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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 26, 1997
ROMAC INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Florida 0-26058 59-3264661
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
120 West Hyde Park Place, Suite 150, Tampa, Florida 33606
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (813)-251-1700
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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This Report on Form 8-K contains forward-looking statements within the
meaning of that term in Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Additional written or oral
forward-looking statements may be made by the Company from time to time, in
filings with the Securities Exchange Commission or otherwise. Statements
contained herein that are not historical facts are forward-looking statements
made pursuant to the safe harbor provisions described above. Forward-looking
statements may include, but are not limited to, projections of revenues, income
or losses, capital expenditures, plans for future operations, the elimination
of losses under certain programs, financing needs or plans, compliance with
financial covenants in loan agreements, plans for sale of assets or businesses,
plans relating to products or services of the Company, assessments of
materiality, predictions of future events, and the effects of pending and
possible litigation, as well as assumptions relating to the foregoing. In
addition, when used in this discussion, the words "anticipates," "estimates,"
"expects" "interests," "plans" and variations thereof and similar expressions
are intended to identify forward-looking statements.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified based on current
expectations. Consequently, future events and actual results could differ
materially from those set forth in, contemplated by, or underlying the
forward-looking statements contained herein. Readers are cautioned not to place
undue reliance on any forward-looking statements contained herein, which speak
only as of the date hereof. The Company undertakes no obligation to publicly
release the result of any revisions to these forward-looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unexpected events.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 26, 1997, Romac International, Inc. ("Romac") consummated
the purchase of substantially all of the assets of Sequent Associates, Inc.
("Sequent") pursuant to an Asset Purchase Agreement ("the Agreement").
Sequent, a California corporation, is a business engaged in providing contract
personnel specializing in information technology professionals. The purchase
price was approximately $20.3 million, and was determined through arms-length
negotiations by the parties. The purchase price is subject to adjustment upon
attainment of certain operating results. The purchase price is also subject to
certain indemnity obligations contained in the Agreement. The transaction was
financed with the proceeds of Romac's May 1996 common stock offering, which
have been invested in short-term government securities since the time of such
offering and Romac's Revolving Line of Credit Loan Agreement with NationsBank,
N.A.
The foregoing is subject to the actual provisions of the Agreement,
which is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. It is impracticable to
provide the financial statements relative to the acquired business described in
Item 2 at the time this report on Form 8-K is filed. The Registrant intends to
file the required financial statements as soon as practicable, but no later than
60 days from the date of this filing.
(b) PRO FORMA FINANCIAL INFORMATION. It is impracticable to provide the
pro forma financial information relative to the acquired business described in
Item 2 at the time this report on Form 8-K is filed. The Registrant intends to
file the required pro forma financial information as soon as practicable, but no
later than 60 days from the date of this filing.
(c) EXHIBITS.
Exhibit Number Description
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2.1 Asset Purchase Agreement between Romac International,
Inc. and the Sellers of Sequent Associates, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROMAC INTERNATIONAL, INC.
(Registrant)
By: /s/ Thomas M. Calcaterra
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Thomas M. Calcaterra,
Chief Financial Officer and
Secretary
Date: October 9, 1997
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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into
effective as of September 1, 1997, by and among ROMAC INTERNATIONAL, INC., a
Florida corporation (the "Buyer"), and SEQUENT ASSOCIATES, INC., a California
corporation (the "Seller"), and MICHAEL H. GREENBERG and MARINA EISENZIMMER
(individually a "Shareholder," and collectively the "Shareholders"). Buyer,
Seller, and Shareholders are referred to collectively herein as the "Parties."
RECITALS
A. Seller is primarily engaged in the business of providing
supplemental contract personnel staffing on a temporary or permanent basis
specializing in information technology professionals and engineering
professionals.
B. Shareholders own all of the stock of Seller.
C. Buyer desires to acquire from Seller, and Seller desires to sell,
transfer and assign to Buyer, substantially all of its assets and properties as
a going concern for the purchase price and upon the terms and subject to the
conditions hereinafter set forth.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Acquired Assets" means all right, title, and interest in and
to all of the assets of Seller, including all of its (a) leaseholds and
subleaseholds therein, improvements, fixtures, and fittings thereon, and
easements, rights- appurtenants thereto (such as appurtenant rights in and to
public of-way, and other streets ), (b) tangible personal property (such as
equipment, supplies, furniture, automobiles, and fixed assets under capital
leases), (c) Intellectual Property, goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions, (d) leases, subleases, and rights
thereunder, (e) agreements, contracts, indentures, mortgages, instruments,
Security Interests, guaranties, customer and candidate lists, noncompetition
agreements, other similar arrangements, and rights thereunder, (f) accounts,
notes, and other receivables, (g) securities, (h) claims, deposits, prepayments,
refunds, causes of action, choses in action, rights of recovery, rights of set
off, and rights of recoupment, (i) franchises, approvals, permits, licenses,
orders, registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies, (j) books, records, ledgers, files,
documents, correspondence, lists, plats, architectural plans, drawings,
specifications, creative materials, advertising and promotional materials,
studies, reports, and other printed or written materials, (k) the use of the
name "Sequent Associates, Inc." and any variations thereof, and (l) the first
$1,200,000.00 in Net Working Capital of Seller provided, however, that the
Acquired Assets shall not include (i) Net Working Capital in excess of
$1,200,000.00 (which amount shall be paid in Cash to Seller at Closing) (ii) the
corporate charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications, taxpayer
and other identification numbers, seals, minute books, stock transfer books,
blank stock certificates, and other documents relating to the organization,
maintenance, and existence of Seller as a corporation, (iii) any of the rights
of Seller under this Agreement (or under any side agreement between Seller on
the one hand and Buyer on the other hand entered into on or after the date of
this Agreement), (iv) any of the assets of Seller that are listed on Exhibit A
attached hereto, or (v) any claims, deposits, prepayments, refunds related to
any Tax obligations of Seller except those that are listed as assets on the Most
Recent Balance Sheet or those that arise from or are related to any Assumed
Liabilities.
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"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, direct costs, amounts
paid in settlements, Liabilities, obligations, Taxes, liens, losses, expenses,
and fees, including court costs and attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"Annualized EBIT" means the amount of the EBIT of the Sequent Profit
Center from October 1, 1997 through the end of the calendar month immediately
preceding the date on which Buyer terminates the employment of Michael H.
Greenberg without cause as such term is defined in the Employment Agreement with
Michael H. Greenberg (hereinafter "Cause") between Shareholders and Buyer and
divided by the number of months from the end of such calendar month from October
1, 1997 multiplied by 12.
"Assumed Liabilities" means (a) all Liabilities of Seller that arise on
or after the Effective Date under the lease agreements that are described in
Section 3(o) and Section 3(l)(ii) of the Disclosure Schedule, (b) all
Liabilities of Seller that arise on or after the Effective Date under the
agreements with Seller's customers or clients that are described in Section 3
(o) of the Disclosure Schedule, (c) all Current Liabilities of Seller that are
included on the Most Recent Balance Sheet and are described in Exhibit B
attached hereto, and (d) all Liabilities of Seller that have arisen from the
Effective Date and have been incurred by Seller in the Ordinary Course of
Business except for any costs or expenses of Seller related to the transactions
contemplated by this Agreement such as attorneys' fees, brokerage commissions,
or accountants' fees.
"Balance Sheet Assets" means Acquired Assets of Seller reflected on the
balance sheet included within the Most Recent Financial Statements and all
Acquired Assets of Seller that have been acquired in the ordinary course of
business since the date of the Most Recent Financial Statements, excluding any
assets that may be disposed of prior to Closing.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the engineering
professionals basis for any specified consequence.
"Business" means the business of Seller of providing supplemental
contract staffing personnel on a temporary or permanent basis specializing in
information technology and hardware and software engineering professionals.
"Buyer" has the meaning set forth in the preface above.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in Section 2(e) below.
"Closing Date" has the meaning set forth in Section 2(e) below.
"Closing Date Balance Sheet" has the meaning set forth in Section 2(d)
below.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Confidential Information" means any confidential information
concerning the business of Seller or Buyer, including but limited to, client
names, commercial opportunities, information regarding the business, financial
condition, customer lists, marketing strategy, names of employees, compensation
amounts and formulas, billing amounts, operations, and prospects. Confidential
Information shall not include any information which is, or becomes, generally
available to the public or which becomes available to the recipient of such
information on a non- confidential basis.
"Current Assets" means Cash and other assets (including prepaids) or
resources commonly identified as those assets which are reasonably expected to
be realized in Cash or sold or consumed during the normal operating cycle of the
business, which is usually 12 months.
"Current Liabilities" means Liabilities whose liquidation reasonably is
expected to require the use of existing resources properly classified as Current
Assets, or the creation of other Current Liabilities whose regular and ordinary
liquidation is expected to occur within a reasonably short period of time, which
is usually 12 months.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Earnout Payment" has the meaning set forth in Section 2(e)(ii) below.
"Earnout Period" has the meaning as set forth in Section 2(c)(iii)
below.
"EBIT" means earnings before interest and taxes as determined in
accordance with GAAP and applied in accordance with and consistent with the
Seller's prior practice for the twelve month period preceding the Effective
Date. In computing the earnings of the Sequent Profit Center, there shall not be
taken into account any of the following costs and/or expenses: (1) any
allocation of Buyer's overhead, whether direct or indirect, to the Sequent
Profit Center except for direct costs of Buyer that are associated with the
replacement of services that were previously provided to the Sequent Profit
Center by Seller; (2) any income tax or interest expense paid by or allocated to
the Sequent Profit Center; (3) any salary, benefit, or bonus of an employee
unless such employee was a prior employee of the Seller, or unless the
employment and the terms of such employment of such individual has been approved
by the Shareholders; (4) the costs of any employee benefits, including without
limitation, salary, bonuses, health insurance, dependent coverage, disability
insurance, life insurance, profit-sharing (of any kind), vacation, and sick
leave to the extent that any such costs represent benefits not previously
provided by Seller, unless any such additional benefits are mutually agreed to
in writing by Shareholders and Buyer (and, in this regard, there shall be no
charge against earnings for any options issued to employees of the Sequent
Profit Center whether as a result of this Agreement or otherwise); (5) any
amount paid to Shareholders in excess of the amounts provided in their
respective employment agreements with Buyer other than the amounts that are
mutually agreed to in writing by Shareholders and Buyer subsequent to Closing;
(6) amortization or depreciation expense allocated to the Earnout Period unless
the capital purchase was approved by the Shareholders; and (7) any expenses of
the type and amount not reasonably consistent with those expenses agreed to by
the parties in calculating EBIT of Seller of $2,375,000.00 for the twelve month
period immediately preceding the Effective Date, unless such expenses are
approved by the Shareholders; provided, however, that any routine, normal, or
recurring operating expenses of the Sequent Profit Center that occur during the
Earnout Period shall be included as an expense of the Sequent Profit Center
whether or not any amounts or funds were expended for such purposes by the
Seller during the twelve month period immediately preceding the Effective Date.
For example, if the Seller did not incur any expenditures for computer
maintenance or repair during the twelve month period immediately preceding the
Effective Date, but the Sequent Profit Center does incur an expenditure for
computer maintenance or repair during the Earnout Period, the cost of such
maintenance or repair shall be an expense of Sequent Profit Center for purposes
of determining the EBIT of the Sequent Profit Center.
"Effective Date" has the meaning set forth in Section 2(e) below.
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"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement that is an Employee Pension
Benefit Plan, (b) qualified defined contribution retirement plan or arrangement
that is an Employee Pension Benefit Plan, (c) qualified defined benefit
retirement plan or arrangement that is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or
material fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Sec.
3(1).
"Employment Agreement(s)" has the meaning set forth in 7(a)(ix) below.
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Extremely Hazardous Substance" has the meaning set forth in Sec. 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended
and any regulations promulgated pursuant thereto, including, but not limited to,
40 CFR Section 370.2 and the appendices to 40 CFR Section 355.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statement" has the meaning set forth in Section 3(g) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
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"Knowledge" means knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in
Section 3(g) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section
3(g) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 3(g)
below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Net Working Capital" means the excess of Current Assets over Current
Liabilities as of August 31, 1997.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406
and Code Sec. 4975.
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not incurred
in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Sequent Profit Center" means the internal profit center of Buyer that
is allocated to the Business of Seller that will be conducted in Seller's San
Jose, California and Newport Beach, California offices after the Closing.
"Shareholder(s)" has the meaning set forth in the preface above.
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"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2. BASIC TRANSACTION.
(a) Purchase and sale of assets. On and subject to the terms
and conditions of this Agreement, Buyer agrees to purchase from Seller, and
Seller agrees to sell, transfer, convey, and deliver to Buyer, all of the
Acquired Assets at the Closing for the consideration specified below in this
Section 2.
(b) Assumption of liabilities. On and subject to the terms and
conditions of this Agreement, Buyer agrees to assume and become responsible for
all of the Assumed Liabilities at the Closing. Buyer shall not assume or have
any responsibility, however, with respect to any other obligation or Liability
of Seller not included within the definition of Assumed Liabilities.
(c) Purchase Price.
(i) The purchase price for the Acquired Assets shall be
$19,145,863.00 (the "Purchase Price"). Buyer agrees to pay to Seller at the
Closing $17,245,863.00 by delivery of cash to Seller payable by wire transfer or
delivery of other immediately available funds. Buyer and Seller agree to pay to
the Escrow Agent the remaining $1,900,000.00 of the Purchase Price, which funds
shall be deposited in escrow pursuant to Section 8(b)(iii), and be payable by
wire transfer or delivery of other immediately available funds.
(ii) In addition to the Purchase Price of $19,145,863.00, Buyer
shall pay to Seller an earnout amount (the "Earnout Payment"), which payment
shall be treated as additional purchase price paid to the Seller for the
Acquired Assets and shall be calculated in accordance with the terms of this
subparagraph. Buyer and Seller agree that the Earnout Payment that is required
pursuant to this subparagraph shall be payable to Seller in accordance with the
terms and conditions of the subparagraph notwithstanding the continued
employment of either Shareholder with Buyer during the Earnout Period.
(A) The period for which the Earnout Payment shall be
calculated is the twelve-month period commencing on October 1, 1997 and
ending September 30, 1998 (the "Earnout Period").
(B) The Earnout Payment shall be calculated as eight times the
amount obtained by subtracting $2,375,000.00 from the EBIT of the
Sequent Profit Center for the Earnout Period (but in no case can such
amount be less than zero). For example, if the EBIT is $3,000,000.00,
then the Earnout Payment will be eight times $625,000.00 (the EBIT of
$3,000,000.00 less $2,375,000.00), or $5,000,000.00.
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(C) The Earnout Payment, or any undisputed portion thereof,
shall be paid by Buyer to Seller within sixty (60) days from the date
the EBIT is determined, but in no event shall such payment of the
undisputed portion of the Earnout Payment be made to Seller later than
December 31, 1998. All payments due and payable pursuant to this
subparagraph shall be made by wire transfer of immediately available
funds to an account designated by Seller. With respect to the disputed
portion of the Earnout Payment, such amount, to the extent determined
to be due under the provisions of subparagraph (E) below, shall be paid
by Buyer to Seller within five (5) business days following the final
determination of the amount due.
(D) The determination of the EBIT amount for the Earnout
Period shall be accompanied by a report of Buyer stating that it has
been prepared in accordance with the definition of EBIT in this
Agreement (subject only to such exceptions thereto as agreed upon by
the Buyer and the Seller).
(E) Within thirty (30) days after the Buyer delivers the
determination of the EBIT amount to the Seller, Seller shall give the
Buyer written notice that it either agrees and accepts such EBIT
amount, or that it disputes one or more items set forth in the
determination of the EBIT amount, describing in reasonable detail the
amount or item disputed and the basis for disputing the item, in which
event the Buyer and Seller shall attempt in good faith to resolve the
dispute. If the Parties are unable to resolve the dispute within thirty
(30) days after the date the Buyer receives notice of the dispute from
the Seller, the Buyer and the Seller shall submit the dispute to
binding arbitration in accordance with the following procedures:
(1) Any arbitration proceeding shall take place in
San Jose, California, and shall be conducted in accordance
with the then current rules of the American Arbitration
Association, except as otherwise specifically provided in this
subparagraph (E).
