Walker and
Outsource International of America, Inc. dated as of March 31, 1997(1)
10.11 Employment Agreement between Paul M. Burrell and the Company dated as
of February 21, 1997(1)*
10.12 Employment Agreement between Robert A. Lefcort and the Company dated as
of March 3, 1997(1)*
10.13 Employment Agreement between Robert E. Tomlinson and the Company dated
as of March 3, 1997(1)*
10.14 Employment Agreement between Robert J. Mitchell and the Company dated
as of March 3, 1997(1)*
10.15 Employment Agreement between Brian Nugent and the Company dated as of
March 11, 1997(7)*
10.16 Employment Agreement between Carolyn Noonan and the Company dated as of
July 22, 1999(8)*
10.17 Employment Agreement between Scott R. Francis and the Company dated as
of April 1, 1998(6)*
10.18 Stock Option Plan, As Amended Effective May 8, 1998(6)*
10.19 Third Amended and Restated Credit Agreement among Outsource
International, Inc., the banks from time to time parties hereto and
BankBoston, N.A., successor by merger to Bank of Boston, Connecticut,
as agent - Revolving Credit Facility dated as of July 27, 1998(6)
10.20 OI Pledge Agreement made by Outsource International, Inc. in favor of
Bank of Boston Connecticut, as Agent, dated as of February 21, 1997(1)
10.21 OI Security Agreement made by Outsource International, Inc. in favor of
Bank of Boston Connecticut, as Agent, dated as of February 21, 1997(1)
10.22 Subsidiary Security Agreement made by Capital Staffing Fund, Inc.,
Outsource Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc.,
Synadyne III, Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees
Insurance Services, Inc. and Outsource International of America, Inc.
in favor of Bank of Boston Connecticut, As Agent, dated as of February
21, 1997(1)
10.23 Subsidiary Guarantee by Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc. and Outsource International of America, Inc. in favor of
Bank of Boston Connecticut, As Agent, dated as of February 21, 1997(1)
10.24 Trademark Security Agreement made by Outsource International, Inc. and
Outsource Franchising, Inc. in favor of Bank of Boston Connecticut
dated as of February 21, 1997(1)
10.25 Interest Rate Collar Transaction between BankBoston, N.A. and Outsource
International, Inc. dated as of February 20, 1998(5)
10.33 Form of Accumulated Adjustments Account Promissory Note dated February
20, 1997 issued by Capital Staffing Fund, Inc., Outsource Franchising,
Inc. and Outsource International of America, Inc. to the following
shareholders of the Company and Schedule of Allocation of AAA
Distribution to such shareholders: Lawrence H. Schubert Revocable
Trust; Robert A. Lefcort Irrevocable Trust; Nadya I. Schubert Revocable
Trust; Louis J. Morelli S Stock Trust; Margaret Ann Janisch S Stock
Trust; Matthew Schubert Outsource Trust; Jason Schubert Outsource
Trust; Alan E. Schubert; Louis A. Morelli; Louis J. Morelli; Raymond S.
Morelli; Matthew B. Schubert; Mindi Wagner; Margaret Morelli Janisch;
Robert A. Lefcort; and Paul M. Burrell(1)
<PAGE>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
10.34 Receivables Purchase and Sale Agreement dated July 27, 1998 among
Outsource International, Inc., Outsource Franchising, Inc., Capital
Staffing Fund, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., and Outsource International
of America, Inc., each as an originator, and Outsource Funding
Corporation, as the buyer, and Outsource International, Inc., as the
servicer(6)
10.35 Receivables Purchase Agreement dated July 27, 1998 among Outsource
Funding Corporation, as the seller, and EagleFunding Capital
Corporation, as the purchaser, and BancBoston Securities, Inc., as the
deal agent and Outsource International, Inc., as the servicer(6)
10.36 Intercreditor Agreement dated July 27, 1998 by and among BankBoston,
N.A., as lender agent; Outsource Funding Corporation, Outsource
International, Inc., Outsource Franchising, Inc., Capital Staffing
Fund, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III, Inc.,
Synadyne IV, Inc., Synadyne V, Inc. and Outsource International of
America, Inc., as originators; Outsource International, in its separate
capacity as servicer; EagleFunding Capital Corporation, as purchaser;
and BancBoston Securities Inc., individually and as purchaser agent(6)
10.50 First Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., each of the banks party to the Credit
Agreement and BankBoston, N.A., as agent for the banks, dated as of
February 22, 1999(7)
10.51 Temporary Waiver and Second Amendment to Third Amended and Restated
Credit Agreement among Outsource International, Inc., it subsidiaries,
each of the banks party to the Credit Agreement and BankBoston, N.A.,
as agent for the banks, dated June 30, 1999(8)
10.53 Third Temporary Waiver to Third Amended and Restated Credit Agreement
among Outsource International, Inc., its subsidiaries, each of the
banks party to the Credit Agreement and BankBoston, N.A., as agent for
the banks, dated as of August 5, 1999(8)
10.55 Third Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc., Outsource International of America, Inc., Mass Staff,
Inc., Staff All, Inc., Outsource of Nevada, Inc., Employment
Consultants, Inc., X-tra Help, Inc., Co-Staff, Inc., Guardian Employer
East, LLC, Guardian Employer West, LLC, each of the banks party to the
Credit Agreement and BankBoston, N.A, as agent for the banks, dated as
of October 1, 1999(9)
10.56 Revolving Credit Agreement among Outsource Funding Corporation, the
banks from time to time parties thereto, and BankBoston, N.A., as agent
for the banks, dated October 1, 1999(9)
10.57 Amended and Restated Receivables Purchase and Sale Agreement dated as
of October 1, 1999 among Outsource International, Inc., Capital
Staffing Fund, Inc., Outsource Franchising, Inc., Synadyne I, Inc.,
Synadyne II, Inc., Synadyne III, Inc., Synadyne IV, Inc., Synadyne V,
Inc. and Outsource International of America, Inc., each as an
originator, and Outsource Funding Corporation, as the buyer, and
Outsource International, Inc., as the servicer(9)
10.58 Fourth Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc., Outsource International of America, Inc., Mass Staff,
Inc., Staff All, Inc., Outsource of Nevada, Inc., Employment
Consultants, Inc., X-tra Help, Inc., Co-Staff, Inc., Guardian Employer
East, LLC, Guardian Employer West, LLC, each of the banks party to the
Credit Agreement and BankBoston, N.A, as agent for the banks, dated as
of December 29, 1999(11)
10.59 First Amendment to Revolving Credit Agreement among Outsource Funding
Corporation, the banks from time to time parties thereto, and
BankBoston, N.A., as agent for the banks, dated December 29, 1999(11)
10.60 Second Amendment to Revolving Credit Agreement among Outsource Funding
Corporation, the banks from time to time parties thereto, and
BankBoston, N.A., as agent for the banks, dated January 31, 2000(11)
10.61 Fifth Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc., Outsource International of America, Inc., Mass Staff,
Inc., Staff All, Inc., Outsource of Nevada, Inc., Employment
Consultants, Inc., X-tra Help, Inc., Co-Staff, Inc., Guardian Employer
East, LLC, Guardian Employer West, LLC, each of the banks party to the
Credit Agreement and BankBoston, N.A, as agent for the banks, dated as
of January 31, 2000(11)
<PAGE>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
10.62 Sixth Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc., Outsource International of America, Inc., Mass Staff,
Inc., Staff All, Inc., Outsource of Nevada, Inc., Employment
Consultants, Inc., X-tra Help, Inc., Co-Staff, Inc., Guardian Employer
East, LLC, Guardian Employer West, LLC, each of the banks party to the
Credit Agreement and BankBoston, N.A, as agent for the banks, dated as
of March 30, 2000(11)
10.63 Third Amendment to Revolving Credit Agreement among Outsource Funding
Corporation, the banks from time to time parties thereto, and
BankBoston, N.A., as agent for the banks, dated March 30, 2000(11)
10.80 Employment agreement between Jon Peterson and the Company dated as of
February 14, 2000(11)
10.81 Employment agreement between Garry E. Meier and the Company dated as of
February 7, 2000(11)
10.85 Asset Purchase Agreement by and between Team Staff, Inc., Teamstaff V,
Inc. and Outsource International, Inc., Synadyne I, Inc., Synadyne II,
Inc., Synadyne III, Inc., Synadyne IV, Inc., Synadyne V, Inc., Guardian
Employer East LLC and Guardian Employer West LLC, dated as of April 7,
2000(11)
10.86 Shared Services Agreement by and between Team Staff, Inc. and Outsource
International, Inc., dated as of April 7, 2000(11)
10.90 Engagement Letter between Outsource International, Inc. and Crossroads
Capital Partners LLC, dated as of May 7, 1999 and three addenda dated
June 18, July 1 and August 2, 1999(8)
10.91 Finder Services Agreement between Outsource International, Inc. and
Crossroads Capital Partners LLC, dated as of June 30, 1999(8)
21 Subsidiaries of the Company(10)
23 Consent of Deloitte & Touche LLP(10)
27 Financial Data Schedule(10)
- ------------------------
* Compensatory plan or arrangement.
(1) Incorporated by reference to the Exhibits to the Company's Registration
Statement on Form S-1 (Registration Statement No. 333-33443) as filed
with the Securities and Exchange Commission on August 12, 1997
(2) Incorporated by reference to the Exhibits to Amendment No. 3 to the
Company's Registration Statement on Form S-1 (Registration Statement
No. 333-33443) as filed with the Securities and Exchange Commission on
October 21, 1997
(3) Incorporated by reference to the Exhibits to Amendment No. 1 to the
Company's Registration Statement on Form S-1 (Registration Statement
No. 333-33443) as filed with the Securities and Exchange Commission on
September 23, 1997
(4) Incorporated by reference to the Exhibits to the Company's Form 10-K
for the year ended December 31, 1997 as filed with the Securities and
Exchange Commission on March 31, 1998
(5) Incorporated by reference to the Exhibits to the Company's Form 10-Q
for the quarterly period ended March 31, 1998, as filed with the
Securities and Exchange Commission on May 15, 1998
(6) Incorporated by reference to the Exhibits to the Company's Form 10-Q
for the quarterly period ended June 30, 1998, as filed with the
Securities and Exchange Commission on August 14, 1998
(7) Incorporated by reference to the Exhibits to the Company's Form 10-K
for the year ended December 31, 1998 as filed with the
Securities and Exchange Commission on March 30, 1999
(8) Incorporated by reference to the Exhibits to the Company's Form 10-Q
for the quarterly period ended June 30, 1999, as filed with the
Securities and Exchange Commission on August 16, 1999
(9) Incorporated by reference to the Exhibits to the Company's Form 8-K, as
filed with the Securities and Exchange Commission on October 19, 1999
(10) Previously filed
(11) Filed herewith
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
behalf of the undersigned, thereunto duly authorized.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ GARRY E. MEIER
----------------------
Garry E. Meier
Chairman of the Board of Directors,
President and Chief Executive Officer
Date: April 20, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ GARRY E. MEIER President, Chief Executive April 20, 2000
- ------------------------------------ Officer and Chairman of the Board
Garry E. Meier of Directors
(Principal Executive Officer)
Vice President,
/s/ SCOTT R. FRANCIS Chief Financial Officer, April 20, 2000
- ------------------------------------ and Director
Scott R. Francis (Principal Financial
Officer)
/s/ PAUL M. BURRELL Director April 20, 2000
- ------------------------------------
Paul M. Burrell
/s/ DAVID S. HERSHBERG Director April 20, 2000
- ------------------------------------
David S. Hershberg
/s/ LAWRENCE CHIMERINE Director April 20, 2000
- ------------------------------------
Lawrence Chimerine
/s/ JAY D. SEID Director April 20, 2000
- -----------------------------------
Jay D. Seid
/s/ CAROLYN H. NOONAN Vice President and Controller April 20, 2000
- ------------------------------------ (Principal Accounting Officer)
Carolyn H. Noonan
</TABLE>
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------ -------------------
10.58 Fourth Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc., Outsource International of America, Inc., Mass Staff,
Inc., Staff All, Inc., Outsource of Nevada, Inc., Employment
Consultants, Inc., X-tra Help, Inc., Co-Staff, Inc., Guardian Employer
East, LLC, Guardian Employer West, LLC, each of the banks party to the
Credit Agreement and BankBoston, N.A, as agent for the banks, dated as
of December 29, 1999
10.59 First Amendment to Revolving Credit Agreement among Outsource Funding
Corporation, the banks from time to time parties thereto, and
BankBoston, N.A., as agent for the banks, dated December 29, 1999
10.60 Second Amendment to Revolving Credit Agreement among Outsource Funding
Corporation, the banks from time to time parties thereto, and
BankBoston, N.A., as agent for the banks, dated January 31, 2000
10.61 Fifth Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc., Outsource International of America, Inc., Mass Staff,
Inc., Staff All, Inc., Outsource of Nevada, Inc., Employment
Consultants, Inc., X-tra Help, Inc., Co-Staff, Inc., Guardian Employer
East, LLC, Guardian Employer West, LLC, each of the banks party to the
Credit Agreement and BankBoston, N.A, as agent for the banks, dated as
of January 31, 2000
10.62 Sixth Amendment to Third Amended and Restated Credit Agreement among
Outsource International, Inc., Capital Staffing Fund, Inc., Outsource
Franchising, Inc., Synadyne I, Inc., Synadyne II, Inc., Synadyne III,
Inc., Synadyne IV, Inc., Synadyne V, Inc., Employees Insurance
Services, Inc., Outsource International of America, Inc., Mass Staff,
Inc., Staff All, Inc., Outsource of Nevada, Inc., Employment
Consultants, Inc., X-tra Help, Inc., Co-Staff, Inc., Guardian Employer
East, LLC, Guardian Employer West, LLC, each of the banks party to the
Credit Agreement and BankBoston, N.A, as agent for the banks, dated as
of March 30, 2000
10.63 Third Amendment to Revolving Credit Agreement among Outsource Funding
Corporation, the banks from time to time parties thereto, and
BankBoston, N.A., as agent for the banks, dated March 30, 2000
10.80 Employment agreement between Jon Peterson and the Company dated as of
February 14, 2000
10.81 Employment agreement between Garry E. Meier and the Company dated as
of February 7, 2000
10.85 Asset Purchase Agreement by and between Teamstaff, Inc., Teamstaff V,
Inc. and Outsource International, Inc., Synadyne I, Inc., Synadyne II,
Inc., Synadyne III, Inc., Synadyne IV, Inc., Synadyne V, Inc., Guardian
Employer East LLC and Guardian Employer West LLC dated as of April 7,
2000
10.86 Shared Services Agreement by and between Teamstaff, Inc. and Outsource
International, Inc. dated as of April 7, 2000
- --------------------------------------------------------------------------------
Exhibit 10.58
OUTSOURCE INTERNATIONAL, INC.
-----------------------------
FOURTH AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Fourth Amendment (this "Fourth Amendment"), dated as of December
29, 1999, among (a) OUTSOURCE INTERNATIONAL, INC. (the "Borrower"), (b) CAPITAL
STAFFING FUND, INC.; (c) OUTSOURCE FRANCHISING, INC.; (d) SYNADYNE I, INC.; (e)
SYNADYNE II, INC.; (f) SYNADYNE III, INC.; (g) SYNADYNE IV, INC.; (h) SYNADYNE
V, INC.; (i) EMPLOYEES INSURANCE SERVICES, INC.; (j) OUTSOURCE INTERNATIONAL OF
AMERICA, INC.; (k) MASS STAFF, INC.; (l) STAFF ALL, INC.; (m) OUTSOURCE OF
NEVADA, INC.; (n) EMPLOYMENT CONSULTANTS, INC.; (o) X-TRA HELP, INC.; (p)
CO-STAFF, INC.; (q) GUARDIAN EMPLOYER EAST, LLC; (r) GUARDIAN EMPLOYER WEST,
LLC; (s) each of the banks party to the Credit Agreement hereinafter referred to
(collectively, the "Banks") and (t) BANKBOSTON, N.A., as agent for the Banks
(the "Agent"), pursuant to that certain Third Amended and Restated Credit
Agreement (as amended, the "Credit Agreement"), dated as of July 27, 1998, among
the Borrower, the Banks and the Agent. Capitalized terms used herein and which
are not otherwise defined shall have the respective meanings ascribed thereto in
the Credit Agreement.
WHEREAS, (i) the Borrower and (ii) each Subsidiary of the Borrower
party to a Subsidiary Guarantee and whose name appears on the signature page
hereof (a "Guarantor") have requested that the Banks and the Agent agree to
amend the terms of the Credit Agreement in certain respects; and
WHEREAS, the Banks and the Agent are willing to amend the terms of the
Credit Agreement in such respects, upon the terms and subject to the conditions
contained herein; and
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ss.1. Amendment to Definitions. Section 1.1 of the Credit Agreement is
hereby amended by deleting the words "December 31, 1999" appearing in the
definition of "Termination Date", and substituting in lieu thereof the words
"January 31, 2000".
ss.2. Consent to Asset Sale. Each of the Banks hereby consents to the
sale by the Borrower of the real property and improvements located at 1144 East
Newport Center Drive, Deerfield Beach, FL (the "Proposed Sale"), and the Agent
hereby confirms its agreement for the Proposed Sale to be free and clear of the
Agent's mortgage and security interest therein; provided, that (i) the Proposed
Sale is consummated on or prior to December 31, 1999, on substantially the terms
contained in the Sale and Purchase
<PAGE>
Agreement for Commercial Improved Land (the "S&P Agreement"), dated December 3,
1999, as amended by an Addendum (the "Addendum") dated December 9, 1999, by and
between the Borrower and Beni Immobili LLC ("BI"), (ii) the proceeds of the
Proposed Sale are paid in cash on the closing date, and such cash proceeds, net
of the amount paid to the holder of the first mortgage on the subject property,
the brokerage commission paid by the Borrower, the cost of state documentary
recording stamps and other closing costs acceptable to the Agent, in each case
as a result of the Proposed Sale (the "Net Cash Proceeds"), are paid to the
Agent with (a) if the BI L/C (as defined below) is issued, a portion, as
described below, to be held by the Agent as cash collateral for the Obligations
and (b) the remainder for immediate application to the Obligations and
automatically permanently reducing the Maximum Commitment by an equal amount
simultaneously with such application to the Obligations and (iii) the Borrower
delivers to the Agent the original letter of credit which it receives pursuant
to Section 2 of the Addendum and takes such other steps related thereto as
reasonably requested by the Agent. The Agent shall, pursuant to the Credit
Agreement, notwithstanding the lack of commitment to issue new Letters of Credit
contained in the Credit Agreement or the restriction on the term thereof, at the
request of the Borrower and as permitted under ss.14 of the S&P Agreement, issue
a Letter of Credit to BI (as amended and in effect from time to time, including
any replacement thereof, the "BI L/C") with an expiration date not later than
October 1, 2002 in a form and amount approved by the Agent and to secure the
Borrower's continuing obligations to the purchaser under the S&P Agreement. So
long as the BI L/C remains outstanding, a portion of the Net Cash Proceeds equal
to 110% of the total amount which may be drawn under the BI L/C shall be
deposited in a cash collateral account to be held by the Agent to secure the
Obligations pursuant to a cash collateral agreement in a form satisfactory to
the Agent. As the Agent determines that the maximum drawing amount of the BI L/C
has been reduced, any amount held in such cash collateral account in excess of
110% of the maximum drawing amount of the BI L/C may be applied by the Agent to
the Obligations and shall automatically permanently reduce the Maximum
Commitment by an equal amount simultaneously with such application to the
Obligations. Upon any draw being made under the BI L/C or termination of the BI
L/C, any amount remaining in such cash collateral account shall be applied first
to any unpaid reimbursement obligations with respect to the BI L/C, and then to
the other Obligations.
ss.3. Confirmation of Obligations. The Borrower hereby confirms that
the obligations of the Borrower arising under each of the Loan Documents to
which it is a party, including Indebtedness consisting of Revolving Credit
Loans, Swingline Loans and L/C Obligations, are included in the Obligations, are
not subject to any claims or defenses whatsoever, and constitute valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law). Each
Guarantor hereby confirms that the obligations of such Guarantor arising under
each of the Loan Documents to which it is a party are included in the
Obligations, are not subject to any claims or defenses whatsoever, and
constitute valid and binding
<PAGE>
obligations of such Guarantor enforceable against such Guarantor in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
ss.4. Release. The Borrower and each Guarantor, on the Borrower's and
each Guarantors own behalf and on behalf of the Borrower's and each Guarantors
successors and assigns, hereby waive, release and discharge the Agent and each
Bank and all of the affiliates of the Agent and each Bank, and all of the
directors, officers, employees, attorneys and agents of the Agent, each Bank and
such affiliates, from any and all claims, demands, actions or causes of action
(known and unknown) arising out of or in any way relating to the Loan Documents
and any documents, agreements, dealings or other matters connected with the
Credit Agreement, in each case to the extent arising (x) on or prior to the date
hereof or (y) out of, or relating to, actions, dealings or matters occurring on
or prior to the date hereof. The waivers, releases, and discharges in this
Section 4 shall be effective regardless of whether the conditions to this Third
Amendment are satisfied and regardless of any other event that may occur or not
occur after the date hereof.
ss.5. Covenants. The Borrower and each Guarantor hereby agrees that:
(a) the Borrower and each Guarantor shall permit the Banks, the Agent
and their advisors to have full and complete access to all information that
Raymond James develops or obtains with respect to the valuation and disposition
of Synadyne and the Borrower and each Guarantor shall authorize Raymond James to
deliver such information to the Banks, the Agent and their advisors, and discuss
the same with them;
(b) the Borrower and each Guarantor shall permit the Banks, the Agent
and their advisors to engage the services of consultants in connection with the
valuation and review of the Borrower's business, and shall permit the Agent
and/or its counsel to continue to retain Nightingale & Associates, LLC
("Nightingale"). Such consultants shall, among other things, make visits to, and
discuss financial and operational matters with, the Borrower and its
Subsidiaries and advise the Agent and the Banks as to the business, operations
and financial condition of the Borrower and its Subsidiaries. Such consultants
shall not be limited in the frequency of visits to the facilities of the
Borrower and its Subsidiaries. The Borrower shall, and shall cause each of its
Subsidiaries to, cooperate with such consultants and provide such consultants
with all information reasonably requested by such consultant in connection with
its engagement by the Agent and/or its counsel. The Borrower shall pay all fees
and expenses of such consultants;
(c) in the event that the Borrower is successful in its efforts to
locate a buyer for Synadyne, the Borrower shall deliver to the Banks, on or
before the Borrower's entering into any agreement to effect such sale, (i)
revised cash flow projections, prepared by CrossRoads Capital Partners, LLC, for
the period prior to and following
<PAGE>
completion of such sale to the Termination Date and (ii) a copy of the proposed
purchase and sale agreement; and
(d) the Borrower shall deliver to the Agent, within 3 days after the
end of each calendar week, a report in the form agreed upon by Nightingale and
the Agent, and prepared in a manner consistent with each prior acceptable
report, setting forth the Borrower's actual cash flow as at the end of such week
versus the cash flow forecast as at the end of such week as reported in the Cash
Budget.
ss.6. Representations and Warranties. The Borrower and each of the
Guarantors represent and warrant to the Banks and the Agents as follows: (
a) Representations and Warranties in Credit Agreement. The
representations and warranties of the Borrower and each of the Guarantors
contained in the Credit Agreement, as amended hereby, (a) were true and correct
in all material respects when made, and (b) except (i) as a result of changes in
the ordinary course of business permitted under the Credit Agreement and (ii) to
the extent such representations and warranties by their terms are made solely as
of a prior date, continue to be true and correct in all material respects on the
date hereof.
(b) Authority, Etc. The execution and delivery by the Borrower and each
of the Guarantors of this Third Amendment and the performance by the Borrower
and each of the Guarantors of all of their agreements and obligations under this
Third Amendment and the Credit Agreement as amended hereby (i) are within the
corporate authority of the Borrower and each of the Guarantors, (ii) have been
duly authorized by all necessary corporate or other proceedings or actions, as
the case may be, by the Borrower and each of the Guarantors, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower or any of the Guarantors is
subject or any judgment, order, writ, injunction, license or permit applicable
to the Borrower or any of the Guarantors, and (iv) do not conflict with any
provision of the corporate charter, by-laws or partnership agreement of, or any
agreement or other instrument binding upon, the Borrower or any of the
Guarantors.
(c) Enforceability of Obligations. This Third Amendment, and the Credit
Agreement as amended hereby, and the other Loan Documents constitute the legal,
valid and binding obligations of the Borrower and each of the Guarantors
enforceable against each such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). After giving effect
to this Fourth Amendment, no Default or Event of Default exists under the Credit
Agreement.
ss.7. Conditions to Effectiveness. This Fourth Amendment shall be
effective as of the date hereof (the "Effective Date") upon the satisfaction of
the following conditions precedent:
<PAGE>
(a) receipt by the Agent of an original counterpart signature to this
Fourth Amendment, duly executed and delivered by the Borrower, each of the
Guarantors, each of the Banks and the Agent;
(b) receipt by the Agent of evidence satisfactory to the Agent that the
Outsource Funding Credit Agreement date has been extended until January 31, 2000
from its current December 31, 1999 maturity date;
(c) receipt by the Agent of appropriate corporate authority
documentation for the Borrower and each of the Guarantors, including copies (to
the extent not already furnished to the Agent) for each such Person's
organizational documents, bylaws and resolutions authorizing the transactions
contemplated by this Fourth Amendment;
(d) payment by the Borrower of the legal, appraisal, consultant and
out-of-pocket fees and expenses of the Agent, in each case, to the extent that
invoices for the same have been presented to the Borrower;
(e) payment by the Borrower of all fees and expenses of Nightingale and
any other consultant retained by the Agent and/or the Banks in connection with
consulting services, to the extent that invoices for the same have been
presented to the Borrower (in addition to any amount previously paid as a
retainer); and
(f) receipt by the Agent of an amendment fee of $35,000 paid by the
Borrower for the pro rata account of each Bank based on such Bank's Commitment
Percentage.
ss.8. Miscellaneous Provisions. (a) Except as otherwise expressly
provided by this Third Amendment, all of the terms, conditions and provisions of
the Credit Agreement shall remain the same. It is declared and agreed by each of
the parties hereto that the Credit Agreement, as amended hereby, shall continue
in full force and effect, and that this Third Amendment and the Credit Agreement
shall be read and construed as one instrument.
(b) THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING
TO, THE LAWS OF THE STATE OF CONNECTICUT (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW).
(c) This Fourth Amendment may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
instrument. In making proof of this Fourth Amendment it shall not be necessary
to produce or account for more than one counterpart signed by each party hereto
by and against which enforcement hereof is sought.
(d) Headings or captions used in this Fourth Amendment are for
convenience of reference only and shall not define or limit the provisions
hereof.
<PAGE>
(e) The Borrower hereby agrees to pay to the Agent, on demand by the
Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by
the Agent in connection with the preparation of this Fourth Amendment (including
without limitation, recording and filing fees, notarization fees, stamp taxes,
any other tax imposed by reason of the execution and delivery of the Loan
Documents, the reasonable fees and expenses of counsel to the Agent and the
reasonable fees and expenses of the Agent's commercial finance examiners and
commercial auditors).
