SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 6 )(1)
STAFF LEASING, INC.
(Name of Issuer)
Shares of Common ($.01 par values)
(Title of Class of Securities)
008523811
(CUSIP Number)
BNP Paribas
499 Park Avenue
New York, NY 10022
(212) 415-9600
Paul E. Glotzer, Esq. Anthony F. Essaye, Esq.
Cleary, Gottlieb, Steen & Hamilton Clifford Chance Rogers & Wells LLP
One Liberty Plaza 607 Fourteenth Street, NW
New York, NY 10006 Washington, DC 20005-2018
(212) 225-2000 (202) 434-0700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 1, 2000
(Date of Event which Requires Filing of this Statement)
<PAGE>
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box. [ ]
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(Continued on following pages)
(Page 1 of 48 Pages)
[Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.]
[1 The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.]
<PAGE>
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CUSIP No. 0008523811 13D Page 2 of 48
================================================================================
1. BNP Paribas IRS Identification No. 94-1677765
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
N/A
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
[ ]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of France
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7. SOLE VOTING POWER
NUMBER OF 0*
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0*
EACH -----------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH 0*
-----------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0*
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0*
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
BK
================================================================================
* BNP Paribas may be deemed to be the beneficial owner of the Common Stock of
Staff Leasing, Inc. reported herein through its ownership of Paribas North
America, Inc. and Paribas Principal, Inc. Such indirect ownership of Staff
Leasing, Inc. is not included above so as to avoid double counting.
<PAGE>
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CUSIP No. 0008523811 13D Page 2 of 48
================================================================================
1. Paribas North America, Inc. IRS Identification No. 13-1929559
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
N/A
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
[ ]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 212,500*
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH -----------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH 212,500*
-----------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
212,500*
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
================================================================================
* In addition to this direct ownership, Paribas North America, Inc. may be
deemed to be the beneficial owner of the Common Stock of Staff Leasing, Inc.
reported herein by Paribas Principal, Inc. through its ownership of Paribas
Principal, Inc. Such indirect ownership of Staff Leasing, Inc. is not included
above so as to avoid double counting.
<PAGE>
-------------------- ------------
CUSIP No. 0008523811 13D Page 2 of 48
================================================================================
1. Paribas Principal, Inc. IRS Identification No. 13-3529118
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
N/A
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
[ ]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of New York
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 1,822,706
SHARES -----------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH -----------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH 1,822,706
-----------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,822,706
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.4%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
================================================================================
<PAGE>
BNP Paribas (successor by merger of Paribas S.A. with and into Banque
Nationale de Paris ("BNP") as of May 23, 2000), Paribas North America, Inc.
("PNA"), and Paribas Principal, Inc. ("PPI"), collectively the "Reporting
Persons", hereby amend the report on Schedule 13D, dated March 19, 1999. This
report was previously amended by Amendment No. 1 dated April 8, 1999, Amendment
No. 2 dated April 22, 1999, Amendment No. 3 dated December 22, 1999, Amendment
No. 4 dated April 7, 2000, and Amendment No. 5 dated July 28, 2000. The initial
Schedule 13D and the amendments thereto are collectively referred to herein as
the "Schedule 13D", filed by BNP Paribas, Banque Nationale de Paris, PNA, PPI
and Paribas in respect of the common stock, par value $.01 per share (the
"Common Stock"), of Staff Leasing, Inc., a Florida corporation (the "Company").
Capitalized terms used but not defined herein shall have the meaning attributed
to such terms in the Schedule 13D. The principal executive offices of the
Company are located at 600 301 Boulevard West, Suite 202, Bradenton, FL 34205.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended to reflect the change in the
plan of the Reporting Persons regarding the Company, by deleting the paragraph
of Item 4 commencing with the words: "Except as disclosed in this Item 4 ..."
and inserting the following instead:
"PPI and PNA, by an Asset Purchase Agreement dated May 22, 2000 (the
"Agreement" attached hereto as Exhibit 6), have entered into an agreement
with QCP Investors, LLC and QCP Investors II, LLC (collectively, "QCP") to
sell in the aggregate 212,500 shares of Common Stock and warrants
exercisable into 499,185 shares of Common Stock for nine hundred
thirty-three thousand eight dollars ($933,008.00). As a condition precedent
to the sale, PPI, PNA, and Quad-C Management, Inc. ("Quad-C") entered into
an agreement dated July 31, 2000 (the "Investors Agreement") whereby PPI
and PNA granted to Quad-C, a proxy with respect to an additional 212,500
shares of the Company's Common Stock and warrants exercisable into 499,185
shares of the Company's Common Stock still owned by PPI and PNA. This proxy
is with respect to any vote, action by written consent or other action
requested by the Company or Quad-C which is required or permitted under
applicable law, and confers on Quad-C the sole and exclusive right to
exercise PPI's and PNA's rights with respect to these shares and warrants.
Confidential treatment has been requested as to portions of the Investors
Agreement not relevant to the granting of the proxy with respect to the
Company's Stock.
Except as disclosed in this Item 4, none of the Reporting Persons has
any current plan or proposals which relate to or in:
(a) The acquisition by any such person of additional securities of the
Company, or the disposition of securities of the Company;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the Company
or any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Company, including any plan or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the Company;
<PAGE>
(f) Any other material change in the Company's business or corporate
structure;
(g) Changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any person;
(h) Causing a class of securities of the Company to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange
Act; or
(j) Any action similar to any of those enumerated above."
Item 5. Interest in Securities of the Issuer.
Item 5 of the Schedule 13D is hereby amended to read as follows:
"Set forth in the table below is the number and percentage of shares
of Common Stock beneficially owned by each Reporting Person. None of the
Reporting Persons beneficially owns shares of any other class of capital
stock of the Company.
<TABLE>
<CAPTION>
Number of Shares Number of Shares Percentage of
Beneficially Owned Beneficially Owned with Aggregate Number of Class Beneficially
with Sole Voting and Shared Voting and Shares Beneficially Owned (2)
Name Dispositive Power(1) Dispositive Power Owned
<S> <C> <C> <C> <C>
Reporting Persons(3) 2,035,206 0 2,035,206 9.4%
PPI(4) 1,822,706 0 1,822,706 8.4%
PNA(5) 212,500 0 212,500 1.0%
BNP Paribas(6) 0 0 0 0.0%
</TABLE>
(1) Pursuant to Rule 13d-3 under the Exchange Act, a person is deemed
to be a "beneficial owner" of a security if that person has or shares
voting power" (which includes the power to vote or to direct the voting of
such security) or "investment power" (which includes the power to dispose
or to direct the disposition of such security). A person is also deemed to
be a beneficial owner of any security of which that person has a right to
acquire beneficial ownership (such as by exercise of options pursuant to a
conversion feature of a security) on or within 60 days after the date
hereof. In addition, more than one person may be deemed to be a beneficial
owner of the same securities, and a person may be deemed to a beneficial
owner of securities as to which he or she may disclaim any beneficial
interest.
(2) The percentages of Common Stock indicated in this table are based
on the 21,701,762 shares of Common Stock outstanding as of March 31, 2000
as disclosed in the Company's most recent Form 10-Q filed with the
Securities and Exchange Commission. Any Common Stock not outstanding which
is subject to options or
<PAGE>
conversion privileges which the beneficial owner had the right to exercise
on or within 60 days after the date hereof is deemed outstanding for
purposes of computing the percentage of Common Stock owned by such
beneficial owner and for the Reporting Persons but is not deemed
outstanding for the purpose of computing the percentage of outstanding
Common Stock owned by any other beneficial owner.
(3) Includes (i) 1,323,521 shares of Common Stock owned of record by
PPI, (ii) warrants to purchase 516,801 shares of Common Stock owned of
record by PPI, and (iii) 212,500 shares of Common Stock owned of record by
PNA.
(4) Includes (i) 1,323,521 shares of Common Stock owned of record by
PPI, and (ii) warrants to purchase 516,801 shares of Common Stock owned of
record by PPI.
(5) Includes 212,500 shares of Common Stock owned of record by PNA.
PNA may also be considered the beneficial owner of the shares reported by
PPI herein through its ownership of PPI. Such shares are not included in
the table so as to avoid double counting.
(6) The shares reported by PPI and PNA herein may be attributed to BNP
Paribas through its ownership of PNA and PPI. Such shares are not included
in the table so as to avoid double counting.
To the best knowledge of PPI, PNA and BNP Paribas, no executive officer or
director of PPI or PNA beneficially owns any securities of the Company except
that certain executive officers and directors of PNA and PPI beneficially own an
aggregate of 154,951 shares of Common Stock (representing 0.7% of the
outstanding shares of Common Stock) and warrants exercisable into 153,569 shares
of Common Stock (representing 0.7% of the outstanding shares of Common Stock)
and have sole voting and dispositive power with respect thereto. The Reporting
Persons do not have any reason to believe that any executive officer or director
of BNP Paribas beneficially owns any securities of the Company although no
actual inquiry of such persons has been made."
Item 7. Materials to be Filed as Exhibits.
Item 7 is amended to add the following:
"6. Asset Purchase Agreement dated May 22, 2000."
"7. Investors Agreement dated July 31, 2000."*
* Portions of which have been omitted pursuant to a request for confidential
treatment.
<PAGE>
SIGNATURE
Each Reporting Person certifies that, after reasonable inquiry and to the
best of its knowledge and belief, the information set forth in this statement is
true, complete and correct.
August 10, 2000
BNP PARIBAS
By: M. S. Alexander
-------------------------------
Name:
Title:
PARIBAS NORTH AMERICA, INC.
By: Donna Kiernam
-------------------------------
Name:
Title:
PARIBAS PRINCIPAL, INC.