(2) The parties shall have ten (10) days after the
expiration of the thirty (30) day mutual resolution period
described above to agree upon an arbitrator to conduct such
proceeding. If the parties fail to so agree within such ten
(10) day period, then within five (5) days after the end of
such ten (10) day period, each party shall select an
arbitrator and, within ten (10) days after the end of such
five (5) day period, such two (2) arbitrators shall select a
third arbitrator. Each arbitrator must either have
professional experience relating to the business, accounting
or legal aspects of the subject of the arbitration. No
arbitrators shall (i) have any material interest in the result
of the arbitration or (ii) be, or shall ever have been, an
affiliate, equity holder or creditor of, or an attorney,
accountant, agent or consultant for, any Party to such
arbitration proceeding.
(3) Each arbitration proceeding shall start as soon
as reasonably practical after the selection of the
arbitrator(s). Specific timing, including the setting of the
dates for hearings, shall be subject to the mutual agreement
of each Party, including the arbitrator(s); provided, however,
that if agreement cannot be reached within a reasonable time,
the arbitrator(s) shall have the sole authority to settle all
timing issues after taking into account the needs of each
Party to prepare for, resolve and dispose of the matter as
soon as reasonably practicable.
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(4) The decision of the arbitrator (or, if there are
three (3) arbitrators, the decision of any two (2)
arbitrators) shall be final and binding upon the Parties, and
judgment may be entered upon any such decision in any court
having jurisdiction.
(5) Except as otherwise specifically provided herein,
all costs incurred in connection with any arbitration
proceeding, including the American Arbitration Association
fees, the arbitrator(s) fees, the cost of using any facilities
for the arbitration hearings and the reasonable fees and
expenses of expert witnesses, legal counsel and accountants of
the prevailing party shall be paid by the non-prevailing
party.
(iii) Notwithstanding the terms of subparagraph (ii) above, Seller
agrees that if the employment of Michael H. Greenberg is terminated without
Cause by the Buyer on or before December 31, 1997, then the EBIT amount of the
Sequent Profit Center for the Earnout Period shall be the greater of (a)
$2,850,000.00, (b) the Annualized EBIT for the Sequent Profit Center, or (c) the
actual EBIT for the Sequent Profit Center for the Earnout Period.
Notwithstanding the terms of subparagraph (ii) above, Seller agrees that if the
employment of Michael H. Goldberg is terminated without Cause by the Buyer after
December 31, 1997, but before September 30, 1998, then the EBIT amount of the
Sequent Profit Center for the Earnout Period shall be the greater of (a) the
Annualized EBIT for the Sequent Profit Center, or (b) the actual EBIT for the
Sequent Profit Center for the Earnout Period.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Holland & Knight
LLP in Tampa, Florida, commencing at 10:00 a.m. local time on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties shall take
at the Closing itself) or such other date as the Parties may mutually determine
(the "Closing Date").
(e) Effective Date of Transaction. The effective date of the purchase
of the Acquired Assets shall be September 1, 1997 (the "Effective Date"),
notwithstanding the fact that the Closing shall occur after such date.
(f) Proration of Certain Income and Expenses. All income and
expenses generated or incurred by the Business before the Effective Date shall
accrue to the benefit of or be payable by the Seller. All income and expenses
generated or incurred in the ordinary course of the Business after the Effective
Date, shall accrue to the benefit of or be payable by the Buyer. To the extent
they relate to the Acquired Assets, all sales, use, and personal property taxes
and assessments, accrued and assessed (other than sales taxes relating to the
transfer of the Acquired Assets), if any, shall be prorated as of the Effective
Date, with the Seller responsible for the portions of such items accruing before
the close of business on the Effective Date and the Buyer responsible for the
portions of such items accruing on and after the Effective Date.
(g) Net Working Capital. Notwithstanding anything to the contrary in
this Agreement, the Parties agree that Seller is transferring all Net Working
Capital to Buyer because Buyer is paying cash at Closing in an amount equal to
Net Working Capital of Seller in excess of $1,200,000.00 as of August 31, 1997.
(h) Deliveries at the Closing. At the Closing, (i) Seller shall deliver
to Buyer the various certificates, instruments, and documents referred to in
Section 7(a) below; (ii) Buyer shall deliver to Seller the various certificates,
instruments, and documents referred to in Section 7(b) below; (iii) Seller shall
execute, acknowledge (if appropriate), and deliver to Buyer (A) assignments
(including lease and Intellectual Property transfer documents) in the forms
attached hereto as Composite Exhibit C and (B) such other instruments of sale,
transfer, conveyance,
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and assignment as Buyer and its counsel reasonably may request; (iv) Buyer shall
execute, acknowledge (if appropriate), and deliver to Seller (A) an assumption
in the form attached hereto as Exhibit D and (B) such other instruments of
assumption as Seller and its counsel reasonably may request; and (v) Buyer shall
deliver to Seller and Escrow Agent the consideration specified in Section 2(c)
above.
(i) Allocation. The Parties agree to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for all
purposes (including financial accounting and tax purposes) in accordance with
the allocation schedule attached hereto as Exhibit E.
3. Representations and Warranties of Seller. Seller and the
Shareholders, jointly and severally, represents and warrants to Buyer that the
statements contained in this Section 3 are correct and complete as of the date
of this Agreement and shall be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section 3), except as set forth in the
disclosure schedule accompanying this Agreement (the "Disclosure Schedule").
The Disclosure Schedule shall be arranged in paragraphs corresponding to the
lettered and numbered paragraphs contained in this Section 3.
(a) Organization of Seller. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Authorization of transaction. Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of Seller and Shareholders
have duly authorized the execution, delivery, and performance of this Agreement
by Seller. This Agreement constitutes the valid and legally binding obligation
of Seller, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above),
shall (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any of Seller and its
Subsidiaries is subject or any provision of the charter or bylaws of Seller or
(ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which Seller is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets). Seller does not
need to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement
(including the assignments and assumptions referred to in Section 2 above).
(d) Brokers' fees. Except for the brokerage commission that is
payable to DeBellas & Company, Seller has no Liability or obligation to pay any
fees, commissions, or other compensation to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which Buyer could
become liable or obligated. Except as set forth above, Seller has no Liability
or obligation to pay any fees, commissions or other compensation to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
(e) Title to assets. Seller has good and marketable title to,
or a valid leasehold interest in, the properties and assets used by them,
located on their premises, or shown on the Most Recent Balance Sheet or acquired
after the date thereof, free and clear of all Security Interests, except for
properties and assets disposed of in the Ordinary Course of Business since the
date of the Most Recent Balance Sheet. Without limiting the generality of the
foregoing, Seller has good and marketable title to all of the Acquired Assets,
free and clear of any Security Interest or restriction on transfer.
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(f) Subsidiaries. Seller has no Subsidiaries.
(g) Financial Statements. Attached hereto as Exhibit F are the
following financial statements (collectively the "Financial Statements"): (i)
audited balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of and for the fiscal years ended December 31, 1994,
December 31, 1995, and December 31, 1996 (the "Most Recent Fiscal Year End") for
Seller; and (ii) unaudited balance sheets and statements of income, changes in
stockholders' equity, and cash flow (the "Most Recent Financial Statements") as
of and for the eight months ended August 31, 1997, (the "Most Recent Fiscal
Month End") for Seller. The Financial Statements (including the Notes thereto)
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, present fairly the financial condition
of Seller as of such dates and the results of operations of Seller for such
periods, are correct and complete, and are consistent with the books and records
of Seller (which books and records are correct and complete).
(h) Events subsequent to Most Recent Fiscal Month End. Except
as set forth in Section 3(h) of the Disclosure Schedule, since the Most Recent
Fiscal Month End, there has not been any adverse change in the business,
financial condition, operations, results of operations, or future prospects of
Seller. Without limiting the generality of the foregoing, since that date:
(i) Seller has not sold, leased, transferred, or
assigned any of its assets, tangible or intangible, other than
for a fair consideration in the Ordinary Course of Business;
(ii) Except for contracts entered into with
employees, independent contractors and other contracts in the
Ordinary Course of Business, Seller has not entered into any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more
than $10,000.00; or
(iii) except in the Ordinary Course of Business, no
party (including Seller) has accelerated, terminated,
modified, or cancelled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases,
and licenses) to which Seller is a party or by which it is
bound;
(iv) Seller has not imposed or granted any
Security Interest upon any of its assets, tangible or
intangible;
(v) Seller has not made any capital expenditure
(or series of related capital expenditures) either involving
more than $10,000.00;
(vi) Seller has not made any capital investment
in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital
investments, loans, and acquisitions);
(vii) Seller has not issued any note, bond, or
other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or
capitalized lease obligation;
(viii) Seller has not delayed or postponed the
payment of accounts payable and other Liabilities outside the
Ordinary Course of Business;
(ix) Seller has not cancelled, compromised,
waived, or released any right or claim (or series of related
rights and claims);
(x) Seller has not granted any license or
sublicense of any rights under or with respect to any
Intellectual Property;
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(xi) there has been no change made or authorized
in the charter or bylaws of Seller;
(xii) Seller has not issued, sold, or otherwise
disposed of any of its capital stock, or granted any options,
warrants, or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of its capital
stock;
(xiii) Seller has not declared, set aside, or paid
any dividend or made any distribution with respect to its
capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(xiv) Seller has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to
its property;
(xv) Seller has not made any loan to, or entered
into any other transaction with, any of its directors,
officers, and employees outside the Ordinary Course of
Business;
(xvi) Except for employment and independent
contractor agreements entered into or modified in the Ordinary
Course of Business, Seller has not entered into any employment
contract or collective bargaining agreement, written or oral,
or modified the terms of any existing such contract or
agreement;
(xvii) Except for adjustments to compensation for
non-shareholder employees in the Ordinary Course of Business,
Seller has not granted any increase in the base compensation
of any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xviii) Seller has not adopted, amended, modified or
terminated any bonus, profit-sharing, incentive, severance, or
other plan, contract, or commitment for the benefit of any of
its directors, officers, and employees (or taken any such
action with respect to any other Employee Benefit Plan);
(xix) Seller has not made any other change in
employment terms for any of its directors or officers;
(xx) Seller has not made or pledged to make any
charitable or other capital contribution outside the Ordinary
Course of Business;
(xxi) Seller has not paid any amount to any third
party with respect to any Liability or obligation (including
any costs and expenses Seller has incurred or may incur in
connection with this Agreement and the transactions
contemplated hereby) that would not constitute an Assumed
Liability if in existence as of the Closing;
(xxii) there has not been any other occurrence,
event, incident, action, failure to act, or transaction
outside the Ordinary Course of Business involving Seller; and
(xxiii) Seller has not committed to any of the
foregoing.
(i) Undisclosed liabilities. Seller has no Liability (and there is no
Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability), except for (i) Liabilities set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and (ii)
Liabilities that have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
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(j) Legal compliance. Seller and its predecessors and
Affiliates have complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and foreign governments (and
all agencies thereof), and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
any of them alleging any failure so to comply.
(k) Tax matters.
(i) Seller has filed all Tax Returns that it was
required to file. All such Tax Returns were correct and complete in all
material respects. All Taxes owed by Seller (whether or not shown on
any Tax Return) have been paid. Seller is not currently the beneficiary
of any extension of time within which to file any Tax Return. No claim
has ever been made by an authority in a jurisdiction where Seller does
not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the assets of
Seller that arose in connection with any failure (or alleged failure)
to pay any Tax.
(ii) Seller has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or
other third party.
(iii) No Shareholder or director or officer of Seller
expects any authority to assess any additional Taxes for any period for
which Tax Returns have been filed. There is no dispute or claim
concerning any Tax Liability of Seller either (A) claimed or raised by
any authority in writing or (B) as to which Shareholders and the
directors and officers of Seller has Knowledge based upon personal
contact with any agent of such authority. Section 3(k) of the
Disclosure Schedule lists all federal, state, local, and foreign
income Tax Returns filed with respect to Seller for taxable periods
ended on or after December 31, 1994, indicates those Tax Returns
that have been audited, and indicates those Tax Returns that currently
are the subject of audit. Seller has delivered to Buyer correct and
complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to
by Seller since December 31, 1994.
(iv) Seller has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(v) Seller has not filed a consent under Code Sec.
341(f) concerning collapsible corporations. Seller has not made any
payments, is not obligated to make any payments, or is not a party to
any agreement that under certain circumstances could obligate it to
make any payments that shall not be deductible under Code Sec. 280G.
Seller has not been a United States real property holding corporation
within the meaning of Code Sec. 897(c)(2) during the applicable period
specified in Code Sec. 897(c)(1)(A)(ii). Seller has disclosed on its
federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the
meaning of Code Sec. 6662. Seller is not a party to any Tax allocation
or sharing agreement. Seller (A) has not been a member of an Affiliated
Group filing a consolidated federal income Tax Return (other than a
group the common parent of which was Seller) or (B) has no Liability
for the Taxes of any Person (other than Seller) under United States
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(vi) The unpaid Taxes of Seller (A) did not, as of
the Most Recent Fiscal Month End, exceed the reserve for Tax Liability
(rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face
of the Most Recent Balance Sheet (rather
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than in any notes thereto) and (B) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance
with the past custom and practice of Seller in filing its Tax Returns.
(l) Real property.
(i) The Seller does not own any real property.
(ii) Section 3(l)(ii) of the Disclosure Schedule
lists and describes briefly all real property leased or
subleased to Seller. Seller has delivered to Buyer correct and
complete copies of the leases and subleases listed in Section 3(l)(ii)
of the Disclosure Schedule (as amended to date). With respect to each
lease and sublease listed in Section 3(l)(ii) of the Disclosure
Schedule:
(A) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(B) the lease or sublease shall continue to be legal,
valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions
contemplated hereby (including the assignments and assumptions
referred to in Section 2 above);
(C) no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse
of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(D) no party to the lease or sublease has repudiated
any provision thereof;
(E) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(F) with respect to each sublease, the
representations and warranties set forth in subSection s (A)
through (E) above are true and correct with respect to the
underlying lease; and
(G) Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold.
(m) Intellectual Property.
(i) Seller has various software licenses and
software sublicenses used in connection with Seller's business. All of
such software is commercially available to the general public and none
of such software is custom designed for Seller. With the Buyer's
permission, Seller will not furnish copies of such software licenses
and software sublicenses to the Buyer nor will the Seller seek or
obtain consent from the software licensors or sublicensors to the
transaction contemplated by this Agreement. Seller owns or has the
right to use pursuant to license, sublicense, agreement, or permission
all Intellectual Property necessary or desirable for the operation of
the business of Seller as presently conducted and as presently proposed
to be conducted. Each item of Intellectual Property owned or used by
Seller immediately prior to the Closing hereunder shall be owned or
available for use by Buyer on identical terms and conditions
immediately subsequent to the Closing hereunder. Seller has taken all
necessary and desirable action to maintain and protect each item of
Intellectual Property that it owns or uses.
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(ii) Seller has not interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of
Shareholders and the directors and officers of Seller has ever
received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation
(including any claim of Seller must license or refrain from using any
Intellectual Property rights of any third party). To the Knowledge of
any of Shareholders and the directors and officers of Seller, no third
party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of
Seller.
