EXHIBIT 2.1
FORM OF
REORGANIZATION AND SPIN-OFF AGREEMENT
BETWEEN
ACCUSTAFF INCORPORATED
AND
STRATEGIX SOLUTIONS, INC.
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
1.01 Definitions.............................................. 1
THE RESTRUCTURINGS
2.01 Capitalization of Strategix.............................. 5
2.02 Certain Transactions..................................... 5
2.03 Other Agreements......................................... 10
2.04 Strategix Board.......................................... 10
2.05 Certain Company Agreements............................... 10
ARTICLE III
THE FIRST SPIN-OFF
3.01 The First Spin-Off....................................... 11
3.02 Timing of the First Spin-Off............................. 11
3.03 Mechanics of the First Spin-Off.......................... 11
ARTICLE IV
THE OFFERING
4.02 Registration and Listing................................. 11
ARTICLE V
THE SECOND SPIN-OFF
5.01 The Second Spin-Off...................................... 12
5.02 Timing of the Second Spin-Off............................ 12
5.03 Mechanics of the Second Spin-Off......................... 12
5.04 Conditions to Obligations................................ 13
ARTICLE VI
RELEASES AND INDEMNIFICATION
6.01 Mutual Release, Etc...................................... 14
6.02 Notices to Third Parties................................. 14
6.03 Survival of Agreements and Representations and Warranties 15
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6.04 Indemnification.......................................... 15
6.05 Procedure for Indemnification for Third Party Claims..... 17
6.06 Remedies Cumulative...................................... 18
ARTICLE VII
INSURANCE
7.01 Policies and Rights Included Within Strategix Business... 19
7.02 Post-Effective Date Claims............................... 19
7.03 Administration; Other Matters............................ 20
7.04 Agreement for Waiver of Conflict and Shared Defense...... 21
7.05 Cooperation.............................................. 21
ARTICLE VIII
EXPENSES
8.01 Expenses................................................. 21
ARTICLE IX
TERMINATION
9.01 Termination.............................................. 22
ARTICLE X
STOCK OPTION
ARTICLE XI
MISCELLANEOUS
10.01 Conditions to Obligations................................ 22
10.02 Complete Agreement....................................... 23
10.03 Expenses................................................. 23
10.04 Governing Law............................................ 23
10.05 Notices.................................................. 23
10.06 Specific Performance..................................... 24
10.07 Amendment and Modification............................... 24
10.08 Successors and Assigns; Third-Party Beneficiaries........ 24
10.09 Counterparts............................................. 24
10.10 Interpretation........................................... 25
10.11 Severability............................................. 25
10.12 References; Construction................................. 25
Schedule 1.01 - Subsidiaries of Strategix
Schedule 2.02(a)(i) - Certain Strategix Business
Schedule 2.06 - External Financings
Schedule 7.03(d) - Deductibles Under Shared Policies
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Exhibit A - Tax Disaffiliation Agreement
Exhibit B - Employee Benefits Agreement
Exhibit C - Services Agreement
Exhibit D - Strategic Marketing and Cross-Selling Agreement
Exhibit E - Transferred Tradenames and Logos
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This REORGANIZATION AND SPIN-OFF AGREEMENT, dated as of _________, 1998
(this "Plan of Reorganization"), is entered into by and between AccuStaff
Incorporated, a Florida corporation (the "Company"), and Strategix Solutions,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
("Strategix").
RECITALS
The Company is a leading provider of business services that include
consulting and strategic staffing services in the areas of information
technology and professional services. Strategix is a leading provider of
business services that include diversified temporary commercial staffing,
training, and outsourcing services. Strategix has been created pursuant to this
Plan of Reorganization. As of the date of this Plan of Reorganization, Career
Horizons, Inc., a wholly owned subsidiary of the Company ("Career Horizons"),
owns all of the issued and outstanding common stock of Strategix. Strategix is
effecting an initial public offering of certain shares of its common stock (the
"Offering"). Prior to the Offering, Career Horizons will distribute all of the
stock of Strategix to the Company and make certain other distributions, as
described herein, designed to qualify as a tax-free reorganization and
distribution within the meaning of Sections 368(a)(1)(D) and 355 of the Internal
Revenue Code of 1986, as amended (the "Code") (the "First Spin-Off"). Upon
completion of the Offering, subject to receipt of a favorable ruling from the
Internal Revenue Service (the "Ruling") or an opinion of counsel, in each case
acceptable as to form and substance to the Company, and subject to certain other
conditions, the Company plans to distribute all of its stock in Strategix pro
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rata to its shareholders and make certain other distributions, as described
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herein, designed to qualify as a tax-free reorganization and distribution within
the meaning of Sections 368(a)(1)(D) and 355 of the Code (the "Second Spin-
Off"). The corporate business purpose of the First Spin-Off and the Second
Spin-Off is to enhance the Offering and the success of both the Strategix
Business (defined below) and the Company Business (defined below).
NOW, THEREFORE, in consideration of the premises and of the respective
covenants and agreements set forth herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. As used in this Plan of Reorganization, the following
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terms shall have the following respective meanings:
1.02 "Affiliate" shall mean, with respect to any person, any other person
controlling, controlled by or under common control with such first person, and
shall
include, without limitation, the officers, directors, general partners and
subsidiary corporations of any person.
"Career Horizons Common Stock" shall mean the common stock, par value $0.01
per share, of Career Horizons.
"Claims Administration" shall mean the processing of claims made under the
Shared Policies, including the reporting of claims to the insurance carriers,
management and defense of claims and providing for appropriate releases upon
settlement of claims.
"Code" shall have the meaning specified in the recitals to this Plan of
Reorganization.
"Company" shall have the meaning specified in the preamble to this Plan of
Reorganization and shall mean any successors by way of merger or otherwise.
"Company Business" shall have the meaning specified in Section 6.04.
"Company Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company.
"Company Group" shall mean the Company and all of the Company Subsidiaries
(but shall not include Strategix and the members of the Strategix Group).
"Effective Date" shall mean the closing date of the initial public offering
of Strategix on a Form S-1 Registration Statement that the SEC has declared
effective.
"Employee Benefits Agreement" shall have the meaning specified in Section
2.03.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"First Spin-Off" shall have the meaning specified in the recitals to this
Plan of Reorganization.
"Form S-1" shall mean the Registration Statement on Form S-1 filed by
Strategix pursuant to this Plan of Reorganization.
"Group" shall mean either the Strategix Group or the Company Group, as the
case may be.
"Indemnified Party" shall have the meaning specified in Section 6.05(a).
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"Indemnifying Party" shall have the meaning specified in Section 6.05(a).
"Insurance Administration" shall mean, with respect to each Shared Policy,
the accounting for (i) premiums, (ii) defense costs, (iii) indemnity payments,
(iv) deductibles and (v) retentions, as appropriate, under the terms and
conditions of each of the Shared Policies; and the reporting to excess insurance
carriers of any losses or claims which may cause the per-occurrence, per claim
or aggregate limits of any Shared Policy to be exceeded, and the distribution of
Insurance Proceeds as contemplated by this Plan of Reorganization.
"Insurance Proceeds" shall mean those monies (i) received by an insured
from an insurance carrier or (ii) paid by an insurance carrier on behalf of an
insured, in either case net of any applicable premium adjustment, deductible,
retention, or cost of reserve paid or held by or for the benefit of such
insured.
"Insured Claims" shall mean those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Shared
Policies, whether or not subject to deductibles, co-insurance, uncollectibility
or retrospectively-rated premium adjustments.
