EXECUTION COPY

 

STOCK REPURCHASE AGREEMENT

 

THIS STOCK REPURCHASE AGREEMENT (the “Agreement”) is entered into effective
March 9, 2012 (the “Execution Date”), by and among Barrett Business Services,
Inc., a Maryland corporation (the “Company”), and Kimberly J. Jacobsen Sherertz,
in her capacities as Personal Representative of the Estate of William W.
Sherertz and Trustee of the Barrett Share Trust under the Will of William W.
Sherertz (“Seller”), and Kimberly J. Jacobsen Sherertz, individually
(“Sherertz”).

 

RECITALS:

 

A.           Seller is the owner of 2,485,929 shares of the Company’s issued and
outstanding common stock (the “Shares”).

 

B.           Seller desires to sell to the Company, and the Company desires to
purchase from Seller, all of the Shares under the terms and conditions set forth
in this Agreement.

 

AGREEMENT:

 

In consideration of the mutual covenants and provisions contained herein, the
parties hereto agree as follows:

 

1.           Sale of Common Stock.

 

1.1.          Delivery of Shares. On the terms and subject to the conditions of
this Agreement, Seller will, on the Closing Date (defined below), sell, convey,
transfer, and deliver to the Company all of her right, title, and interest in
and to the Shares, free and clear of all liens, security interests, claims,
charges, or encumbrances of any nature whatsoever and deliver to the Company a
certificate or certificates representing the Shares, duly endorsed for transfer
or accompanied by appropriate stock transfer powers duly executed in blank,
together with any other documents necessary or reasonably requested by the
Company to transfer good and marketable title to the Shares.

 

1.2.          Purchase Price. The purchase price (“Purchase Price”) for the
Shares shall be twenty dollars ($20.00) per share, representing a total
consideration of forty-nine million, seven hundred eighteen thousand, five
hundred eighty dollars ($49,718,580.00). Twenty million, seven hundred
forty-five thousand, five hundred eighty dollars ($20,745,580.00) (the “Cash
Purchase Price”) will be paid by electronic funds transfer at the Closing
(defined below). The remainder of the Purchase Price will take the form of
28,973 shares of Series A Nonconvertible, Non-Voting Redeemable Preferred Stock
(the “Preferred Shares”), which will be issued and delivered by the Company at
the Closing and will have the preferences and other rights as reflected in the
form of Articles Supplementary attached as Exhibit A.

 

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2.          Closing; Deliveries by Seller; Deliveries by the Company.

 

2.1.         Closing. The closing of the transaction (the “Closing”) will take
place by exchange of appropriate documentation between the parties (via
overnight delivery, facsimile, electronic transmission and other similar means
for exchanging documentation) promptly following the Execution Date, but no
later than April 6, 2012 (the “Closing Date”).

 

2.2.         Deliveries by Seller.

 

2.2.1.        Prior to the Closing, Seller shall deliver, or cause to be
delivered, to the Company:

 

2.2.1.1.Written wire transfer instructions for all payments to be made by the
Company to Seller in the Closing.

 

2.2.1.2.Sufficient evidence to demonstrate that the Shares will be delivered to
the Company in the Closing.

 

2.2.2.        At or prior to the Closing, Seller shall deliver, or cause to be
delivered, to the Company:

 

2.2.2.1.All stock certificates for the Shares, together with duly executed
irrevocable stock powers or other instruments of transfer satisfactory to the
Company.

 

2.2.2.2.All other documents, instruments and writings required, reasonably
requested, or contemplated to be delivered by Seller at or prior to the Closing
pursuant to this Agreement or otherwise in connection with the transaction
contemplated by this Agreement.

 

2.2.2.3.The Lien Release (as defined below) duly executed by Wells Fargo Bank,
National Association.

 

2.3.          Deliveries by the Company. At or prior to the Closing, the Company
shall deliver, or cause to be delivered, to Seller:

 

2.3.1.          The Cash Purchase Price in immediately available funds payable
to Seller.

 

2.3.2.          Stock certificates representing the Preferred Shares.

 

2.3.3.          A certified copy of the Articles Supplementary as filed with and
accepted for record by the State Department of Assessments and Taxation of
Maryland.

 

2.3.4.          All other documents, instruments, and writings required,
reasonably requested, or contemplated to be delivered by the Company at or prior
to the Closing pursuant to this Agreement or otherwise in connection with the
transaction contemplated by this Agreement.

