SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 25, 1996
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CAREER HORIZONS, INC.
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(Exact name of registrant as specified in charter)
Delaware 1-14172 22-3038096
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(State of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
177 Crossways Park Drive, Woodbury, New York 11797
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(Address of principal executive offices)
Registrant's telephone number, including area code (516) 682-1400
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<PAGE>
ITEM 5. OTHER EVENTS.
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On August 26, 1996, Career Horizons, Inc. (the "Company")
announced that it had entered into a definitive agreement and plan of
merger (the "Agreement") providing for a strategic combination of the
Company and Accustaff Incorporated. Copies of the Agreement and the press
release announcing execution of the Agreement are attached hereto as
Exhibit 2.1 and 99.1, respectively, and by this reference made a part
hereof.
ITEM 7. EXHIBITS.
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(c) Exhibits
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2.1 Agreement and Plan of Merger by and among Accustaff
Incorporated, Sunrise Merger Corporation and Career
Horizons, Inc. dated as of August 25, 1996 (without
schedules).
99.1 Press Release, dated August 26, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrants have duly caused this report to be signed on their
behalf by the undersigned hereunto duly authorized.
Dated: August 29, 1996 CAREER HORIZONS, INC.
By:/s/ Walter W. Macauley
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Walter W. Macauley
President, Chief Executive
Officer and Director
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EXHIBIT INDEX
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Exhibit Number Description of Exhibit Page
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2.1 Agreement and Plan of Merger by and
among Accustaff Incorporated,
Sunrise Merger Corporation and
Career Horizons, Inc. dated as of
August 25, 1996 (without schedules) . . . . . . .
99.1 Press Release, dated August 26, 1996 . . . . . .
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ACCUSTAFF INCORPORATED,
SUNRISE MERGER CORPORATION,
AND
CAREER HORIZONS, INC.
DATED AS OF AUGUST 25, 1996
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TABLE OF CONTENTS
Page
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . 1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Time and Place of Closing . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . 2
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Directors and Officers . . . . . . . . . . . . . . . . 2
ARTICLE 3 MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . 2
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . 2
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . 3
3.3 Shares Held by Career or Accustaff . . . . . . . . . . 4
3.4 Fractional Shares . . . . . . . . . . . . . . . . . . 4
3.5 Conversion of Stock Options; Convertible Notes;
Restricted Stock . . . . . . . . . . . . . . . . . . . 4
ARTICLE 4 EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . 6
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . 6
4.2 Rights of Former Career Shareholders . . . . . . . . . 7
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF CAREER . . . . . . . . 8
5.1 Organization, Standing, and Power . . . . . . . . . . 8
5.2 Authority; No Breach By Agreement . . . . . . . . . . 8
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . 9
5.4 Career Subsidiaries . . . . . . . . . . . . . . . . . 10
5.5 SEC Filings; Financial Statements . . . . . . . . . . 10
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . 11
5.7 Absence of Certain Changes or Events . . . . . . . . . 11
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . 12
5.9 Assets . . . . . . . . . . . . . . . . . . . . . . . . 12
5.10 Intellectual Property . . . . . . . . . . . . . . . . 13
5.11 Environmental Matters . . . . . . . . . . . . . . . . 13
5.12 Compliance with Laws . . . . . . . . . . . . . . . . . 14
5.13 Labor Relations . . . . . . . . . . . . . . . . . . . 15
5.14 Employee Benefit Plans . . . . . . . . . . . . . . . . 15
5.15 Material Contracts . . . . . . . . . . . . . . . . . . 16
<PAGE>
5.16 Legal Proceedings . . . . . . . . . . . . . . . . . . 17
5.17 Reports . . . . . . . . . . . . . . . . . . . . . . . 17
5.18 Statements True and Correct . . . . . . . . . . . . . 17
5.19 Accounting, Tax and Regulatory Matters . . . . . . . . 18
5.20 State Takeover Laws . . . . . . . . . . . . . . . . . 18
5.21 Charter Provisions . . . . . . . . . . . . . . . . . . 18
5.22 Opinion of Financial Advisor . . . . . . . . . . . . . 18
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF ACCUSTAFF . . . . . . . 19
6.1 Organization, Standing, and Power . . . . . . . . . . 19
6.2 Authority; No Breach By Agreement . . . . . . . . . . 19
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . 20
6.4 SEC Filings; Financial Statements . . . . . . . . . . 20
6.5 Absence of Undisclosed Liabilities . . . . . . . . . . 21
6.6 Absence of Certain Changes or Events . . . . . . . . . 21
6.7 Tax Matters . . . . . . . . . . . . . . . . . . . . . 21
6.8 Intellectual Property . . . . . . . . . . . . . . . . 22
6.9 Environmental Matters . . . . . . . . . . . . . . . . 22
6.10 Compliance With Laws . . . . . . . . . . . . . . . . . 23
6.11 Labor Relations . . . . . . . . . . . . . . . . . . . 24
6.12 Employee Benefit Plans . . . . . . . . . . . . . . . . 24
6.13 Legal Proceedings . . . . . . . . . . . . . . . . . . 25
6.14 Reports . . . . . . . . . . . . . . . . . . . . . . . 25
6.15 Statements True and Correct . . . . . . . . . . . . . 25
6.16 Authority of Sub . . . . . . . . . . . . . . . . . . . 26
6.17 Accounting, Tax and Regulatory Matters . . . . . . . . 26
ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . 26
7.1 Affirmative Covenants of Career . . . . . . . . . . . 26
7.2 Negative Covenants of Career . . . . . . . . . . . . . 27
7.3 Covenants of Accustaff . . . . . . . . . . . . . . . . 29
7.4 Adverse Changes in Condition . . . . . . . . . . . . . 29
7.5 Reports . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 8 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . 30
8.1 Registration Statement; Proxy Statement; Shareholder
Approval . . . . . . . . . . . . . . . . . . . . . . . 30
8.2 Exchange Listing . . . . . . . . . . . . . . . . . . . 31
8.3 Applications; Antitrust Notification . . . . . . . . . 31
8.4 Filings with State Offices . . . . . . . . . . . . . . 31
8.5 Agreement as to Efforts to Consummate . . . . . . . . 31
8.6 Investigation and Confidentiality . . . . . . . . . . 32
8.7 Press Releases . . . . . . . . . . . . . . . . . . . . 32
8.8 Certain Actions . . . . . . . . . . . . . . . . . . . 32
8.9 Accounting and Tax Treatment . . . . . . . . . . . . . 33
<PAGE>
8.10 Agreements of Affiliates . . . . . . . . . . . . . . . 33
8.11 Employee Benefits and Contracts . . . . . . . . . . . 33
8.12 Indemnification . . . . . . . . . . . . . . . . . . . 34
8.13 Agreement Regarding Certain Acquisitions . . . . . . . 35
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE . . . . . . . . . . . . . . . . . . . . . . . 35
9.1 Conditions to Obligations of Each Party . . . . . . . 35
9.2 Conditions to Obligations of Accustaff . . . . . . . . 37
9.3 Conditions to Obligations of Career . . . . . . . . . 38
ARTICLE 10 TERMINATION . . . . . . . . . . . . . . . . . . . . . . 39
10.1 Termination . . . . . . . . . . . . . . . . . . . . . 39
10.2 Effect of Termination . . . . . . . . . . . . . . . . 41
10.3 Non-Survival of Representations and Covenants . . . . 41
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 41
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . 41
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . 50
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . 52
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . 52
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . 53
11.6 Waivers . . . . . . . . . . . . . . . . . . . . . . . 53
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . 53
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . 54
11.9 Governing Law . . . . . . . . . . . . . . . . . . . . 54
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . 54
11.11 Captions; Articles and Sections . . . . . . . . . . . 54
11.12 Interpretations . . . . . . . . . . . . . . . . . . . 55
11.13 Severability . . . . . . . . . . . . . . . . . . . . . 55
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
<PAGE>
LIST OF EXHIBITS
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Exhibit Number Description
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1. Form of agreement of affiliates of Career.
(S.S. 8.10, 9.2(e)).
<PAGE>
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of August 25, 1996, by and among ACCUSTAFF INCORPORATED
("Accustaff"), a Florida corporation; SUNRISE MERGER CORPORATION ("Sub"), a
Delaware corporation; and CAREER HORIZONS, INC. ("Career"), a Delaware
corporation.
PREAMBLE
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The respective Boards of Directors of Career, Sub and Accustaff
are of the opinion that the transactions described herein are in the best
interests of the parties and their respective shareholders. This Agreement
provides for the acquisition of Career by Accustaff pursuant to the merger
of Sub with and into Career. At the effective time of such merger, the
outstanding shares of the capital stock of Career shall be converted into
the right to receive shares of the common stock of Accustaff (except as
provided herein). As a result, shareholders of Career shall become
shareholders of Accustaff and Career shall continue to conduct its business
and operations as a wholly owned subsidiary of Accustaff. The transactions
described in this Agreement are subject to the approvals of the
shareholders of Career, the shareholders of Accustaff, expiration of the
required waiting period under the HSR Act, and the satisfaction of certain
other conditions described in this Agreement. It is the intention of the
parties to this Agreement that the Merger for federal income tax purposes
shall qualify as a "reorganization" within the meaning of Section 368(a) of
the Internal Revenue Code, and for accounting purposes shall qualify for
treatment as a pooling of interests.
Certain terms used in this Agreement are defined in Section 11.1
of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein,
the parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
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1.1 MERGER. Subject to the terms and conditions of this
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Agreement, at the Effective Time the separate corporate existence of Sub
shall cease and Sub shall be merged with and into Career in accordance with
the provisions of Section 251 of the DGCL and with the effect provided in
Section 259 of the DGCL (the "Merger"). Career shall be the Surviving
Corporation resulting from the Merger and shall become a wholly owned
Subsidiary of Accustaff and shall continue to exist under the Laws of the
State of Delaware. The Merger shall be consummated pursuant to the terms
of this Agreement, which has been approved and adopted by the respective
Boards of Directors of Career, Sub and Accustaff and by Accustaff, as the
sole shareholder of Sub.
<PAGE>
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
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contemplated hereby (the "Closing") will take place at 9:00 A.M. on the
date that the Effective Time occurs (or the immediately preceding day if
the Effective Time is earlier than 9:00 A.M.), or at such other time as the
Parties, acting through their authorized officers, may mutually agree. The
Closing shall be held at such location as may be mutually agreed upon by
the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions
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contemplated by this Agreement shall become effective on the date and at
the time the Certificate of Merger reflecting the Merger shall become
effective with the Secretary of State of the State of Delaware (the
"Effective Time"). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the authorized officers of
each Party, the Effective Time shall occur not later than the second
business day following the satisfaction or waiver of the conditions set
forth in Article 9.
ARTICLE 2
TERMS OF MERGER
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2.1 CHARTER. The Certificate of Incorporation of Career in
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effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation until duly
amended or repealed.
2.2 BYLAWS. The Bylaws of Career in effect immediately prior to
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the Effective Time shall be the Bylaws of the Surviving Corporation until
duly amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Sub in office
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immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors of the
Surviving Corporation from and after the Effective Time in accordance with
the Bylaws of the Surviving Corporation. The officers of Sub in office
immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the officers of the
Surviving Corporation from and after the Effective Time in accordance with
the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
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3.1 CONVERSION OF SHARES. Subject to the provisions of this
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Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of Accustaff, Career, Sub or the shareholders of any of
the foregoing, the shares of the constituent corporations shall be
converted as follows:
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<PAGE>
(a) Each share of Accustaff Common Stock issued and
outstanding immediately prior to the Effective Time shall remain
issued and outstanding from and after the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding
and shall be converted into one share of Career Common Stock.
(c) Each share of Career Common Stock (excluding shares
held by any Career Company or any Accustaff Company) issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for the right to
receive 1.53 shares of Accustaff Common Stock (the "Base Exchange
Ratio" and, subject to the provisions of the remainder of this
sentence, the "Exchange Ratio"); provided, that, in the event that the
Average Closing Price shall be greater than $31.60 (the "Upper
Threshold Price"), the Exchange Ratio shall equal that multiple of a
share of Accustaff Common Stock (rounded to the nearest ten thousandth
of a share) obtained by dividing the product of the Base Exchange
Ratio and the Upper Threshold Price by the Average Closing Price, but
not less than 1.2444 (the "Minimum Exchange Ratio"); provided further,
that, in the event that the Average Closing Price shall be less than
$21.07 (the "Lower Threshold Price" and, together with the Upper
Threshold Price, the "Threshold Prices"), the Exchange Ratio shall
equal that multiple of a share of Accustaff Common Stock (rounded to
the nearest ten thousandth of a share) obtained by dividing the
product of the Base Exchange Ratio and the Lower Threshold Price by
the Average Closing Price, but not more than 1.8006 (the "Maximum
Exchange Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event Accustaff changes the
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number of shares of Accustaff Common Stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor
(in the case of a stock dividend) or the effective date thereof (in the
case of a stock split or similar recapitalization for which a record date
is not established) shall be after the Exchange Ratio has been determined
in accordance with Section 3.1(c) and prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted. In the event Accustaff
changes the number of shares of Accustaff Common Stock issued and
outstanding prior to the Effective Time as a result of a stock split, stock
dividend, or similar recapitalization with respect to such stock and the
record date therefor (in the case of a stock dividend) or the effective
date thereof (in the case of a stock split or similar recapitalization for
which a record date is not established) shall be prior to the date on which
the Exchange Ratio is determined in accordance with Section 3.1(c), (i) the
Base Exchange Ratio, the Minimum Exchange Ratio, the Maximum Exchange Ratio
and the Threshold Prices shall be adjusted to appropriately adjust the
ratio under which shares of Career Common Stock will be converted into
shares of Accustaff Common Stock pursuant to Section 3.1(c), and (ii) if
necessary, the anticipated Effective Time shall be postponed for an
appropriate period of time agreed upon by the parties in order for the
Average Closing Price to reflect the market effect of such stock split,
stock dividend, or similar recapitalization.
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<PAGE>
3.3 SHARES HELD BY CAREER OR ACCUSTAFF. Each of the shares of
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Career Common Stock held by any Career Company or by any Accustaff Company
shall be canceled and retired at the Effective Time and no consideration
shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision of
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this Agreement, each holder of shares of Career Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Accustaff Common 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 Accustaff Common Stock multiplied by the market value of one share
of Accustaff Common Stock at the Effective Time. The market value of one
share of Accustaff Common Stock at the Effective Time shall be the last
sale price of such common stock on the Nasdaq National Market (as reported
by The Wall Street Journal or, if not reported thereby, any other
authoritative source reasonably selected by Accustaff) on the last trading
day immediately preceding the Effective Time. No such holder will be
entitled to dividends, voting rights, or any other rights as a shareholder
in respect of any fractional shares.
3.5 CONVERSION OF STOCK OPTIONS; CONVERTIBLE NOTES; RESTRICTED
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STOCK.
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(a) At the Effective Time, each option or other right to
purchase shares of Career Common Stock pursuant to stock options or stock
appreciation rights ("Career Options") granted by Career under the Career
Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to
Accustaff Common Stock, and Accustaff shall assume each Career Option, in
accordance with the terms of the Career Stock Plan and stock option
agreement by which it is evidenced, except that from and after the
Effective Time, (i) Accustaff and its Compensation Committee shall be
substituted for Career and the Committee of Career's Board of Directors
(including, if applicable, the entire Board of Directors of Career)
administering such Career Stock Plan, (ii) each Career Option assumed by
Accustaff may be exercised solely for shares of Accustaff Common Stock (or
cash, if so provided under the terms of such Career Option), (iii) the
number of shares of Accustaff Common Stock subject to such Career Option
shall be equal to the number of shares of Career Common Stock subject to
such Career Option immediately prior to the Effective Time multiplied by
the Exchange Ratio, and (iv) the per share exercise price under each such
Career Option shall be adjusted by dividing the per share exercise price
under each such Career Option by the Exchange Ratio and rounding up to the
nearest cent. Notwithstanding the provisions of clause (iii) of the
preceding sentence, Accustaff shall not be obligated to issue any fraction
of a share of Accustaff Common Stock upon exercise of Career Options and
any fraction of a share of Accustaff Common Stock that otherwise would be
subject to a converted Career Option shall represent the right to receive a
cash payment upon exercise of such converted Career Option equal to the
product of such fraction and the difference between the market value of one
share of Accustaff Common Stock at the time of exercise of such Option and
the per share exercise price of such Option. The market value of one share
of Accustaff Common Stock at the time of exercise of an Option shall be the
last sale price of such common stock on the Nasdaq National Market (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by Accustaff) on the last trading day
preceding the date of exercise. In addition, notwithstanding the
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<PAGE>
provisions of clauses (iii) and (iv) of the first sentence of this Section
3.5(a), each Career Option which is an "incentive stock option" shall be
adjusted as required by Section 424 of the Internal Revenue Code, and the
regulations promulgated thereunder, so as not to constitute a modification,
extension or renewal of the option, within the meaning of Section 424(h) of
the Internal Revenue Code. Each of Career and Accustaff agrees to take all
necessary steps to effectuate the foregoing provisions of this Section
3.5(a), including using all reasonable efforts to obtain from each holder
of a Career Option any Consent or Contract that may be deemed necessary or
advisable in order to effect the transactions contemplated by this Section
3.5(a). Anything in this Agreement to the contrary notwithstanding,
Accustaff shall have the right, in its sole discretion, not to deliver the
consideration provided in this Section 3.5(a) to a former holder of a
Career Option who has not delivered such Consent or Contract. Not later
than five business days after the Effective Time, Accustaff shall deliver
to the participants in each Career Stock Plan an appropriate notice setting
forth such participant's rights pursuant thereto and the grants subject to
such Career Stock Plan shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 3.5(a)
after giving effect to the Merger), and Accustaff shall comply with the
terms of each Career Stock Plan to ensure, to the extent required by, and
subject to the provisions of, such Career Stock Plan, that Career Options
which qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options after the Effective Time.