By: M. S. Alexander
-------------------------------
Name: M. S. Alexander
Title: President
<PAGE>
Exhibit Index
Exhibit No. Description
-----------------------------------------
6. Asset Purchase Agreement, dated May 22, 2000.
7. Investors Agreement dated July 31, 2000.*
* Portions of which have been omitted pursuant to a request for
confidential treatment
<PAGE>
EXHIBIT 6
ASSET PURCHASE AGREEMENT
BETWEEN
PARIBAS PRINCIPAL, INC.
AND
QCP INVESTORS, LLC,
AND
QCP INVESTORS II, LLC
DATED AS OF MAY 22, 2000
<PAGE>
TABLE OF CONTENTS
Page
1. Purchase of Assets and Assumption of Liabilities..........................1
1.1 Purchase of Assets...................................................1
2. Purchase Price............................................................1
2.1 Amount...............................................................1
2.2 Allocation...........................................................1
3. Closing Date; Cash Payment................................................2
3.1 Closing..............................................................2
3.2 Purchase Price.......................................................2
4. Assignment of Rights......................................................2
5. Representations and Warranties of Sellers.................................2
5.1 Organization, Power, Standing and Qualification......................2
5.2 Due Authorization....................................................3
5.3 Freedom to Contract..................................................3
5.4 Title to Assets......................................................3
5.5 Litigation...........................................................3
5.6 Brokers..............................................................4
6. Representation and Warranties of Buyers...................................4
6.1 Organization, Power and Standing and Qualified.......................4
6.2 Due Authorization....................................................4
6.3 Freedom to Contract..................................................4
6.4 Litigation...........................................................4
6.5 Brokers..............................................................4
6.6 Purchase for Investment..............................................5
6.7 Sophisticated Buyer..................................................5
6.8 Management Agreement.................................................5
7. Pre-Closing Covenants.....................................................5
7.1 Regulatory and Other Approvals.......................................5
7.2 SBA..................................................................5
8. Conditions Precedent to Closing...........................................6
8.1 Conditions Precedent to the Obligations of Buyers
to Complete the Closing.............................................6
(a) Representations, Warranties and Covenants.......................6
(b) Consents, Waivers, Licenses, Filings, etc.......................6
(c) Injunction, etc.................................................6
(d) Assets..........................................................6
-i-
<PAGE>
(e) Closing Certificate of Seller...................................6
(f) Investors Agreement.............................................6
(g) Purchase Agreements.............................................6
(h) Conversion of Non-voting Securities.............................7
8.2 Conditions Precedent to the Obligations of Sellers
to Complete the Closing.............................................7
(a) Representations, Warranties and Covenants.......................7
(b) Consents, Waivers, Licenses, Filings, etc.......................7
(c) Injunction, etc.................................................7
(d) Closing Certificate of Buyers...................................7
(e) Delivery of Funds...............................................7
(f) Investors Agreement.............................................7
(g) Purchase Agreements.............................................7
9. Survival..................................................................7
9.1 Survival of Representations and Warranties..........................7
9.2 Exclusive Provisions; No Rescission.................................8
10. Termination of Agreement..................................................8
10.1 Termination.........................................................8
10.2 Survival............................................................8
11. Miscellaneous.........................................................8
11.1 Certain Definitions.................................................8
11.2 Expenses............................................................9
11.3 Notices.............................................................9
11.4 Publicity; Confidentiality.........................................10
11.5 Entire Agreement...................................................11
11.6 Waivers and Amendments.............................................11
11.7 Governing Law......................................................11
11.8 Binding Effect; No Assignment......................................11
11.9 Counterparts.......................................................11
11.10 Exhibits and Schedules.............................................11
11.11 Headings...........................................................11
11.12 Severability of Provisions.........................................11
-ii-
<PAGE>
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement") made this 22nd day of May, 2000 (the
"Effective Date"), by and between Paribas Principal, Inc., a New York
corporation, and Paribas North America, Inc., a Delaware corporation, each with
offices at the address set forth in Section 11.3 ("Sellers") and each of QCP
Investors, LLC and QCP Investor II, LLC, each a Delaware limited liability
company with offices at the address set forth in Section 11.3 hereof (each a
"Buyer" and collectively, the "Buyers").
WITNESSETH:
WHEREAS, Sellers desire to sell, and Buyers jointly desire to purchase
common stock and warrants as listed on Schedule 1.1 hereto owned by Sellers in
Staff Leasing, Inc. (the "Portfolio Company"); and
WHEREAS, certain terms used herein have the meanings ascribed to such terms
in Section 11.1 hereof.
NOW, THEREFORE, in consideration of the foregoing and of the respective
promises, covenants, representations and warranties herein contained, it is
agreed:
1. Purchase of Assets and Assumption of Liabilities
1.1 Purchase of Assets.
On the terms and subject to the conditions set forth in this Agreement, on
the Closing Date (as herein defined), Sellers agree to sell, transfer, assign,
convey and deliver to Buyers, and Buyers jointly agree to purchase, acquire and
accept from Sellers, (a) in the proportions indicated on Schedule 1.1 hereto as
Buyers may amend from time to time prior to the Closing (as herein defined), all
of Sellers' right, title and interest in and to that portion of the securities
issued by the Portfolio Company and owned by the Sellers as listed on Schedule
1.1 hereto, (b) the rights and obligations to the Assigned Contracts (as defined
below) as more specifically detailed in Section 4 hereof (such assets,
properties and rights are hereinafter collectively referred to as the "Assets"),
free and clear of all liens and encumbrances except for those created by Buyers.
2. Purchase Price.
2.1 Amount. The aggregate purchase price (the "Purchase Price") for
the Assets and the Assigned Contracts shall be $933,008 (the "Cash
Payment"), payable at the Closing in the manner provided in Section 3.2.
2.2 Allocation. The Purchase Price shall be allocated among each of
the securities constituting the Assets on a schedule to be attached hereto
as Schedule 1.1. Each of the parties hereto shall not, and shall not permit
any of its Affiliates to, take a position (except as required pursuant to
any Order) on any Tax Return, before any governmental agency charged with
the collection of any Tax, or in any judicial proceeding, that is in any
way inconsistent with the Purchase Price allocation determined in
accordance with this Section 2.2.
1
<PAGE>
3. Closing Date; Cash Payment.
3.1 Closing. The closing hereunder (the "Closing") shall take place at
10:00 a.m., New York time, at the offices of Clifford Chance Rogers & Wells
LLP on June 30, 2000 or at such other date or at such other place or time
as the parties may mutually agree upon, but not later than five (5)
Business Days after all conditions under each Purchase Agreement (as
defined herein) have been satisfied and/or waived (such date is hereinafter
referred to as the "Closing Date").
3.2 Purchase Price. At the Closing, Buyers will pay their respective
portion of the Purchase Price by bank wire transfer in immediately
available funds to a bank account designated in writing to Buyers by
Sellers not less than two (2) Business Days before the Closing Date.
4. Assignment of Rights.
(a) At the Closing, Sellers shall assign, transfer and set over
("assign") unto the Buyers all of Seller's rights and obligations under
each contract, debt instrument, warrant, agreement, arrangement and
understanding between the Sellers and their affiliates, on the one hand and
the Portfolio Company and/or its subsidiaries on the other. For the
avoidance of doubt, the parties hereto intend that certain rights attached
to the underlying securities that constitute both the Assets and any
securities of the Portfolio Company retained by Sellers (the "Retained
Assets") (i.e., (i) any anti-dilution protection or rights to receive other
securities upon the exercise or conversion thereof in accordance with the
applicable agreements, (ii) the right to receive distributions and/or
principal and interest payments in respect thereof, and (iii) voting rights
generally exercisable by all shareholders or all shareholders of a
particular class) shall remain with the Retained Assets and the Assets, as
applicable, and shall, with respect to the Retained Assets, be subject to
the proxy granted to Quad-C (as herein defined) by Sellers in the Investors
Agreement (as herein defined) until the termination thereof.
(b) Upon the termination of the Investors Agreement, the Assignment
shall be automatically revoked.
(c) To the extent that the assignment hereunder by Sellers to Buyers
of any Asset or Assigned Contract is not permitted or is not permitted
without the consent of any third party, this Agreement shall not be deemed
to constitute an undertaking to assign the same if such consent is not
given or if such an undertaking otherwise would constitute a breach of or
cause a loss of benefits thereunder. Sellers will use commercially
reasonable efforts to obtain any and all such third party consents prior to
the Closing; provided, however, that Sellers shall not be required to pay
or incur any material cost or material expense to obtain any third party
consent to sell any security constituting the Assets or assigning any
contract constituting the Assigned Contracts.
5. Representations and Warranties of Sellers. Each Seller represents and
warrants to Buyers as follows:
5.1 Organization, Power, Standing and Qualification. Seller is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of New York or Delaware, as applicable. Seller has
all requisite corporate power and authority and all necessary licenses and
permits to carry on its business as it has been and is currently being
conducted, to own, lease and operate the property and assets used in
connection therewith (including the Assets and the Assigned Contracts) and
to enter into and perform this Agreement and the investors agreement to be
entered into between Sellers and Quad-C Management, Inc., an affiliate of
Buyers ("Quad-C"), as of the date of the Closing (the "Investors
Agreement").
2
<PAGE>
5.2 Due Authorization. The execution and delivery by Seller of this
Agreement and, at the Closing, the Investors Agreement, the performance by
it of its obligations hereunder and thereunder, and the transactions
contemplated hereby and thereby have been duly and validly authorized by
all necessary corporate action on the part of Seller. This Agreement has
been, and at Closing the Investors Agreement will be, duly executed and
delivered by Seller and each does or will constitute the valid and binding
obligation of Seller enforceable in accordance with its terms, except as
such enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law).