 

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3.          Representations and Warranties of Seller. Seller represents and
warrants to the Company as follows:

 

3.1.          Ownership of the Shares. Seller is the sole owner of the Shares,
the Shares constitute all the Company’s stock owned by Seller, Seller has no
warrants, options, or other securities or agreements entitling her to acquire
additional shares of any class or series of stock of the Company other than the
Preferred Shares, and the Shares will be conveyed to the Company free and clear
of any liens or encumbrances. Seller represents and warrants that she has not
transferred or assigned the Shares or any interest therein to any other person,
and no other person has any right, title, or interest in or to the Shares by
operation of law or otherwise. Notwithstanding the foregoing, certain of the
Shares are subject to a lien in favor of Wells Fargo Bank, National Association.
Seller will procure and deliver to Buyer a lien release at Closing in a form
reasonably acceptable to the Company (the “Lien Release”).

 

3.2.          Authorization and Enforceability. Seller has all requisite power
and authority to execute, deliver, and perform this Agreement and to consummate
the transaction contemplated hereby. The Agreement constitutes a valid and
binding obligation of Seller fully enforceable in accordance with its terms.

 

3.3.          Brokerage Fees. Seller is not as of the date hereof, and will not
become, a party to any agreement, arrangement or understanding with any Person
which could result in the Company having any obligation or liability for any
brokerage fees, commissions, underwriting discounts or other similar fees or
expenses relating to the transaction contemplated by this Agreement. “Person”
shall mean any individual, corporation, company, association, partnership,
limited liability company, joint venture, trust or unincorporated organization,
or a government or any agency, or political subdivision thereof.

 

3.4.          Restrictions on Transferability of the Preferred Shares. Seller
understands that the Preferred Shares are restricted securities within the
meaning of Rule 144 promulgated under the Securities Act of 1933; that there is
no public trading market for the Preferred Shares and the Company has no
obligation or current intention to take action to facilitate the listing or
quotation of the Preferred Shares in any public trading market; and that the
Preferred Shares have not been registered under the Securities Act of 1933 or
the securities laws of any state and the Company has no obligation or current
intention to register the Preferred Shares, such that the Preferred Shares must
be held indefinitely unless they are subsequently registered or, in the opinion
of counsel reasonably acceptable to the Company, a sale or transfer may be made
without registration under Federal and state securities laws. Seller agrees that
any certificate representing the Preferred Shares may bear a legend restricting
the transfer of any of the Preferred Shares in a manner generally consistent
with the foregoing.

 

3.5.          Additional Seller Representations. Seller makes the following
representations and warranties to the Company:

 

3.5.1.          Investigation. Seller, including her agents and advisors, has
been given an opportunity to ask questions about the Company and the Preferred
Shares, has received all information that Seller, including her agents and
advisors, feels is necessary to evaluate the merits and risks of the transaction
contemplated by this Agreement, including the Preferred Shares, and has been
given access to any information that the Company possesses or can acquire
without unreasonable effort or expense that Seller, including her agents and
advisors, feels is necessary or appropriate to verify the accuracy of
information furnished by the Company.

 

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3.5.2.          No Warranty. Seller understands that no representation or
warranty as to the value of the Company, the Company’s business or financial
condition, the Shares, or the Preferred Shares has been or is being made by or
on behalf of the Company.

 

3.5.3.          Opportunity to Consult. Seller acknowledges that she has had the
opportunity to consult with attorneys, accountants, and other advisors regarding
the transaction contemplated by this Agreement. In reaching a determination to
enter into this Agreement, Seller has relied solely upon independent
investigations by Seller, or by Seller’s agents and advisors. Seller has sought
and received, to the extent deemed necessary or appropriate, professional advice
with respect to tax and investment aspects and merits and risks of the
transaction contemplated by this Agreement, including the tax effects and the
appropriateness of the transaction contemplated by this Agreement in light of
Seller’s unique circumstances, and is not relying on the Company or its
officers, directors, or other agents and advisors for such advice and such
advice has not been provided.

 

3.5.4.          Voluntary. Seller is selling the Shares and entering into this
Agreement voluntarily, based on Seller’s own judgment and evaluation, and is not
relying on any verbal or written representations of the Company or any agent of
the same regarding the transaction contemplated by this Agreement or the value
of the Shares or the Preferred Shares except as set forth in this Agreement.

