Exhibit 10.1
EXECUTION VERSION
STOCK AND OPTION PURCHASE AGREEMENT
THIS STOCK AND OPTION PURCHASE AGREEMENT (this “Agreement”), dated September 14,
2010, by and among Westbury (Bermuda) Ltd., a Bermuda exempted company
(“Westbury Ltd.”), Westbury Trust, a Bermuda trust (“Westbury Trust” and,
together with Westbury Ltd., the “Seller”) and Michael G. DeGroote, a resident
of Bermuda (“DeGroote”) on the one hand, and CBIZ, Inc., a Delaware corporation
(“Purchaser” or the “Company”), on the other hand.
RECITAL
Seller beneficially owns 15,433,338 shares of common stock of the Company, par
value $0.01 per share (the “Common Stock”) and Seller hereby desires to (a) sell
to Purchaser seven million, seven hundred sixteen thousand, six hundred
sixty-nine (7,716,669) shares of Common Stock at $6.25 per share (the “Purchased
Shares”), and (b) grant to Purchaser an irrevocable option (the “Option”) to
purchase seven million, seven hundred sixteen thousand, six hundred sixty-nine
(7,716,669) shares of Common Stock (the “Remaining Shares”), and Purchaser
desires to purchase the Purchased Shares and the Option from Seller, upon and
subject to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the respective
representations, warranties, covenants and agreements contained in this
Agreement, and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, Seller and Purchaser, intending to be legally
bound, hereby agree as follows:
1. Purchase and Sale of the Purchased Shares and the Option. Upon the terms and
subject to the conditions set forth in this Agreement, and in reliance upon the
representations and warranties herein made by each party to the other, Seller
agrees to sell and grant, and Purchaser agrees to purchase from Seller, at the
Closing, the Purchased Shares and the Option. Seller will deliver to Purchaser
at the Closing (a) a certificate or certificates representing a portion of the
Purchased Shares with duly executed stock powers attached thereto and
(b) confirmation of book entry transfer of the remaining Purchased Shares into a
Depository Trust Company account of the Purchaser as may be designated by the
Purchaser.
2. Purchase Price.
(a) As the purchase price for the Purchased Shares, Purchaser will pay, or cause
to be paid, to Seller at the Closing in immediately available funds the sum of
forty-eight million, two hundred twenty-nine thousand, one hundred eighty-one
dollars and twenty-five cents ($48,229,181.25).
(b) As the purchase price for the Option, Purchaser will pay, or cause to be
paid, to Seller at the Closing in immediately available funds the sum of five
million dollars ($5,000,000.00).

 

 

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3. Option.
(a) At the Closing, upon receipt of the purchase price described in
Section 2(b), Seller shall grant to Purchaser the Option to purchase from
Seller, in whole or in part, at any time and from time to time after the date of
the Closing (the “Grant Date”) and on or before September 30, 2013 (the
“Exercise Period”), the Remaining Shares at an exercise price of $7.25 per
share, subject to adjustment as provided in Section 3(c) (the “Exercise Price”).
The Exercise Price and the shares purchasable upon exercise of this Option at
any given time (the “Option Shares”) shall be subject to adjustment from time to
time pursuant to the provisions of Section 3(c).
(b) This Option may be exercised in whole or in part from time to time during
the Exercise Period by Purchaser’s notice in writing delivered to the Seller and
Purchaser’s payment to the Seller of an amount of cash equal to the product of
the Exercise Price times the applicable number of Option Shares by wire transfer
of immediately available lawful money of the United States against the delivery
to Purchaser by the release from the Custody Account (as defined in Section 4
below) of the number of the Option Shares to which such exercise applies.
(c) The Option Shares and the Exercise Price shall be subject to adjustment from
time to time as follows:
(i) If the Company shall at any time after the Grant Date and while this Option
remains outstanding and unexpired in whole or in part, effect a subdivision (by
any stock split or otherwise) of the outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately before that
subdivision shall be proportionately decreased and the number of Option Shares
obtainable upon exercise of this Option shall be proportionately increased.
Conversely, if the Company shall at any time or from time to time after the
Grant Date combine (by reverse stock split or otherwise) the outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately before the combination shall be proportionately increased and the
number of shares of Common Stock obtainable upon exercise of this Option shall
be proportionately decreased. Any adjustment under this paragraph shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(ii) In the event the Company at any time, or from time to time after the Grant
Date and while this Option remains outstanding and unexpired in whole or in
part, shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Exercise
Price then in effect immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Exercise
Price then in effect by a fraction:
A. the numerator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date; and

 

