SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
May 30, 1996 (May 1, 1996)
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Date of Report (Date of earliest event reported)
OLSTEN CORPORATION
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(Exact name of registrant as specified in charter)
Delaware
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(State or other jurisdiction of incorporation)
0-3532
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(Commission File Number)
13-2610512
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(IRS Employer Identification No.)
175 Broad Hollow Road
Melville, New York 11747-8905
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(Address of principal executive officers)
(516) 844-7800
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
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On May 13, 1996, the Registrant called for redemption on May
28, 1996, all of its outstanding 4-7/8% Convertible Subordinated
Debentures due 2003 (the "Debentures"). Substantially all of the
$125 million principal amount of the Debentures were converted
into the Registrant's Common Stock, par value $.10 per share,
with approximately 5,381,000 of such shares being issued.
On May 28, 1996, the Registrant, Lawyers Acquisition Corp.,
a Texas corporation which is a wholly-owned subsidiary of the
Registrant ("Merger Sub") and Co-Counsel, Inc., a Texas
corporation ("Co-Counsel") entered into an Agreement and Plan of
Merger (the "Merger Agreement"), pursuant to which Merger Sub
will be merged with and into Co-Counsel and Co-Counsel will
become a wholly-owned subsidiary of the Registrant. The Merger
Agreement is filed as Exhibit 2(a) to this Current Report on Form
8-K and is incorporated herein by reference.
The Registrant, QHR Acquisition Corp., a wholly-owned
subsidiary of the Registrant and Quantum Health Resources, Inc.
("Quantum") have entered into an amendment, dated as of May 1,
1996 (the "Amendment"), to the Agreement and Plan of Merger filed
as Exhibit 2(a) to the Registrant's Current Report on Form 8-K
dated May 3, 1996. The Amendment is filed as Exhibit 2(b) to
this Current Report on Form 8-K and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) Exhibits.
Exhibit 2(a) -- Agreement and Plan of Merger, dated May 28,
1996, by and among Olsten Corporation, Lawyers Acquisition Corp.
and Co-Counsel, Inc.
Exhibit 2(b) -- Amendment to Agreement and Plan of Merger,
dated as of May 1, 1996, by and among Olsten Corporation, QHR
Acquisition Corp. and Quantum Health Resources, Inc.
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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.
OLSTEN CORPORATION
(REGISTRANT)
Date: May 30, 1996 By:/s/ Laurin L. Laderoute, Jr.
Laurin L. Laderoute, Jr.
Vice President
EXHIBIT 2(a)
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the
"Amendment") dated as of May 1, 1996, by and among Olsten
Corporation, a Delaware corporation ("Olsten"), QHR Acquisition
Corp., a Delaware corporation that is a wholly-owned subsidiary
of Olsten ("Merger Sub") and Quantum Health Resources, Inc., a
Delaware corporation ("Quantum").
WHEREAS, Olsten, Merger Sub and Quantum are parties to
an Agreement and Plan of Merger dated May 1, 1996 (the "Merger
Agreement"), which provides, among other things, for the merger
of Merger Sub with and into Quantum, such that Quantum shall
survive as a wholly-owned subsidiary of Olsten (the "Merger");
WHEREAS, Olsten, Merger Sub and Quantum desire to amend
Section 6.9(e) of the Merger Agreement pursuant to this Amendment
to provide for the appropriate treatment of the Quantum
Convertible Subordinated Debentures (as defined in the Merger
Agreement) after the Effective Time (as defined in the Merger
Agreement);
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements herein contained, and
intending to be legally bound hereby, subject to the terms and
conditions set forth herein, Olsten, Merger Sub and Quantum
hereby agree as follows:
Section 1. Section 6.9(e) of the Merger Agreement
shall be amended by deleting the first sentence thereof in its
entirety and inserting the following new sentence in lieu
thereof:
"From and after the Effective Time, each Quantum Convertible
Subordinated Debenture shall entitle the holder thereof to
convert such Quantum Convertible Subordinated Debenture into the
number of shares of Class B Stock receivable by a holder of the
number of shares of Quantum Common Stock into which such Quantum
Convertible Subordinated Debenture might have been converted
immediately prior to the Effective Time (subject to adjustment
after the Effective Time as provided in the Quantum Indenture);
PROVIDED, HOWEVER, that the number of shares of Class B Stock
issuable upon conversion of a Quantum Convertible Subordinated
Debenture shall not include any fractional shares and, upon
exercise of such Quantum Convertible Subordinated Debenture, a
cash payment shall be made for any fractional share based upon
the closing price of a share of Olsten Common Stock on the NYSE
on the trading day immediately prior to the date of conversion."
Section 2. The Merger Agreement shall be amended and
restated in its entirety as of May 1, 1996, to reflect the
foregoing amendment.
Section 3. This Amendment may be executed in two or
more counterparts, all of which shall be considered one and the
same agreement and shall become effective when two or more
counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 4. This Amendment shall be governed by, and
interpreted under, the laws of the State of Delaware applicable
to contracts made and to be performed therein without regard to
conflicts of law principles.
IN WITNESS WHEREOF, Olsten, Merger Sub and Quantum have
caused this Amendment to Agreement and Plan of Merger to be
executed as of May 1, 1996, by the respective officers thereunto
duly authorized.
OLSTEN CORPORATION
By: /s/ William P. Costantini
Senior Vice President
QHR ACQUISITION CORP.
By: /s/ William P. Costantini
Senior Vice President
QUANTUM HEALTH RESOURCES, INC.
By: /s/ Douglas H. Stickney
Chairman, President and
Chief Executive Officer
EXHIBIT 2(b)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated May 28, 1996 (the
"Agreement"), by and among Olsten Corporation, a Delaware
corporation ("Acquiror"), Lawyers Acquisition Corp., a Texas
corporation that is a direct wholly-owned subsidiary of Olsten
("Merger Sub") and Co-Counsel, Inc., a Texas corporation ("Co-
Counsel").
WHEREAS, the Boards of Directors of Olsten, Merger Sub and
Co-Counsel have each determined that it is in the best interests
of their respective shareholders for Merger Sub to merge with and
into Co-Counsel upon the terms and subject to the conditions set
forth herein (the "Merger"), and have adopted the Plan of Merger
in the form attached hereto as Exhibit I (the "Plan of Merger");
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a "pooling of interests";
WHEREAS, for federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended;
WHEREAS, Olsten, Merger Sub and Co-Counsel desire to make
certain representations, warranties, covenants and agreements in
connection with the Merger and also to prescribe various
conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending
to be legally bound hereby, subject to the terms and conditions
set forth herein, Olsten, Merger Sub and Co-Counsel hereby agree
as follows:
ARTICLE I
THE MERGER
Section 1.1 Effective Time of the Merger. Subject to the
provisions of this Agreement, Articles of Merger in the form
attached hereto as Exhibit II (the "Articles of Merger") shall be
duly prepared, executed and acknowledged by Co-Counsel and Merger
Sub and thereafter delivered to the Secretary of State of the
State of Texas, for filing as provided in the Texas Business
Corporation Act (the "TBCA"), as soon as practicable on or after
the Closing Date (as defined in Section 1.2). The Merger shall
become effective upon the issuance of a certificate of merger by
the Secretary of State of the State of Texas pursuant to the TBCA
(the "Effective Time").
Section 1.2 Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m., New York City time, on
a date to be specified by the parties, which shall be no later
than the second Business Day (as defined below) after the latest
to occur of the conditions set forth in Article VII each having
been fulfilled or having been waived in accordance with this
Agreement (the "Closing Date"), at the offices of Gordon Altman
Butowsky Weitzen Shalov & Wein, 114 West 47th Street, New York,
New York 10036, unless another date or place is agreed to in
writing by the parties hereto. For purposes of this Agreement,
"Business Day" means any day other than: (i) a Saturday or
Sunday; and (ii) a day on which banks in the State of New York or
Texas are required or permitted to be closed.
Section 1.3 Effects of the Merger. (a) At the Effective
Time: (i) the separate existence of Merger Sub shall cease and
Merger Sub shall be merged with and into Co-Counsel and Co-
Counsel shall be the surviving corporation (Merger Sub and Co-
Counsel are sometimes referred to herein as the "Constituent
Corporations" and Co-Counsel is sometimes referred to herein as
the "Surviving Corporation"); (ii) all of the outstanding capital
stock of Co-Counsel shall be converted as provided in Section
2.1; (iii) the Articles of Incorporation of Co-Counsel as in
effect immediately prior to the Effective Time shall be amended
as of the Effective Time by operation of this Agreement and by
virtue of the Merger, without any further action by the
shareholders or directors of the Surviving Corporation, to read
in its entirety as the Articles of Incorporation of Merger Sub,
except that Article I of the Articles of Incorporation of the
Surviving Corporation shall be amended at the Effective Time, to
change the name of the Surviving Corporation to Co-Counsel, Inc.
and (iv) the bylaws of Merger Sub, as in effect immediately prior
to the Effective Time, shall be the bylaws of the Surviving
Corporation, until duly amended in accordance with the terms
thereof, of the articles of incorporation of the Surviving
Corporation and of the TBCA. At Olsten's election, any direct
wholly-owned Subsidiary (as defined in Section 2.1(b) hereof) of
Olsten may be substituted for Merger Sub as a constituent
corporation in the Merger, PROVIDED that the parties shall have
executed an appropriate amendment to this Agreement in form and
substance reasonably satisfactory to Olsten and Co-Counsel in
order to reflect such substitution.
(b) The directors and officers of Merger Sub at the
Effective Time shall, from and after the Effective Time, be the
directors and officers of the Surviving Corporation until the
successors of all such persons shall have been duly elected or
appointed and qualified or until their earlier death, resignation
or removal in accordance with the Surviving Corporation's
articles of incorporation and by-laws.
(c) At and after the Effective Time, the corporate
existence of Co-Counsel, with all its rights, privileges, powers
and franchises of a public as well as of a private nature, shall
continue unaffected and unimpaired by the Merger. The Merger
shall have the effects specified in the TBCA.
ARTICLE II
EFFECT OF THE MERGER ON THE
CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.1 Effect on Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part
of the holder of any shares of Co-Counsel's Common Stock, par
value $.01 per share ("Co-Counsel Common Stock"), or any capital
stock of Merger Sub:
(a) Conversion Number for Co-Counsel Common Stock;
Capital Stock of Merger Sub. (i) Subject to Section 2.2(e),
each share of Co-Counsel Common Stock which shall be issued and
outstanding immediately prior to the Effective Time (other than
any shares of Co-Counsel Common Stock to be canceled pursuant to
Section 2.1(b) and any Dissenting Shares (as defined in Section
2.1(c)) shall be converted into the right to receive that number
(the "Conversion Number") of Olsten's Class B Common Stock, par
value $.10 per share ("Class B Stock"), computed in accordance
with Section 2.1(a)(ii). As of the Effective Time, all shares of
Co-Counsel Common Stock, and each holder of a certificate
representing such shares of Co-Counsel Common Stock, shall cease
to have any rights with respect thereto, except the right to
receive the shares of Class B Stock (and cash in lieu of
fractional shares of Class B Stock as contemplated by Section
2.2(e)) to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.2,
without interest. If, between the date hereof and the Effective
Time, the outstanding shares of Class B Stock and/or Olsten
Common Stock, par value $.10 per share ("Olsten Common Stock"),
shall be changed into a different number of shares by reason of
any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment, or a stock dividend thereon
shall be distributed as of a date prior to the Effective Time, or
declared with a record date prior to the Effective Time and a
distribution date or comparable effective date after the
Effective Time, the Conversion Number set forth above shall be
appropriately adjusted to reflect such change; provided, however,
that the foregoing shall not apply to any issuance by Olsten of
Olsten Common Stock upon conversion of Olsten's 4 7/8%
Convertible Subordinated Debentures due 2003 as a result of the
redemption thereof.
(ii) The Conversion Number shall be equal to the
quotient obtained by dividing (x) 420,000 by (y) the sum of (A)
the number of shares of Co-Counsel Common Stock outstanding
immediately prior to the Effective Time (including shares of Co-
Counsel Common Stock issued to the public as part of the Units
referred to in Section 4.2(b), but excluding shares of Co-Counsel
Common Stock issuable as part of any Units acquired upon exercise
of any Representatives' Warrants (as defined below)) and (B) the
number of shares of Co-Counsel Common Stock issuable upon
exercise in full of all options and other rights to purchase or
otherwise acquire Co-Counsel Common Stock (other than the Co-
Counsel Warrants and the Representatives' Warrants, both as
defined in Section 4.2(b)), whether or not vested, which are
outstanding immediately prior to the Effective Time. The number
of shares of Co-Counsel Common Stock that are issuable as
described in clause (B) above shall exclude shares that presently
are reserved for issuance upon exercise of options that will be
cancelled or terminated in accordance with the applicable option
plan and any option agreement relating to such option, prior to
the Effective Time.