At or prior to the Effective Time, Accustaff shall take all corporate
action necessary to reserve for issuance sufficient shares of Accustaff
Common Stock for delivery upon exercise of Career Options assumed by it in
accordance with this Section 3.5. At or prior to the Effective Time,
Accustaff shall file a registration statement on Form S-3 or Form S-8, as
the case may be (or any successor or other appropriate forms), with respect
to the shares of Accustaff Common Stock subject to such options and shall
take all necessary steps to maintain the effectiveness of such registration
statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such options remain
outstanding. With respect to those individuals who subsequent to the
Merger will be subject to the reporting requirements under Section 16(a) of
the 1934 Act, where applicable, Accustaff shall administer the Career Stock
Plan assumed pursuant to this Section 3.5 in a manner that complies with
Rule 16b-3 promulgated under the Exchange Act to the extent the Career
Stock Plan complied with such rule prior to the Effective Time.
(b) In connection with the Closing, Accustaff and Career
shall execute and deliver to the trustee under the Career Indenture the
supplemental indenture contemplated by Section 5.13 of the Career Indenture
(the "Supplemental Indenture"), which Supplemental Indenture shall, as
required by Section 5.13 of the Career Indenture, provide that, effective
as of the Effective Time, each right to acquire shares of Career Common
Stock pursuant to conversion of Career Convertible Notes, which are
outstanding at the Effective Time, shall be converted into and become
rights with respect to Accustaff Common Stock, and Accustaff shall assume
the conversion obligations (and related registration obligations) under
each Career Convertible Note (the "Conversion Obligations"), in accordance
with the terms of such Career Convertible Note, the Career Indenture and
the Supplemental Indenture, except that from and after the Effective Time,
(i) each Conversion Obligation assumed by Accustaff may be exercised solely
for shares of Accustaff Common Stock, (ii) the number of shares of
Accustaff Common Stock subject to such Conversion Obligation shall be equal
to the number of shares of Career Common Stock subject to such Conversion
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<PAGE>
Obligation immediately prior to the Effective Time multiplied by the
Exchange Ratio (subject to such further adjustment as may be provided in
Article V of the Career Indenture), and (iv) the per share conversion price
under each such Conversion Obligation shall be adjusted by dividing the per
share conversion price under each such Conversion Obligation by the
Exchange Ratio and rounding up to the nearest cent (subject to such further
adjustment as may be provided in Article V of the Career Indenture). Each
of Career and Accustaff agrees to take all necessary steps to effectuate
the foregoing provisions of this Section 3.5(b). At or prior to the
Effective Time, Accustaff shall take all corporate action necessary to
reserve for issuance sufficient shares of Accustaff Common Stock for
delivery upon exercise of Career Convertible Notes. Not later than 30 days
after the Effective Time, Accustaff shall cause Career to offer to
repurchase the outstanding Career Convertible Notes in accordance with the
terms of Section 4.07 of the Career Indenture and to mail to each holder of
Career Convertible Notes the notice provided by Section 3.08(e) of the
Career Indenture.
(c) All contractual restrictions or limitations on transfer
with respect to Career Common Stock awarded under the Career Stock Plans or
any other plan, program, Contract or arrangement of any Career Company, to
the extent that such restrictions or limitations shall not have already
lapsed (whether as a result of the Merger or otherwise), and except as
otherwise expressly provided in such plan, program, Contract or
arrangement, shall remain in full force and effect with respect to shares
of Accustaff Common Stock into which such restricted stock is converted
pursuant to Section 3.1.
ARTICLE 4
EXCHANGE OF SHARES
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4.1 EXCHANGE PROCEDURES. As promptly as practicable after the
-------------------
Effective Time, Accustaff shall deposit with SunTrust Bank, Atlanta (the
"Exchange Agent") certificates representing shares of Accustaff Common
Stock required to effectuate the exchanges referred to in Article 3,
together with cash payable in respect of fractional shares pursuant to
Section 3.4. Promptly after the Effective Time, Accustaff and Career shall
cause the Exchange Agent to mail to each holder of record of a certificate
or certificates which represented shares of Career Common Stock immediately
prior to the Effective Time (the "Certificates") (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the certificates theretofore representing shares of
Career Common Stock shall pass, only upon proper delivery of such
certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of Certificates in exchange for certificates
representing shares of Accustaff Common Stock and cash in lieu of
fractional shares. The Exchange Agent may establish reasonable and
customary rules and procedures in connection with its duties. After the
Effective Time, each holder of shares of Career Common Stock (other than
shares to be canceled pursuant to Section 3.3) issued and outstanding at
the Effective Time shall surrender the certificate or certificates
representing such shares to the Exchange Agent and shall promptly upon
surrender thereof receive in exchange therefor the consideration provided
in Section 3.1, together with all undelivered dividends or distributions in
respect of such shares (without interest thereon) pursuant to Section 4.2.
To the extent required by Section 3.4, each holder of shares of Career
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Common Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing
such shares, cash in lieu of any fractional share of Accustaff Common Stock
to which such holder may be otherwise entitled (without interest).
Accustaff shall not be obligated to deliver the consideration to which any
former holder of Career Common Stock is entitled as a result of the Merger
until such holder surrenders such holder's certificate or certificates
representing the shares of Career Common Stock for exchange as provided in
this Section 4.1. In the event of a transfer of ownership of shares of
Career Common Stock represented by Certificates that are not registered in
the transfer records of Career, the consideration provided in Section 3.1
may be issued to a transferee if the Certificates representing such shares
are delivered to the Exchange Agent, accompanied by all documents required
to evidence such transfer and by evidence satisfactory to the Exchange
Agent that any applicable stock transfer taxes have been paid. If any
Certificate shall have been lost, stolen, mislaid or destroyed, upon
receipt of (i) an affidavit of that fact from the holder claiming such
Certificate to be lost, mislaid, stolen or destroyed, (ii) such bond,
security or indemnity as Accustaff and the Exchange Agent may reasonably
require and (iii) any other documents necessary to evidence and effect the
bona fide exchange thereof, the Exchange Agent shall issue to such holder
the consideration into which the shares represented by such lost, stolen,
mislaid or destroyed Certificate shall have been converted. At any time
following the sixth month after the Effective Time, Accustaff shall be
entitled to require the Exchange Agent to deliver to it any cash then held
by the Exchange Agent and all shares of Accustaff Common Stock deposited
with the Exchange Agent pursuant to this Section 4.1 which had not been
disbursed to holders of Certificates (including all interest and other
income received by the Exchange Agent in respect of all funds made
available to it), and thereafter former holders of Career Common Stock
shall be entitled to look only to Accustaff (subject to abandoned property
Laws) as general creditors thereof with respect to the consideration that
may be payable upon due surrender of the Certificates held by them. Any
other provision of this Agreement notwithstanding, neither Accustaff, the
Surviving Corporation nor the Exchange Agent shall be liable to a holder of
Career Common Stock for any amounts paid or property delivered in good
faith to a public official pursuant to any applicable abandoned property
Law. Adoption of this Agreement by the shareholders of Career shall
constitute ratification of the appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER CAREER SHAREHOLDERS. At the Effective Time,
------------------------------------
the stock transfer books of Career shall be closed as to holders of Career
Common Stock immediately prior to the Effective Time and no transfer of
Career Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the
provisions of Section 4.1, each certificate theretofore representing shares
of Career Common Stock (other than shares to be canceled pursuant to
Section 3.3) shall from and after the Effective Time represent for all
purposes only the right to receive the consideration provided in Sections
3.1 and 3.4 in exchange therefor, 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 have
been declared or made by Career in respect of such shares of Career Common
Stock in accordance with the terms of this Agreement and which remain
unpaid at the Effective Time. Whenever a dividend or other distribution is
declared by Accustaff on the Accustaff Common Stock, the record date for
which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares of Accustaff Common Stock
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issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of Accustaff Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Career Common Stock issued and
outstanding at the Effective Time until such holder surrenders such
certificate for exchange as provided in Section 4.1. However, upon
surrender of such Career Common Stock certificate, both the Accustaff
Common Stock certificate (together with all such undelivered dividends or
other distributions without interest) and any undelivered dividends and
cash payments payable hereunder (without interest) shall be delivered and
paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CAREER
----------------------------------------
Career hereby represents and warrants to Accustaff as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Career is a corporation
---------------------------------
duly organized, validly existing, and in good standing under the Laws of
the State of Delaware, and has the corporate power and authority to carry
on its business as now conducted and to own, lease and operate its Assets.
Career is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Career. The minute book and other organizational
documents for Career have been made available to Accustaff for its review
and, except as disclosed in Section 5.1 of the Career Disclosure
Memorandum, are true and complete in all material respects as in effect as
of the date of this Agreement and accurately reflect in all material
respects all amendments thereto and all proceedings of the Board of
Directors and shareholders thereof.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Career has the corporate power and authority necessary
to execute, deliver, and perform its obligations under this Agreement and,
subject, with respect to the consummation of the Merger, to the adoption of
this Agreement by an affirmative vote of the holders of a majority of the
outstanding shares of Career Common Stock entitled to vote thereon, to
consummate the transactions contemplated hereby. The execution, delivery,
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part
of Career, subject, with respect to the consummation of the Merger, to the
adoption of this Agreement by an affirmative vote of the holders of a
majority of the outstanding shares of Career Common Stock entitled to vote
thereon, which is the only shareholder vote required for approval of this
Agreement and consummation of the Merger by Career. Subject to such
requisite shareholder approval, and assuming this Agreement represents a
valid and binding obligation of Accustaff and Sub, this Agreement
represents a legal, valid, and binding obligation of Career, enforceable
against Career in accordance with its terms (except in all cases as such
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enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Career, nor the consummation by Career of the transactions contemplated
hereby, nor compliance by Career with any of the provisions hereof, will
(i) conflict with or result in a breach of any provision of Career's
Certificate of Incorporation or Bylaws or the certificate or articles of
incorporation or bylaws of any Career Subsidiary, or (ii) except as
disclosed in Section 5.2(b) of the Career Disclosure Memorandum, constitute
or result in a Default under, or require any Consent pursuant to, or result
in the creation of any Lien on any Asset of any Career Company under, any
Contract or Permit of any Career Company, except any such Default or Lien,
or any failure to obtain any such Consent, is not reasonably likely to have
a Material Adverse Effect on Career, or, (iii) subject to receipt of the
requisite Consents referred to in Section 9.1(b), violate any Law or Order
applicable to any Career Company or any of their respective material
Assets, except for any such violation which is not reasonably likely to
have a Material Adverse Effect on Career.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NYSE, and other than Consents required
from Regulatory Authorities set forth in Section 5.2(c) of the Career
Disclosure Memorandum, and other than notices to or filings with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect to any employee benefit plans, or under the HSR Act, no notice to,
filing with, or Consent of, any public body or authority is necessary for
the consummation by Career of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of Career consists of
(i) 50,000,000 shares of Career Common Stock, of which 17,658,318 shares
are issued and outstanding as of the date of this Agreement and not more
than 24,074,672 shares will be issued and outstanding at the Effective
Time, and (ii) 1,000,000 shares of preferred stock, par value $.01 per
share, none of which are issued and outstanding. All of the issued and
outstanding shares of capital stock of Career are duly and validly issued
and outstanding and are fully paid and nonassessable under the DGCL. None
of the outstanding shares of capital stock of Career has been issued in
violation of any preemptive rights of the current or past shareholders of
Career.
(b) Except as set forth in Section 5.3(a), or as provided
in the Stock Option Agreement, or as disclosed in Section 5.3 of the Career
Disclosure Memorandum, there are no shares of capital stock or other equity
securities of Career outstanding and no outstanding Rights created by
Career or any Career Company relating to the capital stock of Career.
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5.4 CAREER SUBSIDIARIES. Career has disclosed in Section 5.4 of
-------------------
the Career Disclosure Memorandum all of the Career Subsidiaries that are
corporations (identifying its jurisdiction of incorporation, each
jurisdiction in which it has been qualified and/or licensed to transact
business, and the percentage ownership interest represented by such share
ownership) and all of the Career Subsidiaries that are general or limited
partnerships, limited liability companies, or other non-corporate entities
(identifying the Law under which such entity is organized, each
jurisdiction in which it has been qualified and/or licensed to transact
business, and the amount and nature of the ownership interest therein).
Except as disclosed in Section 5.4 of the Career Disclosure Memorandum,
Career or one of its wholly owned Subsidiaries owns all of the issued and
outstanding shares of capital stock (or other equity interests) of each
Career Subsidiary. No capital stock (or other equity interest) of any
Career Subsidiary is or may become required to be issued (other than to
another Career Company) by reason of any Rights, and there are no Contracts
by which any Career Subsidiary is bound to issue (other than to another
Career Company) additional shares of its capital stock (or other equity
interests) or Rights or by which any Career Company is or may be bound to
transfer any shares of the capital stock (or other equity interests) of any
Career Subsidiary (other than to another Career Company). There are no
Contracts relating to the rights of any Career Company to vote or to
dispose of any shares of the capital stock (or other equity interests) of
any Career Subsidiary. All of the shares of capital stock (or other equity
interests) of each Career Subsidiary held by a Career Company are fully
paid and nonassessable under the applicable corporation Law of the
jurisdiction in which such Subsidiary is incorporated or organized and,
except as disclosed in Section 5.4 of the Career Disclosure Memorandum, are
owned by the Career Company free and clear of any Lien. Except as
disclosed in Section 5.4 of the Career Disclosure Memorandum, each Career
Subsidiary is a corporation, and each such Subsidiary is duly organized,
validly existing, and (as to corporations) in good standing under the Laws
of the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate
its Assets and to carry on its business as now conducted. Each Career
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Career. The minute book and other organizational
documents for each Career Subsidiary have been made available to Accustaff
for its review.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
---------------------------------
(a) Career has timely filed and made available to Accustaff
all SEC Documents required to be filed by Career since December 31, 1992
(the "Career SEC Reports"). The Career SEC Reports (i) at the time filed,
complied or will comply in all material respects with the applicable
requirements of the Securities Laws and other applicable Laws and (ii) did
not, at the time they were filed (or, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material
fact required to be stated in such Career SEC Reports or necessary in order
to make the statements in such Career SEC Reports, in light of the
circumstances under which they were made, not misleading; provided, that
any pro forma financial statements contained in the Career SEC Reports are
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not necessarily indicative of the consolidated financial position of the
Career Companies as of the respective dates thereof and the consolidated
results of operations and cash flows of the Career Companies for the
periods indicated. No Career Subsidiary is required to file any SEC
Documents.