"Liabilities" shall mean all debts, liabilities and obligations, whether
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and whether or not the
same would properly be reflected on a balance sheet.
"Losses" shall have the meaning specified in Section 6.04(a).
"Market Price" of any shares of Common Stock on any date means (i) the
average of the last sale price of such shares on each of the five trading days
on the principal national securities exchange or automated interdealer quotation
system o which such shares are traded or (ii) if such sale prices are
unavailable or such shares are not so traded, the value of such shares on such
date determined in accordance with agreed-upon procedures reasonably
satisfactory to Strategix and the Company.
"Material Adverse Effect on the Company" means a material adverse effect on
the business, assets, properties or operations or financial condition of the
Company or the Company's ability to consummate the transactions contemplated by
this Plan of Reorganization and the other agreements.
"Material Adverse Effect on Strategix" means a material adverse effect on
the business, assets, properties or operations or financial condition of
Strategix or Strategix's ability to consummate the transactions contemplated
by this Plan of Reorganization and the other agreements.
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"Offering" shall have the meaning specified in the recitals to this Plan of
Reorganization.
"Other Agreements" shall have the meaning specified in Section 2.03.
"person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
"Policies" shall mean insurance policies and insurance contracts of any
kind (other than life and benefits policies or contracts), including primary,
excess and umbrella policies, comprehensive commercial general liability
policies, director and officer liability, fiduciary liability, automobile,
aircraft, property and casualty, workers' compensation and employee dishonesty
insurance policies, bonds and self-insurance and captive insurance company
arrangements, together with the rights, benefits and privileges thereunder.
"Record Date" shall have the meaning specified in Section 5.03.
"Registration Statement" shall mean the initial Registration Statement and
all amendments thereto on Form S-1 filed by Strategix with the SEC.
"Required Spin-off Percentage" shall mean at least 80% of the total voting
power and value of the outstanding Capital Stock of Strategix.
"Ruling" shall have the meaning specified in the recitals to this Plan of
Reorganization.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Documents" shall have the meaning specified in Section 6.04(a).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shared Policies" shall mean all Policies, current, past or future to the
extent such Policies are entered into between the date hereof and the Second
Spin-Off Date, that are owned or maintained by or on behalf of the Company or
any member of the Company Group that relate, whether in whole or in part, to the
Strategix Business.
"Second Spin-Off" shall have the meaning specified in the recitals to this
Plan of Reorganization.
"Second Spin-Off Date" shall mean the date as of which the Second Spin-Off
is effective.
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"Stock Option" shall have the meaning specified in Section 10.01.
"Strategix" shall have the meaning specified in the preamble to this Plan
of Reorganization and shall mean any successors by merger or otherwise.
"Strategix Business" shall have the meaning specified in Section 6.04(a).
"Strategix Common Stock" shall mean the common stock, par value $0.01 per
share, of Strategix.
"Strategix Group" shall mean Strategix and those subsidiaries listed on
SCHEDULE 1.01, including any subsidiary transferred to Strategix pursuant to
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Section 2.02.
"Strategix Policies" shall mean all Policies, current or past, which are
owned or maintained by or on behalf of any member of the Company Group, which
relate to the Strategix Business but do not relate to the Company Business.
"Strategix Preferred Stock" shall mean the preferred stock of Strategix.
"Tax Disaffiliation Agreement" shall have the meaning specified in Section
2.03.
"Third Party Claim" shall have the meaning specified in Section 6.05(a).
"Transfer Agent" shall mean SunTrust Bank, Atlanta, Georgia, the transfer
agent for the Company Common Stock.
"Services Agreement" shall have the meaning specified in Section 2.03.
ARTICLE II
THE RESTRUCTURINGS
2.01 Capitalization of Strategix. The authorized capital stock of
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Strategix currently consists of 200,000,000 shares of Strategix
Common Stock, of which ______ shares are issued and outstanding and
owned beneficially and of record by Career Horizons and 20,000,000
shares of Strategix Preferred Stock, none of which shares have been
issued or are outstanding.
2.02 Certain Transactions.
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(a) On or prior to the First Spin-Off the following transactions shall
occur:
(i) Any and all intercompany debt existing between the Company Group
and the Strategix Group shall be cancelled, repaid, disposed of, or
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otherwise adjusted so that prior to the First Spin-Off no intercompany debt
will exist between the Company Group and the Strategix Group; any and all
necessary corporate actions will be taken to accomplish this result.
(ii) modis, inc., ("modis"), will reconstitute the following entities,
which were liquidated during 1998, by creating six wholly owned
corporations and contributing the assets formerly owned by the following
entities to those corporations:
(1) Contract Staffing Group, Inc.
(2) Professionals for Computing, Inc.
(3) Programming Enterprises, Inc.
(4) TSG Professional Services, Inc.
(5) Why Systems, Inc.
(6) Zeitech Inc.;
(iii) modis will form a wholly owned corporation and contribute to
such corporation the assets formerly held by certain corporations
previously merged into modis.
(iv) modis will contribute the business assets formerly held by
▇▇▇▇▇▇▇▇ Group Inc. ("▇▇▇▇▇▇▇▇") and HJM Consulting, Inc. ("HJM") to Actium
Technologies, Inc. ("Actium"), a wholly owned subsidiary of modis;
(v) modis will contribute its limited partnership interest in each of
modis of Georgia L.P. and modis of Pennsylvania, L.P., and the stock of
each of the following corporations to Actium:
(1) the modis subsidiaries formed pursuant to paragraph (i)
hereof.
(2) the modis subsidiary formed pursuant to paragraph (ii)
hereof.
(3) modis of Georgia, Inc.
(4) modis of Pennsylvania, Inc.
(5) ▇▇▇▇▇▇ IT Co.
(6) Executives Monitor, Inc.
(7) Computer Systems Development of America, Inc.
(8) Actium Tools, Inc.
(9) Actium Corporation.
(10) AccuStaff/Computer Action, Inc;
(vi) The Company will contribute the assets of TRAC, a division of the
Company, and the stock of each of the following companies, to modis:
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(1) Manchester, Inc.
(2) Special Counsel, Inc.
(3) LIT, Inc.
(4) Project Professionals, Inc.
(5) Amicus Staffing, Inc.
(6) Keystone Consulting Group, Inc.
(7) AMPL Incorporated
(8) Scientific Staffing
(9) Entegee, Inc.;
(vii) modis will contribute the assets of TRAC, a division of modis,
and the stock of each of the following corporations to Actium:
(1) Manchester, Inc.
(2) Special Counsel, Inc.
(3) LIT, Inc.
(4) Project Professionals, Inc.
(5) Amicus Staffing, Inc.
(6) Keystone Consulting Group, Inc.
(7) AMPL Incorporated
(8) Scientific Staffing
(9) Entegee, Inc;
(viii) modis will merge with and into Career Horizons, with Career
Horizons surviving, but changing its name to modis, pursuant to a plan and
agreement of merger;
(ix) Career Horizons will contribute the stock of the following
companies to PL Services, Inc. ("PL Services"):
(1) The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group
(2) CHI Financial Services Inc.
(3) Century Temporary Services, Inc.
(4) Dial A Temporary, Inc.
(5) Temps & Co. Services, Inc.
(6) Temp Force, Inc.
(7) CAREER HORIZONS Payroll Services, Inc.
(8) Career Horizons Government Services, Inc.
(9) Staff-Additions, Inc.
(10) Staffing Resources (SC) Inc.