 

4.          Representations and Warranties of the Company. The Company
represents and warrants to Seller as follows:

 

4.1.          Organization; Good Standing; Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Maryland. The Company has all requisite corporate power and authority
to execute, deliver, and perform this Agreement and consummate the transaction
contemplated by this Agreement.

 

4.2.          Authorization of Agreement and Enforceability. This Agreement has
been duly and validly authorized, executed, and delivered on behalf of the
Company and constitutes a valid and binding obligation of the Company, fully
enforceable in accordance with its terms.

 

4.3.          Valid Issuance. The Preferred Shares, when issued, sold and
delivered in accordance with the terms of this Agreement and for the
consideration set forth in this Agreement, will be duly and validly issued,
fully paid and nonassessable, will be free of any liens, claims, charges or
encumbrances, will be free of any restrictions on transfer, other than
restrictions on transfer under this Agreement and under applicable state and
federal securities laws, and will have been issued in reliance upon an exemption
from the registration requirements of and will not result in a violation of the
Securities Act of 1933.

 

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4.4.          Brokerage Fees. The Company is not as of the date hereof, and will
not become, a party to any agreement, arrangement or understanding with any
Person which could result in Seller or Sherertz having any obligation or
liability for any brokerage fees, commissions, underwriting discounts or other
similar fees or expenses relating to the transaction contemplated by this
Agreement.

 

4.5.          Effect of Agreement. The execution, delivery, and performance of
this Agreement by the Company and the consummation of the transaction
contemplated hereby will not, with or without the giving of notice or the lapse
of time, or both:

 

4.5.1.          violate any provision, law, statute, rule, or regulation to
which the Company is subject;

 

4.5.2.          violate any judgment, order, writ, or decree of any court,
arbitrator, or governmental agency applicable to the Company;

 

4.5.3.          conflict with the Company’s charter or bylaws in effect on the
Closing Date; or

 

4.5.4.          require the consent, authorization, or approval of any person,
including, but not limited to, any governmental body, that has not been received
prior to the Closing.

 

4.6.          Information Concerning the Company. The Company is a publicly-held
company subject to reporting obligations pursuant to the Securities Exchange Act
of 1934 (the “1934 Act”) and has filed all reports required to be filed under
the 1934 Act since January 1, 2011. As of their respective dates of filing, the
Company's Annual Report on Form 10-K for the year ended December 31, 2010 and
its Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

 

5.          Conditions Precedent to Closing.

 

5.1.          Conditions Precedent to the Company’s Obligations. The obligation
of the Company to consummate the transaction contemplated by this Agreement
shall be subject to the fulfillment of each of the following conditions, any one
or portion of which may be waived in writing by the Company:

 

5.1.1.          The representations and warranties made in this Agreement by
Seller shall be true and correct in all respects on the Closing Date as fully as
though such representations and warranties had been made on and as of the
Closing Date.

 

5.1.2.          The opinion the Company has received from the Company’s
financial advisor that the transaction contemplated by this Agreement is fair
from a financial point of view to the Company shall not have been withdrawn on
or prior to the Closing Date due to events that are both unrelated to the
transaction contemplated by this Agreement and outside of the control of the
Company.

 

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5.1.3.          No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Company from consummating the
transaction contemplated by this Agreement shall be in effect and no action
seeking such relief shall be pending, and no claim or demand shall have been
made as to which Seller or Sherertz would be entitled to indemnification under
Section 7.2.1(ii) of this Agreement.

 

5.2.          Condition Precedent to Seller’s Obligations. The obligation of
Seller to consummate the transaction contemplated by this Agreement shall be
subject to the fulfillment of the following conditions, which may be waived in
writing by Seller:

 

5.2.1.          The representations and warranties made in this Agreement by the
Company shall be true and correct in all respects on the Closing Date as fully
as though such representations and warranties had been made on and as of the
Closing Date.

 

5.2.2.          Nancy Sherertz and the Company shall have executed a stock
repurchase agreement providing for the purchase by the Company of 500,000 shares
of the Company's issued and outstanding common stock owned by Nancy Sherertz.

 

5.2.3.          No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the transaction
contemplated by this Agreement shall be in effect and no action seeking such
relief shall be pending.

 

6.          Standstill.

 

6.1.          At or prior to the Closing, Sherertz and Seller shall, and shall
cause the Estate of William J. Sherertz and all other affiliated holders of the
Company’s common stock (the “Sherertz Affiliates”), to irrevocably withdraw and
rescind all requests made prior to the Execution Date (a) that the Company call
a special meeting of stockholders for any purpose, including replacing one or
more current directors of the Company with any number of alternate nominees for
election as directors of the Company (the “Alternate Slate”) and (b) for any
information from the Company.