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Fourth Amendment as of the date first set forth above.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President & CEO
CAPITAL STAFFING FUND, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
OUTSOURCE FRANCHISING, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
SYNADYNE I, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
SYNADYNE II, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
SYNADYNE III, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
<PAGE>
SYNADYNE IV, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
SYNADYNE V, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
EMPLOYEES INSURANCE SERVICES, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
OUTSOURCE INTERNATIONAL OF AMERICA, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
MASS STAFF, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
STAFF ALL, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
<PAGE>
OUTSOURCE OF NEVADA, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
EMPLOYMENT CONSULTANTS, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
X-TRA HELP, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
CO-STAFF, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
GUARDIAN EMPLOYER EAST, LLC
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Manager
GUARDIAN EMPLOYER WEST, LLC
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Manager
<PAGE>
BANKBOSTON, N.A., individually and as Agent
By: /s/ C. Christopher Smith
--------------------------------------
Name: C. Christopher Smith
Title: Vice President
COMERICA BANK
By: /s/ Martin G. Ellis
--------------------------------------
Name: Martin G. Ellis
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ John J. McGuire
---------------------------------------
Name: John J. McGuire
Title: First Vice President
SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
By: /s/ Byron P. Kurtgis
--------------------------------------
Name: Byron P. Kurtgis
Title: Director
FLEET NATIONAL BANK
By: /s/ C. Christopher Smith
---------------------------------------
Name: C. Christopher Smith
Title: Banking Officer
Exhibit 10.59
OUTSOURCE FUNDING CORPORATION
-----------------------------
FIRST AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
This First Amendment (this "Amendment"), dated as of December 29, 1999,
among (a) OUTSOURCE FUNDING CORPORATION; (b) each of the banks party to the
Credit Agreement hereinafter referred to (collectively, the "Banks") and (c)
BANKBOSTON, N.A., as agent for the Banks (the "Agent"), pursuant to that certain
Revolving Credit Agreement (as amended and in effect from time to time, the
"Credit Agreement"), dated as of October 1, 1999, among the Borrower, the Banks
and the Agent. Capitalized terms used herein and which are not otherwise defined
shall have the respective meanings ascribed thereto in the Credit Agreement.
WHEREAS, the Borrower has requested that the Banks and the Agent agree
to amend the terms of the Credit Agreement in certain respects; and
WHEREAS, the Banks and the Agent are willing to amend the terms of the
Credit Agreement in such respects, upon the terms and subject to the conditions
contained herein; and
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ss.1. Amendment to Definitions. Section 1.1 of the Credit Agreement is
hereby amended by deleting the words "December 31, 1999" appearing in the
definition of "Revolving Credit Loan Maturity Date" and substituting in lieu
thereof the words "January 31, 2000".
ss.2. Confirmation of Obligations. The Borrower hereby confirms that
the obligations of the Borrower arising under each of the Loan Documents to
which it is a party, including Indebtedness consisting of Loans, are included in
the Obligations, are not subject to any claims or defenses whatsoever, and
constitute valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
ss.3. Release. The Borrower, on the Borrower's own behalf and on behalf
of the Borrower's successors and assigns, hereby waives, releases and discharges
the Agent and each Bank and all of the affiliates of the Agent and each Bank,
and all of the directors, officers, employees, attorneys and agents of the
Agent, each Bank and such affiliates, from any and all claims, demands, actions
or causes of action (known and
<PAGE>
unknown) arising out of or in any way relating to the Loan Documents and any
documents, agreements, dealings or other matters connected with the Credit
Agreement, in each case to the extent arising (x) on or prior to the date hereof
or (y) out of, or relating to, actions, dealings or matters occurring on or
prior to the date hereof. The waivers, releases, and discharges in this Section
3 shall be effective regardless of whether the conditions to this Amendment are
satisfied and regardless of any other event that may occur or not occur after
the date hereof.
ss.4. Covenants. The Borrower hereby agrees that:
(a) the Borrower shall permit the Banks, the Agent and their advisors
to have full and complete access to all information that Raymond James develops
or obtains with respect to the valuation and disposition of Synadyne and the
Borrower shall authorize Raymond James to deliver such information to the Banks,
the Agent and their advisors, and discuss the same with them; and
(b) the Borrower shall permit the Banks, the Agent and their advisors
to engage the services of consultants in connection with the valuation of the
Borrower's business, and shall permit the Agent and/or its counsel to continue
to retain Nightingale & Associates, LLC ("Nightingale"). Such consultants shall,
among other things, make visits to, and discuss financial and operational
matters with, the Borrower and advise the Agent and the Banks as to the
business, operations and financial condition of the Borrower. Such consultants
shall not be limited in the frequency of visits to the facilities of the
Borrower. The Borrower shall cooperate with such consultants and provide such
consultants with all information reasonably requested by such consultants in
connection with its engagement by the Agent and/or its counsel. The Borrower
shall pay all fees and expenses of such consultants.
ss.5. Representations and Warranties. The Borrower represents and
warrants to the Banks and the Agents as follows:
(a) Representations and Warranties in Credit Agreement. The
representations and warranties of the Borrower contained in the Credit
Agreement, as amended hereby, (a) were true and correct in all material respects
when made, and (b) except (i) as a result of changes in the ordinary course of
business permitted under the Credit Agreement and (ii) to the extent such
representations and warranties by their terms are made solely as of a prior
date, continue to be true and correct in all material respects on the date
hereof.
(b) Authority, Etc. The execution and delivery by the Borrower of this
Amendment and the performance by the Borrower of all of their agreements and
obligations under this Amendment and the Credit Agreement as amended hereby (i)
are within the corporate authority of the Borrower, (ii) have been duly
authorized by all necessary corporate or other proceedings or actions, as the
case may be, by the Borrower, (iii) do not conflict with or result in any breach
or contravention of any provision of law, statute, rule or regulation to which
the Borrower is subject or any judgment, order, writ, injunction, license or
permit applicable to the Borrower, and (iv)
2
<PAGE>
do not conflict with any provision of the corporate charter, by-laws or
partnership agreement of, or any agreement or other instrument binding upon, the
Borrower.
(c) Enforceability of Obligations. This Amendment, the Credit Agreement
as amended hereby, and the other Loan Documents constitute the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law). After giving effect to this Amendment, no Default or Event of Default
exists under the Credit Agreement.
ss.6. Conditions to Effectiveness. This Amendment shall be effective as
of the date hereof (the "Effective Date") upon the satisfaction of the following
conditions precedent:
(a) receipt by the Agent of an original counterpart signature to this
Amendment, duly executed and delivered by the Borrower, the Banks and the Agent;
(b) receipt by the Agent of evidence satisfactory to the Agent that the
OI Revolving Credit Agreement termination date has been extended until January
31, 2000 from its current December 31, 1999 maturity date;
(c) receipt by the Agent of appropriate corporate authority
documentation for the Borrower, including copies (to the extent not already
furnished to the Agent) of the Borrower's organizational documents, bylaws and
resolutions authorizing the transactions contemplated by the Amendment;
(d) payment by the Borrower of the legal, appraisal, consultant and
out-of-pocket fees and expenses of the Agent, in each case, to the extent that
invoices for the same have been presented to the Borrower; and
(e) payment by the Borrower of all fees and expenses of Nightingale and
any other consultant retained by the Agent and/or the Banks in connection with
consulting services, to the extent that invoices for the same have been
presented to the Borrower (in addition to any amount previously paid as a
retainer to such consultant).
ss.7. Miscellaneous Provisions. (a) Except as otherwise expressly
provided by this Amendment, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement, as amended hereby, shall continue in
full force and effect, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.
(b) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING TO,
THE LAWS OF THE COMMONWEALTH OF
3
<PAGE>
MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
(c) This Amendment may be executed in any number of counterparts, but
all such counterparts shall together constitute but one instrument. In making
proof of this Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
(d) Headings or captions used in this Amendment are for convenience of
reference only and shall not define or limit the provisions hereof.
(e) The Borrower hereby agrees to pay to the Agent, on demand by the
Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by
the Agent in connection with the preparation of this Amendment (including
without limitation, recording and filing fees, notarization fees, stamp taxes,
any other tax imposed by reason of the execution and delivery of the Loan
Documents, the reasonable fees and expenses of counsel to the Agent and the
reasonable fees and expenses of the Agent's commercial finance examiners and
commercial auditors).
4
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Amendment as of the date first set forth above.
OUTSOURCE FUNDING CORPORATION
By: /s/ Joseph C. Wasch
---------------------------------------
Name: Joseph C. Wasch
Title: Vice President
BANKBOSTON, N.A., individually and as Agent
By: /s/ C. Christopher Smith
----------------------------------------
Name: C. Christopher Smith
Title: Vice President
COMERICA BANK
By: /s/ Martin G. Ellis
----------------------------------------
Name: Martin G. Ellis
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ John J. McGuire
----------------------------------------
Name: John J. McGuire
Title: First Vice President
SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
By: /s/ Byron P. Kurtgis
----------------------------------------
Name: Byron P. Kurtgis
Title: Director
FLEET NATIONAL BANK
By: /s/ C. Christopher Smith
----------------------------------------
Name: C. Christopher Smith
Title: Banking Officer
Exhibit 10.60
OUTSOURCE FUNDING CORPORATION
-----------------------------
SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
This Second Amendment (this "Amendment"), dated as of January 31, 2000,
among (a) OUTSOURCE FUNDING CORPORATION; (b) each of the banks party to the
Credit Agreement hereinafter referred to (collectively, the "Banks") and (c)
BANKBOSTON, N.A., as agent for the Banks (the "Agent"), pursuant to that certain
Revolving Credit Agreement (as amended and in effect from time to time, the
"Credit Agreement"), dated as of October 1, 1999, among the Borrower, the Banks
and the Agent. Capitalized terms used herein and which are not otherwise defined
shall have the respective meanings ascribed thereto in the Credit Agreement.
WHEREAS, the Borrower has requested that the Banks and the Agent agree
to amend the terms of the Credit Agreement in certain respects; and
WHEREAS, the Banks and the Agent are willing to amend the terms of the
Credit Agreement in such respects, upon the terms and subject to the conditions
contained herein; and
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ss.1. Amendment to Definitions. Section 1.1 of the Credit Agreement is
hereby amended by deleting the words "January 31, 2000" appearing in the
definition of "Revolving Credit Loan Maturity Date" and substituting in lieu
thereof the words "March 31, 2000".
ss.2. Confirmation of Obligations. The Borrower hereby confirms that
the obligations of the Borrower arising under each of the Loan Documents to
which it is a party, including Indebtedness consisting of Loans, are included in
the Obligations, are not subject to any claims or defenses whatsoever, and
constitute valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
ss.3. Release. The Borrower, on the Borrower's own behalf and on behalf
of the Borrower's successors and assigns, hereby waives, releases and discharges
the Agent and each Bank and all of the affiliates of the Agent and each Bank,
and all of the directors, officers, employees, attorneys and agents of the
Agent, each Bank and such affiliates, from any and all claims, demands, actions
or causes of action (known
<PAGE>
and unknown) arising out of or in any way relating to the Loan Documents and any
documents, agreements, dealings or other matters connected with the Credit
Agreement, in each case to the extent arising (x) on or prior to the date hereof
or (y) out of, or relating to, actions, dealings or matters occurring on or
prior to the date hereof. The waivers, releases, and discharges in this Section
3 shall be effective regardless of whether the conditions to this Amendment are
satisfied and regardless of any other event that may occur or not occur after
the date hereof.
ss.4. Representations and Warranties. The Borrower represents and
warrants to the Banks and the Agents as follows:
(a) Representations and Warranties in Credit Agreement. The
representations and warranties of the Borrower contained in the Credit
Agreement, as amended hereby, (a) were true and correct in all material respects
when made, and (b) except (i) as a result of changes in the ordinary course of
business permitted under the Credit Agreement and (ii) to the extent such
representations and warranties by their terms are made solely as of a prior
date, continue to be true and correct in all material respects on the date
hereof.
(b) Authority, Etc. The execution and delivery by the Borrower of this
Amendment and the performance by the Borrower of all of their agreements and
obligations under this Amendment and the Credit Agreement as amended hereby (i)
are within the corporate authority of the Borrower, (ii) have been duly
authorized by all necessary corporate or other proceedings or actions, as the
case may be, by the Borrower, (iii) do not conflict with or result in any breach
or contravention of any provision of law, statute, rule or regulation to which
the Borrower is subject or any judgment, order, writ, injunction, license or
permit applicable to the Borrower, and (iv) do not conflict with any provision
of the corporate charter, by-laws or partnership agreement of, or any agreement
or other instrument binding upon, the Borrower.
(c) Enforceability of Obligations. This Amendment, the Credit Agreement
as amended hereby, and the other Loan Documents constitute the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law). After giving effect to this Amendment, no Default or Event of Default
exists under the Credit Agreement.
ss.5. Conditions to Effectiveness. This Amendment shall be effective as
of the date hereof (the "Effective Date") upon the following conditions
precedent being satisfied on or before February 1, 2000:
(a) receipt by the Agent of an original counterpart signature to this
Amendment, duly executed and delivered by the Borrower, the Banks and the Agent;
2
<PAGE>
(b) receipt by the Agent of evidence satisfactory to the Agent that the
OI Revolving Credit Agreement termination date has been extended until March 31,
2000 from its current January 31, 2000 maturity date;
(c) payment by the Borrower of the legal, appraisal, consultant and
out-of-pocket fees and expenses of the Agent, in each case, to the extent that
invoices for the same have been presented to the Borrower; and
(d) payment by the Borrower of all fees and expenses of Nightingale &
Associates, LLC, DeBellas & Co. and any other consultant retained by the Agent
and/or the Banks in connection with consulting services, to the extent that
invoices for the same have been presented to the Borrower (in addition to any
amount previously paid as a retainer to such consultant).
ss.6. Miscellaneous Provisions. (a) Except as otherwise expressly
provided by this Amendment, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement, as amended hereby, shall continue in
full force and effect, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.
(b) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING TO,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW).
(c) This Amendment may be executed in any number of counterparts, but
all such counterparts shall together constitute but one instrument. In making
proof of this Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
(d) Headings or captions used in this Amendment are for convenience of
reference only and shall not define or limit the provisions hereof.
(e) The Borrower hereby agrees to pay to the Agent, on demand by the
Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by
the Agent in connection with the preparation of this Amendment (including
without limitation, recording and filing fees, notarization fees, stamp taxes,
any other tax imposed by reason of the execution and delivery of the Loan
Documents, the reasonable fees and expenses of counsel to the Agent and the
reasonable fees and expenses of the Agent's commercial finance examiners and
commercial auditors).
3
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Amendment as of the date first set forth above.
OUTSOURCE FUNDING CORPORATION
By: /s/ Joseph C. Wasch
---------------------------------------
Name: Joseph C. Wasch
Title: Vice President
BANKBOSTON, N.A., individually and as Agent
By: /s/ C. Christopher Smith
----------------------------------------
Name: C. Christopher Smith
Title: Vice President
COMERICA BANK
By: /s/ Martin G. Ellis
----------------------------------------
Name: Martin G. Ellis
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ John J. McGuire
----------------------------------------
Name: John J. McGuire
Title: First Vice President
SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
By: /s/ Byron P. Kurtgis
----------------------------------------
Name: Byron P. Kurtgis
Title: Director
FLEET NATIONAL BANK
By: /s/ C. Christopher Smith
----------------------------------------
Name: C. Christopher Smith
Title: Banking Officer
4
Exhibit 10.61
OUTSOURCE INTERNATIONAL, INC.
-----------------------------
FIFTH AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Fifth Amendment (this "Fifth Amendment"), dated as of January 31,
2000, among (a) OUTSOURCE INTERNATIONAL, INC. (the "Borrower"), (b) CAPITAL
STAFFING FUND, INC.; (c) OUTSOURCE FRANCHISING, INC.; (d) SYNADYNE I, INC.; (e)
SYNADYNE II, INC.; (f) SYNADYNE III, INC.; (g) SYNADYNE IV, INC.; (h) SYNADYNE
V, INC.; (i) EMPLOYEES INSURANCE SERVICES, INC.; (j) OUTSOURCE INTERNATIONAL OF
AMERICA, INC.; (k) MASS STAFF, INC.; (l) STAFF ALL, INC.; (m) OUTSOURCE OF
NEVADA, INC.; (n) EMPLOYMENT CONSULTANTS, INC.; (o) X-TRA HELP, INC.; (p)
CO-STAFF, INC.; (q) GUARDIAN EMPLOYER EAST, LLC; (r) GUARDIAN EMPLOYER WEST,
LLC; (s) each of the banks party to the Credit Agreement hereinafter referred to
(collectively, the "Banks") and (t) BANKBOSTON, N.A., as agent for the Banks
(the "Agent"), pursuant to that certain Third Amended and Restated Credit
Agreement (as amended, the "Credit Agreement"), dated as of July 27, 1998, among
the Borrower, the Banks and the Agent. Capitalized terms used herein and which
are not otherwise defined shall have the respective meanings ascribed thereto in
the Credit Agreement.
WHEREAS, (i) the Borrower and (ii) each Subsidiary of the Borrower
party to a Subsidiary Guarantee and whose name appears on the signature page
hereof (a "Guarantor") have requested that the Banks and the Agent agree to
amend the terms of the Credit Agreement in certain respects; and
WHEREAS, the Banks and the Agent are willing to amend the terms of the
Credit Agreement in such respects, upon the terms and subject to the conditions
contained herein; and
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ss.1. Amendment to Definitions. Section 1.1 of the Credit Agreement is
hereby amended by deleting the words "January 31, 2000" appearing in the
definition of "Termination Date", and substituting in lieu thereof the words
"March 31, 2000".
ss.2. Confirmation of Obligations. The Borrower hereby confirms that
the obligations of the Borrower arising under each of the Loan Documents to
which it is a party, including Indebtedness consisting of Revolving Credit
Loans, Swingline Loans and L/C Obligations, are included in the Obligations, are
not subject to any claims or defenses whatsoever, and constitute valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability
<PAGE>
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law). Each Guarantor hereby confirms that the obligations of such
Guarantor arising under each of the Loan Documents to which it is a party are
included in the Obligations, are not subject to any claims or defenses
whatsoever, and constitute valid and binding obligations of such Guarantor
enforceable against such Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
ss.3. Release. The Borrower and each Guarantor, on the Borrower's and
each Guarantors own behalf and on behalf of the Borrower's and each Guarantors
successors and assigns, hereby waive, release and discharge the Agent and each
Bank and all of the affiliates of the Agent and each Bank, and all of the
directors, officers, employees, attorneys and agents of the Agent, each Bank and
such affiliates, from any and all claims, demands, actions or causes of action
(known and unknown) arising out of or in any way relating to the Loan Documents
and any documents, agreements, dealings or other matters connected with the
Credit Agreement, in each case to the extent arising (x) on or prior to the date
hereof or (y) out of, or relating to, actions, dealings or matters occurring on
or prior to the date hereof. The waivers, releases, and discharges in this ss.3
shall be effective regardless of whether the conditions to this Fifth Amendment
are satisfied and regardless of any other event that may occur or not occur
after the date hereof.
ss.4. Covenants. The Borrower and each Guarantor hereby agrees that:
(a) the Borrower shall deliver to the Agent and the Banks, the
Borrower's and its Subsidiaries' preliminary December, 1999 monthly financial
statements; and
(b) the Borrower and each Guarantor shall, to the extent that it has
not previously done so, forthwith deliver to the Agent all promissory notes,
intercompany notes and other instruments evidencing any intercompany or other
debt obligations in favor of the Borrower or such Guarantor, together with
appropriate transfer powers for each, all to be held upon the terms of the
Security Documents.
ss.5. Representations and Warranties. The Borrower and each of the
Guarantors represent and warrant to the Banks and the Agent as follows:
(a) Representations and Warranties in Credit Agreement. The
representations and warranties of the Borrower and each of the Guarantors
contained in the Credit Agreement, as amended hereby, (a) were true and correct
in all material respects when made, and (b) except (i) as a result of changes in
the ordinary course of business permitted under the Credit Agreement and (ii) to
the extent such representations and warranties by their terms are made solely as
of a prior date, continue to be true and correct in all material respects on the
date hereof.
<PAGE>
(b) Authority, Etc. The execution and delivery by the Borrower and each
of the Guarantors of this Fifth Amendment and the performance by the Borrower
and each of the Guarantors of all of their agreements and obligations under this
Fifth Amendment and the Credit Agreement as amended hereby (i) are within the
corporate authority of the Borrower and each of the Guarantors, (ii) have been
duly authorized by all necessary corporate or other proceedings or actions, as
the case may be, by the Borrower and each of the Guarantors, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower or any of the Guarantors is
subject or any judgment, order, writ, injunction, license or permit applicable
to the Borrower or any of the Guarantors, and (iv) do not conflict with any
provision of the corporate charter, by-laws or partnership agreement of, or any
agreement or other instrument binding upon, the Borrower or any of the
Guarantors.
(c) Enforceability of Obligations. This Fifth Amendment, and the Credit
Agreement as amended hereby, and the other Loan Documents constitute the legal,
valid and binding obligations of the Borrower and each of the Guarantors
enforceable against each such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). After giving effect
to this Fifth Amendment, no Default or Event of Default exists under the Credit
Agreement.
ss.6. Conditions to Effectiveness. This Fifth Amendment shall be
effective as of the date hereof (the "Effective Date") upon the following
conditions precedent being satisfied on or before February 1, 2000:
(a) receipt by the Agent of an original counterpart signature to this
Fifth Amendment, duly executed and delivered by the Borrower, each of the
Guarantors, each of the Banks and the Agent;
(b) receipt by the Agent of evidence, satisfactory to the Agent, of the
Borrower's and the Guarantors' compliance with their undertakings contained in
ss.ss.4(a) and (b);
(c) payment by the Borrower of the legal, appraisal, consultant and
out-of-pocket fees and expenses of the Agent, in each case, to the extent that
invoices for the same have been presented to the Borrower; and
(d) payment by the Borrower of all fees and expenses of Nightingale &
Associates, LLC, DeBellas & Co. and any other consultant retained by the Agent
and/or the Banks in connection with consulting services, to the extent that
invoices for the same have been presented to the Borrower (in addition to any
amounts previously paid as a retainer).
ss.7. Miscellaneous Provisions. (a) Except as otherwise expressly
provided by this Fifth Amendment, all of the terms, conditions and provisions of
the Credit
<PAGE>
Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement, as amended hereby, shall continue in
full force and effect, and that this Fifth Amendment and the Credit Agreement
shall be read and construed as one instrument.
(b) THIS FIFTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING
TO, THE LAWS OF THE STATE OF CONNECTICUT (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW).
(c) This Fifth Amendment may be executed in any number of counterparts,
but all such counterparts shall together constitute but one instrument. In
making proof of this Fifth Amendment it shall not be necessary to produce or
account for more than one counterpart signed by each party hereto by and against
which enforcement hereof is sought.
(d) Headings or captions used in this Fifth Amendment are for
convenience of reference only and shall not define or limit the provisions
hereof.
(e) The Borrower hereby agrees to pay to the Agent, on demand by the
Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by
the Agent in connection with the preparation of this Fifth Amendment (including
without limitation, recording and filing fees, notarization fees, stamp taxes,
any other tax imposed by reason of the execution and delivery of the Loan
Documents, the reasonable fees and expenses of counsel to the Agent and the
reasonable fees and expenses of the Agent's commercial finance examiners and
commercial auditors).
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Fifth Amendment as of the date first set forth above.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
CAPITAL STAFFING FUND, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
OUTSOURCE FRANCHISING, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
SYNADYNE I, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
SYNADYNE II, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
SYNADYNE III, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
<PAGE>
SYNADYNE IV, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
SYNADYNE V, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Vice President
EMPLOYEES INSURANCE SERVICES, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
OUTSOURCE INTERNATIONAL OF AMERICA, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
MASS STAFF, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
STAFF ALL, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
<PAGE>
OUTSOURCE OF NEVADA, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
EMPLOYMENT CONSULTANTS, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
X-TRA HELP, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
CO-STAFF, INC.
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: President
GUARDIAN EMPLOYER EAST, LLC
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Manager
GUARDIAN EMPLOYER WEST, LLC
By: /s/ Paul M. Burrell
---------------------------------------
Name: Paul M. Burrell
Title: Manager
<PAGE>
BANKBOSTON, N.A., individually and as Agent
By: /s/ C. Christopher Smith
--------------------------------------
Name: C. Christopher Smith
Title: Vice President
COMERICA BANK
By: /s/ Martin G. Ellis
--------------------------------------
Name: Martin G. Ellis
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ John J. McGuire
---------------------------------------
Name: John J. McGuire
Title: First Vice President
SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
By: /s/ Byron P. Kurtgis
--------------------------------------
Name: Byron P. Kurtgis
Title: Director
FLEET NATIONAL BANK
By: /s/ C. Christopher Smith
---------------------------------------
Name: C. Christopher Smith
Title: Banking Officer
Exhibit 10.62
OUTSOURCE INTERNATIONAL, INC.
-----------------------------
SIXTH AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Sixth Amendment (this "Sixth Amendment"), dated as of March 30,
2000, among (a) OUTSOURCE INTERNATIONAL, INC. (the "Borrower"), (b) CAPITAL
STAFFING FUND, INC.; (c) OUTSOURCE FRANCHISING, INC.; (d) SYNADYNE I, INC.; (e)
SYNADYNE II, INC.; (f) SYNADYNE III, INC.; (g) SYNADYNE IV, INC.; (h) SYNADYNE
V, INC.; (i) EMPLOYEES INSURANCE SERVICES, INC.; (j) OUTSOURCE INTERNATIONAL OF
AMERICA, INC.; (k) MASS STAFF, INC.; (l) STAFF ALL, INC.; (m) OUTSOURCE OF
NEVADA, INC.; (n) EMPLOYMENT CONSULTANTS, INC.; (o) X-TRA HELP, INC.; (p)
CO-STAFF, INC.; (q) GUARDIAN EMPLOYER EAST, LLC; (r) GUARDIAN EMPLOYER WEST,
LLC; (s) each of the banks party to the Credit Agreement hereinafter referred to
(collectively, the "Banks") and (t) FLEET NATIONAL BANK (f/k/a BankBoston,
N.A.), as agent for the Banks (the "Agent"), pursuant to that certain Third
Amended and Restated Credit Agreement (as amended, the "Credit Agreement"),
dated as of July 27, 1998, among the Borrower, the Banks and the Agent.
Capitalized terms used herein and which are not otherwise defined shall have the
respective meanings ascribed thereto in the Credit Agreement.
