SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
Form 10-Q/A
AMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
November 30, 1997
(Date of Report)
STAFF BUILDERS, INC.
(Exact name of registrant as specified in its charter)
Commission file number 0-11380
Delaware 11-2650500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1983 Marcus Avenue, Lake Success, New York 11042
(Address of principal executive offices) (Zip Code)
(516) 358-1000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
The Registrant hereby amends Item 6. of its Current Report on
Form 10-Q dated January 14, 1998 to add electronic copies of two exhibits
which were not contained in the Form 10-Q as filed electronically on
January 14, 1998 but for which paper copies were filed pursuant to a
temporary hardship exemption:
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant for the quarter
ended November 30, 1997.
(B) Exhibits
Exhibit No.
10.7 Shareholders Agreement between Raymond T. Sheerin
and Michael Altman and Stephen Fleischner and the
Company and Chelsea Computer Consultants, Inc.,
dated September 24, 1996.
10.8 Amendment No. 1 to Shareholders Agreement among
Chelsea Computer Consultants,Inc., Raymond T.
Sheerin, Michael Altman and the Company, dated
October 30,1997.
-2-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Staff Builders, Inc.
Dated: January 20, 1998 By: /s/ Stephen Savitsky
Stephen Savitsky
Chairman of the Board, President
and Chief Executive Officer
Dated: January 20, 1998 By: /s/ Gary Tighe
Gary Tighe
Senior Vice President, Finance
(Principal Financial and
Accounting Officer)
-3-
EXHIBIT
10.7<PAGE>
SHAREHOLDERS
AGREEMENT
between
RAYMOND T. SHEERIN
and
MICHAEL ALTMAN
and
STEPHEN FLEISCHNER
and
STAFF BUILDERS, INC.
and
CHELSEA COMPUTER CONSULTANTS, INC.
<PAGE>
INDEX
PARAGRAPH SUBJECT PAGE
FIRST: REPRESENTATIONS AS TO COMMON STOCK
OWNERSHIP 2
SECOND: PROCEDURE REQUIRED IN SALE OF
COMMON STOCK 3
A. VOLUNTARY 3
(1)VOLUNTARY SALE WITH WRITTEN
CONSENT OF ALL OTHER
SHAREHOLDERS 3
(2)VOLUNTARY SALE WITHOUT
WRITTEN CONSENT 4
THIRD: DETERMINATION OF PURCHASE PRICE
IN THE EVENT OF VOLUNTARY SALE 6
(A) CERTIFIED AND AGREED UPON VALUE 6
(B) PROCEDURE TO ESTABLISH VALUE OF
ISSUED AND OUTSTANDING COMMON
STOCK OF THE CORPORATION 7
(C) BOOK VALUE OF ISSUED AND
OUTSTANDING COMMON STOCK
OF THE CORPORATION 8
FOURTH: METHOD OF PAYMENT IN THE
EVENT OF VOLUNTARY SALE 9
(A) CLOSING DATE 9
(B) PAYMENT OF PURCHASE PRICE 10
FIFTH: SALE IN THE EVENT OF TOTAL
DISABILITY 10
(A) ABSOLUTE OBLIGATION OF DISABLED
SHAREHOLDER TO SELL AND
CORPORATION TO PURCHASE STOCK OF
DISABLED SHAREHOLDER 10
(B) TOTAL DISABILITY 12
(C) PURCHASE PRICE 12
<PAGE>
SIXTH: OBLIGATION OF THE ESTATE OF A
DECEASED SHAREHOLDER TO SELL
AND THE CORPORATION OR
REMAINING SHAREHOLDERS TO
PURCHASE ALL COMMON STOCK
OF A DECEASED SHAREHOLDER 13
(A) INTENT 13
(B) PURCHASE PRICE OF DECEASED
SHAREHOLDER'S COMMON STOCK
INTEREST 13
SEVENTH: PAYMENT OF PURCHASE PRICE TO
ESTATE OF A DECEASED
SHAREHOLDER 13
EIGHTH: SELLER'S RIGHTS UPON REFUSAL OR
FAILURE OF CORPORATION TO
PURCHASE 14
NINTH: SPECIFIC PERFORMANCE 15
TENTH: SHAREHOLDER VOTING 16
ELEVENTH: NON-COMPETE AND NON-DISCLOSURE 17
TWELFTH: LEGEND UPON STOCK CERTIFICATE 18
THIRTEENTH: DOCUMENTARY STAMPS AND
DOCUMENTS 18
FOURTEENTH: CONSTRUCTION 19
FIFTEENTH: LAW GOVERNING 19
SIXTEENTH: BENEFIT 19
SEVENTEENTH: AFTER-ACQUIRED COMMON STOCK 20
EIGHTEENTH: KEYMAN INSURANCE 20
<PAGE>
SHAREHOLDERS AGREEMENT
AGREEMENT made this ...... day of September, 1996 among
Chelsea Computer Consultants, Inc., a domestic corporation duly
organized and existing under and by virtue of the laws of the state of
NEW YORK, having its principal place of business at 156 Fifth
Avenue, New York, New York 10010, (hereinafter referred to as the
"CORPORATION"), Raymond T. Sheerin, residing at 161 West 15
Street, New York, New York 10012 (hereinafter referred to as
"Sheerin"), Michael Altman residing at 131 5th Avenue, New York,
New York 10003 (hereinafter referred to as "Altman"), Stephen
Fleischman, residing at 4 Ceder Mill Lane, North Salem, New York
10560 (hereinafter referred to as "Fleischman") , and Staff Builders,
Inc., with its principal place of business at 1983 Marcus Avenue, C.B.