 

6.2.          From and after the Closing, Sherertz and Seller shall, and shall
use their reasonable best efforts to cause the Sherertz Affiliates and all other
participants in the proxy solicitation initiated by Sherertz (collectively,
the “Sherertz Group”) to, immediately cease all efforts, direct or indirect, in
furtherance of removal of any current director of the Company, election of the
Alternate Slate, or any related solicitation of proxies in connection with a
special meeting of stockholders of the Company or the 2012 annual meeting of
stockholders of the Company, and the Sherertz Group shall not vote, deliver or
otherwise exercise any proxies obtained prior to the Closing Date in connection
with any such meeting of stockholders.

 

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6.3.          Beginning with the Closing Date and ending on May 31, 2014 (the
“Standstill Period”), except with the prior written consent of the Company,
neither Sherertz nor Seller shall (a) solicit proxies or the written consent of
any of the Company’s stockholders; (b) make any public statement with respect to
nomination or election of any director, removal of any member of the Board of
Directors, or any proposal in opposition to the Board of Directors or management
of the Company; (c) submit a request for a special meeting of the Company’s
stockholders; (d) participate in or make a public announcement with respect to
any tender offer or exchange offer, merger, or other business combination
involving the Company that has not been approved by the Board of Directors of
the Company; or (e) initiate any litigation against the Company or any of its
directors or officers, except to enforce the terms of this Agreement. During the
Standstill Period, Sherertz shall use reasonable best efforts to assure that no
Sherertz Affiliate or member of the Sherertz Group takes any such action during
the Standstill Period.

 

7.          Indemnification.

 

7.1.          Indemnification by Seller and Sherertz.

 

7.1.1.          Seller and Sherertz, jointly and severally, shall indemnify and
hold the Company harmless at all times after the date of this Agreement for,
from and against (i) any loss or damages resulting from any breach of a
covenant, obligation, representation, or warranty on the part of Seller or
Sherertz under this Agreement, and (ii) any and all claims, demands, losses,
damages, suits, judgments and expenses of any nature arising out or related to
(A) any claims or demands of any nature by or on behalf of Seller, descendants
of Sherertz, or members of or participants in the Sherertz Group, that arise
under or are related to this Agreement or facts or circumstances arising on or
before the closing of the transactions contemplated by this Agreement, (B) any
claims or demands alleging participation in a breach by Sherertz of a duty owed
to one or more beneficiaries of the Seller or trusts created by William W.
Sherertz for which Sherertz acts as a trustee, or (C) intentional misconduct,
fraud, or criminal violation of law by Seller or Sherertz.

 

7.1.2.          Seller and Sherertz shall reimburse the Company on demand for
any payment made by the Company at any time after the Execution Date with
respect to any liability or claim to which the foregoing indemnity relates,
subject to the Company’s compliance with Section 7.1.3 below.

 

7.1.3.          Seller’s and Sherertz’s obligation to indemnify and hold the
Company harmless shall be conditioned upon (x) the Company giving Seller and
Sherertz prompt notice in writing of the facts and circumstances giving rise to
a claim for indemnity hereunder and, if applicable, a reasonable opportunity to
cure or mitigate any breach after receipt of said written notice, and (y) the
Company permitting Seller and/or Sherertz to control the response to and any
defense or settlement of any claim as to which indemnity is sought pursuant to
Section 7.1.1(i) above (so long as only monetary damages are sought).

 

7.2.          Indemnification by the Company.

 

7.2.1.          The Company shall indemnify and hold Seller, Sherertz and the
Sherertz Group harmless at all times after the date of this Agreement from and
against (i) any loss or damages resulting from any breach of a covenant,
representation, or warranty on the part of the Company under this Agreement, and
(ii) any and all claims, demands, losses, damages, suits, judgments and expenses
of any nature arising under or related to (A) this Agreement, other than claims
or demands described in Section 7.1.1(ii)(A) above or alleging a direct
violation of law by Seller, Sherertz or the Sherertz Group, or (B) intentional
misconduct, fraud, or criminal violation of law by the Company.

 

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7.2.2.          The Company shall reimburse Seller, Sherertz and/or the Sherertz
Group on demand for any payment made by Seller, Sherertz and/or the Sherertz
Group at any time after the Execution Date with respect to any liability or
claim to which the foregoing indemnity relates, subject to Seller’s and
Sherertz’s compliance with Section 7.2.3 below.