(iii) Each share of the capital stock of Merger Sub
which shall be issued and outstanding immediately prior to the
Effective Time shall be converted into and become one fully paid
and nonassessable share of common stock, par value $.01 per
share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Other Co-
Counsel Common Stock. All shares of Co-Counsel Common Stock and
all other shares of capital stock of Co-Counsel that are owned by
Co-Counsel as treasury stock and any shares of Co-Counsel Common
Stock or other shares of capital stock of Co-Counsel owned by Co-
Counsel, Olsten or any wholly-owned Subsidiary of Olsten, shall
be canceled and retired and shall cease to exist and no stock of
Olsten or of Merger Sub or other consideration shall be delivered
in exchange therefor.
As used in this Agreement, the word "Subsidiary" of any
party means any corporation or other organization, whether
incorporated or unincorporated, of which (i) such party or any
other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by
such party or any Subsidiary of such party do not have a majority
of the voting interests in such partnership) or (ii) at least a
majority of the securities or other interests having by their
terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its
Subsidiaries.
(c) Dissenting Shares. (i) Notwithstanding any
provision of this Agreement to the contrary, any shares of Co-
Counsel Common Stock held by a holder who has demanded and
perfected his demand for appraisal of such Co-Counsel Common
Stock in accordance with the TBCA and as of the Effective Time
has not effectively withdrawn or lost such right to appraisal
("Dissenting Shares"), shall not be converted into or represent
the right to receive shares of Class B Stock (or cash in lieu of
fractional shares of Class B Stock as contemplated by Section
2.2(e)) for such shares of Co-Counsel Common Stock pursuant to
Section 2.1(a), but the holder thereof shall only be entitled to
such rights as are granted by the TBCA.
(ii) Notwithstanding the provisions of Section
2.1(c)(i), if any holder of shares of Co-Counsel Common Stock who
demands appraisal of such Co-Counsel Common Stock under the TBCA
shall effectively withdraw or lose (through failure to perfect or
otherwise) his right to appraisal, then, as of the Effective Time
or the occurrence of such event, whichever last occurs, such
holder's shares of Co-Counsel Common Stock shall automatically be
converted into and represent only the right to receive the shares
of Class B Stock (and cash in lieu of fractional shares of Class
B Stock as contemplated by Section 2.2(e)) to be issued or paid
in consideration therefor for such Co-Counsel Common Stock as
provided in Section 2.1(a), without interest thereon, upon
surrender of the certificate or certificates representing such
shares of Co-Counsel Common Stock in accordance with Section 2.2.
Co-Counsel shall give Olsten (A) prompt notice of any
written demands for appraisal of any shares of Co-Counsel Common
Stock, withdrawals of such demands, and any other instruments
served pursuant to the TBCA and received by Co-Counsel and (B)
the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under the TBCA. Co-Counsel
shall not, except with the prior written consent of Olsten,
voluntarily make any payment with respect to any demands for
appraisal of any shares of Co-Counsel Common Stock or offer to
settle or settle any such demands.
Section 2.2 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Olsten
shall deposit, or shall cause to be deposited, with Chemical
Mellon Shareholder Services, L.L.C., or such other bank or trust
company which shall be acceptable to Olsten (the "Exchange
Agent"), for the benefit of holders of shares of Co-Counsel
Common Stock, for exchange in accordance with this Section 2.2,
through the Exchange Agent, certificates representing the shares
of the Class B Stock (such shares of Class B Stock, together with
(i) any dividends or distributions with respect thereto with a
record date after the Effective Time of the Merger and (ii) any
cash delivered to the Exchange Agent to be delivered in lieu of
fractional shares as contemplated by Section 2.2(e), being
hereinafter referred to as the "Exchange Fund") issuable pursuant
to Section 2.1 in exchange for outstanding shares of Co-Counsel
Common Stock. The Exchange Agent shall deliver, pursuant to
irrevocable instructions, the shares of Class B Stock
contemplated to be issued pursuant to Section 2.1 out of the
Exchange Fund. The Exchange Fund shall not be used for any other
purpose.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall
mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time represented
outstanding shares of Co-Counsel Common Stock (the
"Certificates") whose shares were converted into the right to
receive shares of Class B Stock pursuant to Section 2.1: (i) a
letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as
Olsten and Co-Counsel may reasonably specify); and (ii)
instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of
Class B Stock. Upon surrender of a Certificate for cancellation
to the Exchange Agent or to such other agent or agents as may be
appointed by Olsten, together with such letter of transmittal,
duly executed, and such other documents as may be reasonably
required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor certificates
representing that number of whole shares of Class B Stock (and
cash in lieu of fractional shares) which such holder has the
right to receive pursuant to this Article II, and the Certificate
so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Co-Counsel Common Stock which is not
registered in the transfer records of Co-Counsel, certificates
representing the proper number of shares of Class B Stock may be
issued to a transferee if the Certificate representing such Co-
Counsel Common Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes
have been paid. Until surrendered as contemplated by this
Section 2.2, each Certificate shall be deemed at any time after
the Effective Time to represent only the right to receive upon
such surrender one or more certificates representing shares of
Class B Stock and cash in lieu of any fractional shares of Class
B Stock as contemplated by this Section 2.2. The Exchange Agent
shall not be entitled to vote or exercise any rights of ownership
with respect to the Class B Stock held by it from time to time
hereunder.
(c) Distributions with Respect to Unexchanged Shares.
No dividends or other distributions with respect to Class B Stock
with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the
shares of Class B Stock represented thereby and no cash payment
in lieu of fractional shares shall be paid to any such holder
pursuant to Section 2.2(e) until the surrender of such
Certificate in accordance with this Section 2.2. Subject to the
effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the
Certificates representing whole shares of Class B Stock issued in
exchange therefor, without interest: (i) at the time of such
surrender, the amount of any cash payable in lieu of a fractional
share of Class B Stock to which such holder is entitled pursuant
to Section 2.2(e) and the amount of dividends or other
distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Class B
Stock; and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the
Effective Time but prior to such surrender and with a payment
date subsequent to such surrender payable with respect to such
whole shares of Class B Stock.
(d) No Further Ownership Rights in Co-Counsel Common
Stock. All shares of the Class B Stock issued upon the surrender
for exchange of Certificates in accordance with the terms hereof
(including any cash paid pursuant to Section 2.2(c) or 2.2(e))
shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to such shares of Co-
Counsel Common Stock, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time
which may have been declared or made by Co-Counsel on such shares
of Co-Counsel Common Stock in accordance with the terms of this
Agreement or prior to the date hereof and which remain unpaid at
the Effective Time, and there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of Co-Counsel Common Stock which were
outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged as provided in this Article II.
(e) No Fractional Shares. No certificate or scrip
representing fractional shares of Class B Stock shall be issued
upon the surrender for exchange of Certificates, and such
fractional share interests will not entitle the owner thereof to
vote or to any rights of a shareholder of Olsten.
Notwithstanding any other provision of this Agreement, each
holder of shares of Co-Counsel Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a
fraction of a share of Class B Stock (after taking into account
all Certificates delivered by such holder) shall receive, in lieu
thereof, cash (without interest) in an amount equal to such
fractional part of a share of Class B Stock multiplied by the
Average Price. For purposes of this Agreement, "Average Price"
means the average closing price of Olsten Common Stock on the New
York Stock Exchange (the "NYSE") during the ten trading days
immediately prior to the Effective Time.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund and any cash in lieu of fractional shares of Class
B Stock made available to the Exchange Agent which remains
undistributed for 180 days after the Effective Time shall be
delivered to Olsten, upon demand, and any holders of the
Certificates who have not theretofore complied with this Article
II shall thereafter look only to Olsten for delivery of
certificates representing Class B Stock and any cash in lieu of
fractional shares of Class B Stock and any dividends or
distributions with respect to Class B Stock.
(g) No Liability. Neither Olsten, Merger Sub, Co-
Counsel nor the Exchange Agent shall be liable to any holder of
shares of Co-Counsel Common Stock or Class B Stock, as the case
may be, for such shares (or dividends or distributions with
respect thereto) or cash from the Exchange Fund (or by Olsten
after the Exchange Fund has terminated) delivered to a public
official pursuant to any applicable abandoned property, escheat
or similar law. At such time as any amounts remaining unclaimed
by holders of any such shares would otherwise escheat to or
become property of any Governmental Entity (as defined in Section
3.3(c)), such amounts shall, to the extent permitted by
applicable law, become the property of Olsten free and clear of
any claims or interest of any such holders or their successors,
assigns or personal representatives previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent
shall invest any cash included in the Exchange Fund, as directed
by Olsten, on a daily basis. Any interest and other income
resulting from such investments shall be paid to Olsten.
(i) Co-Counsel Affiliates. Certificates surrendered
for exchange by any Co-Counsel Affiliate (as defined in Section
4.22) shall not be exchanged for certificates representing Class
B Stock until Olsten has received a written agreement from such
Co-Counsel Affiliate as provided in Section 6.7.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF OLSTEN AND MERGER SUB
Except as set forth in this Agreement or Olsten's disclosure
schedule previously delivered to Co-Counsel (the "Olsten
Disclosure Schedule"), Olsten and Merger Sub hereby represent and
warrant to Co-Counsel as follows:
Section 3.1 Organization, Standing and Power. Each of
Olsten and Merger Sub: (i) is a corporation duly organized,
validly existing and in good standing under the laws of the state
of its incorporation; (ii) has all requisite corporate power and
corporate authority to own, lease and operate its properties and
to carry on its business as now being conducted and (iii) is duly
qualified or licensed to do business and in good standing in each
jurisdiction in which the business it is conducting, or the
operation, ownership or leasing of its properties, makes such
qualification or licensing necessary, other than in such
jurisdictions where the failure so to be in good standing,
qualified or licensed does not, individually or in the aggregate,
have a Material Adverse Effect (as defined in Section 9.3). Each
of Olsten and Merger Sub has heretofore made available to Co-
Counsel complete and correct copies of its presently effective
certificate of incorporation and by-laws.
Section 3.2 Capital Structure. (a) As of the date
hereof, the authorized capital stock of Olsten consists of
110,000,000 shares of Olsten Common Stock, 50,000,000 shares of
Class B Stock and 250,000 shares of Preferred Stock, par value
$.10 per share ("Olsten Preferred Stock"). As of May 15, 1996,
50,661,229 shares of Olsten Common Stock and 14,055,519 shares of
Class B Stock were issued and outstanding and no shares of Olsten
Preferred Stock were issued or outstanding.
(b) As of the date hereof, the authorized capital stock
of Merger Sub consists of 1,000 shares of common stock, par value
$.01 per share, all of which are validly issued, fully paid and
nonassessable and are owned by Olsten.
(c) All outstanding shares of Olsten Common Stock and
Class B Stock are, and all shares of Class B Stock which are to
be issued pursuant to the Merger (and, after the Effective Time,
upon the exercise of Co-Counsel Warrants and Co-Counsel Stock
Options (as defined in Section 6.9)) will be, when issued in
accordance with the respective terms thereof, validly issued,
fully paid and nonassessable and not subject to preemptive
rights. Each share of Class B Stock to be issued in the Merger
will be immediately convertible, at no expense to the
shareholder, into one share of Olsten Common Stock and such
shares of Olsten Common Stock have been reserved for issuance
upon such conversion. Except as set forth in this Section 3.2
and in the Olsten SEC Documents (as defined in Section 3.4),
there are outstanding: (i) no bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into
securities having the right to vote) on any matters on which
shareholders may vote ("Voting Debt"), shares of capital stock or
other voting securities of Olsten; (ii) no securities of Olsten
or any of its Subsidiaries convertible into or exchangeable for
shares of capital stock, Voting Debt or other voting securities
of Olsten or any of its Subsidiaries; and (iii) no options,
warrants, calls, rights (including preemptive rights),
commitments or agreements to which Olsten or any of its
Subsidiaries is a party or by which it is bound obligating Olsten
or any of its Subsidiaries to issue, deliver, sell, purchase,
redeem or acquire or cause to be issued, delivered, sold,
purchased, redeemed or acquired, additional shares of capital
stock or any Voting Debt or other voting securities of Olsten or
any of its Subsidiaries or obligating Olsten or any of its
Subsidiaries to grant, extend or enter into any such option,
warrant, call, right, commitment or agreement. There are not, as
of the date hereof, and there will not be at the Effective Time,
any shareholder agreements, voting trusts or other agreements or
understandings to which Olsten is a party or by which it is bound
relating to the voting of any shares of the capital stock of
Olsten.