7011, Lake Success, New York 11042 (hereinafter referred to as "SB,
Inc.") (Each of the shareholders above are sometimes referred to herein
collectively as "SHAREHOLDERS").
W I T N E S S E T H :
WHEREAS, the CORPORATION has the authority to issue
1000 shares of common stock, $1.00 par value; and
WHEREAS, the signatories to this Agreement are the sole and
only holders of shares of common stock of the CORPORATION; and
WHEREAS, the parties acknowledge that their respective
ownership of the common stock of the CORPORATION has placed
upon them certain obligations relative to said common stock ownership
as specified herein; and
WHEREAS, the parties desire to set forth the limitations, terms
and conditions under which their respective common stock interests
may be sold, pledged, transferred, or hypothecated, and the
restrictions upon ownership of said common stock.
NOW, THEREFORE, IT IS MUTUALLY AGREED BY AND
BETWEEN THE RESPECTIVE PARTIES HERETO AS FOLLOWS:
FIRST: REPRESENTATIONS AS TO COMMON STOCK
OWNERSHIP
The SHAREHOLDERS represent and warrant that each is the owner
and holder of the number of shares of the capital common stock of the
CORPORATION as specified below, and that all of said shares are
owned free and clear of all liens and encumbrances:
PERCENTAGE
NAME OF NUMBER OF COMMON ISSUED AND
SHAREHOLDER SHARES OWNED OUTSTANDING
Raymond T.Sheerin 364 1/2 36.45%
Michael Altman 364 1/2 36.45%
Stephen Fleischner 81 8.10%
Staff Builders, Inc. 190 19.00%
SECOND: PROCEDURE-REQUIRED IN SALE OF
COMMON STOCK
A. VOLUNTARY SALE
Each of the parties hereto agrees not to sell, assign,
transfer, mortgage, alienate, hypothecate or in any way encumber or
dispose of the shares of common stock of the CORPORATION which
each now owns or which each may hereafter acquire, or any part
thereof, without the express written consent of the CORPORATION
and all of the then existing shareholders, except after the exercise or
non-exercise of the Option, Second Option, First Repurchase Option
and Second Repurchase Option as set forth in certain Stock Purchase
Agreement By and Among Staff Builders, Inc. and Raymond T.
Sheerin, Michael Altman, Stephen Fleishner and Chelsea Computer
Consultants, Inc. dated as of September 24, 1996 ("Stock Purchase
Agreement") and then only under the following specific terms and
conditions:
(1) VOLUNTARY SALE WITH WRITTEN CONSENT
OF ALL OTHER SHAREHOLDERS
The party desiring to dispose of or encumber his or its shares
ofcommon stock must first obtain the written consent of all the other
SHAREHOLDERS. Only with the express written consent of all the
other
SHAREHOLDERS may less than all the SHAREHOLDERS common
stock be sold. If the express written consent is not obtained and the
selling SHAREHOLDER proceeds with the sale by complying with the
requirements under the further paragraphs of this section, such
SHAREHOLDER shall then be required to dispose of his or its entire
common stock interest as well as comply with the provisions of this
section.