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B. the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Exercise Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Exercise Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(iii) If at any time after the Grant Date and while this Option remains
outstanding and unexpired in whole or in part, the Option Shares are changed
into the same or a different number of shares of any class or classes of stock,
this Option will thereafter represent the right to acquire such number and kind
of securities into which the Option Shares are changed.
4. Custody Account.
(a) At the Closing, the Remaining Shares will be placed in a custody account
(“Custody Account”) and will, during the Exercise Period, be subject to a
custody agreement in substantially the form attached hereto as Annex A (the
“Custody Agreement”). Purchaser may, subject to its compliance with
Section 3(b), exercise the Option and cause the Remaining Shares to be released
from the Custody Account in one or any number of blocks, at any one or more
times throughout the Exercise Period, as Purchaser may choose in its sole
discretion. During the Exercise Period, (i) any and all dividends or
distributions (in cash or in kind) declared, paid or payable on any Remaining
Shares held in the Custody Account shall be paid or distributed to Seller,
(ii) the Remaining Shares may not be sold to any party other than Purchaser or a
Permitted Transferee, provided that (x) such Permitted Transferee shall agree to
be subject to the terms of this Agreement and the Custody Agreement and deliver
to the Company a written acknowledgment in form and substance reasonably
satisfactory to the Company to that effect and (y) the Remaining Shares
transferred to a Permitted Transferee shall remain subject to the Custody
Agreement, and (iii) only Seller or a Permitted Transferee, as applicable, shall
have the right to exercise the voting rights associated with the Remaining
Shares, it being understood that Seller and Permitted Transferee, as applicable,
shall maintain and not transfer full discretion over the voting of the Remaining
Shares or the manner in which the Remaining Shares are voted. Notwithstanding
the foregoing, Seller or a Permitted Transferee, as applicable, may within its
absolute discretion, execute and deliver any proxy solicited by management or
any other person except for an irrevocable proxy in connection with any vote or
solicitation of consents from the Company’s stockholders.

 

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(b) “Permitted Transferee” means DeGroote or any DeGroote Family Member.
(i) “DeGroote Family Member” means (A) any spouse or surviving spouse of
DeGroote, (B) any brother, sister, child, adopted child, step child, grandchild,
adopted grandchild or other issue of DeGroote, (C) any spouse or surviving
spouse of any Person referred to in clause (B) of this definition, (D) the
executor, administrator or other personal representative of the estate of any of
the foregoing Persons, (E) any DeGroote Entity or (F) any DeGroote Trust.
(ii) “DeGroote Entity” means any partnership, corporation, limited liability
company or other entity in which all or substantially all of the equity
interests are owned directly or indirectly by one or more DeGroote Family
Members.
(iii) “DeGroote Trust” means any trust of which all or substantially all of the
beneficiaries are, or in which all or substantially all of the beneficial
interests are held by, one or more DeGroote Family Members.
5. Closing. The transfer and sale provided for in this Agreement (the “Closing”)
will take place at the offices of Akin Gump Strauss Hauer & Feld LLP, One Bryant
Park, New York, NY 10036, at 10:00 am Eastern Time, on no later than
September 16, 2010 or on such other date as may be fixed for the Closing by
written agreement between Seller and Purchaser (the “Closing Date”).
6. Representations and Warranties.
(a) Representations and Warranties of Seller and DeGroote. Seller and DeGroote
hereby represent and warrant to Purchaser as follows:
(i) Westbury Ltd. is an exempted company duly organized, validly existing and in
good standing under the laws of Bermuda. Westbury Trust is a trust duly formed,
validly existing and in good standing under the laws of Bermuda.
(ii) Seller has all requisite power and authority to execute and deliver into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Seller and the consummation by
Seller of the transactions contemplated hereby have been duly authorized by all
necessary action on the part of Seller.
(iii) This Agreement has been duly executed and delivered by Seller and DeGroote
and constitutes a valid and binding obligation of Seller and DeGroote,
enforceable in accordance with its terms, except as enforceability may be
subject to the effects of bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the rights of creditors or general
principles of equity.
(iv) The execution and delivery of this Agreement by Seller and DeGroote and the
consummation by Seller and DeGroote of the transactions contemplated hereby will
not (A) violate any provision of any existing law, statute, rule, regulation or
ordinance applicable to Seller or DeGroote or (B) conflict with, result in any
breach of or constitute a default under (1) the Memorandum of Association or
By-laws of Westbury Ltd. and the trust deed of Westbury Trust, (2) any order,
writ, judgment, award or decree of any court, governmental authority, bureau or
agency to which Seller or DeGroote is a party or by which Seller or DeGroote may
be bound or (3) any contract or other agreement or undertaking to which Seller
or DeGroote is a party or by which Seller or DeGroote may be bound.

 

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(v) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, is required by or with respect
to Seller or DeGroote in connection with the execution and delivery of this
Agreement or the consummation by Seller and DeGroote of the transactions
contemplated hereby, except for any filings required under Schedule 13D under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or
Section 16 of the Exchange Act.
(vi) Seller has, and upon transfer by Seller of the Purchased Shares and the
Remaining Shares hereunder Seller will deliver to Purchaser, good and marketable
title to the Purchased Shares and the Remaining Shares, free and clear of any
claims, liens, encumbrances, security interests, restrictions and adverse claims
of any kind or nature whatsoever. There are no outstanding subscriptions,
options, warrants, rights, contracts, understandings or agreements to purchase
or otherwise acquire the Purchased Shares or the Remaining Shares other than as
provided for herein.
(b) Representations and Warranties of Purchaser. Purchaser represents and
warrants to Seller and DeGroote as follows:
(i) Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(ii) Purchaser has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Purchaser and the consummation by Purchaser of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Purchaser.
(iii) This Agreement has been duly executed and delivered by Purchaser and
constitutes a valid and binding obligation of Purchaser, enforceable in
accordance with its terms except as enforceability may be subject to the effects
of bankruptcy, insolvency, reorganization, moratorium or other laws relating to
or affecting the rights of creditors or general principles of equity.
(iv) The execution and delivery of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated hereby will not
(A) violate any provision of any existing law, statute, rule, regulation or
ordinance applicable to Purchaser or (B) conflict with, result in any breach of
or constitute a default under (1) the Certificate of Incorporation or By-laws of
Purchaser, (2) any order, writ, judgment, award or decree of any court,
governmental authority, bureau or agency to which Purchaser is a party or by
which it may be bound or (3) any contract or other agreement or undertaking to
which Purchaser is a party or by which Purchaser may be bound.