(11) CHI Services, Inc.
(12) Health Force, Inc.
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(x) Strategix will draw down under its $300 million credit facility
from NationsBank, N.A. an amount not to exceed $150 million.
(xi) Career Horizons will contribute the stock of PL Services to
Strategix in exchange for (i) the deemed distribution of Strategix stock to
Career Horizons and (ii) the cash drawn down by Strategix under its $300
million credit facility from NationsBank, N.A.
(b) On or prior to the Effective Date, or as soon as reasonably practicable
thereafter, the following transactions shall occur:
(i) AccuStaff LP-2, Inc. ("LP-2") will distribute all of its assets to
the Company in complete liquidation.
(ii) The Company will create two wholly owned corporations ("Placers
LP, Inc." and "Accounting Principals LP, Inc.").
(iii) The Company will contribute the limited partnership interest in
Placers to Placers LP, Inc. and the limited partnership interest in
Accounting Principals to Accounting Principals LP, Inc.
(iv) AccuStaff GP, Inc. ("GP") will create two wholly owned
corporations ("AccuStaff ▇▇ ▇▇, Inc." and "Accounting Principals GP,
Inc.").
(v) GP will contribute the general partnership interests in Excel and
Placers to AccuStaff ▇▇ ▇▇, Inc. and the general partnership interest in
Accounting Principals to Accounting Principals GP, Inc.
(vi) GP will distribute all of its assets to the Company in complete
liquidation.
(vii) The Company will contribute all of the stock of Accounting
Principals GP, Inc. and Accounting Principals LP, Inc.
(viii) CHI Temporaries, Inc. ("CHITS") will redeem the stock of CHITS
held by certain of its shareholders in exchange for their proportionate
share of the assets of CHITS.
(ix) AccuStaff Licensing Corp., a wholly owned corporation of the
Company, will distribute to Company certain trade names.
(x) The Company will contribute all of the stock of the following
entities to Strategix:
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(1) HR Management Services, Inc.
(2) Firstaff, Inc.
(3) Staffing Resources, Inc.
(4) ▇▇▇▇▇▇▇ Professional Employments Specialists, Inc.
(5) Temps America Inc.
(6) CGS Services, Inc.
(7) M&L Management Services, Inc.
(8) Office Specialists, Inc.
(9) Training Delivery Services, Inc.
(10) MindSharp Learning Centers, Inc.
(11) [People Systems, Inc.]
(12) AccuStaff LP-I, Inc.
(10) AccuStaff GP-II , Inc.
(xi) The Company will contribute to Strategix, any and all other
assets, properties, claims and rights, whether real or personal, tangible
or intangible, owned by the Company Group, relating primarily to the
Strategix Business in exchange for the net proceeds received by Strategix
from the Offering plus the difference between $150 million and the amount
distributed to the Company pursuant to Section 2.02(a)(xi).
(xii) The Company will assign, transfer and convey to Strategix all
of the Company Group's right, title and interest in and to the "AccuStaff"
name and logo and the other names and logos and related tradenames and
marks listed on EXHIBIT E attached hereto.
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(xiii) The Company will assign, transfer and convey, or cause to be
assigned, transferred or conveyed, to Strategix, or the appropriate member
of the Strategix Group designated by Strategix, all of the Company's or
such member of the Company Group's respective right, title and interest to
the assets, contracts, permits, licenses, authorizations and agreements
listed or described on SCHEDULE 2.02(A)(I).
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(c) In addition to the transactions described in Section 2.02(a) and (b),
the Company and its Affiliates may take any and all actions, enter into any and
all agreements, or undertake any transactions, whether or not described in
Section 2.02(a) or (b), to effectuate the purposes of this Plan of
Reorganization so as to accomplish the First Spin-Off and the Second Spin-Off.
(d) Neither the Company nor any of its Affiliates are obligated or required
to undertake the transactions described in Section 2.02(a) or (b) if, at the
time such transactions are to be engaged in, such transactions would not be
consistent with, necessary, or helpful to accomplish the purposes of this Plan
of Reorganization,
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or would conflict or not be consistent or compatible with other transactions or
agreements undertaken pursuant to this Plan of Reorganization.
(e) Strategix shall assume, pay, perform and discharge all Liabilities
arising on or after the Effective Date in connection with or with respect to the
Strategix Business. However, the Company shall be responsible for, pay, perform
and discharge all Liabilities that arose prior to the Effective Date in
connection with or with respect to the Strategix Business.
(f) To the extent that any transfers or actions contemplated by this
Article II shall not have been consummated on or prior to the Effective Date,
the parties shall cooperate to effect such transfers as promptly following the
Effective Date as shall be practicable. In the event that any such transfer of
the Strategix Business, including the assumption of all Liabilities arising from
or with respect to such Strategix Business to the extent provided for in Section
2.02(b), has not been consummated, from and after the Effective Date the Company
shall hold such the Strategix Business in trust for the use and benefit of
Strategix (at Strategix's expense) upon receipt of an undertaking from Strategix
to assume the Liabilities relating to such transfer, and take such other actions
as may be reasonably requested in order to place Strategix, insofar as is
reasonably possible, in the same position as would have existed had such
Strategix Business been transferred and such Liabilities assumed as contemplated
hereby.
2.03 Other Agreements. On or prior to the Effective Date, the Company and
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Strategix shall enter into the Tax Disaffiliation Agreement, substantially in
the form attached hereto as EXHIBIT A (the "Tax Disaffiliation Agreement"), the
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Employee Benefits Agreement, substantially in the form attached hereto as
EXHIBIT B (the "Employee Benefits Agreement"), the Services Agreement,
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substantially in the form attached hereto as EXHIBIT C (the "Services
---------
Agreement"), the Strategix Marketing and Cross-Selling Agreement, substantially
in the form attached hereto as EXHIBIT D (the "Strategix Marketing and Cross
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Selling Agreement") and such other agreements as may be advisable in connection
with the First Spin-Off and the Second Spin-off, including agreements with
respect to restructuring, transfer of assets and assumption of liabilities and
other matters, all such other agreements to be on terms reasonably acceptable to
the Company and Strategix (the Tax Disaffiliation Agreement, the Employee
Benefits Agreement, the Services Agreement, the Strategix Marketing and Cross-
Selling Agreement, and such other agreements being collectively referred to
herein as the "Other Agreements").
2.04 Strategix Board. Prior to the Effective Date, the parties hereto
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shall use reasonable efforts to take all steps necessary so that, effective
immediately after the Effective Date, the Board of Directors of Strategix shall
be comprised of those individuals so named in the Registration Statement.
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2.05 Certain Company Agreements. Section 1.3 of the Strategic Marketing
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and Cross-selling Agreement provides for a procedure to address agreements
entered into by the Company prior to the Second Spin-Off that require provision
of both Company Services and Strategix Services (as defined in the Services
Agreement, "Joint Contracts"). The Company and Strategix shall cooperate and,
if deemed mutually advisable or if required by the terms of the Joint Contracts,
use their reasonable efforts to negotiate separate agreements with the customers
that are parties to the Joint Contracts in order to permit the Company Group and
the Strategix Group to each have the benefits of such agreements after the
Effective Date. After the Second Spin-Off, no intercompany agreements between
the Company Group and the Strategix Group will continue to exist except for the
Tax Disaffiliation Agreement.