 

7.2.3.          The Company’s obligation to indemnify and hold Seller, Sherertz
and/or the Sherertz Group harmless shall be conditioned upon Seller’s and
Sherertz's giving the Company prompt notice in writing of the facts and
circumstances giving rise to a claim for indemnity and, if applicable, a
reasonable opportunity to cure or mitigate any breach after receipt of said
written notice, and the Company's being permitted to control the response to and
any payment, settlement or defense of any third-party claim as to which
indemnity is sought.

 

8.          Non-Disparagement. The Company agrees that the Company will not make
any disparaging statements about Seller, Sherertz, or any member of the Sherertz
Group and Seller and Sherertz agree that they will not make any disparaging
statements about the Company, its business, or any present or future owner,
director, officer, or authorized representative of the Company; provided,
however, that in the event that any party to this Agreement or any other person
or entity described in this Section 8 is required to testify under oath in any
legal or administrative proceeding, such party or other person or entity shall
be expected to testify truthfully and such testimony shall not be considered
disparagement. The parties acknowledge that any violation of the provisions of
this Section 8 will cause serious and irreparable damage to the aggrieved party.
Accordingly, each party further acknowledges that, in the event of a breach or
threatened breach of the provisions of this Section 8, the aggrieved party, in
addition and as a supplement to such other rights and remedies, including
recovery of money damages, may seek an injunction or restraining order,
restraining the breaching party from performing any act in violation of the
provisions of this Section 8.

 

9.          Releases.

 

9.1.          By Seller. Seller, on its own behalf, and on behalf of its
affiliates, successors and assigns, does hereby remise, release, and forever
discharge the Company, and the Company’s and its agents, advisors,
representatives, attorneys, successors, subsidiaries, affiliates, heirs,
nominees, directors, officers, employees, stockholders, executors,
administrators, trustees, independent contractors, and insurers (collectively,
the “Seller’s Releasees”), of and from any and all manner of actions and causes
of action, suits, debts, claims, and demands whatsoever, in law or in equity,
whether known or unknown, which the Seller ever had, now has, or may in the
future have, or which all or any of the heirs, executors, administrators,
successors, or assigns of Seller hereafter can, shall, or may have, against the
Seller’s Releasees for or by reason of any cause, matter, or thing whatsoever as
it relates to or arises out of actions or events occurring prior to the Closing
Date. Nothing in the language of this Section 9.1 shall prevent any party to
this Agreement from enforcing the terms of this Agreement or any of the
documents contemplated by Section 2, if there should be a breach or default of
any such agreement.

 

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9.2.     By Sherertz. Sherertz, on her own behalf, and on behalf of the Sherertz
Group and her affiliates, successors and assigns, does hereby remise, release,
and forever discharge the Company and its agents, advisors, representatives,
attorneys, successors, subsidiaries, affiliates, heirs, nominees, directors,
officers, employees, stockholders, executors, administrators, trustees,
independent contractors, and insurers (collectively, the “Sherertz Releasees”),
of and from any and all manner of actions and causes of action, suits, debts,
claims, and demands whatsoever, in law or in equity, whether known or unknown,
which Sherertz ever had, now has, or may in the future have, or which all or any
of the heirs, executors, administrators, successors, or assigns of Sherertz
hereafter can, shall, or may have, against the Sherertz Releasees for or by
reason of any cause, matter, or thing whatsoever as it relates to or arises out
of actions or events occurring prior to the Closing Date. Nothing in the
language of this Section 9.2 shall prevent any party to this Agreement from
enforcing the terms of this Agreement or any of the documents contemplated by
Section 2, if there should be a breach or default of any such agreement.