(b) Each of the Career Financial Statements (including, in
each case, any related notes) contained in the Career SEC Reports,
including any Career SEC Reports filed after the date of this Agreement
until the Effective Time, complied as to form in all material respects with
the applicable published rules and regulations of the SEC with respect
thereto, was prepared in accordance with GAAP (except to the extent
required by changes in generally accepted accounting principles, as may be
indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC), and
fairly presented in all material respects the consolidated financial
position of Career and its Subsidiaries as at the respective dates and the
consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or
are subject to normal and recurring year-end adjustments which were not or
are not expected to be material in amount or effect and that any pro forma
financial statements contained in the Career SEC Reports are not
necessarily indicative of the consolidated financial position of the Career
Companies as of the respective dates thereof and the consolidated results
of operations and cash flows of the Career Companies for the periods
indicated.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
----------------------------------
Section 5.6 of the Career Disclosure Memorandum, no Career Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Career, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of
Career as of December 31, 1995 and June 30, 1996, included in the Career
Financial Statements delivered prior to the date of this Agreement or
reflected in the notes thereto. No Career Company has incurred or paid any
Liability since June 30, 1996, except for such Liabilities incurred or paid
(i) in the ordinary course of business consistent with past business
practice or (ii) in connection with the transactions contemplated by this
Agreement. Except as disclosed in Section 5.6 of the Career Disclosure
Memorandum, no Career Company is directly or indirectly liable, by
guarantee, indemnity, or otherwise, upon or with respect to, or obligated,
by discount or repurchase agreement or in any other way, to provide funds
in respect to, or obligated to guarantee or assume any Liability of any
Affiliate (other than another Career Company) for any amount in excess of
$100,000.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1996,
------------------------------------
except as disclosed in Section 5.7 of the Career Disclosure Memorandum,
(i) there have been no events, changes, or occurrences which have had, or
are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Career, and (ii) the Career Companies have not taken any
action, or failed to take any action, prior to the date of this Agreement,
which action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the
covenants and agreements of Career provided in Article 7.
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5.8 TAX MATTERS.
-----------
(a) All Tax Returns required to be filed by or on behalf of
any of the Career Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired, and all
such Tax Returns filed are complete and accurate in all material respects.
All Taxes shown on filed Tax Returns have been paid. There is no pending
or, to the Knowledge of Career, threatened audit examination, deficiency,
or refund Litigation with respect to any Taxes, except as disclosed in
Section 5.8 of the Career Disclosure Memorandum. All Taxes and other
Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid. There are no Liens with respect to
Taxes upon any of the Assets of the Career Companies, except for any such
Lien which is not reasonably likely to have a Material Adverse Effect on
Career.
(b) Except as disclosed in Section 5.8 of the Career
Disclosure Memorandum, none of the Career Companies has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other
applicable taxing authorities) that is currently in effect.
(c) The provision for any Taxes due or to become due for
any of the Career Companies for the period or periods through and including
the date of the respective Career Financial Statements that has been made
and is reflected on such Career Financial Statements is sufficient to cover
all such Taxes, except for any insufficiency of such provision which is not
reasonably likely to have a Material Adverse Effect on Accustaff.
(d) Each of the Career Companies is in compliance with, and
its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable
information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Internal
Revenue Code, except for any such instance of noncompliance or failure to
so identify which is not reasonably likely to have a Material Adverse
Effect on Career.
(e) Except as disclosed in Section 5.8 of the Career
Disclosure Memorandum, none of the Career Companies has made any payments,
is obligated to make any payments, or is a party to any Contract that could
obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
5.9 ASSETS.
------
(a) Except as disclosed in Section 5.9 of the Career
Disclosure Memorandum, the Career Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets, except for
any such Liens or other defects of title which is not reasonably likely to
have a Material Adverse Effect on Career.
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(b) All Assets which are material to Career's business on a
consolidated basis, held under leases or subleases by any of the Career
Companies, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other
Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which
any proceedings may be brought).
(c) The Career Companies currently maintain insurance in
such amounts, scope, and coverage as Career believes is adequate to conduct
its business. To Career's Knowledge, none of the Career Companies has
received notice from any insurance carrier that any policy of insurance
will be canceled or that coverage thereunder will be reduced or eliminated,
or that premium costs with respect to such policies of insurance will be
substantially increased. There are presently no claims for amounts
exceeding in any individual case $250,000 pending under such policies of
insurance and, since January 1, 1995, no notices of claims in excess of
such amounts have been given by any Career Company under such policies.
5.10 INTELLECTUAL PROPERTY. Except as disclosed in Section 5.10 of
---------------------
the Career Disclosure Memorandum, (i) each Career Company owns or has a
license to use all of the Intellectual Property used by such Career Company
in the course of its business, (ii) each Career Company is the owner of or
has a license to any Intellectual Property sold or licensed to a third
party by such Career Company in connection with such Career Company's
business operations, and such Career Company has the right to convey by
sale or license any Intellectual Property so conveyed, (iii) no Career
Company is in Default under any of its Intellectual Property licenses and
(iv) no proceedings have been instituted, or are pending or to the
Knowledge of Career threatened, which challenge the rights of any Career
Company with respect to Intellectual Property used, sold or licensed by
such Career Company in the course of its business, nor has any person
claimed or alleged any rights to such Intellectual Property, except for any
failure to own or license, Default or proceeding which is not reasonably
likely to have a Material Adverse Effect on Career. To the Knowledge of
Career, the conduct of the business of the Career Companies does not
infringe any Intellectual Property of any other Person.
5.11 ENVIRONMENTAL MATTERS.
---------------------
(a) Each of the Career Companies is in compliance with all
Environmental Laws and has obtained all necessary Permits required to be
issued pursuant to any Environmental Law, except where the failure to so
comply or to obtain such Permits, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect on Career. None of the
Career Companies has received notice or communication from any Regulatory
Authority with respect to (i) any Hazardous Material relative to its
operations, property or acts or (ii) any investigation, demand or request
pursuant to enforcing any Environmental Law relating to it or its
operations, and no such investigation is pending or threatened in any case
which is reasonably likely to have a Material Adverse Effect on Career.
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(b) During the period of (i) any Career Company's ownership
or operation of any of their respective current properties, (ii) any Career
Company's participation in the management of any Participation Facility, or
(iii) any Career Company's holding of a security interest in an Operating
Property, there have been no releases, discharges, spillages, or disposals
of Hazardous Material in, on, under, adjacent to, or affecting (or
potentially affecting) such properties, except for any such release,
discharge, spillage, or disposal which is not reasonably likely to have a
Material Adverse Effect on Career. Prior to the period of (i) any Career
Company's ownership or operation of any of their respective current
properties, (ii) any Career Company's participation in the management of
any Participation Facility, or (iii) any Career Company's holding of a
security interest in an Operating Property, to the Knowledge of Career,
there were no releases, discharges, spillages, or disposals of Hazardous
Material in, on, under, or affecting any such property, Participation
Facility or Operating Property, except for any such release, discharge,
spillage, or disposal which is not reasonably likely to have a Material
Adverse Effect on Career.
5.12 COMPLIANCE WITH LAWS. Each Career Company has in effect all
--------------------
Permits necessary for it to own, lease, or operate its material Assets and
to carry on its business as now conducted, except where the failure to so
hold any such Permit is not reasonably likely to have a Material Adverse
Effect on Career, and there has occurred no Default under any such Permit,
except for any such Default which is not reasonably likely to have a
Material Adverse Effect on Career. Except as disclosed in Section 5.12 of
the Career Disclosure Memorandum, none of the Career Companies:
(a) is in Default under any of the provisions of its
Certificate of Incorporation or Bylaws (or other governing
instruments);
(b) is in Default under any Laws, Orders, or Permits
applicable to its business or employees conducting its business,
except for any such Default which is not reasonably likely to have a
Material Adverse Effect on Career; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or
local government or any Regulatory Authority or the staff thereof
(i) asserting that any Career Company is not in compliance with any of
the Laws or Orders which such governmental authority or Regulatory
Authority enforces, where any such noncompliance is reasonably likely
to have a Material Adverse Effect on Career, (ii) threatening to
revoke any Permits, where any such revocation is reasonably likely to
have a Material Adverse Effect on Career, or (iii) requiring any
Career Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment, or memorandum
of understanding, or to adopt any Board resolution or similar
undertaking, except for any such order, agreement, directive,
commitment, memorandum, resolution or undertaking which is not
reasonably likely to have a Material Adverse Effect on Career.
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Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action with respect to any Career Company by a Regulatory
Authority have been made available to Accustaff.
5.13 LABOR RELATIONS. Except as disclosed in Section 5.13 of the
---------------
Career Disclosure Memorandum, no Career Company is the subject of any
Litigation asserting that it or any other Career Company has committed an
unfair labor practice (within the meaning of the National Labor Relations
Act or comparable state law) or seeking to compel it or any other Career
Company to bargain with any labor organization as to wages or conditions of
employment, nor is any Career Company party to any collective bargaining
agreement, nor is there any strike or other labor dispute involving any
Career Company, pending or threatened, or to the Knowledge of Career, is
there any activity involving any Career Company's employees seeking to
certify a collective bargaining unit or engaging in any other organization
activity.
5.14 EMPLOYEE BENEFIT PLANS.
----------------------
(a) Career has or will deliver or make available to
Accustaff copies of all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay,
vacation, bonus, or other incentive plan, all other written employee
programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans"
as that term is defined in Section 3(3) of ERISA, currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by any
Career Company or ERISA Affiliate (within the meaning of Sections 414(b) or
(c) of the Internal Revenue Code) of a Career Company for the benefit of
employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "Career
Benefit Plans"). Career has disclosed in Section 5.14 of the Career
Disclosure Memorandum all qualified retirement plans of Career Companies
and all executive retirement plans of Career. Any of the Career Benefit
Plans which is an "employee pension benefit plan," as that term is defined
in Section 3(2) of ERISA, is referred to herein as a "Career ERISA Plan."
No Career ERISA Plan is, and no Career Company has or has ever had any
obligation to contribute to or to provide security for, a "defined benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code) or a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All Career Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws, the breach or violation of which are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Career. Each Career ERISA Plan which is intended to be qualified under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service, and Career is not
aware of any circumstances likely to result in revocation of any such
favorable determination letter. No Career Company has engaged in a
transaction with respect to any Career Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would
subject any Career Company to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA.
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(c) Except as disclosed in Section 5.14 of the Career
Disclosure Memorandum, no Career Company has any Liability for retiree
health and life benefits under any of the Career Benefit Plans except as
may be required under Section 4980B of the Internal Revenue Code, Part 6 of
Title I of ERISA or any related state or local law or ordinance.
(d) Except as disclosed in Section 5.14 of the Career
Disclosure Memorandum, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will
(i) result in any payment (including severance, unemployment compensation,
golden parachute, or otherwise) becoming due to any director or any
employee of any Career Company from any Career Company under any Career
Benefit Plan or otherwise, (ii) increase any benefits otherwise payable
under any Career Benefit Plan, or (iii) result in any acceleration of the
time of payment or vesting of any such benefit.
(e) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of
employees and former employees of any Career Company and their respective
beneficiaries, other than entitlements accrued pursuant to funded
retirement plans subject to the provisions of Section 412 of the Internal
Revenue Code or Section 302 of ERISA, have been fully reflected on the
Career Financial Statements to the extent required by and in accordance
with GAAP.
5.15 MATERIAL CONTRACTS. Except as disclosed in Section 5.15 of
------------------
the Career Disclosure Memorandum or otherwise reflected in the Career
Financial Statements, none of the Career Companies, nor any of their
respective Assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate
payments to any officer of Career and presidents of any operating divisions
of any Career Company in any calendar year in excess of $200,000, (ii) any
Contract relating to the borrowing of money by any Career Company or the
guarantee by any Career Company of any such obligation (other than
Contracts evidencing trade payables and Contracts relating to borrowings or
guarantees made in the ordinary course of business), (iii) any Contract
which prohibits or restricts any Career Company from engaging in any
business activities in any geographic area, line of business or otherwise
in competition with any other Person, (iv) any Contract between or among
Career Companies, (v) any Contract involving Intellectual Property (other
than Contracts entered into in the ordinary course with customers and
"shrink-wrap" software licenses), (vi) any Contract relating to the
provision of data processing, network communication, or other technical
services to any Career Company which require payments by such Career
Company to any Persons of $250,000 or more in any year, (vii) any Contract
relating to the purchase or sale of any business, and (viii) any other
Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K filed by Career with the SEC as of the date of this
Agreement (together with all Contracts referred to in Sections 5.9 and
5.14(a), the "Career Contracts"). With respect to each Career Contract and
except as disclosed in Section 5.15 of the Career Disclosure Memorandum:
(i) the Contract is in full force and effect, except where any failure of
such a Contract to be in full force and effect is not reasonably likely to
have a Material Adverse Effect on Career; (ii) no Career Company is in
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Default thereunder, other than any such Default which is not reasonably
likely to have a Material Adverse Effect on Career; (iii) no Career Company
has repudiated or waived any material provision of any such Contract; and
(iv) no other party to any such Contract is, to the Knowledge of Career, in
Default in any respect or has repudiated or waived any material provision
thereunder. All of the indebtedness of any Career Company for money
borrowed, other than the Career Convertible Notes, is prepayable at any
time by such Career Company without penalty or premium.
5.16 LEGAL PROCEEDINGS. There is no Litigation instituted or
-----------------
pending, or, to the Knowledge of Career, threatened against any Career
Company, or against any director, employee or employee benefit plan of any
Career Company, or against any Asset, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Career, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any Career Company, except any such Orders for which
the failure to comply is not reasonably likely to have a Material Adverse
Effect on Career. Section 5.16 of the Career Disclosure Memorandum
contains a summary of all Litigation as of the date of this Agreement to
which any Career Company is a party and which names a Career Company as a
defendant or cross-defendant and for which either equitable relief is
sought or damages in excess of $200,000 are sought from such Career
Company.
5.17 REPORTS. Since January 1, 1993, or the date of organization
-------
if later, each Career Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that
it was required to file with Regulatory Authorities (except failures to
file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Career). As of their respective
dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all respects with
all applicable Laws, except where the failure to comply is not reasonably
likely to have a Material Adverse Effect on Career. As of its respective
date, each such report and document did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except for untrue
statements or omissions which are not reasonably likely to have a Material
Adverse Effect on Career.
5.18 STATEMENTS TRUE AND CORRECT. No statement, certificate,
---------------------------
instrument, or other writing furnished or to be furnished by any Career
Company thereof to Accustaff pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will
contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied in writing by any Career Company
thereof for inclusion in the Registration Statement to be filed by
Accustaff with the SEC will, when the Registration Statement becomes
effective, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein
not misleading. None of the information supplied or to be supplied in
writing by any Career Company thereof for inclusion in the Joint Proxy
Statement to be mailed to each Party's shareholders in connection with the
Shareholders' Meetings, and any other documents to be filed by a Career
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Company with the SEC or any other Regulatory Authority in connection with
the transactions contemplated hereby, will, at the respective time such
documents are filed, and with respect to the Joint Proxy Statement, when
first mailed to the shareholders of Career and Accustaff, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case
of the Joint Proxy Statement or any amendment thereof or supplement
thereto, at the time of the Shareholders' Meetings, be false or misleading
with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Shareholders' Meetings.
All documents that any Career Company is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions
of applicable Law.
5.19 ACCOUNTING, TAX AND REGULATORY MATTERS. No Career Company or,
--------------------------------------
to Career's Knowledge, any Affiliate thereof has taken or agreed to take
any action and Career does not have any Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the Merger from
qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) or result in the
imposition of a condition or restriction of the type referred to in the
last sentence of such Section.
5.20 STATE TAKEOVER LAWS. Each Career Company has taken all
-------------------
necessary action to exempt the transactions contemplated by this Agreement
from, or if necessary to challenge the validity or applicability of, any
applicable "moratorium," "fair price," "business combination," "control
share," or other anti-takeover Laws (collectively, "Takeover Laws"),
including Section 203 of the DGCL.
5.21 CHARTER PROVISIONS. Each Career Company has taken all action
------------------
so that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement do not and
will not result in the grant of any rights to any Person under the
Certificate of Incorporation, Bylaws or other governing instruments of any
Career Company or restrict or impair the ability of Accustaff or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of any Career Company that may be directly or
indirectly acquired or controlled by them.