ARTICLE III
THE FIRST SPIN-OFF
3.01 The First Spin-Off. Career Horizons will effectuate the First
------------------
Spin-Off by distributing to the Company (i) all of the Strategix stock and (ii)
the cash received from Strategix pursuant to Section 2.02(a)(x) of this Plan of
Reorganization in a transaction intended to qualify as a tax-free reorganization
and distribution under Sections 368(a)(1)(D) and 355 of the Code.
3.02 Timing of the First Spin-Off. Subject to the terms and conditions
----------------------------
hereof, the Board of Directors of Career Horizons shall formally declare the
First Spin-Off and pay it by delivery of certificates for Strategix Common Stock
to the Company. The First Spin-Off shall be deemed to be effective upon
notification by Career Horizons to the Company that the First Spin-Off has been
declared and that Career Horizons will proceed with the First Spin-Off.
3.03 Mechanics of the First Spin-Off. The First Spin-Off shall be
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effected by the distribution to the Company of certificates representing the
number of shares of Strategix Common Stock equal to the number of shares of
Career Horizons Common Stock held by the Company. All shares of Career Horizons
Common Stock delivered in the First Spin-Off shall be duly authorized, validly
issued, fully paid, non-assessable and free of preemptive rights.
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ARTICLE IV
THE OFFERING
4.01 The Offering. On the Effective Date, Strategix will offer to sell
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not more than 20 percent of the Strategix Common Stock to the public.
4.02 Registration and Listing. Prior to the Effective Date:
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(a) Strategix shall prepare and file with the SEC a Registration Statement
on Form S-1, with respect to ______ shares of Strategix Common Stock (the
"Registration Statement"), and shall register the Strategix Common Stock with
the SEC under the Exchange Act. Strategix shall use reasonable efforts to have
the Registration Statement declared effective.
(b) Strategix shall use reasonable efforts to take all such action as may
be necessary or appropriate under state securities and blue sky laws in
connection with the transactions contemplated by this Plan of Reorganization.
(c) Strategix shall prepare, and Strategix shall file and seek to make
effective, an application for the listing of the Strategix Common Stock on the
New York Stock Exchange, or such other exchange or quotations system as
Strategix may determine in its discretion, subject to official notice of
issuance.
(d) The parties hereto shall cooperate in preparing, filing with the SEC
and causing to become effective any other registration statements or amendments
thereto that are necessary or appropriate in order to effect the transactions
contemplated hereby or to reflect the establishment of, or amendments to, any
employee benefit plans contemplated by the Employee Benefits Agreement requiring
registration under the Securities Act or the Exchange Act.
ARTICLE V
THE SECOND SPIN-OFF
5.01 The Second Spin-Off. The Company will effectuate the Second Spin-
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Off by distributing (i) all of its Strategix Common Stock pro rata to the
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shareholders of the Company and (ii) the cash received from Strategix pursuant
to Section 2.02(b)(xi) of this Plan of Reorganization and the cash received from
Career Horizons pursuant to Section 2.02(a)(x) of this Plan of Reorganization to
its creditors in a transaction intended to qualify as a tax-free reorganization
and distribution under Sections 368(a)(1)(D) and 355 of the Code.
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5.02 Timing of the Second Spin-Off. Subject to the terms and conditions
-----------------------------
hereof, the Board of Directors of the Company shall formally declare the Second
Spin-Off and pay it by delivery of certificates for Strategix Common Stock to
the Transfer Agent for delivery to the holders entitled thereto. The Second
Spin-Off shall be deemed to be effective upon notification by the Company to the
Transfer Agent that the Second Spin-Off has been declared and that the Transfer
Agent is authorized to proceed with the Second Spin-Off of the certificates
representing shares of Strategix Common Stock.
5.03 Mechanics of the Second Spin-Off. The Second Spin-Off shall be
--------------------------------
effected by the distribution to each holder of record of the Company Common
Stock, as of the close of the stock transfer books on the record date designated
by, or pursuant to the authorization of, the Board of Directors of the Company
(the "Record Date"), of certificates representing the number of shares of
Strategix Common Stock equal to the number of shares of Company Common Stock
held by such holder. All shares of Strategix Common Stock delivered in the
Second Spin-Off shall be duly authorized, validly issued, fully paid, non-
assessable and free of preemptive rights.
5.04 Conditions to Obligations. Subject to the terms and conditions
-------------------------
hereof, Strategix and the Company will take all reasonable steps necessary and
appropriate to cause all conditions to the Second Spin-Off to be satisfied and
to effect the Second Spin-Off. The Board of Directors of the Company will have
the sole discretion to determine the Second Spin-Off Date at any time commencing
after the Effective Date and receipt of the Ruling. The Company has agreed to
consummate the Second Spin-Off subject to the satisfaction or waiver by it, in
its sole discretion, of the following conditions:
(i) the Ruling shall have been obtained, and shall continue in effect, to
the effect that, among other things, the First Spin-Off and the Second Spin-Off
will each qualify as a tax-free reorganization and distribution within the
meaning of Sections 368(a)(1)(D) and 355 of the Code and the First Spin-Off and
the Second Spin-Off will not result in recognition of any income, gain or loss
for federal income tax purposes to Career Horizons, Strategix, the Company or
the Company's shareholders, and such Ruling shall be in form and substance
satisfactory to the Company, in its sole discretion;
(ii) any material governmental approvals and third party consents necessary
to consummate the First Spin-Off and the Second Spin-Off shall have been
obtained and be in full force and effect;
(iii) no order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Second Spin-Off shall be in effect, and no other event
outside the control of the
-13-
Company shall have occurred or failed to occur that prevents the consummation of
the Second Spin-Off; and
(iv) no other events or developments shall have occurred subsequent to the
Effective Date that, in the sole judgment of the Company, would result in the
First Spin-Off and the Second Spin-Off having a material adverse effect on
Career Horizons, Strategix, the Company or the Company's shareholders.
The Company and Strategix have agreed that, after the Effective Date, none
of the parties will take, or permit any of its Affiliates to take, any action
(i) which, if treated as occurring immediately prior to the First Spin-Off,
would prevent the First Spin-Off from qualifying as a tax-free reorganization
and distribution within the meaning of Sections 368(a)(1)(D) and 355 of the
Code; or (ii) which reasonably could be expected to prevent the Second Spin-Off
from qualifying as a tax-free reorganization and distribution within the meaning
of Sections 368(a)(1)(D) and 355 of the Code. The parties have also agreed to
take any reasonable actions necessary in order for the First Spin-Off and Second
Spin-Off to qualify as a tax-free reorganization and distribution pursuant to
Sections 368(a)(1)(D) and 355 of the Code. Without limiting the foregoing,
after the Offering and prior to the date of the Second Spin-Off, Strategix will
not issue or grant, directly or indirectly, any shares of its capital stock or
any rights, warrants, options or other securities to purchase or acquire
(whether upon conversion, exchange or otherwise) any shares of its capital stock
(whether or not then exercisable, convertible or exchangeable), without the
prior consent of the Company if such issuance or grant would reduce the
Company's ownership of the Strategix Common Stock so that Strategix would not be
controlled by the Company within the meaning of 368(c) of the Code.