5.3 Freedom to Contract. Except as set forth on Schedule 5.3 hereto,
the execution and delivery of this Agreement and the Investors Agreement do
not or will not, and the consummation of the transactions contemplated
hereby and thereby will not, (i) violate or conflict with the provisions of
the certificate of incorporation or by-laws of Seller, each as amended,
(ii) result in the imposition of any lien under, cause the acceleration of
any obligation under, or violate or conflict with the terms, conditions or
provisions of, any note, indenture, mortgage, lease, guaranty or other
agreement or instrument to which Seller is a party or by which the Seller
is bound, (iii) result in a breach or violation by Seller of any of the
terms, conditions or provisions of any Law or Order or (iv) except for
filings under the HSR Act as described in Section 7.1 and the expiration of
the applicable waiting period under the HSR Act, require any consent or
approval of, filing with or notice to any Governmental or Regulatory Body.
5.4 Title to Assets. Seller has, and at the Closing Seller will convey
to Buyers, good title to all the Assets free and clear of any liens or
encumbrances except as created by Buyers, including, without limitation,
any agreement, understanding or restriction to which the Seller is a party
or by which Seller is bound affecting the voting rights or other incidents
of record or beneficial ownership pertaining to the Assets. Except as set
forth in the Shareholders Agreement or on Schedule 5.4 hereto, there are no
outstanding subscriptions, options, warrants, rights, puts, calls,
commitments, conversion rights (other than the right to convert non-voting
common stock to voting common stock), rights of exchange, plans or other
agreements or commitments, contingent or otherwise, of any character to
which the Seller is a party or by which Seller is bound providing for the
purchase, redemption, acquisition or retirement by the Portfolio Company or
any other Person of any of the Assets. In addition, except as set forth in
the Shareholders Agreement or on Schedule 5.4 hereto, there are no rights,
agreements, restrictions or encumbrances (such as preemptive rights, rights
of first refusal, rights of first offer, proxies, voting agreements, voting
trusts, registration rights agreements, shareholders agreements), nor any
restrictions on the transferability or sale of such shares pursuant to any
provision of law, contract or otherwise with respect to the purchase, sale
or voting of the Assets (whether outstanding or issuable upon conversion,
exchange or exercise of any other security of the Portfolio Company).
5.5 Litigation.
(a) There is no Action or Proceeding pending or, to the knowledge of
Seller, threatened during the last twelve months against Seller which
relates to the Assets which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect;
(b) There is no Order to which Seller is subject which relates to the
Assets and which has had or would reasonably be expected to have a Material
Adverse Effect; and
(c) Seller is not a party to any Action or Proceeding pending or, to
the knowledge of such Seller, threatened, which, if adversely determined,
would reasonably be expected to adversely affect or restrict the ability of
Seller to consummate the transactions contemplated hereunder. There is no
Order
3
<PAGE>
to which Seller is subject which would adversely affect or restrict the
ability of Seller to consummate the transactions contemplated hereunder.
5.6 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Buyers directly
with Seller without the intervention of any Person on behalf of Seller and
no fees are due to any finders or brokers as a result of the transactions
contemplated hereby.
6. Representation and Warranties of Buyers. Each Buyer represents and
warrants to Sellers that:
6.1 Organization, Power and Standing and Qualified. Buyer is a limited
liability company duly formed, validly existing and in good standing as a
limited liability company under the laws of the State of Delaware. Buyer
has all requisite power and authority and all necessary licenses and
permits to carry on its business as it has been and is currently being
conducted, to own, lease and operate the properties and assets used in
connection therewith and to be acquired pursuant hereto and to enter into
and perform this Agreement and the Investors Agreement.
6.2 Due Authorization. The execution and delivery of this Agreement
and the Quad-C Management Agreement (as herein defined), by Buyer and the
performance by it of its obligations hereunder and thereunder, and the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary action the part of Buyer. This Agreement has
been, and at the Closing, will be, duly executed and delivered by Buyer and
constitutes the valid and binding obligation of Buyer enforceable in
accordance with its terms, except as such enforcement may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
6.3 Freedom to Contract. The execution and delivery of this Agreement
and the Quad-C Management Agreement do not or will not, and the
consummation of the transactions contemplated hereby or thereby will not,
(i) violate or conflict with the provisions of the organizational documents
of Buyer, each as amended, (ii) result in the imposition of any lien under,
cause the acceleration of any obligation under, or violate or conflict with
the terms, conditions or provisions of any note, indenture, mortgage,
lease, guaranty or other agreement or instrument to which Buyer is a party
or by which it or its assets are bound, (iii) result in a breach by Buyer
of any of the terms, conditions or provisions of any Law or Order or (iv)
except for filings under the HSR Act as described in Section 7.1 and the
expiration of the applicable waiting period under the HSR Act, require any
consent or approval of, filing with or notice to any Governmental or
Regulatory Body.
6.4 Litigation. Buyer is not a party to any Action or Proceeding
pending, or, to the knowledge of such Buyer, threatened, which, if
adversely determined, would reasonably be expected to adversely affect or
restrict the ability of Buyer to consummate the transactions contemplated
hereunder. There is no Order to which Buyer is subject which would
adversely affect or restrict the ability of Buyer to consummate the
transactions contemplated hereunder.
6.5 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Sellers directly
with Buyer without the intervention of any Person on behalf of Buyer and no
fees are due to any finders or brokers as a result of the transactions
contemplated hereby.
4
<PAGE>
6.6 Purchase for Investment. The allocable portion of the Assets to be
acquired by Buyer will be acquired by Buyer for its own account for the
purpose of investment and not with a view to, or for sale in connection
with, any distribution thereof. Buyer understands that the allocable
portion of the Assets to be acquired by Buyer are being offered in a
transaction not involving any public offering, within the meaning of the
Securities Act, that such Assets have not been and will not be registered
under the Securities Act and that if it decides to resell, pledge or
otherwise transfer such Assets, such Assets may be offered, resold, pledged
or otherwise transferred only in accordance with any applicable securities
laws of any applicable jurisdiction and the restrictions set forth in the
legends on the certificates evidencing such Assets. Buyer acknowledges that
it has had a full opportunity to conduct such financial, legal and other
due diligence with respect to the Portfolio Companies and the proposed
transaction and to ask questions of and receive answers with respect
thereto as it has considered necessary to make an investment decision, and
Buyer has availed itself of this opportunity to the full extent desired.
6.7 Sophisticated Buyer In the normal course of its business or
investing activities, Buyer invests in or purchases securities similar to
the Assets, and it has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
purchasing such securities. The Buyer is an "accredited investor" within
the meaning of Rule 501(a) of the Securities Act. The Buyer is aware that
it may be required to bear the economic risk of an investment in the Assets
for an indefinite period of time and it is able to bear such risk for an
indefinite period.
6.8 Management Agreement. Buyers, by the Closing, shall have entered
into an agreement (the "Quad-C Management Agreement") with Quad-C whereby
Quad-C has agreed to manage (including the power to exercise all rights
under the Assigned Contracts, to vote the Assets and to have full
dispositive power to sell the Assets) the Assets.
7. Pre-Closing Covenants
7.1 Regulatory and Other Approvals. Each party will (a) take all
commercially reasonable steps necessary or desirable, and proceed
diligently and in good faith and use all commercially reasonable efforts,
as promptly as practicable to obtain all consents, approvals or actions of,
to make all filings with and to give all notices to Governmental or
Regulatory Bodies or any other Person required of it or its Affiliates to
consummate the transactions contemplated hereby or under the Investors
Agreement, (b) provide such other information and communications to such
Governmental or Regulatory Bodies as such Governmental or Regulatory Bodies
may reasonably request in connection therewith and (c) cooperate with the
other party as promptly as practicable in connection with the foregoing.
Each party will provide prompt notification to the other party hereto or
its Affiliates when any such consent, approval, action, filing or notice
referred to in clause (a) above is obtained, taken, made or given or
denied; as applicable, and will advise the other party of any
communications (and, unless precluded by Law, provide copies to each other
party hereto of any such communications that are in writing, with any
Governmental or Regulatory Body or any other Person regarding any of the
transactions contemplated by this Agreement. In addition to and not in
limitation of the foregoing, each party will (a) take promptly all actions
necessary to make the filings required of it or its Affiliates under the
HSR Act, (b) comply at the earliest practicable date with any request for
additional information received by it or its Affiliates from the Federal
Trade Commission or the Antitrust Division of the Department of Justice
pursuant to the HSR Act and (c) cooperate with the other party in
connection with any filing under the HSR Act and in connection with
resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade
Commission, the Antitrust Division of the Department of Justice or state
attorneys general.
5
<PAGE>
7.2 SBA. Sellers will use commercially reasonable efforts to take all
actions required under the Small Business Administration Act, as amended
and the rules and regulations thereunder pertaining to Small Business
Investment Companies to effectuate the transactions contemplated herein.
8. Conditions Precedent to Closing.
8.1 Conditions Precedent to the Obligations of Buyers to Complete the
Closing. The obligations of Buyers to enter into and complete the Closing
are subject to the fulfillment on or prior to the date of Closing (the
"Closing Date") of the following conditions, any one or more of which may
be waived by Buyers in its sole discretion:
(a) Representations, Warranties and Covenants. The representations and
warranties of Sellers contained in this Agreement shall be true, correct
and complete in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of the Closing Date
except as expressly stated herein to be made as of a specified date.
Sellers shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or
complied with by it on or prior to the Closing Date.
(b) Consents, Waivers, Licenses, Filings, etc. All consents,
approvals, authorizations, licenses, registrations, declarations or filings
shall have been obtained or made, as the case may be, in connection with
the transactions contemplated herein (including, but not limited to the
Assignment and the Investors Agreement). The applicable waiting period
under the HSR Act in respect of the transactions contemplated hereby shall
have expired.