(2) VOLUNTARY SALE WITHOUT WRITTEN CONSENT
In the absence of such express, written consent, the party
desiring to dispose of or encumber his or its common stock shall give
to the CORPORATION and to each of the other SHAREHOLDERS
written notice, by registered or certified mail, of his or its intention to
sell, and such notice shall contain an offer to sell all of his or its
common stock in accordance with the terms of this agreement. Within
(30) days after the date of such notice, the SHAREHOLDER giving
such notice shall sell and the CORPORATION shall be obligated to
purchase all of the SHAREHOLDER's common stock on the terms and
conditions recited herein, provided the CORPORATION has available
surplus pursuant to law to accomplish said purchase. The purchase
price and method of payment shall be determined as is set forth below.
If at the time the CORPORATION is required to make
payment of the purchase price its surplus is insufficient for such
purposes, then the following shall occur:
(a) The entire available surplus shall be used to purchase
that portion of the common stock as is appropriate, based upon the
common stock value as determined herein. Any remaining common
stock for which the CORPORATION does not have adequate funds to
make payment may then be purchased by each of the then
SHAREHOLDERS in the ratios of their then ownership should they so
desire.
(b) If the CORPORATION does not, or is unable, to reduce
the capital of the CORPORATION so that the required surplus is
available, then all of such common stock shall be offered to the other
SHAREHOLDERS who shall have the option among them, to purchase
all, but not less than all, of such common stock. Each of the
SHAREHOLDERS shall purchase such portion of the common stock
offered for sale as the number of shares owned by them at such date
bears to the total number of common shares owned by all of the other
SHAREHOLDERS provided, however, that if any SHAREHOLDER
does not purchase his full proportionate share of the common stock the
unaccepted stock may be purchased by the others proportionately.
(c) In the event of a voluntary sale as described above, the
method of establishing the value of the common stock and of payment
shall be similar whether the purchase is by the CORPORATION,
individual SHAREHOLDERS, or between them.
THIRD: DETERMINATION OF PURCHASE PRICE
IN THE EVENT OF VOLUNTARY SALE
The parties acknowledge that it is in their best interest to
establish a value of the total authorized, issued and outstanding
common stock of the CORPORATION at this time so that in the event
a respective SHAREHOLDER desires or is obliged to sell his or its
common stock as required herein, a pre-determined and agreed upon
basis shall exist by which the value of his common stock is established
and "agreed upon" in advance.
In the event there is a desire on the SHAREHOLDER'S part to
sell voluntarily, the value of the selling SHAREHOLDER'S common
stock shall then be established and determined on the following basis,
which shall be absolutely binding and controlling on the
SHAREHOLDER:
(A) CERTIFIED AND AGREED UPON VALUE
The parties shall endeavor, upon the execution of this
agreement, to arrive at an "agreed upon" value of the total, authorized,
issued and outstanding common stock of the CORPORATION, so that
there will be a recognized, established and "agreed upon" value of the
common stockholding of each SHAREHOLDER, which shall be
deemed irrefutable, absolute and binding (See Exhibit "A").
The parties acknowledge that they intend, during the first
week of April of each calendar year commencing in 1997, to
unconditionally and firmly establish an "agreed upon" value of all the
issued and outstanding common stock of the CORPORATION for the
ensuing year. This "agreed upon" determination will be deemed
irrefutable and absolute and not subject to review by any
SHAREHOLDER of his Estate, at a subsequent date and shall expire 1
year after establishment of same unless extended by the written
consent of all parties.
To establish this "agreed upon" value, agreement in writing
must be achieved on a unanimous basis, by each SHAREHOLDER.
(B) PROCEDURE TO ESTABLISH VALUE OF ISSUED AND
OUTSTANDING COMMON STOCK OF THE CORPORATION
In the event a unanimous certification is not established as
provided for in subdivision (A) above, a method of determining the
value of the common stock of the CORPORATION shall be as follows:
The value of the total, authorized, issued and outstanding
common stock of the CORPORATION shall be as set forth in the last
written agreement executed by each and every common
SHAREHOLDER setting forth the certified and agreed upon value of
said common stock unless same has expired, or in the absence of any
such agreement the value of said common stock shall be book value as
determined in accordance with subdivision (C).
( C ) BOOK VALUE OF ISSUED AND OUTSTANDING
COMMON STOCK OF THE CORPORATION
Whenever in this agreement the term "book value" is used, it
shall mean the book value of the common shares of the
CORPORATION, as of the applicable date, as determined by the
accountant or accounting firm then servicing the CORPORATION,
and shall be binding upon the CORPORATION and upon all parties
bound by the terms of this agreement. Such determination shall be
made in accordance with sound accounting practice and the following
shall be observed:
(1) No allowances of any kind shall be made for goodwill,
trade name, or any similar intangible asset.