ARTICLE VI
RELEASES AND INDEMNIFICATION
6.01 Mutual Release, Etc. Effective upon the Second Spin-Off and except
-------------------
as otherwise specifically set forth in this Plan of Reorganization, each of the
Company and Strategix releases and forever discharges the other, and its
Affiliates, successors and assigns and the officers, directors, employees,
partners, agents and representatives of any of them, of and from all debts,
demands, actions, causes of action, suits, accounts, covenants, contracts,
agreements, damages, and any and all claims, demands and liabilities whatsoever
of every name and nature, both in law and in equity, against such other party or
any of its successors or assigns, that the releasing party has or ever had, that
arise out of or relate to events, circumstances or actions taken by such other
party prior to the Second Spin-Off Date; provided, however, that the foregoing
general release shall not apply to this Plan of Reorganization or the Other
Agreements or the transactions contemplated hereby or thereby and shall not
affect either party's right to enforce this Plan of Reorganization
-14-
or any of the Other Agreements, in each case in accordance with its terms. Each
party understands and agrees that, except as otherwise specifically provided
herein, neither the other party nor any of its Affiliates, successors and
assigns or the officers, directors, employees, partners, agents and
representatives of any of them, in this Plan of Reorganization or any of the
Other Agreements, is representing or warranting to such party in any way as to
the assets, business or liabilities transferred, assumed or licensed as
contemplated hereby or thereby, it being agreed and understood that each party
shall take or keep all of its assets "as is" and that it shall bear the economic
and legal risk that conveyance or licensing of such assets shall prove to be
insufficient or that the title to any assets conveyed or licensed shall be other
than good and marketable and free from encumbrances.
6.02 Notices to Third Parties. The members of the Company Group and the
------------------------
Strategix Group shall cooperate to make all filings and give notice to and use
their reasonable efforts to obtain consents from all third parties that may
reasonably be required to consummate the transactions contemplated by this Plan
of Reorganization and the Other Agreements.
6.03 Survival of Agreements and Representations and Warranties. All
---------------------------------------------------------
covenants, agreements, representations and warranties of each of the Company and
Strategix contained in this Plan of Reorganization shall survive the Second
Spin-Off Date for the duration of any applicable statute of limitations with
respect thereto.
6.04 Indemnification.
---------------
(a) Strategix agrees to indemnify and hold harmless the Company, and its
Affiliates, successors and assigns and the officers, directors, employees,
agents and representatives of any of them, from and against any and all losses,
damages, claims or Liabilities, including reasonable attorneys' fees and
disbursements (collectively "Losses"), arising out of, based upon, or resulting
from (i) the operation of the businesses of, or relating to, Strategix or any
other member of the Strategix Group (the "Strategix Business") (including those
Losses arising due to the failure of Strategix or any other member of the
Strategix Group to pay, perform or otherwise discharge its obligations under
this Plan of Reorganization or arising out of or connected with the Strategix
Business) and (ii) any material breach of any covenant contained in this Plan of
Reorganization or the Other Agreements.
Without limiting the generality of the foregoing, Strategix agrees to
indemnify and hold harmless the Company, its officers, directors, employees,
agents and representatives of any of them, each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, and each of the heirs, executors, successors and assigns of
any of the foregoing, from and against any and all Losses arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement on
-15-
Form S-1 or any other document filed with the SEC in connection with the
transactions contemplated hereby or any preliminary or final form thereof or any
amendment or supplement thereto (collectively, the "SEC Documents") or any
omission or alleged omission to state in any SEC Document a material fact
required to be stated therein or necessary to make the statements made therein
not misleading, but in each case only to the extent such untrue statement or
omission or alleged untrue statement or omission relates to any member of the
Strategix Group or the Strategix Business.
(b) The Company agrees to indemnify and hold harmless Strategix, its
Affiliates, successors and assigns and the officers, directors, partners,
employees, agents and representatives of any of them from and against any and
all Losses arising out of, based upon, or resulting from (i) the operation of
the businesses of, or relating to, the Company or any other member of the
Company Group (the "Company Business") (including those Losses arising due to
the failure of the Company or any other member of the Company Group to pay,
perform or otherwise discharge its obligations under this Plan of Reorganization
or arising out of or connected with the Company Business) or (ii) any material
breach of any covenant contained in this Plan of Reorganization or the Other
Agreements.
Without limiting the generality of the foregoing, the Company agrees to
indemnify and hold harmless Strategix, its officers, directors, partners,
employees, agents and representatives of any of them, each person, if any, who
controls Strategix within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, and each of the heirs, executors, successors
and assigns of any of the foregoing, from and against any and all Losses arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any SEC Document or any omission or alleged omission
to state in any SEC Document a material fact required to be stated therein or
necessary to make the statements made therein not misleading, but in each case
only to the extent such untrue statement or omission or alleged untrue statement
or omission does not relate to any member of the Strategix Group or the
Strategix Business.
(c) The indemnification provided by this Section 6.04 shall not include any
Losses (i) relating to any Tax (as defined in the Tax Disaffiliation Agreement),
which shall be covered exclusively by the Tax Disaffiliation Agreement or (ii)
relating to matters for which indemnification is provided in any of the Other
Agreements, which, in each case, shall be covered exclusively by the applicable
provisions of such agreements.
(d) If any indemnification provided in paragraph (a) or (b) of this Section
6.04 is unavailable for any reason, the parties shall contribute in respect of
the applicable Losses on an equitable basis.
-16-
(e) Any indemnification or contribution pursuant to this Section 6.04 shall
be paid net of the amount of any insurance (other than any insurance paid for by
the applicable indemnitee) or other amounts that would be payable by any third
party to the indemnified party in the absence of this Plan of Reorganization.
The parties hereto expressly agree that no insurer or other third party shall be
(i) entitled to any benefit if such entity would not be entitled to receive such
benefit in the absence of the foregoing indemnification and contribution
provisions, (ii) relieved of the responsibility to pay any claims for which it
is under an obligation to pay or (iii) entitled to any subrogation rights with
respect to any obligation hereunder.
(f) Notwithstanding any other provision hereof to the contrary, this
Section 6.04 shall not be deemed to create any obligation, or expand the scope
of any existing obligation on the part of any party to this Plan of
Reorganization to indemnify or hold harmless such party's own officers,
directors, partners, employee, agents or representatives.
(g) The amount of any indemnifiable Loss shall be (x) increased to take
into account any net Tax cost actually incurred by the Indemnified Party arising
from any payments received from the Indemnifying Party (grossed up for such
increase) and (y) reduced to take account of any net Tax benefit actually
realized by the Indemnified Party arising from the incurrence or payment of any
such indemnifiable Loss. In computing the amount of such Tax cost or Tax
benefit, the Indemnified Party shall be deemed to have recognized all other
items of income, gain, loss, deduction or credit before recognizing any item
arising from the receipt of any payment with respect to an indemnifiable Loss or
the incurrence or payment of any indemnifiable Loss.
6.05 Procedure for Indemnification for Third Party Claims.
----------------------------------------------------
(a) Any person seeking any indemnification provided for under this Plan of
Reorganization (the "Indemnified Party") in respect of, arising out of or
involving a claim made by any person against the Indemnified Party (a "Third-
Party Claim"), shall notify in writing (and to the extent received, deliver
copies of all related notices and documents, including court papers), to the
party from whom indemnification is sought (the "Indemnifying Party") of the
Third-Party Claim within 15 days after receipt by such Indemnified Party of
written notice of the Third-Party Claim; provided, however, that failure to give
such notification (or make such delivery) shall not affect the indemnification
provided hereunder except to the extent that the Indemnifying Party shall have
been actually prejudiced as a result of such failure.
(b) If a Third-Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses (except as provided below), to assume the defense thereof with
counsel selected by the Indemnifying Party and reasonably satisfactory to the
Indemnified Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses (except as provided below) subsequently
incurred by the Indemnified Party in connection with the defense thereof.