(iii) Section 3(m)(iii) of the Disclosure Schedule
identifies each patent or registration that has been issued to Seller
with respect to any of its Intellectual Property, identifies each
pending patent application or application for registration that Seller
has made with respect to any of its Intellectual Property, and
identifies each license, agreement, or other permission that Seller has
granted to any third party with respect to any of its Intellectual
Property (together with any exceptions). Seller has delivered to Buyer
correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to
date). Section 3(m)(iii) of the Disclosure Schedule also identifies
each trade name or unregistered trademark used by Seller and its each
item of Intellectual Property required to be identified in Section
3(m)(iii) of the Disclosure Schedule:
(A) Seller possesses all right, title, and interest
in and to the item, free and clear of any Security Interest,
license, or other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or is threatened that challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) Seller has never agreed to indemnify any Person
for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
(iv) Section 3(m)(iv) of the Disclosure Schedule
identifies each item of Intellectual Property that any third party owns
and that Seller uses pursuant to license, sublicense, agreement, or
permission. Seller has delivered to Buyer correct and complete copies
of all such licenses, sublicenses, agreements, and permissions (as
amended to date). With respect to each item of Intellectual Property
required to be identified in Section 3(m)(iv) of the disclosure
Schedule;
(A) the license, sublicense, agreement, or
permission covering the item is legal, valid, binding,
enforceable, and in full force and effect;
(B) the license, sublicense, agreement, or
permission shall continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred
to in Section 2 above);
(C) no party to the license, sublicense, agreement,
or permission is in breach or default, and no event has
occurred that with notice or default or permit termination,
modification, or acceleration thereunder;
(D) no party to the license, sublicense, agreement,
or permission has repudiated any provision thereof;
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(E) with respect to each sublicense, the
representations and warranties set forth in subSection s (A)
through (D) above are true and correct with respect to the
underlying license;
(F) the underlying item of Intellectual Property is
not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(G) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of Seller, any of Shareholders and the
directors and officers of Seller is threatened that challenges
the legality, validity, or enforceability of the underlying
item of Intellectual Property; and
(H) Seller has not granted any sublicense or
similar right with respect to the license, sublicense,
agreement, or permission.
(v) To the Knowledge of any of Shareholders and the
directors and officers of Seller, Seller does not interfere with,
infringe upon, misappropriate, or otherwise come into conflict with,
any Intellectual Property rights of third parties as a result of the
continued operation of its businesses as presently conducted and as
presently proposed to be conducted.
(vi) None of Shareholders and the directors and
officers of Seller has any Knowledge of any new products, inventions,
procedures, or methods of manufacturing or processing that any
competitors or other third parties have developed that reasonably could
be expected to supersede or make obsolete any product or process of
Seller.
(n) Tangible assets. Seller owns or leases all buildings,
machinery, equipment, and other tangible assets necessary for the conduct of
their businesses as presently conducted and as presently proposed to be
conducted. All such assets are included within the Acquired Assets. Each such
tangible asset has been maintained in accordance with normal industry practice,
is in good operating condition and repair (subject to normal wear and tear), and
is suitable for the purposes for which it presently is used and presently is
proposed to be used.
(o) Contracts. Section 3(o) of the Disclosure Schedule lists
the following contracts and other agreements to which Seller is a party:
(i) any agreement with any of Seller's clients or
customers;
(ii) any agreement (or group of related agreements)
for the lease of personal property to or from any Person
providing for lease payments;
(iii) any agreement (or group of related agreements)
for the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or receipt
of services, and the performance of which shall extend over a period of
more than one year;
(iv) any agreement concerning a partnership or joint
venture;
(v) any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation,
or under which it has imposed a Security Interest on any of its assets,
tangible or intangible;
(vi) any agreement concerning confidentiality or
noncompetition;
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(vii) any agreement involving any of Shareholders
and their Affiliates (other than Seller);
(viii) any profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance, or
other plan or arrangement for the benefit of any current or former
directors, officers, and employees;
(ix) any collective bargaining agreement;
(x) any agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis;
(xi) any agreement under which it has advanced or
loaned any amount to any of its directors, officers, and employees;
(xii) any agreement in excess of $10,000.00 under
which the consequences of a default or termination could have a
material adverse effect on the business, financial condition,
operations, results of operations, or future prospects of Seller; or
(xiii) any other agreement (or group of related
agreements) the performance of which involves consideration in excess
of $5,000.00.
Seller has delivered to Buyer a correct and complete copy of each written
agreement listed in Section 3(o) of the Disclosure Schedule (as amended to date)
and a written summary setting forth the terms and conditions of each oral
agreement referred to in Section 3(o) of the Disclosure Schedule. With respect
to each such agreement: (A) the agreement is legal, valid, binding, enforceable,
and in full force and effect; (B) the agreement shall continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby (including
the assignments and in breach or default, and no event has occurred that with
notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement; and (D) no
party has repudiated any provision of the agreement.
(p) Notes and accounts receivable. All notes and accounts
receivable of Seller reflected properly on their books and records, are valid
receivables subject to no set offs or counterclaims, are current and
collectible, and shall be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts set forth on the
face of the Most Recent Balance Sheet (rather than in any notes thereto) as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of Seller. Seller has identified and provided Buyer
complete and correct copies of all instruments, documents and agreements
evidencing such receivables and of all instruments, documents or agreements
creating security therefor.
(q) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of Seller.
(r) Insurance. Section 3(r) of the Disclosure Schedule lists
each insurance policy of Seller that is currently in force (including policies
providing property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements). True and complete copies of each such insurance
policy have been delivered to the Buyer by Seller. Seller has complied with all
the provisions of such policies, and the policies are in full force and effect
as of the date hereof.
(s) Litigation. Section 3(s) of the Disclosure sets forth
each instance in which Seller (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to the
Knowledge of Seller and any of Shareholders and the directors and officers (and
employees with responsibility for litigation
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matters) of Seller, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator. None of the actions, suits proceedings,
hearings, and investigations set forth in Section 3(s) of the Disclosure
Schedule could result in any adverse change in the business, financial
condition, operations, results of operations, or future prospects of Seller.
None of Shareholders and the directors and officers (and employees with
responsibility for litigation matters) of Seller has any reason to believe that
any such action, suit, proceeding, hearing, or investigation may be brought or
threatened against Seller.
(t) Employees. Section 3(t) of the Disclosure Schedule lists
each of the employees (both billable and non-billable) and independent
contractor consultants of Seller. To the Knowledge of Seller, Shareholders and
the directors and officers of Seller, no executive, key employee, or group of
employees has any plans to terminate employment with Seller. Seller is not a
party to or bound by any collective bargaining agreement, nor has any of them
experienced any strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. Seller has not committed any unfair labor
practice. None of Shareholders and the directors and officers of Seller has any
Knowledge of any organizational effort presently being made or threatened by or
on behalf of any labor union with respect to employees of any of Seller.
(u) Employee Benefits.
(i) Section 3(u) of the Disclosure Schedule lists
each Employee Benefit Plan that Seller maintains or to which Seller
contributes.
(A) Each such Employee Benefit Plan (and each related
trust, insurance contract, or fund) complies in form and in
operation in all respects with the applicable requirements of
ERISA, the Code, and other applicable laws.
(B) All required reports and descriptions (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's,
and Summary Plan Descriptions) have been filed or distributed
appropriately with respect to each such Employee Benefit Plan.
The requirements of Part 6 of Subtitle B of Title I of ERISA
and of Code Sec. 4980B have been met with respect to each such
Employee Benefit Plan that is an Employee Welfare Benefit
Plan.
(C) All contributions (including all employer
contributions and employee salary reduction contributions)
that are due have been paid to each such Employee Benefit Plan
that is an Employee Pension Benefit Plan and all contributions
for any period ending on or before the Closing Date that are
not yet due have been paid to each such Employee Pension
Benefit Plan or accrued in accordance with the past custom and
practice of Seller and its Subsidiaries. All premiums or other
payments for all periods ending on or before the Closing Date
have been paid with respect to each such Employee Benefit Plan
that is an Employee Welfare Benefit Plan.
(D) Each such Employee Benefit Plan that is an
Employee Pension Benefit Plan meets the requirements of a
"qualified plan" under Code Sec. 401(a) and has received,
within the last two years, a favorable determination letter
from the Internal Revenue Service.
(E) The market value of assets under each such
Employee Benefit Plan that is an Employee Pension Benefit Plan
(other than any Multiemployer Plan) equals or exceeds the
present value of all vested and nonvested Liabilities
thereunder determined in accordance with PBGC methods,
factors, and assumptions applicable to an Employee Pension
Benefit Plan terminating on the date for determination.
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(F) Seller has delivered to Buyer correct and
complete copies of the plan documents and summary plan
descriptions, the most Revenue Service, the most recent Form
5500 Annual Report, and all related trust agreements,
insurance contracts, and other funding agreements that
implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that
Seller maintains or ever has maintained or to which it contributes,
ever has contributed, or ever has been required to contribute:
(A) No such Employee Benefit Plan that is an Employee
Pension Benefit Plan (other than any Multiemployer Plan) has
been completely or partially terminated or been the subject of
a Reportable Event as to which notices would be required to be
filed with the PBGC. No proceeding by the PBGC to terminate
any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or threatened.
(B) There have been no Prohibited Transactions with
respect to any such Employee Benefit Plan. No Fiduciary has
any Liability for breach of fiduciary duty or any other
failure to act or comply in connection with the administration
or investment of the assets of any such Employee Benefit Plan.
No action, suit, proceeding, hearing, or investigation with
respect to the administration or the investment of the assets
of any such Employee Benefit Plan (other than routine claims
for benefits) is pending or threatened. None of Shareholders
and the directors and officers of Seller has any Knowledge of
any Basis for any such action, suit, proceeding, hearing, or
investigation.
(C) Seller has not incurred, and none of Shareholders
and the directors and officers of Seller has any reason to
expect that any of Seller shall incur, any Liability to the
PBGC (other than PBGC premium payments) or otherwise under
Title IV of ERISA (including any withdrawal Liability) or
under the Code with respect to any such Employee Benefit Plan
that is an Employee Pension Benefit Plan.
(iii) Seller has never contributed to, or has ever
been required to contribute to any Multiemployer Plan or has any
Liability (including withdrawal Liability) under any Multiemployer
Plan.
(iv) Seller does not maintain or contribute, or ever
has maintained or contributed, or ever has been required to contribute
to any Employee Welfare Benefit Plan providing medical, health, or life
insurance or other welfare-type benefits for current or future retired
or terminated employees, their spouses, or their dependents (other than
in accordance with Code Sec. 4980B).
(v) Guaranties. Seller is not a guarantor or otherwise is
liable for any Liability or obligation (including indebtedness) of any other
Person.
(w) Environment, health, and safety.
(i) Seller and its predecessors and Affiliates have
complied in all material respects with all Environmental, Health, and
Safety Laws, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced
against it alleging any failure so to comply. Without limiting the
generality of the preceding sentence, Seller and its predecessors and
Affiliates have obtained and been in compliance in all material
respects with all of the terms and conditions of all permits, licenses,
and other authorizations that are required under, and has complied with
all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables that
are contained in, all Environmental, Health, and Safety Laws.
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(ii) To Seller's Knowledge, Seller has no Liability
(and none of Seller, and its predecessors and Affiliates) has handled
or disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any substance or
condition, or owned or operated any property or facility in any manner
that could form the Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
against Seller giving rise to any Liability) for damage to any site,
location, or body of water (surface or subsurface), for any illness of
or, personal injury to any employee or other individual, or for any
reason under any Environmental, Health, and Safety Law.
(iii) To Seller's Knowledge, all properties and
equipment used in the business of Seller and its predecessors and
Affiliates have been free of asbestos, PCB's, methylene chloride,
trichloroethylene,1,2-trans-dichloroethylene, dioxins, dibenzofurans,
and Extremely Hazardous Substances.
(x) Certain business relationships With Seller. None of
Shareholders or their Affiliates has been involved in any business arrangement
or relationship with Seller within the past 12 months, and none of Shareholders
or their Affiliates owns any asset, tangible or intangible, that is used in the
business of Seller.
(y) Business Names and Addresses. Within the last five (5)
years, Seller has not used a business name other than Sequent Associates, Inc.
and variations thereof, and has not had a business address other than the
addresses that are set forth in Section 3(y) of the Disclosure Schedule.
(z) Existing Customers. Seller does not have any Knowledge or
reason to believe that any existing customer of the Seller will not continue to
do business with the Seller after the Closing Date. Seller makes no
representations or warranties that any existing customer of the Seller will
continue to do business with Buyer after their current contracts with Seller
terminate. Buyer acknowledges and agrees that the representations of Seller
under this subparagraph have been made without investigation on the part of
Seller or Shareholders and that neither Seller nor Shareholders have contacted
any of Seller's customers concerning future business relations with Seller or
Buyer.
(aa) Disclosure. No representation or warranty contained in
this Agreement, or in any certificate or document furnished or to be furnished
by Seller or any Shareholder to Buyer or their representatives in connection
herewith or pursuant hereto, contains or shall contain an untrue statement of a
fact or omit to state any fact required to make the statements herein or therein
contained not misleading where necessary in order to provide a prospective
purchaser of the Acquired Assets with full and complete accurate information as
to Seller and the condition (financial and otherwise) of the properties, assets,
liabilities, and business of Seller. The representations and warranties
contained in this Section 3 or elsewhere in this Agreement, or any document
delivered pursuant hereto or in connection herewith, shall not be affected or
deemed waived by reason of the fact that Buyer or its representatives knew or
should have known that any such representation or warranty is or might be
inaccurate in any respect.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller and to Shareholders that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement and shall be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Section 4), except as set forth in the Disclosure Schedule. The Disclosure
Schedule shall be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 4.
(a) Organization of Buyer. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
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(b) Authorization of transaction. Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of Buyer, enforceable in
accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above),
shall (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Buyer is subject or any provision of its
charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in then of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which Buyer is a
party or by which it is bound or to which any of its assets is subject. Buyer
does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to in Section 2
above).
(d) Brokers' fees. Buyer has no liability or obligation to pay
any fees, commissions or other compensation to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which Seller
could become liable or obligated.
(e) Employees of Seller. Buyer presently intends to employ all
of the employees of Seller on the Closing Date as employees of the Buyer. Seller
acknowledges and agrees that the foregoing representation does not require Buyer
to continue to employ any such persons for any specific periods of time after
the Closing Date other than Shareholders pursuant to their respective employment
agreements.
(f) Disclosure. No representation or warranty contained in
this Agreement, or in any certificate or document furnished or to be furnished
by Buyer to Seller or its representatives in connection herewith or pursuant
hereto, contains or shall contain an untrue statement of a fact or omit to state
any fact required to make the statements herein or therein contained not
misleading where necessary in order to provide a prospective purchaser of the
Acquired Assets with full and complete accurate information as to Buyer, and the
condition (financial and otherwise) of the properties, assets, liabilities, and
business of Buyer. The representations and warranties contained in this
Section 4 or elsewhere in this Agreement, or any document delivered pursuant
hereto or in connection herewith, shall not be affected or deemed waived by
reason of the fact that Seller or its representatives knew or should have known
that any such representation or warranty is or might be inaccurate in any
respect.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties shall use its best efforts to
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 7 below).
(b) Notices and consents. Seller shall give any notices to
third parties, and Seller shall use its reasonable best efforts to obtain any
third party consents, that Buyer may request in connection with the matters
referred to in Section 3(c) above. Each of the Parties shall give any notices
to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section 3(c) and Section 4(c)
above. Without limiting the generality of the foregoing, each of the Parties
shall file any Notification and Report Forms and related material that it may be
required to file with the Federal Trade Commission and the Antitrust Division of
the United States Department of Justice under the
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Hart-Scott-Rodino Act, shall use its best efforts to obtain an early termination
of the applicable waiting period, and shall make any further filings pursuant
thereto that may be necessary, proper, or advisable in connection therewith.
(c) Operation of business. Seller shall not engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business. Without limiting the generality of the foregoing, Seller
shall not (i) declare, set aside, or pay any dividend or make any distribution
with respect to its capital stock or redeem, purchase, or otherwise acquire any
of its capital stock, (ii) pay any amount to any third party with respect to any
Liability or obligation (including any costs and expenses Seller has incurred or
may incur in connection with this Agreement and the transactions contemplated
hereby) that would not constitute an Assumed Liability if in existence as of the
Closing, or (iii) otherwise engage in any practice, take any action, or enter
into any transaction of the sort described in Section 3(h) above.