5.22 OPINION OF FINANCIAL ADVISOR. Prior to the execution of this
----------------------------
Agreement, Career has received the opinion of Salomon Brothers Inc to the
effect that, as of the date of this Agreement, the consideration to be
received by holders of shares of Career Common Stock is fair to such
holders from a financial point of view.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF ACCUSTAFF
-------------------------------------------
Accustaff hereby represents and warrants to Career as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Accustaff is a corporation
---------------------------------
duly organized, validly existing, and in good standing under the Laws of
the State of Florida, and has the corporate power and authority to carry on
its business as now conducted and to own, lease and operate its material
Assets. Accustaff is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed
is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Accustaff.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Accustaff has the corporate power and authority
necessary to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated herein, including the Merger, have been
duly and validly authorized by all necessary corporate action in respect
thereof on the part of Accustaff, subject to the approval of the issuance
of the shares of Accustaff Common Stock pursuant to the Merger by a
majority of the votes cast at the Accustaff Shareholders' Meeting (assuming
for such purpose that the votes cast in respect of such proposal represent
a majority of the outstanding Accustaff Common Stock), which is the only
shareholder vote required for approval of this Agreement and consummation
of the merger by Accustaff. Subject to such requisite shareholder approval
and assuming this Agreement represents a valid and binding obligation of
Career, this Agreement represents a legal, valid, and binding obligation of
Accustaff, enforceable against Accustaff in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of
specific performance or injunctive relief is subject to the discretion of
the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Accustaff, nor the consummation by Accustaff of the transactions
contemplated hereby, nor compliance by Accustaff with any of the provisions
hereof, will (i) conflict with or result in a breach of any provision of
Accustaff's Articles of Incorporation or Bylaws, or (ii) constitute or
result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any Accustaff Company under, any
Contract or Permit of any Accustaff Company, except any such Default or
Lien, or any failure to obtain any such Consent, is not reasonably likely
to have a Material Adverse Effect on Accustaff or, (iii) subject to receipt
of the requisite Consents referred to in Section 9.1(b), violate any Law or
Order applicable to any Accustaff Company or any of their respective
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material Assets, except for any such violation which is not reasonably
likely to have a Material Adverse Effect on Accustaff.
(c) Except as set forth in Section 6.2 of the Accustaff
Disclosure Memorandum, and other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NASD, and other than Consents required
from Regulatory Authorities, and other than notices to or filings with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect to any employee benefit plans, or under the HSR Act, no notice to,
filing with, or Consent of, any public body or authority is necessary for
the consummation by Accustaff of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of Accustaff consists of
(i) 150,000,000 shares of Accustaff Common Stock, of which 65,663,634
shares are issued and outstanding as of the date of this Agreement, and
(ii) 10,000,000 shares of preferred stock, par value $.01 per share, none
of which are issued and outstanding. All of the issued and outstanding
shares of Accustaff Capital Stock are, and all of the shares of Accustaff
Common Stock to be issued in exchange for shares of Career Common Stock
upon consummation of the Merger, when issued in accordance with the terms
of this Agreement, will be, duly and validly issued and outstanding and
fully paid and nonassessable under the FBCA. None of the outstanding
shares of Accustaff Capital Stock has been, and none of the shares of
Accustaff Common Stock to be issued in exchange for shares of Career Common
Stock upon consummation of the Merger will be, issued in violation of any
preemptive rights of the current or past shareholders of Accustaff.
(b) Except as set forth in Section 6.3(a), or as disclosed
in Section 6.3 of the Accustaff Disclosure Memorandum, as of the date of
this Agreement, there are no shares of capital stock or other equity
securities of Accustaff outstanding and no outstanding Rights created by
Accustaff or any Accustaff Company relating to the capital stock of
Accustaff.
6.4 SEC FILINGS; FINANCIAL STATEMENTS.
---------------------------------
(a) Accustaff has timely filed and made available to Career
all SEC Documents required to be filed by Accustaff since December 31, 1992
(the "Accustaff SEC Reports"). The Accustaff SEC Reports (i) at the time
filed, complied or will comply in all material respects with the applicable
requirements of the Securities Laws and other applicable Laws and (ii) did
not, at the time they were filed (or, if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material
fact required to be stated in such Accustaff SEC Reports or necessary in
order to make the statements in such Accustaff SEC Reports, in light of the
circumstances under which they were made, not misleading; provided, that
any pro forma financial statements contained in the Accustaff SEC Reports
are not necessarily indicative of the consolidated financial position of
the Accustaff Companies as of the respective dates thereof and the
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consolidated results of operations and cash flows of the Accustaff
Companies for the periods indicated. No Accustaff Subsidiary is required
to file any SEC Documents.
(b) Each of the Accustaff Financial Statements (including,
in each case, any related notes) contained in the Accustaff SEC Reports,
including any Accustaff SEC Reports filed after the date of this Agreement
until the Effective Time, complied as to form in all material respects with
the applicable published rules and regulations of the SEC with respect
thereto, was prepared in accordance with GAAP (except to the extent
required by changes in generally accepted accounting principles, as may be
indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC), and
fairly presented in all material respects the consolidated financial
position of Accustaff and its Subsidiaries as at the respective dates and
the consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or
are subject to normal and recurring year-end adjustments which were not or
are not expected to be material in amount or effect and that any pro forma
financial statements contained in the Accustaff SEC Reports are not
necessarily indicative of the consolidated financial position of the
Accustaff Companies as of the respective dates thereof and the consolidated
results of operations and cash flows of the Accustaff Companies for the
periods indicated.
6.5 ABSENCE OF UNDISCLOSED LIABILITIES. No Accustaff Company has
----------------------------------
any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Accustaff, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of
Accustaff as of December 31, 1995 and June 30, 1996, included in the
Accustaff Financial Statements delivered prior to the date of this
Agreement or reflected in the notes thereto. No Accustaff Company has
incurred or paid any Liability since June 30, 1996, except for such
Liabilities incurred or paid (i) in the ordinary course of business
consistent with past business practice or (ii) in connection with the
transactions contemplated by this Agreement.
6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1996,
------------------------------------
except as disclosed in the Accustaff Financial Statements delivered prior
to the date of this Agreement or as disclosed in Section 6.6 of the
Accustaff Disclosure Memorandum, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Accustaff, and (ii) the
Accustaff Companies have not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if
taken after the date of this Agreement, would represent or result in a
material breach or violation of any of the covenants and agreements of
Accustaff provided in Article 7.
6.7 TAX MATTERS.
-----------
(a) All Tax Returns required to be filed by or on behalf of
any of the Accustaff Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired, and all
such Tax Returns filed are complete and accurate in all material respects.
All Taxes shown on filed Tax Returns have been paid. As of the date of
this Agreement, there is no audit examination, deficiency, or refund
Litigation with respect to any Taxes, except as disclosed in Section 6.7 of
the Accustaff Disclosure Memorandum. All Taxes and other Liabilities due
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with respect to completed and settled examinations or concluded Litigation
have been paid. There are no Liens with respect to Taxes upon any of the
Assets of the Accustaff Companies, except for any such Lien which is not
reasonably likely to have a Material Adverse Effect on Accustaff.
(b) None of the Accustaff Companies has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other
applicable taxing authorities) that is currently in effect.
(c) The provision for any Taxes due or to become due for
any of the Accustaff Companies for the period or periods through and
including the date of the respective Accustaff Financial Statements that
has been made and is reflected on such Accustaff Financial Statements is
sufficient to cover all such Taxes, except for any insufficiency of such
provision which is not reasonably likely to have a Material Adverse Effect
on Accustaff.
(d) Each of the Accustaff Companies is in compliance with,
and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable
information reporting and Tax withholding requirements under federal, state
and local Tax Laws, and such records identify with specificity all accounts
subject to backup withholding under Section 3406 of the Internal Revenue
Code, except for any such instance of noncompliance or failure to so
identify which is not reasonably likely to have a Material Adverse Effect
on Career.
6.8 INTELLECTUAL PROPERTY. Except as disclosed in Section 6.8 of
---------------------
the Accustaff Disclosure Memorandum, (i) each Accustaff Company owns or has
a license to use all of the Intellectual Property used by such Accustaff
Company in the course of its business, (ii) each Accustaff Company is the
owner of or has a license to any Intellectual Property sold or licensed to
a third party by such Accustaff Company in connection with such Accustaff
Company's business operations, and such Accustaff Company has the right to
convey by sale or license any Intellectual Property so conveyed, (iii) no
Accustaff Company is in Default under any of its Intellectual Property
licenses and (iv) no proceedings have been instituted, or are pending or to
the Knowledge of Accustaff threatened, which challenge the rights of any
Accustaff Company with respect to Intellectual Property used, sold or
licensed by such Accustaff Company in the course of its business, nor has
any person claimed or alleged any rights to such Intellectual Property,
except for any failure to own or license, Default or proceeding which is
not reasonably likely to have a Material Adverse Effect on Accustaff. To
the Knowledge of Accustaff, the conduct of the business of the Accustaff
Companies does not infringe any Intellectual Property of any other Person.
6.9 ENVIRONMENTAL MATTERS.
---------------------
(a) Each of the Accustaff Companies is in compliance with
all Environmental Laws and has obtained all necessary Permits required to
be issued pursuant to any Environmental Law, except where the failure to so
comply or to obtain such Permits, individually or in the aggregate, is not
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reasonably likely to have a Material Adverse Effect on Accustaff. None of
the Accustaff Companies has received notice or communication from any
Regulatory Authority with respect to (i) any Hazardous Material relative to
its operations, property or acts or (ii) any investigation, demand or
request pursuant to enforcing any Environmental Law relating to it or its
operations, and no such investigation is pending or threatened in any case
which is reasonably likely to have a Material Adverse Effect on Accustaff.
(b) During the period of (i) any Accustaff Company's
ownership or operation of any of their respective current properties,
(ii) any Accustaff Company's participation in the management of any
Participation Facility, or (iii) any Accustaff Company's holding of a
security interest in an Operating Property, there have been no releases,
discharges, spillages, or disposals of Hazardous Material in, on, under,
adjacent to, or affecting (or potentially affecting) such properties,
except for any such release, discharge, spillage, or disposal which is not
reasonably likely to have a Material Adverse Effect on Career. Prior to
the period of (i) any Accustaff Company's ownership or operation of any of
their respective current properties, (ii) any Accustaff Company's
participation in the management of any Participation Facility, or (iii) any
Accustaff Company's holding of a security interest in an Operating
Property, to the Knowledge of Accustaff, there were no releases,
discharges, spillages, or disposals of Hazardous Material in, on, under, or
affecting any such property, Participation Facility or Operating Property,
except for any such release, discharge, spillage, or disposal which is not
reasonably likely to have a Material Adverse Effect on Career.
6.10 COMPLIANCE WITH LAWS. Each Accustaff Company has in effect
--------------------
all Permits necessary for it to own, lease or operate its material Assets
and to carry on its business as now conducted, except where the failure to
so hold any such Permit is not reasonably likely to have a Material Adverse
Effect on Accustaff, and there has occurred no Default under any such
Permit, except for any such Default which is not reasonably likely to have
a Material Adverse Effect on Accustaff. Except as disclosed in Section
6.10 of the Accustaff Disclosure Memorandum, none of the Accustaff
Companies:
(a) is in Default under its Articles of Incorporation or
Bylaws (or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits
applicable to its business or employees conducting its business,
except for any such Default which is not reasonably likely to have a
Material Adverse Effect on Accustaff; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or
local government or any Regulatory Authority or the staff thereof
(i) asserting that any Accustaff Company is not in compliance with any
of the Laws or Orders which such governmental authority or Regulatory
Authority enforces, where any such noncompliance is reasonably likely
to have a Material Adverse Effect on Accustaff, (ii) threatening to
revoke any Permits, where any such revocation is reasonably likely to
have a Material Adverse Effect on Accustaff, or (iii) requiring any
Accustaff Company to enter into or consent to the issuance of a cease
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and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any Board resolution or
similar undertaking, which restricts materially the conduct of its
business, except for any such order, agreement, directive, commitment,
memorandum, resolution or undertaking which is not reasonably likely
to have a Material Adverse Effect on Accustaff.
6.11 LABOR RELATIONS. Except as disclosed in Section 6.11 of the
---------------
Accustaff Disclosure Memorandum, no Accustaff Company is the subject of any
Litigation asserting that it or any other Accustaff Company has committed
an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state law) or seeking to compel it or any other
Accustaff Company to bargain with any labor organization as to wages or
conditions of employment, nor is any Accustaff Company party to any
collective bargaining agreement, nor is there any strike or other labor
dispute involving any Accustaff Company, pending or threatened, or to the
Knowledge of Accustaff, is there any activity involving any Accustaff
Company's employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
6.12 EMPLOYEE BENEFIT PLANS.
----------------------
(a) Accustaff has delivered or made or will make available
to Career copies of all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay,
vacation, bonus, or other incentive plan, all other written employee
programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans"
as that term is defined in Section 3(3) of ERISA, currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by any
Accustaff Company or ERISA Affiliate of an Accustaff Company for the
benefit of employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "Accustaff
Benefit Plans"). Any of the Accustaff Benefit Plans which is an "employee
pension benefit plan," as that term is defined in Section 3(2) of ERISA, is
referred to herein as a "Accustaff ERISA Plan." No Accustaff ERISA Plan
is, and no Accustaff Company has or has ever had any obligation to
contribute to or to provide security for, a "defined benefit plan" (as
defined in Section 414(j) of the Internal Revenue Code) or a multiemployer
plan within the meaning of Section 3(37) of ERISA.
(b) All Accustaff Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws, the breach or violation of which are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Accustaff. Except as disclosed in Section 6.12 of the Accustaff Disclosure
Memorandum, each Accustaff ERISA Plan which is intended to be qualified
under Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service, and Accustaff is
not aware of any circumstances likely to result in revocation of any such
favorable determination letter. No Accustaff Company has engaged in a
transaction with respect to any Accustaff Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would
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subject any Accustaff Company to a Tax imposed by either Section 4975 of
the Internal Revenue Code or Section 502(i) of ERISA.
6.13 LEGAL PROCEEDINGS. Except as set forth in Section 6.13 of the
-----------------
Accustaff Disclosure Memorandum, there is no Litigation instituted or
pending, or, to the Knowledge of Accustaff, threatened against any
Accustaff Company, or against any director, employee or employee benefit
plan of any Accustaff Company, or against any Asset, interest, or right of
any of them, that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Accustaff, nor are there any Orders
of any Regulatory Authorities, other governmental authorities, or
arbitrators outstanding against any Accustaff Company, except any such
Orders for which the failure to comply is not reasonably likely to have a
Material Adverse Effect on Accustaff.
6.14 REPORTS. Since January 1, 1993, or the date of organization
-------
if later, each Accustaff Company has filed all reports and statements,
together with any amendments required to be made with respect thereto, that
it was required to file with Regulatory Authorities (except failures to
file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Accustaff). As of their respective
dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all respects with
all applicable Laws, except where the failure to comply is not reasonably
likely to have a Material Adverse Effect on Accustaff. As of its
respective date, each such report and document did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading,
except for untrue statements or omissions which are not reasonably likely
to have a Material Adverse Effect on Accustaff.
6.15 STATEMENTS TRUE AND CORRECT. No statement, certificate,
---------------------------
instrument or other writing furnished or to be furnished by any Accustaff
Company to Career pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any
untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the information
supplied or to be supplied in writing by any Accustaff Company for
inclusion in the Registration Statement to be filed by Accustaff with the
SEC, will, when the Registration Statement becomes effective, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein not misleading. None of the
information supplied or to be supplied in writing by any Accustaff Company
for inclusion in the Joint Proxy Statement to be mailed to each Party's
shareholders in connection with the Shareholders' Meetings, and any other
documents to be filed by any Accustaff Company with the SEC or any other
Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with
respect to the Joint Proxy Statement, when first mailed to the shareholders
of Career and Accustaff, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Joint Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Shareholders'
Meetings, be false or misleading with respect to any material fact, or omit
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to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for the
Shareholders' Meetings. All documents that any Accustaff Company is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.
6.16 AUTHORITY OF SUB. Sub is a corporation duly organized,
----------------
validly existing and in good standing under the Laws of the State of
Delaware as a wholly owned Subsidiary of Accustaff. The authorized capital
stock of Sub shall consist of 1,000 shares of Sub Common Stock, all of
which is validly issued and outstanding, fully paid and nonassessable and
is owned by Accustaff free and clear of any Lien. Sub has the corporate
power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of Sub. This
Agreement represents a legal, valid, and binding obligation of Sub,
enforceable against Sub in accordance with its terms (except in all cases
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the
equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
Accustaff, as the sole shareholder of Sub, has voted prior to the Effective
Time the shares of Sub Common Stock in favor of adoption of this Agreement,
as and to the extent required by applicable Law.