WHEREAS, (i) the Borrower and (ii) each Subsidiary of the Borrower
party to a Subsidiary Guarantee and whose name appears on the signature page
hereof (a "Guarantor") have requested that the Banks and the Agent agree to
amend the terms of the Credit Agreement in certain respects; and
WHEREAS, the Banks and the Agent are willing to amend the terms of the
Credit Agreement in such respects, upon the terms and subject to the conditions
contained herein; and
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ss.1. Amendment to Definitions. Section 1.1 of the Credit Agreement is
hereby amended by deleting the words "March 31, 2000" appearing in the
definition of "Termination Date", and substituting in lieu thereof the words
"April 30, 2000".
ss.2. Confirmation of Obligations. The Borrower hereby confirms that
the obligations of the Borrower arising under each of the Loan Documents to
which it is a party, including Indebtedness consisting of Revolving Credit
Loans, Swingline Loans and L/C Obligations, are included in the Obligations, are
not subject to any claims or defenses whatsoever, and constitute valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general
<PAGE>
equitable principles (whether enforcement is sought by proceedings in equity or
at law). Each Guarantor hereby confirms that the obligations of such Guarantor
arising under each of the Loan Documents to which it is a party are included in
the Obligations, are not subject to any claims or defenses whatsoever, and
constitute valid and binding obligations of such Guarantor enforceable against
such Guarantor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
ss.3. Release. The Borrower and each Guarantor, on the Borrower's and
each Guarantors own behalf and on behalf of the Borrower's and each Guarantors
successors and assigns, hereby waive, release and discharge the Agent and each
Bank and all of the affiliates of the Agent and each Bank, and all of the
directors, officers, employees, attorneys and agents of the Agent, each Bank and
such affiliates, from any and all claims, demands, actions or causes of action
(known and unknown) arising out of or in any way relating to the Loan Documents
and any documents, agreements, dealings or other matters connected with the
Credit Agreement, in each case to the extent arising (x) on or prior to the date
hereof or (y) out of, or relating to, actions, dealings or matters occurring on
or prior to the date hereof. The waivers, releases, and discharges in this ss.3
shall be effective regardless of whether the conditions to this Sixth Amendment
are satisfied and regardless of any other event that may occur or not occur
after the date hereof.
ss.4. Representations and Warranties. The Borrower and each of the
Guarantors represent and warrant to the Banks and the Agent as follows:
(a) Representations and Warranties in Credit Agreement. The
representations and warranties of the Borrower and each of the Guarantors
contained in the Credit Agreement, as amended hereby, (a) were true and correct
in all material respects when made, and (b) except (i) as a result of changes in
the ordinary course of business permitted under the Credit Agreement and (ii) to
the extent such representations and warranties by their terms are made solely as
of a prior date, continue to be true and correct in all material respects on the
date hereof.
(b) Authority, Etc. The execution and delivery by the Borrower and each
of the Guarantors of this Sixth Amendment and the performance by the Borrower
and each of the Guarantors of all of their agreements and obligations under this
Sixth Amendment and the Credit Agreement as amended hereby (i) are within the
corporate authority of the Borrower and each of the Guarantors, (ii) have been
duly authorized by all necessary corporate or other proceedings or actions, as
the case may be, by the Borrower and each of the Guarantors, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower or any of the Guarantors is
subject or any judgment, order, writ, injunction, license or permit applicable
to the Borrower or any of the Guarantors, and (iv) do not conflict with any
provision of the corporate charter, by-laws or partnership agreement of, or any
agreement or other instrument binding upon, the Borrower or any of the
Guarantors.
2
<PAGE>
(c) Enforceability of Obligations. This Sixth Amendment, and the Credit
Agreement as amended hereby, and the other Loan Documents constitute the legal,
valid and binding obligations of the Borrower and each of the Guarantors
enforceable against each such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). After giving effect
to this Sixth Amendment, no Default or Event of Default exists under the Credit
Agreement.
ss.5. Conditions to Effectiveness. This Sixth Amendment shall be
effective as of the date hereof upon the satisfaction of the following
conditions precedent:
(a) receipt by the Agent of an original counterpart signature to this
Sixth Amendment, duly executed and delivered by the Borrower, each of the
Guarantors, each of the Banks and the Agent;
(b) receipt by the Agent satisfactory to the Agent that the OutSource
Funding Credit Agreement termination date has been extended until April 30, 2000
from its current March 31, 2000 maturity date;
(c) payment by the Borrower of the legal, appraisal, consultant and
out-of-pocket fees and expenses of the Agent, in each case, to the extent that
invoices for the same have been presented to the Borrower; and
(d) payment by the Borrower of all fees and expenses of Nightingale &
Associates, LLC, DeBellas & Co. and any other consultant retained by the Agent
and/or the Banks in connection with consulting services, to the extent that
invoices for the same have been presented to the Borrower (in addition to any
amounts previously paid as a retainer).
ss.6. Miscellaneous Provisions. (a) Except as otherwise expressly
provided by this Sixth Amendment, all of the terms, conditions and provisions of
the Credit Agreement shall remain the same. It is declared and agreed by each of
the parties hereto that the Credit Agreement, as amended hereby, shall continue
in full force and effect, and that this Sixth Amendment and the Credit Agreement
shall be read and construed as one instrument.
(b) THIS SIXTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING
TO, THE LAWS OF THE STATE OF CONNECTICUT (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW).
(c) This Sixth Amendment may be executed in any number of counterparts,
but all such counterparts shall together constitute but one instrument. In
making proof of this Sixth Amendment it shall not be necessary to produce or
account for more than one counterpart signed by each party hereto by and against
which enforcement hereof is sought.
3
<PAGE>
(d) Headings or captions used in this Sixth Amendment are for
convenience of reference only and shall not define or limit the provisions
hereof.
(e) The Borrower hereby agrees to pay to the Agent, on demand by the
Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by
the Agent in connection with the preparation of this Sixth Amendment (including
without limitation, recording and filing fees, notarization fees, stamp taxes,
any other tax imposed by reason of the execution and delivery of the Loan
Documents, the reasonable fees and expenses of counsel to the Agent and the
reasonable fees and expenses of the Agent's commercial finance examiners and
commercial auditors).
4
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Sixth Amendment as of the date first set forth above.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
CAPITAL STAFFING FUND, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
OUTSOURCE FRANCHISING, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
SYNADYNE I, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
SYNADYNE II, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
SYNADYNE III, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
<PAGE>
SYNADYNE IV, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
SYNADYNE V, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
EMPLOYEES INSURANCE SERVICES, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
OUTSOURCE INTERNATIONAL OF AMERICA, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
MASS STAFF, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
STAFF ALL, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
<PAGE>
OUTSOURCE OF NEVADA, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
EMPLOYMENT CONSULTANTS, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
X-TRA HELP, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
CO-STAFF, INC.
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Vice President & CFO
GUARDIAN EMPLOYER EAST, LLC
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Manager
GUARDIAN EMPLOYER WEST, LLC
By: /s/ Scott R. Francis
-------------------------------------
Name: Scott R. Francis
Title: Manager
<PAGE>
FLEET NATIONAL BANK (f/k/a BANKBOSTON, N.A.),
individually and as Agent
By: /s/ C. Christopher Smith
--------------------------------------
Name: C. Christopher Smith
Title: Vice President
COMERICA BANK
By: /s/ Martin G. Ellis
--------------------------------------
Name: Martin G. Ellis
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
(f/k/a LaSalle National Bank)
By: /s/ John J. McGuire
--------------------------------------
Name: John J. McGuire
Title: First Vice President
SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
By: /s/ Byron P. Kurtgis
--------------------------------------
Name: Byron P. Kurtgis
Title: Director
Exhibit 10.63
OUTSOURCE FUNDING CORPORATION
-----------------------------
THIRD AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
This Third Amendment (this "Amendment"), dated as of March 30, 2000,
among (a) OUTSOURCE FUNDING CORPORATION; (b) each of the banks party to the
Credit Agreement hereinafter referred to (collectively, the "Banks") and (c)
FLEET NATIONAL BANK (f/k/a BankBoston, N.A.), as agent for the Banks (the
"Agent"), pursuant to that certain Revolving Credit Agreement (as amended and in
effect from time to time, the "Credit Agreement"), dated as of October 1, 1999,
among the Borrower, the Banks and the Agent. Capitalized terms used herein and
which are not otherwise defined shall have the respective meanings ascribed
thereto in the Credit Agreement.
WHEREAS, the Borrower has requested that the Banks and the Agent agree
to amend the terms of the Credit Agreement in certain respects; and
WHEREAS, the Banks and the Agent are willing to amend the terms of the
Credit Agreement in such respects, upon the terms and subject to the conditions
contained herein; and
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ss.1. Amendment to Definitions. Section 1.1 of the Credit Agreement is
hereby amended by deleting the words "March 31, 2000" appearing in the
definition of "Revolving Credit Loan Maturity Date" and substituting in lieu
thereof the words "April 30, 2000".
ss.2. Confirmation of Obligations. The Borrower hereby confirms that
the obligations of the Borrower arising under each of the Loan Documents to
which it is a party, including Indebtedness consisting of Loans, are included in
the Obligations, are not subject to any claims or defenses whatsoever, and
constitute valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
ss.3. Release. The Borrower, on the Borrower's own behalf and on behalf
of the Borrower's successors and assigns, hereby waives, releases and discharges
the Agent and each Bank and all of the affiliates of the Agent and each Bank,
and all of the directors, officers, employees, attorneys and agents of the
Agent, each Bank and such affiliates, from any and all claims, demands, actions
or causes of action (known and unknown) arising out of or in any way relating to
the Loan Documents and any
<PAGE>
documents, agreements, dealings or other matters connected with the Credit
Agreement, in each case to the extent arising (x) on or prior to the date hereof
or (y) out of, or relating to, actions, dealings or matters occurring on or
prior to the date hereof. The waivers, releases, and discharges in this Section
3 shall be effective regardless of whether the conditions to this Amendment are
satisfied and regardless of any other event that may occur or not occur after
the date hereof.
ss.4. Representations and Warranties. The Borrower represents and
warrants to the Banks and the Agents as follows:
(a) Representations and Warranties in Credit Agreement. The
representations and warranties of the Borrower contained in the Credit
Agreement, as amended hereby, (a) were true and correct in all material respects
when made, and (b) except (i) as a result of changes in the ordinary course of
business permitted under the Credit Agreement and (ii) to the extent such
representations and warranties by their terms are made solely as of a prior
date, continue to be true and correct in all material respects on the date
hereof.
(b) Authority, Etc. The execution and delivery by the Borrower of this
Amendment and the performance by the Borrower of all of their agreements and
obligations under this Amendment and the Credit Agreement as amended hereby (i)
are within the corporate authority of the Borrower, (ii) have been duly
authorized by all necessary corporate or other proceedings or actions, as the
case may be, by the Borrower, (iii) do not conflict with or result in any breach
or contravention of any provision of law, statute, rule or regulation to which
the Borrower is subject or any judgment, order, writ, injunction, license or
permit applicable to the Borrower, and (iv) do not conflict with any provision
of the corporate charter, by-laws or partnership agreement of, or any agreement
or other instrument binding upon, the Borrower.
(c) Enforceability of Obligations. This Amendment, the Credit Agreement
as amended hereby, and the other Loan Documents constitute the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law). After giving effect to this Amendment, no Default or Event of Default
exists under the Credit Agreement.
ss.5. Conditions to Effectiveness. This Amendment shall be effective as
of the date hereof upon the satisfaction of the following conditions precedent:
(a) receipt by the Agent of an original counterpart signature to this
Amendment, duly executed and delivered by the Borrower, the Banks and the Agent;
(b) receipt by the Agent of evidence satisfactory to the Agent that the
OI Revolving Credit Agreement termination date has been extended until April 30,
2000 from its current March 31, 2000 maturity date;
2
<PAGE>
(c) payment by the Borrower of the legal, appraisal, consultant and
out-of-pocket fees and expenses of the Agent, in each case, to the extent that
invoices for the same have been presented to the Borrower; and
(d) payment by the Borrower of all fees and expenses of Nightingale &
Associates, LLC, DeBellas & Co. and any other consultant retained by the Agent
and/or the Banks in connection with consulting services, to the extent that
invoices for the same have been presented to the Borrower (in addition to any
amount previously paid as a retainer to such consultant).
ss.6. Miscellaneous Provisions. (a) Except as otherwise expressly
provided by this Amendment, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement, as amended hereby, shall continue in
full force and effect, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.
(b) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING TO,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW).
(c) This Amendment may be executed in any number of counterparts, but
all such counterparts shall together constitute but one instrument. In making
proof of this Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
(d) Headings or captions used in this Amendment are for convenience of
reference only and shall not define or limit the provisions hereof.
(e) The Borrower hereby agrees to pay to the Agent, on demand by the
Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by
the Agent in connection with the preparation of this Amendment (including
without limitation, recording and filing fees, notarization fees, stamp taxes,
any other tax imposed by reason of the execution and delivery of the Loan
Documents, the reasonable fees and expenses of counsel to the Agent and the
reasonable fees and expenses of the Agent's commercial finance examiners and
commercial auditors).
3
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Amendment as of the date first set forth above.
OUTSOURCE FUNDING CORPORATION
By: /s/ Scott R. Francis
---------------------------------------
Name: Scott R. Francis
Title: Vice President
FLEET NATIONAL BANK (f/k/a BankBoston, N.A.),
individually and as Agent
By: /s/ C. Christopher Smith
----------------------------------------
Name: C. Christopher Smith
Title: Vice President
COMERICA BANK
By: /s/ Martin G. Ellis
----------------------------------------
Name: Martin G. Ellis
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ John J. McGuire
----------------------------------------
Name: John J. McGuire
Title: First Vice President
SUNTRUST BANK, SOUTH FLORIDA,
NATIONAL ASSOCIATION
By: /s/ Byron P. Kurtgis
----------------------------------------
Name: Byron P. Kurtgis
Title: Director
4
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of February 14, 2000, by and between OutSource International, Inc., a Florida
corporation (the "Company"), and Jon H. Peterson ("Employee").
WHEREAS, the Company, through its Board of Directors, desires to retain
the services of Employee, and Employee desires to be retained by the Company, on
the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment, as Vice President of Finance and Treasurer, the terms
subject to this Agreement.
2. Term. The term ("Term") of this Agreement shall commence on February
14, 2000 and shall continue until terminated in accordance with the terms
hereof.
3. Duties. During his employment hereunder, Employee will serve as the
Vice President of Finance and Treasurer. Employee shall report directly to the
Chief Financial Officer of the Company and shall serve at his direction.
Employee shall perform services as assigned by the Chief Financial Officer of
the Company consistent with the title of Vice President of Finance and
Treasurer. Employee shall diligently perform such duties and shall devote his
entire business skill, time and effort to his employment and his duties
hereunder and shall not during the Term, directly or indirectly, alone or as a
member of a partnership, or as an officer, director, employee or agent of any
other person, firm or business organization engage in any other business
activities or pursuits requiring his personal service that materially conflict
with his duties hereunder or the diligent performance of such duties. This shall
not, however, preclude Employee from serving on boards of directors of other
corporations; provided that such service does not conflict with the duties of
Employee hereunder or result in a conflict of interest.
4. Compensation.
a. Salary. During his employment hereunder, Employee shall be paid an
initial salary of $140,000 per year, payable in equal installments not less than
monthly ("Base Salary"). The Employee's Base Salary shall be reviewed at least
annually by the Board of Directors or any Committee of the Board delegated the
authority to review executive compensation.
1
<PAGE>
b. Bonus. In addition to Base Salary, Employee shall be entitled to
participate in the Company's Stock Option Plan, as amended and restated (the
"Stock Option Plan") and, in addition, to participate in a Management Bonus
Program, beginning in calendar year 2000, to be established by the Company with
an initial targeted bonus for calendar year 2000 of 30% for Employee, based upon
the achievement of mutually agreed upon goals and objectives (hereafter the
"Management Bonus Program"). The bonus, subject to approval by the Company Board
of Directors, shall be based on the following:
(1) 70% OSI achieving budget
(2) 30% achieving your individual goals as mutually agreed upon with
the President
c. Insurance. During his employment hereunder, Employee shall be
entitled to participate in such health, life, disability and other insurance
programs, if any, that the Company may offer to other key executive employees of
the Company from time to time. You will be eligible for such benefits as of
April 1, 2000.
d. Other Benefits. During his employment hereunder, Employee shall be
entitled to such other benefits, if any, that the Company may offer to other key
executive employees of the Company from time to time.
e. Vacation. Employee shall be entitled to 3 weeks vacation leave (in
addition to holidays) in each calendar year during the Term, or such additional
amount as may be set forth in the vacation policy that the Company shall
establish from time to time. Except with respect to vacation time unused as the
result of a written request by the Company to postpone a vacation, any unused
vacation from one calendar year shall not carry-over to any subsequent calendar
year.
f. Expense Reimbursement. Employee shall, upon submission of
appropriate supporting documentation, be entitled to reimbursement of reasonable
out-of-pocket expenses incurred in the performance of his duties hereunder in
accordance with policies established by the Company. Such expenses shall
include, without limitation, reasonable travel and entertainment expenses,
gasoline and toll expenses and cellular phone use charges, if such charges are
directly related to the business of the Company.
5. Grounds for Termination.
The Board of Directors of the Company may terminate this Agreement for
any reason at any time including, without limitation, for "Cause." As used
herein, "Cause" shall mean any of the following: (i) failure on the part of
Employee to disclose to Company in writing on or before the date hereof
Employee's breach of or default under any employment, non-compete,
confidentiality or other agreement between Employee and any prior employer of
Employee (including without limitation any breach or default that might result
from Employee's entering into or performing his duties and obligations under
this Agreement); (ii) an act of willful misconduct or gross negligence by
Employee in the performance of his material duties or obligations to the
Company; (iii) indictment of Employee for a felony involving moral turpitude,
whether relating
2
<PAGE>
to his employment or otherwise; (iv) an act of dishonesty or breach of trust on
the part of Employee resulting or intended to result directly or indirectly in
personal gain or enrichment at the expense of the Company; (v) conduct on the
part of Employee intended to injure the business of the Company; (vi) Employee's
addiction to any drug or chemical; (vii) Employee's insubordination unless
resulting from Employee's refusal to do an illegal act; (viii) a material
failure of Employee to perform or observe the provisions of this Agreement
(other than by reason of disability as defined herein). The existence of any of
the foregoing events or conditions, except under clause (iii), shall be
determined by the Board of Directors (excluding the Employee) in the exercise of
its reasonable judgment provided that if such occurrence relates to section (i),
(vi) or (viii) above, it must persist more than (a) five (5) days after notice
is given to Employee by personal delivery or (b) ten (10) days after a notice is
given to Employee by any other means, each notice which details the occurrence.
Notwithstanding the foregoing, if occurrence under sections (ii), (v), (vii) or
(viii) cannot reasonably be remedied within the time periods set forth, the
Board of Directors shall not exercise its right to terminate under this section
if Employee begins to remedy the occurrence within the time period and continues
actively and diligently in good faith to completely remedy such occurrence. As
used herein "insubordination" means Employee failing to use his best efforts to
comply with a written directive made by the Company's Board of Directors for any
action or inaction not inconsistent with the duties set forth here.
6. Termination by Employee.
Employee may terminate this Agreement with Good Reason. "Good Reason"
means:
a. At any time, the Employee is required, without his written consent,
to relocate his office more than seventy-five miles from the location of the
Company's current corporate headquarters;
b. The Company decreases the Employee's compensation below the levels
provided for by the terms of Section 4 (taking into account increases made from
time to time in accordance with Section 4);
c. A material breach of the provisions of this Agreement by the Company
(except those set forth in Paragraph 4.a) and Employee provides at least 15 days
prior written notice to at least two members of the Company's Board of Directors
(other than Employee) of the existence of such breach and his intention to
terminate this Agreement (no such termination shall be effective if such breach
is cured during such period or if the Company is in good faith attempting to
cure such breach);
d. The failure of the Company to comply with the provisions of
Paragraph 4.a for an uninterrupted 10 day period; or
e. The Company materially reduces the Employee's benefits under any
employee benefit plan, program or arrangement of the Company (other than a
change that affects all employees similarly situated) from the level in effect
upon the Employee's commencement or participation.
3
<PAGE>
7. Payment and Other Provisions Upon Termination.
a. In the event that: Employee's employment with the Company (including
its subsidiaries) is terminated by the Company for Cause as provided in
Paragraph 5; or Employee terminates his employment without Good Reason as
described in Paragraph 6; then, on or before Employee's last day of employment
with the Company:
i. Salary and Bonus Payments: The Company shall pay in a lump
sum to Employee such amount of compensation due to Employee hereunder
for services rendered to the Company, as well as compensation for
unused vacation time, as has accrued but remains unpaid. Any and all
other rights granted to Employee under this Agreement shall terminate
as of the date of termination.
ii. Noncompetition/Nonsolicitation Period. The provisions of
Paragraph 14 shall continue to apply with respect to Employee for a
period of one year following the date of termination.
b. In the event that: Employee's employment with the Company (including
its subsidiaries) is terminated by the Company for any reason other than for
Cause as provided in Paragraph 5 and other than as a consequence of Employee's
death, disability, or normal retirement under the Company's retirement plans and
practices; or Employee terminates his employment with Good Reason as described
in Paragraph 6; then:
i. Salary and Bonus Payments: On or before Employee's last day
of employment with the Company, the Company shall pay to Employee, as
compensation for services rendered to the Company, a cash amount equal
to the sum of (x) one-half (1/2) of the amount of Employee's Base
Salary and (y) ninety percent of one-half (1/2) of the amount of the
estimated target bonus under the Management Bonus Program as in effect
immediately prior to his date of termination (the "Cash Amount"). The
final calculation of Employee's target bonus shall be made, and any
remaining bonus amount due to Employee paid, in the manner set forth in
Section 7.a.i. At the election of the Company, the Cash Amount may be
paid to Employee in periodic installments in accordance with the
regular salary payment practices of the Company, with the first such
installment to be paid on or before Employee's last day of employment
with the Company. Notwithstanding the foregoing sentence, the entire
Cash Amount shall be paid to Employee during the period not to exceed
one year following Employee's last day of employment with the Company.
No interest shall be paid with respect to any of the Cash Amount not
paid on the Employee's date of termination.
ii. Benefit Plan Coverage: The Company shall maintain in full
force and effect for Employee and his dependents for one year after the
date of termination, all life, health, accident, and disability benefit
plans and other similar employee benefit plans, programs and
arrangements in which Employee or his dependents were entitled to
participate immediately prior to
4
<PAGE>
the date of termination, in such amounts as were in effect immediately
prior to the date of termination, provided that such continued
participation is possible under the general terms and provisions of
such benefit plans, programs and arrangements. In the event that
participation in any benefit plan, program or arrangement described
above is barred, or any such benefit plan, program or arrangement is
discontinued or the benefits thereunder materially reduced, the Company
shall arrange to provide Employee and his dependents for one year after
the date of termination with benefits substantially similar to those
that they were entitled to receive under such benefit plans, programs
and arrangements immediately prior to the date of termination, or, at
the Company's option, a lump sum payment to Employee equal to the
Company's cost immediately prior to termination to provide such
benefits. If immediately prior to the date of termination the Company
provided Employee with any club memberships, Employee will be entitled
to continue such memberships at his sole expense. Notwithstanding any
time period for continued benefits stated in this Paragraph 7.b.ii, all
benefits in this Paragraph 7.b.ii will terminate on the date that
Employee becomes an employee of another employer and eligible to
participate in the employee benefit plans of such other employer. To
the extent that Employee was required to contribute amounts for the
benefits described in this Paragraph 7.b.ii prior to his termination,
he shall continue to contribute such amounts for such time as these
benefits continue in effect after termination.
iii. [INTENTIONALLY OMITTED]
iv. Savings and Other Plans: Except as otherwise more
specifically provided herein or under the terms of the respective plans
relating to termination of employment, Employee's active participation
in any applicable savings, retirement, profit sharing or supplemental
employee retirement plans or any deferred compensation or similar plan
of the Company or any of its subsidiaries shall continue only through
the last day of his employment. All other provisions, including any
distribution and/or vested rights under such plans, shall be governed
by the terms of those respective plans.
v. Noncompetition/Nonsolicitation Period. The provisions of
Paragraph 14 shall continue, beyond the time periods set forth in such
paragraph, to apply with respect to Employee for the shorter of (x)
twelve months following the date of termination or (y) until such time
as the Company has failed to comply with the provisions of Paragraph
7.b.i for a an uninterrupted 10-day period and such failure is not
cured within 5 days after written notice of such failure is delivered
to at least two directors of the Company (other than Employee).
c. In the event Employee's employment with the Company (including its
subsidiaries) is terminated by the Company other than for Cause as provided in
Paragraph 5 and other than as a consequence of Employee's death, disability, or
normal retirement under the Company's retirement plans and practices, and the
reason for such termination is not based upon unsatisfactory performance by
Employee of his duties hereunder as stated in written performance evaluations or
other written documents prepared by the Company, then the following provision
shall apply. This same provision shall also apply if Employee terminates his
employment with Good Reason as described in Paragraph 6.
5
<PAGE>
i. Exercisability of Stock Options. Notwithstanding the
vesting period provided for in the Stock Option Plan and any related
stock option agreements between the Company and Employee for stock
options ("options") and stock appreciation rights ("rights") granted
Employee by the Company, all options and stock appreciation rights
shall be immediately exercisable upon termination of employment. In
addition, Employee will have the right to exercise all options and
rights for the shorter of (x) one year following his termination of
employment or (y) with respect to each option, the remainder of the
period of exercisability under the terms of the appropriate documents
that grant such options.
d. The provisions of this Paragraph 7 shall apply if Employee's
employment is terminated prior to or more than two years after the occurrence of
a Change of Control (as defined in Paragraph 8.c). From the occurrence of any
Change of Control until the second anniversary of such Change of Control, the
provisions of Paragraph 8 shall apply in place of this Paragraph 7, except that
in the event that after a Change of Control Employee's employment is terminated
by Employee without Good Reason or Company terminates Employee for Cause, then
the provisions of Paragraph 8 shall not apply and the provisions of Paragraph
7.a shall apply. Termination upon death, disability and retirement are covered
by Paragraphs 9, 10, and 11, respectively.
8. Payment and Other Provisions after Change of Control.
a. Salary, Performance Award, and Bonus Payments: In the event
Employee's employment with the Company is terminated within two years following
the occurrence of a Change of Control (other than as a consequence of his death
or disability, or of his normal retirement under the Company's retirement plans
and practices) either (x) by the Company for any reason other than for Cause or
(z) by Employee with Good Reason as provided in Paragraph 6, then Employee shall
be entitled to receive from the Company, the following:
i. Base Salary. Employee's Base Salary as in effect at the
date of termination shall be paid on the date of termination; ii.
Target Bonus. Ninety percent of the amount of the Employee's estimated
target bonus under the Management Bonus Program for the fiscal year in
which the date of termination occurs shall be paid on the date of
termination; the final calculation of Employee's target bonus shall be
made, and any remaining bonus amount due to Employee paid, in the
manner set forth in Section 7.a.i.; and
iii. [OMITTED INTENTIONALLY]
iv. Other Benefits. All benefits under Paragraphs 7.b.ii,
7.b.iv and 7.c.i shall be extended to Employee as described in such
paragraphs.