(c) Injunction, etc. At the Closing, there shall not be any Order
outstanding against any party hereto or Law promulgated that prevents the
consummation of, and no Action or Proceeding shall be pending or threatened
against a party hereto or the Portfolio Company which questions the
legality of, seeks to restructure or to restrain or prevent the
consummation of, the transactions contemplated by this Agreement, the
Investors Agreement or any of the conditions to the consummation of the
transactions contemplated by this Agreement or the Investors Agreement or
which, in the case of any such Order, Law or Action or Proceeding, would
reasonably be expected to materially adversely affect Buyers' ability to
consummate the transactions herein or have a Material Adverse Effect.
(d) Assets. Sellers shall have delivered to Buyers, certificates,
notes and other evidence of ownership representing the Assets, duly
endorsed in blank or accompanied by stock powers duly endorsed by Seller
with all necessary transfer tax and other relevant stamps affixed.
(e) Closing Certificate of Seller. Sellers shall have delivered to
Buyers certificates signed by an authorized officer of Seller, dated the
Closing Date, as to the matters set forth in Section 8.1(a), (b) and (c)
and in form and substance reasonably satisfactory to Buyers.
(f) Investors Agreement. Sellers shall have executed and delivered to
Buyers the Investors Agreement and shall have delivered to Quad-C any
prepaid fee in accordance with Section 2.1(a) thereof.
(g) Purchase Agreements. The asset purchase agreements (the "Purchase
Agreements") between Paribas Principal, Inc. and Buyers dated as of the
date hereof, relating to the sale of securities and/or debt instruments of
certain companies from Paribas Principal, Inc. to Buyers, shall have been
executed and delivered to the Sellers and shall have not been subsequently
terminated. Additionally, the Closing hereunder and closing thereunder
shall occur simultaneously.
6
<PAGE>
(h) Conversion of Non-voting Securities. Sellers shall have converted
all non-voting securities it owns in the Portfolio Company to voting
securities at or immediately after the Closing.
8.2 Conditions Precedent to the Obligations of Sellers to Complete the
Closing. The obligations of Sellers to enter into and complete the Closing
are subject to the fulfillment on or prior to the Closing Date, of the
following conditions, any one or more of which may be waived by Sellers in
its sole discretion:
(a) Representations, Warranties and Covenants. The representations and
warranties of Buyers contained in this Agreement shall be true, correct and
complete in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date except
as expressly stated herein to be made as of a specified date. Buyers shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by
it on or prior to the Closing Date.
(b) Consents, Waivers, Licenses, Filings, etc. All consents,
approvals, authorizations, licenses, registrations, declarations or filings
shall have been obtained or made, as the case may be in connection with the
transactions contemplated herein (including, but not limited to the
Assignment and the Investors Agreement). The applicable waiting period
under the HSR Act in respect of the transactions contemplated hereby shall
have expired.
(c) Injunction, etc. At the Closing, there shall not be any Order
outstanding against any party hereto or Law promulgated that prevents the
consummation, and no Action or Proceeding shall be pending or threatened
against a party hereto or the Portfolio Company which questions the
legality of, seeks to restructure or to restrain or prevent the
consummation of, the transactions contemplated by this Agreement or the
Investors Agreement or any of the conditions to the consummation of the
transaction contemplated by this Agreement or the Investors Agreement or
which, in the case of any such Order, Law or Action or Proceeding, would
reasonably be expected to materially adversely affect the Seller's ability
to consummate the transactions herein or have a Material Adverse Effect.
(d) Closing Certificate of Buyers. Each Buyer shall have delivered to
Sellers a certificate signed by an authorized officer of such Buyer, dated
the Closing Date, as to the matters set forth in Section 8.2(a), (b) and
(c) and in form and substance reasonably satisfactory to Sellers.
(e) Delivery of Funds. Buyers shall have delivered to Sellers the
Purchase Price in accordance with Section 3.2.
(f) Investors Agreement. Quad-C shall have executed and delivered to
Sellers the Investors Agreement.
(g) Purchase Agreements. The asset purchase agreements (the "Purchase
Agreements") between Sellers and Buyers dated as of the date hereof,
relating to the sale of securities and/or debt instruments of certain
companies from Sellers to Buyers, shall have been executed and delivered to
the Sellers and shall have not been subsequently terminated. Additionally,
the Closing hereunder and closing thereunder shall occur simultaneously.
9. Survival.
9.1 Survival of Representations and Warranties. The representations
and warranties of each Sellers and Buyers contained in this Agreement will
survive the Closing until the date which is one (1) year after the Closing
Date; provided, however, that the representations and warranties set forth
in
7
<PAGE>
Sections 5.4, 5.6, 6.5 and 6.6 shall survive until the applicable statue of
limitations. No claim may be made against any party hereto and no party
hereto shall have any liability to any other party hereto after the
applicable survival period for a representation or warranty specified above
shall have expired, except that, if a claim shall be made by a party hereto
against another party hereto prior to the expiration of such survival
period, then such survival period shall be extended as it relates to such
claim until such claim has been satisfied or otherwise resolved as provided
in this Section 9.1.
9.2 Exclusive Provisions; No Rescission. Except as set forth in this
Agreement, neither Buyers nor Sellers are making any representation,
warranty, covenant or agreement with respect to the matters contained
herein. Anything herein to the contrary notwithstanding, no breach of any
representation, warranty, covenant or agreement contained herein shall give
rise to any right on the part of Buyers or Seller, after the consummation
of the purchase and sale of the Assets contemplated hereby, to rescind this
Agreement or any of the transactions contemplated hereby (except as
contemplated in Sections 4 hereof or in the Investors Agreement).
10. Termination of Agreement.
10.1 Termination. This Agreement (i) may be terminated prior to the
Closing by the mutual written consent of Sellers and Buyers, and (ii) shall
automatically terminate if (a) the Closing has not occurred by the date
that is ninety (90) days from the Effective Date or (b) any of the Purchase
Agreements is terminated (unless such termination is waived by the mutual
agreement of the parties hereto).
10.2 Survival. In the event this Agreement is terminated pursuant to
Section 10.1, (i) this Agreement shall become null and void and of no
further force and effect, except for the provisions of this Section 10.2
and Sections 4, 11.2, 11.3, 11.4, 11.7 and 11.12 and (ii) there shall be no
liability on the part of the Sellers or Buyers or their respective
officers, directors or Affiliates; provided, however, that if such
termination shall result from the willful breach by a party of the
provisions contained in this Agreement such party shall be fully liable for
any and all damages, costs and expenses sustained or incurred by the other
party hereto as a result of such breach.
11. Miscellaneous.
11.1 Certain Definitions. As used in this Agreement, the following
terms have the following meanings unless the context otherwise requires:
"Action or Proceeding" means any action, suit, proceeding or arbitration by
any Person, or any investigation or audit by any Governmental or Regulatory
Body.
"Affiliate," means with respect to any Person, any other Person
controlling, controlled by or under common control with such first Person.
"Business Day" means any day on which commercial banks are not authorized
or required by law to close in New York, New York.
"Code" means the Internal Revenue Code of 1986, as amended.
"Governmental or Regulatory Body" means any court, tribunal, arbitrator or
any government or political subdivision thereof, whether federal, state,
county, local or foreign, or any agency, authority, official or
instrumentality of any such government or political subdivision.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Law" means any law, statute, rule, regulation, ordinance and other
pronouncement having the effect of law of the United States of America, any
foreign country or any domestic or foreign state, county, city or other
political subdivision or of any Governmental or Regulatory Body.
8
<PAGE>
"Material Adverse Effect" means a material adverse effect on the
properties, assets, business, liabilities, results of operations or
condition (financial or otherwise) of the Portfolio Company.
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Body, in each case whether preliminary or
final.
"Person" means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental or Regulatory Body or other
entity.
"Securities Act" means the Securities Act of 1933, as amended and the rules
and regulations of the Securities and Exchange Commission thereunder.
"Tax" and "Taxes" means all taxes or other assessments imposed by any
federal, state or local taxing authority, including income, excise,
property, sales, use, ad valorem, and franchise taxes other than applicable
Transfer Taxes.
"Tax Return" means any return, report, information return, or other
document (including any related or supporting information) filed or
required to be filed with any federal, state or local governmental entity
or other authority in connection with the determination, assessment or
collection of any Tax or the administration of any laws, regulations or
administrative requirements relating to any Tax.
11.2 Expenses. Except as otherwise expressly provided herein, whether
or not the transactions contemplated by this Agreement shall be
consummated, each of the parties hereto shall pay its own expenses
(including, without limitation, attorney's and accountants' fees and
out-of-pocket expenses) incident to this Agreement and the transactions
contemplated hereby.
11.3 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall
be given personally, sent by facsimile transmission or sent by prepaid air
courier or certified registered mail, postage prepaid. Any such notice
shall be deemed to have been given (a) when received, if delivered in
person, sent by facsimile transmission and, in the case of facsimile,
confirmed in writing within three (3) Business Days thereafter, or sent by
prepaid air courier or (b) three (3) Business Days following the mailing
thereof, if mailed by registered or certified first class mail, postage
prepaid, return receipt requested, in any such case as follows (or to such
other address or addresses as a party may have advised the other in the
manner provided in this Section 11.3):
If to Sellers:
Paribas Principal, Inc.
and Paribas North America, Inc.
The Equitable Tower
787 Seventh Avenue
New York, NY 10019
Attention: Steve Alexander
Facsimile: (212) 841-2146
and
PAI (Paribas Affaires Industrielles)
3 rue d'antin
75002 Paris
Attention: Herve Couffin
Facsimile: (33-1) 42-98-04-62
<PAGE>
With a copy (which shall not constitute notice) to:
Clifford Chance Rogers & Wells LLP
607 Fourteenth Street NW
Washington, DC 20005-2018
Attention: Anthony F. Essaye, Esq.