Section 3.3 Authority Relative to this Agreement. (a)
Olsten and Merger Sub have all necessary corporate power and
corporate authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Olsten and Merger Sub and the
consummation by Olsten and Merger Sub of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Olsten and Merger Sub. The Plan
of Merger has been duly adopted by the Board of Directors of
Merger Sub. This Agreement has been duly executed and delivered
by Olsten and Merger Sub and assuming this Agreement constitutes
the valid and binding agreement of Co-Counsel, constitutes the
legal, valid and binding obligation of Olsten and Merger Sub,
enforceable against Olsten and Merger Sub in accordance with its
terms.
(b) The execution and delivery of this Agreement by
Olsten and Merger Sub do not, and the consummation of the
transactions contemplated hereby by Olsten and Merger Sub will
not: (i) conflict with, or result in any violation or breach of,
any provision of the currently effective certificate of
incorporation or by-laws of Olsten or Merger Sub or (ii) assuming
the consents, approvals, authorizations or permits and filings or
notifications referred to in Section 3.3(c) are duly and timely
obtained or made, result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a
default (or give rise to any right of termination, cancellation
or acceleration or lien or other charge or encumbrance) under any
of the terms, conditions, or provisions (any of the foregoing a
"Violation") of any loan or credit agreement, note, mortgage,
indenture, lease, or other agreement, obligation, instrument,
concession, franchise, license, permit, judgment, order, decree,
statute, law, ordinance, rule or regulation to which Olsten or
Merger Sub or their assets may be bound, except for such
Violations that, individually or in the aggregate, do not have a
Material Adverse Effect.
(c) No consent, approval, order or authorization of,
or registration, declaration or filing with, or permit from any
court, administrative agency, commission or other governmental
authority or instrumentality, domestic or foreign (a
"Governmental Entity"), is required by or with respect to Olsten
or any of its Subsidiaries to validly execute and deliver this
Agreement on behalf of Olsten or any of its Subsidiaries or to
effect the Merger, except for: (i) (A) the filing with the
Securities and Exchange Commission ("SEC") and the effectiveness
of a registration statement on Form S-4 under the Securities Act
of 1933, as amended (the "Securities Act"), in connection with
the issuance of the Class B Stock pursuant to this Agreement and
the Olsten Common Stock issuable upon conversion of such Class B
Stock, as amended or supplemented (such registration statement,
as it may be amended or supplemented from time to time, the
"S-4") and (B) the filing with the SEC of such reports under
Section 13(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and such other compliance with the
Securities Act, the Exchange Act and the rules and regulations
thereunder, as may be required in connection with this Agreement
and the transactions contemplated hereby, and the obtaining from
the SEC of such orders as may be so required; (ii) the filing of
the Articles of Merger with the Secretary of State of Texas;
(iii) such filings and approvals as may be required by applicable
state securities or "blue sky" laws and (iv) filings with, and
approval of, the NYSE for the listing of the shares of Olsten
Common Stock issuable upon conversion of the Class B Stock to be
issued pursuant to this Agreement, except where the failure to
obtain such consents, approvals, order, authorizations or permits
or to make such filings does not have a Material Adverse Effect.
Section 3.4 SEC Documents; Financial Statements.
(a) The Olsten Disclosure Schedule sets forth a true and complete
list of each report, schedule, registration statement and
definitive proxy statement filed by Olsten with the SEC since
December 31, 1993 (collectively, the "Olsten SEC Documents"). As
of their respective dates: (i) the Olsten SEC Documents complied
in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Olsten SEC
Documents and (ii) none of the Olsten SEC Documents contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) The financial statements of Olsten included in the
Olsten SEC Documents (including the audited financial statements
of Olsten and its consolidated Subsidiaries for the fiscal year
ended December 31, 1995, included in Olsten's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995) complied
as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, have been prepared
in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in
the case of the unaudited statements, as permitted by Rule 10-01
of Regulation S-X of the SEC) and fairly present in accordance
with applicable requirements of GAAP (subject, in the case of the
unaudited statements, to normal, recurring audit adjustments) the
consolidated financial position of Olsten and its consolidated
Subsidiaries as at their respective dates and the consolidated
results of operations and the consolidated cash flows of Olsten
and its consolidated Subsidiaries for the periods then ended.
Section 3.5 Information Supplied. None of the
information supplied or to be supplied by Olsten for inclusion or
incorporation by reference in (i) the S-4 will, at the time the
S-4 is filed with the SEC and at the time it becomes effective
under the Securities Act or at the Effective Time, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the proxy statement in
definitive form relating to the meeting of Co-Counsel's
shareholders to be held in connection with the Merger, as amended
or supplemented (such definitive proxy statement, as it may be
amended or supplemented from time to time, the "Proxy Statement")
will, at the date such information is supplied to shareholders of
Co-Counsel, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The
S-4, insofar as it relates to Olsten or Merger Sub or other
information supplied by Olsten for inclusion therein, will comply
as to form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder.
Section 3.6 Absence of Certain Changes or Events.
Olsten does not have any material indebtedness, obligations or
liabilities of any kind (whether accrued, absolute, contingent or
otherwise, and whether due or to become due or asserted or
unasserted), and, to the best knowledge of Olsten, there is no
basis for the assertion of any claim or liability of any nature
against Olsten, which is not fully reflected in, reserved against
or otherwise described in the financial statements included in
the Olsten SEC Documents, except for such indebtedness,
obligations or liabilities as would not have a Material Adverse
Effect. Except as disclosed in the Olsten SEC Documents or as
disclosed in writing by Olsten to Co-Counsel prior to the date
hereof, since December 31, 1995, the business of Olsten has been
conducted only in the ordinary and usual course and there has not
been any material adverse change in its business, properties,
operations or financial condition and no event has occurred and
no fact or set of circumstances has arisen which has resulted in
or could reasonably be expected to result in a Material Adverse
Effect.
Section 3.7 Litigation. There are (i) no actions,
proceedings or claims pending, and (ii) to the knowledge of
Olsten, no investigations pending, or actions, proceedings,
claims or investigations threatened, in any case, against Olsten
or any of its Subsidiaries, before any Governmental Entity which,
if adversely decided, individually or in the aggregate would have
a Material Adverse Effect. Neither Olsten nor any of its
Subsidiaries nor any of their property is subject to any order,
judgment, injunction, or decree which, individually or in the
aggregate, has a Material Adverse Effect.
Section 3.8 Taxes. Olsten has filed all tax returns
required to be filed by it (including estimated tax returns), has
properly determined the taxes due on such returns and has paid
all taxes required to be paid as shown on such returns, except in
each case, where the failure to do so would not have a Material
Adverse Effect.
Section 3.9 Accounting Matters. To the knowledge of
Olsten, neither Olsten nor any of its affiliates has, through the
date of this Agreement, taken or agreed to take any action that
(without giving effect to any action taken or agreed to be taken
by Co-Counsel or any of its affiliates) would prevent Olsten from
accounting for the business combination to be effected by the
Merger as a pooling-of-interests. As used in this Agreement, the
term "affiliate" has the meaning ascribed to it in Regulation
12b-2 promulgated under the Exchange Act.
Section 3.10 Operation of Merger Sub. Merger Sub is a
direct, wholly-owned subsidiary of Olsten, was formed solely for
the purpose of engaging in the transactions contemplated hereby,
has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
Section 3.11 Disclosure. No representation or warranty
by Olsten in this Agreement and no statement contained in any
document or other writing furnished or to be furnished to Co-
Counsel or any of its representatives pursuant to the provisions
hereof contains or will contain any untrue statement of material
fact or omits or will omit to state any material fact necessary
in order to make the statements made herein or therein not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CO-COUNSEL
Except as set forth in this Agreement or Co-Counsel's
disclosure schedule previously delivered to Olsten (the "Co-
Counsel Disclosure Schedule"), Co-Counsel hereby represents and
warrants to Olsten and to Merger Sub as follows:
Section 4.1 Organization, Standing and Power. Co-Counsel
(i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas; (ii) has all
requisite corporate power and corporate authority to own, lease
and operate its properties and to carry on its business as now
being conducted and (iii) is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the
business it is conducting, or the operation, ownership or leasing
of its properties, makes such qualification or licensing
necessary, other than in such jurisdictions where the failure so
to be in good standing, qualified or licensed does not,
individually or in the aggregate, have a Material Adverse Effect.
Co-Counsel has heretofore made available to Olsten complete and
correct copies of its presently effective articles of
incorporation and by-laws. Co-Counsel has no Subsidiaries and
will not have any Subsidiaries at the Effective Time.
Section 4.2 Capital Structure. (a) The authorized
capital stock of Co-Counsel consists of 20,000,000 shares of Co-
Counsel Common Stock and 5,000,000 shares of Preferred Stock, par
value $.01 per share (the "Co-Counsel Preferred Stock").
(b) As of the date hereof, 3,741,500 shares of Co-
Counsel Common Stock were issued and outstanding and no shares of
Co-Counsel Preferred Stock were issued or outstanding. The Co-
Counsel Disclosure Schedule lists all shares of Co-Counsel Common
Stock which were reserved for issuance pursuant to Co-Counsel's
Stock Option Plan For Non-Employee Directors and Co-Counsel's
Employee Stock Option Plan, respectively (collectively, the "Co-
Counsel Stock Option Plans") and (ii) no shares of Co-Counsel
Common Stock were held by Co-Counsel in its treasury. As of the
date hereof, there were outstanding: (i) 1,437,500 redeemable
common stock purchase warrants to purchase Co-Counsel Common
Stock at an exercise price of $3.75 per share (the "Co-Counsel
Warrants") and (ii) non-redeemable warrants to acquire 125,000
Units (as hereinafter defined) at an exercise price of $3.90 per
Unit issued to the representatives identified in Co-Counsel's
Prospectus dated November 15, 1993 (the "Representatives'
Warrants"). Each "Unit" (herein so called) consists of one share
of Co-Counsel Common Stock and one Co-Counsel Warrant
(collectively, the "Units").
(c) All outstanding shares of Co-Counsel Common Stock
are and all shares of Co-Counsel Common Stock which may be issued
pursuant to the Co-Counsel Stock Option Plans, the Co-Counsel
Warrants and the Representatives' Warrants will be, when issued
in accordance with the respective terms thereof, validly issued,
fully paid and nonassessable and not subject to preemptive
rights. The Co-Counsel Disclosure Schedule sets forth all
options granted pursuant to the Co-Counsel Stock Option Plans
which are outstanding as of the date hereof, the number of shares
of Co-Counsel Common Stock for which such options are
exercisable, the option exercise price, and the identity of the
optionee and which of such options are incentive stock options
and which are non-qualified stock options. Except as set forth
in this Section 4.2, there are outstanding: (i) no shares of
capital stock, Voting Debt or other voting securities of Co-
Counsel; (ii) no securities of Co-Counsel convertible into or
exchangeable for shares of capital stock, Voting Debt or other
voting securities of Co-Counsel and (iii) no options, warrants,
calls, rights (including preemptive rights), commitments or
agreements to which Co-Counsel is a party or by which it is bound
obligating Co-Counsel to issue, deliver, sell, purchase, redeem
or acquire or cause to be issued, delivered, sold, purchased,
redeemed or acquired, additional shares of capital stock or any
Voting Debt or other voting securities of Co-Counsel or
obligating Co-Counsel to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. There are
not as of the date hereof, and there will not be at the Effective
Time, any shareholder agreements, voting trusts or other
agreements or understandings to which Co-Counsel or any of its
shareholders is a party or by which it or any of its shareholders
is bound relating to the voting of any shares of the capital
stock of Co-Counsel.
Section 4.3 Authority Relative to this Agreement. (a)
Co-Counsel has all necessary corporate power and corporate
authority to execute and deliver this Agreement and, subject with
respect to consummation of the Merger, to approval of the Plan of
Merger by the affirmative vote of the holders of two-thirds of
the outstanding shares of Co-Counsel Common Stock entitled to
vote thereon (the "Counsel Vote"), to consummate the transactions
contemplated hereby. The Plan of Merger has been duly adopted by
the Board of Directors of Co-Counsel. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Co-Counsel, subject, with respect
to consummation of the Merger, to approval of the Plan of Merger
by the Co-Counsel Vote. This Agreement has been duly executed
and delivered by Co-Counsel and, subject, with respect to
consummation of the Merger, to approval of the Plan of Merger by
the Co-Counsel Vote, and assuming this Agreement constitutes the
valid and binding agreement of Olsten and Merger Sub, constitutes
the valid and binding obligation of Co-Counsel, enforceable
against Co-Counsel in accordance with its terms.