6
<PAGE>
b. Noncompetition/Nonsolicitation Period. In the event of a termination
under Paragraph 8.a within one year after a Change of Control the provisions of
Paragraph 14 shall continue to apply as stated in paragraph 7.b.v.
c. For purposes of this Agreement, the term "Change of Control" shall
mean:
i. The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of " 13(d)(3) or "
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) (any of the foregoing
described in this Paragraph 8.c.i hereafter a "Person") of 33% or more
of either (a) the then outstanding shares of Capital Stock of the
Company (the "Outstanding Capital Stock") or (b) the combined voting
power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the "Voting
Securities"), provided, however, that any acquisition by (x) the
Company or any of its subsidiaries, or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its
subsidiaries or (y) any Person that is eligible, pursuant to Rule
13d-1(b) under the Exchange Act, to file a statement on Schedule 13G
with respect to its beneficial ownership of Voting Securities, whether
or not such Person shall have filed a statement on Schedule 13G, unless
such Person shall have filed a statement on Schedule 13D with respect
to beneficial ownership of 33% or more of the Voting Securities or (z)
any corporation with respect to which, following such acquisition, more
than 60% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
Outstanding Capital Stock and Voting Securities immediately prior to
such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the Outstanding
Capital Stock and Voting Securities, as the case may be, shall not
constitute a Change of Control; or
ii. Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual becoming a
director subsequent to the date hereof whose election or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors
of the Company (as such terms are used in Rule 14a-11 of Regulation
14A, or any successor section, promulgated under the Exchange Act); or
iii. Approval by the shareholders of the Company of a
reorganization, merger or consolidation (a "Business Combination"), in
each case, with respect to which all or substantially all holders of
the Outstanding Capital Stock and Voting Securities immediately
7
<PAGE>
prior to such Business Combination do not, following such Business
Combination, beneficially own, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from Business Combination; or
iv. (a) a complete liquidation or dissolution of the Company
or (b) a sale or other disposition of all or substantially all of the
assets of the Company other than to a corporation with respect to
which, following such sale or disposition, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors is then owned
beneficially, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Capital Stock and Voting Securities
immediately prior to such sale or disposition in substantially the same
proportion as their ownership of the Outstanding Capital Stock and
Voting Securities, as the case may be, immediately prior to such sale
or disposition.
9. Termination by Reason of Death. If Employee shall die while employed
by the Company both prior to termination of employment and during the effective
term of this Agreement, all Employee's rights under this Agreement shall
terminate with the payment of that portion of Base Salary as has accrued but
remains unpaid and a prorated amount of targeted bonus under the Company's
Management Bonus Program through the month in which his death occurs, plus three
additional months of the fixed salary and targeted bonus. The calculation of
Employee's target bonus shall be made, and any bonus amount due to Employee
paid, in the manner set forth in Section 7.a.i. All benefits under Paragraphs
7.b.ii, 7.b.iv and 7.c.i shall be extended to Employee's estate as described in
such paragraphs. In addition, Employee's eligible dependents shall receive
continued benefit plan coverage under Paragraph 7.b.ii for three months from the
date of Employee's death.
10. Termination by Disability. Employee's employment hereunder may be
terminated by the Company for disability. In such event, all Employee's rights
under this Agreement shall terminate with the payment of that portion of Base
Salary as has accrued but remains unpaid as of the thirtieth (30th) day after
such notice is given except that all benefits under Paragraphs 7.b.ii, 7.b.iv
and 7.c.i shall be extended to Employee as described in such paragraphs,
provided, however, that, with respect to Paragraph 7.b.ii, the period for
continued benefit plan coverage shall be limited to six months from the date of
termination. In addition, the noncompetition and nonsolicitation provisions of
Paragraph 14 shall continue to apply to Employee for a period of six months from
the date of termination. For purposes of this Agreement, "disability" is defined
to mean that, as a result of Employee's incapacity due to physical or mental
illness:
a. Employee shall have been absent from his duties as an officer of the
Company on a substantially full-time basis for six (6) consecutive months; and
8
<PAGE>
b. Within thirty (30) days after the Company notifies Employee in
writing that it intends to replace him, Employee shall not have returned to the
performance of his duties as an officer of the Company on a full-time basis.
11. Retirement. It is expected that the Compensation Committee of the
Company's Board of Directors will develop a benefit plan for retirement. It is
expected that Employee's rights upon retirement will be specifically described
in such retirement benefit plan. If retirement benefits for Employee are not
specifically described in such plan, the Company shall provide Employee upon
retirement benefits no lesser than the highest level of benefits accorded any
other retiring executive officer during the five year period immediately
preceding Employee's retirement.
12. Indemnification. If litigation shall be brought to enforce or
interpret any provision contained herein, the non-prevailing party shall
indemnify the prevailing party for reasonable attorney's fees (including those
for negotiations, trial and appeals) and disbursements incurred by the
prevailing party in such litigation, and hereby agrees to pay prejudgment
interest on any money judgment obtained by the prevailing party calculated at
the generally prevailing NationsBank of Florida, N.A. base rate of interest
charged to its commercial customers in effect from time to time from the date
that payment(s) to him should have been made under this Agreement.
13. [Intentionally Omitted]
14. Noncompetition and Nonsolicitation.
a. The nature of the system and methods employed in the Company's
business is such that Employee will be placed in a close business and personal
relationship with the customers of the Company and be privy to confidential
customer usage and rate information. Accordingly, at all times during the term
of this Agreement and for a period of one (1) year immediately following the
termination of Employee's employment hereunder (the "Noncompetition and
Nonsolicitation Period") for any reason whatsoever, and for such additional
periods as may otherwise be set forth in this Agreement in reference to this
Paragraph 14, so long as the Company continues to carry on the same business,
Employee shall not, for any reason whatsoever, directly or indirectly, for
himself or on behalf of, or in conjunction with, any other person, persons,
company, partnership, corporation or business entity:
i. Call upon, divert, influence or solicit or attempt to call
upon, divert, influence or solicit any customer or customers of the
Company nationwide;
ii. Divulge the names and addresses or any information
concerning any customer of the Company;
iii. Disclose any information or knowledge relating to the
Company, including but not limited to, the Company's system or method
of conducting business to any person, persons, firms, corporations or
other entities unaffiliated with the Company, for any reason or purpose
whatsoever;
9
<PAGE>
iv. Own, manage, operate, control, be employed by, participate
in or be connected in any manner with the ownership, management,
operation or control of the same, similar or related line of business
as that carried on by the Company ("Competition") within a radius of
fifty (50) miles from Employee's principal office.
b. The time period covered by the covenants contained in this Paragraph
14 shall not include any period(s) of violation of any covenant or any period(s)
of time required for litigation to enforce any covenant.
c. The covenants set forth in this Paragraph 14 shall be construed as
an agreement independent of any other provision in this Agreement and existence
of any potential or alleged claim or cause of action of Employee against the
Company, whether predicted on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants contained herein.
An alleged or actual breach of the Agreement by the Company shall not be a
defense to enforcement of the provisions of this Paragraph 14.
d. Employee acknowledges that he has read the foregoing and agrees that
the nature of the geographical restrictions are reasonable given the
international nature of the Company's business. In the event that these
geographical or temporal restrictions are judicially determined to be
unreasonable, the parties agree that these restrictions shall be judicially
reformed to the maximum restrictions which are reasonable.
e. Notwithstanding anything to the contrary contained herein, in the
event that Employee engages in Competition, or any conduct expressly prohibited
by this Paragraph 14 at any time during the Noncompetition and Nonsolicitation
Period for any reason whatsoever, Employee shall not receive any of the
termination benefits he otherwise would be entitled to receive pursuant to
Paragraphs 7.b., 7.c., 8.a. and 10 hereof.
15. Confidentiality.
a. Nondisclosure. Employee acknowledges and agrees that the
Confidential Information (as defined below) is a valuable, special and unique
asset of the Company's business. Accordingly, except in connection with the
performance of his duties hereunder, Employee shall not at any time during or
subsequent to the term of his employment hereunder disclose, directly or
indirectly, to any person, firm, corporation, partnership, association or other
entity any proprietary or confidential information relating to the Company or
any information concerning the Company's financial condition or prospects, the
Company's customers, the design, development, manufacture, marketing or sale of
the Company's products or the Company's methods of operating its business
(collectively "Confidential Information"). Confidential Information shall not
include information which, at the time of disclosure, is known or available to
the general public by publication or otherwise through no act or failure to act
on the part of Employee.
10
<PAGE>
b. Return of Confidential Information. Upon termination of Employee's
employment, for whatever reason and whether voluntary or involuntary, or at any
time at the request of the Company, Employee shall promptly return all
Confidential Information in the possession or under the control of Employee to
the Company and shall not retain any copies or other reproductions or extracts
thereof. Employee shall at any time at the request of the Company destroy or
have destroyed all memoranda, notes, reports, and documents, whether in "hard
copy" form or as stored on magnetic or other media, and all copies and other
reproductions and extracts thereof, prepared by Employee and shall provide the
Company with a certificate that the foregoing materials have in fact been
returned or destroyed.
c. Books and Records. All books, records and accounts whether prepared
by Employee or otherwise coming into Employee's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company upon termination of Employee's employment hereunder or upon the
Company's request at any time.
16. Injunction/Specific Performance Setoff. Employee acknowledges that
a breach of any of the provisions of Paragraphs 14 or 15 hereof would result in
immediate and irreparable injury to the Company which cannot be adequately or
reasonably compensated at law. Therefore, Employee agrees that the Company shall
be entitled, if any such breach shall occur or be threatened or attempted, to a
decree of specific performance and to a temporary and permanent injunction,
without the posting of a bond, enjoining and restraining such breach by Employee
or his agents, either directly or indirectly, and that such right to injunction
shall be cumulative to whatever other remedies for actual damages to which the
Company is entitled. Employee further agrees that, except as otherwise provided
in Paragraph 13 hereof, the Company may set off against or recoup from any
amounts due under this Agreement to the extent of any losses incurred by the
Company as a result of any breach by Employee of the provisions of Paragraphs 14
or 15 hereof.
17. Severability: Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
18. Successors: This Agreement shall be binding upon Employee and inure
to his and his estate's benefit, and shall be binding upon and inure to the
benefit of the Company and any permitted successor of the Company. Neither this
Agreement nor any rights arising hereunder may be assigned or pledged by:
Employee or anyone claiming through Employee; or by the Company, except to any
corporation which is the successor in interest to the Company by reason of a
merger, consolidation or sale of substantially all of the assets of the Company.
The foregoing sentence shall not be deemed to have any effect upon the rights of
Employee upon a Change of Control.
19. Controlling Law: This Agreement shall in all respects be governed
by, and construed in accordance with, the laws of the State of Florida.
11
<PAGE>
20. Notices. Any notice required or permitted to be given hereunder
shall be written and sent by registered or certified mail, telecommunicated or
hand delivered at the address set forth herein or to any other address of which
notice is given:
To the Company: OutSource International, Inc.
1144 East Newport Center Drive
Deerfield Beach, Florida 33442
Attention: General Counsel
To Employee: Jon H. Peterson
300 S.E. Mizner Blvd.
Boca Raton, Fl. 33432
21. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto on the subject matter hereof and may not be modified
without the written agreement of both parties hereto.
22. Waiver. A waiver by any party of any of the terms and conditions
hereof shall not be construed as a general waiver by such party.
23. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and both of which together shall constitute
a single agreement.
24. Interpretation. In the event of a conflict between the provisions
of this Agreement and any other agreement or document defining rights and duties
of Employee or the Company upon Employee's termination, the rights and duties
set forth in this Agreement shall control.
12
<PAGE>
25. Certain Limitations on Remedies. Paragraph 7.b provides that
certain payments and other benefits shall be received by Employee upon the
termination of Employee by the Company other than for Cause and states that
these same provisions shall apply if Employee terminates his employment for Good
Reason. It is the intention of this Agreement that if the Company terminates
Employee other than for Cause (and other than as a consequence of Employee's
death, disability or normal retirement) or if Employee terminates his employment
with Good Reason, then the payments and other benefits set forth in Paragraph
7.b shall constitute the sole and exclusive remedies of Employee. This Paragraph
25 shall have no effect upon the provisions of Paragraph 8 of this Agreement.
IN WITNESS WHEREOF, this Employment Agreement has been executed by the
parties as of the date first above written.
COMPANY:
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Scott R. Francis
-------------------------
Scott R. Francis
Its: Chief Financial Officer
EMPLOYEE:
/s/ Jon H. Peterson
-------------------
Name: Jon H. Peterson
13
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of February 7, 2000, by and between OutSource International, Inc., a Florida
corporation (the "Company"), and Garry Meier ("Employee").
WHEREAS, the Company, through its Board of Directors, desires to retain
the services of Employee, and Employee desires to be retained by the Company, on
the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
accepts employment, as Chief Executive Officer and President subject to the
terms of this Agreement. You will work at the Company's headquarters, currently
located at 1144 East Newport Center Drive, Deerfield Beach, Florida.
2. Term. The term ("Term") of this Agreement shall commence on February
14, 2000 and shall continue until terminated by Employee or by the Company in
accordance with the terms hereof.
3. Duties. During his employment hereunder, Employee will serve as the
Chief Executive Officer and President of the Company. Employee shall report
directly to the Board of Directors of the Company (the "Board") and shall serve
at their direction. Employee will be appointed to the Board of Directors at the
first meeting of the Board of Directors following your employment. Employee
shall perform services as assigned by the Board consistent with the title of
Chief Executive Officer and President. The officers that shall report to you
will include, but not be limited to, the following: Chief Financial Officer,
Chief Information Officer, General Counsel, all Zone Vice Presidents, Vice
President of Human Resources, Vice President of Sales and Marketing Operations.
Employee shall diligently perform such duties and shall devote his entire
business skill, time and effort to his employment and his duties hereunder and
shall not during the Term, directly or indirectly, alone or as a member of a
partnership, or as an officer, director, employee or agent of any other person,
firm or business organization engage in any other business activities or
pursuits requiring his personal service that materially conflict with his duties
hereunder or the diligent performance of such duties. This shall not, however,
preclude Employee from serving on boards of directors of other corporations;
provided that such service does not conflict with the duties of Employee
hereunder or result in a conflict of interest.
4. Compensation.
a. Salary. Employee shall be paid an initial salary of $300,000 per
year for the first year of employment, payable in equal installments not less
frequently than semi-monthly ("Annual Base Salary"). The Annual Base Salary for
years two, three, and four (effective February 21, 2001), shall be $325,000.00.
The Annual Base Salary after year four shall be determined by the Board of
Directors.
1
<PAGE>
b. Bonus. In addition to the Annual Base Salary, Employee shall be
entitled to an annual performance bonus, with an initial targeted bonus for year
one of the Agreement of between 50% and 100% of Annual Base Salary (to be
determined jointly by Employee and the Board of Directors), based upon the
achievement by the Company of mutually agreed upon goals and objectives for the
relevant fiscal year. Unless otherwise provided herein, the annual performance
bonus shall be paid, if at all, after completion of the Company's financial
statements for the fiscal year. The initial fiscal year for this Agreement ends
March 31, 2001. For year one of the Agreement, Employee shall receive a minimum
performance bonus in the amount of $150,000.00 (the "Minimum Performance Bonus")
irrespective of the Company's performance, to be paid on the one year
anniversary of his employment with the Company ("First Anniversary"), but only
if Employee is employed by the Company on the First Anniversary. For year two of
employment, Employee shall receive a minimum performance bonus in the amount of
$81,250 irrespective of the Company's performance, to be paid on the two year
anniversary of his employment with the Company ("Second Anniversary"), but only
if Employee is employed by the Company on the Second Anniversary. Any amounts
paid as a Minimum Performance Bonus on an anniversary of employment shall be
applied against the targeted bonus amount for the fiscal year in which the
anniversary occurs. There will be no minimum performance bonus amounts after the
second year of employment.
c. Stock Options. Effective the date you execute this Agreement, you
will receive a grant of an option to acquire 400,000 shares of Outsource
International, Inc. common stock. The strike price of the shares shall be the
Fair Market Value on the date of the grant. These options shall vest 25% at the
completion of each year of employment with the Company (100% vested after the
end of year four). In addition, on your first anniversary of employment with the
Company, you shall be granted an option to purchase 100,000 shares of Outsource
International, Inc. common stock, at the Fair Market Value on the date of the
grant. These options shall vest 33% at the completion of each year of employment
with the Company. Fair Market Value shall mean the average of the closing "bid"
and "ask" prices on the day of any grant. The options shall be incentive stock
options to the extent permitted by law, and shall be granted pursuant to the
Company's Stock Option Plan and a written stock option agreement. The term of
the options shall be ten years (subject to expiration per the terms of the stock
option agreement and the Internal Revenue Code).
d. Insurance. During his employment hereunder, Employee shall be
entitled to participate in such health, life, short term and long-term
disability and other insurance programs, if any, that the Company may offer to
other key executive employees of the Company from time to time. Employee shall
be entitled to short term and long term disability insurance irrespective of
whether the Company provides such insurance to other employees. You will be
eligible for such benefits as of thirty days from the effective date of this
Agreement.
e. Other Benefits. During his employment hereunder, Employee shall be
entitled to such other benefits that the Company may offer to other key
executive employees of the Company from time to time.
f. Vacation. Employee shall be entitled to 4 weeks vacation leave (in
addition to holidays) in each calendar year during the Term, or such additional
amount as may be set forth in the vacation policy that the Company shall
establish from time to time. Except with respect to vacation time unused as the
result of a written request by the Company to postpone a vacation, any unused
vacation from one calendar year shall not carry-over to any subsequent calendar
year.
2
<PAGE>
g. Expense Reimbursement. Employee shall, upon submission of
appropriate supporting documentation, be entitled to reimbursement of reasonable
out-of-pocket expenses incurred in the performance of his duties hereunder in
accordance with policies established by the Company. Such expenses shall
include, without limitation, reasonable travel and entertainment expenses,
gasoline and toll expenses and cellular phone use charges, if such charges are
directly related to the business of the Company. You will also be reimbursed for
twenty-four round trip airline tickets from Fort Lauderdale, Florida to St.
Louis, Missouri each year; however, Employee agrees to use his best efforts to
coordinate such trips with business travel, and in the most cost efficient
manner.
h. Interim Living and Relocation Expenses. The Company will reimburse
you for the cost of a reasonable one bedroom, furnished apartment residence in
the Deerfield Beach, Florida area for a period of 120 days from the first day of
your employment, as well as the cost of a rental car, meals, and other
appropriate miscellaneous living expenses during this period You will also be
reimbursed for other reasonable out-of-pocket expenses incurred in connection
with your relocation to the Fort Lauderdale, Florida area (grossed up to be tax
neutral).
i. You will be reimbursed the reasonable attorneys' fees incurred by
you for the review of this Agreement by counsel.
5. Grounds for Termination.
The Board of Directors of the Company may terminate this Agreement for
any reason at any time including, without limitation, for "Cause." As used
herein, "Cause" shall mean any of the following: (i) failure on the part of
Employee to disclose to Company in writing on or before the date hereof
Employee's breach of or default under any employment, non-compete,
confidentiality or other agreement between Employee and any prior employer of
Employee (including without limitation any breach or default that might result
from Employee's entering into or performing his duties and obligations under
this Agreement); (ii) an act of willful misconduct or gross negligence by
Employee in fulfilling his obligations to the Company (determined without regard
to the financial performance of the Company or the manner of performance by
Employee of his duties in the ordinary course of business); (iii) indictment of
Employee for a felony involving moral turpitude, whether relating to his
employment or otherwise; (iv) an act of dishonesty or breach of trust on the
part of Employee resulting or intended to result directly or indirectly in
personal gain or enrichment at the expense of the Company; (v) conduct on the
part of Employee intended to injure the business of the Company; (vi) Employee's
addiction to any drug or chemical; (vii) Employee's insubordination unless
resulting from Employee's refusal to do an illegal act; (viii) failure to
establish and maintain a residence within a reasonable daily commute to the
Company's headquarters within a reasonable time after the expiration of the 120
day period beginning on the first day of Employment with the Company. The
existence of any of the foregoing events or conditions, except under clause
(iii), shall be determined by the Board of Directors (excluding the Employee) in
the exercise of its reasonable judgment provided that if such occurrence relates
to section (i) or(vi) above, it must persist more than (a) five (5) days after
notice is given to Employee by personal delivery or (b) ten (10) days after a
notice is given to Employee by any other means, each notice which details the
occurrence. Notwithstanding the foregoing, if occurrence under sections (ii),
(v) or (vii) cannot reasonably be remedied within the time periods set forth,
the Board of Directors shall not exercise its right to terminate under this
section if Employee begins to remedy the occurrence within the time period and
continues actively and diligently in good faith to completely remedy such
occurrence. As used herein "insubordination" means Employee failing to use his
best efforts to comply with a written
3
<PAGE>
directive made by the Company's Board of Directors for any action or inaction
not inconsistent with the duties set forth here.
6. Payment and Other Provisions Upon Termination.
a. In the event that Employee's employment with the Company (including
its subsidiaries) is terminated by the Company for Cause as provided in
Paragraph 5; then, on or before Employee's last day of employment with the
Company:
i. Salary and Bonus Payments: The Company shall pay in a lump
sum to Employee such amount of compensation earned by Employee
hereunder for services rendered to the Company as of the time of such
termination, as well as compensation for unused vacation time, as has
accrued but remains unpaid. Any and all other rights granted to
Employee under this Agreement shall terminate as of the date of
termination.
ii. Noncompetition/Nonsolicitation Period. The provisions of
Paragraph 12 shall continue to apply with respect to Employee for a
period of one year following the date of termination.
b. In the event that: Employee's employment with the Company (including
its subsidiaries) is terminated by the Company for any reason other than for
Cause as provided in Paragraph 5 and other than as a consequence of Employee's
death, disability, or normal retirement under the Company's retirement plans and
practices, then:
i. Salary and Bonus Payments: On or before Employee's last day
of employment with the Company, the Company shall pay to Employee, as
compensation for services rendered to the Company, a cash amount equal
to one and one-half times the Annual Base Salary in effect at the time
(the "Cash Amount"). At the election of the Company, the Cash Amount
may be paid to Employee in periodic installments in accordance with the
regular salary payment practices of the Company, with the first such
installment to be paid on or before Employee's last day of employment
with the Company. Notwithstanding the foregoing sentence, the entire
Cash Amount shall be paid to Employee during the period not to exceed
eighteen months following Employee's last day of employment with the
Company. No interest shall be paid with respect to any of the Cash
Amount not paid on the Employee's date of termination.
ii. Benefit Plan Coverage: The Company shall maintain in full
force and effect for Employee and his dependents for eighteen months
after the date of termination, all life, health, accident, and
disability benefit plans and other similar employee benefit plans,
programs and arrangements in which Employee or his dependents were
entitled to participate immediately prior to the date of termination,
in such amounts as were in effect immediately prior to the date of
termination, provided that such continued participation is possible
under the general terms and provisions of such benefit plans, programs
and arrangements. In the event that participation in any benefit plan,
program or arrangement described above is barred, or any such benefit
plan, program or arrangement is discontinued or the benefits thereunder
materially reduced, the Company shall arrange to provide Employee and
his dependents for eighteen months after the date of termination with
benefits substantially similar to those that they were entitled to
receive under such benefit plans, programs and arrangements immediately
prior to the date of termination, or, at the Company's option, a lump
sum payment to Employee equal to the Company's cost immediately prior
to termination to provide such benefits (grossed up to be tax neutral
to Employee) If immediately prior to the date of termination the
Company provided Employee with any club memberships, Employee will be
entitled
4
<PAGE>
to continue such memberships at his sole expense. Notwithstanding any
time period for continued benefits stated in this Paragraph 6.b.ii, all
benefits in this Paragraph 6.b.ii will terminate on the date that
Employee becomes an employee of another employer and eligible to
participate in the employee benefit plans of such other employer. To
the extent that Employee was required to contribute amounts for the
benefits described in this Paragraph 6.b.ii prior to his termination,
he shall continue to contribute such amounts for such time as these
benefits continue in effect after termination.
iii.Savings and Other Plans: Except as otherwise more
specifically provided herein or under the terms of the respective plans
relating to termination of employment, Employee's active participation
in any applicable savings, retirement, profit sharing or supplemental
employee retirement plans or any deferred compensation or similar plan
of the Company or any of its subsidiaries shall continue only through
the last day of his employment. All other provisions, including any
distribution and/or vested rights under such plans, shall be governed
by the terms of those respective plans.
iv. Noncompetition/Nonsolicitation Period. The provisions of
Paragraph 12 shall continue, beyond the time periods set forth in such
paragraph, to apply with respect to Employee for the shorter of (x)
twelve months following the date of termination or (y) until such time
as the Company has failed to comply with the provisions of Paragraph
6.b.i for a an uninterrupted 10-day period and such failure is not
cured within 5 days after written notice of such failure is delivered
to at least two directors of the Company (other than Employee).
7. Change of Control. In the event of a Change of Control, Employee
shall be entitled to the following benefits as of the effective date of the
Change of Control:
i. Exercisability of Stock Options. Notwithstanding the
vesting period provided for in the Stock Option Plan and any related
stock option agreements between the Company and Employee for stock
options ("options") and stock appreciation rights ("rights") granted
Employee by the Company, all options and stock appreciation rights
shall be immediately exercisable on the effective date of a Change of
Control.
ii. Other Benefits. All benefits under Paragraphs 6.b.ii and
6.b.iii shall be extended to Employee as described in such paragraphs.
c. For purposes of this Agreement, the term "Change of Control" shall
mean:
i. The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of " 13(d)(3) or "
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) (any of the foregoing
described in this Paragraph 7.c.i hereafter a "Person") of 33% or more
of either (a) the then outstanding shares of Capital Stock of the
Company (the "Outstanding Capital Stock") or (b) the combined voting
power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the "Voting
Securities"), provided, however, that any acquisition by (x) the
Company or any of its subsidiaries, or any employee benefit plan (or
sponsored or maintained by the Company or any of its subsidiaries or
(y) any Person that is eligible, pursuant to Rule 13d-1(b) under the
Exchange Act, to file a statement on Schedule 13G with respect to its
beneficial ownership of Voting Securities, whether or not such Person
shall have filed a statement on Schedule 13G, unless such Person shall
have filed a statement on Schedule 13D with respect to beneficial
ownership of 33% or more of the Voting Securities or (z)
5
<PAGE>
any corporation with respect to which, following such acquisition, more
than 60% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
Outstanding Capital Stock and Voting Securities immediately prior to
such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the Outstanding
Capital Stock and Voting Securities, as the case may be, shall not
constitute a Change of Control; or
ii. Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any individual becoming a
director subsequent to the date hereof whose election or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors
of the Company (as such terms are used in Rule 14a-11 of Regulation
14A, or any successor section, promulgated under the Exchange Act); or
iii.Approval by the shareholders of the Company of a
reorganization, merger or consolidation (a "Business Combination"), in
each case, with respect to which all or substantially all holders of
the Outstanding Capital Stock and Voting Securities immediately prior
to such Business Combination do not, following such Business
Combination, beneficially own, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from Business Combination; or
iv. (a) a complete liquidation or dissolution of the Company
or (b) a sale or other disposition of all or substantially all of the
assets of the Company other than to a corporation with respect to
which, following such sale or disposition, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors is then owned
beneficially, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Capital Stock and Voting Securities
immediately prior to such sale or disposition in substantially the same
proportion as their ownership of the Outstanding Capital Stock and
Voting Securities, as the case may be, immediately prior to such sale
or disposition.