Facsimile: (202) 434-0800
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
Attention: Ronald M. Sanders, Esq.
Facsimile: (212) 878-8375
If to Buyers:
QCP Investors, LLC
QCP Investors II, LLC
c/o Quad-C Management, Inc.
230 East High Street
Charlottesville, VA 22902
Attention: Stephen M. Burns
Gary A. Binning
Facsimile: (804) 979-1145
With a copy (which shall not constitute notice) to:
White & Case, LLP
1155 Avenue of the Americas
New York, NY 10036
Attention: John M. Reiss, Esq.
Facsimile: (212) 354-8113.
11.4 Publicity; Confidentiality. Except as may be required by Law, no
publicity release or public announcement concerning this Agreement or the
transactions contemplated hereby shall be made by Buyers or Sellers without
advance approval thereof by each other party hereto. While this Agreement
or the Investors Agreement is in effect and after this Agreement or the
Investors Agreement terminates, each party hereto and its Affiliates shall
keep confidential, and shall not disclose, the terms of this Agreement or
the Investors Agreement to any other Person without the prior consent of
each other party hereto unless (i) the disclosure is in response to legal
order or subpoena, (ii) the terms are readily ascertainable from public or
published information, or trade sources (without violation of the foregoing
provisions of this sentence), (iii) the disclosure is (A) in connection
with any Action or Proceeding in respect of this Agreement or (B) to a
Governmental or Regulatory Body the filing with or consent of which is
required in connection with the transactions contemplated by this Agreement
, (iv) the disclosure is to any officer, director, employee, partner or
agent of any party hereto or of any of its Affiliates or (v) to creditors
or warrant holders of the Portfolio Company.
11.5 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) and the Investors Agreement and the agreements,
certificates and other documents delivered pursuant to this Agreement and
the Investors Agreement contain the entire agreement among the parties
<PAGE>
with respect to the transactions described herein, and supersede all prior
agreements, written or oral, with respect thereto.
11.6 Waivers and Amendments. This Agreement may be amended,
superseded, cancelled, renewed or extended, and the terms hereof may be
waived, only by a written instrument signed by the parties or, in the case
of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof.
11.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of law. Any judicial proceeding brought against any
of the parties to this Agreement on any dispute arising out of this
Agreement or any matter related hereto may be brought in the District Court
for the Southern District of New York or in the courts of the State of New
York located in New York City, and, by execution and delivery of this
Agreement, each of the parties hereto accepts the exclusive jurisdiction of
the aforesaid courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. Each of the Parties
hereto waives the defense of an inconvenient forum to the maintenance of
any such action or proceeding in such courts.
11.8 Binding Effect; No Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective
successors and legal representatives. This Agreement is not assignable by
any party hereto without the prior written consent of the other parties
hereto and any other purported assignment shall be null and void.
11.9 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed
by all of the parties hereto.
11.10 Exhibits and Schedules. The Exhibits and Schedules are a part of
this Agreement as if fully set forth herein. All references herein to
Sections, subsections, clauses, Exhibits and Schedules shall be deemed
references to such parts of this Agreement, unless the context shall
otherwise require.
11.11 Headings. The headings in this Agreement are for reference only,
and shall not affect the interpretation of this Agreement.
11.12 Severability of Provisions. If any provision or any portion of
any provision of this Agreement or the application of such provision or any
portion thereof to any Person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or
portion of such provision as is held invalid or unenforceable to persons or
circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed this Agreement on the date first above written.
PARIBAS PRINCIPAL, INC.
By: /s/ Herve Couffin
-------------------------------------------
Name: Herve Couffin
Title: Director
PARIBAS NORTH AMERICA, INC.
By: /s/ Donna Kiernam
-------------------------------------------
Name: Donna Kiernam
Title: Chief Financial Officer
QCP INVESTORS, LLC
By: Quad-C Partners V, L.P., its sole member
By: Quad-C Advisors V, LLC, its general partner
By: /s/ Stephen M. Burns
-------------------------------------------
Name: Stephen M. Burns
Title: Vice President
QCP INVESTORS II, LLC
By: /s/ Stephen M. Burns
-------------------------------------------
Name: Stephen M. Burns
Title: Managing Member
<PAGE>
SCHEDULE 1.1
ASSETS
<TABLE>
<CAPTION>
Type of Security Number of Shares/Units of the Security Allocated Purchase Price
---------------- -------------------------------------- ------------------------
QCP QCP Total QCP QCP Total
Investors, Investors Investors, Investors
LLC II, LLC LLC II, LLC
<S> <C> <C> <C> <C> <C> <C>
Common Stock, par value $.01 per 204,319 8,181 212,500(1) $897,086 $ 35,921 $933,007
share Shares
Warrants to purchase shares of 479,966 19,219 499,185(2) $ 0.96 $ 0.04 $ 1.00
Common Stock, par value $.01 per Warrants
share, at an exercise price of
$7.24 per share
Total Purchase Price $933,008
</TABLE>
--------
(1) Paribas North America, Inc. is the seller of the Common Stock.
(2) Paribas Principal, Inc. is the seller of the Warrants.
<PAGE>
SCHEDULE 5.3
Freedom to Contract
Warrant Agreement, dated as of July 1, 1995, between Staff Capital, L.P.
and each of Banque Paribas and Pilgrim Prime Rate Trust.
Warrant Agreement, dated as of November 3, 1993, between Staff Capital,
L.P. and Banque Paribas.
Warrant to purchase Common Stock of Staff Leasing, Inc., dated as of June
30, 1997, issued to Paribas Principal Incorporated.
Warrant to purchase Common Stock of Staff Leasing, Inc., dated as of June
25, 1998, issued to Paribas Principal Incorporated.
<PAGE>
SCHEDULE 5.4
Title to Assets
Warrant Agreement, dated as of July 1, 1995, between Staff Capital, L.P.
and each of Banque Paribas and Pilgrim Prime Rate Trust.
Warrant Agreement, dated as of November 3, 1993, between Staff Capital,
L.P. and Banque Paribas.
Warrant to purchase Common Stock of Staff Leasing, Inc., dated as of June
30, 1997, issued to Paribas Principal Incorporated.
Warrant to purchase Common Stock of Staff Leasing, Inc., dated as of June
25, 1998, issued to Paribas Principal Incorporated.
<PAGE>
EXHIBIT 7
*** Indicates that confidential information has been omitted.
INVESTORS AGREEMENT
Between
Paribas Principal, Inc.
and
Quad-C Management, Inc.
<PAGE>
TABLE OF CONTENTS
Page
1. Rights and Duties of Quad-................................................1
1.1 Duties and Rights of Quad-C..........................................1
1.2 Additional Investments...............................................4
2. Compensation..............................................................4
2.1 Fees.................................................................4
2.2 Expenses.............................................................5
3. Term; Termination.........................................................5
3.1 Term.................................................................5
3.2 Termination Upon Default by Quad-C...................................5
3.3 Termination Upon Change in Control of Quad-C.........................6
3.4 Quad-C's Obligations after Termination...............................6
3.5 Effect of Termination................................................6
4. Inspection................................................................6
5. Representations and Warranties............................................7
5.1 Authorization and Enforceability.....................................7
5.2 No Conflict/Consents.................................................7
5.3 Good Standing........................................................7
5.4 Compliance with Laws and Contracts...................................7
5.5 Survivability........................................................8
6. Covenants.................................................................8
6.1 Affiliate Transactions...............................................8
6.2 SBA Compliance.......................................................8
6.3 Confidentiality......................................................8
6.4 Notices..............................................................9
6.5 Indemnification......................................................9
7. Independent Contractor...................................................10
8. Assignment; Successors and Assigns.......................................11
9. No Partnership...........................................................11
10. No Waiver................................................................11
11. Approvals................................................................11
12. Notices..................................................................11
13. Applicable Law; Venue....................................................13
14. Amendments...............................................................13
15. Invalidation.............................................................13
16. Captions.................................................................13
<PAGE>
17. Counterparts.............................................................13
18. Other Business of Quad-C.................................................13
<PAGE>
INVESTORS AGREEMENT
This INVESTORS AGREEMENT (the "Agreement") dated as of the 31st day of July
2000, between Paribas Principal, Inc., a New York corporation ("PPI"), Paribas
North America, Inc., a Delaware corporation ("PNA," and together with PPI, the
"Sellers") and Quad-C Management, Inc. a Delaware corporation ("Quad-C").