 

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(v) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, is required by or with respect
to Purchaser in connection with the execution and delivery of this Agreement or
the consummation by Purchaser of the transactions contemplated hereby, except
for the filing of a Current Report on Form 8-K in accordance with the Exchange
Act.
7. Closing Conditions.
(a) Conditions to Each Party’s Obligations. The obligation of Purchaser to
purchase the Purchased Shares and the Option at the Closing and the obligation
of Seller to sell the Purchased Shares and the Option at the Closing are subject
to the fulfillment at or prior to the Closing of the following conditions:
(i) No preliminary or permanent injunction or other order shall have been issued
by any court of competent jurisdiction or by any governmental or regulatory
body, nor shall any statute, rule, regulation or executive order have been
promulgated or enacted by any governmental authority which prevents the
consummation of the transactions contemplated by this Agreement.
(ii) No action or proceeding before any court or any governmental or regulatory
authority shall have been commenced by any governmental or regulatory body and
shall be pending against any of the parties hereto or any of their respective
affiliates, associates, officers or directors seeking to prevent or delay the
transactions contemplated by this Agreement.
(b) Conditions to Obligation of Purchaser. The obligation of Purchaser to
purchase the Purchased Shares and the Option at the Closing is subject to the
fulfillment at or prior to the Closing of the following conditions:
(i) The representations and warranties of Seller and DeGroote contained in this
Agreement shall have been true and correct when made and shall be true and
correct in all material respects at and as of the Closing Date with the same
force and effect as though such representations and warranties were made at and
as of the Closing Date.
(ii) Seller and DeGroote shall have performed and complied in all material
respects with all agreements, obligations and conditions required by this
Agreement to be performed or complied with by Seller and DeGroote at or prior to
the Closing.

 

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(c) Conditions to Obligation of Seller. The obligation of Seller to sell the
Purchased Shares and the Option at the Closing is subject to the fulfillment at
or prior to the Closing of the following conditions:
(i) The representations and warranties of Purchaser contained in this Agreement
shall have been true and correct when made and shall be true and correct in all
material respects at and as of the Closing Date with the same force and effect
as though such representations and warranties were made at and as of the Closing
Date.
(ii) Purchaser shall have performed and complied in all material respects with
all agreements, obligations and conditions required by this Agreement to be
performed or complied with by Purchaser at or prior to the Closing.
8. Miscellaneous.
(a) No Brokers. Seller and DeGroote, on the one hand, and Purchaser, on the
other hand, each represent to the other that neither it nor any of its
respective affiliates have employed any broker or finder or incurred any
liability for any brokerage or finder’s fees or commissions or expenses related
thereto in connection with the negotiation, execution or consummation of this
Agreement or any of the transactions contemplated hereby and respectively agree
to indemnify and hold the other harmless from and against any and all claims,
liabilities or obligations with respect to any such fees, commissions or
expenses asserted by any person on the basis of any act or statement alleged to
have been made by such party or any of its affiliates.
(b) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties in respect of the subject matter hereof and
supersedes all prior understandings, agreements or representations by or between
the parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
(c) Assignment; Binding Effect; Third Party Beneficiaries. 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. All of the terms,
agreements, covenants, representations, warranties and conditions of this
Agreement are binding upon and inure to the benefit of and are enforceable by,
the parties and their respective successors and permitted assigns. There are no
third party beneficiaries having rights under or with respect to this Agreement.
(d) Further Assurances. If any further action is necessary or reasonably
desirable to carry out this Agreement’s purposes, each party will take such
further action (including executing and delivering any further instruments and
documents and providing any reasonably requested information) as the other party
reasonably may request.
(e) Survival of Representations, Warranties and Covenants. Each representation,
warranty, covenant and obligation in this Agreement will survive for a period of
one year after the execution and delivery of this Agreement and the consummation
of the transactions contemplated by this Agreement, and will not be affected by
any investigation by or on behalf of the other party to this Agreement.
(f) Indemnification. Seller and DeGroote, on the one hand, and Purchaser, on the
other hand, respectively, will each indemnify and hold harmless the other from
and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, legal fees and expenses) suffered or incurred by
any such indemnified party to the extent arising from any breach of any
representation or warranty of the indemnifying party contained in this Agreement
or any breach by the indemnifying party, or failure by the indemnifying party to
perform, any covenant or agreement contained herein.

 

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(g) Notices. All notices, requests and other communications provided for or
permitted to be given under this Agreement must be in writing and given by
personal delivery, by certified or registered United States mail (postage
prepaid, return receipt requested), by a nationally recognized overnight
delivery service for next day delivery, or by facsimile transmission, as follows
(or to such other address as any party may give in a notice given in accordance
with the provisions hereof):
If to Purchaser:
6050 Oak Tree Blvd., South, Suite 500
Cleveland, OH 44131
Attention: Michael W. Gleespen
Facsimile: 216-447-9007
with a copy (which will not constitute notice) to:
Akin Gump Strauss Hauer & Feld LLP
One Bryant Park
New York, NY 10036
Attention: Mark Zvonkovic
Facsimile: (212) 872-1002
If to Seller or DeGroote:
Victoria Hall
11 Victoria Street
Hamilton, HMEX Bermuda
Attention: James Watt
Facsimile: (441) 292 9485
with a copy (which will not constitute notice) to:
Dickstein Shapiro LLP
1633 Broadway 10019-6708
Attention: Malcolm I. Ross, Esq.
Facsimile: (212) 277-6501
All notices, requests or other communications will be effective and deemed given
only as follows: (i) if given by personal delivery, upon such personal delivery,
(ii) if sent by certified or registered mail, on the fifth business day after
being deposited in the United States mail, (iii) if sent for next day delivery
by overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter’s
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient’s time zone) on a
business day, or is received on a day that is not a business day, then such
notice, request or communication will not be deemed effective or given until the
next succeeding business day. Notices, requests and other communications sent in
any other manner, including by electronic mail, will not be effective.