6.17 ACCOUNTING, TAX AND REGULATORY MATTERS. No Accustaff Company
--------------------------------------
or, to Accustaff's Knowledge, any Affiliate thereof has taken or agreed to
take any action and Accustaff does not have any Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the Merger from
qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) or result in the
imposition of a condition or restriction of the type referred to in the
last sentence of such Section.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 AFFIRMATIVE COVENANTS OF CAREER. From the date of this
-------------------------------
Agreement until the earlier of the Effective Time or the termination of
this Agreement, unless the prior written consent of Accustaff shall have
been obtained, and except as otherwise expressly contemplated herein,
Career shall and shall cause each of its Subsidiaries to (a) operate its
business only in the usual, regular, and ordinary course, (b) preserve
intact its business organization and Assets and maintain its rights and
franchises, and (c) take no action which would (i) materially adversely
affect the ability of any Party to obtain any Consents required for the
transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 9.1(b),
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or (ii) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF CAREER. From the date of this Agreement
----------------------------
until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Accustaff shall have been
obtained, and except as otherwise expressly contemplated herein, Career
covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following:
(a) amend the Articles or Certificate of Incorporation,
Bylaws or other governing instruments of any Career Company, or
(b) incur any additional debt obligation or other
obligation for borrowed money (other than indebtedness of a Career
Company to another Career Company) in excess of an aggregate of
$500,000 (for the Career Companies on a consolidated basis) except in
the ordinary course of the business of Career Subsidiaries consistent
with past practice, or impose, or suffer the imposition, on any Asset
of any Career Company of any Lien or permit any such Lien to exist
(other than in connection with Liens in effect as of the date hereof
that are disclosed in the Career Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any Career
Company, or declare or pay any dividend or make any other distribution
in respect of Career's capital stock; or
(d) except for this Agreement, or pursuant to the exercise
of stock options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, or pursuant to the
Stock Option Agreement, or as disclosed in Section 7.2(d) of the
Career Disclosure Memorandum, issue, sell, pledge, encumber, authorize
the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Career Common Stock or any other
capital stock of any Career Company, or any stock appreciation rights,
or any option, warrant, or other Right; or
(e) adjust, split, combine or reclassify any capital stock
of any Career Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Career
Common Stock, or sell, lease, mortgage or otherwise dispose of or
otherwise encumber (x) any shares of capital stock of any Career
Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Career Company) or (y) any Asset having a book
value in excess of $250,000 other than in the ordinary course of
business consistent with past practice for reasonable and adequate
consideration; or
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(f) except for purchases of U.S. Treasury securities or
U.S. Government agency securities, which in either case have
maturities of three years or less, purchase any securities or make any
material investment, either by purchase of stock of securities,
contributions to capital, Asset transfers, or purchase of any Assets,
in any Person other than a wholly owned Career Subsidiary, or
otherwise acquire direct or indirect control over any Person, other
than in connection with (i) foreclosures in the ordinary course of
business, (ii) the creation of new wholly owned Subsidiaries organized
to conduct or continue activities otherwise permitted by this
Agreement, or (iii) investments in connection with cash management
activities consistent with past practices; or
(g) grant any increase in compensation or benefits to the
employees or officers of any Career Company, except in the ordinary
course of business and consistent with past practice disclosed in
Section 7.2(g) of the Career Disclosure Memorandum or as required by
Law; pay any severance or termination pay or any bonus other than
pursuant to written policies or written Contracts in effect on the
date of this Agreement and disclosed in Section 7.2(g) of the Career
Disclosure Memorandum; and enter into or amend any severance
agreements with officers of any Career Company; grant any material
increase in fees or other increases in compensation or other benefits
to directors of any Career Company except in accordance with past
practice disclosed in Section 7.2(g) of the Career Disclosure
Memorandum; or voluntarily accelerate the vesting of any stock options
or other stock-based compensation or employee benefits or other
Rights; or
(h) enter into or amend any employment Contract between any
Career Company and any Person (if such employment Contract is, or if
such employment Contract had been entered into or amended prior to the
date of this Agreement, such employment Contract (as amended) would
be, a Career Contract) (unless such amendment is required by Law) that
the Career Company does not have the unconditional right to terminate
without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any Career
Company or terminate or withdraw from, or make any material change in
or to, any existing employee benefit plans of any Career Company other
than any such change that is required by Law or that, in the opinion
of counsel, is necessary or advisable to maintain the tax qualified
status of any such plan, or make any distributions from such employee
benefit plans, except as required by Law, the terms of such plans or
consistent with past practice; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) except as disclosed in Section 7.2(k) of the Career
Disclosure Memorandum, commence any Litigation other than in
accordance with past practice, settle any Litigation involving any
Liability of any Career Company for material money damages or
restrictions upon the operations of any Career Company; or
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(l) except in the ordinary course of business, modify,
amend or terminate any Career Contract or waive, release, compromise
or assign any material rights or claims.
7.3 COVENANTS OF ACCUSTAFF. From the date of this Agreement until
----------------------
the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Career shall have been obtained, and
except as otherwise expressly contemplated herein, Accustaff covenants and
agrees that it shall (a) continue to conduct its business and the business
of its Subsidiaries in a manner designed in its reasonable judgment, to
enhance the long-term value of the Accustaff Common Stock and the business
prospects of the Accustaff Companies and to the extent consistent therewith
use all reasonable efforts to preserve intact the Accustaff Companies' core
businesses and goodwill with their respective employees and the communities
they serve, and (b) take no action which would (i) materially adversely
affect the ability of any Party to obtain any Consents required for the
transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 9.1(b),
or (ii) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement; provided, that the foregoing
shall not prevent any Accustaff Company from acquiring any Assets or other
businesses or from discontinuing or disposing of any of its Assets or
business if such action is, in the judgment of Accustaff, desirable in the
conduct of the business of Accustaff and its Subsidiaries. Accustaff
further covenants and agrees that it will not, without the prior written
consent of Career, (i) amend the Articles of Incorporation or Bylaws of
Accustaff, in each case in any manner adverse to the holders of Career
Common Stock as compared to rights of holders of Accustaff Common Stock
generally as of the date of this Agreement, or (ii) during any period used
to determine the Average Closing Price, repurchase, redeem, or otherwise
acquire or exchange (other than exchanges in the ordinary course under
employee benefit plans), directly or indirectly, any shares, or any
securities convertible into any shares, of Accustaff Common Stock.
Accustaff further covenants and agrees that it will not acquire direct or
indirect control over any Person where the consideration for such
acquisition consists of Accustaff Common Stock having an aggregate market
value as of the date of public announcement of such acquisition of $300
million or more without the prior written consent of the chief executive
officer of Career, which consent shall not be unreasonably withheld
(provided that such consent shall be deemed to be unreasonably withheld if
such acquisition, in the good faith judgment of the chief executive officer
of Accustaff when publicly announced, will be accretive to Accustaff's
earnings per share in the first full year after consummation of such
acquisition.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give
----------------------------
written notice promptly to the other Party upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to
it or any of its Subsidiaries which (i) is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on it or
(ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use all
reasonable efforts to prevent or promptly to remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all
-------
reports required to be filed by it with Regulatory Authorities between the
date of this Agreement and the Effective Time and shall deliver to the
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other Party copies of all such reports promptly after the same are filed.
If financial statements are contained in any such reports filed with the
SEC, such financial statements will fairly present the consolidated
financial position of the entity filing such statements as of the dates
indicated and the consolidated results of operations, changes in
shareholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements
to normal recurring year-end adjustments that are not material). As of
their respective dates, such reports filed with the SEC will comply in all
material respects with the Securities Laws and will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Any
financial statements contained in any other reports to another Regulatory
Authority shall be prepared in accordance with Laws applicable to such
reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
---------------------
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER APPROVAL.
-------------------------------------------------------------
Accustaff shall prepare and file the Registration Statement with the SEC,
and shall use all reasonable efforts to cause the Registration Statement to
become effective under the 1933 Act and take any action required to be
taken under the applicable state Blue Sky or securities Laws in connection
with the issuance of the shares of Accustaff Common Stock upon consummation
of the Merger. Career shall cooperate in the preparation and filing of the
Registration Statement and shall furnish all information concerning it and
the holders of its capital stock as Accustaff may reasonably request in
connection with such action. Career shall call a Shareholders' Meeting, to
be held as soon as reasonably practicable after the Registration Statement
is declared effective by the SEC in accordance with the rules of the NYSE,
for the purpose of voting upon adoption of this Agreement and such other
related matters as it deems appropriate. Accustaff shall call a
Shareholders' Meeting, to be held as soon as reasonably practicable after
the Registration Statement is declared effective by the SEC, for the
purpose of voting upon the issuance of shares of Accustaff Common Stock
pursuant to the Merger and such other related matters as it deems
appropriate. The Parties shall use all reasonable efforts to cause the
Shareholders' Meetings to be held on the same day, unless the Parties
otherwise agree. In connection with the Shareholders' Meetings, (i) Career
and Accustaff shall prepare and file with the SEC a Joint Proxy Statement
and mail such Joint Proxy Statement to their respective shareholders,
(ii) the Parties shall furnish to each other all information concerning
them that they may reasonably request in connection with such Joint Proxy
Statement, (iii) the Board of Directors of Career and Accustaff shall
recommend to their respective shareholders the approval of the matters
submitted for approval (subject to the Board of Directors of Career, after
having consulted with and considered the advice of outside counsel,
reasonably determining in good faith that the making of such
recommendation, or the failure to withdraw or modify its recommendation,
would not constitute a breach of fiduciary duties of the members of such
Board of Directors to Career's shareholders under applicable law), and
(iv) the Board of Directors and officers of Career and Accustaff shall use
all reasonable efforts to obtain such shareholders' approval (subject to
the Board of Directors of Career, after having consulted with and
considered the advice of outside counsel, reasonably determining in good
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faith that the taking of such actions would not constitute a breach of
fiduciary duties of the members of such Board of Directors to Career's
shareholders under applicable law). Accustaff and Career shall make all
necessary filings with respect to the Merger under the Securities Laws.
8.2 EXCHANGE LISTING. Accustaff shall take all action required to
----------------
list, prior to the Effective Time, on the Nasdaq National Market the shares
of Accustaff Common Stock to be issued to the holders of Career Common
Stock pursuant to the Merger, and Accustaff shall give all notices and make
all filings with the NASD required in connection with the transactions
contemplated herein.
8.3 APPLICATIONS; ANTITRUST NOTIFICATION. Accustaff shall prepare
------------------------------------
and file, and Career shall cooperate in the preparation and, where
appropriate, filing of, applications with all Regulatory Authorities having
jurisdiction over the transactions contemplated by this Agreement seeking
the requisite Consents necessary to consummate the transactions
contemplated by this Agreement. To the extent required by the HSR Act,
each of the Parties will promptly file with the United States Federal Trade
Commission and the United States Department of Justice the notification and
report form required for the transactions contemplated hereby and any
supplemental or additional information which may reasonably be requested in
connection therewith pursuant to the HSR Act and will comply in all
material respects with the requirements of the HSR Act. The Parties shall
deliver to each other copies of all filings, correspondence and orders to
and from all Regulatory Authorities in connection with the transactions
contemplated hereby.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
--------------------------
conditions of this Agreement, Career shall execute and file the Certificate
of Merger with the Secretary of State of the State of Delaware in
connection with the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
-------------------------------------
and conditions of this Agreement, each Party agrees to use, and to cause
its Subsidiaries to use, all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws to consummate and make
effective, as soon as reasonably practicable after the date of this
Agreement, the transactions contemplated by this Agreement, including using
all reasonable efforts to lift or rescind any Order adversely affecting its
ability to consummate the transactions contemplated herein and to cause to
be satisfied the conditions referred to in Article 9; provided, that
nothing herein shall preclude either Party from exercising its rights under
this Agreement. Without limiting the generality of the foregoing, each
Party agrees to use all reasonable efforts to cause the Effective Time to
occur not later than the second business day following the last to occur of
(i) the effective date (including expiration of any applicable waiting
period) of the last required Consent of any Regulatory Authority having
authority over and approving or exempting the Merger, and (ii) the date on
which the shareholders of Career and Accustaff approve this Agreement to
the extent such approval is required by applicable Law or the rules of the
NYSE or NASD. Each Party shall use, and shall cause each of its
Subsidiaries to use, all reasonable efforts to obtain all Consents
necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
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8.6 INVESTIGATION AND CONFIDENTIALITY.
---------------------------------
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all material developments relevant to its business
and to consummation of the Merger and shall permit the other Party to make
or cause to be made such investigation of the business and properties of it
and its Subsidiaries and of their respective financial and legal conditions
as the other Party reasonably requests, provided that such investigation
shall be on reasonable notice during normal business hours and reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall
affect the representations and warranties of the other Party contained
herein.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to
the Effective Time, each Party shall promptly return or certify the
destruction of all documents and copies thereof, and all work papers
containing confidential information received from the other Party. All
documents and information furnished pursuant to this Section 8.6 shall be
subject to the Confidentiality Agreement dated August 13, 1996, between the
Parties.
(c) Career shall use all reasonable efforts to exercise its
rights under confidentiality agreements entered into with Persons which
were considering an Acquisition Proposal with respect to Career to preserve
the confidentiality of the information relating to the Career Companies
provided to such Persons and their Affiliates and Representatives.
8.7 PRESS RELEASES. Prior to the Effective Time, Career and
--------------
Accustaff shall consult with each other as to the form and substance of any
press release or other public disclosure materially related to this
Agreement or any other transaction contemplated hereby; provided, that
nothing in this Section 8.7 shall be deemed to prohibit any Party from
making any disclosure which its counsel deems necessary or advisable in
order to satisfy such Party's disclosure obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and
---------------
the transactions contemplated hereby, no Career Company nor any Affiliate
thereof nor any Representatives thereof retained by any Career Company
shall directly or indirectly solicit any Acquisition Proposal by any
Person. Except to the extent the Board of Directors of Career, after
having consulted with and considered the advice of outside counsel,
reasonably determines in good faith that the failure to take such actions
would constitute a breach of fiduciary duties of the members of such Board
of Directors to Career's shareholder under applicable law, no Career
Company or any Affiliate or Representative thereof shall furnish any non-
public information that it is not legally obligated to furnish, negotiate
with respect to, or enter into any Contract with respect to, any
Acquisition Proposal, but Career may communicate information about such an
Acquisition Proposal to its shareholders (including any statement required
pursuant to Rule 14e-2 of the 1934 Act) if and to the extent that it is
required to do so in order to comply with its legal obligations as advised
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by outside counsel. Career shall notify Accustaff orally as promptly as
practicable and in writing within 24 hours following the receipt of any
Acquisition Proposal and the details thereof, and advise Accustaff of any
developments with respect to such Acquisition Proposal promptly upon the
occurrence thereof. Career shall (i) immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
Persons conducted heretofore with respect to any of the foregoing, and
(ii) direct and use all reasonable efforts to cause all of its Affiliates
and Representatives not to engage in any of the foregoing.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes
----------------------------
and agrees to use all reasonable efforts to cause the Merger, and to take
no action which would cause the Merger not, to qualify for treatment as a
pooling of interests for accounting purposes or as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code for
federal income tax purposes.
8.10 AGREEMENT OF AFFILIATES. Career has disclosed in Section 8.10
-----------------------
of the Career Disclosure Memorandum all Persons whom it reasonably believes
is an "affiliate" of Career for purposes of Rule 145 under the 1933 Act.
Career shall use all reasonable efforts to cause each such Person to
deliver to Accustaff not later than 30 days after the date of this
Agreement, a written agreement, substantially in the form of Exhibit 1.
Accustaff shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of resale of
Accustaff Common Stock by such affiliates.
8.11 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective
-------------------------------
Time, Accustaff shall provide generally to officers and employees of the
Career Companies employee benefits under employee benefit and welfare plans
(other than stock option or other plans involving the potential issuance of
Accustaff Common Stock), on terms and conditions which when taken as a
whole are substantially similar to those currently provided by the
Accustaff Companies to their similarly situated officers and employees;
provided, that, except to the extent required by Law, Accustaff shall, or
shall cause the Career Companies to, provide to officers and employees of
the Career Companies employee benefits under the existing medical and
dental plans of the Career Companies for a period of not less than six
months following the Effective Time. For purposes of participation,
vesting and (except in the case of Accustaff retirement plans) benefit
accrual under Accustaff's employee benefit plans, the service of the
employees of the Career Companies prior to the Effective Time shall be
treated as service with an Accustaff Company participating in such employee
benefit plans. Accustaff also shall cause the Surviving Corporation and
its Subsidiaries to honor in accordance with their terms all employment,
severance, consulting and other compensation Contracts disclosed in Section
8.11 of the Career Disclosure Memorandum to Accustaff between any Career
Company and any current or former director, officer, or employee thereof,
and all provisions for vested benefits or other vested amounts earned or
accrued through the Effective Time under the Career Benefit Plans.