WHEREAS, PPI, PNA (in the case of Staff Leasing, Inc. only), QCP Investors,
LLC and QCP Investors II, LLC, each an affiliate of Quad-C (the "Buyers"), have
entered into separate asset purchase agreements, dated as of May 22, 2000 (the
"Purchase Agreements") pursuant to which PPI has agreed to sell certain of its
shares of voting and non-voting common stock, preferred stock, junior
subordinated notes (including one-half of any accumulated unpaid dividends
(including PIK dividends) accrued and unpaid interest (including PIK interest))
and warrants, as the case may be, of five companies (each a "Portfolio Company,"
and collectively, the "Portfolio Companies") and PNA has agreed to sell its
212,500 shares of common stock of Staff Leasing, Inc. as more fully described on
Schedule 1 hereto (such securities, together with any additional securities
subsequently acquired by Quad-C, Buyers or their affiliates in the Portfolio
Companies, being the "Quad-C Assets");
WHEREAS, it is a condition precedent of each of the Purchase Agreements
that the parties enter into this Agreement;
WHEREAS, after the consummation of the transactions contemplated by the
Purchase Agreements, PPI will continue to own securities in each of the
Portfolio Companies and PNA will continue to own securities in Staff Leasing,
Inc. as more fully described on Schedule 1 hereto (such securities, together
with any additional securities subsequently acquired by Sellers or its
affiliates in the Portfolio Companies, being the "Assets"); and
WHEREAS, Sellers desire to permit Quad-C after the consummation of the
transactions contemplated by the Purchase Agreements to exercise certain rights
with respect to the Assets, subject to the terms and conditions provided herein,
and Quad-C is willing to exercise such rights in its discretion;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound thereby, Sellers and Quad-C hereby agree as
follows:
1. Rights and Duties of Quad-C.
1.1 Duties and Rights of Quad-C. Quad-C agrees to perform and shall
have the exclusive right to perform the following:
(a) Sellers hereby grant to Quad-C with respect to all of the
Assets a proxy (which is deemed to be coupled with an interest) (the
"Proxy") for the term of this Agreement with respect to any vote,
action by written consent or other action requested by a Portfolio
Company or Quad-C, which is required or permitted under applicable law
or under the terms of the securities constituting the Assets, and
Quad-C shall have the sole and exclusive right to exercise Seller's
rights under the terms of each Assigned Contract (as defined in the
Purchase Agreements), including, but not limited to the nomination of,
and voting for, any directors of the Board of Directors of each
Portfolio Company and their respective subsidiaries (and any related
committee thereof) and the exercise (in Quad-C's sole discretion) of
any consent, veto or other similar right to any transaction or action
a Portfolio Company and/or its subsidiaries may enter into or take or
otherwise; provided, however, (i) in each case Quad-C shall vote,
consent, or takes such other action with respect to, Quad-C Assets in
the same manner as it
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votes, consents, or takes such other action with respect to the Assets
and (ii) ***. The Proxy shall only terminate and be revoked upon the
termination of this Agreement in accordance with Sections 3.2 and 3.3
hereof.
(b) ***
(c) To determine whether to make an additional investment in a
Portfolio Company and, with respect to any such investment opportunity, to
act in accordance with Section 1.2 hereof.
(d) ***
(e) Sellers acknowledge and agree that Quad-C shall be entitled to
prosecute on behalf of Sellers and the Buyers any indemnity or other claim
Sellers may have against the Portfolio Companies and/or any other party who
sold Sellers securities of the Portfolio Companies, pursuant to the terms
of a subscription, purchase, merger, and/or other similar acquisition
agreement and/or related agreement thereto pursuant to which Sellers
acquired the Assets and the Quad-C Assets and any recovery thereunder shall
be shared pro rata (based on the underlying securities of the relevant
Portfolio Company purchased by the Buyers pursuant to the Purchase
Agreements and retained by Sellers as of the date hereof) between the
Buyers and Sellers.
(f) If any third party consent to the sale of the Quad-C Assets or
assignment of the Assigned Contracts (as defined in each Purchase
Agreement) is not obtained prior to the date hereof, Sellers will cooperate
with Buyers in any reasonable arrangement required by Buyers designed to
provide Buyers with the benefits and obligations under the applicable Asset
and Assigned Contracts, and to allow Quad-C to exercise all of the rights
under the Assigned Contracts and under this Agreement. Without limiting the
generality of the foregoing, Sellers agree during the term of this
Agreement, at the direction of Quad-C, to enforce for the benefit of Buyers
any and all rights of Sellers against any other Person arising out of
breach or cancellation by such other Person under such Assigned Contracts
including, if so requested by Quad-C, acting as an agent on behalf of
Buyers, or taking such other action as Quad-C shall otherwise reasonably
request including, but not limited to, (i) nominating persons selected by
Quad-C to serve on the Boards of Directors of the Portfolio Companies and
their respective subsidiaries (and any related committees thereof), (ii)
exercising any consent, veto or other similar rights Sellers may have with
respect to any transaction or other action any Portfolio Company and/or any
of their respective subsidiaries may enter into or take as so directed by
Quad-C in its sole discretion, (iii) entering into any amendment, consent
or waiver under such Assigned Contracts, (iv) exercising any registration
rights on behalf of Quad-C, Buyers, and Sellers as so directed by Quad-C,
(v) exercising any rights of first-offer for the benefit of Quad-C, Buyers
and Sellers, (vi) exercising any drag-along or similar right for the
benefit of Quad-C, Buyers and Sellers, (vii) accelerating any debt
instruments that may from time to time be included in the Assets and Quad-C
Assets as directed by Quad-C and (viii) otherwise taking such other actions
with respect to the Assets, Quad-C Assets and the Assigned Contract, so as
to enable Quad-C to exercise its rights under this Agreement including
affording Quad-C the ability to sell the Assets on the same basis as it
sells Quad-C Assets and to make all decisions with respect to the Portfolio
Companies.
1.2 Additional Investments.
(a) Quad-C shall, in connection with any additional investment it
and/or any of its affiliates determines to make in a Portfolio Company
(including through the exercise of any preemptive rights), prepare and
submit a written notice of its intention to make such additional investment
and invite PPI, and PNA with respect to Staff Leasing, Inc. only, to
co-invest with Quad-C and/or such affiliate. Such notice shall describe (i)
the number and type of securities to be acquired, (ii) the price
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thereof, (iii) the financing for such acquisition, if any, (iv) the
expected timing of such investment and the other material terms and
conditions upon which Quad-C contemplates making such investment, (v) the
business purpose of the investment, and (vi) pro forma budgets and
forecasts for the Portfolio Company upon the consummation of the proposed
investment (it being understood that Quad-C shall not have any liability
whatsoever to PPI or PNA, as the case may be, and/or their officers,
directors, partners, employees, agents and affiliates with respect to such
budgets and forecasts) and PPI or PNA, as the case may be, shall have
fifteen (15) business days to respond to the notice and elect to
participate in the proposed transaction. If PPI or PNA, as the case may be,
has not so responded at the end of such period, Sellers shall be deemed to
have rejected the proposal.
(b) If PPI or PNA, as the case may be, agrees to participate, Quad-C
and/or such affiliate will negotiate definitive documentation with respect
to such investment and shall supervise the closing of such investment. The
investment will be allocated between PPI or PNA, as the case may be, and
Quad-C and/or such affiliate in the same proportion as their then current
ownership interest in the particular Portfolio Company.
(c) If PPI or PNA, as the case may be, declines to participate in such
transaction, or is deemed to decline to so participate, Quad-C and/or such
affiliate may still consummate the transaction. * * *
2. Compensation.
2.1 Fees.
(a) Quad-C shall only receive, pursuant to the Purchase Agreements,
the assignment of all fees (but not including any dividends or other
distributions declared and/or paid on any of the Assets after the date
hereof) (the "Fees") payable by the Portfolio Companies to PPI as listed on
Schedule 4 hereof pursuant to the various shareholder agreements, advisory
services agreements, and financial services advisory agreements listed on
Schedule 4(a) hereof (the "Portfolio Agreements"), which Fees shall be
pro-rated for the current year; provided, however, that PPI has no personal
liability or responsibility to personally pay the Fees, other than Fees
received by PPI from a Portfolio Company which should have been paid to
Quad-C pursuant to this Agreement (including any fees which have been
prepaid for the period (or any portion thereof) after the date hereof which
fees shall be paid to Quad-C upon the execution of this Agreement). PPI
acknowledges that if payments of the fees to Quad-C is restricted pursuant
to any contract, agreement or understanding between the Portfolio Company
and any other person, that such Fees shall accrue and be payable to Quad-C
as soon as permissible under any such agreement, contract or understanding
(which may be upon the sale of the Portfolio Company).
(b) ***
(c) ***
2.2 Expenses. ***
3. Term; Termination.
3.1 Term. The term of this Agreement shall commence on the date hereof
and shall continue so long as Sellers continue to own any Asset.
3.2 Termination Upon Default by Quad-C. Sellers shall jointly have the
right to terminate this Agreement, upon written notice thereof given to
Quad-C, in the event of (a) Quad-C's
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(i) filing a petition seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other applicable
federal, state or foreign bankruptcy or other similar law, or (ii)
consenting to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or
similar official) of Quad-C or of any substantial part of its properties or
assets, or (iii) the liquidation, dissolution or winding up of Quad-C; or
(b) a material default by Quad-C in the performance of or in compliance
with any of the material covenants or agreements of Quad-C, the Buyers, or
their affiliates contained in this Agreement (including, without
limitation, the conviction of fraud or willful misconduct of Quad-C in a
court of competent jurisdiction), if such material default shall continue
for a period of thirty (30) days after written notice thereof shall have
been given to Quad-C by Sellers; provided, however, that (i) Quad-C shall
have no right to cure any default resulting from Quad-C's fraud, willful
misconduct or gross negligence or if such default is not capable of being
cured (ii) Quad-C shall have such longer period of time not to exceed an
additional sixty (60) days, to cure such default if such default is not
capable of being cured within thirty (30) days but is capable of being
cured in such longer period and Quad-C has commenced such cure within
thirty (30) days and is diligently pursuing such cure and (iii) Quad-C
shall have such longer period of time to cure such default if such default
is not capable of being cured within the ninety (90) day period specified
in subclause (ii) above unless such breach is a result of an act not in the
reasonable control of Quad-C not resulting from Quad-C's fraud, willful
misconduct or gross negligence (including, but not limited to, the
bankruptcy, liquidation or assignment for the benefit of creditors of any
Portfolio Company, any general cessation of trading in the financial
markets, any general banking moratorium, war, hostilities, revolution,
natural disasters, and other acts of God), in which case, Quad-C shall have
a reasonable time to cure such breach provided Quad-C is diligently
pursuing such cure.
3.3 Termination Upon Change in Control of Quad-C. ***
3.4 Quad-C's Obligations after Termination.
(a) For a period of ninety (90) days after such termination, Quad-C
shall make itself available to consult with Sellers or any other person or
persons designated by Sellers with respect to the Assets.