 

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(h) Specific Performance; Remedies. Each party acknowledges and agrees that the
other party would be damaged irreparably if any provision of this Agreement were
not performed in accordance with its specific terms or were otherwise breached.
Accordingly, the parties will be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and its provisions in addition to any other remedy to which they
may be entitled, at law or in equity. Except as expressly provided herein, the
rights, obligations and remedies created by this Agreement are cumulative and in
addition to any other rights, obligations or remedies otherwise available at law
or in equity. Except as expressly provided herein, nothing herein will be
considered an election of remedies.
(i) Headings. The article and section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
(j) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
choice of law principles.
(k) Amendment. This Agreement may not be amended or modified except by a writing
signed by all of the parties.
(l) Extensions; Waivers. Any party may, for itself only, (a) extend the time for
the performance of any of the obligations of any other party under this
Agreement, (b) waive any inaccuracies in the representations and warranties of
any other party contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any such extension or waiver will be
valid only if set forth in a writing signed by the party to be bound thereby. No
waiver by any party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, may 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 because of any prior or
subsequent such occurrence. Neither the failure nor any delay on the party of
any party to exercise any right or remedy under this Agreement will operate as a
waiver thereof, nor will any single or partial exercise of any right or remedy
preclude any other or further exercise of the same or of any other right or
remedy.
(m) Expenses. Each party will bear its own costs and expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including all fees and expenses of agents,
representatives, financial advisors, legal counsel and accountants.
(n) Counterparts; Effectiveness. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument. This Agreement will become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, which delivery may be made by exchange of
copies of the signature page by facsimile transmission.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

            CBIZ, Inc.
      By:   /s/ Jerome P. Grisko, Jr.        Name:   Jerome P. Grisko, Jr.     
  Title:   President        Westbury (Bermuda) Ltd.
      By:   /s/ Jim Watt        Name:   Jim Watt        Title:   President     
  Westbury Trust
      By:   /s/ Jim Watt        Name:   Jim Watt        Title:   Trustee       
Michael G. DeGroote        /s/ Michael G. DeGroote   

 

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Annex A
EXECUTION VERSION
CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT (as the same may be amended or modified from time to time
pursuant hereto, this “Agreement”) is made and entered into as of September 14,
2010, by and among Westbury (Bermuda) Ltd., a Bermuda exempted company, and
Westbury Trust, a Bermuda trust (collectively, “Seller”), Michael G. DeGroote
(“DeGroote”), CBIZ, Inc., a Delaware corporation (“Company”), and JPMorgan Chase
Bank, N.A. (the “Custodian”).
WHEREAS, Company, Seller and DeGroote are desirous of appointing the Custodian
as its agent to hold 7,716,669 shares of common stock of the Company (the
“Shares”) subject to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment. Company, Seller and DeGroote hereby appoint the Custodian as the
custodian for the purposes set forth herein, and the Custodian hereby accepts
such appointment under the terms and conditions set forth herein.
2. Custody Account. The Custodian will establish and maintain one or more
custody accounts as required (the “Accounts”) in the name of Seller for the
purpose of holding the Shares that shall be deposited with the Custodian.
3. Disposition and Termination. The Custodian shall release all or a portion of
the Shares deposited in the Accounts to Company upon, and pursuant to, the joint
written instructions of Company, Seller and DeGroote in the form of Annex A
hereto and in accordance with the security procedures set forth in Section 12
below. This Agreement shall terminate at the earlier of (a) the mutual agreement
of Seller, DeGroote and Company, (b) September 30, 2013, (c) upon receipt of a
written notice from Seller, DeGroote and Company stating that the Underlying
Agreement (as defined below) has been terminated by its terms, and (d) the date
on which the final release of all of the Shares has been made hereunder in
accordance with the terms hereof. Any Shares remaining in the Accounts upon
termination of this Agreement shall be returned by the Custodian to Seller
(together with all instruments of assignment executed in connection with such
remaining Shares) or to whoever may be lawfully entitled to receive the same or
as a court of competent jurisdiction shall direct.
4. Use of Depositories; Nominee Name.
(a) The Custodian may deposit the Shares with, and hold securities in, any
securities depository, settlement system, dematerialized book entry system or
similar system (together a “Securities Depository”) on such terms as such
systems customarily operate and Company, Seller and DeGroote will provide the
Custodian with such documentation or acknowledgements that the Custodian may
require to hold the Shares in such systems. The Custodian is not responsible for
the selection or monitoring of any Securities Depository and will have no
responsibility for any act or omission by (or the insolvency of) any Securities
Depository. In the event Company, Seller or DeGroote incur a loss due to the
negligence, willful misconduct, or insolvency of a Securities Depository, the
Custodian will make reasonable endeavors, to seek recovery from the Securities
Depository, but Custodian will not be obligated to institute legal proceedings,
file proofs of claim in any insolvency proceeding, or take any similar action.
The Securities Depository must be acceptable and approved by the Custodian, as
an operating system compatible with the Custodian’s bank systems.
(b) The Custodian will identify in its books that the Shares credited to the
Accounts belong to Seller (except as otherwise may be agreed by all parties
hereto).
(c) The Custodian is authorized:
(i) to hold securities in or deposit securities with any Securities Depository
or settlement system, acceptable to the Custodian; and