8.12 INDEMNIFICATION.
---------------
(a) Accustaff shall, and shall cause the Surviving
Corporation to, indemnify, defend and hold harmless the present and former
directors, officers, employees and agents of the Career Companies (each, an
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"Indemnified Party") against all Liabilities, losses, damages, claims or
expenses (including attorneys' fees or expenses), judgments or amounts paid
in settlement arising out of actions or omissions that are in whole or in
part based upon or arise out of the Indemnified Party's service or services
as directors, officers, employees or agents of any of the Career Companies
or, at Career's request, of another corporation, partnership, joint
venture, trust or other enterprise occurring at or prior to the Effective
Time (including the transactions contemplated by this Agreement) to the
fullest extent permitted under Delaware Law and by Career's Certificate of
Incorporation and Bylaws as in effect on the date hereof, including
provisions relating to advances of expenses incurred in the defense of any
Litigation and whether or not any Accustaff Company is insured against any
such matter. Without limiting the foregoing, in any case in which approval
by the Surviving Corporation is required to effectuate any indemnification
(including any advancement of expenses), the Surviving Corporation shall
direct, at the election of the Indemnified Party, that the determination of
any such approval shall be made by independent counsel mutually agreed upon
between Accustaff and the Indemnified Party.
(b) Accustaff shall, or shall cause the Surviving
Corporation to, use all reasonable efforts (and Career shall cooperate
prior to the Effective Time in these efforts) to maintain in effect for a
period of six years after the Effective Time Career's existing directors'
and officers' liability insurance policy (provided that Accustaff may
substitute therefor (i) policies of at least the same coverage and amounts
containing terms and conditions which are substantially no less
advantageous or (ii) with the consent of Career given prior to the
Effective Time, any other policy) with respect to claims arising from facts
or events which occurred prior to the Effective Time and covering persons
who are currently covered by such insurance; provided, that neither
Accustaff nor the Surviving Corporation shall be obligated to make
aggregate premium payments for such six-year period in respect of such
policy (or coverage replacing such policy) which exceed, for the portion
related to Career's directors and officers, 300% of the last annual premium
payment on Career's current policy in effect as of the date of this
Agreement (the "Maximum Amount"). If the amount of the premiums necessary
to maintain or procure such insurance coverage exceeds the Maximum Amount,
Accustaff shall use all reasonable efforts to maintain the most
advantageous policies of directors' and officers' liability insurance
obtainable for a premium equal to the Maximum Amount.
(c) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 8.12, upon learning of any such
Liability or Litigation, shall promptly notify Accustaff thereof, provided
that the failure of any Indemnified Party so to notify shall not relieve
Accustaff or the Surviving Corporation from any Liability it may have under
this Section 8.12 except to the extent that such failure substantially
prejudiced Accustaff or the Surviving Corporation. In the event of any such
Litigation (whether arising before or after the Effective Time),
(i) Accustaff or the Surviving Corporation shall have the right to assume
the defense thereof and neither Accustaff nor the Surviving Corporation
shall be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified
Parties in connection with the defense thereof, except that if Accustaff or
the Surviving Corporation elects not to assume such defense or counsel for
the Indemnified Parties advises that there are substantive issues which
raise conflicts of interest between Accustaff or the Surviving Corporation
and the Indemnified Parties, the Indemnified Parties may retain counsel
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satisfactory to them, and Accustaff or the Surviving Corporation shall pay
all reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received; provided, that
Accustaff and the Surviving Corporation shall be obligated pursuant to this
paragraph (c) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction, unless such Indemnified Parties shall have
been advised in writing by counsel that there exist conflicts of interests
among such Indemnified Parties that preclude one firm of counsel from
representing the interests of all such Indemnified Parties, (ii) Accustaff,
the Surviving Corporation and the Indemnified Parties will cooperate in the
defense of any such Litigation, and (iii) neither Accustaff nor the
Surviving Corporation shall be liable for any settlement effected without
its prior written consent, which consent shall not be unreasonably
withheld; and provided further that neither Accustaff nor the Surviving
Corporation shall have any obligation hereunder to any Indemnified Party
when and if a court of competent jurisdiction shall determine, and such
determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by
applicable Law.
(d) If Accustaff or the Surviving Corporation or any
successors or assigns shall consolidate with or merge into any other Person
and shall not be the continuing or surviving Person of such consolidation
or merger or shall transfer all or substantially all of its assets to any
Person, then and in each case, proper provision shall be made so that the
successors and assigns of Accustaff or the Surviving Corporation shall
assume the obligations set forth in this Section 8.12.
(e) The provisions of this Section 8.12 shall survive the
Effective Time and are intended expressly to be for the benefit of each of
the Indemnified Parties.
8.13 AGREEMENT REGARDING CERTAIN ACQUISITIONS. If, prior to the
----------------------------------------
earlier of the Effective Time or the date of termination of this Agreement,
Career presents to Accustaff a Qualifying Acquisition Proposal identified
by Career that Accustaff fails to approve within a reasonable period of
time following presentation and the opportunity for Accustaff to conduct a
reasonable due diligence investigation of the business subject to the
Qualifying Acquisition Proposal, Accustaff agrees that through the end of
the 12-month period following the termination of this Agreement, none of
the Accustaff Companies shall acquire such business, whether by way of
merger, share exchange or acquisition of all or substantially all of the
stock or assets of such business.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
---------------------------------------
obligations of each Party to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 11.6:
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(A) SHAREHOLDER APPROVAL. The shareholders of Career shall
--------------------
have adopted this Agreement as and to the extent required by Law, by
the provisions of any governing instruments, or by the rules of the
NYSE. The shareholders of Accustaff shall have approved the issuance
of shares of Accustaff Common Stock pursuant to the Merger, as and to
the extent required by Law, by the provisions of any governing
instruments, or by the rules of the NASD.
(B) REGULATORY APPROVALS. All Consents of, filings and
--------------------
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger (other than Consents and
filing, registration and notice requirements (i) which are set forth
in Section 5.2(c) of the Career Disclosure Memorandum or (ii) which,
if not obtained, made or complied with, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
either Party, which the Parties agree are at the sole risk of
Accustaff ("Excluded Consents")) shall have been obtained or made and
shall be in full force and effect and all waiting periods required by
the HSR Act or by any other Law the failure to comply with which is
reasonably likely to have a Material Adverse Effect on either Party
shall have expired. No Consent obtained from any Regulatory Authority
(other than Excluded Consents) which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in
a manner (including requirements relating to the raising of additional
capital or the disposition of Assets) which in the reasonable judgment
of the Board of Directors of Accustaff would so materially adversely
impact the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or requirement
been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.
(C) LEGAL PROCEEDINGS. No court or governmental or
-----------------
regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law (other than Laws
requiring the obtaining of Excluded Consents) or Order (whether
temporary, preliminary or permanent) or taken any other action which
prohibits, restricts (other than restrictions imposed upon or relating
to the business or operations of Career that are the subject of the
Excluded Consents) or makes illegal consummation of the transactions
contemplated by this Agreement.
(D) REGISTRATION STATEMENT. The Registration Statement shall
----------------------
be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, proceeding or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and
all necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of
Accustaff Common Stock issuable pursuant to the Merger shall have been
received.
(E) EXCHANGE LISTING. The shares of Accustaff Common Stock
----------------
issuable pursuant to the Merger shall have been approved for listing
on the Nasdaq National Market.
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(F) TAX MATTERS. Each Party shall have received a written
-----------
opinion of counsel from Alston & Bird, in form reasonably satisfactory
to such Parties (the "Tax Opinion"), to the effect that (i) the Merger
will constitute a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code, (ii) the exchange in the Merger of
Career Common Stock for Accustaff Common Stock will not give rise to
gain or loss to the shareholders of Career with respect to such
exchange (except to the extent of any cash received), (iii) none of
Career, Sub or Accustaff will recognize gain or loss as a consequence
of the Merger (except for amounts resulting from any required change
in accounting methods and any income and deferred gain recognized
pursuant to Treasury regulations issued under Section 1502 of the
Internal Revenue Code), (iv) the aggregate tax basis of the Accustaff
Common Stock received by a holder of Career Common Stock pursuant to
the Merger will be the same as the aggregate tax basis of the Career
Common Stock surrendered in exchange therefor (reduced by any amount
allocable to a fractional share interest for which cash is received),
(v) the holding period of the Accustaff Common Stock received by a
holder of Career Common Stock pursuant to the Merger will include the
holding period of the Career Common Stock surrendered in exchange
therefor, provided that the Career Common Stock is held as a capital
asset at the Effective Time, and (vi) the assumption by Accustaff of
Career Options that are "incentive stock options" will not constitute
a modification, extension or renewal of such options, within the
meaning of Section 424(h) of the Internal Revenue Code. In rendering
such Tax Opinion, such counsel shall be entitled to rely upon
representations of officers of Career and Accustaff reasonably
satisfactory in form and substance to such counsel.
(G) POOLING LETTERS. Accustaff and Career shall have
---------------
received letters, dated as of the date of filing of the Registration
Statement with the SEC and as of the Effective Time, addressed to
Accustaff and Career, in form and substance reasonably acceptable to
Accustaff and Career, from Coopers & Lybrand, L.L.P. to the effect
that the Merger will qualify for pooling-of-interests accounting
treatment.
9.2 CONDITIONS TO OBLIGATIONS OF ACCUSTAFF. The obligations of
--------------------------------------
Accustaff to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Accustaff pursuant to Section
11.6(a):
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.2(a), the accuracy of the representations and warranties of
Career set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties set forth in Section 5.3
shall be true and correct (except for inaccuracies which are de
minimis in amount). The representations and warranties set forth in
Sections 5.20, 5.21, 5.22 and 5.23 shall be true and correct in all
material respects. There shall not exist inaccuracies in the
representations and warranties of Career set forth in this Agreement
(including the representations and warranties set forth in Sections
5.3, 5.20, 5.21, 5.22 and 5.23) such that the aggregate effect of such
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inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on Career; provided that, for purposes of this sentence only,
those representations and warranties which are qualified by references
to "material" or "Material Adverse Effect" or to the "Knowledge" of
any Person shall be deemed not to include such qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of Career to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. Career shall have delivered to Accustaff
------------
(i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer,
to the effect that the conditions set forth in Section 9.1 as relates
to Career and in Sections 9.2(a) and 9.2(b) have been satisfied, and
(ii) certified copies of resolutions duly adopted by Career's Board of
Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Accustaff and
its counsel shall request.
(D) ACCOUNTANT'S LETTERS. Accustaff shall have received from
--------------------
Coopers & Lybrand, L.L.P. letters dated not more than five days prior
to (i) the date of the Joint Proxy Statement and (ii) the Effective
Time, with respect to certain financial information regarding Career,
in form and substance reasonably satisfactory to Accustaff, which
letters shall be based upon customary specified procedures undertaken
by such firm in accordance with Statement of Auditing Standard No. 72.
(E) AFFILIATES AGREEMENTS. Accustaff shall have received
---------------------
from each affiliate of Career the affiliates letter referred to in
Section 8.10, to the extent necessary to assure in the reasonable
judgment of Accustaff that the transactions contemplated hereby will
qualify for pooling-of-interests accounting treatment.
9.3 CONDITIONS TO OBLIGATIONS OF CAREER. The obligations of
-----------------------------------
Career to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Career pursuant to Section 11.6(b):
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
------------------------------
Section 9.3(a), the accuracy of the representations and warranties of
Accustaff set forth in this Agreement shall be assessed as of the date
of this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of Accustaff set forth in
Section 6.3 shall be true and correct (except for inaccuracies which
are de minimis in amount). The representations and warranties of
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Accustaff set forth in Section 6.17 shall be true and correct in all
material respects. There shall not exist inaccuracies in the
representations and warranties of Accustaff set forth in this
Agreement (including the representations and warranties set forth in
Sections 6.3 and 6.17) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on Accustaff; provided that, for purposes of this sentence
only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the
"Knowledge" of any Person shall be deemed not to include such
qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
---------------------------------------
the agreements and covenants of Accustaff to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(C) CERTIFICATES. Accustaff shall have delivered to Career
------------
(i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer,
to the effect that the conditions set forth in Section 9.1 as relates
to Accustaff and in Sections 9.3(a) and 9.3(b) have been satisfied,
and (ii) certified copies of resolutions duly adopted by Accustaff's
Board of Directors and shareholders and Sub's Board of Directors and
sole shareholder evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, all in such reasonable detail as Career and its counsel shall
request.
(D) ACCOUNTANT'S LETTERS. Career shall have received from
--------------------
Coopers & Lybrand, L.L.P. letters dated not more than five days prior
to (i) the date of the Joint Proxy Statement and (ii) the Effective
Time, with respect to certain financial information regarding
Accustaff, in form and substance reasonably satisfactory to Career,
which letters shall be based upon customary specified procedures
undertaken by such firm in accordance with Statement of Auditing
Standard No. 72.
ARTICLE 10
TERMINATION
-----------
10.1 TERMINATION. Notwithstanding any other provision of this
-----------
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of Career and Accustaff or both, this Agreement may be
terminated and the Merger abandoned at any time prior to the Effective
Time:
(a) By mutual consent of Accustaff and Career; or
(b) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any representation or warranty
contained in this Agreement which cannot be or has not been cured
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within 15 days after the giving of written notice to the breaching
Party of such breach and which breach is reasonably likely, in the
opinion of the non-breaching Party, to have, individually or in the
aggregate, a Material Adverse Effect on the breaching Party; or
(c) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured
within 15 days after the giving of written notice to the breaching
Party of such breach; or
(d) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event (i) any
Consent of any Regulatory Authority required for consummation of the
Merger (other than Excluded Consents) and the other transactions
contemplated hereby shall have been denied by final nonappealable
action of such authority or if any action taken by such authority is
not appealed within the time limit for appeal, or (ii) the
shareholders of Career or Accustaff fail to approve by the required
vote the matters relating to this Agreement and the transactions
contemplated hereby at the Shareholders' Meetings where such matters
were presented to such shareholders for approval and voted upon; or
(e) By either Party in the event that the Merger shall not
have been consummated by December 31, 1996, if the failure to
consummate the transactions contemplated hereby on or before such date
is not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(e); or
(f) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event that any
of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(e); or
(g) By Career, if prior to the adoption of this Agreement
by an affirmative vote of the holders of a majority of the outstanding
shares of Career Common Stock entitled to vote thereon at the Career
Shareholders Meeting, the Board of Directors of Career has
(x) withdrawn or modified or changed its recommendation or approval of
this Agreement in a manner adverse to Accustaff in order to approve
and permit Career to accept an Acquisition Proposal, and
(y) determined, based on the advice of outside legal counsel to
Career, that the failure to take such action as set forth in the
preceding clause (x) would result in breach of the Board of Directors'
fiduciary duties under applicable Law; provided, however, that (A) the
Board of Directors of Career shall have been advised by such outside
counsel that notwithstanding this Agreement, and notwithstanding any
concessions which may be offered by Accustaff in negotiations entered
into pursuant to clause (B) below, such fiduciary duties would also
require the directors to terminate this Agreement as a result of such
Acquisition Proposal, (B) at least two business days prior to any such
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<PAGE>
termination, Career shall, and shall cause its advisors to, negotiate
with Accustaff to make such adjustments in the terms and conditions of
this Agreement as would enable Career to proceed with the transactions
contemplated herein on such adjusted terms, and (C) Career shall have
tendered to Accustaff payment in full of the amount specified in
Section 11.2(d) concurrently with delivery of notice of termination
pursuant to this Section 10.1(g).
10.2 EFFECT OF TERMINATION. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 10.1, this Agreement
shall become void and have no effect, except that (i) the provisions of
this Section 10.2 and Article 11 and Section 8.6(b) shall survive any such
termination and abandonment, and (ii) the Parties shall be entitled to the
remedies set forth in Section 11.2.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
---------------------------------------------
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.10, 8.11 and 8.12.
ARTICLE 11
MISCELLANEOUS
-------------
11.1 DEFINITIONS.
-----------
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as
amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"ACQUISITION PROPOSAL" shall mean any proposal for an
Acquisition Transaction (including any tender offer or exchange offer
that, if successful, would constitute or result in an Acquisition
Transaction), other than the transactions contemplated by this
Agreement.
"ACQUISITION TRANSACTION" shall mean (A) a merger,
consolidation or similar transaction involving Career or any Career
Subsidiaries, the Assets of which constitute 25% or more of the
consolidated assets of the Career Companies (other than transactions
solely between Career Companies), (B) except as permitted pursuant to
Section 7.1, the disposition, by sale, lease, exchange or otherwise,
of Assets of Career or any of its Subsidiaries representing in either
case 25% or more of the consolidated assets of the Career Companies or
(C) the issuance, sale or other disposition (including by way of
merger, consolidation, share exchange, tender offer, exchange offer or
any similar transaction) by any Career Company or any other Persons of
securities representing 25% or more of the voting power of Career
(including any securities previously acquired).
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<PAGE>
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person;
(ii) any officer, director, partner, employer, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of
such Person; or (iii) any other Person for which a Person described in
clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated
herein by reference.