 

9.3.    By the Company. The Company, on its own behalf, and on behalf of its
affiliates, successors and assigns, does hereby remise, release, and forever
discharge Seller and Sherertz (and their respective agents, advisors,
representatives, attorneys, successors, affiliates, heirs, nominees, employees,
executors, administrators, trustees, independent contractors, and insurers), as
well as the individual members of the Sherertz Group (collectively,
the “Company’s Releasees”), of and from any and all manner of actions and causes
of action, suits, debts, claims, and demands whatsoever, in law or in equity,
whether known or unknown, which the Company ever had, now has, or may in the
future have, or which all or any of the subsidiaries, affiliates, directors,
officers, employees, agents, representatives, successors, or assigns of the
Company hereafter can, shall, or may have, against the Company’s Releasees for
or by reason of any cause, matter, or thing whatsoever as it relates to or
arises out of actions or events occurring prior to the Closing Date; provided
that this provision shall not release, alter or otherwise affect the obligations
of the Black Pearl on the Columbia, LLC under a Lease Agreement with the Company
dated December 23, 2009, other than obligations pursuant Section 2.1 of such
agreement that accrued or will accrue prior to the Closing Date. Nothing in the
language of this Section 9.3 shall prevent any party to this Agreement from
enforcing the terms of this Agreement or any of the documents contemplated by
Section 2, if there should be a breach or default of any such agreement.

 

10.         Miscellaneous.

 

10.1.  Further Actions. The parties will execute such further documents and take
such further actions as may be reasonably requested by the other in order to
effect the transactions contemplated by this Agreement.

 

10.2.  Attorneys’ Fees. In the event it is necessary for any party hereto to
institute suit in connection with this Agreement or breach thereof, the
prevailing party in such suit shall be entitled to reimbursement for its
reasonable costs, expenses and attorneys’ fees incurred.

 

10.3.  Survival of Representations and Warranties. The representations,
warranties, covenants, and agreements set forth in this Agreement, and any other
written representation and any ancillary document, are contingent on and shall
survive the Closing.

 

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10.4. Assignment. This Agreement shall not be assigned by any party hereto
without prior written consent of the other parties.

 

10.5. Binding on Successors and Permitted Assigns. This Agreement shall be
binding upon and inure to the benefit of the Company, Seller, and Sherertz and
their respective successors, heirs, devisees, transferees, and permitted
assigns.

 

10.6. Governing Law; Venue; Injunctive Relief. This Agreement shall be governed
by and construed in accordance with the laws of the State of Washington,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of law. Any legal action by or against Seller, Sherertz, or the
Company relating to this Agreement shall be instituted and determined
exclusively in the federal courts located in the State of Washington, to the
jurisdiction of which each party hereby expressly and unconditionally and
irrevocably agrees to submit. The parties hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement, and to
specifically enforce the terms hereof, in addition to any other remedy to which
they are entitled at law or in equity.

 

10.7. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforcement of any such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties waive any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.

 

10.8. Waiver. No waiver of any provision of this Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.

 

10.9. Entire Agreement; Amendment. This Agreement comprises the entire agreement
of the parties with respect to the matters addressed herein, and supersedes all
prior oral and written agreements of the parties and all discussions,
correspondence or other communications with respect to such matters. This
Agreement may not be amended or modified, except by written agreement of the
parties. No provision of this Agreement may be waived, except in writing, and
only in the specific instance and for the specific purposes for which given.

 

10.10. Headings. The headings used in this Agreement are solely for convenience
of reference, are not part of this Agreement, and are not to be considered in
construing or interpreting this Agreement.

 

10.11. Costs. The Company, Seller, and Sherertz shall each bear their respective
expenses and legal fees incurred with respect to this Agreement and the
transaction contemplated herein. 

 

10.12. Signatures.  This Agreement may be signed in counterparts.  A fax
transmission of a signature page will be considered an original signature page. 
At the request of a party, the other party will confirm a fax-transmitted
signature page by delivering an original signature page to the requesting party.

 

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10.13. Third Party Beneficiary. Members of the Sherertz Group who are not a
party to this Agreement shall be deemed to be third party beneficiaries under
this Agreement and may have a direct cause of action under this Agreement
against a party hereto.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Stock Repurchase
Agreement effective on the day and year first herein written.

  

SELLER:   COMPANY:           Barrett Business Services, Inc.       /s/ Kimberly
J. Jacobsen Sherertz   By:  /s/ Michael L. Elich Kimberly J. Jacobsen Sherertz,
    Name:  Michael L. Elich in her capacities as Personal Representative of    
Title: President and Chief Executive the Estate of William W. Sherertz and
Trustee       Officer of the Barrett Share Trust under the Will of        
William W. Sherertz                   /s/ Kimberly J. Jacobsen Sherertz        
Kimberly J. Jacobsen Sherertz, individually        

 

 

 

 

 

EXHIBIT A

 

FORM OF ARTICLES SUPPLEMENTARY

SERIES A NONCONVERTIBLE, NON-VOTING REDEEMABLE PREFERRED STOCK

 