 

 

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(ii) to register in the name of Seller, the Custodian, a Securities Depository,
or their respective nominees, such securities as are customarily held in
registered form.
5. Entitlements. With respect to all Shares held in the Accounts, the Custodian
by itself, or through the use of the book entry system or the appropriate
Securities Depository, shall, unless otherwise instructed in writing to the
contrary by Company, Seller and DeGroote: (a) collect all income and other
payments reflecting dividends and other distributions on the Shares in the
Accounts and disburse such amounts to Seller; (b) forward to Seller copies of
all information or documents that it may receive from the Company which, in the
opinion of the Custodian, are intended for the beneficial owner of the Shares
including, without limitation, all proxies and other authorizations properly
executed and all proxy statements, notices and reports; and (c) hold directly,
or through the book entry system or Securities Depository, all rights issued
with respect to the Shares held by the Custodian hereunder.
6. Custodian. (a) The Custodian shall have only those duties as are specifically
and expressly provided herein, which shall be deemed purely ministerial in
nature, and no other duties shall be implied. The Custodian shall neither be
responsible for, nor chargeable with, knowledge of, nor have any requirements to
comply with, the terms and conditions of any other agreement, instrument or
document between Company, Seller, DeGroote and any other party, in connection
herewith, if any, including without limitation that certain Stock and Option
Purchase Agreement among Company, Seller and DeGroote (the “Underlying
Agreement”), nor shall the Custodian be required to determine if any person or
entity has complied with any Underlying Agreement, nor shall any additional
obligations of the Custodian be inferred from the terms of any Underlying
Agreement, even though reference thereto may be made in this Agreement. In the
event of any conflict between the terms and provisions of this Agreement, those
of the Underlying Agreement, any schedule or exhibit attached to this Agreement,
or any other agreement with Company, Seller and DeGroote, the terms and
conditions of this Agreement shall control. The Custodian may rely upon and
shall not be liable for acting or refraining from acting upon any written
notice, document, instruction or request furnished to it hereunder and believed
by it to be genuine and to have been signed or presented by Company, Seller and
DeGroote without inquiry and without requiring substantiating evidence of any
kind. The Custodian shall not be liable to Company, Seller, DeGroote, any
beneficiary or other person for refraining from acting upon any instruction
setting forth the release of Shares in the Accounts, unless such instruction
shall have been delivered to the Custodian in accordance with Section 12 below
and the Custodian has been able to satisfy any applicable security procedures as
may be required thereunder. The Custodian shall be under no duty to inquire into
or investigate the validity, accuracy or content of any such document, notice,
instruction or request. The Custodian shall have no duty to solicit any payments
which may be due to it or the Accounts nor shall the Custodian have any duty or
obligation to confirm or verify the accuracy or correctness of any amounts
deposited with it hereunder.
(b) The Custodian shall not be liable for any action taken, suffered or omitted
to be taken by it except to the extent that a final adjudication of a court of
competent jurisdiction determines that the Custodian’s gross negligence or
willful misconduct was the primary cause of any loss to Company, Seller or
DeGroote. The Custodian may execute any of its powers and perform any of its
duties hereunder directly or through affiliates or agents. The Custodian may
consult with counsel, accountants and other skilled persons to be selected and
retained by it. The Custodian shall not be liable for any action taken, suffered
or omitted to be taken by it in accordance with, or in reliance upon, the advice
or opinion of any such counsel, accountants or other skilled persons. In the
event that the Custodian shall be uncertain or believe there is some ambiguity
as to its duties or rights hereunder or shall receive instructions, claims or
demands from any party hereto which, in its opinion, conflict with any of the
provisions of this Agreement, it shall be entitled to refrain from taking any
action and its sole obligation shall be to keep safely all property held in
escrow until it shall be given a joint direction in writing by Company, Seller
and DeGroote which eliminates such ambiguity or uncertainty to the satisfaction
of Custodian or by a final and non-appealable order or judgment of a court of
competent jurisdiction. Company, Seller and DeGroote agree to pursue any redress
or recourse in connection with any dispute without making the Custodian a party
to the same. Anything in this Agreement to the contrary notwithstanding, in no
event shall the Custodian be liable for special, incidental, punitive, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Custodian has been advised of the
likelihood of such loss or damage and regardless of the form of action.