"ASSETS" of a Person shall mean all of the assets,
properties, businesses and rights of such Person of every kind,
nature, character and description, whether real, personal or mixed,
tangible or intangible, accrued or contingent, or otherwise relating
to or utilized in such Person's business, directly or indirectly, in
whole or in part, whether or not carried on the books and records of
such Person, and whether or not owned in the name of such Person or
any Affiliate of such Person and wherever located.
"AVERAGE CLOSING PRICE" shall mean the average of the daily
last sale prices for the shares of Accustaff Common Stock for the
twenty (20) consecutive trading days on which such shares are actually
traded and quoted on the Nasdaq National Market (as reported by The
Wall Street Journal or, if not reported thereby, any other
authoritative source mutually selected by Accustaff and Career) ending
at the close of trading on the second trading day immediately
preceding the Closing Date.
"ACCUSTAFF COMMON STOCK" shall mean the $.01 par value
common stock of Accustaff.
"ACCUSTAFF COMPANIES" shall mean, collectively, Accustaff
and all Accustaff Subsidiaries.
"ACCUSTAFF DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Accustaff Incorporated Disclosure Memorandum"
delivered prior to the date of this Agreement to Career describing in
reasonable detail the matters contained therein and, with respect to
each disclosure made therein, specifically referencing each Section of
this Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall not be deemed to be
disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"ACCUSTAFF FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if
any) of Accustaff as of June 30, 1996, and as of December 31, 1995 and
January 1, 1995, and the related statements of income, stockholders'
equity, and cash flows (including related notes and schedules, if any)
for the six months ended June 30, 1996, and for each of the three
fiscal years ended December 31, 1995, January 1, 1995 and January 1,
1994, as filed by Accustaff in SEC Documents, and (ii) the
consolidated balance sheets of Accustaff (including related notes and
schedules, if any) and related statements of income, stockholders'
equity, and cash flows (including related notes and schedules, if any)
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<PAGE>
included in SEC Documents filed with respect to periods ended
subsequent to June 30, 1996.
"ACCUSTAFF SUBSIDIARIES" shall mean the Subsidiaries of
Accustaff.
"CERTIFICATE OF MERGER" shall mean the Certificate of Merger
to be executed by Career and filed with the Secretary of State of the
State of Delaware relating to the Merger as contemplated by Section
1.1.
"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of or
default under any Contract, Law, Order, or Permit, (ii) any occurrence
of any event that with the passage of time or the giving of notice or
both would constitute a breach or violation of or default under any
Contract, Law, Order, or Permit, or (iii) any occurrence of any event
that with or without the passage of time or the giving of notice would
give rise to a right to terminate or revoke, change the current terms
of, or renegotiate, or to accelerate, increase, or impose any
Liability under, any Contract, Law, Order, or Permit.
"DGCL" shall mean the Delaware General Corporation Law.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment (including
ambient air, surface water, ground water, land surface, or subsurface
strata) and which are administered, interpreted, or enforced by the
United States Environmental Protection Agency and state and local
agencies with jurisdiction over, and including common law in respect
of, pollution or protection of the environment, including the
Comprehensive Environmental Response Compensation and Liability Act,
as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq.
("RCRA"), and other Laws relating to emissions, discharges, releases,
or threatened releases of any Hazardous Material, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
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<PAGE>
"EXHIBIT" shall mean the Exhibit so marked, a copy of which
is attached to this Agreement. Such Exhibit is hereby incorporated by
reference herein and made a part hereof, and may be referred to in
this Agreement and any other related instrument or document without
being attached hereto.
"FBCA" shall mean the Florida Business Corporation Act.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GOVERNMENT PROGRAM" shall mean Medicare and Medicaid
programs under Titles XVIII and XIX of the federal Social Security
Act, as amended, and other similar federal, state, or local
reimbursement or governmental programs for which an HHA is eligible to
receive reimbursement.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HHA" shall mean any home health agency owned, operated or
franchised by a Career Company.
"HSR ACT" shall mean Section 7A of the Clayton Act, as added
by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated
thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating
thereto), trade secrets, franchises, know-how, inventions, and other
intellectual property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"JOINT PROXY STATEMENT" shall mean the proxy statement used
by Career and Accustaff to solicit the approval of their respective
shareholders of the transactions contemplated by this Agreement, which
shall include the prospectus of Accustaff relating to the issuance of
the Accustaff Common Stock to holders of Career Common Stock.
"KNOWLEDGE" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall
mean those facts that are actually known or should reasonably have
been known in the ordinary course of business taking into account the
nature of such Person's responsibilities by the chairman, president,
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chief financial officer, chief accounting officer, general counsel, or
any senior, executive or other vice president of such Person.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or
business, including those promulgated, interpreted or enforced by any
Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or
expense (including costs of investigation, collection and defense),
claim, deficiency, guaranty or endorsement of or by any Person (other
than endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage, pledge, reservation, restriction,
security interest, title retention or other security arrangement, or
any adverse right or interest, charge, or claim of any nature
whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable and (ii) Liens which do not materially impair the use of
or title to the Assets subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated
by this Agreement.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such Party
and its Subsidiaries, taken as a whole, or (ii) the ability of such
Party to perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this Agreement,
provided that "Material Adverse Effect" shall not be deemed to include
the impact of (a) changes in Laws of general applicability or
interpretations thereof by courts or governmental authorities,
(b) changes in generally accepted accounting principles or regulatory
accounting principles, and (c) actions and omissions of a Party (or
any of its Subsidiaries) taken with the prior informed written Consent
of the other Party in accordance with the terms hereof.
"MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in
question; provided that any specific monetary amount stated in this
Agreement shall determine materiality in that instance.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
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"NASDAQ NATIONAL MARKET" shall mean the National Market
System of the National Association of Securities Dealers Automated
Quotations System.
"NYSE" shall mean the New York Stock Exchange, Inc.
"OPERATING PROPERTY" shall mean any property owned, leased,
or operated by the Party in question or by any of its Subsidiaries or
in which such Party or Subsidiary holds a security interest or other
interest (including an interest in a fiduciary capacity), and, where
required by the context, includes the owner or operator of such
property, but only with respect to such property.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other
court, arbitrator, mediator, tribunal, administrative agency, or
Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"PARTY" shall mean either Career or Accustaff, and "PARTIES"
shall mean both Career and Accustaff.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business (and shall include any
certification for participation and reimbursement under any Government
Program or Private Program).
"PERSON" shall mean a natural person or any legal,
commercial or governmental entity, such as, but not limited to, a
corporation, general partnership, joint venture, limited partnership,
limited liability company, trust, business association, group acting
in concert, or any person acting in a representative capacity.
"PRIVATE PROGRAM" shall mean any private non-governmental
programs, including any private insurance programs, under which any
HHA directly or indirectly is receiving payments.
"QUALIFYING ACQUISITION PROPOSAL" shall mean a bona fide
---- ----
written acquisition proposal contained in a letter of intent executed
by Career and the authorized representative of a target staffing or
related business providing for an acquisition of such business by
Career for cash; provided that (i) such acquisition can be consummated
without funding or other financial accommodation by Accustaff, and
(ii) based on reasonable assumptions without taking into account cost
savings or other potential synergies following the acquisition, such
acquisition would be accretive on an earnings per share basis to
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Career and to Accustaff (in the case of Accustaff on a pro forma
combined basis) for the 12-month period following the acquisition.
"REGISTRATION STATEMENT" shall mean the Registration
Statement on Form S-4, or other appropriate form, including any pre-
effective or post-effective amendments or supplements thereto, filed
with the SEC by Accustaff under the 1933 Act with respect to the
shares of Accustaff Common Stock to be issued to the shareholders of
Career in connection with the transactions contemplated by this
Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NYSE, the NASD, the Federal Trade Commission, the United States
Department of Justice, and all other federal, state, county, local or
other governmental or regulatory agencies, authorities (including
self-regulatory authorities and Persons administering Government
Programs and Private Programs), instrumentalities, commissions, boards
or bodies having jurisdiction over the Parties and their respective
Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative
retained or employed by a Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations or restrictions of any
character whatsoever relating to, or securities or rights convertible
into or exchangeable for, shares of the capital stock of a Person or
by which a Person is or may be bound to issue additional shares of its
capital stock or other Rights.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents
filed, or required to be filed, by a Party or any of its Subsidiaries
with any Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors
Act of 1940, as amended, the Trust Indenture Act of 1939, as amended,
and the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SHAREHOLDERS' MEETINGS" shall mean the respective meetings
of the shareholders of Career and Accustaff to be held pursuant to
Section 8.1, including any adjournment or adjournments thereof.
"SUB COMMON STOCK" shall mean the $.01 par value common
stock of Sub.
"SUBSIDIARIES" shall mean all those corporations,
associations, or other business entities of which the entity in
question either (i) owns or controls 50% or more of the outstanding
equity securities either directly or through an unbroken chain of
entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent (provided,
there shall not be included any such entity the equity securities of
which are owned or controlled in a fiduciary capacity), (ii) in the
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case of a partnership, serves as a general partner, (iii) in the case
of a limited liability company serves as a managing member, or
(iv) otherwise has the ability to elect a majority of the directors or
managing members thereof.
"CAREER COMMON STOCK" shall mean the $.01 par value common
stock of Career.
"CAREER COMPANIES" shall mean, collectively, Career and all
Career Subsidiaries.
"CAREER CONVERTIBLE NOTES" shall mean the 7% Convertible
Senior Notes Due 2002 of Career.
"CAREER DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Career Horizons, Inc. Disclosure Memorandum"
delivered prior to the date of this Agreement to Accustaff describing
in reasonable detail the matters contained therein and, with respect
to each disclosure made therein, specifically referencing each Section
of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed
to be disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"CAREER FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if
any) of Career as of June 30, 1996, and as of December 31, 1995, June
30, 1995 and June 30, 1994, and the related statements of income,
changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) for the six months ended June 30, 1996,
the six months ended December 31, 1995, and for each of the three
fiscal years ended June 30, 1995, 1994 and 1993, as filed by Career in
SEC Documents, and (ii) the consolidated balance sheets of Career
(including related notes and schedules, if any) and related statements
of income, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents filed
with respect to periods ended subsequent to June 30, 1996.
"CAREER INDENTURE" shall mean the Indenture, dated as of
October 19, 1995, between Career and Chemical Bank, as Trustee,
relating to the Career Convertible Notes.
"CAREER STOCK PLANS" shall mean the existing stock option
and other stock-based compensation plans of Career designated as
follows: the 1990 Terminal Value Stock Option Plan, as amended, the
1993 Stock Option and Performance Award Plan, the Executive Deferred
Compensation and Restricted Stock Plan dated June 1, 1990, as amended,
and the Executive Deferred Compensation Plan.
"CAREER SUBSIDIARIES" shall mean the Subsidiaries of Career,
which shall include the Career Subsidiaries described in Section 5.4
and any corporation or other organization acquired as a Subsidiary of
Career in the future and held as a Subsidiary by Career at the
Effective Time.
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"SURVIVING CORPORATION" shall mean Career as the surviving
corporation resulting from the Merger.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
"TAX" or "TAXES" shall mean any federal, state, county,
local, or foreign taxes, charges, fees, levies, imposts, duties, or
other assessments, including income, gross receipts, excise,
employment, sales, use, transfer, license, payroll, franchise,
severance, stamp, occupation, windfall profits, environmental, federal
highway use, commercial rent, customs duties, capital stock, paid-up
capital, profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax or governmental fee of any kind whatsoever,
imposes or required to be withheld by the United States or any state,
county, local or foreign government or subdivision or agency thereof,
including any interest, penalties, and additions imposed thereon or
with respect thereto.
"TRIGGERING EVENT" shall mean any of the following events
subsequent to the date of this Agreement:
(i) any Person (other than Accustaff or any Subsidiary
thereof) shall have (A) made, or disclosed an intention to make,
a bona fide proposal to Career or its stockholders to engage in
an Acquisition Transaction; (B) commenced (as such term is
defined in Rule 14d-2 under the 1934 Act) or filed a registration
statement under the 1933 Act with respect to a tender offer or
exchange offer to purchase any shares of Career Common Stock such
that, upon consummation of such offer, such person would own or
control 25% or more of the then-outstanding shares of Career
Common Stock; or (C) filed, or disclosed an intention to file, an
application or notice, whether in draft or final form, under any
applicable federal or state Law (including a notice filed under
the HSR Act) seeking the Consent to an Acquisition Transaction
from any federal or state governmental or Regulatory Authority or
agency; or
(ii) any Person (other than Accustaff or any Accustaff
Subsidiary) shall have acquired beneficial ownership (as such
term is defined in Rule 13d-3 promulgated under the 1934 Act) of
or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the 1934 Act), other than a group
of which Accustaff or any of its Subsidiaries is a member, shall
have been formed which beneficially owns or has the right to
acquire beneficial ownership of 20% or more of the then-
outstanding shares of Career Common Stock; or
(iii) Career shall have breached any of the
provisions of Section 8.8.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
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Average Closing Price Section 3.1(c)
Base Exchange Ratio Section 3.1(c)
Accustaff Benefit Plans Section 6.12
Accustaff ERISA Plan Section 6.12
Accustaff SEC Reports Section 6.4(a)
Certificates Section 4.1
Closing Section 1.2
Conversion Obligations Section 3.5(b)
Effective Time Section 1.3
ERISA Affiliate Section 5.14(a)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Fee Section 11.2(d)
Lower Threshold Price Section 3.1(c)
Maximum Amount Section 8.12
Maximum Exchange Ratio Section 3.1(c)
Merger Section 1.1
Minimum Exchange Ratio Section 3.1(c)
Payment Event Section 11.2(d)
Career Benefit Plans Section 5.14
Career Contracts Section 5.15
Career ERISA Plan Section 5.14
Career Options Section 3.5
Career SEC Reports Section 5.5(a)
Supplemental Indenture Section 3.5(b)
Takeover Laws Section 5.20
Tax Opinion Section 9.1(f)
Threshold Prices Section 3.1(c)
Upper Threshold Price Section 3.1(c)
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall
be deemed followed by the words "without limitation."
11.2 EXPENSES.
--------
(a) Except as otherwise provided in this Section 11.2, each
of the Parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration and application fees, printing
fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel, except that each of the
Parties shall bear and pay one-half of the filing fees payable in
connection with the Registration Statement and the Joint Proxy Statement
and printing costs incurred in connection with the printing of the
Registration Statement and the Joint Proxy Statement and Accustaff shall
pay the HSR Act filing fee.
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(b) Notwithstanding the foregoing,
(i) if this Agreement is terminated by Accustaff
pursuant to any of Sections 10.1(b), 10.1(c), or 10.1(f) (but only on
the basis of the failure of Career to satisfy any of the conditions
enumerated in Section 9.2(a) and (b)), or by either Party pursuant to
Section 10.1(d)(ii) (as relates to approval of Career's shareholders),
or
(ii) if the Merger is not consummated as a direct
result of the failure of Career to satisfy any of the conditions set
forth in Section 9.2(a) and (b),
then Career shall promptly (but not later than five business days after
receipt of notice from Accustaff) pay to Accustaff an amount equal to all
documented out-of-pocket fees and expenses incurred by Accustaff
(including, without limitation, fees and expenses payable to investment
bankers, accountants and counsel) arising out of, in connection with or
related to the Merger or the transactions contemplated by this Agreement
not to exceed $2,500,000 in the aggregate, provided, that if such breach
--------
was a result of intentional or willful misconduct or misrepresentation,
Career shall pay such additional amounts as Accustaff may be entitled to
receive at law or in equity.
(c) Notwithstanding the foregoing,
(i) if this Agreement is terminated by Career pursuant
to either of Sections 10.1(b), 10.1(c), or 10.1(f) (but only on the
basis of the failure of Accustaff to satisfy any of the conditions
enumerated in Section 9.3(a) and (b)), or by either Party pursuant to
Section 10.1(d)(ii) (as relates to approval of Accustaff's
shareholders), or
(ii) if the Merger is not consummated as a direct
result of the failure of Accustaff to satisfy any of the conditions
set forth in Section 9.3(a) and (b),
then Accustaff shall promptly (but not later than five business days after
receipt of notice from Career) pay to Career an amount equal to all
documented out-of-pocket fees and expenses incurred by Career (including,
without limitation, fees and expenses payable to investment bankers,
accountants and counsel) arising out of, in connection with or related to
the Merger or the transactions contemplated by this Agreement not to exceed
$2,500,000 in the aggregate, provided, that if such breach was a result of
--------
intentional or willful misconduct or misrepresentation, Accustaff shall pay
such additional amounts as Career may be entitled to receive at law or in
equity.