(b) The execution and delivery of this Agreement by
Co-Counsel do not, and the consummation of the transactions
contemplated hereby by Co-Counsel will not: (i) conflict with,
or result in any violation or breach of any provision of, the
currently effective articles of incorporation or by-laws of Co-
Counsel or (ii) assuming the consents, approvals, authorizations
or permits and filings or notifications referred to in Section
4.3(c) are duly and timely obtained or made and the approval of
the Plan of Merger by the Co-Counsel Vote has been obtained,
result in any Violation of any loan or credit agreement, note,
mortgage, indenture, lease, Co-Counsel Benefit Plan (as defined
in Section 4.9) or other agreement, obligation, instrument,
concession, franchise, license, Co-Counsel Permit (as defined in
Section 4.11), judgment, order, decree, statute, law, ordinance,
rule or regulation to which Co-Counsel or its assets may be
bound, except for such Violations that, individually or in the
aggregate, do not have a Material Adverse Effect.
(c) No consent, approval, order or authorization of,
or registration, declaration or filing with, or permit from any
Governmental Entity, is required by or with respect to Co-Counsel
to validly execute and deliver this Agreement on behalf of Co-
Counsel by Co-Counsel or to effect the Merger, except for: (i)
the filing with the SEC of (A) the Proxy Statement and (B) such
reports under Section 13(a) of the Exchange Act, and such other
compliance with the Exchange Act and the rules and regulations
thereunder, as may be required in connection with this Agreement
and the transactions contemplated hereby; (ii) the filing of the
Articles of Merger with the Secretary of State of the State of
Texas and (iii) such filings and approvals as may be required by
the applicable state securities or "blue sky" laws.
Section 4.4 SEC Documents; Financial Statements. (a)
The Co-Counsel Disclosure Schedule sets forth a true and complete
list of each report, schedule, registration statement and
definitive proxy statement ever filed by Co-Counsel with the SEC
(collectively, the "Co-Counsel SEC Documents"). As of their
respective dates: (i) the Co-Counsel SEC Documents complied in
all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Co-Counsel
SEC Documents and (ii) none of the Co-Counsel SEC Documents
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The financial statements of Co-Counsel included in
the Co-Counsel SEC Documents (including the audited financial
statements of Co-Counsel for the fiscal year ended December 31,
1995, included in Co-Counsel's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1995 (the "Counsel 10-K"))
complied as to form in all material respects with the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as
permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly
present in accordance with applicable requirements of GAAP
(subject, in the case of the unaudited statements, to normal,
recurring audit adjustments) the financial position of Co-Counsel
and the results of operations and the cash flow of Co-Counsel for
the periods then ended.
Section 4.5 Information Supplied. None of the
information supplied or to be supplied by Co-Counsel for
inclusion or incorporation by reference in: (i) the S-4 will, at
the time the S-4 is filed with the SEC and at the time it becomes
effective under the Securities Act or at the Effective Time,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading; and (ii) the Proxy
Statement will, at the date mailed to Co-Counsel's shareholders
and at the time of the meeting of Co-Counsel's shareholders to be
held in connection with the Merger or at the Effective Time,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The
Proxy Statement, insofar as it relates to Co-Counsel or other
information supplied by Co-Counsel for inclusion therein, will
comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder, and
the S-4, insofar as it relates to Co-Counsel or other information
supplied by Co-Counsel for inclusion therein, will comply as to
form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder.
Section 4.6 No Undisclosed Material Liabilities; Absence
of Certain Changes or Events. Co-Counsel does not have any
material indebtedness, obligations or liabilities of any kind
(whether accrued, absolute, contingent or otherwise, and whether
due or to become due or asserted or unasserted), and, to the best
knowledge of Co-Counsel, there is no basis for the assertion of
any claim or liability of any nature against Co-Counsel, which is
not fully reflected in, reserved against or otherwise described
in the financial statements included in the Co-Counsel SEC
Documents, except for such indebtedness, obligations or
liabilities as would not have a Material Adverse Effect. Except
as disclosed in the Co-Counsel SEC Documents or as disclosed in
writing by Co-Counsel to Olsten prior to the date hereof of,
since December 31, 1995, the business of Co-Counsel has been
conducted only in the ordinary and usual course and there has not
been any material adverse change in its business, properties,
operations or financial condition and no event has occurred and
no fact or set of circumstances has arisen which has resulted in
or could reasonably be expected to result in a Material Adverse
Effect.
Section 4.7 Litigation. There are no actions, suits,
proceedings, claims (including counterclaims in any action, suit
or proceeding in which Co-Counsel or any of its affiliates is a
plaintiff) or investigations pending or, to the knowledge of Co-
Counsel, threatened against or involving Co-Counsel or any of its
present or former directors, officers, employees, consultants,
agents, or shareholders, any of its properties, assets or
business or any Co-Counsel Benefit Plan that individually or in
the aggregate, has a Material Adverse Effect. There are no
actions, suits or claims or legal, administrative or arbitrative
proceedings or investigations pending or orders, judgments,
injunctions, awards or decrees of any Governmental Entity,
against or involving any of its present or former directors,
officers, employees, consultants, agents, or shareholders of Co-
Counsel which, individually or in the aggregate, have a Material
Adverse Effect. The Co-Counsel Disclosure Schedule contains
true, accurate and complete information regarding the status of
all such actions, suits, proceedings, claims and investigations,
including any settlement proposal or damages estimate
communicated to any party, orally or in writing. Co-Counsel has
entered into settlement agreements (the "Settlement Agreements")
with all of the defendants in the action entitled Of Counsel
Enterprises, Inc. vs. L.C. Wegard & Co., Inc., et al. pending in
the United States District Court for the Southern District of
Texas, Houston Division (the "IPO Litigation") and has delivered
to Olsten true, correct and complete copies of such Settlement
Agreements. Other than as set forth in the Settlement
Agreements, there are no arrangements, agreements or
understandings between Co-Counsel and any of such defendants with
respect to the settlement of the IPO Litigation. The Settlement
Agreements have been duly approved by Co-Counsel's Board of
Directors.
Section 4.8 Taxes. Co-Counsel has filed all tax returns
required to be filed by it (including estimated tax returns), has
properly determined the taxes due on such returns and has paid
all taxes required to be paid as shown on such returns. The most
recent financial statements contained in the Co-Counsel SEC
Documents reflect an adequate reserve for all taxes payable by
Co-Counsel accrued through the date of such financial statements.
All deficiencies for any taxes which have been proposed, asserted
or assessed against Co-Counsel have been fully paid, or are fully
reflected as a liability in such financial statements, or are
being contested and an adequate reserve therefor has been
established and is fully reflected in such financial statements.
There are no liens for taxes (other than for current taxes not
yet due and payable) on the assets of Co-Counsel. The federal,
state and foreign income tax returns of Co-Counsel have been
examined by and settled with the Internal Revenue Service (the
"IRS") or other applicable taxing authority, or the statute of
limitations with respect to such years has expired, for all years
through 1992. There has been no waiver or extension of the
statute of limitations for the assessment of any tax for any
taxable year. Co-Counsel is not a party to or bound by any
agreement providing for the allocation or sharing of taxes. Co-
Counsel has not filed a consent pursuant to or agreed to the
application of Section 341(f) of the Internal Revenue Code of
1986, as amended (the "Code"). No deficiency for any taxes has
been proposed, asserted or assessed with respect to Co-Counsel,
no audit or other examination of the tax returns of Co-Counsel is
currently in progress and no facts exist which constitute grounds
for the assessment of any additional taxes with respect to Co-
Counsel or any of its affiliates. Co-Counsel has disclosed on
its federal income tax returns all positions taken therein that
could give rise to a substantial understatement of federal income
tax within the meaning of Section 6662 of the Code. All taxes
which are required by the laws of the United States, any state or
political subdivision thereof or any foreign country to be
withheld or collected by Co-Counsel have been duly withheld or
collected and, to the extent required, have been paid to the
proper governmental authorities or properly deposited as required
by applicable laws. Co-Counsel (i) has not been a member of an
affiliated group filing a consolidated federal income tax return
(other than a group the common parent of which was Co-Counsel)
and (ii) does not have any liability for the taxes of any person
(other than Co-Counsel) under Treas. Reg. section 1.1502-6 (or any
similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise. For purposes
of this Agreement, the term tax (including, with correlative
meaning, the terms "taxes" and "taxable") shall include all
federal, state, local, and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, property,
withholding, excise and other taxes, duties, or assessments of
any nature whatsoever, together with all interest, penalties and
additions imposed with respect to such amounts.
Section 4.9 Benefit Plans.
(a) The Co-Counsel Disclosure Schedule contains a true
and complete list of each: (i) pension, retirement, savings,
profit sharing, stock bonus, deferred compensation, bonus,
incentive compensation, stock option, restricted stock, stock
purchase, stock appreciation right, salary continuation,
severance or termination pay, medical, hospital, dental,
cafeteria, flexible spending, dependent care, life or other
insurance, disability, fringe benefit, vacation pay, sick pay,
holiday, unemployment, employee loan, educational assistance or
other employee benefit plan or program, agreement or arrangement
and (ii) employment, consulting or severance agreement, in each
case, whether written or oral, covering current or former
employees, directors or agents of Co-Counsel and maintained,
sponsored or contributed to by Co-Counsel, or with respect to
which Co-Counsel may be a party or otherwise have any liability
(including, but not limited to, any "employee benefit plans", as
defined in Section 3(3) of ERISA) (all the foregoing being herein
called the "Co-Counsel Benefit Plans")). With respect to the
Co-Counsel Benefit Plans, individually and in the aggregate, Co-
Counsel has made available to Olsten a true and correct copy of
(i) the three most recent annual reports (Form 5500) filed with
the IRS, if any, (ii) such Co-Counsel Benefit Plan, (iii) any
summary plan description relating to such Co-Counsel Benefit
Plan, (iv) each trust agreement, insurance contract, annuity
contract or other funding vehicle or investment contract relating
to a Co-Counsel Benefit Plan, (v) the most recent actuarial
report or valuation, (vi) the latest IRS determination letter and
any other IRS ruling relating to a Co-Counsel Benefit Plan and
(vii) the premium expenses and claims experience for each Co-
Counsel Benefit Plan which is a welfare benefit plan for the
three most recent fiscal years and for the period from the
beginning of the current fiscal year to the last day of the month
preceding the date hereof.
(b) Each Co-Counsel Benefit Plan complies, in form and
operation, in all material respects, with all applicable laws.
No event has occurred with respect to the Co-Counsel Benefit
Plans, and there exists no condition or set of circumstances in
connection with which Co-Counsel could be subject to any
liability under ERISA, the Code or any other applicable statute,
order or governmental rule or regulation, which has a Material
Adverse Effect.
(c) Each of the Co-Counsel Benefit Plans and related
trusts that is intended to be qualified under Section 401(a) and
exempt from tax under Section 501(a) of the Code has been
determined by the IRS to be so qualified and exempt and, to the
knowledge of Co-Counsel, nothing has occurred since such
determination to cause any of such Co-Counsel Benefit Plans and
related trusts not to qualify under Section 401(a) or be exempt
under Section 501(a) of the Code.
(d) With respect to the Co-Counsel Benefit Plans, all
required returns, reports and descriptions have been
appropriately filed and distributed.
(e) With respect to the Co-Counsel Benefit Plans,
there has been no prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code, or any
liability for taxes or breach of fiduciary duty and there is no
action, suit, grievance, arbitration or other claim with respect
to the administration or investment of assets of the Co-Counsel
Benefit Plans (other than routine claims for benefits made in the
ordinary course of plan administration) pending, or to the
knowledge of Co-Counsel, threatened, and Co-Counsel has no
knowledge of any facts which are reasonably likely to give rise
to any such action, suit, grievance or other claim.
(f) Co-Counsel does not maintain, sponsor, or
contribute to (or is required to contribute to) any "defined
benefit plan" as defined in Section 3(35) of ERISA,
"multiemployer plan" as defined in Section 3(37) of ERISA, or
"multiple employer plan" within the meaning of Sections 4063 or
4064 of ERISA. With respect to any "employee benefit plan" (as
defined in Section 3(3) of ERISA), whether or not terminated,
currently or formerly maintained or contributed to by Co-Counsel,
or any entity which was at any time under common control,
determined under Section 414(b), (c), (m) or (o) of the Code,
with Co-Counsel, no liability has been incurred, and no event has
occurred and no condition exists, which could subject Co-Counsel,
directly or indirectly (through an indemnification agreement or
otherwise) to any material liability, including, without
limitation, any material liability under Section 412, 4971, 4975
or 4980B of the Code or Title IV of ERISA.