 

 

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7. Succession. The Custodian may resign and be discharged from its duties or
obligations hereunder by giving thirty (30) days advance notice in writing of
such resignation to Company, Seller and DeGroote specifying a date when such
resignation shall take effect. Company, Seller and DeGroote shall have the right
at any time by written agreement to remove the Custodian and appoint a successor
by giving the Custodian thirty (30) days advance notice in writing of such
replacement and instructions to deliver the Shares to such successor custodian.
The Custodian shall have the right to withhold an amount equal to any amount due
and owing to the Custodian, plus any costs and expenses the Custodian shall
reasonably believe may be incurred by the Custodian in connection with the
termination of this Agreement. Any entity into which the Custodian may be merged
or converted or with which it may be consolidated, or any entity to which all or
substantially all the escrow business may be transferred, shall be the Custodian
under this Agreement without further act. Custodian’s sole responsibility after
such thirty-day notice period expires shall be to hold the Shares in the
Accounts (without any obligation to reinvest the same) and to deliver the same
to a designated substitute custodian, if any, or in accordance with the
directions of a final order or judgment of a court of competent jurisdiction, at
which time of delivery Custodian’s obligations hereunder shall cease and
terminate, subject to the provisions of Section 9(b).
8. Compensation and Reimbursement. Company agrees (a) to pay the Custodian upon
execution of this Agreement and from time to time thereafter reasonable
compensation for the services to be rendered hereunder, along with any fees or
charges for accounts, including those levied by any governmental authority which
the Custodian may impose, charge or pass-through, which unless otherwise agreed
in writing shall be as described in Schedule 2 attached hereto, and (b) to pay
or reimburse the Custodian upon request for all reasonable out-of-pocket
expenses, disbursements and advances, including, without limitation reasonable
attorney’s fees and expenses, incurred or made by it in connection with the
performance of this Agreement. The obligations contained in this Section 8 shall
survive the termination of this Agreement and the resignation, replacement or
removal of the Custodian.
9. Indemnity. (a) Seller, DeGroote, and Company shall jointly and severally
indemnify, defend and save harmless the Custodian and its affiliates and their
respective successors, assigns, directors, agents and employees (the
“Indemnitees”) from and against any and all losses, damages, claims,
liabilities, penalties, judgments, settlements, litigation, investigations,
costs or expenses (including, without limitation, the reasonable fees and
expenses of outside counsel and experts and their staffs and all expense of
document location, duplication and shipment) (collectively “Losses”) arising out
of or in connection with (i) the Custodian’s execution and performance of this
Agreement, tax reporting or withholding, the enforcement of any rights or
remedies under or in connection with this Agreement, or as may arise by reason
of any act, omission or error of the Indemnitee, except in the case of any
Indemnitee to the extent that such Losses are finally adjudicated by a court of
competent jurisdiction to have been primarily caused by the gross negligence or
willful misconduct of such Indemnitee, or (ii) its following any joint
instructions or other directions from the Company, Seller and DeGroote, except
to the extent that its following any such instruction or direction is expressly
forbidden by the terms hereof. The indemnity obligations set forth in this
Section 9(a) shall survive the resignation, replacement or removal of the
Custodian or the termination of this Agreement.
(b) Seller hereby grants the Custodian a lien on, right of set-off against and
security interest in, the Accounts for the payment of any claim for
indemnification, fees, expenses and amounts due to the Custodian or an
Indemnitee. In furtherance of the foregoing, the Custodian is expressly
authorized and directed, but shall not be obligated, to charge against,
liquidate sufficient assets and withdraw the proceeds of such from the Accounts
for its own account or for the account of an Indemnitee any amounts due to the
Custodian or to an Indemnitee under either Sections 7, 8 or 9(a).
10. Account Opening Information/Taxpayer Identification Number/Tax Reporting.
(a) Patriot Act Disclosure. Section 326 of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (“USA PATRIOT Act”) requires the Custodian to implement reasonable
procedures to verify the identity of any person that opens a new account with
it. Accordingly, the Parties acknowledge that Section 326 of the USA PATRIOT Act
and the Custodian’s identity verification procedures require the Custodian to
obtain information which may be used to confirm Seller’s and DeGroote’s identity
including without limitation name, address and organizational documents
(“identifying information”). Seller and DeGroote agree to provide the Custodian
with and consents to the Custodian obtaining from third parties any such
identifying information required as a condition of opening an account with or
using any service provided by the Custodian.

 

 

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(b) Certification and Tax Reporting. Seller, DeGroote and Company have provided
the Custodian with thier fully executed Internal Revenue Service (“IRS”) Forms
W-8, or W-9 and/or other required documentation. All interest or other income
earned under this Agreement shall be allocated Seller and reported, as and to
the extent required by law, by the Custodian to the IRS, or any other taxing
authority, on IRS Form 1099 or 1042S (or other appropriate form) as income
earned from the Accounts by Seller whether or not said income has been
distributed during such year. Custodian shall withhold any taxes in the absence
of proper tax documentation, or as required by law, and shall remit such taxes
to the appropriate authorities.
11. Notices. All communications hereunder shall be in writing and except for the
joint instructions from Company, Seller and DeGroote setting forth the release
of Shares (which shall be specifically governed by Section 12 below), shall be
deemed to be duly given after it has been received and the receiving party has
had a reasonable time to act upon such communication if it is sent or served:
(a) by facsimile;
(b) by overnight courier; or
(c) by prepaid registered mail, return receipt requested;
to the appropriate notice address set forth below or at such other address as
any party hereto may have furnished to the other parties in writing by
registered mail, return receipt requested.