(2) All accounts payable shall be taken at the face amount,
less discounts deductible therefrom, and all accounts receivable shall
be taken at the face amount thereof, less discounts to the customers
and a reasonable reserve for bad debts.
(3) All machinery, fixtures, and equipment shall be taken at
the valuation appearing on the books of the CORPORATION.
(4) Inventory of merchandise and supplies shall be computed
at cost or market value, whichever is lower.
(5) All unpaid and accrued taxes shall be deducted as
liabilities.
FOURTH: METHOD OF PAYMENT IN THE
EVENT OF VOLUNTARY SALE
In the event any SHAREHOLDER exercises his right to sell his
or its common stock on a voluntary basis, described in paragraph
SECOND, then, and in that event, payment therefore and the delivery
of the common stock by the seller shall be made in the following
manner:
(A) CLOSING DATE
Within thirty (30) days after seller has advised the
CORPORATION (or the individual SHAREHOLDERS if the
CORPORATION is unable to act as Purchaser) of Seller's desire to sell
his or its common stock the seller shall deliver to the CORPORATION
the common stock certificate or certificates representing all the shares
of common stock then owned by SHAREHOLDER. The stock
certificates shall be duly endorsed in blank for proper transfer and
shall be accompanied by all other documents necessary for an
effective and valid transfer. The seller shall further deposit with the
CORPORATION sufficient funds to pay for all stock transfer stamps.
The CORPORATION shall thereafter cause the ownership of the
common stock to be recorded in its name, or in the name of the
respective purchasing SHAREHOLDER in the percentage in which the
common stock was purchased by them as provided herein. It is, of
course, understood that although transfer shall be made upon the
records of the CORPORATION and the Purchasers entitled to all
rights as SHAREHOLDERS, a default in payment by the
CORPORATION or Purchasers, as the case may be, shall cause them to
relinquish their rights to the purchase, on the basis specifically
provided hereunder.
(B) PAYMENT OF PURCHASE PRICE
In the event a sale occurs voluntarily, then simultaneously with
the deposit of the common stock by the selling SHAREHOLDER with
the CORPORATION duly endorsed for transfer the CORPORATION
and/or the individual purchasing SHAREHOLDERS shall each pay
the full price required of each of them, which shall vary because of
the amount of common stock owned by each SHAREHOLDER. In
addition, the CORPORATION shall deliver to the respective
purchasers, duly endorsed for transfer, all such shares of common
stock with the necessary stock transfer stamps thereon, duly affixed
and canceled, and all other documents necessary to transfer such
shares.
FIFTH: SALE IN THE EVENT OF TOTAL DISABILITY
(A) ABSOLUTE OBLIGATION OF DISABLED
SHAREHOLDER TO SELL AND CORPORATION TO
PURCHASE STOCK OF DISABLED SHAREHOLDER
1. In the event SHEERIN and/or ALTMAN (hereinafter
"SHAREHOLDER") becomes totally disabled, he shall then be required
to sell his common stock interest to the CORPORATION which shall
be required to purchase said stock interest, provided and to the extent
a surplus exists. In the event a surplus does not exist, then the
remaining SHAREHOLDERS shall have the option to purchase the
common stock of the totally disabled SHAREHOLDER on the same
basis as they then common stock in the CORPORATION.
Should the other SHAREHOLDERS fail to purchase the entire
common stock interest of a totally disabled SHAREHOLDER, then and
in that event the totally disabled SHAREHOLDER shall have the right
to sell his entire common stock interest to a third party free of any
conditions described herein.
2. In the event SB, Inc. shall become insolvent, is
generally unable to pay its debts as they mature, files or has filed
against it a petition in bankruptcy, liquidation or reorganization, or
if SB, Inc. discontinues doing business for any reason, or if a
custodian, receiver or trustee of any kind is appointed for it or any of
its property ("Corporate Disability") then, in such event SB, Inc. shall
then be required to sell its common stock interest to the
CORPORATION which shall be required to purchase said stock
interest, provided a surplus exists. In the event a surplus does not
exist, then the remaining SHAREHOLDERS shall have the option to
purchase the common stock of SB, Inc. on the same basis as they then
own common stock in the CORPORATION. Should the other
SHAREHOLDER fail to purchase the entire common stock interest of
SB, Inc., then and in that event the SB, Inc. Shall have the right to
sell entire common stock interest to a third party free of any
conditions described herein.