Notwithstanding the Indemnifying Party's election to assume the defense of such
Third Party
-17-
Claim, the Indemnified Party shall have the right to employ separate counsel and
to participate in the defense of such action at its own expense; provided,
however, that the Indemnifying Party shall bear the reasonable fees, costs, and
expenses of such separate counsel if (i) the use of counsel chosen by the
Indemnifying Party to represent the Indemnified Party would present such counsel
with a conflict of interest that would preclude such counsel from representing
the Indemnified Party pursuant to legal canons of ethics or other applicable
law; (ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent it within 30 days after
notice to the Indemnifying Party of the institution of such Third Party Claim or
(iii) the Indemnifying Party shall authorize the Indemnified Party to employ
separate counsel at the Indemnifying Party's expense. If the Indemnifying Party
chooses to defend a Third Party Claim, each party hereto shall cooperate in the
defense thereof. Such cooperation shall include the retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party of records
and information which are reasonably relevant to such Third Party Claim, and
making employees available (subject to reimbursement by the Indemnifying Party
of actual expenses incurred therewith) on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. If
the Indemnifying Party chooses to defend any Third Party Claim, the Indemnifying
Party shall have the right to agree to a settlement, compromise or discharge of
such Third Party Claim which by its terms obligates the Indemnifying Party to
pay the full amount of the liability in connection with such Third Party Claim
and releases the Indemnified Party completely in connection with such Third
Party Claim; provided that such settlement, compromise or discharge shall be
subject to the prior written consent of the Indemnified Party, which consent may
not be unreasonably withheld, unless, (A) there is no finding or admission of
any violation of law or any violation of the rights of any person and no effect
on any other claims that may be made against the Indemnified Party, and (B) the
sole relief provided is monetary damages that are paid in full by the
Indemnifying Party. Whether or not the Indemnifying Party shall have assumed the
defense of a Third Party Claim, so long as the Indemnifying Party acknowledges
in writing its obligation to indemnify the Indemnified Party with respect to the
applicable claims, the Indemnified Party shall not admit any liability with
respect to, or settle, compromise or discharge, such Third Party Claim without
the Indemnifying Party's prior written consent, which consent may not be
withheld unless, in the Indemnifying Party's good-faith judgment, such
settlement, compromise or discharge is unreasonable in light of such Third Party
Claim against, and defenses available to, the Indemnified Party.
(c) In no event shall an Indemnifying Party be liable for the fees and
expenses of more than one counsel for all Indemnified Parties in connection with
any one action,
-18-
or separate but similar or related actions, in the same jurisdiction arising out
of the same general allegations or circumstances.
6.06 Remedies Cumulative. The remedies provided in this Article VI
-------------------
shall be cumulative and shall not preclude assertion by any Indemnified Party of
any other rights or the seeking of any other remedies against any Indemnifying
Party; provided, however, that the procedures set forth in Section 6.05 shall be
the exclusive procedures governing any indemnity action brought under this Plan
of Reorganization or otherwise and relating to a Third-Party Claim, except as
otherwise specifically provided in any of the Other Agreements.
ARTICLE VII
INSURANCE
7.01 Policies and Rights Included Within Strategix Business. The
------------------------------------------------------
Strategix Business shall include (i) any and all rights of an insured party
under each of the Shared Policies, subject to the terms of such Shared Policies
and any limitations or obligations of Strategix contemplated by this Article IX,
specifically including rights of indemnity and the right to be defended by or at
the expense of the insurer, with respect to all claims, suits, actions,
proceedings, injuries, losses, liabilities, damages and expenses incurred or
claimed to have been incurred prior to the Effective Date by any party in or in
connection with the conduct of the Strategix Business or, to the extent any
claim is made against Strategix or any member of the Strategix Group, the
conduct of the Company Business, and which claims, suits, actions, proceedings,
injuries, losses, liabilities, damages and expenses may arise out of an insured
or insurable occurrence under one or more of such Shared Policies; provided,
however, that nothing in this clause shall be deemed to constitute an assignment
of such Shared Policies, or any of them, to Strategix, and (ii) the Strategix
Policies.
7.02 Post-Effective Date Claims. If, subsequent to the Effective Date,
--------------------------
any person shall assert a claim against Strategix or any member of the Strategix
Group (including where Strategix or any member of the Strategix Group is a joint
defendant with any person other than a member of the Company Group) with respect
to any claim, suit, action, proceeding, injury, loss, liability, damage or
expense incurred or claimed to have been incurred prior to the Effective Date
in, or in connection with, the conduct of the Strategix Business or, to the
extent any claim is made against Strategix or any member of the Strategix Group
(including where any member of the Strategix Group is a joint defendant with any
person other than a member of the Company Group), in, or in connection with, the
conduct of the Company Business, and which claim, suit, action, proceeding,
injury, loss, liability, damage or expense may arise out of an insured or
insurable occurrence under one or more of the Shared Policies, the Company
shall, at the time such claim is asserted, to the extent any such Policy may
require that Insurance Proceeds thereunder be collected directly by the named
insured
-19-
be deemed to designate, without need of further documentation, Strategix
as the agent and attorney-in-fact to assert and to collect any related Insurance
Proceeds under such Shared Policy, and shall further be deemed to assign,
without need of further documentation, to Strategix any and all rights of an
insured party under such Shared Policy with respect to such asserted claim,
specifically including rights of indemnity and the right to be defended by or at
the expense of the insurer and the right to any applicable Insurance Proceeds
thereunder; provided, however, that nothing in this Section 9.02 shall be deemed
to constitute an assignment of the Shared Policies, or any of them, to
Strategix.
7.03 Administration; Other Matters.
-----------------------------
(a) Except as otherwise provided in Section 7.02 hereof, from and after the
Effective Date, the Company shall be responsible for Insurance Administration
of, and Claims Administration under, the Shared Policies; provided that the
retention of such responsibilities by the Company is in no way intended to
limit, inhibit or preclude any right to insurance coverage for any Insured Claim
of a named insured under such Policies as contemplated by the terms of this Plan
of Reorganization; and provided further that the Company's retention of the
administrative responsibilities for the Shared Policies shall not relieve
Strategix, when submitting any Insured Claim, of its responsibility for
reporting such Insured Claim accurately, completely and in a timely manner or of
Strategix's authority to settle any such Insured Claim within any period
permitted or required by the relevant Policy. The Company may discharge its
administrative responsibilities under this Section 7.03 by contracting for the
provision of services by independent parties. Each of the parties hereto shall
administer and pay any costs relating to defending its respective Insured Claims
under Shared Policies to the extent such defense costs are not covered under
such Policies and shall be responsible for obtaining or reviewing the
appropriateness of releases upon settlement of its respective Insured Claims
under Shared Policies.
(b) Except for Losses that are subject to the indemnification provisions of
Section 7.02, the Company and Strategix shall not be liable to one another for
claims not reimbursed by insurers for any reason not within the control of the
Company or Strategix, as the case may be, including coinsurance provisions,
deductibles, quota share deductibles, self-insured retentions, bankruptcy or
insolvency of an insurance carrier, Shared Policy limitations or restrictions,
any coverage disputes, any failure to timely claim by the Company or Strategix
or any defect in such claim or its processing.