     
If to Company
  6050 Oak Tree Blvd., South, Suite 500
Cleveland, OH 44131
Attention: Michael W. Gleespen
Tel No.: (216) 447-9000
Fax No.: (216) 447-9007
 
   
If to Seller or DeGroote
  Victoria Hall
11 Victoria Street
Hamilton, HMEX Bermuda
Attention: James Watt
Tel No.: (441) 292 9480
Fax No.: (441) 292 9485
 
    with a copy (which shall not constitute notice) to: Dickstein Shapiro LLP
1633 Broadway
New York, NY 10019
Tel No.: (212) 277-6525
Fax No.: (212) 277-6501 
 
   
If to the Custodian
  JPMorgan Chase Bank, N.A.
Escrow Services
4 New York Plaza, 21st Floor
New York, N.Y. 10004
Attention: Florence Hanley or Sal Lunetta
Fax No.: 212.623.6168

 

 

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Notwithstanding the above, in the case of communications delivered to the
Custodian, such communications shall be deemed to have been given on the date
received by an officer of the Custodian or any employee of the Custodian who
reports directly to any such officer at the above-referenced office. In the
event that the Custodian, in its sole discretion, shall determine that an
emergency exists, the Custodian may use such other means of communication as the
Custodian deems appropriate.
12. Security Procedures. Notwithstanding anything to the contrary as set forth
in Section 11, the joint instructions in the form of Annex A hereto setting
forth the release of Shares, may be given to the Custodian only by confirmed
facsimile and no instruction for or related to the release of Shares in the
Accounts, shall be deemed delivered and effective unless the Custodian actually
shall have received such instruction by facsimile at the number provided to the
Company, Seller and DeGroote by the Custodian in accordance with Section 11 and
as further evidenced by a confirmed transmittal to that number.
(a) The Custodian is authorized to seek confirmation of the joint instructions
by telephone call-back to the person or persons designated on Schedule 1 hereto,
and the Custodian may rely upon the confirmation of anyone purporting to be the
person or persons so designated. The persons and telephone numbers for
call-backs may be changed only in a writing actually received and acknowledged
by the Custodian. If the Custodian is unable to contact any of the authorized
representatives identified in Schedule 1, the Custodian is hereby authorized
both to receive written instructions from and seek confirmation of such
instructions by telephone call-back to any one or more, as the case may be, of
each of the Company’s and Seller’s executive officers (“Executive Officers”),
which shall include the titles of President, Chief Financial Officer or
Treasurer in the case of the Company and President in the case of Seller as the
Custodian may select. Such Executive Officer shall deliver to the Custodian a
fully executed incumbency certificate, and the Custodian may rely upon the
confirmation of anyone purporting to be any such officer.
(b) Company, Seller and DeGroote acknowledge that the security procedures set
forth in this Section 12 are commercially reasonable.
13. Compliance with Court Orders. In the event that any of the Shares deposited
hereunder shall be attached, garnished or levied upon by any court order, or the
delivery thereof shall be stayed or enjoined by an order of a court, or any
order, judgment or decree shall be made or entered by any court order affecting
the Shares deposited under this Agreement, (a) the Custodian shall provide a
copy or written notice of the same to each of Company, Seller, and DeGroote as
soon as practicable and at most within five (5) Business Days of the Custodian’s
receipt of the same, and (b) the Custodian is hereby expressly authorized, in
its sole discretion, to obey and comply with all writs, orders or decrees so
entered or issued, which it is advised by legal counsel of its own choosing is
binding upon it, whether with or without jurisdiction, and in the event that the
Custodian obeys or complies with any such writ, order or decree it shall not be
liable to Company, Seller, DeGroote or to any other person, entity, firm or
corporation, by reason of such compliance notwithstanding such writ, order or
decree be subsequently reversed, modified, annulled, set aside or vacated.
“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which the Custodian located at the notice address set forth above is
authorized or required by law or executive order to remain closed.
14. Miscellaneous. Except for changes to the joint instructions as provided in
Section 12, the provisions of this Agreement may be waived, altered, amended or
supplemented, in whole or in part, only by a writing signed by all parties to
this Agreement. Neither this Agreement nor any right or interest hereunder may
be assigned in whole or in part by any party to this Agreement, except as
provided in Section 7, without the prior consent of all parties hereto. This
Agreement shall be governed by and construed under the laws of the State of New
York. Each party irrevocably waives any objection on the grounds of venue, forum
non-conveniens or any similar grounds and irrevocably consents to service of
process by mail or in any other manner permitted by applicable law and consents
to the jurisdiction of the courts located in the State of New York. To the
extent that in any jurisdiction Company, Seller or DeGroote may now or hereafter
be entitled to claim for itself or its assets, immunity from suit, execution
attachment (before or after judgment), or other legal process, Company, Seller
and DeGroote shall not claim, and each hereby irrevocably waives, such immunity.
Each party further hereby waives any right to a trial by jury with respect to
any

 

 

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lawsuit or judicial proceeding arising or relating to this Agreement. No party
to this Agreement is liable to any other party for losses due to, or if it is
unable to perform its obligations under the terms of this Agreement because of,
acts of God, fire, war, terrorism, floods, strikes, electrical outages,
equipment or transmission failure, or other causes reasonably beyond its
control. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. All signatures of the parties to this Agreement may
be transmitted by facsimile or email, and such facsimile or email will, for all
purposes, be deemed to be the original signature of such party whose signature
it reproduces, and will be binding upon such party. If any provision of this
Agreement is determined to be prohibited or unenforceable by reason of any
applicable law of a jurisdiction, then such provision shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in such jurisdiction shall not invalidate
or render unenforceable such provisions in any other jurisdiction. Where,
however, the conflicting provisions of any such applicable law may be waived,
they are hereby irrevocably waived by the parties hereto to the fullest extent
permitted by law, to the end that this Agreement shall be enforced as written.
Except as expressly provided in Section 9 above, nothing in this Agreement,
whether express or implied, shall be construed to give to any person or entity
other than the parties hereto any legal or equitable right, remedy, interest or
claim under or in respect of this Agreement or any Shares in the Accounts
hereunder.