(d) Preservation of business. Seller shall keep its business
and properties substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, customers, and employees.
(e) Full access. Seller shall permit representatives of Buyer
to have full access to all premises, properties, personnel, books, records
(including Tax records), contracts, and documents of or pertaining to each of
Seller and its Subsidiaries and shall furnish Buyer with copies of such
documents and instruments and with such information with respect to the affairs
of Seller as Buyer may from time-to-time request. No investigation by Buyer
shall affect in any manner the representations and warranties made by Seller and
Shareholders in this Agreement, nor any other certificate or agreement furnished
or to be furnished by Seller to Buyer or its representatives in connection
herewith or pursuant hereto, and the right of Buyer to rely on them. Seller
shall use its best efforts to keep Buyer fully informed as to the affairs of
Seller and advise Buyer of all important matters pertaining to Buyer prior to
Closing.
(f) Notice of developments. Each Party shall give prompt
written notice to the other Party of any material adverse development causing a
breach of any of its own representations and warranties in Section 3 and Section
4 above. No disclosure by any Party pursuant to this Section 5(f), however,
shall be deemed to amend or supplement the Disclosure Schedule or to prevent or
cure any misrepresentation, breach of warranty, or breach of covenant.
(g) Exclusivity. Seller and each Shareholder shall not (i)
solicit, initiate, or encourage the submission of any proposal or offer from any
Person relating to the acquisition of any capital stock or other voting
securities, or any substantial portion of the assets, of any of Seller and its
Subsidiaries (including any acquisition structured as a merger, consolidation,
or share exchange) or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, or assist or participate in,
or facilitate in any other manner any effort or attempt by any Person to do or
seek any of immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
(h) Stock Options. Buyer agrees to grant at the Closing 18,600
stock options to be divided among the employees of Seller as specified in
Exhibit G. Buyer and Seller agree that the option price of the options granted
pursuant to this subparagraph shall be set based upon the market value of the
shares of stock of Buyer at the end of the day on the Closing Date. All such
options shall be subject to the terms and conditions of Buyer's stock option
plan, which terms and conditions will be provided to Seller prior to the Closing
Date.
6. POST-CLOSING COVENANTS. The Parties agree as follows with
respect to the period following the Closing.
(a) General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties shall take such further action (including the execution and
delivery of such further instruments and documents) as the other Party
reasonably may request, all
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the sole cost and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefor under Section 8 below). Seller
acknowledges and agrees that from and after the Closing Buyer shall be entitled
to possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Acquired Assets and
Assumed Liabilities. Buyer acknowledges and agrees that Seller is entitled to
make copies of all documents, books, records (including tax records),
agreements, and financial data of any sort related to the Acquired Assets and
Assumed Liabilities. Buyer further agrees that Seller and/or Shareholders shall
be granted access to the original books and records of Seller relating to the
Acquired Assets and the Assumed Liabilities as long as Seller and/or
Shareholders provide Buyer advance written notice of their intention to review
such books and records. Seller and/or Shareholders agree that any such
inspection will be made during normal business hours and Seller and/or
Shareholders agree not to interfere with Buyer's business. Buyer agrees to make
the books and records of Seller related to the Acquired Assets and Assumed
Liabilities available within a reasonable period of time after Seller's and/or
Shareholder's written notice to inspect such books and records, which period of
time shall not exceed five (5) business days.
(b) Litigation support. If and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Acquired Assets and Assumed Liabilities, the
other Party shall cooperate with the contesting or defending Party and its
counsel in the contest or defense, make available its personnel, and provide
such testimony and access to its books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefor under Section 8 below).
(c) Transition. Seller shall not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of Seller from maintaining the
same business relationships with Buyer after the Closing as it maintained with
Seller prior to the Closing. Seller shall refer all customer inquiries relating
to the businesses of Seller to Buyer from and after the Closing.
(d) Confidentiality. Seller and each Shareholder shall treat
and hold as such all of the Confidential Information, refrain from using any of
the Confidential Information except in connection with this Agreement, and
deliver promptly to Buyer or destroy, at the request and option of Buyer, all
tangible embodiments (and all copies) of the Confidential Information that is in
its possession. If Seller or any Shareholder is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, Seller or such Shareholder shall notify
Buyer promptly of the request or requirement so that Buyer may seek an
appropriate protective order or waive compliance with the provisions of this
Section 6(d). If, in the absence of a protective order or the receipt of a
waiver hereunder, Seller or any Shareholder is, on the advice of counsel,
compelled to disclose any Confidential Information to any tribunal or else
stand liable for contempt, Seller or any such Shareholder may disclose the
Confidential Information to the tribunal; provided, however, that Seller or any
such Shareholder shall use its best efforts to obtain, at the request of Buyer,
an order or other assurance that confidential treatment shall be accorded to
such portion of the Confidential Information required to be disclosed as Buyer
shall designate.
(e) Covenant not to compete. For a period of five years from
and after the Closing Date, neither Seller nor any Shareholder shall engage
directly or indirectly in any business that Seller conducts as of the Closing
Date within 100 miles of any geographic area in which Seller conducts business
as of the Closing Date; provided, however, that no owner of less than 1% of the
outstanding stock of any publicly traded corporation shall be deemed to engage
solely by reason thereof in any of its businesses. This covenant not to compete
is not to be interpreted to restrict or prohibit Shareholders in: (i) providing
consulting services to non-staffing companies; (ii) providing in their
individual capacities retained search services for senior management level
engineering personnel in the information technology or engineering areas as long
as such services are not provided for any prior
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Customer of the Seller; (iii) pursuing business opportunities that offer job
advertisement through the Internet or other mass distribution media; or (iv)
providing supplemental contracting staffing personnel on a temporary or
permanent basis for any types of profession that have not been provided by
Seller to its Customers. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 6(e) is invalid
or unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed. For purposes of this subparagraph, the term
"Customer" means any customer or client of the Seller within one (1) year prior
to the Effective Date.
(f) Solicitation. For a period of five (5) years from and
after the Closing Date, neither Seller nor any Shareholder will solicit the
business of any customer of the Seller or the Buyer relating to the Business.
For the purposes of this paragraph, the word "Customer" means organizations
(whether corporations, partnerships, or otherwise) or persons who have done
business of any nature with the Seller, Buyer, or any Affiliate of the Seller or
Buyer within five (5) years from the Closing Date.
(g) Solicitation of Employees. Seller and each Shareholder
hereby agree that for a period of five (5) years commencing on the Closing Date,
they will not, without Buyer's prior consent, hire as an employee or enter into
any type of consulting agreement with any current employees of Seller for a
period of one year after the termination of employment of any such employee with
Seller without first obtaining the written consent of Buyer.
(h) Bonus Payment. Buyer agrees to pay to Ms. Sherill Nathan a
retention bonus of $30,000.00 to be paid upon the earlier to occur of (i) six
months from the Closing Date if Mrs. Nathan is still employed by Buyer, or (ii)
Buyer's termination of employment of Ms. Nathan without cause. In the event
Buyer terminates Ms. Nathan's employment without cause prior to six months from
the Closing Date, the $30,000.00 bonus will be paid only if Ms. Nathan releases
Buyer from any and all claims concerning her termination. Buyer agrees to advise
Ms. Nathan in writing (on or before the closing Date) of Buyer's obligations
pursuant to this subparagraph.
(i) Management of Sequent Profit Center. The business
operations of Seller acquired by Buyer shall be operated as a separate business
unit during the Earnout Period unless the parties otherwise agree. The
Shareholders as employees of Buyer pursuant to their employment agreements with
Buyer shall have the day-to-day management responsibility for the Sequent Profit
Center subject to the overall review and approval of Buyer. During the Earnout
Period, Buyer shall (i) conduct its business in conformity with sound business
practices consistent with past practices; and (ii) supply to the Sequent Profit
Center capital and other fundings that are needed to operate the Sequent Profit
Center in a manner at least equal to the manner that the Seller operated its
Business prior to the Closing Date.
(j) Books and Records of Sequent Profit Center. After Buyer
presents to Seller the report of the EBIT of the Sequent Profit Center that is
required by Section 2(ii), Buyer agrees to provide the Seller, the Shareholders,
its attorneys, accountants and agents, access to the books, records and
financial statements of the Sequent Profit Center. Seller and/or Shareholders
agree to provide Buyer advance written notice thereof, agree that any such
inspection will be during normal business hours, agree not to interfere with
Buyer's business, and Buyer agrees to make such documents available to Seller
and/or Shareholders, their attorneys, accountants and/or agents within a
reasonable period of time, which period shall not exceed five (5) business days.
Buyer agrees that any costs associated solely with determining the EBIT of the
Sequent Profit Center and relating to the determination of the Earnout Payment
shall be borne by Buyer and shall not be deducted from the earnings of the
Sequent Profit Center. Until the Earnout Amount has been paid to Seller, Buyer
agrees to provide to the Seller a monthly report
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which itemizes the EBIT for the Sequent Profit Center for each month commencing
with the month of October 1997, within a reasonable period of time, which period
will not exceed thirty (30) days after the end of each such month.
(k) Name Change. At the Closing, the Seller shall assign the
right to use the name "Sequent Associates, Inc." and variations thereof to the
Buyer, shall cease the use of such name, and shall cooperate with the Buyer in
the assumption of such name by the Buyer in all jurisdictions where the Seller
is currently qualified to do business. As soon after the Closing Date as
practicable, the Seller shall either dissolve or change its name to a new name
bearing no resemblance to its present name.
(l) Employees of Seller. Buyer and Seller agree and
acknowledge that any accrued vacation pay that is due and owing to the employees
of Seller has been included as a Current Liability of Seller in the Most Recent
Financial Statements, and that the Buyer shall not have any claims against
Seller for such accrued vacation pay as long as the amounts set forth in the
Most Recent Financial Statements are correct. Buyer and Seller further agree
that Seller has not accrued any liabilities on its Most Recent Financial
Statements for sick leave of its employees and that such employees will not be
paid any amounts by Buyer or Seller upon termination of their respective
employment with Buyer after the Closing Date.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) Conditions to obligation of Buyer. The obligation of
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) Seller shall have performed and complied
with all of its covenants hereunder in all material respects through
the Closing;
(iii) Seller shall have procured all of the third
party consents specified in Section 5(b) above;
(iv) no action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of any
federal, state, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation,
(C) affect adversely the right of Buyer to own the Acquired Assets, to
operate the former businesses of Seller, and to control Seller's
Subsidiaries, or (D) affect adversely the business, assets, properties,
operation (financial or otherwise), or prospects of Buyer with respect
to its ownership of the Acquired Assets or operation of its business as
a result of such acquisition (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(v) the board of directors of Buyer and the
shareholders of Buyer have approved the transactions contemplated by
this Agreement;
(vi) Seller shall have delivered to Buyer a
certificate to the effect that each of the conditions specified above
in Section 7(a)(i)-(iv) is satisfied in all respects and Seller shall
deliver to Buyer each of the assignments and other documents required
by Section 2(h);
(vii) Seller and Buyer shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Section 3(c) and Section 4(c) above;
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(viii) Buyer, Seller and Escrow Agent shall have
entered into an escrow agreement in the form of Exhibit H (the "Escrow
Agreement");
(ix) Mike Greenberg and Marina Eisenzimmer shall
have each entered into an employment, noncompetition and
confidentiality agreement with Buyer in the form and substance set
forth in Exhibit I (individually an "Employment Agreement, and
collectively, the "Employment Agreements"). The combined annual
compensation to be paid to such persons shall not exceed $135,000.00.
(x) Buyer shall have received from counsel to
Seller an opinion in form and substance as set forth in Exhibit J
attached hereto, addressed to Buyer, and dated as of the Closing Date;
and
(xi) all actions to be taken by Seller in
connection with consummation of the transactions contemplated hereby
and all certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby shall be
satisfactory in form and substance to Buyer.
Buyer may waive any condition specified in this Section 7(a) if it executes a
writing so stating at or prior to the Closing.
(b) Conditions to obligation of Seller. The obligation of
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the
Closing;
(iii) no action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this
Agreement or (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(iv) the board of directors of Seller shall have
approved the transactions contemplated by this Agreement.
(v) Buyer shall have delivered to Seller a
certificate to the effect that each of the conditions specified above
in Section 7(b)(i)-(iii) is satisfied in all respects;
(vi) Buyer shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Section 3(c) and Section 4(c) above;
(vii) Buyer, Seller and Escrow Agent shall have
entered into the Escrow Agreement;
(viii) the relevant parties shall have entered into
agreements in form and substance as set forth in Exhibits C, H and I,
and the same shall be in full force and effect;
(ix) Seller shall have received from counsel to
Buyer an opinion in form and substance as set forth in Exhibit K
attached hereto, addressed to Buyer, and dated as of the Closing Date;
and
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(x) all actions to be taken by Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby shall be satisfactory in
form and substance to Seller.
Seller may waive any condition specified in this Section 7(b) if it executes a
writing so stating at or prior to the Closing.
8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) Survival of Representations and Warranties.
All of the representations and warranties of the Seller, Shareholders, and Buyer
contained herein shall survive the Closing hereunder (even if the other party
knew or had reason to know of any misrepresentation or breach of warranty at the
time of Closing) and continue in full force and effect for twelve (12) months
following the Closing Date, except with respect to Section 3(k) and for any
Adverse Consequences suffered by Buyer from the fraud of Seller or any
Shareholders which shall continue in effect until the expiration of the
applicable statute of limitations.
(b) Indemnification Provisions for Benefit of the Buyer.
(i) In the event Seller or any Shareholder breaches
(or in the event any third party alleges facts that, if true, would
mean Seller or any Shareholder has breached) any of their
representations, warranties, and covenants contained herein and, if
there is an applicable survival period pursuant to Section 8(a) above,
provided that Buyer makes a written claim for indemnification against
any of the Sellers pursuant to Section 10(g) below within such survival
period, then Seller and each of the Shareholders, jointly and
severally, agree to indemnify Buyer from and against the entirety of
any Adverse Consequences Buyer may suffer through and after the date of
the claim for indemnification (including any Adverse Consequences Buyer
may suffer after the end of any applicable survival period) resulting
from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach).
(ii) Seller and each of the Shareholders, jointly
and severally, agree to indemnify the Buyer from and against the
entirety of any Adverse Consequences Buyer may suffer resulting from,
arising out of, relating to, in the nature of, or caused by any
Liability of the Seller for the unpaid Taxes of any Person (other than
Seller) under Treas. Reg. Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(iii) $1,900,000.00 of the Purchase Price shall be
deposited in escrow for a period of twelve months from the Closing Date
to secure the indemnification obligations of Seller and Shareholders
pursuant to this Section 8(b).
(iv) Except for any Adverse Consequences of Buyer
that arise from any fraud of the Seller or the Shareholders or from
breaches by Seller or Shareholders of the representations in Section
3(k) above, Buyer agrees that the maximum amount of Adverse
Consequences that it may recover from Seller and Shareholders pursuant
to this Section 8 shall be limited to $5,700,000.00.
(v) Notwithstanding anything to the contrary in
this Section 8(b), there shall be no liability hereunder on the part of
the Seller or the Shareholders until the Adverse Consequences suffered
by the Buyer exceeds in the aggregate $37,500.00, in which event Seller
and Shareholders shall be liable for all Adverse Consequences suffered
by Buyer in excess of $37,500.00 subject to the limitations set forth
in subparagraph 8(b)(iv) above.
26
<PAGE> 27
(c) Indemnification Provisions for Benefit of Seller.
(i) In the event Buyer breaches (or in the event any
third party alleges facts that, if true, would mean Buyer has breached)
any of its representations, warranties, and covenants contained herein,
and, if there is an applicable survival period pursuant to Section 8(a)
above, provided that Seller makes a written claim for indemnification
against Buyer pursuant to Section 10(g) below within such survival
period, then Buyer agrees to indemnify Seller from and against the
entirety of any Adverse Consequences Seller may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences Seller may suffer after the end of any applicable survival
period) resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or the alleged breach).