(g) With respect to the Co-Counsel Benefit Plans,
there are no funded benefit obligations for which contributions
are due and have not been made or for which contributions have
not been properly accrued as required by GAAP, and there are no
unfunded benefit obligations which have not been (i) accounted
for by reserves (if required by GAAP) or (ii) if required (and to
the extent required, if any), properly disclosed in accordance
with GAAP or the rules and regulations of the SEC, in the
financial statements of Co-Counsel.
(h) No Co-Counsel Benefit Plan or other contract or
agreement to which Co-Counsel is a party provides life, health or
other welfare benefits to retirees or other terminated employees
of Co-Counsel or their dependents, other than continuation
coverage mandated by Section 4980B of the Code or any state law
requiring similar continuation coverage.
(i) The audited balance sheet of Co-Counsel contained
in the Co-Counsel 10-K reflects reserves which are adequate to
cover any reasonably expected liabilities for unresolved or
outstanding workers compensation claims or claims under Co-
Counsel's self-funded employee welfare plans.
Section 4.10 Labor Relations. None of the employees of
Co-Counsel is represented by any labor union. To the knowledge of
Co-Counsel, there is no activity involving any employees of Co-
Counsel seeking to certify a collective bargaining unit or
engaging in any other organizational activity.
Section 4.11 Permits; Compliance with Law. Co-Counsel is
in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity
necessary for Co-Counsel to own, lease and operate its properties
or to carry on its business as it is now being conducted
(collectively, the "Co-Counsel Permits"), except where the
failure to have any of the Co-Counsel Permits would not,
individually or in the aggregate, have a Material Adverse Effect.
Co-Counsel (i) is, and has been, in compliance with all laws,
regulations, rules and orders, and reporting, licensing,
certification, registration and qualification requirements
applicable to its business or employees conducting its business,
including, without limitation, any federal, state or local laws,
statutes, regulations or ordinances, and any judicial or adminis-
trative orders or judgments thereunder and the common law,
pertaining to all health, industrial hygiene and environmental
laws, including the handing, storage, transportation and
disposition of waste, any regulated waste hazardous, toxic
substances or other products or materials used by Co-Counsel in
the operations of its business, the breach or violation of which,
individually or in the aggregate, has a Material Adverse Effect;
and (ii) has received no notification or communication from any
Governmental Entity (A) asserting that Co-Counsel is not in
compliance with any of the foregoing, which noncompliance has a
Material Adverse Effect, or (B) threatening to revoke any Co-
Counsel Permit, which revocation has a Material Adverse Effect.
Section 4.12 Insurance. Co-Counsel maintains insurance
against such risks and in such amounts as Co-Counsel reasonably
believes are necessary to conduct its business. Co-Counsel has
provided Olsten with true and accurate copies of all such
policies. Co-Counsel is not in default with respect to any
provisions or requirements of any such policy nor have any of
them failed to give notice or present any claim thereunder in due
and timely fashion, except for defaults or failures which,
individually or in the aggregate, do not have a Material Adverse
Effect. To the knowledge of Co-Counsel, Co-Counsel has not
received any notice of cancellation or termination in respect of
any of its insurance policies.
Section 4.13 Property. The Co-Counsel Disclosure Schedule
sets forth a true, complete and accurate list and description of
all real property owned or leased by Co-Counsel as of the date
hereof including, any leasehold estate which may been assigned by
Co-Counsel, as assignor. Such description includes, with respect
to each lease, the term thereof, the location and number of
square feet of the premises thereof and the amount of base rent
and additional rent (including escalations) payable thereunder.
True, complete and accurate copies of the leases (including, but
not limited to any subleases or assignment agreements, if any)
set forth on the Co-Counsel Disclosure Schedule have been
delivered to Olsten. Except as described in the following
sentence, Co-Counsel has good, valid and marketable title to, or
a valid leasehold in, all of its properties and assets (real,
personal, mixed, tangible and intangible), including, without
limitation, all of the properties and assets reflected in the
balance sheet of Co-Counsel (except for properties and assets
disposed of in the ordinary course of business and consistent
with past practices since December 31, 1995). None of such
properties or assets are subject to any liability, obligation,
claim, lien, mortgage, pledge, security interest, conditional
sale agreement, charge or encumbrance of any kind (whether
absolute, accrued, contingent or otherwise), except for
imperfections of title and encumbrances, if any, which are not
substantial in amount, do not materially detract from the value
of the property or assets subject thereto and do not impair the
operations of Co-Counsel.
Section 4.14 Contracts. The Co-Counsel Disclosure
Schedule lists all contracts, agreements and instruments to which
Co-Counsel is a party or by which it or any of its properties or
assets are bound: (a) which if terminated, canceled or materially
modified, could reasonably be expected to have a Material Adverse
Effect; (b) which involve payment obligations of any party
thereto in excess of $25,000; (c) which continue in effect after
December 31, 1997, (d) which require indemnification or
contribution payments by any party thereto, or (e) which grant
registration rights to any person or entity (collectively, the
"Co-Counsel Contracts"). All of the Co-Counsel Contracts are in
full force and effect, Co-Counsel is not is in breach, violation
or default under any Co-Counsel Contract, and, to the knowledge
of Co-Counsel, no condition exists which constitutes a breach,
violation or default thereunder by Co-Counsel or gives rise to
any right of termination, cancellation, prepayment or
acceleration and Co-Counsel is not aware of any default by any
other party to any Co-Counsel Contract nor of any event or
condition which constitutes a breach thereunder.
Section 4.15 Intellectual Property. Co-Counsel owns,
possesses or has the right to use (perpetually and without
payment of royalties), for the life of the proprietary right, all
franchises, patents, trademarks, service marks, tradenames,
licenses and authorizations which are necessary or useful to, or
are currently used in its business (collectively, "Intellectual
Property Rights"). The Co-Counsel Disclosure Schedule sets forth
a true, correct and complete list and description of all such
Intellectual Property Rights. Co-Counsel is not a licensor or
licensee of any Intellectual Property Rights. All filings and
other actions necessary to perfect the rights of Co-Counsel to
its Intellectual Property Rights have been duly made in all
jurisdictions where such rights are used by it except in such
case, as does not have a Material Adverse Effect. Co-Counsel is
not infringing any Intellectual Property Rights of any person or
otherwise violating the rights of any person which could subject
Co-Counsel to liabilities which would prevent Co-Counsel from
conducting its business substantially in the manner in which it
is now being conducted and no claim has been made or threatened
against Co-Counsel alleging any such violation, except, in such
case, as does not have a Material Adverse Effect.
Section 4.16 Related Party Transactions. Except as
disclosed in the Co-Counsel SEC Documents, there have been no
material transactions between Co-Counsel on the one hand and (i)
a record or beneficial owner of five percent or more of the
voting securities of Co-Counsel or (ii) an affiliate of any such
officer, director or beneficial owner, on the other hand.
Section 4.17 Transaction Expenses. Co-Counsel does not
currently and will not in the future have any liability or
obligation (whether for the payment of fees or otherwise and
whether or not conditioned on the occurrence, existence or
absence of one or more events or circumstances) to any person or
entity arising from or relating to services provided to Co-
Counsel or Co-Counsel's affiliates in connection with any aspect
of the preparation or negotiation of, or the consummation of the
transactions contemplated by, this Agreement or the decision to
engage in such preparation, negotiation and consummation.
Section 4.18 Accounting Matters. To the knowledge of Co-
Counsel, neither Co-Counsel nor any of its affiliates has,
through the date of this Agreement, taken or agreed to take any
action that (without giving effect to any action taken or agreed
to be taken by Olsten or any of its affiliates) would prevent
Olsten from accounting for the business combination to be
effected by the Merger as a pooling-of-interests.
Section 4.19 Vote Required. The only vote of the holders
of any class or series of Co-Counsel capital stock necessary to
approve the Plan of Merger is the affirmative vote by the holders
of two-thirds of the outstanding shares of Co-Counsel Common
Stock entitled to vote thereon.
Section 4.20 Affiliates. The Co-Counsel Disclosure
Schedule sets forth a list of all persons who are, to the
knowledge of Co-Counsel at the date hereof, "affiliates" of Co-
Counsel for purposes of Rule 145 under the Securities Act (the
"Co-Counsel Affiliates").
Section 4.21 Certain Agreements. Except for the Co-
Counsel Benefit Plans, Co-Counsel is not a party to any written
or oral employment agreement, or other arrangement regarding
employees (including the Co-Counsel Benefit Plans), directors or
agents, including any (i) agreement with any executive officer or
other employee of Co-Counsel the benefits of which are
contingent, or the terms of which are materially altered, upon
the occurrence of a transaction involving Co-Counsel of the
nature contemplated by this Agreement or (ii) agreement or plan,
any of the benefits of or rights under which will be increased,
or the vesting or payment of the benefits of or rights under
which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any
of the benefits of which will be calculated on the basis of any
of the transactions contemplated by this Agreement. No holder of
any option to purchase shares of Co-Counsel Common Stock, or
shares of Co-Counsel Common Stock granted in connection with the
performance of services for Co-Counsel, is or will be entitled to
receive cash from Co-Counsel in lieu of or in exchange for such
option or shares as a result of the transactions contemplated by
this Agreement.
Section 4.22 Relationships with Clients. Co-Counsel is
not engaged in any material dispute with any client of Co-
Counsel, except for disputes which do not have a Material Adverse
Effect. To Co-Counsel's knowledge, no client is considering
termination or any adverse modification of its arrangements
relating to businesses of Co-Counsel (other than terminations or
modifications that occur in the ordinary course of business as a
result of work orders being completed and which do not have a
Material Adverse Effect).
Section 4.23 Disclosure. No representation or warranty by
Co-Counsel in this Agreement and no statement contained in any
document or other writing furnished or to be furnished to Olsten
or to Merger Sub or any of their representatives pursuant to the
provisions hereof contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact
necessary in order to make the statements made herein or therein
not misleading. All copies of all Co-Counsel Contracts and all
other documents delivered to Olsten, Merger Sub or any of their
representatives pursuant hereto are true, complete and accurate
in all material respects. There has been no event or transaction
which has occurred or information which has come to the attention
of Co-Counsel (other than events or information relating to
economic conditions of general public knowledge) which could
reasonably be expected to have a Material Adverse Effect or which
could reasonably be expected to prevent or impair the ability of
the Surviving Corporation, after the Effective Time, to carry on
the business of Co-Counsel in the same manner as it is presently
being conducted.
ARTICLE V
COVENANTS OF OLSTEN AND CO-COUNSEL
PENDING THE MERGER
During the period from the date of this Agreement to the
Effective Time, Olsten and Co-Counsel each agree that (except as
contemplated or expressly permitted by this Agreement or to the
extent that the other party shall otherwise agree in writing):
Section 5.1 Ordinary Course. The business of Co-Counsel
shall be conducted only in the ordinary course of business and in
a manner consistent with past practice. Co-Counsel shall use all
reasonable efforts to preserve substantially intact the business
organization of itself, to keep available the services of its
present officers, employees and consultants and to preserve its
present relationships with customers, suppliers and other persons
with which it has a significant business relationship.
Section 5.2 Governing Documents. No party shall amend or
propose to amend its certificate of incorporation or by-laws or
equivalent organizational documents, PROVIDED that Olsten shall
be permitted to make non-material amendments to its bylaws.
Section 5.3 Issuance of Securities. Co-Counsel shall not,
issue, deliver or sell, or authorize or propose to issue, deliver
or sell, any shares of its capital stock of any class, any Voting
Debt or any securities convertible into, or any rights, warrants
or options to acquire any such shares, Voting Debt or convertible
securities or other ownership interest, except for the issuance
of Co-Counsel Common Stock issuable pursuant to the exercise of
the Co-Counsel Warrants, the Representatives' Warrants and the
Co-Counsel Stock Options disclosed in Section 4.2(b).
Section 5.4 Dividends; Changes in Stock. No party shall,
nor shall any party propose to: (i) declare, set aside, make or
pay any dividend or other distribution, payable in cash, stock,
property or otherwise, with respect to any of its capital stock
(except in the case of Olsten (x) cash dividends or distributions
paid on or with respect to a class of common stock all of which
shares of common stock are owned directly or indirectly by Olsten
and (y) it may continue the declaration and payment of its
regular quarterly cash dividends) or (ii) reclassify, combine,
split or subdivide any of its capital stock. Co-Counsel shall
not redeem, purchase or otherwise acquire, directly or indirectly
any of its capital stock.