(d) In addition to the foregoing, Career agrees to pay
Accustaff, subject to the terms and conditions of this Section 11.2(d), a
fee (the "Fee") of $30,000,000, upon the occurrence of any of the following
events:
(i) upon termination of this Agreement by Career in
accordance with the provisions of Section 10.1(g) (such Fee to be
payable as set forth in Section 10.1(g)); or
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(ii) if, during the period beginning of the date of
this Agreement and ending six months after any termination of this
Agreement by either Party pursuant to Section 10.1(d)(ii) (as relates
to approval of Career's shareholders, but only if the Career Board of
Directors shall have failed to recommend, or shall have withdrawn or
modified in any manner adverse to Accustaff their recommendation, that
Career shareholders approve this Agreement) or by Accustaff pursuant
to Section 10.1(c) or 10.1(f) (but only on the basis of the failure of
Career to satisfy any of the conditions set forth in Section 9.2(b))
(or ending 12 months following any such termination, if, prior to such
termination, there shall have occurred a Triggering Event), the Career
Board of Directors shall authorize entry into an agreement with any
Person (other than Accustaff or any Accustaff Subsidiary) providing
for an Acquisition Transaction or shall recommend acceptance of, or
shall fail to recommend rejection of, a tender offer or exchange offer
that, if successful, would result in an Acquisition Transaction, or an
Acquisition Transaction shall have been consummated (each, a "Payment
Event") (such Fee to be payable by wire transfer of immediately
available funds within five business days following the occurrence of
such Payment Event); provided, that the amount of such Fee shall be
reduced by any amounts previously paid by Career to Accustaff pursuant
to Section 11.2(b).
(e) Nothing contained in this Section 11.2 shall constitute
or shall be deemed to constitute liquidated damages for the willful breach
by a Party of the terms of this Agreement; provided, that termination of
this Agreement by Career pursuant to Section 10.1(g) following a Triggering
Event shall not constitute a willful breach of this Agreement.
11.3 BROKERS AND FINDERS. Except for Salomon Brothers Inc as to
-------------------
Career and except for Robert W. Baird & Co. Incorporated as to Accustaff,
each of the Parties represents and warrants that neither it nor any of its
officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions, or finders' fees in
connection with this Agreement or the transactions contemplated hereby. In
the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being
retained by Career or Accustaff, each of Career and Accustaff, as the case
may be, agrees to indemnify and hold the other Party harmless of and from
any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
----------------
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect
to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written or oral.
Nothing in this Agreement expressed or implied, is intended to confer upon
any Person, other than the Parties or their respective successors, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, other than as provided in Section 8.12.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement
----------
may be amended by a subsequent writing signed by each of the Parties upon
the approval of each of the Parties, whether before or after shareholder
approval of this Agreement has been obtained; provided, that after any such
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approval by the holders of Career Common Stock, there shall be made no
amendment that reduces or modifies in any material respect the
consideration to be received by holders of Career Common Stock; and further
provided, that after any such approval by the holders of Accustaff Common
Stock, the provisions of this Agreement relating to the manner or basis in
which shares of Career Common Stock will be exchanged for shares of
Accustaff Common Stock shall not be amended after the Shareholders'
Meetings in a manner adverse to the holders of Accustaff Common Stock
without any requisite approval of the holders of the issued and outstanding
shares of Accustaff Common Stock entitled to vote thereon.
11.6 WAIVERS.
-------
(a) Prior to or at the Effective Time, Accustaff, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of
any term of this Agreement by Career, to waive or extend the time for the
compliance or fulfillment by Career of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of Accustaff under this Agreement, except any condition which,
if not satisfied, would result in the violation of any Law. No such waiver
shall be effective unless in writing signed by a duly authorized officer of
Accustaff.
(b) Prior to or at the Effective Time, Career, by action of
its Board of Directors, to the extent legally allowed, shall have the right
to waive any Default in the performance of any term of this Agreement by
Accustaff, to waive or extend the time for the compliance or fulfillment by
Accustaff of any and all of its obligations under this Agreement, and to
waive any or all of the conditions precedent to the obligations of Career
under this Agreement. No such waiver shall be effective unless in writing
signed by a duly authorized officer of Career.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the
right of such Party at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition or of the breach
of any term contained in this Agreement in one or more instances shall be
deemed to be or construed as a further or continuing waiver of such
condition or breach or a waiver of any other condition or of the breach of
any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
----------
this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party. 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.
11.8 NOTICES. All notices or other communications which are
-------
required or permitted hereunder shall be in writing and sufficient if
delivered by hand, by facsimile transmission (with receipt confirmed), by
registered or certified mail, postage pre-paid, or by courier or overnight
carrier, to the persons at the addresses set forth below (or at such other
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
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Career: Career Horizons, Inc.
177 Crossways Park Drive
Woodbury, New York 11797
Telecopy Number: (516) 496-3167
Attention: _Walter W. Macauley
Copy to Counsel: Reid & Priest LLP
40 West 57th Street
New York, New York 10019-4097
Telecopy Number: (212) 603-2001
Attention: Leonard Gubar
Accustaff: Accustaff Incorporated
6440 Atlantic Boulevard
Jacksonville, Florida 32211
Telecopy Number: (904) 725-8513
Attention: _Derek E. Dewan
Copy to Counsel: Alston & Bird
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy Number: (404) 881-7777
Attention: Jeffrey A. Allred
11.9 GOVERNING LAW. This Agreement shall be governed by and
-------------
construed in accordance with the Laws of the State of Delaware, without
regard to any applicable conflicts of Laws.
11.10 COUNTERPARTS. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
11.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained
-------------------------------
in this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to particular
Articles or Sections shall mean and refer to the referenced Articles and
Sections of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any
---------------
uncertainty or ambiguity herein shall be construed or resolved against any
party, whether under any rule of construction or otherwise. No party to
this Agreement shall be considered the draftsman. The parties acknowledge
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and agree that this Agreement has been reviewed, negotiated, and accepted
by all parties and their attorneys and shall be construed and interpreted
according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all parties hereto.
11.13 SEVERABILITY. Any term or provision of this Agreement
------------
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as
is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf as of the day and year first above written.
ACCUSTAFF INCORPORATED
By: /s/ Derek E. Dewan
---------------------------------
President
SUNRISE MERGER CORPORATION
By: /s/ Derek E. Dewan
---------------------------------
President
CAREER HORIZONS, INC.
By: /s/ Walter W. Macauley
---------------------------------
President
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Exhibit 1
to Agreement and
Plan of Merger
Form of Affiliate Agreement
Gentlemen:
The undersigned is a holder of shares of Common Stock, par value $0.01
per share ("Common Stock"), of Career Horizons, Inc., a Delaware
corporation ("Career"), and will be entitled to receive in connection with
the merger (the "Merger") of Sunrise Merger Corporation, a Delaware
corporation and a subsidiary of AccuStaff Incorporated, a Florida
corporation ("AccuStaff"), with and into Career, shares of Common Stock,
par value $0.01 per share, of AccuStaff (the "Securities").
The undersigned acknowledges that the undersigned may be deemed an
"affiliate" of Career within the meaning of Rule 145 ("Rule 145")
promulgated under the Securities Act of 1933, as amended (the "Act"),
and/or as such term is used in and for purposes of Accounting Series
Releases 130 and 135, as amended, of the Securities and Exchange Commission
(the "Commission"), although nothing contained herein shall be construed as
an admission of such status.
If in fact the undersigned were an affiliate of Career under the Act,
the undersigned's ability to sell, assign or transfer any Securities
received by the undersigned in exchange for any shares of Career pursuant
to the Merger may be restricted unless such transaction is registered under
the Act or an exemption from such registration is available. The
undersigned understands that such exemptions are limited and the
undersigned has obtained advice of counsel as to the nature and conditions
of such exemptions, including instruction with respect to the applicability
to the sale of such Securities of Rules 144 and 145(d) promulgated under
the Act.
The undersigned hereby represents to and covenants to AccuStaff that
the undersigned will not sell, assign or transfer any Securities received
by the undersigned in exchange for shares of Common Stock pursuant to the
Merger except (i) pursuant to an effective registration statement under the
Act, (ii) by a transaction in conformity with the volume and other
limitations of Rule 145 or Rule 144 under the Act ("Rule 144"), to the
extent applicable, or any other applicable rules promulgated by the
Commission or (iii) in a transaction which, in the opinion of independent
counsel reasonably satisfactory to Career, or as described in a "no-action"
or interpretative letter from the Staff of the Commission, is not required
to be registered under the Act.
In the event of a sale of Securities pursuant to Rule 145, or, if
applicable, Rule 144, the undersigned will supply AccuStaff with evidence
of compliance with such Rule, in the form of customary seller's and
broker's Rule 145 or, if applicable, Rule 144, representation letters or as
AccuStaff may otherwise reasonably request. The undersigned understands
<PAGE>
that AccuStaff may instruct its transfer agent to withhold the transfer of
any Securities disposed of by the undersigned in a manner inconsistent with
this letter.
The undersigned acknowledges and agrees that appropriate legends will
be placed on certificates representing Securities received by the
undersigned in the Merger or held by a transferee thereof, which legends
will be removed (i) by delivery of substitute certificates upon receipt of
an opinion in form and substance reasonably satisfactory to AccuStaff to
the effect that such legends are no longer required for the purposes of the
Act and the rules and regulations of the Commission promulgated thereunder
or (ii) in the event of a sale of the Securities which has been registered
under the Act.
The undersigned further represents to, and covenants with Career and
AccuStaff that the undersigned will not, during the 30 days prior to the
effective time of the Merger sell, transfer or otherwise dispose of, or
reduce any risk relative to, any shares of Common Stock, and the
undersigned will not sell, transfer or otherwise dispose of, or reduce any
risk relative to, the Securities received by the undersigned in the Merger
or any other shares of the capital stock of AccuStaff until after such time
as results covering at least 30 days of operations of AccuStaff (including
the combined operations of Career) have been published by AccuStaff in the
form of a quarterly earnings report, or an annual report on Form 10-K, if
such 30 day period includes the end of AccuStaff's fiscal year, an
effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q, or 8-K, or any other public filing or
announcement which includes such results of operations.
The undersigned acknowledges that it has carefully reviewed this
letter and understands the requirements hereof and the limitations imposed
upon the distribution, sale, transfer or other disposition of Securities.
Nothing contained herein shall be deemed to limit any registration rights
granted to the undersigned pursuant to or any agreement between the
undersigned and Career or AccuStaff, as the case may be.
Very truly yours,
______________________________
[Name]
Dated: _______________, 1996
<PAGE>
As an inducement to the above individual to deliver this letter,
AccuStaff agrees that for so long and to the extent necessary to permit
such individual to sell the Securities pursuant to Rule 145 and, to the
extent applicable, Rule 144 under the Act, AccuStaff shall use all
reasonable efforts to file, on a timely basis, all reports and data
required to be filed by it with the Commission pursuant to Section 13 of
the Securities and Exchange Act of 1934.
Very truly yours,
ACCUSTAFF INCORPORATED
By:___________________________
Name:
Title:
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Michael D. Abney Michael T. Druckman
Chief Financial Officer Chief Financial Officer
AccuStaff Incorporated Career Horizons, Inc.
(904) 725-5574 (516) 682-1403
Derek E. Dewan Walter W. Macauley
Chairman, President and CEO President and CEO
AccuStaff Incorporated Career Horizons, Inc.
(904) 725-5574 (516) 682-1401
ACCUSTAFF AND CAREER HORIZONS TO MERGE
-----------------
ESTIMATED 1996 REVENUES OF COMBINED COMPANY
WILL BE OVER $1.3 BILLION
-----------------
ONE OF THE LARGEST MERGERS IN U.S. STAFFING INDUSTRY HISTORY
JACKSONVILLE, Florida (August 26, 1996) - AccuStaff Incorporated
(Nasdaq/NM:ASTF) and Career Horizons, Inc. (NYSE:CHZ) today jointly
announced that they have signed a definitive merger agreement under which
Career Horizons will be acquired by and merged into AccuStaff. Career
Horizons will operate as a subsidiary of AccuStaff after the merger. The
consolidated company, operating as AccuStaff Incorporated, will be a
nationwide provider of strategic staffing, consulting and outsourcing
services with a total of over 750 offices in 43 states and combined annual
estimated 1996 revenues in excess of $1.3 billion. Estimated combined
revenues for 1997, exclusive of future acquisitions, are projected to be in
excess of $1.7 billion. The merger will create the fourth largest staffing
company in the United States.
Under terms of the agreement, Career Horizons' stockholders will
receive 1.53 shares of AccuStaff stock for each share owned of Career
Horizons' stock. Based on AccuStaff's closing price of $28 per share on
Friday, August 23, 1996, the transaction would be valued at approximately
$1 billion. The agreement specifies that the exchange ratio will be
adjusted under certain circumstances depending on AccuStaff's market price
prior to the closing, but that the minimum exchange ratio will be 1.2444
and the maximum exchange ratio will be 1.8006. The transaction, which has
been unanimously approved by the boards of directors of each company, will
be accounted for as a pooling of interests and will be a tax-free
reorganization. The merger agreement is subject to certain regulatory
approvals as well as approval by the shareholders of each company at
special meetings expected to be held within the next 90 days. Closing of
the merger is expected during the fourth quarter of 1996.
AccuStaff Incorporated is organized into three divisions: Professional
Services, which provides personnel for information technology,
technical/engineering, legal and accounting; Commercial, which provides
clerical, office automation and light industrial services; and
Telecommunications, which provides a national customer with trained
customer care and telemarketing services. Headquartered in Jacksonville,
Florida, AccuStaff's 1996 revenues are projected to reach $772 million
prior to the Career Horizons merger. Since its initial public offering in
August 1994, AccuStaff has completed 33 acquisitions in the staffing
industry.
Headquartered in Woodbury, New York, Career Horizons provides
temporary personnel for clerical, commercial, hospital and other healthcare
functions, and information technology. The Company also provides financial
and support services to associated temporary personnel firms. Career
Horizons' revenues for 1995 were $385 million and are projected to reach
approximately $613 million in 1996. Including company-owned, franchise and
associated offices, Career Horizons has a total of 574 offices in 43
states.
Commenting on the announcement, AccuStaff's Chairman, President and
CEO, Derek E. Dewan stated, "This merger will create on of the strongest
and most diversified national companies in the staffing industry. Both
AccuStaff and Career Horizons have been major consolidators in the industry
and this transaction accelerates that trend, creating an even stronger
platform for growth and additional acquisitions. We have a number of
acquisitions to pursue and Walt Macauley will add tremendous value in this
area. Our combined cash position, together with credit facilities, gives
us the liquidity to make strategic and even larger acquisitions. The
pipeline is full and both companies will accelerate on a united front the
acquisition program before the merger is final. In addition to its
excellent management team and reputation for delivering quality staffing
services, Career Horizons will substantially increase the scope of our
commercial and information technology services, while adding new areas in
healthcare and financial support services to associated temporary personnel
firms. With very little overlap in our office locations, the merger will
also significantly expand our geographic market coverage and client list.
"We expect the merger to be accretive to AccuStaff's earnings for the
first full year of combined operations and we believe it will also add
significant long-term value to our shareholders. The merger will also
expand the career opportunities for the employees of both firms. Above
all, this transaction will create new growth opportunities for the combined
company."
Following the merger, Derek E. Dewan will remain Chairman, President
and CEO of AccuStaff and Walter W. Macauley, currently President and CEO of
Career Horizons, will join the AccuStaff Board of Directors as Vice
Chairman. In addition to his operating role at Career Horizons, Macauley
will assist AccuStaff in the implementation of its acquisition strategy.
Macauley said, "We are extremely pleased to join forces with AccuStaff as
we share the same strategic goals. Together our companies can penetrate
the marketplace more effectively than we can as separate entities. Our
excellent back office infrastructure will play an important role in the
integration of our two companies and future acquisitions. The broader
product breadth of the new company will allow us to provide added services
to our account base."
This press release contains certain forward-looking statements and
projects on (including statements concerning managements' plans and
objectives for future operations and services and statements concerning
earnings expectations) that are based on managements' beliefs as well as
assumptions made by, and information currently available to, management.
AccuStaff's actual results might differ materially from the plans
envisioned in, or results projected by, those statements if AccuStaff's
assumptions prove to be inaccurate or for a variety of other reasons,
including those relating to factors identified in AccuStaff's Prospectus
dated April 18, 1996, and its quarterly reports on Form 10-Q for the
quarters ended March 31, 1996, and June 30, 1996, as well as in Career
Horizons' prospectus dated February 29, 1996, and its quarterly reports on
Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996.
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