(ii) Buyer agrees to indemnify the Seller and the
Shareholders from and against the entirety of any Adverse Consequences
Seller or Shareholders may suffer resulting from, arising out of, or
relating to, in the nature of, or caused by (A) any third party
challenging the Effective Date of the transactions contemplated by this
Agreement, and (B) or any Liability relating to the Assumed Liabilities
from and after the Effective Date.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other
Party (the "Indemnifying Party") under this Section 8, then the
Indemnified Party shall promptly notify each Indemnifying Party
thereof in writing; provided, however, that no delay on the part of
the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is
prejudiced.
(ii) Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with counsel
of its choice satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15
days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence
acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (C) the Third
Party Claim involves only money damages and does not seek an injunction
or other equitable relief, (D) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith
judgment of the Indemnified Party, likely to establish a precedential
custom or practice adverse to the continuing business interests of the
Indemnified Party, and (E) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with Section
8(d)(ii) above, (A) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim, (B) the Indemnified Party will not consent
to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the
Indemnifying Party, and (C) the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party.
(iv) In the event any of the conditions in Section
8(d)(ii) above is or becomes unsatisfied, however, (A) the Indemnified
Party may defend against, and consent to the entry of any judgment or
enter into any settlement with respect to, the Third Party Claim in any
manner it may deem appropriate (and the
27
<PAGE> 28
Indemnified Party need not consult with, or obtain any consent from,
any Indemnifying Party in connection therewith), (B) the Indemnifying
Parties will reimburse the Indemnified Party promptly and periodically
for the costs of defending against the Third Party Claim (including
attorneys' fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Adverse Consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim to the fullest extent provided
in this Section 8.
(e) Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy any Party may have for breach of
representation, warranty, or covenant. Each of the Shareholders hereby agrees
that he or it will not make any claim for indemnification against Seller by
reason of the fact that he or it was a director, officer, employee, or agent of
any such entity or was serving at the request of any such entity as a partner,
trustee, director, officer, employee, or agent of another entity (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw, agreement, or otherwise) with respect to
any action, suit, proceeding, complaint, claim, or demand brought by the Buyer
against such Shareholder (whether such action, suit, proceeding, complaint,
claim, or demand is pursuant to this Agreement, applicable law, or otherwise).
9. TERMINATION.
(a) Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
(i) Buyer and Seller may terminate this Agreement
by mutual written consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving
written notice to Seller on or before the 30th day following the date
of this Agreement if Buyer is not satisfied with the results of its
continuing business, legal, and accounting due diligence regarding
Seller; which termination right shall terminate on the Closing Date;
(iii) Buyer may terminate this Agreement by giving
written notice to Seller at any time prior to the Closing (A) if Seller
has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, Buyer has notified
Seller of the breach, and the breach has continued without cure for a
period of 30 days after the notice of breach or (B) if the Closing
shall not have occurred on or before October 1, 1997 (or such later
date permitted herein), by reason of the failure of any condition
precedent under Section 7(a) hereof (unless the failure results
primarily from Buyer itself breaching any representation, warranty, or
covenant contained in this Agreement); and
(iv) Seller may terminate this Agreement by giving
written notice to Buyer at any time prior to the Closing (A) if Buyer
has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, Seller has
notified Buyer of the breach, and the breach has continued without cure
for a period of 30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before October 1, 1997 (or such
later date permitted herein), by reason of the failure of any condition
precedent under Section 7(b) hereof (unless the failure results
primarily from Seller itself breaching any representation, warranty, or
covenant contained in this Agreement).
(b) Effect of termination. If any Party terminates this
Agreement pursuant to Section 9(a) above, all rights and obligations of the
Parties hereunder shall terminate without any Liability of any Party to any
other Party (except for any Liability of any Party then in breach).
28
<PAGE> 29
10. MISCELLANEOUS.
(a) Press releases and public announcements. No Party shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written approval
of the other Party; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party shall use its reasonable best efforts to advise the
other Party prior to making the disclosure).
(b) No third-party beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) Entire agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
(d) Succession and assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party; provided, however, that Buyer may: (i) assign its
rights and interests hereunder to one or more Persons with an equivalent or
higher net worth than Buyer and (ii) designate one or more Person to perform its
obligations hereunder (in any or all of which cases Buyer shall no longer be
responsible for the performance of the obligations so assigned).
(e) Counterparts; Facsimile Signatures. This Agreement
may be executed in one or more counterparts and by facsimile transmission of
signed counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(f) Headings. The Section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
four business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to Seller:
Sequent Associates, Inc.
964 Durlston Road
Redwood City, California 94062
29
<PAGE> 30
With a copy to:
Berliner Cohen
Ten Almaden Boulevard, 11th Floor
San Jose, California 95113
Attention: Alan J. Pinner, Esq.
If to Shareholders:
Michael H. Greenberg
964 Durlston Road
Redwood City, California 94062
Marina Eisenzimmer
356 Carrera Drive
Mill Valley, California 94941
If to Buyer:
Romac International, Inc.
120 West Hyde Park Place
Suite 200
Tampa, Florida 33606
Attn: Howard Sutter, Vice President
With a copy to:
Holland & Knight LLP
400 N. Ashley Street, Suite 2050
Tampa, Florida 33602
Attn: David R. Singleton, Esq.
All notices, requests, demands, claims, and other communications that are
delivered by Buyer to Seller pursuant to this Agreement shall also be delivered
to Shareholders. Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, facsimile transmission, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication shall
be deemed to have been duly given unless and until it actually is received by
the intended recipient. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
(h) Governing law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Florida without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Florida or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Florida.
(i) Amendments and waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
Buyer and Seller. Seller may consent to any such amendment
30
<PAGE> 31
at any time prior to the Closing without the prior authorization of its board of
directors or stockholders. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(k) Expenses. Each of Buyer, Seller, and Shareholders shall
bear his or its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby. Seller agrees that it has not paid any amount to any third party, and
shall not pay any amount to any third party until after the Closing, with
respect to any of the costs and expenses of Seller and Shareholders (including
any of their legal fees and expenses, brokerage commissions, and accounting fees
and expenses) in connection with this Agreement or any of the transactions
contemplated hereby. Sales, transfer, documentary and similar taxes, fees and
assessments, if any, payable in connection with the sale, conveyance,
assignment, transfers and deliveries made to Buyer in connection herewith shall
be paid by Buyer.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule
specifically identifies the exception with particularity and describes the
relevant facts in detail. Without limiting the generality of the foregoing, the
mere listing (or inclusion of a copy) of a document or other item shall not be
deemed adequate to disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with the existence of
the document or other item itself). The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) that the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
(m) Incorporation of Exhibits and Schedules. The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
(n) Specific performance. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably if any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 10(o)
below), in addition to any other remedy to which it may be entitled, at law or
in equity.
(o) Bulk transfer laws. Buyer acknowledges that Seller shall
not comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement. Seller warrants
and agrees to pay and discharge when due all claims of creditors that could be
asserted against Buyer by reason of such non-compliance to the extent that such
liabilities are not Assumed Liabilities. Seller hereby
31
<PAGE> 32
indemnifies and agrees to hold Buyer harmless from, against and in respect of,
and shall on demand reimburse Buyer for, any loss, liability, cost or expense
suffered or incurred by Buyer by reason of the failure of Seller to pay or
discharge any such claims.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
32
<PAGE> 33
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective as of the date first above written.
BUYER:
ROMAC INTERNATIONAL, INC.
By: /s/ Howard W. Sutter
-------------------------------
Howard W. Sutter, as its
Vice President
SELLER:
SEQUENT ASSOCIATES, INC.
By: /s/ Michael H. Greenberg
-------------------------------
Michael H. Greenberg, as its
President
-------------------------------
SHAREHOLDERS:
/s/ Michael H. Greenberg
-----------------------------------
Michael H. Greenberg
/s/ Marina Eisenzimmer
-----------------------------------
Marina Eisenzimmer
33
<PAGE> 34
LISTING OF EXHIBITS
A Excluded Assets
B Listing of Current Liabilities
C Form of Assignments
D Assumption Agreement
E Purchase Price Allocation
F Financial Statements
G Listing of Stock Option Participants
H Escrow Agreement
I Employment Agreements with Shareholders
J Opinion of Seller's Counsel
K Opinion of Buyer's Counsel
34
<PAGE> 35
EXHIBIT A
EXCLUDED ASSETS
<TABLE>
<S> <C>
1. Laptop Computer, 1995 $ 2,555
2. Marina's home computer $ 401
3. Fujitsu Laptop Computer, 1997 $ 2,928
4. Art Vision Gallery 1992 Photograph in Mike Greenberg's office $ 0
5. Art Vision Gallery 1993 Photograph in Mike Greenberg's office $ 0
6. Painting Vision Gallery 3/10/94 painting in Mike Greenberg's office $ 0
7. Art Work 1/28/95 painting in Mike Greenberg's office $ 390
8. Spring At Pnt. Chimney 6/6/95 Painting in Marina Eisenzimmer's office $ 1,224
9. Sailboat picture located in Marina Eisenzimmer's office $ 0
10. Map located in Marina Eisenzimmer's office $ 0
11. Executive Chair, black frame located in Mike Greenberg's office $ 545
12. Side chairs located in Mike Greenberg's office
13. Touhy Desk DK Cherry, located in Mike Greenberg's office $ 1,459
14. Touhy Credenza DK Cherry located in Mike Greenberg's office $ 1,424
15. Myerovich Painting located in Mike Greenberg's office $ 8,550
16. Model Sailboat located in Mike Greenberg's office $ 2,119
17. Gateway Computer $ 2,380
18. The following shareholder loans:
(i) Loan to Mike Greenberg $18,429
(ii) Loan to Marina Eisenzimmer for $ 4,000
(iii) Loan to Marina Eisenzimmer for $ 9,000
19. The following receivables:
(i) OnLine Focus: $17,967
(ii) Internet Business Solutions: $16,067
Total: $89,438
</TABLE>
-58-
<PAGE> 36
EXHIBIT B
LISTING OF CURRENT LIABILITIES
<TABLE>
<S> <C>
Accounts Payable-Trade $ 62,262.82
Credit Cards Payable $ (789.19)
Personal Property Taxes Payable $ 7,373.71
Accrued Wages-Contractors $595,418.14
Accrued PR Tax-Contractors $ 51,130.88
Accrued WC-Contractors $ 5,941.79
Accrued Commissions-Placement & Conversions $ 3,075.00
Accrued Commission-Contractor Fees $ 40,504.45
Accrued PR Taxes-Contractor Fee Commissions $ 5.083.31
Accrued Salaries-sales, Acctg & Admin $ 25,307.00
Accrued PR Taxes-Sales, Acctg & Admin Salaries $ 2,046.00
Contractor's Medical Ins Premium Withheld $ (0.03)
Accrued Management Bonus $ 1,669.00
Accrued Payroll Clearing (36,561.34)
Accrued Vaction 19,287.92
Garnishments Payable $ (390.92)
Total Current Liabilitis $781,358,54
</TABLE>
*Sequent Agrees to provide futher detail with respect to Sequent's accounts
payable within five (5) business days of closing.
-59-
<PAGE> 37
COMPOSITE EXHIBIT C
BILL OF SALE AND ASSIGNMENT
This Bill of Sale and Assignment (the "Bill of Sale") is executed and
delivered to be effective as of September 1, 1997, by Sequent Associates, Inc.,
a California corporation (the "Seller") in favor of Romac International, Inc., a
Florida corporation ("Buyer").
In consideration of the payment by Buyer to Seller of $100.00 and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
1. Seller hereby sells, transfers, conveys, assigns and delivers to
Buyer the Acquired Assets owned by Seller and are described and defined in that
certain Asset Purchase Agreement between Buyer, Seller, and certain other
parties dated as of September 1, 1997, and all ownership rights, title, and
interest in and to the Acquired Assets.
2. Seller hereby agrees that, from time to time after the delivery of
this Bill of Sale, it will, at the request of Buyer and without further
consideration, promptly take such further action and execute and deliver such
additional assignments, bills of sale, consents or other similar instruments as
Buyer may reasonably deem necessary to complete the transfer of the title or
possession of the Acquired Assets to, or vest them in, Buyer.
3. The provisions of this Bill of Sale are binding upon Seller, its
successors and assigns, and are for the benefit of Buyer, its successors and
assigns, and all rights hereby granted Buyer may be exercised by Buyer, its
successors or assigns. This Bill of Sale shall be governed by and construed in
accordance with the laws of the State of Florida without giving any effect to
any choice or conflict of law provision or rule (whether of the State of Florida
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida.
IN WITNESS WHEREOF, Seller has executed and delivered this Bill of Sale
effective as of the date first set forth above.
WITNESSES: SELLER:
SEQUENT ASSOCIATES, INC., a
California corporation
By:
- -------------------------------- ------------------------
Print Name: Name:
--------------------- ---------------------
- -------------------------------- Title:
---------------------
- --------------------------------
Print Name:
---------------------
<PAGE> 38
STATE OF ______________)
COUNTY OF ______________)
The foregoing instrument was acknowledged before me this ________ day
of ________, 1997 by _________________________ as __________________ of Sequent
Associates, Inc., a __________________ corporation, on behalf of the
corporation. He/She is either personally known by me or as produced
_____________________________ as identification.
---------------------------
Notary Public
Print Name:
---====---------
(SEAL)
My Commission Expires:
2
<PAGE> 39
ASSIGNMENT OF LEASE
For valuable consideration, and subject to the continuation of liability set
forth herein, Sequent Associates aka Sequent Personnel Services, Inc., a
California Corporation ("Assignor") does hereby assign and transfer to Romac
International, Inc. ("Assignee") all the Assignor's right, title and interest in
and to that certain lease dated December 23, 1996, (the "Lease") by and between
Bayshore Office Park, a joint venture between Principal Mutual Life Insurance
Company, an Iowa Corporation and Associates, Inc., a California Corporation as,
as Landlord, and Sequent Personnel Services, Inc. a California Corporation as
Tenant, conveying the premises located on 2107 North First Street, Suite 490,
effective the 25th day of September, 1997.
ASSIGNEE: Sequent Associates
/s/ Michael Greenberg
------------------------------------------
By: Michael Greenberg
President
ACCEPTANCE OF ASSIGNMENT
The Assignee named in the foregoing Assignment hereby accepts said Assignment,
and hereby and agrees to, perform and be bound by all the terms, covenants,
conditions, and obligations contained in the Lease in due part of the Tenant to
be kept and performed as though the undersigned was the original Tenant
thereunder effective the 25th day of September 1997.
ASSIGNEE: Romac International, Inc.
/s/ Howard Sutter
------------------------------------------
By: Howard Sutter
Vice President
CONSENT AND APPROVAL
Landlord hereby consents to this Assignment without waiving its rights with
respect to future such covenants, and confirms that the provisions of the Lease
with respect to assignment have been complied with, and hereby accepts such
assignment effective the 25th day of September 1997, subject however, to the
provisions contained in Article 24 of the Lease, and subject to its reservation
of all rights and remedies against Assigner as set forth herein, and certifies
that the Lease is a valid and enforceable obligation.
BAYSHORE OFFICE PARK, a joint venture Principal Mutual Life Insurance
Company, an Iowa Corporation and Associates, Inc. a California Corporation,
By: Inc. a California Corporation
Joint Venture Partner
By:
-------------------------
By:
-------------------------
By:
-------------------------
By:
--------------------------
By: Principal Mutual Life Insurance Company, an Iowa Corporation,
Joint Venture Partner
<PAGE> 40
Inc:
----------------------
By: ----------------------
----------------------
PAGE 4 OF 4
<PAGE> 41
EXHIBIT D
ASSUMPTION AGREEMENT
This is an Assumption Agreement, dated as of September 1, 1997, between
Sequent Associates, Inc., a California corporation ("Assignor") and Romac
International, Inc., a Florida corporation ("Assignee").