(B) TOTAL DISABILITY
The term "totally disabled" for purposes of paragraph (A)
(1)shall mean any ailment which prevents any individual
SHAREHOLDER from actively participating in the affairs of the
CORPORATION for a period of more than 270 days out of a
continuous period of 365 days.
(C) PURCHASE PRICE
In the event a SHAREHOLDER becomes totally disabled, the
CORPORATION agrees that the disabled SHAREHOLDER (or there is
a Corporate Disability as to SB, Inc.) shall be entitled to receive
payment for his or its common stock as determined either under
paragraph THIRD (A) (if a certified value has been established) or
under THIRD (B) (if the procedure basis is to be applied) based on the
same method of payment described in paragraph FOURTH (B) for a
voluntary sale.
SIXTH: OBLIGATION OF THE ESTATE OF A DECEASED
SHAREHOLDER TO SELL AND THE CORPORATION
OR REMAINING SHAREHOLDERS TO PURCHASE
ALL COMMON STOCK OF A DECEASED
SHAREHOLDER
(A) INTENT
Upon the death of one of the SHAREHOLDERS his Estate
must sell and the CORPORATION (if it enjoys a surplus) must
purchase the decedent's common stock holdings in the
CORPORATION, as is more specifically set forth herein and on the
terms and conditions recited in this Agreement.
The parties have agreed that their respective Estates should be
obligated to sell all their common stock to the CORPORATION in the
event of their respective deaths and the CORPORATION should be
obligated to purchase such stock, if a surplus exists.
(B) PURCHASE PRICE OF DECEASED
SHAREHOLDER'S COMMON STOCK INTEREST
The value of a deceased SHAREHOLDER'S common stock shall
be determined in the same manner as the value of his common stock
would be in the event of his voluntary sale, which is described in
paragraph THIRD.
SEVENTH: PAYMENT OF PURCHASE PRICE TO ESTATE OF A
DECEASED SHAREHOLDER
Upon proper instructions from the Court as to the identity of
the person lawfully entitled to receive the proceeds on behalf of the
Estate, simultaneously with the deposit of the common stock of the
deceased shareholder with the Corporation duly endorsed for transfer,
the Corporation and/or the individual purchasing Shareholders shall
each pay the full price required of each of them, which shall vary
because of the amount of common stock owned by each Shareholder.
In addition, the CORPORATION shall deliver to the respective
purchasers, duly endorsed for transfer, all such shares of common
stock with the necessary stock transfer stamps thereon, duly affixed
and canceled, and all other documents necessary to transfer such
shares.
EIGHTH: SELLER'S RIGHTS UPON REFUSAL OR FAILURE
OF CORPORATION TO PURCHASE
In the event the CORPORATION cannot or does not purchase
the common stock of a SHAREHOLDER desiring or required to sell as
provided hereunder, and the remaining SHAREHOLDERS elect not to
purchase said common stock on the 30th day following notice of a
desire to sell, then
and in that event the SHAREHOLDER desiring or required to sell has
the sole option of either:
(A) Instituting an action against the CORPORATION,
requiring it to purchase the common stock in accordance with the
"agreed upon" price, if one is in existence, or in accordance with the
procedure, provided, of course, that a surplus exists so that the
CORPORATION is properly in a position to purchase as provided
herein; or
(B) Sell the common stock to a third party who must then
become a signatory to this agreement and institute suit against the
CORPORATION for the difference if any between the price he would
have received pursuant to this agreement and the full value of the
remuneration be received from the third party.
NINTH: SPECIFIC PERFORMANCE
The parties acknowledge that it is their intention and
agreement that the common stock of the CORPORATION should not
be freely tradeable in the open market. For that reason, among others,
the parties acknowledge that they will be irreparably damaged in the
event the restrictions and limitations on the sale of common stock as
provided by this agreement are not specifically enforced in every
respect. Should any dispute arise, therefore, concerning the sale or
disposition of common stock, or should any SHAREHOLDER threaten,
or violate any of the terms relating to the sale of common stock, the
parties acknowledge, therefore, that the CORPORATION should
properly be entitled to obtain an injunction restraining any sale or
disposition in violation of the terms of this agreement pending the
determination of such controversy. Thereafter, the parties shall be
governed entirely by the determination of the Court.
In the event of any controversy concerning the right or
obligation to purchase or sell any common stock, such right or
obligation shall be enforceable in a Court of equity through a decree
of specific performance or an injunction obtained by the
CORPORATION.