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
CBIZ, INC.

         
Signature:
       
 
       

         
Printed Name:
       
 
       

WESTBURY (BERMUDA) LTD.

         
Signature:
       
 
       

         
Printed Name:
       
 
       

WESTBURY TRUST

         
Signature:
       
 
       

         
Printed Name:
       
 
       

MICHAEL G. DEGROOTE

         
Signature:
       
 
       

         
Printed Name:
       
 
       

JPMORGAN CHASE BANK, N.A.
as Custodian

         
By:
       
 
       

         
Its: Vice President
       
 
       

 

 

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Schedule 1
Telephone Number(s) and authorized signature(s) for
Person(s) Designated to give Share Release Instructions
If from Company:

                  Name   Telephone Number   Signature
 
           
1.
  Jerome P. Grisko   (216) 447-9000    
 
           
2.
  Ware H. Grove   (216) 447-9000    
 
           
3.
  Kelly J. Marek   (216) 447-9000    

If from Seller:

                  Name   Telephone Number   Signature
 
           
1.
  James A. Loatt   (441) 292-9480    

Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Share Release Instructions
If from Company:

                Name   Telephone Number
 
       
1.
  Jerome P. Grisko   (216) 447-9000
 
       
2.
  Ware H. Grove   (216) 447-9000
 
       
3.
  Kelly J. Marek   (216) 447-9000

If from Seller:

                Name   Telephone Number
 
       
1.
  James A. Watt   (441) 292-9480

All Share release instructions must include the signature of the person(s)
authorizing said Share release.

 

 

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Schedule 21
(J.P. MORGAN LOGO) [c06081c0608102.gif]
Based upon our current understanding of your proposed transaction, our fee
proposal is as follows:

         
Account Acceptance Fee
  $WAIVED

Encompassing review, negotiation and execution of governing documentation,
opening of the account, and completion of all due diligence documentation.
Payable upon closing.

         
Annual Administration Fee
  $ 2,500  

The Administration Fee covers our usual and customary ministerial duties,
including record keeping, distributions, document compliance and such other
duties and responsibilities expressly set forth in the governing documents for
each transaction. Payable upon closing and annually in advance thereafter,
without pro-ration for partial years.
Extraordinary Services and Out-of Pocket Expenses
Any additional services beyond our standard services as specified above, and all
reasonable out-of-pocket expenses including attorney’s or accountant’s fees and
expenses will be considered extraordinary services for which related costs,
transaction charges, and additional fees will be billed at the Bank’s then
standard rate. Disbursements, receipts, investments or tax reporting exceeding
25 items per year may be treated as extraordinary services thereby incurring
additional charges. The Escrow Agent may impose, charge, pass-through and modify
fees and/or charges for any account established and services provided by the
Escrow Agent, including but not limited to, transaction, maintenance,
balance-deficiency, and service fees and other charges, including those levied
by any governmental authority.
Disclosure & Assumptions

•  
Please note that the fees quoted are based on a review of the transaction
documents provided and an internal due diligence review. JPMorgan reserves the
right to revise, modify, change and supplement the fees quoted herein if the
assumptions underlying the activity in the account, level of balances, market
volatility or conditions or other factors change from those used to set our
fees.
     
The escrow deposit shall be continuously invested in a JPMorgan Chase Bank money
market deposit account (“MMDA”) MMDA have rates of compensation that may vary
from time to time based upon market conditions.
  •  
The Depositor acknowledges and agrees that they are permitted by U.S. law to
make up to six (6) pre-authorized withdrawals or telephonic transfers from an
MMDA per calendar month or statement cycle or similar period. If the MMDA can be
accessed by checks, drafts, bills of exchange, notes and other financial
instruments (“Items”), then no more than three (3) of these six (6) transfers
may be made by an Item. The Escrow Agent is required by U.S. law to reserve the
right to require at least seven (7) days notice prior to a withdrawal from a
money market deposit account.
  •  
Payment of the invoice is due upon receipt.

Compliance
To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person or entity that opens an
account. We may ask for information that will enable us to meet the requirements
of the Act.
 

      1  
Conform to fee proposal

 

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Annex A
[Date]
VIA FACSIMILE: _________
[Name and Address of Custodian]
Re: Joint Written Instructions on Release of Shares Pursuant to Option Exercise
Ladies and Gentlemen:
Reference is made to that certain Custody Agreement, dated as of September ___,
2010 (the “Agreement”), by and among Westbury (Bermuda) Ltd., a Bermuda exempted
company, and Westbury Trust (collectively, “Seller”) and Michael G. DeGroote,
CBIZ, Inc. ( “Company”) and JPMorgan Chase Bank, N.A. (the “Custodian”).
Capitalized terms used but not defined herein shall have the meanings provided
in the Agreement.
Pursuant to Sections 3 and 12 of the Agreement, Company hereby notifies the
Custodian of, and Seller and DeGroote acknowledge, exercise of the Option (as
defined in the Underlying Agreement) by Company in accordance with the terms of
the Underlying Agreement, and Seller, DeGroote and Company hereby instruct the
Custodian to release ___________ Shares to Company.

            Very truly yours,

CBIZ, INC.
      By:         Name:       Title:         WESTBURY (BERMUDA) LTD.
      By:         Name:       Title:         WESTBURY TRUST
      By:         Name:       Title:         MICHAEL G. DEGROOTE