Pursuant to an Asset Purchase Agreement of even date herewith among
Assignor, Assignee, and certain other parties (the "Purchase Agreement"),
Assignor agreed to sell substantially all of its assets to Assignee and Assignee
agreed to assume certain obligations of Assignor. Therefore, for $10.00 and
other valuable consideration (as more fully described in the Purchase
Agreement), the receipt and sufficiency of which are hereby acknowledged,
Assignor and Assignee agree as follows:
1. Defined terms. Any capitalized terms not defined herein shall have
the meaning ascribed to such terms in the Purchase Agreement.
2. Assumption of Obligations. Assignee hereby assumes the obligations
of Assignor under the Assumed Liabilities in accordance with the terms of the
Purchase Agreement (collectively, the "Obligations"). Assignee does not assume
any liabilities or obligations of Assignor, whatsoever, except the Obligations
specifically identified herein.
3. Further Agreements of Assignee. At any time and from time to time at
the reasonable request of Assignor, Assignee shall execute and deliver to
Assignor any new, additional, or confirmatory instrument, and any other document
necessary to effect the assumption of the Obligations contemplated by this
Assumption Agreement, and to carry into effect the intent and purposes of this
Assumption Agreement.
4. Miscellaneous. This Assumption Agreement shall be interpreted and
enforced in all respects in accordance with the laws of Florida, except any
choice of law rules of Florida that may direct the interpretation or enforcement
of this Assumption Agreement to the laws of a different jurisdiction. This
Assumption Agreement shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, and legal representatives of the parties.
<PAGE> 42
5. Counterparts. This Assumption Agreement may be signed in
counterparts and by facsimile transmission with the same effect as
if the signature on each counterpart were upon the same instrument.
IN WITNESS WHEREOF, in the parties have executed this Assumption
Agreement to be effective as of the 1st day of September 1997.
"ASSIGNOR"
SEQUENT ASSOCIATES, INC., a
California corporation
By:
---------------------------
, as its
-------------------
---------------------------
"ASSIGNEE"
ROMAC INTERNATIONAL, INC., a
Florida corporation
By:
---------------------------
, as its
-------------------
---------------------------
- 2 -
<PAGE> 43
EXHIBIT E
PURCHASE PRICE ALLOCATION
1. Acquired Assets: The net book value of the Acquired Assets
as reflected on Sequent's books and records
as of 8/31/97 and as reflected on Sequent's
8/31/97 Financial Statements.
2. Non-compete Agreement: $100,000.00
3. Goodwill: The remainder of the Purchase Price
-60-
<PAGE> 44
EXHIBIT H
ESCROW AGREEMENT
This is an Escrow Agreement, dated as of September 1, 1997 (this
"Agreement"), by and among Romac International, Inc., a Florida corporation (the
"Buyer"), Sequent Associates, Inc. a California corporation (the "Seller"), and
Michael H. Greenberg and Marina Eisenzimmer (individually, a "Shareholder" and
collectively the "Shareholders") and NationsBank, N.A. as Escrow Agent (herein
called "Escrow Agent").
BACKGROUND. The Buyer, the Seller, and the Shareholders are parties to
an Asset Purchase Agreement dated as of September 1, 1997 (the "Purchase
Agreement"), pursuant to which, and subject to the conditions therein, the Buyer
will purchase substantially all of the assets of Seller. The Buyer, the Seller
and the Shareholders desire to appoint the Escrow Agent to act for and on behalf
of the parties hereto, and to receive, in escrow, a certain portion of the
purchase price as partial security for the performance of certain obligations of
the Seller and the Shareholders, as provided herein. Capitalized terms that are
used herein without definition shall have the meanings attributed in the
Purchase Agreement.
THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Establishment of Escrow. On the date of execution of this Agreement,
the Seller, the Shareholders, and the Buyer shall deposit $1,900,000.00 of the
Purchase Price in escrow with the Escrow Agent. Such amount and all interest and
earnings thereon (the "Escrow Fund") shall be held in escrow and disbursed in
accordance with the terms and conditions of this Agreement. The Escrow Fund is
being deposited with Escrow Agent as partial security for the performance by the
Seller and Shareholders of their obligations under the indemnification
provisions contained in the Purchase Agreement.
2. Claims on Escrow Fund. If, during the term of this Agreement, the
Buyer wishes to assert a claim against the Escrow Fund pursuant to the Purchase
Agreement, the Buyer shall deliver a notice of claim pursuant to Article 8 of
the Purchase Agreement (a "Notice of Claim") to Seller, Shareholders, and Escrow
Agent, which Notice of Claim shall state (the amount sought for the Adverse
Consequences suffered by the Buyer) and the circumstances in reasonable detail.
If Seller or Shareholders have not disputed or agreed to the payment of a Notice
of Claim within fifteen (15) days after the receipt by them of a Notice of a
Claim, Buyer shall deliver an additional copy of the previously delivered Notice
of Claim to Seller, Shareholders, and Escrow Agent (the "Duplicate Notice of
Claim"). If (i) Escrow Agent has not received, within 30 days after the receipt
by Escrow Agent of the Notice of Claim or within 15 days after receipt by Escrow
Agent of the Duplicate Notice of Claim, whichever occurs later, a copy of a
notice from Seller or Shareholders that they deny or dispute the claim in whole
or in part, as asserted in such Notice of Claim or Duplicate Notice of Claim
from the Buyer, or (ii) Escrow Agent receives at any time notice from the Seller
and
<PAGE> 45
Shareholders that they accept the obligation(s) described in such Notice of
Claim or Duplicate Notice of Claim from the Buyer (in whole or in part), the
Escrow Agent will transfer cash from the Escrow Fund in an amount equal to the
Adverse Consequences suffered by the Buyer pursuant to the Notice of Claim which
has been accepted by the Seller and Shareholders or which has not been timely
disputed or denied. If Escrow Agent has received, within the applicable time
periods set forth in this paragraph, a copy of a notice from the Seller or
Shareholders that they deny or dispute such claim or the amount thereof, Escrow
Agent shall disburse the disputed portion of such Notice of Claim only upon the
joint written instructions of Buyer, Seller, and Shareholders or a final order
from a court of competent jurisdiction.
3. Investment of Escrow Fund. The Escrow Agent shall invest and
reinvest moneys on deposit in the Escrow Fund, unless joint written notice to
the contrary is received from the Seller, Shareholders, and the Buyer, in any
combination of the following or any: (a) direct obligations of the Government of
the United States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the government of the
United States, maturing within 6 months from the date of purchase, (b) insured
interest-bearing accounts or certificates of deposit of, or time deposits with,
any commercial bank that is a member of the Federal Reserve System is organized
under the laws of the United States or any state thereof and has combined
capital and surplus of at least $1 billion, and maturing within 6 months from
the date of purchase, or (c) interests in an investment company or fund
registered under the Investment Company Act of 1940 which invests solely in the
foregoing.
4. Obligations of Escrow Agent. The Escrow Agent shall have no duty or
obligation to collect any amounts at any time due in respect of the Purchase
Agreement, and shall not be responsible for any defaults thereunder. It is
further agreed that should a controversy arise before, during or after the term
of this Agreement, with respect to this Agreement or the right of any of the
parties hereto or of any third person or any money or property deposited herein
or affected hereby, the parties expressly agree and consent that Escrow Agent
shall have the right to do either or both of the following:
(a) Withhold further performance of this Agreement on its part
until such controversy is resolved to the satisfaction of Escrow Agent, or
(b) Commence or defend any action or proceeding for the
determination of such controversy. Except for usual and customary fees of the
Escrow Agent (as provided in Section 7 below), the Seller and Shareholders,
jointly and severally on the one hand, and the Buyer on the other hand, each
agree to pay one-half of all costs, damages, judgments, and expenses, including
a reasonable attorney's fee, suffered or incurred by Escrow Agent in connection
with or arising out of this Agreement, including, but without limiting the
generality of the foregoing any suit or proceeding
2
<PAGE> 46
for or in the nature of interpleader brought by or against Escrow Agent. In the
event of any such action or proceeding, Escrow Agent shall be entitled to
deliver all funds and other property held by it into the appropriate court and
shall thereupon be released and discharged from all obligations and liabilities
created by this Agreement.
5. Limitations on Liability of Escrow Agent. The Buyer, the Seller and
the Shareholders agree that Escrow Agent shall not be liable for the failure of
any condition of this Agreement or the Purchase Agreement, or for damage caused
or omission done in good faith, or for any claim or loss, claimed or suffered by
any party hereto by the exercise of Escrow Agent's discretion, or for any other
reason except negligence or willful or wanton misconduct on the part of Escrow
Agent, and the Seller, the Shareholders, and the Buyer jointly and severally
agree, in the absence of any such negligence or willful or wanton misconduct on
the part of Escrow Agent, to hold Escrow Agent harmless and to indemnify Escrow
Agent for all loss, costs, expense or liability, including reasonable attorneys'
fees and other expenses that may be incurred, sustained or asserted against it
in connection with this Agreement, or court action ensuing therefrom.
6. Termination. This Agreement will terminate one (1) year after the
Closing Date, unless at such time there is outstanding an unsatisfied Notice of
Claim of the Buyer pursuant to Section 2 hereof. If at such time there are one
or more outstanding Notices of Claim of the Buyer pursuant to Section 2 hereof,
the Escrow Agent shall retain an amount of the Escrow Fund equal to the amount
specified by the Buyer in one or more Notices of Claim with respect to such
unsatisfied claims (or a lesser amount, if so instructed by the Buyer), and this
Agreement shall terminate with respect to any excess over said amount. All
remaining portions of the Escrow Fund that are not subject to an outstanding
claim, together with all interest or other income earned on the Escrow Fund
shall be transferred to the Seller one (1) year from the Closing Date. With
respect to any portion of the Escrow Fund retained by the Escrow Agent, this
Agreement will terminate after such portion of the Escrow Fund has been
distributed to the Buyer and, if applicable, the Seller after all unsatisfied
claims of the Buyer have been finally resolved. At such time as the Escrow Agent
has been notified by the Buyer, the Seller, and the Shareholders of the amount
of the final determination of all such outstanding claims of the Buyer, the
Escrow Agent shall transfer such amount of the remaining portion of the Escrow
Fund to the Buyer, and will distribute to the Seller the balance, if any,
remaining in the Escrow Fund after the distribution to the Buyer contemplated by
this Section 6.
7. Expenses of Escrow Agent. The Buyer on the one hand, and the Seller
and the Shareholders jointly and severally, on the other hand, each agrees to
pay to Escrow Agent reasonable compensation for its services hereunder and to
reimburse Escrow Agent for reasonable expenses incurred by it in connection
herewith, one-half being paid by the Buyer and one-half by the Seller and the
Shareholders.
3
<PAGE> 47
8. Remedies; Governing Law. The validity, interpretation, construction,
and enforcement of this Agreement are governed by the laws of the State of
Florida and the federal laws of the United States of America, excluding the laws
of those jurisdictions pertaining to resolution of conflicts with laws of other
jurisdictions. In any mediation, arbitration, litigation, or other legal
proceeding arising out of this Agreement, the losing party shall reimburse the
prevailing party, on demand, for all costs incurred by the prevailing party in
connection with the proceeding. Absent an agreement among all parties to this
Agreement otherwise, jurisdiction for all claims brought under this Agreement
shall lie exclusively in the appropriate state court in Hillsborough County,
Florida or in the appropriate federal court in the Middle District of Florida,
Tampa Division.
9. Notices. Every notice, consent, demand, approval, and request
required or permitted by this Agreement will be valid only if it is in writing,
delivered personally or by first class, postage prepaid certified United States
mail or by a recognized national overnight delivery service, and addressed by
the sender to the party who is the intended recipient at its address set forth
below its signature or to the address most recently designated to the other
party by notice given in accordance with this Section. A validly given notice,
consent, demand, approval, or request will be effective on the earlier of its
receipt, if delivered personally or by overnight delivery service, or the
seventh day after it is postmarked by the United States Postal Service, if it is
delivered by United States certified mail. Each party promptly shall notify the
other parties of any change in its principal mailing address.
10. Form and Interpretation. The headings preceding the text of the
sections of this Agreement are solely for convenient reference and neither
constitute a part of this Agreement nor affect its meaning, interpretation, or
effect. Unless otherwise expressly indicated, all references in this Agreement
to a section are to a section of this Agreement. As used in this Agreement, the
word "including" is always without limitation, the word "days" refers to
calendar days, including Saturdays, Sundays, and holidays, words in the singular
number include words of the plural number and vice versa, the word "person"
includes, in addition to a natural person, a trust, corporation, partnership,
joint venture, association, unincorporated organization, public body or
authority, and a government or any governmental body, agency, authority,
department, or subdivision, and the word "costs" includes the fees, costs, and
expenses of agents, experts, attorneys, witnesses, mediators, arbitrators, and
supersedeas bonds, whether incurred before or after demand or commencement of
any legal proceedings, and whether incurred pursuant to trial, appellate,
mediation, arbitration, bankruptcy, administrative, or judgment-execution
proceedings. Whenever possible, each provision of this Agreement should be
construed and interpreted so that it is valid and enforceable under applicable
law. However, if a provision in this Agreement is held by a court to be invalid
or unenforceable under applicable law, that provision will be deemed separable
from the remaining provisions of this Agreement and will not affect
4
<PAGE> 48
the validity, interpretation, or effect of other provisions of this Agreement or
the application of that provision to circumstances in which it is valid and
enforceable.
11. Integration; Modification. Together with the Purchase Agreement,
this Agreement records the final, complete, and exclusive understandings among
the parties regarding the subject matter of this Agreement and supersedes any
prior or contemporaneous agreement, understanding, or representation, oral or
written, by any of them. A waiver, amendment, discharge, extension, termination,
or modification of this Agreement will be valid and effective only if it is in
writing and signed by the parties to this Agreement. A written waiver of a
right, remedy, or obligation under any provision of this Agreement will not
constitute a waiver of the provision itself, a waiver of any succeeding right,
remedy, or obligation under the provision, or a waiver of any other right,
remedy, or obligation under this Agreement.
12. Execution; Effective Date. The parties may execute this Agreement
in counterparts. Each executed counterpart will constitute an original document,
and all of them, together, will constitute the same agreement. This Agreement
will become effective on the execution date stated below, when each party has
executed and delivered a counterpart to the other parties.
DULY EXECUTED by each of the undersigned, as of the day and year first
written above.
THE BUYER:
ROMAC INTERNATIONAL, INC.,
a Florida Corporation
By:
-------------------------------------
Howard W. Sutter, Vice President
Address for Notices:
120 West Hyde Park Place
Suite 1200
Tampa, Florida 33606
Attention: Howard Sutter, Vice President
with a copy to:
David R. Singleton, Esq.
Holland & Knight LLP
400 North Ashley Drive
Suite 2300
Tampa, Florida 33602
5
<PAGE> 49
THE SELLER:
SEQUENT ASSOCIATES, INC., a
California corporation
By:
---------------------------
, as its
-------------------
---------------------------
Address for Notices:
964 Durlston Road
Redwood City, California 94062
with a copy to:
Berliner Cohen
Ten Almaden Boulevard, 11th Floor
San Jose, California 95113
Attention: Alan J. Pinner, Esq.
THE SHAREHOLDERS:
------------------------------------
Michael H. Greenberg
Address for Notices:
964 Durlston Road
Redwood City, California 94062
--------------------------------------
Marina Eisenzimmer
Address for Notices:
356 Carrera Drive
Mill Valley, California 94941
6
<PAGE> 50
THE ESCROW AGENT:
NATIONSBANK, N.A.
----------------------
By: Shari B. Sawyers
Title: Vice President
Address for Notices:
400 North Ashley Drive
6th Floor
Tampa, Florida 33602
(813) 224-5228
7
<PAGE> 51
EXHIBIT I
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This is an Employment and Noncompetition Agreement (the "Agreement"), dated as
of September 1, 1997 between ROMAC INTERNATIONAL, INC., a Florida corporation
(the "Company") and MICHAEL H. GREENBERG (the "Employee").