TENTH: SHAREHOLDER VOTING
A. Each SHAREHOLDER shall vote the shares of the
CORPORATION'S common stock owned by SHAREHOLDER at all
meetings of the CORPORATION'S SHAREHOLDERS for the election
of SHEERIN, ALTMAN and STAFF BUILDERS, INC. as the sole
directors of the CORPORATION and for the election of any other
directors by unanimous vote of the SHAREHOLDERS.
B. Each SHAREHOLDER shall vote at all meetings of the
Board of Directors for the election as officers of the CORPORATION
the following persons and no others:
President: Michael Altman
Vice Presidents: Raymond T. Sheerin
Secretary/Treasurer: Raymond T. Sheerin
C. The SHAREHOLDERS shall vote at all meetings of
SHAREHOLDERS in person or by proxy. Votes representing 650i of
the outstanding shares of the CORPORATION shall be required for
the approval of the following action taken by the SHAREHOLDERS:
(1) Liquidation or sale of assets outside the ordinary course
of business;
(2) Merger or consolidation;
(3) Corporate name change;
(4) Creation of new subsidiary;
(5) Recapitalization;
(6) Increase in authorized shares; and
(7) Dividend distribution.
This provision shall only be applicable after the exercise of non
exercise of the Option, Second Option, First Repurchase Option and
Second Repurchase Option as set forth in Certain Stock Purchase
Agreement until such time any such action by Shareholders shall be by
unanimous consent only.
D. The SHAREHOLDERS agree and acknowledge that the
voting requirements and other provisions regulating the rights, duties
and obligations of SHAREHOLDERS, as set forth in this Agreement,
are and may be contrary to and conflict with the Certificate of
Incorporation, the By-Laws of the CORPORATION and certain
provisions of the Business Corporation Law of the State of New York.
Accordingly, the SHAREHOLDERS agree as to each other and as a
group to amend the Certificate of Incorporation and By-Laws of the
Corporation to reflect the voting requirements set forth in paragraph
C above.
ELEVENTH: NON-COMPETE AND NON-DISCLOSURE
During the term of this Agreement, the parties do hereby agree
that they will not directly or indirectly, as owner, shareholder,
partner, manager, proprietor, employee, agent or otherwise, enter into
any new business venture directly in competition with the business of
the CORPORATION. The parties agree further they will not disclose
to another or use for his own benefit the trade secrets, formulas
and/or methods used by the CORPORATION in its business, and/or
the customer lists of the CORPORATION at any time during this
Agreement, or thereafter or after sale of his or its shares for a period
of two (2) years. In the event of a breach or threatened breach by a
SHAREHOLDER of the provisions of this paragraph, the
CORPORATION shall be entitled to an injunction restraining the
SHAREHOLDER from disclosing or using for his own benefit, in
whole or in part, the trade secrets, formulas, methods and/or customer
lists of the CORPORATION. Nothing herein shall be construed as
prohibiting the CORPORATION from pursuing any other remedies
available to the CORPORATION for such breach or threatened
breach, including the recovery of damages from the SHAREHOLDER.
TWELFTH: LEGEND UPON STOCK CERTIFICATE
The parties acknowledge that upon each common stock
certificate there shall appear the following legend:
"This stock is not transferable conditionally, or unconditionally,
except in strict compliance with the terms of a SHAREHOLDERS
agreement entered into between the parties dated ......I a copy of which
is on file in the office of the CORPORATION".
THIRTEENTH: DOCUMENTARY STAMPS AND DOCUMENTS
Whenever any common stock is sold pursuant to this agreement,
the seller shall affix to the certificates of stock the necessary
document documentary stamps. Further, each SHAREHOLDER, for
himself or itself, agrees to execute all documents necessary to give
effect to the terms of this agreement.
FOURTEENTH: CONSTRUCTION
In the event any parts of this agreement are found to be void,
the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.
FIFTEENTH: LAW GOVERNING
This agreement shall be construed according to the laws of the State of
New York.
SIXTEENTH: BENEFIT
This Agreement shall be binding upon and shall operate for the
benefit of the SHAREHOLDERS and their respective executors and
administrators (and as to SB, Inc. its shareholders), and shall also be
binding upon any transferee who has received any stock in accordance
with the provisions of this agreement and the executor or
administrator of such transferee and shall be binding upon any person
to whom any common stock of the SHAREHOLDERS is transferred in
violation of the provisions of this Agreement and the executor or
administrator of such person.