Barrett Business Services, Inc., a Maryland corporation (the “Corporation”),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:

 

FIRST: Under the authority contained in Article III of the Charter of the
Corporation (the “Charter”), the Board of Directors (the “Board”), by duly
adopted resolutions, classified and designated 50,000 shares of authorized but
unissued Preferred Stock (as defined in the Charter), $0.01 par value per share,
of the Corporation as shares of Series A Nonconvertible, Non-Voting Redeemable
Preferred Stock (the “Series A Preferred Stock”), with the following preferences
or other rights, voting powers, restrictions, limitations as to dividends and
other distributions, qualifications, and terms and conditions of redemption,
which, upon any restatement of the Charter, shall become part of Article III of
the Charter, with any necessary and appropriate renumbering or relettering of
the sections or subsections hereof.

 

“Series A Nonconvertible, Non-Voting Redeemable Preferred Stock

 

(1) Designation and Number. A series of Preferred Stock, designated the “Series
A Nonconvertible, Non-Voting Redeemable Preferred Stock” (the “Series A
Preferred Stock”), is hereby established. The number of shares of the Series A
Preferred Stock shall be 50,000.

 

(2) Rank. The Series A Preferred Stock shall, with respect to rights to the
payment of dividends and the distributions of assets upon the liquidation,
dissolution, or winding up of the Corporation, rank (a) senior to all classes or
series of Common Stock (as defined in the Charter) and any other class or series
of stock of the Corporation if the holders of the Series A Preferred Stock are
entitled to receive dividends or amounts distributable upon the liquidation,
dissolution, or winding up of the Corporation or redemption in preference or
priority to the holders of shares of such class or series (the “Junior Stock”);
(b) on a parity with any class or series of stock of the Corporation if the
holders of such class or series of stock and the Series A Preferred Stock are
entitled to receive dividends and amounts distributable upon the liquidation,
dissolution, or winding up of the Corporation or redemption in proportion to
their respective amounts of accumulated, accrued, and unpaid dividends per share
or liquidation preferences, without preference or priority of one over the other
(the “Parity Stock”); and (c) junior to any class or series of stock of the
Corporation if holders of such class or series are entitled to receive dividends
and amounts distributable upon the liquidation, dissolution, or winding up of
the Corporation or redemption in preference or priority to the holders of the
Series A Preferred Stock (the “Senior Stock”).

 

(3) Dividends.

 

(a) Subject to the preferential rights of holders of any class or series of
Senior Stock, holders of the outstanding shares of Series A Preferred Stock
shall be entitled to receive, when and as authorized by the Board of Directors
and declared by the Corporation, out of funds legally available for the payment
of dividends, if applicable, cumulative preferential dividends at the rate of 5%
per annum based on the $1,000 liquidation preference (as may be adjusted in
accordance with Section 7) with such rate increasing by 2% on each April 1
beginning April 1, 2013, until all of the outstanding shares of Series A
Preferred Stock are redeemed as provided in Section 5. Such dividends shall
accrue from the first date on which any Series A Preferred Stock is issued (the
“Original Issue Date”) and shall be payable semi-annually in arrears on or
before March 31 and September 30 of each year (each a “Dividend Payment Date”);
provided, however, that if any Dividend Payment Date is not a Business Day (as
defined below), then the dividend which would otherwise have been payable on
such Dividend Payment Date may be paid on the following Business Day with the
same force and effect as if paid on such Dividend Payment Date. Any dividend
payable on the Series A Preferred Stock for any partial dividend period will be
computed on the basis of a 360-day year consisting of twelve 30-day months. A
“dividend period” shall mean, with respect to the first “dividend period,” the
period from and including the Original Issue Date to and including the first
Dividend Payment Date, and with respect to each subsequent “dividend period,”
the period from, but excluding, a Dividend Payment Date to and including the
next succeeding Dividend Payment Date or other date as of which accrued
dividends are to be calculated.

 

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(b) No dividends shall be declared or paid or funds set apart for the payment of
dividends by the Corporation or other distributions on any Common Stock or other
Junior Stock for any period (other than dividends or other distributions payable
in shares of Common Stock or other Junior Stock or in options, warrants or
rights to subscribe for or purchase any shares of Common Stock or other Junior
Stock and which options, warrants or rights do not entitle the holder thereof to
rights to dividends, amounts distributable upon the liquidation, dissolution, or
winding up of the Corporation or redemption on parity with or senior to the
Series A Preferred Stock), and no shares of Common Stock or other Junior Stock
may be repurchased, redeemed or otherwise retired, nor may funds be set apart
for such payment, repurchase, redemption or retirement, unless all accrued and
unpaid dividends in respect of the Series A Preferred Stock have been paid or
set apart for such payment on the Series A Preferred Stock for all prior
dividend periods.