Section 5.5 Acquisition Proposals. Co-Counsel will not and
will direct its officers, directors, employees and any investment
banker, financial advisor, attorney, accountant or other
representative retained by Co-Counsel not to: (i) solicit or
otherwise encourage any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below in this Section 5.5), or
(ii) except to the extent permitted by the last sentence of this
Section 5.5, agree to or endorse any Acquisition Proposal or
engage in negotiations concerning, provide any nonpublic
information to, or have any discussions with, any person relating
to any Acquisition Proposal. Co-Counsel will immediately cease
and cause to be terminated any existing activities, discussions
or negotiations with any parties conducted heretofore with
respect to any of the foregoing and, in connection therewith,
will request that confidential information furnished by or on
behalf of Co-Counsel to any such parties be returned to Co-
Counsel immediately. Co-Counsel shall immediately notify Olsten
of any negotiations, requests for nonpublic information or
discussions with respect to an Acquisition Proposal and will keep
Olsten fully informed of the status and details of any such
Acquisition Proposal, indication or request. As used in this
Agreement, "Acquisition Proposal" means any proposal or offer
involving a merger, consolidation, share exchange,
recapitalization, business combination or other similar
transaction involving Co-Counsel or any proposal or offer to
acquire an equity interest (other than an immaterial equity
interest) in, or a material portion of the assets of Co-Counsel
other than the transactions contemplated by this Agreement.
Notwithstanding any other provision of this Agreement, nothing
contained in this Agreement shall prohibit Co-Counsel or Co-
Counsel's Board of Directors (the "Counsel Board of Directors"):
(A) from taking and disclosing to Co-Counsel's shareholders a
position or making other disclosures contemplated by Rule 14e-2
promulgated under the Exchange Act as based upon advice of its
outside legal counsel (which may be Co-Counsel's regularly
engaged outside legal counsel) may be required by law; (B) from
withdrawing, modifying or changing its recommendation to Co-
Counsel's shareholders with respect to the Merger or (C) from
taking, authorizing or permitting any action or actions in
response to or in connection with any Acquisition Proposal, or
any action contemplated by clause (ii) of the first sentence of
this Section 5.5, if the Co-Counsel Board of Directors determines
in good faith, based upon the advice of its outside legal
counsel, that, in each such case, the failure to do so would
violate its fiduciary duties to the holders of Co-Counsel Common
Stock under applicable law.
Section 5.6 No Acquisitions. Co-Counsel shall not acquire
or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any material amount of assets other than in the ordinary
course of business.
Section 5.7 No Dispositions. Co-Counsel shall not sell,
lease, encumber or otherwise dispose of, or agree to sell, lease
(whether such lease is an operating or capital lease), encumber
or otherwise dispose of any material portion of its assets.
Section 5.8 Indebtedness; Leases. Co-Counsel shall not
incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or warrants or
rights to acquire any debt securities of Co-Counsel or guarantee
any debt securities of others or enter into, cancel, surrender,
amend or modify any lease or sublease (whether such lease or
sublease is an operating or capital lease) other than in each
case in the ordinary course of business.
Section 5.9 Advice of Changes; Governmental Filings. Each
party shall confer on a regular and frequent basis with the
other, report on operational matters and promptly advise the
other orally and in writing of: (i) any material inaccuracy or
breach of any of its representations, warranties or covenants
contained in this Agreement and (ii) any material failure of a
party or any officer, director, employee, agent or affiliate
thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder;
PROVIDED, HOWEVER, that such advice shall not be taken into
account in determining whether any of the conditions contained in
Article VII has been satisfied. Each party shall promptly
provide the other (or its counsel) copies of all filings made by
such party with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.
Section 5.10 Employee Arrangements. Co-Counsel shall not:
(a) increase or agree to increase the compensation (whether cash
or non-cash) payable or to become payable or the benefits
provided or to be provided to its directors, officers or
employees, except for: (i) increases in salary or wages of
employees other than officers of Co-Counsel (whether in such
capacity or otherwise) in accordance with past practices and not
to exceed 5% on an annual basis; or (ii) increases required by
the provisions of any Co-Counsel Benefit Plan as in effect on the
date hereof; (b) grant or increase the amount of any severance or
termination pay to, or enter into any employment or severance
agreements with, any officers or employees of Co-Counsel; (c)
enter into or amend any collective bargaining agreement; or (d)
establish, adopt, enter into or amend any employee benefit or
fringe benefit plans or arrangements for the benefit of any
directors, officers or employees, including, without limitation,
any plans or arrangements of the type set forth in Section 4.9
hereof; PROVIDED, HOWEVER, that nothing in this Section 5.10
shall prevent the payment or other performance of any award or
grant made prior to the date hereof and disclosed in the Co-
Counsel SEC Documents, the Co-Counsel Disclosure Schedule or
pursuant to this Agreement. For the purposes of this Section
5.10, the term "officer" shall mean only those persons who are
required to file Form 3 or 4 under Section 16(a) of the Exchange
Act.
Section 5.11 No Dissolution, Etc. Neither Olsten nor Co-
Counsel shall authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial liquidation or
dissolution.
Section 5.12 No Action. No party hereto will take or agree
or commit to take any action that is reasonably likely to make
any of its representations or warranties hereunder inaccurate in
any material respect at the date made (to the extent so limited)
or as of the Effective Time.
Section 5.13 Tax Returns. Co-Counsel will file all tax
returns required to be filed by it (including estimated tax
returns) and will pay all taxes due prior to the Effective Time.
Section 5.14 Litigation. Without Olsten's prior written
consent, Co-Counsel shall not, nor shall it permit any of its
affiliates or representatives to, take any action with respect to
any pending or threatened actions, suits or proceedings,
including, without limitation, conducting settlement negotiations
or entering into any binding settlement agreement, arrangement or
understanding.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of S-4 and Proxy Statement. Co-
Counsel shall as promptly as practicable prepare and file with
the SEC the Proxy Statement and Olsten shall as promptly as
practicable prepare and file with the SEC the S-4, in which the
Proxy Statement will be included as a prospectus. Olsten shall
use its reasonable efforts, and Co-Counsel shall cooperate with
Olsten, to have the S-4 declared effective by the SEC as promptly
as practicable and to keep the S-4 effective as long as is
necessary to consummate the Merger. Olsten shall, as promptly as
practicable, provide copies of any written comments received from
the SEC with respect to the S-4 to Co-Counsel and advise Co-
Counsel of any verbal comments with respect to the S-4 received
from the SEC. Co-Counsel shall use all reasonable efforts to
cause the Proxy Statement to be mailed to its shareholders
promptly after the S-4 is declared effective. Olsten shall use
reasonable efforts to obtain all necessary state securities laws
or "blue sky" permits, approvals and registrations in connection
with the issuance of Class B Stock (and the Olsten Common Stock
issuable upon conversion of such Class B Stock) pursuant to the
Merger. If at any time prior to the Effective Time, any event
with respect to Olsten or any of its Subsidiaries or with respect
to other information supplied by Olsten or for inclusion in the
Proxy Statement or S-4, shall occur which is required to be
described in an amendment of, or a supplement to, the Proxy
Statement or the S-4, such event shall be so described, and such
amendment or supplement shall be promptly filed with the SEC and,
as required by law, disseminated to the shareholders of Co-
Counsel. If at any time prior to the Effective Time, any event
with respect to Co-Counsel or with respect to other information
supplied by Co-Counsel for inclusion in the Proxy Statement or
S-4, shall occur which is required to be described in an
amendment of, or a supplement to, the Proxy Statement or the S-4,
such event shall be so described, and such amendment or
supplement shall be promptly filed with the SEC and, as required
by law, disseminated to the shareholders of Co-Counsel. Olsten
shall advise Co-Counsel, promptly after it receives notice
thereof, of the time when the S-4 has become effective or any
supplement or amendment thereto has been filed, the issuance of
any stop order, the denial or suspension of the qualification of
the Class B Stock (or the Olsten Common Stock issuable upon
conversion of such Class B Stock) issuable pursuant to the Merger
for offering or sale in any jurisdiction or any request by the
SEC for any amendment or supplement to the S-4 or comments
thereon and responses thereto or requests by the SEC for
additional information.
Section 6.2 Letters of Accountants. (a) Olsten shall use
reasonable best efforts to cause Coopers & Lybrand L.L.P.
("C&L"), Olsten's independent public accountants, to deliver to
Olsten, a letter to the effect that pooling-of-interests
accounting is appropriate for the Merger if it is closed and
consummated in accordance with this Agreement, and Co-Counsel
shall use reasonable best efforts to cause BDO Seidman L.L.P.
("Seidman"), Co-Counsel's independent public accountants, to
cooperate fully with C&L (including without limitation, sharing
information, analysis and work product, engaging in active
discussions and delivering to Co-Counsel a letter substantially
similar to C & L's letter to Olsten) in connection with C&L's
delivery of such letter.
(b) Co-Counsel shall use reasonable best efforts to
cause to be delivered to Olsten a letter of Seidman, Co-Counsel's
independent public accountants, dated a date within two Business
Days before the date on which the S-4 shall become effective and
addressed to Olsten, in form and substance reasonably
satisfactory to Olsten and customary in form and substance for
letters delivered by independent public accountants in connection
with registration statements similar to the S-4.
Section 6.3 Accounting Matters. Neither Olsten, Co-Counsel
nor any of their respective affiliates shall take or agree to
take any action or fail to take any action that would prevent
Olsten from accounting for the business combination to be
effected by the Merger as a pooling-of-interests under GAAP.
Without limitation of the foregoing, each party agrees that
neither it nor its affiliates will, and it will direct its
accountants not to, discuss with or make any written
presentations to the SEC concerning the application of pooling-
of-interests accounting, unless such party has provided to the
other party a reasonable opportunity to participate fully in any
such discussion or presentation. Each party shall promptly
notify the other parties if at any time such party has knowledge
of any fact or circumstance which causes such party to believe
that C&L will not be able to deliver the letter referred to in
Section 6.2(a).
Section 6.4 Access to Information. From the date hereof to
the Effective Time, Olsten and Co-Counsel shall each afford to
the other, and the officers, employees, accountants, counsel and
other representatives of the other, access at all reasonable
times to its officers, employees, agents, properties, offices,
plants, other facilities and to all books and records (including
tax returns), and shall furnish to the other party all financial,
operating and other data and information as the other party,
through its officers, employees or agents, may reasonably
request. Each of Co-Counsel and Olsten agrees that it will not,
and will cause its respective representatives not to, use any
information obtained pursuant to this Section 6.4 for any purpose
unrelated to the consummation of the transaction contemplated by
this Agreement. The Confidentiality Agreement dated January 4,
1996 between Olsten and Co-Counsel ("Co-Counsel Confidentiality
Agreement") shall apply with respect to information furnished by
Co-Counsel and Co-Counsel's representatives thereunder or
hereunder and any other activities contemplated thereby.
Section 6.5 Meeting of Shareholders. Co-Counsel shall
promptly take all action necessary in accordance with the laws of
the State of Texas, the Exchange Act, its articles of
incorporation and its by-laws to convene a meeting of its
shareholders for the purpose of approving this Agreement.
Subject to Section 5.5, Co-Counsel will, through its Board of
Directors, recommend to its shareholders approval of this
Agreement and shall use its reasonable best efforts to obtain
approval of this Agreement by its shareholders (except to the
extent Co-Counsel's Board of Directors in good faith, determines
that, based upon the advice of its outside legal counsel, to do
so would violate its fiduciary duties to the holders of Co-
Counsel Common Stock under applicable law).
Section 6.6 Legal Conditions to Merger. Each of Co-Counsel
and Olsten will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on
itself with respect to the Merger (including furnishing all
information required in connection with approvals of or filings
with any Governmental Entity) and will promptly cooperate with
and furnish information to each other in connection with any such
requirements imposed upon either of them in connection with the
Merger.
Section 6.7 Affiliates. Prior to the Closing Date, Co-
Counsel shall notify Olsten in writing regarding any changes in
the identity of the Co-Counsel Affiliates. Co-Counsel shall use
all reasonable efforts to cause each Co-Counsel Affiliate to
deliver to Olsten on or prior to the Closing Date an agreement in
substantially the form previously agreed upon (each, an
"Affiliate Agreement").
Section 6.8 Stock Exchange Listing. Olsten shall use its
reasonable best efforts to cause the shares of Olsten Common
Stock, issuable upon conversion of the Class B Stock to be issued
pursuant to this Agreement, to be listed on the NYSE, subject to
notice of official issuance thereof.
Section 6.9 Stock Options; Co-Counsel Warrants.