SEVENTEENTH: AFTER-ACQUIRED COMMON STOCK
Whenever any party to this Agreement or any related
individual hereafter acquires any common stock of the
CORPORATION in addition to the common stock owned at the time
of the execution of this agreement, such stock so acquired shall also be
fully subject to all the terms of this agreement. Whenever . any person
pursuant to the terms of this Agreement acquired any common stock
of the CORPORATION and such person is neither a party to this
agreement nor a related individual, the acquisition of such common
stock shall be subject to all the terms of this agreement including those
terms relating to sale, transfer, or assignment, so as to govern the
future sale. These persons shall, upon issuance of common stock to
them, become signatories to this Agreement.
EIGHTEENTH: KEYMAN INSURANCE
It is hereby agreed that subsequent to the execution of this
Agreement the parties will acquire Keyman Insurance on Altman in a
sum not less than $2,000,000 payable to the Corporation.
IN WITNESS WHEREOF, the undersigned have each signed
this agreement the date and the year first above written.
Staff Builders, Inc. /s/ Raymond T. Sheerin
By:/s/ Stephen Savitsky Raymond T. Sheerin
/s/ Michael Altman
Michael Altman
Chelsea Computer Consultants,Inc. /s/Stephen Fleischner
Stephen Fleischner
By: /s/ Michael Altman
SHARECHELSEA/JOANNE
<PAGE>
EXHIBIT "A"
CERTIFIED AND AGREED UPON
VALUE OF THE TOTAL ISSUED AND
OUTSTANDING COMMON STOCK OF
CHELSEA COMPUTER CONSULTANTS, INC.
The undersigned, being all of the Shareholders of CHELSEA
COMPUTER CONSULTANTS, INC. (the "Corporation"), do hereby certify and
agree that the value of the total authorized, issued and outstanding common
stock of the Corporation is TEN MILLION ($ 10,000,000) DOLLARS. The
undersigned each acknowledge and agree, that said value is irrefutable,
absolute and binding on each shareholder.
Date: September 24,1996
/s/ Michael Altman
Michael Altman
/s/ Raymond T. Sheerin
Raymond T. Sheerin
/s/Stephen Fleischner
Stephen Fleischner
Staff Builders, Inc.
By: /s/Stephen Savitsky
Stephen Savitsky, President
<PAGE>
AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT
BY AND AMONG STAFF BUILDERS, INC. AND RAYMOND T. SHEERIN,
MICHAEL ALTMAN, STEPHEN FLEISCHNER AND CHELSEA COMPUTER
CONSULTANTS, INC.
SCHEDULE TITLE
EXHIBIT 4.3A AMENDMENT NO. 1 TO EMPLOYMENT
AGREEMENT BY AND BETWEEN CHELSEA
COMPUTER CONSULTANTS, INC. AND
MICHAEL ALTMAN
EXHIBIT 4.3B AMENDMENT NO. 1 TO EMPLOYMENT
AGREEMENT BY AND BETWEEN CHELSEA
COMPUTER CONSULTANTS, INC. AND
RAYMOND T. SHEERIN
EXHIBIT 4.4 AMENDMENT NO. 1 TO SHAREHOLDERS
AGREEMENT BY AND AMONG CHELSEA
COMPUTER CONSULTANTS, INC.
RAYMOND T. SHEERIN, MICHAEL
ALTMAN AND STAFF BUILDERS, INC.
*The Company agrees to furnish supplementally a copy of any
omitted schedule to the Commission upon request.
EXHIBIT
10.8<PAGE>
AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT
AMENDMENT NO. 1, dated as of October 30, 1997 (this
"Amendment") to the Shareholders Agreement, dated as of
September 24, 1996 (the "Shareholders Agreement"), among
Chelsea Computer Consultants, Inc., a New York Corporation
having its principal place of business of business at 156 Fifth
Avenue, New York, NY 10010 ("Corporation" ), Raymond T.
Sheerin, residing at 161 West 15th Street, New York, NY
("Sheerin"), Michael Altman, residing at 131 Fifth Avenue, New
York, NY ("Altman") and Staff Builders, Inc., a New York
Corporation having its principal place of business of business at
1983 Marcus Avenue, Lake Success, NY 11042 ("SB,Inc."),
WHEREAS, the Corporation has redeemed all of the shares
previously owned by Stephen Fleischman, and
WHEREAS, SB, Inc. has pursuant to a Stock Purchase
Agreement and Amendment No. 1 thereto by and among Staff
Builders, Inc., Michael Altman, Stephen Fleischner, Raymond T.