8. Termination by Reason of Death. If Employee shall die while employed
by the Company both prior to termination of employment and during the effective
term of this Agreement, all Employee's rights under this Agreement shall
terminate with the payment of that portion of Base Salary as has accrued but
remains unpaid and a prorated amount of targeted bonus under the Company's
Management Bonus Program through the month in which his death occurs, plus three
additional months of the fixed salary and targeted bonus. The calculation of
Employee's target bonus shall be made, and any bonus amount due to Employee
paid, in the manner set forth in Section 6.a.i. All benefits under Paragraphs
6.b.ii and 6.b.iii shall be extended to Employee's estate as described in such
paragraphs.
9. Termination by Disability. Employee's employment hereunder may be
terminated by the Company for disability. In such event, all Employee's rights
under this Agreement shall terminate with the payment of that portion of Base
Salary as has accrued but remains unpaid as of the thirtieth (30th)
6
<PAGE>
day after such notice is given except that all benefits under
Paragraphs 6.b.ii and 6.b.iii shall be extended to Employee as
described in such paragraphs, provided, however, that, with respect to
Paragraph 6.b.ii, the period for continued benefit plan coverage shall
be limited to six months from the date of termination. In addition, the
non-competition and non-solicitation provisions of Paragraphs 12 and 13
shall continue to apply to Employee for a period of six months from the
date of termination. For purposes of this Agreement, "disability" is
defined to mean that, as a result of Employee's incapacity due to
physical or mental illness:
a. Employee shall have been absent from his duties as an officer of the
Company on a substantially full-time basis for six (6) consecutive months; and
b. Within thirty (30) days after the Company notifies Employee in
writing that it intends to replace him, Employee shall not have returned to the
performance of his duties as an officer of the Company on a full-time basis.
10. Retirement. It is expected that the Compensation Committee of the
Company's Board of Directors will develop a benefit plan for retirement. It is
expected that Employee's rights upon retirement will be specifically described
in such retirement benefit plan. If retirement benefits for Employee are not
specifically described in such plan, the Company shall provide Employee upon
retirement benefits no lesser than the highest level of benefits accorded any
other retiring executive officer during the five year period immediately
preceding Employee's retirement.
11. Indemnification. If litigation shall be brought to enforce or
interpret any provision contained herein, the non-prevailing party shall
indemnify the prevailing party for reasonable attorney's fees (including those
for negotiations, trial and appeals) and disbursements incurred by the
prevailing party in such litigation, and hereby agrees to pay prejudgment
interest on any money judgment obtained by the prevailing party calculated at
the generally prevailing Bank of America base rate of interest charged to its
commercial customers in effect from time to time from the date that payment(s)
to him should have been made under this Agreement.
12. Noncompetition and Nonsolicitation.
a. The nature of the system and methods employed in the Company's
business is such that Employee will be placed in a close business and personal
relationship with the customers of the Company and be privy to confidential
customer usage and rate information. Accordingly, at all times during the term
of this Agreement and for a period of one (1) year immediately following the
termination of Employee's employment hereunder (the "Non-competition and
Non-solicitation Period") for any reason whatsoever, and for such additional
periods as may otherwise be set forth in this Agreement in reference to this
Paragraph 12, so long as the Company continues to carry on the same business,
Employee shall not, for any reason whatsoever, directly or indirectly, for
himself or on behalf of, or in conjunction with, any other person, persons,
company, partnership, corporation or business entity:
i. Call upon, divert, influence or solicit or attempt to call
upon, divert, influence or solicit any customer or customers of the
Company nationwide;
ii. Divulge the names and addresses or any information
concerning any customer of the Company;
7
<PAGE>
iii. Disclose any information or knowledge relating to the
Company, including but not limited to, the Company's system or method
of conducting business to any person, persons, firms, corporations or
other entities unaffiliated with the Company, for any reason or purpose
whatsoever;
iv. Own, manage, operate, control, be employed by, participate
in or be connected in any manner with the ownership, management,
operation or control of the same, similar or related line of business
as that carried on by the Company ("Competition") within a radius of
fifty (50) miles from Employee's principal office.
b. The time period covered by the covenants contained in this Paragraph
12 shall not include any period(s) of violation of any covenant or any period(s)
of time required for litigation to enforce any covenant.
c. The covenants set forth in this Paragraph 12 shall be construed as
an agreement independent of any other provision in this Agreement and existence
of any potential or alleged claim or cause of action of Employee against the
Company, whether predicted on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants contained herein.
An alleged or actual breach of the Agreement by the Company shall not be a
defense to enforcement of the provisions of this Paragraph 12.
d. Employee acknowledges that he has read the foregoing and agrees that
the nature of the geographical restrictions are reasonable given the nature of
the Company's business. In the event that these geographical or temporal
restrictions are judicially determined to be unreasonable, the parties agree
that these restrictions shall be judicially reformed to the maximum restrictions
which are reasonable.
e. Notwithstanding anything to the contrary contained herein, in the
event that Employee engages in Competition, or any conduct expressly prohibited
by this Paragraph 12 at any time during the Non-competition and Non-solicitation
Period for any reason whatsoever, Employee shall not receive any of the
termination benefits he otherwise would be entitled to receive pursuant to
Paragraphs 6, 7, and 9 hereof.
13. Confidentiality.
a. Nondisclosure. Employee acknowledges and agrees that the
Confidential Information (as defined below) is a valuable, special and unique
asset of the Company's business. Accordingly, except in connection with the
performance of his duties hereunder, Employee shall not at any time during or
subsequent to the term of his employment hereunder disclose, directly or
indirectly, to any person, firm, corporation, partnership, association or other
entity any proprietary or confidential information relating to the Company or
any information concerning the Company's financial condition or prospects, the
Company's customers, the design, development, manufacture, marketing or sale of
the Company's products or the Company's methods of operating its business
(collectively "Confidential Information"). Confidential Information shall not
include information which, at the time of disclosure, is known or available to
the general public by publication or otherwise through no act or failure to act
on the part of Employee.
b. Return of Confidential Information. Upon termination of Employee's
employment, for whatever reason and whether voluntary or involuntary, or at any
time at the request of the Company, Employee shall promptly return all
Confidential Information in the possession or under the control of Employee to
the Company and shall not retain any copies or other reproductions or extracts
thereof. Employee shall at any time at the request of the Company destroy or
have destroyed all memoranda, notes, reports, and documents, whether in "hard
copy" form or as stored on magnetic or other media, and all copies and
8
<PAGE>
other reproductions and extracts thereof, prepared by Employee and shall provide
the Company with a certificate that the foregoing materials have in fact been
returned or destroyed.
c. Books and Records. All books, records and accounts whether prepared
by Employee or otherwise coming into Employee's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company upon termination of Employee's employment hereunder or upon the
Company's request at any time.
14. Injunction/Specific Performance Setoff. Employee acknowledges that
a breach of any of the provisions of Paragraphs 12 or 13 hereof would result in
immediate and irreparable injury to the Company which cannot be adequately or
reasonably compensated at law. Therefore, Employee agrees that the Company shall
be entitled, if any such breach shall occur or be threatened or attempted, to a
decree of specific performance and to a temporary and permanent injunction,
without the posting of a bond, enjoining and restraining such breach by Employee
or his agents, either directly or indirectly, and that such right to injunction
shall be cumulative to whatever other remedies for actual damages to which the
Company is entitled. Employee further agrees that the Company may set off
against or recoup from any amounts due under this Agreement to the extent of any
losses incurred by the Company as a result of any breach by Employee of the
provisions of Paragraphs 12 or 13 hereof.
15. Severability: Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Successors: This Agreement shall be binding upon Employee and inure
to his and his estate's benefit, and shall be binding upon and inure to the
benefit of the Company and any successor of the Company. Neither this Agreement
nor any rights arising hereunder may be assigned or pledged by Employee or
anyone claiming through Employee; or by the Company, except to any corporation
which is the successor in interest to the Company by reason of a merger,
consolidation or sale of substantially all of the assets of the Company. The
foregoing sentence shall not be deemed to have any effect upon the rights of
Employee upon a Change of Control.
17. Controlling Law: This Agreement shall in all respects be governed
by, and construed in accordance with, the laws of the State of Florida.
18. Notices. Any notice required or permitted to be given hereunder
shall be written and sent by registered or certified mail, telecommunicated or
hand delivered at the address set forth herein or to any other address of which
notice is given:
To the Company: OutSource International, Inc.
1144 East Newport Center Drive
Deerfield Beach, Florida 33442
Attention: General Counsel
To Employee: Garry Meier
1957 Bennington Common Drive
St. Louis, Missouri 63146
9
<PAGE>
19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto on the subject matter hereof and may not be modified
without the written agreement of both parties hereto.
20. Waiver. A waiver by any party of any of the terms and conditions
hereof shall not be construed as a general waiver by such party.
21. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and both of which together shall constitute
a single agreement.
22. Interpretation. In the event of a conflict between the provisions
of this Agreement and any other agreement or document defining rights and duties
of Employee or the Company upon Employee's termination, the rights and duties
set forth in this Agreement shall control.
23. Certain Limitations on Remedies. Paragraph 6.b provides that
certain payments and other benefits shall be received by Employee upon the
termination of Employee by the Company other than for Cause. It is the intention
of this Agreement that if the Company terminates Employee other than for Cause
(and other than as a consequence of Employee's death, disability or normal
retirement), then the payments and other benefits set forth in Paragraph 6.b
shall constitute the sole and exclusive remedies of Employee. This Paragraph 23
shall have no effect upon the provisions of Paragraph 7 of this Agreement.
IN WITNESS WHEREOF, this Employment Agreement has been executed by the
parties as of the date first above written.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Scott R. Francis
------------------------
Scott R. Francis
Its: Chief Financial Officer
EMPLOYEE:
/s/ Garry Meier 2/7/2000
-----------------------------
Name: Garry Meier
10
ASSET PURCHASE AGREEMENT
by and between
TEAMSTAFF, INC.,
TEAMSTAFF V, INC.
and
OUTSOURCE INTERNATIONAL, INC.
and
SYNADYNE I, INC., SYNADYNE II, INC., SYNADYNE III, INC.,
SYNADYNE IV, INC., SYNADYNE V, INC.,
GUARDIAN EMPLOYER EAST LLC AND
GUARDIAN EMPLOYER WEST LLC
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS AND SCHEDULES
----------------------
EXHIBITS
--------
<S> <C>
Exhibit A Bill of Sale, Assignment and Assumption Agreement
Exhibit B Sellers' Audited Operational Financial Statements for the fiscal years
ended December 31, 1997 and December 31, 1998 and Unaudited Operational
Statements of Income for 12 months ended December 31, 1999
Exhibit C List of States where the Sellers conduct business
Exhibit D Form of Non Solicitation Agreement
Exhibit E Synadyne Retention/Severance Policy
Exhibit F Non-Disturbance Agreement of Fleet Bank
Exhibit G Shared Services Agreement
Exhibit H Client Services Agreement
Exhibit I Sub Lease for Delray Beach Premises
Exhibit J Sub Lease for Deerfield Beach Premises
SCHEDULES
---------
Number Title
- ------ -----
2.1(a) Accounts
2.1(c) Fixed Assets
2.2(a) Customer Deposits
2.3 Accounts Receivable
2.4(b) Assumed Liabilities
2.5(A) Assignable Listed Investments
2.5(B) Non Assignable Listed Instruments
5.1(a) Other Names
5.7 Listed Instruments/Accounts Contracts
5.8 Exceptions to Claims/Litigation
5.9 Insurance Policies
5.11 Employee Benefit Plan
5.12 Liens
5.13 Current Accounts
5.14 Competitive Interests
5.15 Liens/Material Changes
</TABLE>
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
AGREEMENT made as of the 7th day of April, 2000 by and between
TEAMSTAFF V, INC., a Florida corporation, maintaining a place of business at
1211 N. Westshore Blvd., Tampa, Florida; TEAMSTAFF, INC., a New Jersey
corporation, with offices located at 300 Atrium Drive, Somerset, New Jersey
08873 ("TeamStaff"); OUTSOURCE INTERNATIONAL, INC., a Florida corporation
maintaining its principal place of business at 1144 East Newport Center Drive,
Deerfield Beach, FL 33442 (hereinafter referred to as "OII") and Synadyne I,
Inc., a Florida corporation with its principal place of business at 1144 East
Newport Center Drive, Deerfield Beach, FL 33442 ("Synadyne I"), Synadyne II,
Inc., a Florida corporation with its principal place of business at 1144 East
Newport Center Drive, Deerfield Beach, FL 33442 ("Synadyne II"), Synadyne III,
Inc., a Florida corporation with its principal place of business at 1144 East
Newport Center Drive, Deerfield Beach, FL 33442 ("Synadyne III"), Synadyne IV,
Inc., a Florida corporation with its principal place of business at 1144 East
Newport Center Drive, Deerfield Beach, FL 33442 ("Synadyne IV"), Synadyne V,
Inc., a Florida corporation with its principal place of business at 1144 East
Newport Center Drive, Deerfield Beach, FL 33442 ("Synadyne V"), Guardian
Employer East LLC, a Delaware limited liability corporation with its principal
place of business at 1144 East Newport Center Drive, Deerfield Beach, FL 33442
("Guardian East") and Guardian Employer West LLC, a Delaware limited liability
corporation with its principal place of business at 1144 East Newport Center
Drive, Deerfield Beach, FL 33442 ("Guardian West").
W I T N E S S E T H :
WHEREAS, TeamStaff is engaged in the business of providing professional
employee related services; and
WHEREAS, the Sellers are engaged in the business of operating a
professional employer business in the states set forth in Exhibit C annexed
hereto; and
WHEREAS, TeamStaff is the legal and beneficial owner of 80% of the
outstanding shares of Purchaser and ADCT, Inc., a wholly owned subsidiary of
OII, is the legal and beneficial owner of 20% of the outstanding shares of
Purchaser; and
WHEREAS, Purchaser and Sellers are affiliates of each other; and
WHEREAS, Purchaser is desirous of acquiring from Sellers certain of the
assets of the Sellers used in connection with Sellers' professional employer
organization business ("PEO") subject to the terms and conditions of this
Agreement; and
<PAGE>
WHEREAS, Sellers are desirous of selling these assets to Purchaser
subject to the terms of this Agreement:
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants and agreements contained herein, the parties agree as follows:
SECTION ONE: DEFINITIONS
-----------
The following definitions have the indicated meanings for the purposes
of this Agreement:
AAA: American Arbitration Association.
Account: Each party to whom Sellers have provided PEO services since
the dates of Sellers'incorporation and the right to do business with such party.
Accounts Receivable: All accounts receivable of the Sellers outstanding
on the Effective Date and as set forth on Schedule 2.3.
Acquired Assets: The property of Sellers' PEO business described in
Section Two hereof, which is being sold to Purchaser pursuant to the terms of
this Agreement.
Assumed Liabilities: Those liabilities of Sellers to be assumed by
Purchaser and as set forth on Schedule 2.4(b).
Closing Date: April 7, 2000 or such other date as may be agreed upon by
the parties in writing.
COBRA: Consolidated Omnibus Budget Reconciliation Act of 1985.
Code: The Internal Revenue Code of 1986, as amended.
Current Accounts: Each PEO client of Sellers who is receiving PEO
services, including payroll, from Sellers as of the Effective Date.
Earnout Payment: The payments, if any, of up to a maximum of $1,250,000
payable by Purchaser to OII pursuant to Section 3.2 hereof.
Effective Date: April 8, 2000 at 12:01 a.m. or such other time as may
be agreed upon by the parties.
Employee Benefit Plan: An Employee Welfare Benefit Plan, an Employee
Pension Benefit Plan, a Multi-Employer Plan and any other plan, program or
arrangement providing retirement, deferred compensation, severance pay, bonuses,
stock options, stock purchase or any other form of retirement or deferred
benefit, sponsored or maintained by an employer.
<PAGE>
Employee Pension Benefit Plan: Any plan, fund or program sponsored by
an employer or an employee organization which provides retirement income to
employees for periods extending to the termination of employment or beyond as
described in Section 3(2) of ERISA.
Employee Welfare Benefit Plan: Any plan, fund or program sponsored by
an employer or an employee organization which provides to its employees certain
benefits listed under Section 3(1) of ERISA.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Financial Statements: The audited operational financial statements of
Sellers for the fiscal years ended December 31, 1997 and December 31, 1998 and
the unaudited operational statements of income for the 12 months ended December
31, 1999.
Intellectual Property: (a) All trademarks, service marks, logos,
tradenames and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith and all applications, registrations and renewals in connection
therewith; (b) all copyrights and applications, registrations and renewals in
connection therewith; (c) all trade secrets and confidential business
information; and (d) all other proprietary rights.
GAAP: Generally Accepted Accounting Principles.
Knowledge: Means actual knowledge.
Liabilities: Sellers' liabilities, debts and obligations of any kind or
nature whether accrued, absolute, contingent or unliquidated, known or unknown,
and whether due or to become due including any liability under any Employee
Benefit Plan or Multi-Employer Plan.
Listed Instruments: The agreements, contracts and instruments with the
Current Accounts set forth in Schedule 5.7.
Material: Shall mean any claim, loss event, fact or circumstance which
individually would result in damages, or might result in damages of $15,000
individually and $25,000 in the aggregate.
Material Adverse Effect: Any event, circumstance change or effect that
is, or could reasonably be expected to be, materially adverse to the condition
(financial or otherwise) of the Acquired Assets.
Modular Furniture: All office furniture and cubicles used by Sellers in
the operation of their PEO business.
Multi-Employer Plan: A plan to which more than one (1) employer is
required to contribute and which is maintained pursuant to one (1) or more
collective bargaining agreements between one (1) or more unions and more than
one (1) employer as described in Section 3(37) of ERISA.
<PAGE>
Non-Solicitation Agreements: The agreements between TeamStaff,
Purchaser and the persons whose names appear in Section 7(a)(viii) hereof,
substantially in the form of Exhibit D annexed hereto.
OII: Outsource International, Inc., a Florida corporation and the sole
shareholder of Sellers.
Permits: All licenses, permits, exemptions, business certificates,
orders and approvals from any federal, state, local and foreign governmental or
regulatory agency or body.
Purchase Price: The sum of $3,500,000 payable in accordance with
Section Three hereof.
Purchaser: TeamStaff V, Inc., a subsidiary of TeamStaff and any
affiliate or related party of TeamStaff or TeamStaff V, Inc. to which any of the
Acquired Assets or Listed Instruments are transferred or conveyed.
Purchaser's Legal Counsel: Goldstein & DiGioia, LLP.
Section: Sections of this Agreement.
Sellers: Synadyne I, Inc., a Florida corporation with its principal
place of business at 1144 East Newport Center Drive, Deerfield Beach, FL 33442,
Synadyne II, Inc., a Florida corporation with its principal place of business at
1144 East Newport Center Drive, Deerfield Beach, FL 33442, Synadyne III, Inc., a
Florida corporation with its principal place of business at 1144 East Newport
Center Drive, Deerfield Beach, FL 33442, Synadyne IV, Inc., a Florida
corporation with its principal place of business at 1144 East Newport Center
Drive, Deerfield Beach, FL 33442 Synadyne V, Inc., a Florida corporation with
its principal place of business at 1144 East Newport Center Drive, Deerfield
Beach, FL 33442, Guardian Employer East LLC, a Delaware limited liability
corporation with its principal place of business at 1144 East Newport Center
Drive, Deerfield Beach, FL 33442 and Guardian Employer West LLC, a Delaware
limited liability corporation with its principal place of business at 1144 East
Newport Center Drive, Deerfield Beach, FL 33442.
Sellers' Legal Counsel: Akerman, Senterfitt & Eidson, P.A.
TeamStaff: TeamStaff, Inc., a New Jersey corporation and the owner of
80% of the capital stock of Purchaser.
<PAGE>
SECTION TWO: SALE AND PURCHASE OF ASSETS
---------------------------
2.1 SALE AND PURCHASE OF ASSETS
---------------------------
Each of the Sellers hereby sells, transfers, assigns and delivers to
Purchaser and Purchaser hereby purchases, acquires and accepts from Sellers,
free and clear of all liens and encumbrances, as of the Effective Date all of
Sellers' right, title and interest in and to the assets of Sellers set forth
below:
(a) All Accounts of the Sellers' PEO business listed on Schedule 2.1(a)
hereof (including the right to do business with such Accounts and all contracts
related to such Accounts) including all Current Accounts and customer lists,
files, historical information, and fee schedules relating to such Accounts and
Current Accounts;
(b) The tradename "Synadyne" and all uses thereof including, without
limitation, the Internet domain name Synadyne.com;
(c) Certain desktop computers not subject to operating or capital
leases specifically listed in Schedule 2.1(c) and used in the daily conduct of
Sellers' PEO business operations; and
(d) Sellers' catalogs, brochures, marketing, advertising and public
relations materials; provided, however, Purchaser shall acquire only the
Intellectual Property rights which OII or Sellers may have in connection with
such catalogs, brochures, marketing, advertising and public relations materials
("Marketing Materials").
(collectively the "Acquired Assets").
<PAGE>
2.2 CUSTOMER DEPOSITS
-----------------
Schedule 2.2(a) sets forth the name of each Current Account with the
amount of customer deposit being held by Sellers and/or OII with respect to such
Current Accounts. Sellers shall deliver all customer deposits relating to the
Current Accounts constituting part of the Acquired Assets to Purchaser. Delivery
of such customer deposits shall be made by offset of the total gross amount of
such deposits against the Purchase Price. Within 10 days of the Closing Date,
the Purchaser shall deliver to each Current Account listed on Schedule 2.2(a) a
letter, in form and substance satisfactory to the Sellers, advising such Current
Account that: (i) the Purchaser has acquired the PEO business of Sellers and
that customer deposits have been transferred to the Purchaser in connection
therewith; and (ii) neither OII nor the Sellers have any liability to the
Current Account with respect to such deposits. If any Current Account is
terminated by TeamStaff in the first 90 days after Closing, and such Current
Account has a deposit remaining after TeamStaff or Purchaser has satisfied their
accounts receivable due from such Current Account, and Sellers or OII have an
outstanding Accounts Receivable with respect to such Current Account, then the
remaining balance of such customer deposit shall immediately be returned to OII.
2.3 ACCOUNTS RECEIVABLES
--------------------
(a) Within five (5) days of the Closing, Sellers shall deliver Schedule
2.3 to Purchaser which shall set forth the name of each Current Account and the
amount of any Account Receivable owed by the Current Account to the Sellers as
of the Effective Date. All outstanding Accounts Receivable owed to Sellers by
any Accounts as of the Effective Date shall remain the property of the Sellers.
(b) Following the Closing Date, the Sellers and the Purchaser shall
assist each other in good faith to collect all Accounts Receivable. Each of the
parties hereto acknowledge and understand that pursuant to the terms of the
Shared Services Agreement, personnel of the Sellers and OII shall be providing
services to Purchaser with respect to the Accounts Receivable. Mary O'Brien, an
employee of Sellers, shall devote 50% of her time to assist Purchaser after the
Closing Date with respect to client services, including collection of Accounts
Receivable. Purchaser, pursuant to the Shared Services Agreement, shall pay 50%
<PAGE>
of Ms. O'Brien's compensation. Each of the Purchaser, OII and the Sellers agree
that OII and Sellers, will, with respect to Sellers' Accounts Receivable set
forth in Schedule 2.3 perform all collection efforts with respect to Sellers'
Accounts Receivable. The Sellers, OII, Purchaser and TeamStaff shall include in
all mailings to Accounts a notice instructing the Current Account to specify the
invoice being paid by the Current Account. If a payment is received by OII,
Sellers, Purchaser or TeamStaff, and the payment does not explicitly state the
invoice being paid, then the payment shall be applied to an invoice only upon
notification in writing from the Current Account which has remitted the payment,
indicating to which invoice of the Current Account the payment should be
credited. Any such notification shall be documented in the "client notes
section" of the "Masterpack Systems".
2.4 EXCLUDED ASSETS AND ASSUMED LIABILITIES
---------------------------------------
(a) Expressly excluded from the Acquired Assets are any assets of
Sellers not expressly listed in Section 2.1.
(b) Neither Purchaser nor TeamStaff will assume nor be liable for any
Liabilities of OII or the Sellers other than those Liabilities listed in
Schedule 2.4(b) hereof, which list also includes the name and a description of
each Employee Benefit Plan of the Sellers being assumed by Purchaser (the
"Assumed Liabilities"). Without limiting the foregoing, in no event shall
TeamStaff or Purchaser be liable for employee compensation, including any
residual liability arising from any insurance policies which provide coverage
for any of Sellers' clients or worksite employees for any coverage period prior
to the Effective Date, severance benefits and other remuneration up to the date
of payroll or related taxes, or social security payments, payable by OII or
Sellers up to the Effective Date, and OII and the Sellers shall indemnify and
hold TeamStaff and the Purchaser harmless from any and all such liability.
Notwithstanding anything herein to the contrary, for payroll periods beginning
prior to the Effective Date and ending after the Effective Date, Teamstaff or
Purchaser will be liable for all employee payroll due with regard to such
period.
<PAGE>
2.5 LIST OF ACCOUNTS
----------------
Schedule 2.5(A) sets forth those Listed Instruments which are
assignable to an affiliate of the Sellers or OII without the consent of the
other party or parties thereto. This Agreement shall serve as an assignment and
transfer of all rights and obligations of the Sellers (but excluding all
Liabilities existing prior to the Effective Date) under all of the Listed
Instruments set forth on Schedule 2.5(A). Schedule 2.5(B) sets forth those
Listed Instruments which are nonassignable without the consent of the other
party or parties thereto. Neither Sellers nor OII make any representation or
warranty with respect to the assignability of any Listed Instrument or the
validity of the assignment contemplated hereunder. Neither Sellers nor OII shall
be liable to Purchaser for any claims, losses, damages, costs or expenses
arising out of the nonassignability of any Listed Instruments.
2.6 ACCESS TO RECORD
----------------
Purchaser shall maintain, for a period of one year following the
Closing Date, in good order all records, files and other historical information
related to the Acquired Assets and Assumed Liabilities transferred to Purchaser
pursuant to this Agreement (the "Records") and upon reasonable request, provide
copies of such Records and reasonable assistance to Sellers at Sellers' expense
and grant Sellers and OII access to such Records during normal business hours.
2.7 EMPLOYEES OF SELLERS
--------------------
(a) As of the Effective Date, Purchaser intends to offer employment to
all employees of Sellers (the "Employees"), other than Robert Lefcort, Raymond
Dile, John Leavitt and David Andersen on an at-will basis. Sellers shall
cooperate in good faith with Purchaser to solicit the Employees to agree to be
employed by Purchaser. In the event that Purchaser terminates any Employee
within 30 days of the Closing Date, OII shall pay severance to the first 15
persons so terminated in accordance with Sellers' severance policies attached as
Exhibit E annexed hereto. Teamstaff shall provide the same severance and
outplacement services to all other Employees who are terminated by Purchaser
within such 30 day period. Purchaser shall process and pay all such severance
payments payable by OII under this Section 2.7, which payments will be prepaid
in advance by OII.