(a) At the Effective Time, each outstanding option to
purchase Co-Counsel Common Stock which has been granted pursuant
to the Co-Counsel Stock Option Plans (collectively, the "Co-
Counsel Stock Options"), whether vested or unvested, and each
outstanding right to acquire shares of Co-Counsel Common Stock
pursuant to the Co-Counsel Warrants or the Representatives'
Warrants, shall be assumed by Olsten. After the Effective Time,
each (A) Co-Counsel Stock Option and each Co-Counsel Warrant
shall automatically be deemed to constitute an option, warrant or
right to acquire, on the same terms and conditions as were
applicable under such Co-Counsel Stock Option or Co-Counsel
Warrant, as the case may be, the number of shares of Class B
Stock equal to the product obtained by multiplying (i) the number
of shares of Co-Counsel Common Stock subject to the Co-Counsel
Stock Option or the Co-Counsel Warrant, as the case may be, by
(ii) the Conversion Number, at a price per share equal to the
quotient obtained by dividing (x) the exercise price for the
shares of Co-Counsel Common Stock subject to such Co-Counsel
Stock Option or Co-Counsel Warrant, as the case may be, by (y)
the Conversion Number; (B) each of the then outstanding
Representatives' Warrants shall automatically be deemed to
constitute a warrant or right to acquire, on the same terms and
conditions as were applicable under such Representatives'
Warrants, the number of new units ("New Units") equal to the
product obtained by multiplying (i) the number of then
outstanding Representatives' Warrants by (ii) the Conversion
Number, at a price per New Unit equal to the quotient obtained by
dividing (i) $3.90 by (ii) the Conversion Number and (C) with
respect to each New Unit, any Co-Counsel Common Stock and Company
Warrant obtained as a result of exercise of a converted
Representatives' Warrant to acquire such New Unit, such Co-
Counsel Common Stock and Co-Counsel Warrant shall be deemed to
have been converted on the same basis as described in clause (A)
above; PROVIDED, HOWEVER, that the number of shares of Class B
Stock that may be purchased upon exercise of such Co-Counsel
Stock Option, Representatives' Warrant or Co-Counsel Warrant
shall not include any fractional share and, upon exercise of such
Co-Counsel Stock Option, Representatives' Warrant or Co-Counsel
Warrant, a cash payment shall be made for any fractional share in
accordance with the requirements of such Co-Counsel Stock Option,
Representatives' Warrant or Co-Counsel Warrant; and PROVIDED
FURTHER, that in the case of any Co-Counsel Stock Option to which
Section 421 of the Code applies by reason of its qualification
under any of Sections 422-424 of the Code ("qualified stock
options"), the option price, the number of shares purchasable
pursuant to such option and the terms and conditions of exercise
of such option shall be determined in order to comply with
Section 424(a) of the Code.
(b) As soon as practicable after the Effective Time,
Olsten shall deliver to each then holder of a Co-Counsel Stock
Option, Co-Counsel Warrant or Representatives' Warrant, an
appropriate notice setting forth such holder's right to acquire
Class B Stock, and the Co-Counsel Stock Option agreement, Co-
Counsel Warrant and Representatives' Warrant of each such holder
shall be deemed to be appropriately amended so that such option
continues in effect on the same terms and conditions as contained
in the outstanding Co-Counsel Stock Option Agreement, Co-Counsel
Warrant or Representatives' Warrant (subject to the adjustments
required by this Section 6.9 after giving effect to the Merger).
(c) As soon as practicable after the Effective Time,
Olsten shall file registration statements: (i) on Form S-8 (or
any successor form) or another appropriate form with respect to
the shares of Class B Stock subject to Co-Counsel Stock Option
Plans (and the shares of Olsten Common Stock into which such
shares of Class B Stock are convertible) and (ii) on Form S-3 (or
any successor form) or another appropriate form with respect to
the shares of Class B Stock subject to the Co-Counsel Warrants
(and the shares of Olsten Common Stock into which such shares of
Class B Stock are convertible), and shall use its reasonable best
efforts to maintain the effectiveness of such registration
statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as any Co-Counsel
Stock Options or Co-Counsel Warrants remain outstanding.
Section 6.10 Fees and Expenses. (a) Except as otherwise
provided in this Section, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses.
(b) If Olsten terminates this Agreement as permitted
under Section 8.1(d) as a result of the occurrence of any event
described in clause (i) of Section 6.10(d) or as permitted under
Section 8.1(g), or Co-Counsel terminates this Agreement as
permitted under Section 8.1(f) or (g), then Co-Counsel shall pay
to Olsten promptly, but in no event later than two Business Days,
after such termination, an amount in immediately available funds
equal to $500,000.
(c) If Olsten terminates this Agreement as permitted
under Section 8.1(d) as a result of the occurrence of any event
described in clause (ii) of Section 6.10(d) (so long as no event
described in clause (i) of Section 6.10(d) has occurred), then
Co-Counsel shall pay Olsten promptly, but in no event later than
two Business Days after Olsten's demand therefor, an amount in
immediately available funds equal to Olsten's reasonable,
documented out-of-pocket expenses incurred in connection with the
negotiation, execution, delivery and performance of this
Agreement and the transactions contemplated hereby (including,
without limitation, costs and disbursements of attorneys,
accountants and investment bankers, filing fees and the expenses
incurred in connection with printing and mailing the Proxy
Statement and the S-4) up to $250,000; provided, however, that if
within one year after such termination, Co-Counsel or any of its
Subsidiaries has effected or has entered into an agreement to
effect any Acquisition Proposal or any tender or exchange offer
referred to in Section 6.10(d)(ii) is closed, then Co-Counsel
shall pay to Olsten promptly, but in no event later than two
Business Days, after the consummation of, or execution of any
agreement relating to, such Acquisition Proposal, or consummation
of such tender or exchange offer, in addition to the amount paid
to Olsten in reimbursement of its expenses as provided above, an
amount in immediately available funds, equal to the difference
between $500,000 and the amount of such expenses previously paid
by Co-Counsel to Olsten.
(d) Each of the events described in the following
clauses (i) and (ii) is hereinafter referred to as a "Trigger
Event":
(i) The Co-Counsel Board of Directors shall have
(A) withdrawn or materially modified its approval or
recommendation of this Agreement for any reason other than the
occurrence of an event relating to Olsten which has a Material
Adverse Effect or (B) postponed the date scheduled for Co-
Counsel's shareholders' meeting relating to this Agreement (the
"Co-Counsel Meeting") beyond September 30, 1996, without Olsten's
prior written consent, which consent shall not be unreasonably
delayed or withheld; or
(ii) The Plan of Merger shall not have been
approved with the Co-Counsel Vote having been taken by the
requisite vote of Co-Counsel shareholders as provided in Section
6.1 in circumstances when (a) an offer or proposal to effect an
Acquisition Proposal (which was not encouraged or solicited by
Olsten) with or for Co-Counsel has been publicly announced or (b)
any person or group (as defined in Section 13(d)(3) of the
Exchange Act) ("Group") (other than Olsten or any of its
affiliates) shall have become a beneficial owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) ("Beneficial
Owner") of at least 15% of the outstanding shares of Co-Counsel
Common Stock, or any person or group shall have commenced, or
shall have publicly announced its intention to commence, a tender
or exchange offer for at least 25% of the outstanding shares of
Co-Counsel Common Stock unless at least five (5) days prior to
the latest scheduled date for the Co-Counsel Meeting, such person
or group publicly announces its withdrawal of such offer or
intention not to commence such tender or exchange offer.
Section 6.11 Brokers or Finders. Each of Olsten and Co-
Counsel represents, as to itself and its affiliates, that no
agent, broker, investment banker, financial advisor or other firm
or person is or will be entitled to any broker's or finder's fee
or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement, except De Bellas
& Co., all of whose fees and expenses will be paid by Olsten in
accordance with Olsten's agreement with such firm, and the
persons disclosed in the Co-Counsel Disclosure Schedule, all of
whose fees and expenses will be paid by Co-Counsel in accordance
with Co-Counsel's agreement with such firms (true, correct and
complete copies of which have been delivered by Co-Counsel to
Olsten), and each of Olsten and Co-Counsel respectively agree to
indemnify and hold the other harmless from and against any and
all claims, liabilities or obligations with respect to any other
fees, commissions or expenses asserted by any person on the basis
of any act or statement alleged to have been made by such party
or its affiliate.
Section 6.12 Indemnification. Olsten and Merger Sub agree
that all rights to indemnification existing in favor of the
present directors, officers and employees of Co-Counsel (solely
in their capacities as such) or present directors of Co-Counsel
serving or who served at Co-Counsel's request as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise,
as provided in Co-Counsel's articles of incorporation or bylaws
(each as in effect on the date hereof), and the indemnification
agreements with such present directors, officers and employees as
in effect as of the date hereof with respect to matters occurring
prior to the Effective Time shall survive the Merger and shall
continue in full force and effect and without modification (other
than modifications which would enlarge the indemnification
rights) for a period of not less than the statutes of limitations
applicable to such matters, and Olsten agrees to cause the
Surviving Corporation to comply fully with its obligations
hereunder and thereunder. Furthermore, the present Article XIII
of the Articles of Incorporation of Co-Counsel shall not be
modified or terminated for a period of at least four years after
the Effective Time, except for modifications which enlarge the
protection or rights of the directors.
Section 6.13 Employment Agreements. At the Closing, Olsten
shall offer or cause the Surviving Corporation to offer to enter
into employment agreements with each of the individuals listed in
Section 6.13 of the Co-Counsel Disclosure Schedule, each such
agreement to be substantially in the form previously agreed to
among Olsten, Co-Counsel and each such individual on or prior to
the date hereof.
Section 6.14 Additional Agreements; Reasonable Efforts.
Subject to the terms and conditions of this Agreement, each of
the parties hereto agrees to use all reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws
and regulations (including, without limitation, providing
information and making all necessary filings under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended) to
consummate and make effective the transactions contemplated by
this Agreement, subject to the Co-Counsel Vote, including
cooperating fully with the other party. Except as otherwise
contemplated herein, in any case at any time after the Effective
Date, any further action is necessary or desirable to carry out
the purposes of this Agreement or to vest the Surviving
Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of either of the Constituent
Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action. Co-Counsel
shall use its best efforts to cause Stephens Inc. to issue at the
earliest practicable date, an opinion addressed to Co-Counsel or
Co-Counsel's Board of Directors that the Conversion Number is
fair, from a financial point of view, to Co-Counsel and the
holders of Co-Counsel Common Stock (the "Fairness Opinion").
Section 6.15 Reserved Shares; Eligibility for Rules 144 and
145. (a) On the date hereof, Olsten has, and at and following
the Effective Time, Olsten shall have (i) sufficient shares of
Class B Stock reserved for issuance (A) upon conversion of shares
of Co-Counsel Common Stock in the Merger and (B) upon the
exercise of all options and warrants to acquire shares of Class B
Stock (including, after the Effective Time, all options to
acquire Co-Counsel Common Stock and the Co-Counsel Warrants and
the Representatives' Warrants assumed by Olsten pursuant to
Section 6.9 hereof) and (ii) sufficient shares of Olsten Common
Stock reserved for issuance upon conversion of all issued and
outstanding Class B Stock and all Class B Stock issuable pursuant
to clause (i) of this Section.
(b) The shares of Olsten Common Stock acquired upon
conversion of Class B Stock will be available for resale without
restriction (i) immediately and without any limitation by those
present holders of Co-Counsel Common Stock, the Co-Counsel Stock
Options or the Co-Counsel Warrants who are not Co-Counsel
Affiliates and (ii) immediately after expiration of the
"Restricted Period" (as defined in the Affiliate Agreements) by
the present holders of Co-Counsel Common Stock, the Co-Counsel
Stock Options or the Co-Counsel Warrants who are Co-Counsel
Affiliates and who comply with the requirements of Rule 145(d)(1)
in effecting such resales. Olsten shall use all reasonable
efforts to insure that Rule 144 and Rule 145 shall at all times
remain available for Co-Counsel Affiliates to resell their shares
of Olsten Common Stock. The parties confirm that since Olsten
Common Stock (and Class B Stock) will be registered with the SEC
in the S-4 and distributed in a public offering, no shares of
such Olsten Common Stock or Class B Stock will be "restricted
securities" within the meaning of Rule 144.
ARTICLE VII
CONDITIONS OF MERGER
Section 7.1 Conditions to Obligations of Each Party to
Effect the Merger. The respective obligations of each party to
effect the Merger shall be subject to the fulfillment at or prior
to the Effective Time of the following conditions:
(a) Shareholder Approval. The Plan of Merger shall
have been approved by the Co-Counsel Vote.
(b) NYSE Listing. The shares of Olsten Common Stock
issuable upon conversion of Class B Stock to be issued pursuant
to this Agreement shall have been authorized for listing on the
NYSE upon official notice of issuance.
(c) Other Approvals. Other than the filing provided
for by Section 1.1, all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity required in
connection with the consummation of the Merger, the failure to
obtain which has a Material Adverse Effect on Olsten and its
Subsidiaries, taken as a whole (assuming the Merger had taken
place), shall have been filed, occurred or been obtained. Olsten
shall have received all state securities laws or "blue sky"
permits and authorizations necessary to issue the Class B Stock
(and the Olsten Common Stock issuable upon conversion of such
Class B Stock) pursuant to the Agreement.