Sheerin and Chelsea Computer Consultants has exercised its
option to purchase additional shares of the Corporation's stock
from Sheerin and Altman at the Option Closing, and
WHEREAS, the parties hereto have executed and delivered
the Shareholders Agreement and have agreed to amend the
Shareholders Agreement as set forth in this Amendment;
NOW, THEREFORE, for good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used but not
defined in this Amendment shall have the meanings given to such
terms in the Shareholders Agreement.
SECTION 2. Article FIRST of the Shareholders
Agreement is amended by replacing such Article in its entirety
with the following:
"FIRST: REPRESENTATIONS AS TO COMMON STOCK
OWNERSHIP
Except with respect to the shares owned by SBI, Inc. which
are pledged to Mellon Bank N.A. as security for a certain loan, the
SHAREHOLDERS represent and warrant that given effect to
consummation sale of shares at the Option Closing that each is
the owner and holder of the number of shares of the capital
common stock of the CORPORATION as specified below, and
that all of said shares are owned free and clear of all liens and
encumbrances:
PERCENTAGE
NAME OF NUMBER OF COMMON ISSUED AND
SHAREHOLDER SHARES OWNED OUTSTANDING
Raymond T. Sheerin 84.46 9.19%
Michael Altman 84.46 9.19%
Staff Builders, Inc. 750.08 81.82%"
SECTION 3. The first paragraph of Article SECOND of
the Shareholders Agreement is amended by replacing such
paragraph in its entirety with the following:
"SECOND: PROCEDURE REQUIRED IN THE SALE OF
COMMON STOCK
A. VOLUNTARY SALE
Each of the parties hereto agrees not to sell, assign,
transfer, mortgage, alienate, hypothecate or in any way encumber
or dispose of the shares of common stock of the CORPORATION
which each now owns or which each may hereafter acquire, or
any part thereof, without the express written consent of the
CORPORATION and all of the then existing SHAREHOLDERS
and then only under the following specific terms and conditions:"
SECTION 4. Article TENTH of the Shareholders Agreement is
amended by replacing such Article in its entirety with the
following:
"TENTH: SHAREHOLDER VOTING
A. Each SHAREHOLDER shall vote the shares of
the CORPORATION'S common stock owned by
SHAREHOLDER at all meetings of the CORPORATION'S
SHAREHOLDERS for the election of SHEERIN, ALTMAN and
three (3) directors nominated by SB, Inc. as the sole directors
of the CORPORATION and for the election of any other
directors by unanimous vote of the SHAREHOLDERS.
B. Each SHAREHOLDER shall vote at all meetings
of the Board of Directors for the election as officers of the
CORPORATION the following persons and no others:
President: Michael Altman
Vice President: Raymond T. Sheerin
Secretary/Treasurer: Raymond T. Sheerin
C. The SHAREHOLDERS shall vote at all meetings
of SHAREHOLDERS in person or by proxy. Votes representing
65% of the outstanding shares of the CORPORATION shall be
required for the approval of the following action taken by the
SHAREHOLDERS:
1. Liquidation or sale of assets outside the ordinary
course of business;
2. Merger or consolidation;
3. Corporation name change;
4. Creation of new subsidiary;
5. Recapitalization;
6. Increase in authorized shares; and
7. Dividend distribution
D. The SHAREHOLDERS agree and acknowledge
that the voting requirements and other provisions regulating the
rights, duties and obligations of shareholders, as set forth in
this Agreement, are and may be contrary to and conflict with
the Certificate of Incorporation, the By-Laws of the
CORPORATION and certain provisions of the Business
Corporation Law of the State of New York. Accordingly, the
SHAREHOLDERS agree as to each other and as a group of
amend the Certificate of Incorporation and By-Laws of the
Corporation to reflect the voting requirements set forth in
paragraph C above."
SECTION 5. A new Article NINETEENTH of the
Shareholders Agreement is hereby added as follows:
"NINETEENTH: TERMINATION
It is hereby agreed that upon the public offering of any equity
security of the CORPORATION this Shareholder Agreement
shall terminate."
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
CHELSEA COMPUTER
CONSULTANTS, INC.
By: /s/Michael Altman
Name: Michael Altman
Title:President
/s/ Raymond T. Sheerin
RAYMOND T. SHEERIN
/s/ Michael Altman
MICHAEL ALTMAN
STAFF BUILDERS, INC.
By:/s/ Stephen Savitsky
Name: Stephen Savitsky
Title:Chairman of the Board,CEO