<PAGE>
(b) Sellers will retain employment of Ms. Mary O'Brien after the
Effective Date for a period of 90 days. Neither Teamstaff nor Purchaser shall
solicit Ms. O'Brien for employment during such 90 day period. During the period
of the Shared Services Agreement, or such shorter term as determined by
Purchaser, Ms. O'Brien will devote 50% of her time with representatives of
Purchaser providing training to such persons regarding the collection of the
Purchaser's accounts receivable. In the event that neither Teamstaff nor
Purchaser offer employment to Ms. O'Brien upon termination of the 90 day period,
then OII and Sellers shall bear all responsibility for any severance payments to
Ms. O'Brien. In the event that Teamstaff or Purchaser employs Ms. O'Brien within
30 days following the end of the 90 day period, Teamstaff and Purchaser shall
reimburse Sellers or OII for any severance payments made to Ms. O'Brien
(c) Sellers shall remain liable and bear all responsibility for all
obligations or payments due to employees for all unused or accrued vacation,
personnal or sick time and earned but unpaid commissions for all time periods
prior to the Effective Date.
SECTION THREE: PURCHASE PRICE; EARNOUT PAYMENT
-------------------------------
3.1 PURCHASE PRICE
--------------
Subject to the terms and conditions of this Agreement, on the Closing
Date Purchaser shall pay OII in consideration of and in full payment for the
sale, transfer and assignment of the Acquired Assets and assumption of the
Assumed Liabilities, the sum of $3,500,000 in cash (the "Purchase Price") by
wire transfer of immediately available funds.
3.2 EARNOUT PAYMENT
---------------
(a) Purchaser or TeamStaff shall pay to OII an additional payment of
One Million Two Hundred Fifty Thousand Dollars ($1,250,000) (the "Earnout
Payment"), by wire transfer of immediately available funds, payable on April 30,
2001, subject to the following conditions:
(i) On October 15, 2000, Purchaser shall provide to OII a
written report that lists the Current Accounts (who are listed on the Final
Current Accounts List (as defined below) (for purposes of this Section 3.2
<PAGE>
referred to as "Synadyne Customers") who are customers of Purchaser as of
September 30, 2000, and the number of employees subject to a contract with
Purchaser at any Synadyne Customer as of September 30, 2000 (the "September 30,
2000 Employees"). On April 15, 2001, Purchaser shall provide to OII a written
report that lists the Synadyne Customers, and the number of employees subject to
a contract with Purchaser and being paid a salary at a Synadyne Customer as of
March 31, 2001 (the "March 31, 2001 Employees"). For purposes of calculating the
number of September 30, 2000 Employees and March 31, 2001 Employees, all
Allstate agent accounts, whether independent or not at the time of this
Agreement, shall constitute one Synadyne Customer. For purposes of calculating
the number of September 30, 2000 Employees and March 31, 2001 Employees, all
employees subject to a contract with Purchaser and being paid a salary at an
Allstate agent office shall be included. It is understood that the total number
of employees in the Allstate Account on September 30, 2000 or March 31, 2001
will not exceed the number of employees in the Allstate Account as of the
Closing Date.
(ii) If the aggregate number of March 31, 2001 Employees is
less than 9500, the following calculations shall determine the amount of the
Earnout Payment that Purchaser shall pay to OII on April 30, 2001: (A) subtract
the number of March 31, 2001 Employees from 9500 (the "March 31, 2001 Amount");
(B) multiply the March 31, 2001 Difference by $500.00 (the "Reduction Amount");
(C) subtract the Reduction Amount from $1,250,000 (the "Subtotal"); (D) subtract
the number of March 31, 2001 Employees from the number of September 30, 2000
Employees, and, (x) if the difference is a number more than zero, multiply the
difference by $187.50 (the "Credit Amount") or (y) if the difference between the
number of March 31, 2001 Employees and the number of September 30, 2000
Employees is less than zero, the Credit Amount shall be zero; and (E) add the
Credit Amount to the Subtotal (the "Earn-out Amount"). Purchaser shall pay the
Earn-out Amount to OII on or before April 30, 2001. By way of example, if the
aggregate number of March 31, 2001 Employees is 9300, the March 31, 2001 Amount
would be 200, and the Reduction Amount would be $100,000 (200 times $500), and
the Subtotal would be $1,150,000. Assume also that on September 30, 2000 there
were 9400 employees. As a result, the Credit Amount would be 100 (9400-9300)
times $187.50, or $18,750. The Earn-out Amount to be paid to OII would be
$1,168,750 ($1,150,000 + $18,750).
(iii) If the aggregate number of March 31, 2001 Employees is
9500 or greater, Purchaser shall pay to OII on April 30, 2001 the sum of
$1,250,000.
<PAGE>
(iv) After receipt of the reports from Purchaser on October
15, 2000 and April 15, 2001, respectively, OII shall have the right for 90 days
thereafter to inspect the records of Purchaser for the purpose of verifying the
number of employees and Synadyne Customers stated in the reports.
3.3 ESCROW OF FUNDS FOR PAYMENT OF UNEMPLOYMENT TAXES.
--------------------------------------------------
Immediately at Closing, OII and the Sellers shall place into escrow
with OII's counsel an aggregate of $192,000 which shall be held by such counsel
until such date as payment of state unemployment taxes ("SUTA") are due on April
30, 2000. OII's counsel shall agree in writing not to release such funds except
to pay such SUTA taxes. Any remaining funds will be transferred to OII.
immediately thereafter
SECTION FOUR: CLOSING
-------
4.1 CLOSING
-------
The closing of the purchase and sale of the Acquired Assets provided
herein and the assumption of the Assumed Liabilities (the "Closing") will be
held at or before April 7, 2000, or at such other place, day and time as Seller
and Purchaser may mutually agree. The date of the Closing is herein referred to
as the "Closing Date."
4.2 TERMINATION
-----------
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and abandoned at any time after the date of this
Agreement but not later than the Closing:
(a) by the mutual consent of Sellers and Purchaser; or
(b) by either party any time after April 7, 2000 if, by that date, the
Closing has not taken place; provided, however, no party to this agreement shall
have the right to terminate if the Closing shall not have occurred by April 7,
2000 as a result of their respective actions or inactions; or
(c) by Purchaser if any condition provided in Section 7(a) hereof has
not been satisfied or waived on or before the Closing Date; or
(d) by the Sellers or OII if any condition provided in Section 7(b)
hereof has not been satisfied or waived on or before the Closing Date.
4.3 EFFECTIVE DATE
--------------
Except as otherwise set forth herein, the transactions contemplated
hereby shall be deemed to have been effected as of April 8, 2000, at 12:01 a.m.
or such other time and place as the parties may mutually agree.
SECTION FIVE: REPRESENTATIONS AND WARRANTIES OF SELLERS
-----------------------------------------
Each of the Sellers and OII, jointly and severally, hereby makes the
representations and warranties contained in this Section Five to Purchaser and
TeamStaff for the purpose of inducing Purchaser and TeamStaff to enter into and
consummate this Agreement.
5.1 ORGANIZATION AND BUSINESS OPERATION
-----------------------------------
Each Seller is a corporation or limited liability company, as the case
may be, duly organized, validly existing and in good standing under the laws of
the state of its formation with full corporate authority to own, lease and/or
operate the Acquired Assets. Each Seller is, and has been at all times material
to the transactions contemplated by this Agreement, qualified or licensed to do
business as a PEO in all jurisdictions where the conduct of its PEO business or
the ownership of the Acquired Assets requires it to be so qualified or licensed.
Except as disclosed on Schedule 5.1(a), Sellers have only transacted business
under its respective corporate name or the tradename Synadyne and has not
transacted business under any other assumed or fictitious name.
<PAGE>
5.2 AUTHORITY: NO CONFLICTING INSTRUMENTS
--------------------------------------
Each Seller and OII has full corporate power and authority to enter
into and consummate this Agreement and the other agreements contemplated by this
Agreement. All corporate action on behalf of Sellers and OII necessary to
authorize the execution and delivery of this Agreement, and the consummation and
performance by OII and Sellers of the transactions contemplated by this
Agreement, have been taken; and this Agreement constitutes a valid and binding
obligation of Sellers and OII, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency or other similar laws relating to or
affecting the enforcement of creditors' rights generally and to general
principles of equity (regardless of whether enforcement is at equity or at law).
The execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, (A) will not violate or conflict with (i) any
term or provision of OII's or each Seller's Articles of Incorporation or
By-Laws, or Certificate of Formation, as the case may be; (ii) any law,
regulation or order of the United States or any state or any agency or political
subdivision thereof, (iii) any decree or order of any court or other
governmental entity, and (B) will not result in a violation or breach of, or
constitute a default under, or permit acceleration of, or give any other party
the right to terminate, any material permit or agreement to which Sellers or OII
are a party and to which any of the Acquired Assets are subject other than the
Listed Instruments and those agreements and policies set forth on Schedule 5.2.
5.3 FINANCIAL STATEMENTS
--------------------
The audited Financial Statements of Sellers for the fiscal years year
ended December 31, 1997 and December 31, 1998 have been delivered to Purchaser
by Sellers and are accurate and complete in all material respects and prepared
by Sellers in accordance with GAAP consistently applied from year to year. The
unaudited operational statements of income for the 12 months ended December 31,
1999 have been prepared by the Sellers and OII and are accurate and complete in
all material respects and prepared by Sellers in accordance with GAAP.
<PAGE>
5.4 TAX RETURNS
-----------
Seller has filed with the appropriate federal, state, local and foreign
authorities all payroll tax returns required by law, regulation, or otherwise to
be filed by it for all taxable periods ending on or prior to the Effective Date
for which returns have become due. Sellers have paid all payroll taxes,
penalties and interest which were due and payable or may become due for or
during all taxable periods ending on or prior to the date hereof including all
employee withholding taxes and employee benefits of any kind or nature
(regardless of the amount shown due on any tax return). Except as set forth on
Schedule 5.4, none of Sellers' payroll tax returns, to Sellers' Knowledge, have
ever been audited by the IRS or any state agency. No Seller has executed and
filed with the IRS or any other taxing authority any agreement extending the
period for assessment or collection of any payroll taxes for which it may be
directly or indirectly liable. Except as set forth on Schedule 5.4, no Seller is
a party to any pending action, proceeding or audit by any governmental authority
for assessment or collection of payroll taxes for which it may be directly or
indirectly liable, and no claim for assessment or collection of payroll taxes
for which it may be directly or indirectly liable has been asserted or to
Seller's Knowledge threatened against it. Sellers have delivered to TeamStaff a
true and correct copy of each federal and state payroll tax return filed by
Sellers since January 1, 1998.
5.5 WARRANTIES
----------
There are no claims or notices, written or oral, and Sellers have no
Knowledge that any service rendered by Sellers to any Current Account breached
any representation or warranty, express or implied, made by Sellers; failed to
meet any specification with respect to such service which was furnished by
Seller; or was otherwise improper or grossly negligently provided, except where
any such breach, failure or negligence would not have a Material Adverse Effect.
<PAGE>
5.6 PERMITS; COMPLIANCE WITH LAW
----------------------------
(a) Sellers have maintained all PEO Permits in connection with the
operation of its PEO business in such jurisdiction where such PEO Permits may be
required and where the Acquired Assets may be located, except where the failure
to maintain would not have a Material Adverse Effect on the Acquired Assets.
Each Seller is in material compliance with all federal, state, local and foreign
laws, ordinances, codes, regulations, orders, requirements, standards and
procedures which are applicable to its business including all minimum wage, fair
employment, disability benefit, health and all other employee related laws.
(b) Except as set forth on Schedule 5.6(b), no Seller has, since its
incorporation or formation, as the case may be, entered into a Memorandum of
Understanding, Consent Decree or similar instrument with any governmental agency
or has been the subject of any investigation or legal proceeding, involving or
affecting the Acquired Assets which had or could have a Material Adverse Effect.
(c) No Seller, nor to its Knowledge after reasonable investigation, any
of its respective officers, directors, employees or agents, on behalf of or for
the benefit of each Seller, directly or indirectly, have: (i) offered or paid
any amount to, or made any financial arrangement with, any of the Current
Accounts in order to promote business from such Current Accounts, other than
standard pricing or discount arrangements consistent with proper business
practices; (ii) given, or agreed to give, or is aware that there has been made,
or that there is an agreement to make, any gift or gratuitous payment of any
kind, nature or description (whether in money, property or services) to any
Current Account or supplier, source of financing, landlord, sub-tenant, licensee
or anyone else; or (iii) made, or has agreed to make, any payments to any person
with the intention or understanding that any part of such payment was to be used
directly or indirectly for the benefit of any Current Account or employee,
supplier or landlord of such Seller, or for any purpose other than that
reflected in the documents supporting the payments.
5.7 CONTRACTS
---------
(a) Schedule 5.7(a) sets forth all of the Listed Instruments relating
to Current Accounts to be assigned to, the Purchaser in accordance with this
Agreement to which Seller is a party or by which Seller is or may be bound.
(b) A true and correct copy of each Listed Instrument has been
furnished by Seller to Purchaser. Except as set forth in Schedule 5.7(b), Seller
has not given or received notice, and Seller has no Knowledge, that there exists
(i) any Material default or event of default under any Listed Instrument or (ii)
any event or condition which, with notice or lapse of time or both, would
constitute an event of default under any of the Listed Instruments by Seller or
by any other party to any Listed Instrument, which could have a Material Adverse
Effect on the Acquired Assets.
5.8 CLAIMS AND LITIGATION
---------------------
There are no actions, suits, claims (other than routine claims for
employee benefits which are fully insured) or any legal, administrative or
arbitration proceedings or investigations, of any kind or nature, pending,
existing or, to the Knowledge of Sellers, threatened, relating to the Acquired
Assets, and to Sellers' Knowledge there is no state of facts or the occurrence
of any event which will form the basis of any such action, suit, claim,
proceeding or investigation, except as set forth on Schedule 5.8. There are no
outstanding orders, writs, injunctions or decrees of any court, governmental
agency or arbitration tribunal relating to the Acquired Assets which would have
a Material Adverse Effect on the Acquired Assets. There is no suit, action,
investigation, claim or administrative proceeding which has been brought or, to
Sellers' Knowledge, is threatened by any governmental entity or any third party
which (i) questions the validity or legality of the purchase or sale of the
Acquired Assets or this Agreement or (ii) seeks to enjoin the consummation of
the transactions set forth in this Agreement.
<PAGE>
5.9 INSURANCE
---------
(a) Schedule 5.9 sets forth all policies and binders of workers'
compensation and group health, dental and vision insurance policies held by
Sellers, specifying the insurer and the policy number. Except for required
deductibles, none of which are Material except those set forth on Schedule 5.9,
all such insurance policies and binders, if any, are in such amounts, and to
Seller's Knowledge after reasonable investigation, fully insure against any such
claims, losses and risks listed on Schedule 5.8 and for which coverage is
provided under such policies and such insurance policies are in full force and
effect as of the Effective Date. Sellers are not in Material default with
respect to any material provision contained in any such insurance policy and
Sellers have not received notice of cancellation or non-renewal of any such
policy of insurance.
(b) Each Seller has continuously maintained in effect since the
commencement of its professional employer services business, without lapse or
suspension, insurance policies which have provided its employees with workmen's
compensation insurance or similar occupational accident coverage insurance. All
Sellers' workers' compensation insurance policies in effect as of the Closing
Date are set forth on Schedule 5.9.
(a) All claims of any kind or nature accrued or made by Seller's
employees or others as of the Effective Date are fully insured under policies of
workers compensation and employee related insurance (except for applicable
deductables) which have been maintained by Sellers as indicated in Schedule 5.9.
5.10 EMPLOYEES
---------
Sellers have provided TeamStaff with a list of each of its regular or
"in-house" employees together with such employee's current salary and the date
such employee was first employed by Sellers.
<PAGE>
5.11 EMPLOYEE BENEFIT PLANS
----------------------
Schedule 5.11 lists each Employee Benefit Plan currently maintained or
sponsored by Sellers. Neither Sellers nor any Affiliate (as defined below) has
at any time established, maintained, sponsored or made any contributions to any
Multi-Employer Plan. Each of the Employee Benefit Plans providing health
benefits has at all times been operated in material compliance with the health
care continuation provisions of ERISA, the Code, COBRA and state health care
continuation laws. All open claims filed by employees under any Employee Benefit
Plan, which accrued prior to the Effective Date, are the responsibility and
obligation of Seller, regardless of whether such claims are filed prior to or
after the Effective Date. For purposes of this Section 5.11, the term
"Affiliate" shall include all persons under common control with Seller within
the meaning of Sections 4001(a)(14) or (b)(1) of ERISA or any regulation
promulgated thereunder, or Sections 414(b), (c) or (m) of the Code, as amended,
or any regulations promulgated thereunder.
Sellers and OII represent and warrant that all payments or
contributions owed by them with respect to Employee Benefit Plans which were due
on or prior to March 31, 2000 have been paid in full.
5.12 ASSETS FREE AND CLEAR
---------------------
Sellers own all of the Acquired Assets free and clear of all liens,
security interests, encumbrances, equities, claims, agreements and obligations
of any kind or nature, except as set forth on Schedule 5.12. On the Closing
Date, Sellers and OII shall deliver the Acquired Assets free and clear of all
liens, encumbrances, equities, claims, agreements and obligations of any kind or
nature.
5.13 STATUS OF CURRENT ACCOUNTS
--------------------------
Schedule 5.13 is a list of all of Sellers' Current Accounts. Within
five (5) days after the Effective Date, Sellers shall furnish Purchaser with a
list of all of Sellers Current Accounts as of the Effective Date (the "Final
Current Account List"). Sellers have not received written or oral notice, of the
intention on the part of any Current Account to terminate or curtail its
business relationship with Sellers.
<PAGE>
5.14 COMPETITIVE INTERESTS
---------------------
Other than as disclosed on Schedule 5.14 annexed hereto, to (a)
Sellers' Knowledge after reasonable investigation, none of the officers or
directors of Sellers or OII and (b) Sellers' Knowledge, none of the employees of
Sellers or OII, are (i) directors, officers, partners, consultants, agents or
employees or own, directly or indirectly, or have any interest in any
corporation, firm, association or other business entity or organization, (ii)
are in the PEO business, or (iii) are a competitor, lessor, lessee, customer,
supplier, sales representative or distributor of any Seller, or (iv) has an
interest in any Leasehold, Permit, or any confidential information which any
Seller is using or the use of which is necessary or desirable for the conduct of
any Seller's business.
5.15 ACTIONS OF SELLER
-----------------
Since December 31, 1998 and except as disclosed to Purchaser in
Schedule 5.15, Sellers have not (i) mortgaged, pledged or subjected to lien,
charge, or any other encumbrance, any of the Acquired Assets, except for liens
held by Fleet National Bank, as agent; (ii) waived any rights of value related
to the Acquired Assets; (iii) entered into any material transaction with respect
to the Acquired Assets; (iv) had any material adverse change in the condition,
financial or otherwise, of the Acquired Assets, Assumed Liabilities, or Listed
Instruments.
5.16 RESTRICTIVE COVENANTS
---------------------
Schedule 5.16 sets forth a list of officers, directors, founders,
promoters or key employees of Sellers who are employed by OII's PEO business
immediately preceding the Effective Date who are bound by a restrictive covenant
or non-competition agreement.
<PAGE>
5.17 NO MISLEADING STATEMENTS
------------------------
Neither this Agreement, nor the Financial Statements, nor any Schedule,
instrument or certificate executed or delivered by or on behalf of Seller
pursuant to this Agreement, or in connection with the consummation of the
transactions contemplated herein, contains to Sellers' Knowledge, any untrue
statement of a material fact.
5.18 RIGHTS TO SYNADYNE NAME
-----------------------
The Sellers and/or OII have, to their Knowledge, all Intellectual
Property rights in the tradename "Synadyne" and to their Knowledge, the use of
such name does not infringe upon or violate any Intellectual Property rights of
any other person. Neither the Sellers nor OII have written notice of any claim
of infringement in connection with their use of the Synadyne name. With respect
to the Marketing Materials of the Sellers, neither Sellers nor OII make any
representation or warranty as to the Intellectual Property rights they may have
therein, other than with respect to the Synadyne name.
SECTION SIX: REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser and TeamStaff, jointly and severally, hereby represent and
warrant to Sellers and OII for the purpose of inducing Sellers and OII to enter
into and consummate this Agreement and the transactions contemplated herein
that:
6.1 PURCHASER'S ORGANIZATION AND STANDING.
--------------------------------------
Each of Purchaser and TeamStaff are duly organized, validly existing
and in good standing under the laws of the state of their incorporation, with
full corporate authority to conduct its business and to own and operate its
assets and properties, as presently conducted. Each of TeamStaff and Purchaser
is duly qualified to do business, and is in good standing, in each jurisdiction
where the character of its properties owned or held under lease or the nature of
its activities makes such qualification necessary, except where such failure to
so qualify would not have a material adverse effect on its business.
<PAGE>
6.2 AUTHORITY; NO CONFLICTING INSTRUMENTS
-------------------------------------
Neither the execution and delivery of this Agreement by Purchaser or
TeamStaff, nor the consummation of the transactions contemplated by this
Agreement, shall violate any provision of the Certificate of Incorporation or
By-Laws of either Purchaser or TeamStaff or violate, conflict with, result in a
breach or termination of, constitute a default under, or accelerate the
performance required by, any instrument to which either of them or by which
either of their respective properties may be bound, or result in the creation of
a material lien, charge or incumbrance on any of their respective assets or
properties which would adversely affect the ability of either of them to
consummate the transactions contemplated by this Agreement.
Neither TeamStaff nor Purchaser is in violation of their respective
Certificates of Incorporation, By-laws or other governing documents, nor are
either of them in default in the performance of any material obligation,
agreement or condition contained in any license, material contract, indenture,
mortgage, deed of trust, lease or loan agreement or in any bond, debenture, note
or any other evidence of indebtedness to which it is a party or by which it is
bound.
6.3 AUTHORITY FOR AGREEMENT
-----------------------
Each of Purchaser and TeamStaff has full corporate power and authority
(other than approval by the Board of Directors of TeamStaff which approval must
be obtained prior to Closing) to execute and deliver this Agreement and to
perform and consummate the transactions contemplated by this Agreement. Other
than approval by the Board of Directors of TeamStaff, which approval must be
obtained prior to Closing, all corporate proceedings required to be taken by or
on behalf of Purchaser and/or TeamStaff to authorize each of them to enter into
and carry out this Agreement and to perform and consummate the transactions
contemplated herein, have been duly and properly taken. This Agreement has been
duly executed and delivered by each of Purchaser and TeamStaff and is valid and
binding upon them in accordance with its terms, subject to applicable
bankruptcy, insolvency or other similar laws relating to or affecting the
enforcement of creditors' rights generally and to general principles of equity
(regardless of whether enforcement is at equity or at law).
<PAGE>
6.4 NO MISLEADING STATEMENTS
------------------------
Neither this Agreement, nor any certificate, Schedule, instrument or
other agreement delivered or executed by or on behalf of Purchaser or TeamStaff
pursuant to this Agreement, or in connection with the consummation of the
transactions contemplated herein, contains any untrue statement of a material
fact.
6.5 LITIGATION
----------
There is no claim, suit, action or proceeding pending or, to the best
knowledge of TeamStaff or Purchaser, threatened against or affecting either
TeamStaff or Purchaser or any of their respective subsidiaries which is likely
to Materially and adversely affect the business, properties or financial
condition of either of TeamStaff or Purchaser and their respective subsidiaries
taken as a whole. There is no suit, action, investigation or claim of any kind
or nature, brought or threatened by any governmental entity or any third party
with respect to Purchaser or TeamStaff which questions the validity or legality
of the purchase or sale of the Assets or this Agreement or seeks to enjoin the
consummation of the transactions set forth in this Agreement.
6.6 NO VIOLATION
------------
Neither TeamStaff nor Purchaser is in violation of any law, ordinance,
governmental rule or regulation or court decree to which it may be subject nor
has either one of them failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure to obtain is likely to have
any Material Adverse Effect on the condition (financial or otherwise),
properties, results of operations or net worth of either TeamStaff or Purchaser.
6.7 CONSENTS
--------
No consent, approval, authorization or order of, or filing or
registration with, any court, governmental agency or body is required in
connection with the execution, delivery and performance of this Agreement by
either TeamStaff or Purchaser, except for a notice filing required by the State
of Florida with respect to the transfer of 20% of the capital stock of Purchaser
to ADCT, Inc.
<PAGE>
SECTION SEVEN: CONDITIONS TO OBLIGATIONS OF PURCHASER
--------------------------------------
(a) The obligations of Purchaser and TeamStaff to consummate the
transactions contemplated herein are subject to the satisfaction on the Closing
Date of the following conditions by Sellers and the delivery by Sellers to
Purchaser and TeamStaff of the indicated documents.
(i) Legal Opinion
A legal opinion from Sellers' Counsel, dated the Closing Date,
in form and substance satisfactory to Purchaser.
(ii) Certificate of Good Standing
A Certificate of Good Standing dated within ten (10) days
prior to the Effective Date from the Secretary of State of the state of
incorporation or formation as applicable certifying that each Seller has filed
all required reports, paid all required fees and taxes, and is, as of such date
in good standing and authorized to transact business as a domestic corporation.
(iii) Bill of Sale, Assignment and Assumption Agreement
A Bill of Sale, Assignment and Assumption Agreement between
Sellers and Purchaser in the form satisfactory to Purchaser; (a) conveying the
Acquired Assets to Purchaser free and clear of all liens and encumbrances; and
(b) assigning the Listed Instruments and the Assumed Liabilities set forth on
Schedule 2.4(b) to Purchaser, to the extent permitted therein.
(iv) Certificate of Secretary
A Certificate of the Secretary of the Sellers certifying that
annexed thereto are a true and correct copy of the Sellers': (i) Articles of
Incorporation as amended; (ii) By-Laws as amended; and (iii) resolutions of the
Board of Directors and Shareholders of each Seller and OII authorizing and
approving the execution and delivery of this Agreement and the transaction
contemplated hereby.
(v) Financial Statements.
The Agreement shall also be subject to receipt of the
Financial Statements.
(vi) Shared Services Agreement.
The parties shall have executed a Shared Services Agreement in
form and substance satisfactory to TeamStaff and substantially in the form
annexed hereto as Exhibit G.
(vii) Client Service Agreement.
The parties shall have executed a Client Service Agreement in
form and substance satisfactory to TeamStaff and substantially in the form
annexed hereto as Exhibit H
<PAGE>
(viii) Sub Lease Agreements.
The parties shall have executed a Sub-lease Agreement with
respect to the premises located at 1690 South Congress Avenue, Delray Beach,
Florida, and a Stub Period Lease with respect to the premises located at 1144
East Newport Center Drive, Deerfield Beach Florida, both in form and substance
satisfactory to TeamStaff and substantially in the form of Exhibit I and J,
respectively.
(ix) Assignment of Employee Benefit Plans.
The Sellers' and TeamStaff shall have executed and delivered
any and all such documents in order to effectuate the transfer of the Sellers'
Employee Benefit Plans listed on Schedule 2.4(b) to Purchaser.