(c) In the event that the aggregate limits on any Shared Policies are
exceeded by the aggregate of outstanding Insured Claims filed by the parties
hereto with respect
-20-
to the period of coverage under such Shared Policy, the parties agree to
allocate the Insurance Proceeds received thereunder based upon their respective
percentage of the total of their bona fide claims that were covered under such
Shared Policy with respect to such coverage period (the "allocable portion of
insurance proceeds"), and any party who has received Insurance Proceeds in
excess of such party's allocable portion of such Insurance Proceeds shall pay to
the other party the appropriate amount so that each party will have received its
allocable portion of such Insurance Proceeds pursuant hereto. Each of the
parties agrees to use reasonable efforts to maximize available coverage under
the Shared Policies, and to take all reasonable steps to recover from all other
responsible parties in respect of an Insured Claim to the extent coverage limits
under a Shared Policy have been exceeded or would be exceeded as a result of
such Insured Claim.
(d) In the event that each party has bona fide claims under any Shared
Policy for which a deductible is payable with respect to the period of coverage
under such Shared Policy, the parties agree that the aggregate amount of the
deductible paid shall be borne by the parties in the same proportion that the
Insurance Proceeds received by each such party with respect to such coverage
period bears to the total Insurance Proceeds received under the applicable
Shared Policy (the "allocable share of the deductible"), and any party that has
paid more than such share of the deductible shall be entitled to receive from
the other party an appropriate amount such that each party has borne its
allocable share of the deductible pursuant hereto. For purposes of this
paragraph 7.03(d), the amount of the relevant deductible under any Shared Policy
shall be that set forth in Schedule 7.03(d) hereto.
----------------
7.04 Agreement for Waiver of Conflict and Shared Defense. In the event
---------------------------------------------------
that Insured Claims of both parties hereto exist relating to the same
occurrence, the parties shall jointly defend and waive any conflict of interest
necessary to the conduct of the joint defense. Nothing in this Article VII
shall be construed to limit or otherwise alter in any way the obligations of the
parties to this Plan of Reorganization, including those created by this Plan of
Reorganization or the Other Agreements, by operation of law or otherwise.
7.05 Cooperation. The parties agree to use their reasonable efforts to
-----------
cooperate with respect to the various insurance matters contemplated by this
Plan of Reorganization.
ARTICLE VIII
EXPENSES
8.01 Expenses. Strategix shall bear all fees and expenses of
--------
accountants and outside counsel to Strategix in connection with the preparation,
review and filing of the Registration Statement, all filing fees, printing and
mailing expenses in connection
-21-
with the Registration Statement, all exchange listing fees with respect to
Strategix Common Stock any fees of transfer agents and registrants in connection
with the Registration Statement, without limitation, all fees and disbursements
of the underwriters if any, relating to the transactions contemplated hereby and
the Other Agreements. The Company shall pay the expenses related to the First
Spin-Off. Whether or not the Second Spin-Off is consummated, each party shall
bear its own respective third-party fees, costs and expenses paid or incurred in
connection with the Second Spin-Off.
ARTICLE IX
TERMINATION
9.01 Termination. This Plan of Reorganization may be terminated at any
------------
time prior to the Second Spin-Off Date by the mutual consent of Strategix and
the Company, or by the Company at any time prior to the Effective Date. In
addition, this Plan of Reorganization will terminate if the Second Spin-Off does
not occur on or prior to December 31, 1999, unless extended by the Company and
Strategix. If this Plan of Reorganization is terminated prior to the Effective
Date, no party hereto (or any of its respective directors or officers) will have
any liability or further obligation to any other party. In the event of any
termination of this Plan of Reorganization on or after the Effective Date, only
the provisions of this Plan of Reorganization that obligate the parties to
pursue the Second Spin-Off, or take, or refrain from taking, actions which would
or might prevent the Second Spin-Off from qualifying as a tax-free
reorganization and distribution under Sections 368(a)(1)(D) and 355 of the Code,
will terminate and the other provisions of this Plan of Reorganization and each
Other Agreement will remain in full force and effect.
ARTICLE X
STOCK OPTION
Strategix hereby grants to the Company a continuing option, transferable to
any of its subsidiaries, to purchase, under certain circumstances, additional
shares of Strategix Common Stock at the Market Price (the "Stock Option"). The
Stock Option may be exercised by the Company on or before the Spin-off Date
simultaneously with the issuance of any equity security of the Company (other
than in the Offering or upon the exercise of the Underwriters' over-allotment
options), with respect to Strategix Common Stock, only to the extent necessary
to maintain the Required Spin-off Percentage.
-22-
ARTICLE XI
MISCELLANEOUS
11.01 Conditions to Obligations.
-------------------------
(a) The obligations of the parties hereto to consummate the Second Spin-Off
are subject to the satisfaction or waiver of each of the following conditions:
(i) The Other Agreements shall have been executed and delivered by
each of the Company and Strategix;
(ii) The Registration Statement shall have become effective under the
Exchange Act;
(iii) The Strategix Common Stock shall have been approved for listing
on the New York Stock Exchange subject to official notice of issuance;
(iv) No governmental authority or regulatory body (including any court
of competent jurisdiction) shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) to
prevent or prohibit the Second Spin-Off; and
(v) All other agreements or conditions set forth and described in
Section 5.04 shall have been satisfied or waived.
(b) Any determination made by the Board of Directors of the Company on
behalf of either party hereto prior to the Second Spin-Off Date concerning the
satisfaction or waiver of any or all of the conditions set forth in this Section
shall be conclusive.
11.02 Complete Agreement. This Plan of Reorganization, the Exhibits and
------------------
Schedules hereto and the agreements and other documents referred to herein,
including the Other Agreements, shall constitute the entire Plan of
Reorganization between the parties hereto with respect to subject matter hereof
(other than this Plan of Reorganization and the Schedules and Exhibits thereto)
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter.
11.03 Expenses. Intentionally Omitted.
--------
-23-
11.04 Governing Law. This Plan of Reorganization shall be governed by
-------------
and construed in accordance with the laws of the State of Florida (other than
the laws regarding choice of laws and conflicts of laws that would apply the
substantive laws of any other jurisdiction) as to all matters, including matters
of validity, construction, effect, performance and remedies.
11.05 Notices. All notices, requests, claims, demands and other
-------
communications that are required or permitted hereunder shall be in writing and
shall be sufficient if delivered in person, by overnight courier, by hand
delivery, telecopied with confirmation of receipt, or sent by registered or
certified mail, postage prepaid, return receipt requested, to the addresses set
forth below, or to such other addresses of which either party shall notify the
other party in accordance with this Section 11.05, and shall be deemed given as
of the time of such delivery.
If to Strategix prior to the Second Spin-Off Date:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section.
11.06 Specific Performance. Each party hereto acknowledges that there is
--------------------
no adequate remedy at law for failure by such party to comply with the
provisions of this Plan of Reorganization and that such failure would cause
immediate harm that would not be adequately compensable in damages, and
therefore each party agrees that its agreements contained herein may be
specifically enforced without the requirement of posting a bond or other
security, in addition to all other remedies available to the parties hereto
under this Plan of Reorganization.
11.07 Amendment and Modification. This Plan of Reorganization may be
--------------------------
amended, modified or supplemented only by a written Agreement signed by the
parties hereto.
-24-
11.08 Successors and Assigns; Third-Party Beneficiaries -. This Plan of
------------------------------------------------- -
Reorganization and all of the provisions hereof shall be binding upon and inure
to the benefit of the parties hereto and their successors and permitted assigns,
but neither this Plan of Reorganization nor any of the rights, interests and
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other party. Except for the provisions of Article VI
relating to indemnities, which are also for the benefit of the applicable
Indemnified Party, this Plan of Reorganization is solely for the benefit of the
parties hereto, and is not intended to confer upon any other persons any rights
or remedies hereunder.