3.5 Effect of Termination. If this Agreement is terminated for any reason
other than pursuant to Section 3.2(b) (other than by reason of a violation of
subclause (i) of the proviso of the first sentence of Section 1.1(a) * * *.
4. Inspection. Quad-C will keep at its principal office and will make
available to representatives and agents of Sellers, for inspection and copying,
at their reasonable request and during normal business hours and upon reasonable
notice, copies of all documents and financial records which are relevant to the
Assets and which are received by Quad-C in connection with the performance of
its duties under this Agreement (including for a ninety (90) day period
following the termination of this Agreement.) If requested by Sellers, Quad-C
shall promptly furnish copies of such documents directly to Sellers; provided
that the cost of providing such copies is reasonable in the sole discretion of
Quad-C and if the cost is not reasonable, Quad-C shall furnish such copies at
the expense of Sellers.
5. Representations and Warranties. Each of PPI, PNA and Quad-C (the
"Parties," and individually, a "Party") jointly represent and warrant to each
other the following:
5.1 Authorization and Enforceability. Such Party has all requisite power
and authority under applicable law to execute and deliver this Agreement and any
agreement related hereto and to perform its obligations hereunder and or under
such agreements and to consummate and perform the
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transactions contemplated hereby or thereby. This Agreement has been duly
authorized, executed and delivered by such Party and constitutes a valid and
binding agreement of such party enforceable against such Party in accordance
with its terms except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding brought in equity or at law).
5.2 No Conflict/Consents. The execution, delivery and performance of this
Agreement and any other agreement related hereto by such Party and the
consummation of the transactions contemplated hereby and thereby do not, and
will not, violate or be in conflict with, or constitute a breach of or default
(or an event which, with notice or lapse of time or both, would constitute a
default) under the terms of any applicable law, order, judgement, instrument, or
any contract, license, organizational documents or other agreement to which such
Party is a party or by which such Party, or the Assets or Quad-C Assets are
bound or that would prevent the consummation or performance of the transactions
contemplated hereby, and except as specifically provided for herein, no consent
or approval is necessary in order to permit such Party to execute and deliver
this Agreement and perform its duties and obligations hereunder.
5.3 Good Standing. Such Party is duly organized, validly existing and in
good standing in the state of its formation, with full power and authority to
own its assets and carry on its business. Such Party is duly qualified and
licensed in each jurisdiction in which the character or location of assets
owned, leased or operated by it or the business conducted by it makes such
qualification or licensing necessary except where the failure to be duly
qualified or licensed or in good standing would not reasonably be expected to
have a material adverse effect on Sellers or, as the case may be, Quad-C or on
the ability of Sellers or, as the case may be, Quad-C to perform its respective
obligations under this Agreement.
5.4 Compliance with Laws and Contracts. Such Party will comply, and will
cause its affiliates to comply, in all material respects with (i) all applicable
laws and regulations in connection with the transactions contemplated herein,
(ii) the provisions of this Agreement, the Purchase Agreement and the Assignment
Agreement, (iii) all agreements and instruments by which the Parties, the
Portfolio Companies or the Assets or Quad-C Assets are bound, (iv) all
applicable decrees, orders and judgments and (v) all required approvals, permits
and licenses. If at any time any authorization, consent, approval, permit or
license from any third-party or officer, agency or instrumentality of any
government shall become necessary or required in order to consummate and perform
the transactions contemplated hereby, such Party will promptly take or cause to
be taken all reasonable steps within its power to obtain such authorization,
consent, approval, permit or license.
5.5 Survivability. The representations and warranties of the Parties under
this Section 5 shall survive the execution and delivery of this Agreement.
6. Covenants.
6.1 Affiliate Transactions. Except for the transactions contemplated by any
other agreement, arrangement or understanding between Quad-C and/or its
affiliates and the Portfolio Companies entered into prior to the date hereof and
listed on Schedule 5 hereto, Quad-C hereby covenants that it may not, nor shall
it permit any of its affiliates to enter into any transaction involving the
Assets or the Portfolio Companies or any of their affiliates other than ordinary
commercial transactions involving the routine sale of goods or services on
market terms and other than the transactions contemplated by this Agreement
without obtaining the consent of Sellers.
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6.2 SBA Compliance. Quad-C shall allow PPI, and PPI agrees to use its
reasonable best efforts, to promptly take any and all actions as are reasonably
necessary to permit PPI to comply with the Small Business Administration Act and
the rules and regulations thereunder (the "SBA Rules") in connection with its
ownership of any of the Assets or any of the securities comprising the Assets.
After taking such actions, in the event PPI is unable to comply with the SBA
Rules, it shall have a right to terminate this Agreement with respect to such
Asset or security with which it is not in compliance with the SBA Rules and PPI
and Quad-C will rely on other agreements (including, but not limited to any
existing shareholders agreement to which PPI and any Portfolio Company is a
party) and/or use good faith efforts to enter into other agreements that comply
with the SBA rules in order to provide Quad-C and PPI with substantially the
same benefits, obligations and protections contained herein.
6.3 Confidentiality. Each of the parties hereto hereby agrees that
throughout the term of this Agreement it shall keep (and shall cause its
directors, officers, partners, employees, representatives and outside advisors
and its affiliates to keep) the terms of this Agreement and all non-public
information relating to any of the Portfolio Companies (including any such
information received prior to the date hereof) confidential except information
which (i) becomes known to such party from a source, other than a Portfolio
Company, its directors, officers, partners, employees, representatives or
outside advisors pursuant to the terms of this Agreement, which source is not
known to be obligated to such Portfolio Company to keep such information
confidential or (ii) becomes generally available to the public through no breach
of this Agreement by any party hereto. Each of the parties hereto agrees that
such non-public information will not be used by such party or its directors,
officers, partners, employees, representatives, outside advisors or affiliates
either to compete with any Portfolio Company or to conduct itself in a manner
inconsistent with the antitrust laws of the United States or any State.
Notwithstanding the foregoing, a party hereto may disclose non-public
information (a) to a creditor or warrant holder of the Portfolio Company or (b)
if required to do so by a court of competent jurisdiction or by any governmental
agency, provided, however, that prompt notice of such disclosure be given to the
other party prior to the making of such disclosure so that such party may seek a
protective order or other appropriate remedy. In the event that such protective
order or other remedy is not obtained, the party hereto required to disclose the
non-public information will disclose only that portion which such party is
advised by opinion of counsel is legally required to be disclosed and will
request that confidential treatment be accorded such portion of the non-public
information.
6.4 Notices. Quad-C shall promptly and in any case within ten (10) Business
days of learning of the same, notify Sellers in writing of (i) any breach of
this Agreement, the Purchase Agreement or the Assigned Contracts, (ii) any
material change in control of Quad-C or any Portfolio Company, (iii) the
termination of any Senior Executive or the nomination of, or removal of, any
director from the Board of Directors of any Portfolio Company or any of its
subsidiaries (or any related committee thereof), (iv) of the bankruptcy,
liquidation or dissolution of Quad-C or any Portfolio Company, (v) any sale of
any Asset or Quad-C Asset, (vi) Quad-C shall routinely notify PPI as of any
votes, consents or other actions (including nominations and votes for directors
on the Board of Directors of a Portfolio Company, its subsidiaries or any
related committee thereof) taken with respect to the Assets, Quad-C Assets and
the Assigned Contracts and (vii) of any material marketing, negotiation and
sales activities with respect to the Assets, Quad-C Assets or the Portfolio
Companies and any other material actions of, or events concerning, the Portfolio
Companies. Quad-C shall keep Sellers informed with reasonable promptness of (i)
any material offer received or expression of interest to purchase all or any
portion of the Assets, Quad-C Assets, or the Portfolio Companies or (ii) any
material litigation relating to the Assets, the Quad-C Assets, Quad-C (but only
in connection with the services rendered hereunder) or any Portfolio Company.
6.5 Indemnification.
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(a) BNP Paribas ("BNP") and Sellers shall jointly indemnify, to the
fullest extent permitted by law, the Manger, its officers, directors,
partners, employees, affiliates and agents, and any successors thereto (and
any officers, directors, partners, employees, affiliates and agents of such
successors) (each, a "Quad-C Indemnified Person," and collectively the
"Quad-C Indemnified Persons") harmless from any liability (whether fixed or
unfixed, liquidated or unliquidated), actual or punitive damage,
deficiency, demand, claim, suit, action or cause of action (and any
investigation in connection therewith), fine, penalty, loss, cost or
expense, including, without limitation, reasonable attorneys' fees and
expenses ("Damages"), incurred or suffered as a result of, or in connection
with, or arising out of (i) the transactions contemplated by this Agreement
and the Purchase Agreements (including, but not limited to, any sale of any
of the Assets by Quad-C on behalf of Sellers) or (ii) any other actions
taken by Quad-C hereunder, except if such Damages are determined by a court
of competent jurisdiction to be the result of gross negligence, fraud,
intentional misconduct on the part of Quad-C or the material breach of any
obligation hereunder. Without limiting the generality of the foregoing and
in addition thereto, BNP and Sellers shall also jointly indemnify and hold
harmless each Quad-C Indemnified Party against any and all Damages
resulting from any claim, suit, action or cause of action (and any
investigation in connection therewith) by any officer, director, partner,
employee, affiliate and agent of BNP and/or Sellers and/or any participant
in BNP's and/or each Seller's "carried interest" program or other
compensation arrangement between BNP and/or Sellers and such person or
persons that relate to or involve any of the Assets or Quad-C Assets, which
claim, suit, action or cause of action (and any investigation in connection
therewith) results from, or is in connection with or arises out of the
transactions contemplated by this Agreement and the Purchase Agreements
(including, but not limited to, any sale of any of the Assets by Quad-C on
behalf of PPI). Quad-C Indemnified Persons shall first pursue any claim for
indemnification under this Section 6.5(a) against Sellers, and to the
extent it recovers less than the full amount of its Damages or if Sellers
do not have sufficient liquid assets to satisfy any such indemnity claim,
BNP shall pay such shortfall.