(x) Receipt of Necessary Approvals and Consents.
TeamStaff and the Purchaser shall have received the approval
of (A) any and all necessary governmental authorities (but not including
governmental approval with respect to PEO licenses), (B) its Board of Directors
and (C) and its lenders to the transactions contemplated hereby.
(xi) Release of Liens.
TeamStaff and the Purchaser shall have received in form and
substance satisfactory to them, evidence of release of all liens, security
interests, and encumbrances with respect to the Acquired Assets.
(xii) Consent Agreement from OII Lenders;
Consent of Landlord to Sublease TeamStaff and the Purchaser
shall have received written evidence, (A) from Fleet National Bank consenting to
the transactions contemplated herein and allowing Teamstaff's access to the
systems of OII used in the delivery of services under the Shared Services
Agreement , substantially in form and substance attached as Exhibit F and (B)
from the landlord for the premises of OII located at 1690 South Congress Avenue,
Delray Beach, Florida stating that it has consented to the Sublease Agreement.
(xiii) Non-Solicitation Agreements.
TeamStaff shall have received Non-Solicitation Agreements from
Robert LefCort, Raymond Dile and David Anderson.
(xiv) Evidence of Payment of all Employee Plan Obligations.
Sellers and OII shall provide written evidence or assurance, reasonably
satisfactory to Teamstaff, that all payments with respect to Employee Benefit
Plans which were due on or prior to March 31, 2000 have been paid.
<PAGE>
(b) The obligations of Sellers to sell the Acquired Assets pursuant to
this Agreement are subject to the satisfaction on or prior to Closing Date of
the following conditions by Purchaser and/or TeamStaff and the delivery by
Purchaser and/or TeamStaff of the indicated documents.
(i) Legal Opinion
A legal opinion from Purchaser's Legal Counsel, in form and
substance satisfactory to Sellers.
(ii) Certificate of Secretary
A Certificate of the Secretary of Purchaser certifying that
annexed thereto are a true and correct copy of: Purchaser's (i) Articles of
Incorporation, as amended; (ii) By-laws, as amended and (iii) resolutions of
Purchaser's Board of Directors unanimously authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
(iii) Certificate of TeamStaff Secretary
A Certificate of the Secretary of TeamStaff certifying that
attached thereto is a true and correct copy of the resolutions of TeamStaff's
Board of Directors authorizing the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.
(iv) TeamStaff's Good Standing Certificate
One or more Certificates of the Secretary of State (or other
authorized public official) of TeamStaff's jurisdiction of incorporation
certifying as of a date within ten (10) days prior to the Effective Date that
TeamStaff has filed all required reports, paid all required fees and taxes, and
is, as of such date, in good standing and authorized to transact business as a
domestic corporation.
(vi) Purchaser's Good Standing Certificate
A Certificate of Good Standing dated within ten (10) days
prior to the Effective Date from the Secretary of State of the State of Florida
evidencing the good standing of Purchaser.
(vii) Purchaser's Consideration
Purchaser shall have delivered the Purchase Price to OII by
wire transfer of immediately available funds to an account designated by OII and
as otherwise set forth in Section Three hereof.
(viii) Bill of Sale, Assignment and Assumption Agreement
The Bill of Sale, Assignment and Assumption Agreement shall
have been executed by Purchaser.
<PAGE>
(ix) Shared Services Agreement.
The parties shall have executed the Shared Services Agreement
in form and substance satisfactory to Sellers and substantially in the form
annexed hereto as Exhibit G.
(x) Client Service Agreement.
The parties shall have executed the Client Service Agreement
in form and substance satisfactory to Sellers and substantially in the form
annexed hereto as Exhibit H.
(xi) Sub Lease Agreements.
The parties shall have executed a Sub-lease Agreement with
respect to the premises located at 1690 South Congress Avenue, Delray Beach,
Florida, and a Stub Period Lease with respect to the premises located at 1144
East Newport Center Drive, Deerfield Beach Florida, both in form and substance
satisfactory to OII and substantially in the form of Exhibit I and J,
respectively.
(xii) Receipt of Necessary Approvals and Consents.
OII and Sellers shall have received the approval of (A) any
and all necessary governmental authorities (but not including governmental
approval with respect to PEO licenses), (B) their respective Board of Directors
and (C) and its lenders to the transactions contemplated hereby.
SECTION EIGHT: INDEMNIFICATION
---------------
8.1 INDEMNIFICATION BY SELLER AND OII
---------------------------------
OII and Sellers shall, jointly and severally, indemnify and hold
harmless Purchaser and TeamStaff from and against any and all claims, causes of
action, suits, judgments, taxes, losses, damages, deficiencies, obligations,
costs and expenses (including, without limitation, interest, penalties,
reasonable attorneys' fees and costs) arising out of or otherwise in respect of:
(i) any misrepresentation, inaccuracy in or breach of any representation,
warranty, covenant or agreement of Sellers or OII contained in this Agreement
which is specifically intended to survive the Closing; (ii) any transaction by
Sellers or OII, including but not limited to, any sale, lease, service or the
conduct of Sellers' PEO business prior to the Effective Date; (iii) any matter
whatsoever relating to the operation, maintenance, conduct and control of or
otherwise relating in any manner to the Acquired Assets or Sellers' PEO
business, including, without limitation, all Employee Benefit Plans or
employment matters, federal, state and local income and employee related taxes
and workers' compensation claims prior to the Effective Date; and (iv) any
Liabilities other than Assumed Liabilities. Notwithstanding the foregoing,
neither the Sellers nor OII shall have any liability to Purchaser for any
claims, losses, damages, costs or expenses arising out of the nonassignability
of any Listed Instrument.
<PAGE>
Purchaser agrees, within 30 days after its receipt of notice of any
claim covered hereby, to notify Seller of such claim, or of any claim as to
which Purchaser asserts a right to indemnification. If any claim for
indemnification by Purchaser arises out of a claim for monetary damages, Seller
may, upon written notice to Purchaser, undertake to conduct any proceedings or
negotiations in connection therewith that are necessary to defend Purchaser and
to take all other steps to settle or defeat any such claims, and to employ
counsel to contest any such claims; provided, however, that Seller shall
reasonably consider the advice of Purchaser as to the defense of such claims.
Purchaser shall have the right to participate at its own expense in such
defense, but the control of such litigation or settlement shall remain with
Seller. Purchaser shall provide all reasonable cooperation in connection with
any such defense. Counsel and auditor fees, filings fees and court fees in all
proceedings, contests or lawsuits with respect to such claim or asserted
liability shall be borne by Sellers and OII. If any such claim is made hereunder
and neither Sellers nor OII elect not to undertake the defense thereof by
written notice to Purchaser, Purchaser shall be entitled to control such
litigation and settlement and shall be entitled to indemnity with respect
thereto. The indemnification undertaken by Sellers and OII is and shall be
absolute, unconditional and irrevocable and shall not be subject to any right of
setoff, counterclaim or defense.
8.2 INDEMNIFICATION BY PURCHASER
----------------------------
Purchaser and TeamStaff shall indemnify and hold Sellers and OII
harmless from and against any and all claims, causes of action, suits,
judgments, taxes, losses, damages, deficiencies, obligations, costs and expenses
(including, without limitation, interest, penalties, reasonable attorneys' fees
and costs) arising out of or otherwise in respect of (i) any misrepresentation,
inaccuracy in or breach of any representation, warranty, covenant or agreement
of Purchaser or TeamStaff contained in this Agreement which is specifically
intended to survive the Closing; (ii) any transaction by Purchaser, including
but not limited to, any sale, lease, repair, service or the conduct of business
occurring after the Effective Date; (iii) any matter whatsoever relating to the
operation, maintenance, conduct and control of or otherwise relating in any
manner to the Acquired Assets or Purchaser's business, including all Employee
Benefit Plans or employment matters after the Effective Date; and (iv) any
Assumed Liabilities.
<PAGE>
Sellers and OII agree, within 30 days after its receipt of notice of
any claim covered hereby, to notify Purchaser of such claim, or of any claim as
to which Sellers or OII assert a right to indemnification. If any claim for
indemnification by Sellers or OII arises out of a claim for monetary damages,
Purchaser may, upon written notice to Sellers and OII, undertake to conduct any
proceedings or negotiations in connection therewith that are necessary to defend
Sellers and OII and to take all other steps to settle or defeat any such claims,
and to employ counsel to contest any such claims; provided, however, that
Purchaser shall reasonably consider the advice of Sellers and OII as to the
defense of such claims. Sellers and OII shall have the right to participate at
their own expense in such defense, but the control of such litigation or
settlement shall remain with Purchaser. Sellers and OII shall provide all
reasonable cooperation in connection with any such defense. Counsel and auditor
fees, filings fees and court fees in all proceedings, contests or lawsuits with
respect to such claim or asserted liability shall be borne by Purchaser. If any
such claim is made hereunder and Purchaser does not elect to undertake the
defense thereof by written notice to Sellers and OII, Sellers and OII shall be
entitled to control such litigation and settlement and shall be entitled to
indemnity with respect thereto. The indemnification undertaken by Purchaser is
and shall be absolute, unconditional and irrevocable and shall not be subject to
any right of setoff, counterclaim or defense, except as provided in Section 8.3
below.
8.3 LIABILITY THRESHOLD AND CAP
---------------------------
Purchaser covenants with Sellers and OII that it shall not make any
claim against Sellers or OII (nor shall Sellers or OII be liable to Purchaser
for any claim) pursuant to Section 8.1 until the aggregate amount of any such
claimed losses, liabilities, damages, costs and expenses exceeds $50,000 (the
"Threshold"); provided, however, Sellers and OII shall be liable with respect to
all claims, losses, damages, costs and expenses relating to payroll and other
employee related taxes and workers compensation claims prior to the Effective
Date without giving effect to the Threshold. Thereafter, Purchaser and TeamStaff
may claim for losses, liabilities, damages, costs and expenses up to an
aggregate amount equal to the Purchase Price. Solely with respect to claims for
indemnification by TeamStaff resulting from: (i) commencement by third parties
of judicial proceedings; (ii) administrative or governmental proceedings; (iii)
notices of assessment received by TeamStaff for failure to pay taxes; or (iv)
notices received by TeamStaff from any governmental or regulatory agency
alleging failure to pay workers compensation, TeamStaff shall have the right to
withhold or offset all Earnout Payments in an amount equal to any claim for
liability hereunder.
<PAGE>
8.4 TERMINATION
-----------
The indemnification provisions provided by Sellers to Purchaser and by
Purchaser to Sellers pursuant to this Section shall terminate and be of no
further force and effect on the date which is 18 months from the Closing Date
with respect to all claims for indemnification, except with respect to Employee
related payroll taxes for which the period shall be three (3) year from the
Closing Date and except in all cases with respect to any bona fide claims of
which the indemnifying party has received notice prior to the relevant time
period which have not been resolved.
8.5 PAYMENT TERMS OF INDEMNIFICATION
--------------------------------
Any payment required to be made by either party under this Section 8
shall be made within 30 days of the date that such payment is determined to be
due and owing, unless, as result of judicial or governmental order or under the
terms of any settlement which may have been entered into in accordance with this
Section 8, such payment is required to be made earlier.
SECTION NINE: RESTRICTIVE COVENANTS.
----------------------
9.1 SELLER'S COVENANT.
-----------------
Each Seller and OII covenants and agrees for a period of three (3)
years, commencing on the Effective Date, not to directly or indirectly, as a
proprietor, partner, stockholder, director, officer, joint venturer, investor,
lender or in any other capacity, own, engage, conduct, manage, operate,
participate in and be associated with or be connected in any manner whatsoever
with any person, firm, partnership, joint venture, corporation or other entity
that competes with Purchaser's Employee leasing businesses; provided, however,
that this noncompetition covenant shall not apply to (i) payrolling services
provided by OII or Sellers in connection with OII's temporary staffing operation
or (ii) shares of capital stock owned by any such person in any public
corporation, traded on a national or regional exchange or reported by the
National Association of Security Dealers, Inc., if such person does not own more
than 3% of the issued and outstanding capital stock of such public corporation.
<PAGE>
9.2 ENFORCEABILITY
--------------
It is the desire and intent of the parties hereto that the provisions
of this covenant be enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, to the extent any provision hereof is deemed unenforceable by
virtue of its scope in terms of area or length of time, but may be enforceable
with limitations thereon, the parties agree that the same shall, nevertheless,
be enforceable to the fullest extent permissible under the laws and public
policies applied in such jurisdiction in which enforcement is sought.
SECTION TEN: ARBITRATION
-----------
Any controversy, claim, or dispute arising out of or relating to this
Agreement, or any breach thereof, including without limitation any dispute
concerning the scope of this arbitration clause, shall be settled by arbitration
in Miami- Dade County, Florida before three (3) arbitrators of the AAA in
accordance with the Commercial Arbitration Rules of the AAA as supplemented
herein, and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. Pending final award, arbitrator
compensation and expenses shall be advanced equally by both parties.
The final award may grant such other, further, and different relief as
authorized by the AAA Commercial Arbitration Rules, but may not include punitive
damages. Notwithstanding the foregoing, the Parties may bring any action seeking
injunctive relief and ancillary damages to enforce the provisions of Section Ten
and any party to this Agreement may implead or assert a cross-claim against any
other party to this Agreement in connection with any action or lawsuit brought
by a third party against any of the parties to this Agreement. Notwithstanding
the foregoing, the parties may mutually agree to submit any controversy, claim
or dispute arising out of or relating to this Agreement to mediation before a
mutually acceptable mediator.
SECTION ELEVEN: SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------------------
The representations, warranties and covenants contained in this
Agreement and in any instrument or certificate delivered pursuant to, or
provided for in, this Agreement shall survive the consummation of the
transactions contemplated by this Agreement for a period of 18 months. Each
party to this Agreement shall be deemed to have relied upon each and every
representation, warranty and covenant of the other party, regardless of any
investigation made at any time by the party relying on such representation,
warranty and covenant.
<PAGE>
SECTION TWELVE: MISCELLANEOUS
-------------
12.1 BROKERAGE
---------
Sellers represents and warrants to Purchaser that Sellers has dealt
only with or retained only Raymond James Financial as its broker or finder for
or on account of this Agreement. Purchaser represents and warrants to Sellers
that it has not dealt with or retained any broker or finder or paid or agreed to
pay any commission or fee to any broker or finder for or on account of this
Agreement.
12.2 EXPENSES
--------
Sellers agrees to pay all of the costs and expenses incurred by it in
connection with this Agreement or in consummating the transactions contemplated
herein; including, without limitation, the fees, disbursements and expenses of
its attorneys, accountants and advisors. Purchaser agrees to pay all of the
costs and expenses incurred by it in connection with this Agreement or in
consummating the transactions contemplated herein.
12.3 FURTHER ASSURANCES
------------------
If at any time after the date hereof any further assignments, transfers
or assurances are reasonably necessary or desirable to carry out the provisions
of this Agreement, the parties to this Agreement shall execute and deliver any
and all bills of sale, instruments of conveyance, assignments, transfers, powers
of attorney and assurances of law, and do all things reasonably necessary or
proper to such end and otherwise to carry out the provisions and intent of this
Agreement.
12.4 NOTICES
-------
All notices and other communications permitted or required under this
Agreement shall be in writing and shall be sufficiently given if and when hand
delivered to the persons set forth below, or if sent by registered or certified
mail, postage prepaid, return receipt requested, or by telegram, addressed as
set forth below or to such other person or persons and/or at such other address
or addresses as shall be furnished in writing by any party to the others or by
personal delivery thereof. Any such notice or communication which is mailed or
telegraphed shall be deemed to have been given as of the date received or
delivery was attempted, as evidenced by the return receipt with respect to a
letter or the official notation of time and date of delivery of a telegram.
To TeamStaff and Purchaser: 300 Atrium Drive
Somerset NJ 08873
Attention: Mr. Donald Kappauf
Copy to: Goldstein & DiGioia, LLP
369 Lexington Avenue
New York, NY 10017
Attention: Brian Daughney, Esq.
To Seller: 1144 East Newport Center Drive
Deerfield Beach, FL 33442
Attention: Gary Meier and Joe Wasch
Copy to: Akerman, Senterfitt & Eidson, P.A.
350 E. Las Olas Boulevard Suite 1600
Fort Lauderdale, FL 33301
Attention: Donn Beloff, Esq.
12.5 SECTION HEADINGS
----------------
The section headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
12.6 SEVERABILITY
------------
The invalidity or unenforceability of any particular provision, or part
of any provision of this Agreement, shall not affect its other provisions or
parts, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions or parts were omitted.
<PAGE>
12.7 COUNTERPARTS
------------
This Agreement may be executed in two or more counterparts and by
facsimile, each of which shall be deemed an original and all of such
counterparts together shall be deemed to be one and the same instrument.
12.8 SCHEDULES
---------
All Schedules referred to in this Agreement are annexed to and made
parts of this Agreement and incorporated herein.
12.9 ENTIRE AGREEMENT, AMENDMENTS; BINDING EFFECT
--------------------------------------------
This Agreement, (i) together with the Schedules and other agreements it
expressly contemplates, constitutes the entire agreement between the parties to
it with respect to the transactions contemplated by this Agreement and
supersedes all their prior agreements and understandings, (ii) may not be
modified or discharged, nor may any of its terms be waived, except by an
instrument in writing, signed by the party or parties to be charged, and (iii)
shall bind and inure to the benefit of the parties and their respective heirs,
executors, administrators, successors and assigns. Nothing expressed or
mentioned in this Agreement is intended, or will be construed, to give any
person, firm, corporation or other entity, other than the parties to this
Agreement and their respective heirs, executors, administrators, successors and
assigns, any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any of its provisions.
12.10 GOVERNING LAW AND JURISDICTION
------------------------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida.
12.11 ASSIGNMENT
----------
No assignment or delegation of any rights or obligations hereunder
shall be made by any party hereto without the consent of the other parties.
<PAGE>
12.12 WAIVERS
-------
The failure of any party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such party at a
later time to enforce the same. No waiver of any nature, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or of any breach or a waiver
of any other condition or of any breach of any other term, covenant,
representation or warranty of this Agreement.
SECTION THIRTEEN: POST CLOSING COVENANTS
----------------------
The Parties agree as follows with respect to the period following the
Closing.
13.1. FURTHER ACTIONS REQUIRED TO EFFECT AGREEMENT.
---------------------------------------------
In case at any time after the Closing any further action is necessary
to carry out the purposes of this Agreement, each of the Parties will take such
further action (including the execution and delivery of such further instruments
and documents) as any other Party reasonably may request, all at the sole cost
and expense of the requesting Party (unless the requesting Party is entitled to
indemnification therefor under Section 10 hereof). The Sellers acknowledge and
agree that from and after the Closing, TeamStaff shall be entitled to possession
of all documents, books, records (including tax records), agreements, and
financial data of any sort relating to the Acquired Assets; provided, however,
that, after Closing, TeamStaff shall provide the Sellers with reasonable access
to and the right to copy such documents, books, records (including tax records),
agreements, and financial data.
13.2. COOPERATION WITH RESPECT TO LITIGATION.
---------------------------------------
In the event and for so long as any Party actively is contesting or
defending against any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand in connection with (i) any transaction contemplated
under this Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving any of
the Acquired Assets, each of the other Parties will cooperate with him or it and
his or its counsel in the contest or defense, make available their personnel,
and provide such testimony and access to their books and records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or defending
Party is entitled to indemnification therefor under Section 8 hereof).
<PAGE>
13.3. MAINTENANCE OF BUSINESS RELATIONSHIPS.
--------------------------------------
Neither the Sellers nor OII will take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of any of the Sellers from maintaining the
same business relationships with TeamStaff and the Purchaser after the Closing
as it maintained with the Sellers prior to the Closing. Each of the Sellers and
OII will refer all customer inquiries relating to the Sellers' PEO business to
TeamStaff and the Purchaser from and after the Effective Date.
13.4. POST CLOSING DELIVERY OF FINANCIAL STATEMENTS
---------------------------------------------
OII shall provide to Purchaser, as soon as possible after the Closing
Date, but in no event later than 45 days after the Closing Date, audited,
operational financial statements of Sellers' PEO business for the year ended
December 31, 1999, prepared in accordance with Regulation S-X of the rules and
regulations of the Securities and Exchange Commission and GAAP consistent with
past practice. The Sellers' Financial Statements for the fiscal years ending
December 31, 1997 and December 31, 1998 shall be re-issued in accordance with
Regulation S-X of the rules and regulations of the Securities and Exchange
Commission and GAAP consistent with past practice and delivered by Sellers as
soon as possible following the Closing.
<PAGE>
13.5. UTILIZATION OF SELLERS' EQUIPMENT
---------------------------------
In the event that following the Closing Date, the Purchaser or
TeamStaff deem it necessary to utilize any leased equipment used prior to the
Closing Date by the Sellers in connection with the Acquired Assets, TeamStaff
shall have the option to use such leased equipment subject to payment to OII of
its costs to lease such equipment. Leased Equipment shall exclude all Modular
Furniture and PC computers. OII shall not assess or collect a fee or costs from
Purchaser or TeamStaff for Modular Furniture or PC computers that Purchaser or
TeamStaff used while a tenant under the Sublease Agreement for 1690 South
Congress Avenue, Delray Beach, Florida.
13.6. REPURCHASE OF INTERESTS IN TEAMSTAFF V, INC.
--------------------------------------------
Immediately following the Effective Date, OII (or its affiliate) shall
tender to Teamstaff, and Teamstaff shall purchase, the 20% ownership of
TeamStaff V, Inc. owned by OII (or its affiliate) for a purchase price of $200.
13.7 TRANSFER OF PEO PAYROLL EXPERIENCE RATINGS
------------------------------------------
To the extent permitted by law: (a) in those states where OII maintains
a temporary employee staffing business, Sellers and OII will cooperate with
Purchaser to transfer in whole or in part their PEO unemployment experience, and
(b) in those states where OII does not maintain a temporary employee staffing
business, OII and Sellers will cooperate with Purchaser to transfer to Purchaser
their unemployment experience rate. The parties shall cooperate in good faith to
complete any and all necessary filings in order to effectuate the obligations
under this Section 13.7, including the filing of notices to governmental
agencies to obtain credits. The parties agree that OII and the Sellers shall not
make any filings with respect to state unemployment taxes for the second quarter
commencing April 1, 2000 to the extent that transfers under this section are
permissable and Teamstaff and the Purchasers shall indemnify and hold harmless
OII and the Sellers from any Liability related to such filings made by it. OII
and the Sellers shall pay to Teamstaff the actual state unemployment tax
withheld for the period up to Effective Date.
13.8 REIMBURSEMENT OF FEES AND EXPENSES.
-----------------------------------
The parties agree that except as otherwise provided herein or in the
Shared Services Agrement (a) Teamstaff and the Purchaser shall reimburse Sellers
or OII for any fees or expenses relating to the operation or use of the Acquired
Assets or the conduct of Purchaser's PEO business after the Effective Date which
are paid by OII or Sellers on behalf of Teamstaff or Purchaser, within 10 days
of receipt by Teamstaff or Purchaser of adequate documentation relating to such
fees and expenses and (b) Sellers or OII shall reimburse Purchaser or Teamstaff
for any fees or expenses relating to the operation or use of the Acquired Assets
or the conduct of Sellers' PEO business prior to the Effective Date which are
paid by Teeamstaff or Purchaser on behalf of OII or Sellers, within 10 days of
receipt by OI or Sellers of adequate documentation relating to such fees and
expenses. Each party shall be provided reasonable time to reconcile any such
amounts claimed to be due and owing.
<PAGE>
13.9 POST CLOSING EMPLOYEE TRANSFER DOCUMENTATION
---------------------------------------------
All parties to this Agreement shall cooperate in good faith and use
their best efforts to timely and properly file any and all employee related tax
and payroll related filings, certificates or documents as may required in
connection with the transactions contemplated herein.
13.10 COBRA CONTINUATION.
-------------------
Purchaser shall assume the liability and obligation of the Sellers to
provide any continuation of group health coverage required under Internal
Revenue Code ("Code") Section 4980B or ERISA Section 601 through 608 ("Cobra
Coverage") with respect to any employee employed by the Purchaser on and after
the Effective Date or "qualified beneficiary" (as defined in Code Section 4980B)
of such Employee who undergoes a "qualifying event" (as defined in Code Section
49ipB) on, prior to or after the Effective Date. In addition, Purchaser shall be
responsible for all liabilities and obligations with respect to Cobra Coverage
in regard to former employees of Sellers (including qualified beneficiaries of
such former employees) regardless of whether the qualifying events with respect
to such individuals occurred on, before or after the Effective Date.
Notwithstanding the foregoing, nothing contained in this Section 13.10 shall be
construed or interpreted as to: (i) provide that TeamStaff or Purchase have any
liability for any event, claim, losses or damages arising prior to the Effective
Date, or (ii) amend or alter the indemnification provisions under Section 8.1
hereof.
13.11 PUBLIC ANNOUNCEMENTS.
---------------------
Each party shall cooperate with the other, if necessary, with respect
to the making of any public announcement or communication relating to this
Agreement and the transactions contemplated hereunder. Except as may be required
by applicable law, no party may issue any press releases or other public
communication relating to this Agreement or the transactions contemplated
hereunder without the prior written consent of the other parties. In the event
any such press release or other public communication shall be required by
applicable law, each party shall first consult in good faith with the other
party with respect to form and subsyance of such release or communication.
<PAGE>
13.12. 401K PLAN FORFEITURES.
----------------------
No party to this Agreement shall take any action to obtain for their
possession any forfeitures existing under the Sellers' 401k plans, it being
understood and agreed by all parties hereto that all forfeitures (net of any
administrative fees) are the property of the employer customer who employed the
forfeiting employee.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto on the date first above written.
<TABLE>
<CAPTION>
<S> <C>
TEAMSTAFF, INC. TEAMSTAFF V, INC.
By: /s/ Donald W. Kappauf By: /s/ Donald W. Kappauf
------------------------- -------------------------
Name: Donald W. Kappauf Name: Donald W. Kappauf
Title: President & CEO Title: President & CEO
OUTSOURCE INTERNATIONAL, INC. GUARDIAN EMPLOYER WEST LLC
By: /s/ Jon H. Peterson By: /s/ Jon H. Peterson
------------------- -------------------
Name: Jon H. Peterson Name: Jon H. Peterson
Title: Vice President and Treasurer Title: Vice President and Treasurer
of Employment Consultants, Inc. Sole Member
of Guardian Employer West, LLC
SYNADYNE I, INC. SYNADYNE II, INC.
By: /s/ Jon H. Peterson By: /s/ Jon H. Peterson
------------------- -------------------
Name: Jon H. Peterson Name: Jon H. Peterson
Title: Vice President and Treasurer Title: Vice President and Treasurer
SYNADYNE III, INC. SYNADYNE IV, INC.