(d) S-4. The S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order
or proceedings seeking a stop order.
(e) No Injunction or Restraints. No temporary
restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction prohibiting
the consummation of the Merger shall be in effect; PROVIDED,
HOWEVER, that prior to invoking this condition, each party shall
use all reasonable efforts to have any such decree, ruling,
injunction or order vacated, except as otherwise contemplated by
this Agreement.
Section 7.2 Additional Conditions to Obligations of Olsten
and Merger Sub. The obligations of Olsten and Merger Sub to
effect the Merger are also subject to the following conditions
(any one or more of which may be waived by Olsten and Merger Sub,
but only in a writing signed by Olsten and Merger Sub):
(a) Representations and Warranties. All
representations and warranties of Co-Counsel contained in this
Agreement which are qualified with respect to Material Adverse
Effect on Co-Counsel or materiality shall be true and correct,
and all representations and warranties that are not so qualified
shall be true and correct in all material respects, in each case
as if such representation or warranty was made on and as of the
Effective Time, except to the extent that any such representation
or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct as of
such specified date.
(b) Agreements and Covenants. Co-Counsel shall have
performed or complied in all material respects with all of its
agreements and covenants contained in this Agreement to be
performed or complied with by it at or prior to the Effective
Time.
(c) No Pending Proceedings. Neither Olsten nor Co-
Counsel nor any Subsidiary of Olsten shall be required by the
Department of Justice, the Federal Trade Commission or any other
Governmental Entity to hold separate, sell or otherwise dispose
of any Subsidiary or assets or properties, the effect of any of
which would be to materially impair the value of the Merger to
Olsten.
(d) Affiliate Agreements. Olsten shall have received
from each Co-Counsel Affiliate (as defined in Section 4.22) an
executed copy of an Affiliate Agreement.
(e) Compliance Certificate. Co-Counsel shall have
delivered to Olsten a certificate, dated as of the Closing Date,
signed by the President or any Vice President of Co-Counsel,
certifying as to the fulfillment of the conditions specified in
paragraphs (a) and (b) of this Section 7.2.
(f) Appraisal Rights. Shareholders holding no more
than 7.5% of the outstanding Co-Counsel Common Stock shall have
demanded their appraisal rights under the TBCA.
(g) Opinion of Accountants. Olsten shall have
received an opinion from C&L, in form reasonably satisfactory to
Olsten, to the effect that the business combination to be
effected by the Merger would be properly accounted for as a
pooling- of-interests in accordance with GAAP and all published
rules, regulations and policies of the SEC.
Section 7.3 Additional Conditions to Obligation of Co-
Counsel. The obligation of Co-Counsel to effect the Merger is
also subject to the following conditions (any one or more of
which may be waived by Co-Counsel, but only in a writing signed
by Co-Counsel):
(a) Representations and Warranties. All
representations and warranties of Olsten and Merger Sub contained
in this Agreement which are qualified with respect to Material
Adverse Effect on Olsten or materiality shall be true and
correct, and all representations and warranties that are not so
qualified shall be true and correct in all material respects, in
each case as if such representation or warranty is made as of the
Effective Time, except to the extent that any such representation
or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct as of
such specified date.
(b) Agreements and Covenants. Olsten shall have
performed or complied in all material respects with all of its
agreements and covenants contained in this Agreement to be
performed or complied with by it at or prior to the Effective
Time.
(c) Compliance Certificate. Olsten shall have
delivered to Co-Counsel a certificate, dated the Closing Date,
signed by the Chairman, President or any Vice President of
Olsten, certifying as to the fulfillment of the conditions
specified in paragraphs (a) and (b) of this Section 7.3.
(d) Tax Opinion. Co-Counsel shall have received an
opinion from Bracewell & Patterson, L.L.P., dated the Effective
Time, to the effect that (i) the Merger will be treated for
federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code; (ii) Co-Counsel will be a
party to the reorganization within the meaning of Section 368(b)
of the Code; (iii) no gain or loss will be recognized by Co-
Counsel as a result of the Merger; and (iv) no gain or loss will
be recognized by any shareholder of Co-Counsel as a result of the
Merger with respect to Co-Counsel Common Stock converted solely
into Class B Stock (and the Olsten Common Stock issuable upon
conversion of such Class B Stock. In rendering such opinion,
such counsel may rely upon representations contained in
certificates and this Agreement of Co-Counsel, Olsten, Merger Sub
and others.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated
at any time prior to the Effective Time, whether before or after
approval of the matters presented in connection with the Merger
by the shareholders of Co-Counsel:
(a) By mutual consent of the Board of Directors of
Olsten and Co-Counsel Board of Directors; or
(b) By either Olsten or Co-Counsel, if the Merger
shall not have been consummated by October 31, 1996 (PROVIDED
that the right to terminate this Agreement under this Section
8.1(b) shall not be available to any party whose failure to
fulfill any obligation hereunder has been the cause of or
resulted in the failure of the Merger to occur on or before such
date); or
(c) By either Olsten or Co-Counsel, if there has been
a material breach of any representation, warranty, covenant or
agreement on the part of the other set forth in this Agreement,
which breach has not been cured within fifteen (15) Business Days
following receipt by the breaching party of notice of such
breach, or if a court of competent jurisdiction or governmental
regulatory or administrative agency or commission having proper
jurisdiction and authority thereof shall have issued an order,
decree or ruling (which order, decree or ruling the parties
hereto shall use their best efforts to lift) prohibiting the
transactions contemplated by this Agreement and such order,
decree or ruling shall have become final and non-appealable; or
(d) By Olsten, if a Trigger Event shall have occurred;
or
(e) By Olsten or Co-Counsel, if the Co-Counsel Vote
shall not have been obtained by reason of the failure to obtain
the required vote at a duly held meeting of shareholders or at
any adjournment thereof; or
(f) By Co-Counsel, if Co-Counsel receives from any
person other than Olsten or its affiliates an offer with respect
to an Acquisition Proposal and the Co-Counsel Board of Directors
so terminates in good faith, based upon the advice of its outside
legal counsel, that such termination is required in the exercise
of its fiduciary duties to the holders of Co-Counsel Common Stock
under applicable law.
(g) By Olsten or Co-Counsel, if (i) Co-Counsel shall
have not received the Fairness Opinion prior to the earlier of
(x) June 3, 1996 and (y) the date that the S-4 is ready for
filing with the SEC or (ii) the Fairness Opinion shall have been
withdrawn, modified or revoked.
Section 8.2 Effect of Termination. In the event of
termination of this Agreement as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no
obligations on the part of a party hereto or their respective
directors or officers except for obligations of a party (but not
its officers or directors) (a) with respect to this Section 8.2,
the second and third sentences of Section 6.4 and Sections 6.10
and 6.11 and (b) to the extent that such termination results from
the willful breach by a party hereto of any of its
representations, warranties, covenants or agreements, in each
case, as set forth in this Agreement, except as otherwise
provided in Section 9.7.
Section 8.3 Amendment. This Agreement may only be amended
by the parties hereto, prior to the Effective Time, in accordance
with applicable law; PROVIDED, HOWEVER, that, after approval of
this Agreement by the shareholders of Co-Counsel under the TBCA,
no amendment may be made which would require further approval by
such shareholders without such further approval. This Agreement
may not be amended except by an instrument in writing signed on
behalf of the parties hereto.
Section 8.4 Extension; Waiver. At any time prior to the
Effective Time, any party hereto may, to the extent legally
allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive
any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained
herein. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party to be bound
thereby.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties,
Covenants and Agreements. The representations, warranties,
covenants and agreements in this Agreement shall not survive
beyond the Effective Time. This Section 9.1 shall not limit any
covenant or agreement of any party hereto which by its express
terms contemplates performance after the Effective Time.
Section 9.2 Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be
deemed to have been duly given or made upon receipt, if made or
given by hand delivery, telecopier or facsimile transmission
(electronically confirmed), or upon receipt by registered or
certified mail (postage prepaid, return receipt requested) at the
following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Olsten:
William P. Costantini, Esq.
Senior Vice President and General Counsel
Olsten
175 Broad Hollow Road
Melville, New York 11747
(516) 844-7250 (telephone)
(516) 844-7266 (telecopier)
with a copy to:
Marjorie Sybul Adams, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
(212) 626-0861 (telephone)
(212) 626-0799 (telecopier)
(b) if to Co-Counsel:
Joseph A. Turano, III
President
Co-Counsel, Inc.
3 Riverway, Suite 1140
Houston, TX 77056
(713) 961-5552 (telephone)
(713) 961-9133 (telecopier)
with a copy to:
Rick Wittenbraker, Esq.
Bracewell & Patterson, L.L.P.
711 Louisiana Street
Houston, Texas 77002
713-223-2900 (telephone)
713-221-1212 (telecopier)
Section 9.3 Interpretation; Certain Definitions. When a
reference is made in this agreement to Sections, such reference
shall be to a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
Whenever the word "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the
words "without limitation". The term "Material Adverse Effect"
shall mean with respect to Olsten or Co-Counsel, as the case may
be, an effect of such magnitude on Olsten or Co-Counsel, as the
case may be, that is or that can reasonably be expected to be
materially adverse to the business, results of operations or
financial condition of Olsten or Co-Counsel, as the case may be.
The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by
the party to whom such information is to be made available. Any
reference to "the knowledge of" Co-Counsel or Olsten, as
applicable, shall be deemed to refer to (a) in the case of
Olsten, to the actual knowledge of any of its executive officers
set forth in Section 9.3 of the Olsten Disclosure Schedule and
(b) in the case of Co-Counsel, to the actual knowledge of any of
its executive officers set forth in Section 9.3 of the Co-Counsel
Disclosure Schedule.
Section 9.4 Counterparts. This Agreement may be executed
in two or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when two or
more counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.5 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement (including the documents and
the instruments referred to herein) constitutes the entire
agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the
subject matter hereof. Except as otherwise provided in Section
6.9, 6.12 and 6.15, this Agreement is not intended to confer upon
any person other than the parties hereto any rights or remedies
hereunder. The parties hereby acknowledge that no party shall
have the right to acquire or shall be deemed to have acquired
shares of common stock of the other party pursuant to the Merger
until consummation thereof.
Section 9.6 Governing Law. Except to the extent that the
laws of the State of Texas or the State of Delaware are
mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF OLSTEN,
CO-COUNSEL, OR MERGER SUB IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT THEREOF.
Section 9.7 No Remedy in Certain Circumstances. Each party
agrees that, should any court or other competent authority hold
any provision of this Agreement or part hereof to be null, void
or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent
herewith or required hereby, the validity, legality and
enforceability of the remaining provisions and obligations con-
tained or set forth herein shall not in any way be affected or
impaired thereby, unless the foregoing inconsistent action or the
failure to take an action makes the Agreement impossible to
perform in which case this Agreement shall terminate pursuant to
Article VIII hereof. Except as otherwise contemplated by this
Agreement, to the extent that a party hereto took an action
inconsistent herewith or failed to take action consistent
herewith or required hereby pursuant to an order or judgment of a
court or other competent authority, such party shall incur no
liability or obligation unless such party did not in good faith
seek to resist or object to the imposition or entering of such
order or judgment.
Section 9.8 Publicity. The initial press release relating
to this Agreement shall be a joint press release mutually
satisfactory to the parties, and thereafter Co-Counsel and Olsten
shall, subject to their respective legal obligations (including
requirements of stock exchanges and other similar regulatory
bodies), consult with each other and use their reasonable efforts
to agree upon the text of any press release before issuing any
such press release or otherwise making public statements with
respect to the transactions contemplated hereby and in making any
filings with any Governmental Entity or with any national
securities exchange with respect thereto.
Section 9.9 Assignment. Except as expressly provided in
this Agreement, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
Section 9.10 Specific Performance. The parties acknowledge
that money damages are not an adequate remedy for violations of
this Agreement and that any party may, in its sole discretion,
apply to a court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or
prevent any violation hereof and, to the extent permitted by
applicable law, each party waives any objection to the imposition
of such relief.
Section 9.11 Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not
alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be executed on May 28, 1996, by
the respective officers thereunto duly authorized.
OLSTEN CORPORATION
By: /s/ Anthony J. Puglisi
--------------------------------
Title: Senior Vice President
LAWYERS ACQUISITION CORP.
By: /s/ Anthony J. Puglisi
--------------------------------
Title: Senior Vice President
CO-COUNSEL, INC.
By: /s/ Joseph A. Turano, III
--------------------------------
Title: President