(b) Quad-C shall indemnify, to the fullest extent permitted by law,
BNP, Sellers, their officers, directors, partners, employees, affiliates
and agents, and any successors thereto (and any officers, directors,
partners, employees, affiliates and agents of such successors) (each, a
"Seller Indemnified Person," and collectively the "Seller Indemnified
Persons" and collectively with Quad-C Indemnified Parties, the "Indemnified
Parties") harmless from any Damages ("Damages"), incurred or suffered as a
result of, or in connection with, or arising out of (i) the gross
negligence, fraud or intentional misconduct on the part of Quad-C in
connection with any action taken by Quad-C hereunder.
(c) Any Indemnified Party entitled to indemnification under the
provisions of this Section 6.5 shall (i) give prompt notice to the
indemnifying party of any claim, suit, action or cause of action (and any
investigation in connection therewith) with respect to which it seeks
indemnification, (ii) be entitled to defend (and settle) such claim, suit,
action or cause of action (and any investigation in connection therewith)
and (iii) be entitled to the advancement of expenses to the full extent
contemplated in this Section 6.5 in connection with any such claim, suit
action, or cause of action (and any investigation in connection therewith).
(d) If for any reason the foregoing indemnify is unavailable, then
indemnifying party shall contribute to the amount paid or payable by the
Indemnified Party as a result of such Damages (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and the Indemnified Party on the other or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law
or provides a lesser sum to the Indemnified Party than the amount
hereinafter calculated, in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnifying party on the one
hand and the Indemnified Party on the other but also the relative fault of
the indemnifying party and the Indemnified Party as well as any other
relevant equitable considerations.
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(e) Notwithstanding anything to the contrary contained herein, BNP's
and Sellers' aggregate liability under Sections 6(a) and (d) hereunder
shall be limited to * * *.
7. Independent Contractor. At all times during the term of this Agreement,
Quad-C and its agents and employees, shall be and act as independent contractors
and shall not be nor be deemed to be employees of Sellers.
8. Assignment; Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and the Indemnified Parties, and
shall not be assignable.
9. No Partnership. Nothing in this Agreement shall be construed as creating
a Partnership or joint venture between Sellers and Quad-C with respect to the
use, operation or sale of all or any portion of the Assets.
10. No Waiver. No failure or delay on the part of any party in exercising
any right, privilege, power, or remedy under this Agreement, and no course of
dealing shall operate as a waiver of any such right, privilege, power or remedy;
nor shall any single or partial exercise of any right, privilege, power or
remedy under this Agreement preclude any other or further exercise of any such
right, privilege, power or remedy or the exercise of any other right, privilege,
power or remedy. No waiver shall be asserted against any party unless signed in
writing by such party. The rights, privileges, powers and remedies available to
the parties are cumulative and not exclusive of any other rights, privileges,
powers or remedies provided by statute, at law, in equity or otherwise. Except
as provided in this Agreement, no notice to or demand on any party in any case
shall entitle such party to any other or further notice or demand in any similar
or other circumstances or constitute a waiver of the right of the party giving
such notice or making such demand to take any other or further action in any
circumstances without notice of demand.
11. Approvals. Each of Quad-C and Sellers shall act promptly and reasonably
in exercising its right to approve or disapprove of any document, proposal,
report, selection or other request submitted to it for approval under the terms
of this Agreement.
12. Notices. Any notices, demand, report, consent, instruction, approval,
waiver or other communication (collectively "Notice") required or permitted to
be given pursuant to any provisions of this Agreement, shall be deemed duly
given only when in writing, signed by or on behalf of the person giving the
same, and either (i) personally delivered (with receipt acknowledged), (ii) sent
by telefax (with appropriate fax generated confirmation of receipt), (iii) sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed to the person or persons to whom such Notice is to be given, or (iv)
sent by any nationally known overnight delivery service, in each case at the
address set forth for such party below, or at such other address as shall have
been set forth in a Notice sent pursuant to the provisions of this Section 12:
To Quad-C and Buyers :
Quad-C Management, Inc.
230 East High Street
Chartlottesville, VA 22902
Fax: (804) 979- 1145
Attention: Stephen M. Burns
Gary A. Binning
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with a copy (which shall not constitute notice) to:
White & Case, LLP
1155 Avenue of the Americas
New York, NY 10036
Attention: John M. Reiss, Esq.
Facsimile: (212) 354-8113.
To Sellers:
Paribas Principal, Inc.
and Paribas North America
The Equitable Tower
787 Seventh Avenue
New York, NY 10019
Attention: Steve Alexander
Facsimile: (212) 841-2146
and
PAI (Paribas Affaires Industrielles)
3 rue d'antin
75002 Paris
Attention: Herve Couffin
Facsimile: (33-1) 42-98-04-62
with a copy (which shall not constitute notice) to:
Clifford Chance Rogers & Wells LLP
607 Fourteenth St., N.W.
Washington, DC 20005
Fax: (202) 434-0800
Attention: Anthony F. Essaye, Esq.
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, NY 10166
Fax: (212) 878-8375
Attention: Ronald M. Sanders, Esq.
Notwithstanding any provision herein to the contrary, any routine reports
required by this Agreement to be submitted to Sellers at specified times may be
sent by first-class mail. All Notices shall be deemed given when properly sent.
The time to respond to any such Notice shall run from the date (i) when received
or receipt is refused, or (ii) upon failure of delivery because notice of a
change of address has not been given in accordance with the terms of this
Section 12.
13. Applicable Law; Venue. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without reference to any conflict
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of law or choice of law principles of any State that might apply the law of
another jurisdiction. Each of the parties hereto hereby irrevocably agrees that
the courts of the State of New York located in New York City and the District
Court for the Southern District of the State of New York shall have exclusive
jurisdiction in connection with any actions or proceedings arising between the
parties under, relating to, arising out of or in connection with this Agreement.
Each of the parties hereby irrevocably consents and submits to the jurisdiction
of said courts for any such action or proceeding and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. Each
of the parties hereby waives the defense of an inconvenient forum to the
maintenance of any such action or proceeding in said courts.
14. Amendments. This Agreement may not be amended, modified, discharged or
changed in any respect whatsoever, except by a further agreement in writing duly
executed by the parties hereto.
15. Invalidation. Invalidation or unenforceability of any one or more of
the provisions of this Agreement shall in no way affect any of the other
provisions hereof, which shall remain in full force and effect.
16. Captions. The captions or headings of this Agreement are for
convenience of reference only, and in no way define, describe, extend or limit
the scope of intent of this Agreement or the meaning or intent of any provision
hereof.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which counterparts shall be deemed an original, but all of
which when taken together shall be deemed one original.
18. Other Business of Quad-C. Quad-C and any of its officers, directors,
partners, employees and affiliates may engage in or possess an interest in any
other business venture of any kind, nature or description, independently or with
others, whether or not such ventures are competitive with any Portfolio Company,
notwithstanding that representatives of Quad-C or any of its affiliates are
serving on the Boards of Directors of any Portfolio Company. Nothing in this
Agreement shall be deemed to prohibit Quad-C and/or any of its officers,
directors, partners, employees and affiliates from dealing, or otherwise
engaging in business, with persons transacting business with any Portfolio
Company. Sellers and their affiliates shall not have any rights or obligations
by virtue of this Agreement or the Purchase Agreements, in or to any independent
venture of Quad-C and/or any of its officers, directors, partners, employees and
affiliates, or the income or profits or losses or distributions derived
therefrom , and such venture shall not be deemed wrongful or improper even if
competitive with the business of any Portfolio Company.
10
<PAGE>
IN WITNESS WHEREOF, the parties have caused this instrument to be executed
as of the day and year first above written.
QUAD-C MANAGEMENT, INC.
By: /s/ Gary A. Binning
-------------------------------------------
Name: Gary A. Binning
Title: Vice President
PARIBAS PRINCIPAL, INC.
By: /s/ Steve Alexander
-------------------------------------------
Name: Steve Alexander
Title: President
PARIBAS NORTH AMERICA, INC.
By: /s/ Donna Kiernam
-------------------------------------------
Name: Donna Kiernam
Title: Chief Financial Officer
QCP INVESTORS, LLC
By: Quad-C Partners V, L.P., its sole member
By: Quad-C Advisors V, LLC, its general partner
By: /s/ Gary A. Binning
-------------------------------------------
Name: Gary A. Binning
Title: Vice President
QCP INVESTORS II, LLC
By: /s/ Gary A. Binning
-------------------------------------------
Name: Gary A. Binning
Title: Vice President
<PAGE>
SCHEDULE 1
Quad-C Assets:
Portfolio Company Stock Warrants Subordinated Notes
***
Staff Leasing, Inc. 212,500 Shares of 499,185 Warrants to None
Common Stock, par purchase 499,185
value $.01 per share Shares of Common
Stock, par value
$.01 per share
<PAGE>
SCHEDULE 1
Assets:
Portfolio Company Stock Warrants Subordinated Notes
***
Staff Leasing, Inc. 212,500 Shares of 499,185 Warrants to None
Common Stock, par purchase 499,185
value $.01 per Shares of Common
share(3) Stock, par value
$.01 per share
----------
(3)Owned by PNA
<PAGE>
SCHEDULE 2
***
<PAGE>
SCHEDULE 3
***
<PAGE>
SCHEDULE 4
Portfolio Company Fees
***
Staff Leasing, Inc. N/A
<PAGE>
SCHEDULE 4(a)
***