By: /s/ Jon H. Peterson By: /s/ Jon H. Peterson
------------------- -------------------
Name: Jon H. Peterson Name: Jon H. Peterson
Title: Vice President and Treasurer Title: Vice President and Treasurer
SYNADYNE V, INC. GUARDIAN EMPLOYER EAST LLC
By: /s/ Jon H. Peterson By: /s/ Jon H. Peterson
------------------- -------------------
Name: Jon H. Peterson Name: Jon H. Peterson
Title: Vice President and Treasurer Title: Vice President and Treasurer
of Employment Consultants, Inc. Sole Member
of Guardian Employer East, LLC
</TABLE>
SHARED SERVICES AGREEMENT
-------------------------
THIS SHARED SERVICES AGREEMENT (the "Services Agreement") is entered
into as of April 7, 2000, by and between Teamstaff, Inc., a New Jersey
corporation ("Client"), and Outsource International, Inc., a Florida corporation
("OSI").
WHEREAS, Client and Outsource have entered into an Asset Purchase
Agreement of even date herewith ("Asset Purchase Agreement") which, among other
things, provides for the purchase by Client of certain assets of the
Professional Employer Organization ("PEO") business of Outsource operated under
the tradename "Synadyne" upon the terms and conditions contained therein,
WHEREAS, Client desires, and OSI has agreed to provide, certain
back-office and client servicing services to Client for an interim period
beginning on the date hereof as a result of the purchase by Client of certain
assets of the Synadyne PEO business; and
WHEREAS, Client and OSI desire to set forth herein the terms under
which the services will be provided.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises set forth below and other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
1 DEFINITIONS
1.1 All terms not otherwise defined herein shall have the meanings ascribed to
such terms in the Asset Purchase Agreement
2 SERVICES
2.1 Nature of Services. It is the intention of the parties hereto that OSI shall
provide, to and on behalf of Client during the term hereof, those services
listed in Exhibit A, attached hereto, with respect to the Acquired Assets, which
services were rendered by OSI prior to the Closing Date (the "Services"). OSI
agrees during the term of this Agreement to provide the Services in accordance
with the standard of performance set forth in Section 1.3 below. Any services
not specifically described in Exhibit "A" are not included in the definition of
"Services", including, but not limited to OSI computer repair and maintenance,
workers compensation services, unemployment services, legal services, executive
services, and others. OSI acknowledges that Client may request, in writing, from
time to time, that OSI provide other services that may be desired by Client to
operate the Acquired Assets, so long as OSI provided such other services to the
Acquired Assets prior to the date hereof. Any such additional services shall be
performed at a cost that is mutually agreed upon by Client and OSI. In the event
that following the Closing Date, a service not otherwise set forth on Exhibit A
is deemed necessary by Client and was performed by OSI prior to the Closing
Date, then Exhibit A shall be mutually amended to include such services so long
as both parties agree on the costs to be incurred by Client for such services,
and so long as the resources exist at OSI to provide such services after the
closing date.
<PAGE>
2.2 Standard of Performance. OSI will devote commercially reasonable efforts to
deliver the same standard of performance as OSI delivered in connection with its
operation of the Acquired Assets. Client may, from time to time, evaluate and
review OSI's performance hereunder, and OSI will cooperate in any such
evaluation and review. In all matters relating to the performance of this
Services Agreement, OSI and Client shall comply with all applicable federal,
state, and local laws, rules, and regulations.
2.3 Scope of Services. During the term hereof, OSI shall devote such resources
as are necessary for the delivery of the Services, in accordance with the
standard of performance set forth in Section 2.2 above.
2.4 Insurance Coverage. OSI shall maintain appropriate insurance coverage for
the Services being provided during the duration of this Agreement, in accordance
with the standards of performance set forth in Section 2.2 above.
2.5 Qualifications. All persons assigned to perform the Services shall have
adequate education, experience, training, skills, expertise and knowledge
relating to the Services being performed by them. Notwithstanding any other
provision within this Agreement, employee assignments shall be made to assure
consistent and continued delivery of Services and to ensure prompt availability
and accessibility of individual OSI personnel in accordance with the standard of
performance set forth in Section 2.2 above.
2.6 Required Personnel. OSI shall designate at least one employee, who shall be
satisfactory to Client, who shall be the primary contact with respect to the
Services. Such designee shall be responsible for ensuring that Client's requests
and the Services are available to Client in accordance with Exhibit A. In
addition, such designee shall coordinate with Client to ensure that Client has
access, as defined herein, to all computer systems, software and hardware that
are required in connection with the delivery of the Services.
3 COMPENSATION
3.1 Fees and Expenses. For and in consideration of the Services to be provided
by OSI, and subject to the limitations set forth below, Client shall pay to OSI
the fees and costs described in Exhibit A attached hereto and described in
further detail in Exhibit B attached hereto. In addition to the fees and costs
described in Exhibit A (a) Client shall reimburse OSI (subject to Client's prior
consent if an individual expense is expected to exceed $2,000.00) for all
out-of-pocket costs reasonably and directly incurred by OSI to third parties
(other than Affiliates of OSI) as a result of the performance of the Services in
the ordinary course of business; (b) Client will reimburse OSI for all telephone
and data charges, at cost related to its operating system, incurred by OSI on
behalf of Client resulting from Client's use of the OSI/Synadyne system; and (c)
Client will reimburse OSI for its services in exporting and transitioning
Client' data to its operating system(s) at a cost to be mutually determined as
such services are more particularly determined, depending on the individual
performing the services on behalf of OSI. If non-OSI resources are used, the
vendor rate and costs will be passed directly to Client, at no profit to OSI.
After the Closing, OSI and Client will meet and agree on a scope of work, a cost
estimate and the timing of performance of the work.
-2-
<PAGE>
3.2 Payment Procedures. Throughout the term of this Agreement, OSI may submit
one or more requests for payment hereunder to Client. All such requests shall be
accompanied by a detailed itemization of all amounts for which OSI requests
payment and such other detail as Client may reasonably request. Client shall
make payments for out of pocket expenses references in 3.1 above within thirty
(30) days of receiving OSI's request for payment and all required accompanying
documentation; and within fifteen days (15) for Services.
3.3 Taxes. Neither federal, state, nor local income or payroll tax of any kind
shall be withheld or paid by Client on behalf of OSI, and OSI agrees to be
responsible for all taxes and similar payments arising out of its activities
contemplated by this Agreement, including, without limitation, federal, state,
and local income tax, social security tax, self-employment tax, unemployment
insurance tax, and all other taxes, fees, and withholdings. OSI agrees to
indemnify and hold harmless Client from and against any liability, obligation,
claim, cause of action, damage, interest, penalty, cost, or expense (including
attorneys' fees) Client may incur as a result of any taxes, fees, penalties, or
interest assessed against Client relating to payments to OSI hereunder.
4 TERM AND TERMINATION
4.1 Term. The term of this Agreement shall commence on the Closing Date and
terminate on July 31, 2000 (the "Termination Date"), unless sooner terminated
pursuant to the provisions hereof. The right to terminate this Agreement is
separate from the right of Client to terminate the Services pursuant to Section
5.3 hereof; provided, however, that OSI shall not be required to perform any of
the Services beyond the Termination Date.
5 Termination.
5.1 Termination of Agreement by OSI. OSI may terminate this Agreement prior to
July 31, 2000 based on failure to pay an invoice for services rendered. OSI
shall provide fifteen (15) days prior written notice of the effective date of
any such termination. Client may avoid a termination for failure to pay by
paying all amounts due and owing less any amounts in contention, within that
fifteen (15) day notice period.
5.2 Termination of Agreement by Client. Client may terminate this Agreement upon
fifteen (15) days prior written notice to OSI. In addition, in the event that
OSI files for bankruptcy protection or becomes subject to an involuntary
bankruptcy proceeding, this Agreement may be terminated immediately by Client
upon delivery of written notice to OSI. In the event that, as a result of its
financial condition, OSI fails to materially perform the Services hereunder,
Client may immediately terminate this Agreement upon one (1) day's written
notice.
5.3 Termination of Service(s). Client may terminate one or more of the services
provided herein at any time. To the extent a Service is terminated, the terms of
this Agreement shall no longer be applicable with regard to such Service.
Notwithstanding any other provision hereof, Client shall provide fifteen (15)
days' prior written notice to OSI if at any time it wishes to terminate any of
the individual Services. An adjustment in fees shall be agreed upon by the
parties to reflect any reduction in Services. Any such reduction shall be based
on the detailed cost information contained in Exhibit B attached hereto.
-3-
<PAGE>
5.4 Cooperation. Upon receiving notice of the termination of this Agreement or
any Service hereunder, OSI shall cooperate with Client in terminating the
relevant Services. Any costs associated with such transition that are incurred
by OSI, including training expense, shall be the sole responsibility of Client.
6 INDEMNIFICATION
6.1 Indemnification by OSI. OSI shall indemnify, defend and hold harmless
Client, and its directors, officers, employees, and agents from and against any
and all losses, claims, actions, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and court costs) relating to or arising
from or in connection with any act or omission constituting gross negligence or
intentional misconduct by OSI or its agents, employees, representatives or
contractors under this Agreement. OSI shall not be liable for consequential,
special or punitive damages under this indemnification; provided, however, that
in the event it is established in a final, non-appealable judgment that OSI
committed intentional misconduct in the performance of services required
hereunder, then Client shall be entitled to seek consequential damages.
6.2 Indemnification by Client. Client shall indemnify, defend and hold harmless
OSI, and its directors, officers, employees and agents from and against any and
all losses, claims, actions, damages, liabilities, costs and expenses (including
reasonable attorneys' fees and court costs) relating to or arising from or in
connection with any act or omission constituting gross negligence or intentional
misconduct by Client or its agents, employees, representatives or contractors
(other than OSI) under this Agreement. Client shall not be liable for
consequential, special or punitive damages under this indemnification; provided,
however, that in the event it is established in a final, non-appealable judgment
that Client committed intentional misconduct in the performance of services
required hereunder, then OSI shall be entitled to seek consequential damages.
6.3. Procedure. The procedure for seeking indemnification under this Agreement
shall be governed by and implemented in accordance with Sections 8.1, 8.2 and
8.5 of the Purchase Agreement.
7 MISCELLANEOUS
7.1 Non-Waiver. No failure of any party to exercise any power or right under
this Agreement or to insist on compliance with any obligation under this
Agreement, and no custom or practice of any other party that varies from the
terms of this Agreement, shall waive the right of the first party to demand full
compliance with this Agreement.
7.2 Severability. In the event any court holds one or more clauses of this
Agreement void or unenforceable, OSI and Client shall treat that clause or those
clauses as separate and shall treat the remainder of this Agreement as valid and
in full force and effect. The terms of this Agreement shall be equitably
adjusted to compensate the appropriate party for any consideration lost because
of the elimination of such clause or clauses. Should any term of this Agreement
be considered void or inconsistent with Florida law, then such term shall be
void and any
-4-
<PAGE>
inconsistency shall be construed and governed by Florida law to the extent the
term is void or inconsistent.
7.3 Governing Law. This Agreement shall be interpreted in accordance with the
laws of Florida applicable to contracts made and performed (or as if they were
made and performed) entirely in Florida.
7.4 Entire Agreement. This Agreement and the Purchase Agreement constitute the
entire agreement of the parties regarding the subject matter hereof, is a
complete, exclusive statement thereof, and supersedes any and all prior or
contemporary agreements and understandings.
7.5 Notice. Any notice or other communication required to be given pursuant to
this Services Agreement shall be deemed duly given if delivered personally or by
overnight delivery service or marked by certified or registered mail, return
receipt requested and postage prepaid, or sent by facsimile addressed to the
relevant party at its address and facsimile number as follows:
- --------------------------------------------------------------------------------
To the Buyer To the Seller
- --------------------------------------------------------------------------------
Mr. Kenneth J. Jankowski Mr. Scott R. Francis
Senior V.P. & COO Chief Financial Officer
TeamStaff, Inc. Outsource International, Inc.
1211 N. Westshore Boulevard 1144 E. Newport Center Drive
Tampa, FL 33067 Deerfield Beach, FL 33442
Facsimile: (813) 289-0352 Facsimile: (954) 418-6191
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
With a copy to: With a copy to:
- --------------------------------------------------------------------------------
Mr. Brian Daughney, Esq. Donn A. Beloff, Esq.
Akerman, Senterfitt & Edison, P.A.
Goldstein & DiGioia LLP 450 East Las Olas Boulevard
369 Lexington Ave Suite 950
New York, NY 10017 Fort Lauderdale, FL 33301
Facsimile: (212) 557-0295 Facsimile: (954) 463-2224
- --------------------------------------------------------------------------------
or to such other address or facsimile number as any party may provide to the
other party in writing. All such notices and other communications shall be
effective on the date of delivery, mailing, or facsimile transmission, as the
case may be.
7.6 Amendment. No modifications of this Agreement shall be valid unless
made in writing and signed by each of the parties hereto.
7.7 Assignment. Neither party shall assign, in whole or in part, any of
its rights, obligations or benefits under this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
-5-
<PAGE>
7.8 Survival. The provisions of Section 5 and Section 6 of this
Agreement shall survive the expiration or termination of this Agreement, and
shall be enforceable thereafter to the full extent permitted by law.
IN WITNESS WHEREOF, the parties hereto have executed this Services
Agreement as of the day and year first above written.
OUTSOURCE INTERNATIONAL, INC.
By: /s/ Jon H. Peterson
-----------------------------------
Name: Jon H. Peterson
Title: Vice President and Treasurer
________________, INC.
By: /s/ Donald W. Kappauf
-----------------------------------
Name: Donald W. Kappauf
--------------------------------
Title: President & CEO
--------------------------------
-6-
<PAGE>
EXHIBIT A TO SHARED SERVICES AGREEMENT
DESCRIPTION OF SERVICES
Outsource will provide only the following Services to the Client as described in
greater detail below. Any service not specified is excluded:
o As discussed more fully herein, certain accounting support services
including: billing reconciliation and posting; cash receipt application;
and accounts receivable and GL maintenance (Client is responsible for
actual account receivable collection activity).
o Use of the Davison system and all other software licenses as specified to
provide continued PEO services to clients. Although the term of the Shared
Services Agreement is only 120 days, OSI will keep all core MIS systems and
services operating for 180 days following the closing. So long as OSI
continues to provide the Synadyne Technology Hosting Services referenced
herein for such 180 day period, then Client will continue to pay the
associated monthly charge for such services. In the event that OSI, as a
result of bankruptcy or insolvency, is unable to provide such core MIS
systems and services, OSI or any successor or assignee, to the extent
permitted by law, shall allow Client complete access to such systems in
order for Client to conduct its business and service accounts.
o Information Services-use of specified technology infrastructure as
described herein.
o Outsource will not provide any of the following Services to the Client:
o Executive
o Legal Services
o Credit-will not determine business to accept or reject or determine
pricing thereof.
o Unemployment
o Select treasury or cash management services
o Accounts payable (except to provide pre-paids and cut over issues,
reconciliations and bill backs)
o Training services
o Human Resource Services
o Benefits Administration
o Payroll and client service team administration and resolution of
issues with clients
o Risk Management
o Information Services, except technology infrastructure specifically as
defined and detailed below
-7-
<PAGE>
Accounting and Finance
- ----------------------
To be provided at a cost of $ 22,004.64 PER MONTH
1. All Services specified above will be delivered in the same manner as
previously furnished to Synadyne during the period preceding the sale, and
consistent with past practices and at the same or similar level of support.
2. OSI will not be responsible for the accuracy or timeliness of the entry of
data into the Davison system or any other system by Client and their
employees. If inaccurate or untimely information is processed, OSI is not
responsible for any such errors or the subsequent impact to Client's
business created by such errors and omissions.
3. If any of the systems experience operating difficulties, OSI will use best
efforts to remedy such operating issues. Client agrees that OSI shall not
have any liability for such operating difficulties, or their impact on the
Client or Services provided above, unless due to OSI's gross negligence.
Notwithstanding anything contained in the Shared Services Agreement to
which this Exhibit A is attached, Client acknowledges that OSI has made no
representations, warranties or covenants of any kind, express or implied,
as to the design, condition or performance of any of the systems utilized
by the Client, their merchantability or fitness for a particular purpose.
3.a OSI will provide a weekly written report describing any and all system
or facility level changes that are planned for the period ending July
31, 2000 that will impact the Acquired Assets. Client will notify OSI
in advance of any changes that it intends to make with respect to the
Acquired Assets.
3.b OSI will provide a weekly written (email) summary of all planned MIS
changes that will impact the Acquired Assets.
4. OSI is not responsible for funding Client's payroll accounts or payroll tax
deposits, nor responsible for any operating deficiencies created by
Client's failure to adequately or timely fund such accounts. Client will
provide payroll and depository account information to OSI no later than
three (3) days before Effective Date, in order that the Davison software
may be updated no later than three (3) days after the closing date with
Client banking data.
All billing activity related to Client's accounts generated by the Davison
software will be reconciled and posted to the Masterpack AR subsidiary
ledger in a separate "company" from the OSI AR detail activity. There is a
36-hour lag for activity to be posted in Masterpack (i.e. items invoiced in
Davison on Monday will show posted to the Masterpack AR by Wednesday in the
AM). The invoice file (electronic "Merged Credit File") shall be matched
against the Davison detail prior to posting. Cash receipts of all types
(ACH, wire, credit card and checks) will be posted by OSI to the Client AR
subsidiary ledger in Masterpack as each deposit is reconciled by OSI,
provided necessary information is received from Client. Client
-8-
<PAGE>
will provide a separate lockbox or other depository account wherein all
customer payments shall be deposited. Client will provide detail receipt
activity and/or provide OSI Cash Management personnel with access to
depository transaction detail on a daily basis so cash receipts may be
posted timely. Subsequent to successful posting of cash receipts via the
electronic cash receipt process, cash belonging to Client but received by
OSI in its lockbox account will be electronically transferred to Client
daily via ACH.
6. OSI currently receives electronic data from its banks and their lock boxes
to allow OSI to electronically post collections activity to the accounts
receivable reports. Client must provide OSI, at its option, with daily
electronic data files including collection activity and information from,
but not limited to, its lock boxes, offices or any other collection sites
for accounts receivable to allow OSI to apply cash receipts on a timely
basis.
7. OSI will provide initial accounting closing services to Client. Client GL
activity will be agreed and balanced to subsidiary ledger detail on a
monthly basis, consistent with past practices of OSI. All reconciliation
detail will be provided to Client on a monthly basis, consistent with past
practices of OSI. OSI will electronically transmit the GL data to Client on
a monthly basis, consistent with past practices of OSI. The client will be
able to access their daily data via the client profitability report
available in the Davison system. All adjustments and true-ups will be
performed by Client in its GL. No adjustments or true-ups will be performed
by OSI for Client activity although OSI will advise Client upon request. GL
accounts that will be maintained include but are not limited to Revenue,
Trade Payroll, Payroll Taxes, Trade Benefits, and other Trade Cost of
Revenue.
8. OSI will provide a daily electronic aging report with respect to the
Clients' account receivables for the Client consistent with past practices
of OSI. Client will be provided with inquiry only access to all client's
customer files in Masterpack at all times.
9. OSI will provide reasonable and necessary information relating to payroll,
accounts receivable and billing consistent with its past practices in
preparing its own financial statements to enable Client to prepare its own
financial statements.
10. Client is responsible for providing and paying for all operating stock
supplies required for OSI to provide the above Services, including but not
limited to: check stock, invoice stock, envelopes, necessary to provide the
Services specified above. OSI will work with Client to provide reasonable
access to OSI's vendors who supply such supplies, and allow Client to, at
their sole cost and expense, to modify such supplies as to (but not limited
to) the company name and affiliation, addresses, if appropriate, and return
addressees and lock box remittance directions, and to purchase such
necessary supplies in the quantities determined by Client, thereby allowing
OSI to provide such Service to Client for the Client's offices. Client can
make changes to forms and supplies, but only to the extent that the Davison
system, the payroll and billing system will function as presently
configured without any system modifications.
-9-
<PAGE>
11. Client acknowledges that the frame relay connection to UNIX host is
provided by MCI. OSI specifically disclaims any liability or responsibility
for any business interruption whatsoever caused by or related to MCI or any
other telecommunications provider, or its inability to provide the required
service. OSI will provide vendor names, phone numbers, and escalation
procedures for handling all MIS and building level services during the term
of the agreement.
12. The OSI designee who serves as its primary contact with Client regarding
technology shall be available to Client on a priority basis. Such designee
shall coordinate with Client in order to ensure that Client is able to
obtain all necessary services to service its customer accounts during
normal business hours of operation, and via pager on weekends and nights.
13. OSI will assist, with best efforts, in training Client's A/R clerk in the
process OSI's accounts receivable process consistent with past practices of
OSI.
-10-
<PAGE>
Synadyne Technology Hosting Services
- ------------------------------------
To be provided at a cost of $ 13,207.00 PER MONTH
Plus a one-time charge to be paid by Client for the Unidata usage permit
estimated to be $24,125
OSI will provide "hosting services" for Synadyne's information
technology infrastructure during the Transition Period as described herein.
These hosting services will consist of providing and maintaining the following
Processing Hardware and Operational Software, plus the Services listed. Client
will be responsible for all direct costs associated with phone, line and data
charges, plus other non-itemized functions and expenses.
During the relocation of OSI's headquarter's building, OSI will manage the
physical relocation of the Processing Hardware, Operational Software and all of
Synadyne's PC, Printers and other support technology to the new facility. The
relocation will be performed over a designated weekend beginning no earlier then
noon on the _____________before the move date. OSI will use all commercially
reasonable efforts to provide that Client will have full operational access to
its information technology infrastructure no later the noon on the Monday
immediately following the move. Notwithstanding any other statement or
limitation on liability provided for in this shared service agreement, OSI shall
be liable for damages (defined only as the inability to process payroll) equal
to $5,000 per day in the event that Client's operations are disrupted as a
result of OSI's relocation.
Schedule of Service Availability
All Processing Hardware, Operational Software, and network facilities necessary
for the operation of the business are expected to be available for use on a 24
hour by 7 day basis inclusive of holidays with the exception of routine
maintenance and data back-up requirements. OSI is not authorized to shut down
(excluding emergency shutdown situations) any systems without explicit prior
approval from the Client.
Physical Access to Data Center
Client IT personnel shall have authorized access to all Processing Hardware,
Operational Software, and network facilities located in the OSI data center
solely for the purposes of inspecting such systems required for operating the
PEO business, and only in the presence of an OSI representative. Client will
provide advanced notice of such requirements to the appropriate OSI data center
personnel prior to access. Client will not conduct any activities which are
intrusive or invasive to the Processing Hardware, Operational Software, and
network facilities located in the OSI data center.
-11-
<PAGE>
The term "Processing Hardware" as used herein, shall mean the following hardware
- - Oscar Server - HP RISC class machine, UNIX operating system
- - Syn-server - Intel processor, NT operating system
- - Web server - Intel processor, NT operating system
- - Mail Server - Intel processor, NT operating system
- - Telephone PBX including ACD and Voice mail
- - Communications infrastructure (FRAME, dial-in, etc.)
UPS support for the core operation servers and phones. The term "Operational
Software" as used herein, shall mean the following software
- - OSCAR (core HRIS operations system with payroll, benefits, tax calculations,
invoicing etc.)
- - Masterpack (Financial system including AR, GL, AP)
- - Vertex (tax calculation)
- - Unidata (Ardent DBMS)** SB Client (DBMS client)
- - ACH (bank settlement) Novell Netware
- - MS-Windows/MS-Office Telemagic (client management)*
- - IC Verify (credit card processing) Paytrain (payroll training)
- - Cognos/Impromptu (data analysis)* Email (Groupwise)
- - Right FAX (FAX server) Performance Now
Note: * indicates only partially installed at this time and not
operational. ** indicates billed separately and paid for by Client
The term "Services" as used herein, shall mean the following services
- - Availability Assurance for UNIX, Unidata and Novell
- - UNIX Administration (including user-id, passwords, DASD, etc.)
- - Security Administration
- - Nightly database backups
- - Installation, Moves and Changes (IMACS) for PC and related hardware
- - Unidata Administration
- User-id, password setup and maintenance
- File sizing and management
- Application cataloging
- Environment administration
- - Level 1 (work stoppage) program support for OSCAR, Vertex, IC Verify,
RightFAX
- - Application management (cataloging, source code administration, PRC, etc) for
OSCAR
- - Application programmer training for Synadyne's programmer
- - Novell Administration, including Groupwise
- - Disaster Recovery services
- - Internet access
- - Voicemail administration
- - Internet site maintenance (continuing availability of the site with no content
changes)
Client retains ownership of all Synadyne Domain Names and related Internet
addressing schemes that support the PEO operation. All costs associated with
hardware leases, software licenses or other maintenance contracts will either be
direct pass throughs as incurred or as part of the monthly fee for services
-12-
<PAGE>
EXHIBIT B TO SHARED SERVICES AGREEMENT
OSI Shared Services Finance and Accounting Costs
- ------------------------------------------------
<TABLE>
<CAPTION>
Hrly Rate Monthly Hrs % Effort Overhead Rate $ Cost Per Month
<S> <C> <C> <C> <C> <C>
Cash App $13.48 160 100% 140% $ 3,019.52
Cash App $10.07 160 100% 140% $ 2,255.68
Acctg $20.67 160 50% 140% $ 2,315.39
Cash Mgnt $14.42 160 50% 140% $ 1,615.04
Mgnt $49.04 160 100% 140% $10,984.62
AR $13.50 160 50% 140% $ 1,512.00
AP $13.50 160 10% 140% $ 302.40
-----------
Total $22,004.64
</TABLE>
Assumptions:
1) Current Cash Application level is two people full time. Expect the same
effort through duration of shared services agreement.
2) Accounting will be reduced to about one half the current resource 3) Cash
Management is currently 50% of one body. Daily cash reconciliation will keep
effort at current effort.
3) Accounts Receivable significant input regarding daily true-ups of Accounts
Receivable and training of Client's clerk.
4) Management effort is John Leavitt over the duration of the agreement.
5) AP is 10% of one person to work through cut over issues first week of April
6) Overhead is 40% for benefits and supplies.
-14-
<PAGE>
EXHIBIT B TO SHARED
SERVICES AGREEMENT
OSI Information Services Infrastructure Shared Services
-------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL MONTHLY
--------------------------------------------
<S> <C> <C> <C>
Davison SW Maintenance $ 30,000 $ 30,000 $ 2,500
Additional Technology
Unix Host for OSCAR $ 7,000
File Sharing $ 800
GroupWise Server (Email) $ 800
WEB Server (NT) $ 800
Fax Server $ 800
Vertex Tax Updates $ 4,890
Unidata Database $ 6,500
Performance Now HR SW $ 1,500
MP Financial SW $ 7,500
Unix Administration $ 35,395
NT Administration $ 13,000
Desktop Support $ 4,700
GroupWise Support $ 13,000
Telecom Administration $ 10,000
Off-site Backup Storage $ 700
Warm-site DR Resource $ 12,700
WOTC / Frick Programming (SUTA) $ 4,800
Telemagic Support $ 3,600 $ 128,485 $ 10,707
--------------- ---------
Total $128,485 $ 13,207
PLUS
--------------------------------------
Unidata platform with Ardent
(usage/license)
to be paid by Buyer in one lump some payment to Vendor $ 24,125
</TABLE>
-15-