BACKGROUND
Simultaneously with the execution of this Agreement, the Company is acquiring
substantially all of the assets of Sequent Associates, Inc. (the "Seller"). The
Employee has been a shareholder and key employee of the Seller. The Company
wishes to retain the Employee's services in connection with its acquisition of
the Seller's business and to obtain certain non-compete and non-disclosure
protections from the Employee. The Employee is willing to accept such employment
on the terms and conditions set forth herein.
Accordingly, the parties agree as follows:
TERMS
1. EMPLOYMENT. The Company agrees to employ the Employee,
and the Employee hereby accepts such employment, upon the
terms and conditions set forth in the Agreement.
2. TERM. Subject to the provisions for termination contained in
Section 6, the term of employment under this Agreement shall
be for a period of thirteen months commencing as of September
1, 1997, and ending October 31, 1998.
3. DUTIES. The Employee shall be engaged as a full-time
employee in the position of Information Technology
Division Vice-President. The Company shall not reduce
the dignity, responsibility, authority, importance or
scope of such position during the term of this Agreement.
The Employee shall perform substantially the same duties
as he performed with Seller prior to the acquisition of
Seller's assets by the Company and such other duties as
may be reasonably assigned to him by the Company and
accepted by the Employee, which duties shall be
consistent with a senior management position.
4. COMPENSATION.
(a) As compensation for services rendered by the
Employee to the Company, the Company shall pay the
Employee a salary of $67,500.00 per year
PAGE 1 OF 14
<PAGE> 52
("Salary"), payable in equal semi-monthly
installments of $2,812.50 per installment.
(b) The Company, at its expense less any Employee
contribution required by Company from time to time,
agrees to provide to the Employee and his family
the comprehensive health, medical, and dental
insurance coverage in effect from time to time at
the Company during the Employee's employment,
unless Employee decides not to obtain any or all of
such benefits from Company. The Employee shall be
entitled to participate in any incentive stock
option, employee benefit, or other plans (including
the Company's 401 (k) or deferred compensation
plan) as defined by the Company.
(c) The Company shall reimburse the Employee on a
monthly basis for all business expenses reasonably
incurred by the Employee in the performance of his
duties under this Agreement in accordance with
Company guidelines; provided, however, that the
Employee shall furnish to the Company an itemized
list of receipts and invoices in substantiation of
such expenditures. The Company agrees that any
trips that Company requires Employee to make to the
Company's headquarters in Tampa, Florida shall be
by business class airline service.
5. VACATION. During the term of this Agreement, the Employee
shall be entitled to take four weeks paid vacation per year,
in addition to recognized national holidays.
6. TERMINATION.
(a) The Employee's employment hereunder may be
terminated at any time by:
(i) mutual written agreement;
(ii) the death of the Employee; or
(iii) action of the Company for Cause,
as defined in Subsection 6(c).
(b) The Company agrees to provide Employee 30 days
written notice and an opportunity to cure any event
which is deemed a termination for Cause under
Subsection 6(c) hereof within such 30-day cure period
prior to the effective date of a termination by the
Company for Cause pursuant to Subsection 6(a)(iii)
(c) For purposes of this Agreement, termination for
"Cause" shall mean:
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<PAGE> 53
(i) The failure of the Employee to
perform his duties under this Agreement;
(ii) The repetitive or material violation
by the Employee of the Company's written
policies and procedures;
(iii) The failure of the Employee to follow
the lawful and ethical written instructions
of the Company in a timely manner;
(iv) The failure of the Employee to report
to work for the Company for more than three
(3) consecutive business days other than as
a result of vacation, personal days or
illness;
(v) The conviction or plea agreement of
the Employee of a felony;
(vi) The admitted or proven theft or
embezzlement by the Employee of Company
funds; or
(vii) The Employee's abandonment of his
employment.
7. NON-COMPETITION AND NON-DISCLOSURE.
(a) The Employee acknowledges that in the course of his
employment hereunder, he will obtain knowledge of
confidential matters essential to the business and
competitive position of the Company, including,
without limitation, customer and candidate lists,
business strategies, financial information, and
trade secrets that could unfairly disadvantage the
Company were the Employee to engage in business
activities competitive with the Company.
(b) The Employee therefore agrees that he shall not, at
any time during his employment hereunder and for a
period of two years thereafter, accept employment
as an officer, director or employee of, or be or
become the owner of 10% or more of the outstanding
equity interest of, or otherwise consult with or
participate in the business of, any entity engaged
in business competitive with that of the Company,
within 100 miles of any location of the Company in
which the employee works or has supervisory
responsibility over. This covenant not to compete
is not be interpreted to restrict or prohibit
Employee in: (i) providing consulting services to
non-staffing companies; (ii) providing in its
3
PAGE 3 OF 14
<PAGE> 54
individual capacity retained search services for
senior management level engineering personnel in the
information technology or engineering areas as long
as such services are not provided for any prior
Customer of Sequent Associates, Inc. (the "Seller");
(iii) pursuing business opportunities that offer job
advertisement through the Internet or other mass
distribution media; or (iv) providing supplemental
contracting staffing personnel on a temporary or
permanent basis for any types of profession that have
not been provided by Seller to its Customers. For
purposes of this subparagraph, the term "Customer"
means any customer or client of the Seller within one
(1) year prior to the effective date of this
Agreement. For the purposes of this Agreement,
Employee acknowledges and agrees that business
competitive with that of Company shall include any
business that provides for the placement of an
employee or independent contractor information
technology consultants or engineering consultants to
clients and any other lines of business of Company
for which Company has assigned responsibilities to
the Employee and Employee has agreed to perform any
such responsibilities on behalf of Company.
(c) The Employee recognizes and acknowledges that all
records, documents, customer and candidate lists,
referral sources, financial information, trade
secrets, methods, techniques, processes, marketing
and acquisition strategies and plans, intellectual
property (regardless of whether patentable or
copyrightable), formulas, computer print-outs, and
other information of any kind, whether or not
complete and whether or not reduced to writing
(collectively, the "Confidential Information"),
obtained by the Employee with regard to the Company
(or its affiliates, employees, principals,
customers, or business associates) during the
course of the Employee's employment, and not
generally known in the public domain, constitute
valuable, special, and unique and proprietary
assets of the Company's business. The Employee
agrees that during the Employee's employment
hereunder, and following the termination of the
Employee's employment, whether the termination
shall be voluntary or involuntary, or for Cause, or
whether the termination is solely due to the
expiration of the term of this Agreement, the
Employee will not at any time, directly or
indirectly disclose, disseminate, or publish any
Confidential Information to or for any other person
4
PAGE 4 OF 14
<PAGE> 55
group, firm, corporation, or other entity, or utilize
the same for any reason or purpose whatsoever other
than (i) for the benefit and at the request of the
Company, (ii) as may be required by law, or (iii) in
connection with obtaining advice from the Employee's
legal counsel. Upon termination of this Agreement, or
at any time upon the request of the Company, the
Employee shall promptly deliver to the company all
memoranda, notes, records, reports, manuals,
drawings, lists, formulas, and other documents (and
all copies thereof) relating to the business of the
Company and all property associated therewith, then
possessed or under the control of the Employee.
(d) The Employee further agrees that during the
Employee's employment hereunder and following the
termination of the Employee's employment, whether
the termination shall be voluntary or involuntary,
for Cause, or whether the termination is solely due
to the expiration of the term of this Agreement,
the Employee will not, in any manner or at any
time, solicit or encourage any person, firm,
corporation, or other entity that is a customer,
business associate, or referral source of the
Company, and/or other employees of the Company, to
cease doing business or terminate their employment
with the Company.
(e) If any covenant or provision contained in this
section 7, is found by a court of competent
jurisdiction to be unreasonable in duration,
geographical scope, or other character of
restriction, the covenant or provision shall not be
rendered unenforceable thereby, but rather the
duration, geographical scope, or deemed
automatically reduced or modified with retroactive
effect to the extent necessary to render such
covenant or provision enforceable, and such
covenant or provision shall be enforced as
modified.
(f) The parties acknowledge and agree that damages in
the event of a breach of the provisions of
Section 7 by the Employee, though great and
irreparable, would be difficult to ascertain, and
therefore the Company, in addition to and without
limiting any other remedy or right to an injunction
or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and the
Employee hereby waives any and all defenses he may
5
PAGE 5 OF 14
<PAGE> 56
have on the ground of inappropriateness of any such equitable
relief.
8. ASSIGNMENT, BINDING EFFECT. The Company may not assign
its rights or delegate its duties hereunder without the
Employee's prior written consent, except in connection
with a merger or acquisition pursuant to which the
acquiring entity assumes the Company's obligation
hereunder. The Employee may not delegate his duties or
assign his rights hereunder, without the Company's prior
written consent. This Agreement shall inure to the
benefit of and be binding upon the Company's permitted
successors and assigns, and shall inure to the benefit of
and be binding upon the Employee's heirs, distributees
and personal representatives.
9. SEVERABILITY. If any provision of this Agreement is held
to be invalid, illegal, or unenforceable, in whole or in
part, such invalidity shall not affect any otherwise
valid provision, and all other valid provisions shall
remain in full force and effect.
10. COUNTERPARTS; FACSIMILE COUNTERPARTS. This Agreement may
be executed in two or more counterparts and by facsimile
transmission of signed counterparts, each of which shall
be deemed an original, and all of which together shall
constitute one document.
11. TITLES. The titles and headings preceding the text of
the sections of this Agreement have been inserted solely
for convenience of reference and do not constitute a part
of this Agreement or affect its meaning, interpretation,
or effect.
12. WAIVER. The failure of either party to insist in any one or
more instances upon performance of any terms or conditions of
this Agreement shall not be construed as a waiver of future
performance of any such term, covenant, or condition, and the
obligations of either party with respect to such term,
covenant, or condition shall continue in full force and
effect.
13. ENTIRE AGREEMENT; MODIFICATION. This Agreement
supersedes all previous agreements, negotiations, or
communications between the Employee and this Company with
respect to the subject matter hereof, and contains the
complete and exclusive expression of the understanding
between the parties. This Agreement cannot be amended,
modified, or supplemented in any respect except by a
subsequent written agreement entered into by both
parties.
6
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<PAGE> 57
14. NOTICE. Any notice required or permitted to be given
under this Agreement shall be in writing and personally
delivered or sent by Federal Express or other nationally
recognized overnight delivery service, postage pre-paid,
and addressed as follows:
To the Company:
Romac International, Inc
120 W. Hyde Park Place
Suite #120
Tampa, Florida 33606
Attn: Howard W. Sutter, Vice President
To the Employee:
Micahel H. Greenberg
964 Durlston Road
Redwood City, California 94062
15. COSTS AND EXPENSES. In the event either party breaches its
performance obligations under this Agreement, the breaching
party shall be responsible for costs and expenses (including
legal fees) of the non-breaching party in any litigation or
action in which the non-breaching party prevails.
16. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
ROMAC INTERNATIONAL, INC.
By:
--------------------------------------
Howard W. Sutter, Vice President
Michael H. Greenberg
--------------------------------------
7
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<PAGE> 58
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This is an Employment and Noncompetition Agreement (the "Agreement"), dated as
of September 1, 1997 between ROMAC INTERNATIONAL, INC., a Florida corporation
(the "Company") and MARINA EISENZIMMER (the "Employee").
BACKGROUND
Simultaneously with the execution of this Agreement, the Company is acquiring
substantially all of the assets of Sequent Associates, Inc. (the "Seller"). The
Employee has been a shareholder and key employee of the Seller. The Company
wishes to retain the Employee's services in connection with its acquisition of
the Seller's business and to obtain certain non-compete and non-disclosure
protections from the Employee. The Employee is willing to accept such employment
on the terms and conditions set forth herein.
Accordingly, the parties agree as follows:
TERMS
1. EMPLOYMENT. The Company agrees to employ the Employee,
and the Employee hereby accepts such employment, upon the
terms and conditions set forth in the Agreement.
2. TERM. Subject to the provisions for termination contained in
Section 6, the term of employment under this Agreement shall
be for a period of thirteen months commencing as of September
1, 1997, and ending October 31, 1998.
3. DUTIES. The Employee shall be engaged as a full-time
employee in the position of Information Technology
Division Vice-President. The Company shall not reduce
the dignity, responsibility, authority, importance or
scope of such position during the term of this Agreement.
The Employee shall perform substantially the same duties
as he performed with Seller prior to the acquisition of
Seller's assets by the Company and such other duties as
may be reasonably assigned to him by the Company and
accepted by the Employee, which duties shall be
consistent with a senior management position.
4. COMPENSATION.
(a) As compensation for services rendered by the
Employee to the Company, the Company shall pay the
Employee a salary of $67,500.00 per year
PAGE 8 OF 14
<PAGE> 59
("Salary"), payable in equal semi-monthly
installments of $2,812.50 per installment.
(b) The Company, at its expense less any Employee
contribution required by Company from time to time,
agrees to provide to the Employee and his family
the comprehensive health, medical, and dental
insurance coverage in effect from time to time at
the Company during the Employee's employment,
unless Employee decides not to obtain any or all of
such benefits from Company. The Employee shall be
entitled to participate in any incentive stock
option, employee benefit, or other plans (including
the Company's 401 (k) or deferred compensation
plan) as defined by the Company.
(c) The Company shall reimburse the Employee on a
monthly basis for all business expenses reasonably
incurred by the Employee in the performance of his
duties under this Agreement in accordance with
Company guidelines; provided, however, that the
Employee shall furnish to the Company an itemized
list of receipts and invoices in substantiation of
such expenditures. The Company agrees that any
trips that Company requires Employee to make to the
Company's headquarters in Tampa, Florida shall be
by business class airline service.
5. VACATION. During the term of this Agreement, the Employee
shall be entitled to take four weeks paid vacation per year,
in addition to recognized national holidays.
6. TERMINATION.
(a) The Employee's employment hereunder may be
terminated at any time by:
(i) mutual written agreement;
(ii) the death of the Employee; or
(iii) action of the Company for Cause,
as defined in Subsection 6(c).
(b) The Company agrees to provide Employee 30 days
written notice and an opportunity to cure any event
which is deemed a termination for Cause under
Subsection 6(c) hereof within such 30-day cure period
prior to the effective date of a termination by the
Company for Cause pursuant to Subsection 6(a)(iii)
(c) For purposes of this Agreement, termination for
"Cause" shall mean:
2
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<PAGE> 60
(i) The failure of the Employee to
perform his duties under this Agreement;
(ii) The repetitive or material violation
by the Employee of the Company's written
policies and procedures;
(iii) The failure of the Employee to follow
the lawful and ethical written instructions
of the Company in a timely manner;
(iv) The failure of the Employee to report
to work for the Company for more than three
(3) consecutive business days other than as
a result of vacation, personal days or
illness;
(v) The conviction or plea agreement of
the Employee of a felony;
(vi) The admitted or proven theft or
embezzlement by the Employee of Company
funds; or
(vii) The Employee's abandonment of his
employment.
7. NON-COMPETITION AND NON-DISCLOSURE.
(a) The Employee acknowledges that in the course of his
employment hereunder, he will obtain knowledge of
confidential matters essential to the business and
competitive position of the Company, including,
without limitation, customer and candidate lists,
business strategies, financial information, and
trade secrets that could unfairly disadvantage the
Company were the Employee to engage in business
activities competitive with the Company.