11.09 Counterparts. This Plan of Reorganization may be executed in
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.10 Interpretation.
--------------
(a) The Article and Section headings contained in this Plan of
Reorganization are solely for the purpose of reference, are not part of the
agreement of the parties hereto and shall not in any way affect the meaning or
interpretation of this Plan of Reorganization.
(b) The parties hereto intend that the Second Spin-Off shall be a as a tax-
free distribution within the meaning of Section 355 of the Code, so that no gain
or loss shall be recognized for federal income tax purposes as a result of such
transaction, and all provisions of this Plan of Reorganization shall be so
interpreted.
11.11 Severability. If any provision of this Plan of Reorganization or
------------
the application thereof to any person or circumstance is determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party.
11.12 References; Construction. References to any "Article", "Exhibit",
------------------------
"Schedule" or "Section", without more, are to Articles, Exhibits, Schedules and
Sections to or of this Plan of Reorganization. Unless otherwise expressly
stated, clauses beginning with the term "including" set forth examples only and
in no way limit the generality of the matters thus exemplified.
-25-
IN WITNESS WHEREOF, the parties hereto have caused this Plan of
Reorganization to be duly executed as of the date first above written.
ACCUSTAFF INCORPORATED
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
STRATEGIX SOLUTIONS, INC.
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
-26-
SCHEDULE 1.01
SUBSIDIARIES OF STRATEGIX
People Systems, Inc.
Office Specialists, Inc.
Training Delivery Services, Inc.
MindSharp Learning Centers, Inc.
HR Management Services, Inc.
Firstaff, Inc.
Staffing Resources, Inc.
▇▇▇▇▇▇▇▇ Professional Employment Specialists, Inc.
Temps America, Inc.
CGS Services, Inc.
M&L Management Services, Inc.
AccuStaff LP-1, Inc.
Excel Temporary Services, L.P.
AccuStaff GP, Inc.
The Placers, Ltd.
Placers LP, Inc.
PL Services, Inc.
CHI Financial Services, Inc.
Contemporary Graphics Group, Inc.
EIM Associates, Inc.
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group
Century Temporary Services, Inc.
Dial A Temporary, Inc.
Temps & Co. Services, Inc.
Temps & Co. Franchising Inc.
Temp Force, Inc.
Tempforce Company
CH Payroll Services, Inc.
Career Horizons Government Services, Inc.
Staff-Additions, Inc.
Staffing Resources (SC) Inc.
CHI Services, Inc.
Potomac Personnel Services, Inc.
The Original Tempo Health Power, Inc.
Health Force, Inc.
Healthforce Company
Health Force Operating Corp.
Medi-Force, Inc.
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SCHEDULE 2.02(a)(i)
CERTAIN STRATEGIX BUSINESS
CUSTOMER CONTRACTS WITH THE FOLLOWING ENTITIES:
CitiBank
3M
Bechtel National, Inc.
EDS
BellSouth
Blue Cross/Blue Shield
Chase
Commonwealth of Virginia
State of Florida Department of Transportation
SLS, Inc.
First Union
Fleet & Industrial Supply Center
Prime Co.
SAIC
Syscon
United Services Automobile Association
Varian
Mecklenburg County
Duke Power Company
Nassau County Medical Center
Times Mirror Company
Discovery Communications, Inc.
Scientific-Atlanta, Inc.
NCR Retail Systems Group
CIBA Vision Corporation
First USA
Zeneca, Inc.
Sea Land Services, Inc. and CSX Corporation
▇▇▇▇▇▇ Office Interiors
Granotec
Florida International Museum, Inc.
Distribution & Auto Service, Inc.
The First National Bank of Chicago
Ryder Integrated Logistics, Inc.
Centura Bank
▇▇▇▇ South Communications, Inc.
ADP Investor Services
CitiBank
Zurich Insurance Company
Technology Services Solutions
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THE FOLLOWING COMPUTER-RELATED AGREEMENTS:
Master Agreement between AccuStaff Incorporated and Avnet Computer Division
of Avnet, Inc.
Customer Agreement between AccuStaff Incorporated and IBM
License between Informix and AccuStaff Incorporated
Microsoft License between Microsoft and AccuStaff Incorporated
Software License between Oracle and AccuStaff Incorporated
License between PeopleSoft and AccuStaff Incorporated
Service Agreement between Resumix, Inc. and AccuStaff Incorporated
License between Resumix, Inc. and AccuStaff Incorporated
Lease between Sun Financial and AccuStaff Incorporated
List of Programs between Support Magic and AccuStaff Incorporated
Amendment to License between Symantec and AccuStaff Incorporated
License between Unison Software and AccuStaff Incorporated
THE FOLLOWING FRANCHISE AGREEMENTS:
License Agreement between Temp Force, Inc. and ▇▇▇▇▇ ▇▇▇▇ Associates, Inc.
Franchise Agreement between Temps & Co. Services, Inc. and ▇▇▇▇▇▇-▇▇▇▇▇▇,
Inc.
Franchise Agreement between Temps & Co. Services, Inc. and ▇▇▇▇▇▇ & Co.
License Agreement between Career Employment Services, Inc. and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Franchise Agreement between Temps & Co. Services, Inc. and WRL, Inc.
License Agreement between Temp Force, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-29-
Amended and Restated License Agreement between Temp Force, Inc. and ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
License Agreement between Career Employment Services, Inc. and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
License Agreement between Temp Force, Inc. and ▇▇▇▇ ▇▇▇▇▇▇▇
Franchise Agreement between Temps & Co. Services, Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
License Agreement between Career Employment Services, Inc. and Career
Center, Inc.
License Agreement between Career Employment Services, Inc. and Stagg and
Crociani Personnel
License Agreement between Temp Force, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
License Agreement between Career Employment Services, Inc. and J&B
Placement Services, Inc.
License Agreement between Temp Force, Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇▇
License Agreement between Temp Force, Inc. and ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
License Agreement between Temp Force, Inc. and R&L Personnel
Franchise Agreement between Temps & Co. Services, Inc. and American
National Services Corp.
Agreement between Temp Force, Inc. and ▇▇▇▇▇▇▇ and Associates, Inc.
License Agreement between Temp Force, Inc. and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Franchise Agreement between Temps & Co. Services, Inc. and G. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Franchise Agreement between Temps & Co. Services, Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇
License Agreement between Temp Force, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
License Agreement between Career Employment Services, Inc. and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-30-
License Agreement between Career Employment Services, Inc. and ▇▇▇▇▇▇
Professional (Agency), Inc.
License Agreement between Temp Force, Inc. and Marmel, Inc.
Franchise Agreement between Temps & Co. Services, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
License Agreement between Career Employment Services, Inc. and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
License Agreement between Career Employment Services, Inc. and ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇
Franchise Agreement between Temps & Co. Services, Inc. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇
AccuStaff Licensing Agreement between Temp Force, Inc. and E&K Personnel,
Inc.
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SCHEDULE 7.03(d)
DEDUCTIBLES UNDER SHARED POLICIES
-32-
EXHIBIT A
TAX DISAFFILIATION AGREEMENT
-33-
EXHIBIT B
EMPLOYEE BENEFITS AGREEMENT
-34-
EXHIBIT C
SERVICES AGREEMENT
-35-
EXHIBIT D
STRATEGIC MARKETING AND CROSS-SELLING AGREEMENT
-36-
EXHIBIT E
TRANSFERRED TRADENAMES AND LOGOS
-37-