(b) The Employee therefore agrees that he shall not, at
any time during his employment hereunder and for a
period of two years thereafter, accept employment
as an officer, director or employee of, or be or
become the owner of 10% or more of the outstanding
equity interest of, or otherwise consult with or
participate in the business of, any entity engaged
in business competitive with that of the Company,
within 100 miles of any location of the Company in
which the employee works or has supervisory
responsibility over. This covenant not to compete
is not be interpreted to restrict or prohibit
Employee in: (i) providing consulting services to
non-staffing companies; (ii) providing in its
3
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<PAGE> 61
individual capacity retained search services for
senior management level engineering personnel in the
information technology or engineering areas as long
as such services are not provided for any prior
Customer of Sequent Associates, Inc. (the "Seller");
(iii) pursuing business opportunities that offer job
advertisement through the Internet or other mass
distribution media; or (iv) providing supplemental
contracting staffing personnel on a temporary or
permanent basis for any types of profession that have
not been provided by Seller to its Customers. For
purposes of this subparagraph, the term "Customer"
means any customer or client of the Seller within one
(1) year prior to the effective date of this
Agreement. For the purposes of this Agreement,
Employee acknowledges and agrees that business
competitive with that of Company shall include any
business that provides for the placement of an
employee or independent contractor information
technology consultants or engineering consultants to
clients and any other lines of business of Company
for which Company has assigned responsibilities to
the Employee and Employee has agreed to perform any
such responsibilities on behalf of Company.
(c) The Employee recognizes and acknowledges that all
records, documents, customer and candidate lists,
referral sources, financial information, trade
secrets, methods, techniques, processes, marketing
and acquisition strategies and plans, intellectual
property (regardless of whether patentable or
copyrightable), formulas, computer print-outs, and
other information of any kind, whether or not
complete and whether or not reduced to writing
(collectively, the "Confidential Information"),
obtained by the Employee with regard to the Company
(or its affiliates, employees, principals,
customers, or business associates) during the
course of the Employee's employment, and not
generally known in the public domain, constitute
valuable, special, and unique and proprietary
assets of the Company's business. The Employee
agrees that during the Employee's employment
hereunder, and following the termination of the
Employee's employment, whether the termination
shall be voluntary or involuntary, or for Cause, or
whether the termination is solely due to the
expiration of the term of this Agreement, the
Employee will not at any time, directly or
indirectly disclose, disseminate, or publish any
Confidential Information to or for any other person
4
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<PAGE> 62
group, firm, corporation, or other entity, or utilize
the same for any reason or purpose whatsoever other
than (i) for the benefit and at the request of the
Company, (ii) as may be required by law, or (iii) in
connection with obtaining advice from the Employee's
legal counsel. Upon termination of this Agreement, or
at any time upon the request of the Company, the
Employee shall promptly deliver to the company all
memoranda, notes, records, reports, manuals,
drawings, lists, formulas, and other documents (and
all copies thereof) relating to the business of the
Company and all property associated therewith, then
possessed or under the control of the Employee.
(d) The Employee further agrees that during the
Employee's employment hereunder and following the
termination of the Employee's employment, whether
the termination shall be voluntary or involuntary,
for Cause, or whether the termination is solely due
to the expiration of the term of this Agreement,
the Employee will not, in any manner or at any
time, solicit or encourage any person, firm,
corporation, or other entity that is a customer,
business associate, or referral source of the
Company, and/or other employees of the Company, to
cease doing business or terminate their employment
with the Company.
(e) If any covenant or provision contained in this
section 7, is found by a court of competent
jurisdiction to be unreasonable in duration,
geographical scope, or other character of
restriction, the covenant or provision shall not be
rendered unenforceable thereby, but rather the
duration, geographical scope, or deemed
automatically reduced or modified with retroactive
effect to the extent necessary to render such
covenant or provision enforceable, and such
covenant or provision shall be enforced as
modified.
(f) The parties acknowledge and agree that damages in
the event of a breach of the provisions of
Section 7 by the Employee, though great and
irreparable, would be difficult to ascertain, and
therefore the Company, in addition to and without
limiting any other remedy or right to an injunction
or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and the
Employee hereby waives any and all defenses he may
5
PAGE 12 OF 14
<PAGE> 63
have on the ground of inappropriateness of any such
equitable relief.
8. ASSIGNMENT, BINDING EFFECT. The Company may not assign
its rights or delegate its duties hereunder without the
Employee's prior written consent, except in connection
with a merger or acquisition pursuant to which the
acquiring entity assumes the Company's obligation
hereunder. The Employee may not delegate his duties or
assign his rights hereunder, without the Company's prior
written consent. This Agreement shall inure to the
benefit of and be binding upon the Company's permitted
successors and assigns, and shall inure to the benefit of
and be binding upon the Employee's heirs, distributees
and personal representatives.
9. SEVERABILITY. If any provision of this Agreement is held
to be invalid, illegal, or unenforceable, in whole or in
part, such invalidity shall not affect any otherwise
valid provision, and all other valid provisions shall
remain in full force and effect.
10. COUNTERPARTS; FACSIMILE COUNTERPARTS. This Agreement may
be executed in two or more counterparts and by facsimile
transmission of signed counterparts, each of which shall
be deemed an original, and all of which together shall
constitute one document.
11. TITLES. The titles and headings preceding the text of
the sections of this Agreement have been inserted solely
for convenience of reference and do not constitute a part
of this Agreement or affect its meaning, interpretation,
or effect.
12. WAIVER. The failure of either party to insist in any one or
more instances upon performance of any terms or conditions of
this Agreement shall not be construed as a waiver of future
performance of any such term, covenant, or condition, and the
obligations of either party with respect to such term,
covenant, or condition shall continue in full force and
effect.
13. ENTIRE AGREEMENT; MODIFICATION. This Agreement
supersedes all previous agreements, negotiations, or
communications between the Employee and this Company with
respect to the subject matter hereof, and contains the
complete and exclusive expression of the understanding
between the parties. This Agreement cannot be amended,
modified, or supplemented in any respect except by a
subsequent written agreement entered into by both
parties.
6
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<PAGE> 64
14. NOTICE. Any notice required or permitted to be given
under this Agreement shall be in writing and personally
delivered or sent by Federal Express or other nationally
recognized overnight delivery service, postage pre-paid,
and addressed as follows:
To the Company:
Romac International, Inc
120 W. Hyde Park Place
Suite #120
Tampa, Florida 33606
Attn: Howard W. Sutter, Vice President
To the Employee:
Marina Eisenzimmer
356 Carrera Drive
Redwood City, California 94941
15. COSTS AND EXPENSES. In the event either party breaches its
performance obligations under this Agreement, the breaching
party shall be responsible for costs and expenses (including
legal fees) of the non-breaching party in any litigation or
action in which the non-breaching party prevails.
16. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of
California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
ROMAC INTERNATIONAL, INC.
By:
---------------------------------
Howard W. Sutter, Vice President
------------------------------------
Marina Eisenzimmer
7
PAGE 14 OF 14
<PAGE> 65
EXHIBIT "J"
[BERLINER COHEN LETTERHEAD]
September ___, 1997
Romac International, Inc.
120 West Hyde Park Place, Suite 120
Tampa, Florida 33606
Re: Legal Opinion
Gentlemen:
We have acted as counsel to Sequent Associates, Inc. ("Seller") in
connection the execution and delivery of an Asset Purchase Agreement, dated as
of September 1, 1997 (the "Agreement"), between the Seller and Romac
International, Inc. (the "Buyer") and the shareholders of Seller.
We are delivering this opinion pursuant to Section 7(a) (xi) of the
Agreement. Unless otherwise defined in this letter, capitalized terms used in
this letter have the meanings set forth in the Agreement.
This letter is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this letter should be read in
conjunction therewith.
As used in this opinion, the term "knowledge" means the conscious
awareness of facts or other information by the individual signing this opinion
or any lawyer in this firm who had actual involvement in preparing this opinion;
however, except as otherwise expressly indicated, we have not undertaken any
independent investigation to determine the accuracy of such facts or
<PAGE> 66
Romac International, Inc.
September ___, 1997
information, and any limited inquiry undertaken by us during the preparation of
this opinion letter should not be regarded as such an investigation. No
inference as to our knowledge of any such matters should be drawn from the fact
of our representation of Seller.
With respect to factual matters underlying the opinions expressed below,
we have relied upon a certificate of an officer of Seller, certificates of
public officials, and the representations and warranties of Seller and Seller's
shareholders contained in this Agreement.
The Law (defined in the Accord) covered by the opinions expressed below
is limited to the Law of the State of California and the federal laws of the
United States, and we assume no responsibility as to the applicability of the
Law of any other jurisdiction to the subject transaction or the effects of any
such Law thereon. We have assumed for purposes of the Remedies Opinion (defined
in the Accord) included in Section 3 of this letter that the Closing Documents
are governed by California law.
Based upon and subject to the foregoing, we are of the opinion that:
1. Seller is a corporation organized and validly existing under the
laws of the State of California, and Seller has the corporate power to carry on
its business as now being conducted.
2. Seller has the requisite corporate power and authority to execute
and deliver the Agreement and the Escrow Agreement, Assumption Agreement and
Bill of Sale which Seller is required to execute and deliver to Buyer at Closing
(the "Closing Documents") and to consummate the transactions contemplated
thereby. The execution delivery and performance of the Closing Documents by
Seller will not conflict with the Articles of Incorporation or Bylaws of Seller,
or, to our knowledge, except as set forth in Section 3(c) of the Disclosure
Schedule, result in a breach of, or default under, any material instrument or
agreement to which Seller is a party or by which its assets are bound. The
execution and delivery of each Closing Documents and the performance of the
transactions contemplated thereby have been duly authorized and approved by all
requisite corporate action on the part of Seller.
3. Each Closing Document to which Seller is a party has been duly
executed and delivered on behalf of Seller and represents a valid and binding
obligation of Seller enforceable against it in accordance with its terms;
provided, however, that this Remedies Opinion is subject to the qualification
that certain provisions of the Closing Documents may be unenforceable,
including, without limitation, choice-of-law, non-competition, waiver,
injunction, specific performance, forum selection and consent to jurisdiction
provisions, but such enforceability will not, subject to the other exceptions,
qualifications and limitations applicable to the Remedies Opinion, render the
Agreement or other Closing Documents invalid as a whole or substantially
interfere with the realization of the principal benefits provided thereby.
4. To our knowledge, no consent, license, authorization or approval
of, or filing with, any person or entity (including, without limitation, any
governmental authority) is necessary or required in connection with the
execution, delivery or performance of the
-2-
<PAGE> 67
Romac International, Inc.
September __,1997
Agreement and the transactions contemplated thereunder, except for consents,
licenses, authorizations, approvals and filings referred to or disclosed in the
Agreement.
5. We hereby confirm to you that, to our knowledge, there are no suits
or proceedings at law or in equity (including proceedings by or before by
court, arbitrator, governmental or administrative commission, board, bureau or
other administrative agency) pending or threatened by or against or involving
Seller or against any of its properties, existence or revenues, except as may
be set forth in Section 3(a) of the Disclosure Schedule.
This opinion is furnished to you solely for your benefit and may not be
delivered to or relied upon by any other person without our prior written
consent.
Very truly yours,
BERLINER COHEN
-3-
<PAGE> 68
EXHIBIT K
As of September 1, 1997
Sequent Associates, Inc.
Michael H. Greenberg and
Marina Eisenzimmer
964 Durlston Road
Redwood City, California 94062
Ladies and Gentlemen:
We have acted as counsel to Romac International, Inc., a Florida
corporation (the "Company"), in connection with the execution and delivery of an
Asset Purchase Agreement, dated as of September 1, 1997 (the "Agreement"),
between the Company, Sequent Associates, Inc., a California corporation
("Seller"), and Michael H. Greenberg and Marina Eisenzimmer (collectively, the
"Shareholders").
We are delivering this opinion pursuant to Section 7(b)(ix) of the
Agreement. Unless otherwise defined in this letter, capitalized terms used in
this letter have the meanings set forth in the Agreement.
This letter is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). As a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other limitations, all as
more particularly described in the Accord, and this letter should be read in
conjunction therewith.
As used in this opinion, the term "knowledge" means the conscious
awareness of facts or other information by the individual signing this opinion
or any lawyer in this firm who has had actual involvement in preparing this
opinion.
With respect to factual matters underlying the opinions expressed
below, we have relied upon representations from an officer of the Company, as
set forth in Attachment 1 hereto.
The law covered by the opinions expressed below is limited to the laws
of the State of Florida and the federal laws of the United States, and we assume
no responsibility as to the applicability of the law of any other jurisdiction
to the subject transaction or the effects of such laws thereon.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation organized under the laws of
Florida and its status is active.
2. The Company has the requisite corporate power and authority to
execute and deliver the Agreement and other documents the Company is required
thereby to execute and deliver to the Seller or the Shareholders at Closing (the
"Closing Documents") and to consummate the transactions contemplated thereby.
The execution, delivery, and performance of the Closing Documents by the Company
will not conflict with, or result in a breach of, the Articles of Incorporation
or Bylaws of the Company, or, to our knowledge, any material instrument or
agreement to which the Company is a party or by which its assets
<PAGE> 69
are bound. The execution and delivery of each Closing Document and the
performance of the transactions contemplated thereby have been duly authorized
and approved by all requisite corporate action on the part of the Company.
3. Each Closing Document to which the Company is a party has been duly
executed and delivered on behalf of the Company and represents a valid and
binding obligation of the Company, enforceable against it in accordance with its
terms.
4. To our knowledge, no consent, license, authorization or approval of,
or filing with, any person or entity (including, without limitation, any
governmental authority) is necessary or required in connection with the
execution, delivery or performance of the Agreement and the transactions
contemplated thereunder, except for consents, licenses, authorizations,
approvals and filings referred to or disclosed in the Agreement.
5. To our knowledge, there are no suits or proceedings at law or in
equity (including proceedings by or before any court, arbitrator, governmental
or administrative commission, broad, bureau or other administrative agency)
pending or threatened by or against or involving the Company which, if adversely
determined, would have an adverse effect on the properties, assets, business or
condition, financial or otherwise, of the Company or which would prevent the
Company from consummating the transactions contemplated by the Closing
Documents.
This opinion is furnished to you solely for your benefit and may not be
delivered to or relied upon by any other person without our prior written
consent.
Very truly yours,
HOLLAND & KNIGHT LLP
David R. Singleton
<PAGE> 70
ATTACHMENT 1
FACTUAL CERTIFICATE
The undersigned person is supplying this Certificate to Holland &
Knight LLP to permit Holland & Knight LLP to deliver an opinion of counsel in
connection with the closing of the transactions contemplated by an Asset
Purchase Agreement dated as of September 1, 1997 (the "Agreement"), among Romac
International, Inc. (the "Company"), Sequent Associates, Inc., Michael H.
Greenberg, and Marina Eisenzimmer. The undersigned person is delivering the
representations and warranties set forth below with the understanding that
Holland & Knight LLP intends to rely upon such representations and warranties in
delivering its opinion.
1. The execution, delivery, and performance of the Agreement and the
other documents executed in connection therewith (the "Closing Documents") by
the Company will not conflict with, or result in a breach of, the Articles of
Incorporation or Bylaws of the Company, or any material instrument or agreement
to which the Company is a party or by which its assets are bound. The execution
and delivery of each Closing Document and the performance of the transactions
contemplated thereby have been duly authorized and approved by all requisite
corporate action on the part of the Company.
2. No consent, license, authorization or approval of, or filing with,
any person or entity (including, without limitation, any governmental authority)
is necessary or required in connection with the execution, delivery or
performance of the Agreement and the transactions contemplated thereunder,
except for consents, licenses, authorizations, approvals and filings referred to
or disclosed in the Agreement.
3. There are no suits or proceedings at law or in equity (including
proceedings by or before any court, arbitrator, governmental or administrative
commission, broad, bureau or other administrative agency) pending or threatened
by or against or involving Company which, if adversely determined, would have an
adverse effect on the properties, assets, business or condition, financial or
otherwise, of Company or which would prevent Company from consummating the
transactions contemplated by the Closing Documents.
ROMAC INTERNATIONAL, INC.
By:
--------------------------------
Howard W. Sutter, Vice President
<PAGE> 71
The disclosure schedules to this Agreement have been omitted pursuant
to Item 601(b)(2) of Regulation S-K. Romac International, Inc. agrees to
furnish these schedules to the Commission upon request.