 

(c) Dividends shall be payable, at the sole option of the Corporation, either
(i) in cash, (ii) by issuance of additional shares of Series A Preferred Stock
(including fractional shares) having an aggregate Liquidation Preference equal
to the amount of the dividend to be paid, or (iii) in any combination thereof.
All dividends paid with respect to shares of Series A Preferred Stock, whether
in cash or shares of Series A Preferred Stock, shall be made pro rata among the
holders of Series A Preferred Stock based on the aggregate accrued but unpaid
dividends on the shares held by each such holder. If and when any shares are
issued under this Section 3(c) for the payment of accrued dividends, such shares
shall be validly issued and outstanding and fully paid and nonassessable.

 

(d) No dividends on shares of Series A Preferred Stock shall be declared by the
Corporation or paid or set apart for payment by the Corporation at such time as
the terms and provisions of any existing written agreement between the
Corporation and any other party, including any existing agreement relating to
its indebtedness, (i) prohibit or impose any penalty on such declaration,
payment or setting apart for payment or (ii) provide that such declaration,
payment or setting apart for payment would constitute a breach thereof or a
default thereunder, or if such declaration or payment shall be restricted or
prohibited by law.

 

(e) Notwithstanding the foregoing, dividends on the Series A Preferred Stock
shall accumulate, whether or not the terms and provisions set forth in Section
3(d) hereof at any time prohibit the current payment of dividends, whether or
not there are funds legally available for the payment of such dividends and
whether or not dividends are declared.

 

(f) Notwithstanding the foregoing, no dividend will be declared or paid with
respect to shares of the Series A Preferred Stock that are redeemed prior to the
elapse of six months from the Original Issue Date (for avoidance of doubt, such
date being __________).

 

(g) For purposes of these Articles Supplementary, “Business Day” shall mean any
day on which a bank doing business in the State of Washington is not permitted
to be closed.

 

(4) Liquidation Preference.

 

(a) Upon any voluntary or involuntary liquidation, dissolution, or winding up of
the Corporation, the holders of the Series A Preferred Stock then outstanding
are entitled to be paid, or have the Corporation declare and set apart for
payment, out of the assets of the Corporation legally available for distribution
to its stockholders, before any distribution of assets is made to holders of any
Junior Stock, a liquidation preference per share of Series A Preferred Stock
equal to the sum of (i) $1,000.00 (as may be adjusted in accordance with Section
7) and (ii) all accrued and unpaid dividends (the “Liquidation Preference”).

 

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(b) In the event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the available assets of the Corporation are
insufficient to pay the full amount of the Liquidation Preference on all
outstanding shares of Series A Preferred Stock and all shares of Parity Stock,
then the holders of the Series A Preferred Stock and all holders of such Parity
Stock shall share ratably in any such distribution of assets in proportion to
the full liquidation preference to which they would otherwise be respectively
entitled.

 

(c) After payment of the full amount of the Liquidation Preference to which they
are entitled, the holders of Series A Preferred Stock will have no right or
claim to any of the remaining assets of the Corporation.

 

(d) Upon the Corporation’s provision of written notice as to the effective date
of any such liquidation, dissolution or winding up of the Corporation,
accompanied by a check in the amount of the full Liquidation Preference to which
each record holder of the Series A Preferred Stock is entitled, the Series A
Preferred Stock shall no longer be deemed outstanding shares of stock of the
Corporation and all rights of the holders of such shares will terminate. Such
notice shall be given by first class mail, postage pre-paid, to each record
holder of the Series A Preferred Stock at the respective mailing addresses of
such holders as the same shall appear on the stock transfer records of the
Corporation.

 

(e) In determining whether a distribution (other than upon voluntary or
involuntary liquidation), by distribution, redemption or other acquisition of
the Corporation’s equity securities is permitted under Maryland law, no effect
shall be given to amounts that would be needed, if the Corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of stockholders whose preferential rights on dissolution are
superior to those receiving the distribution.

 

(f) The consolidation or merger of the Corporation with or into any other
business enterprise or of any other business enterprise with or into the
Corporation, or the sale, lease or conveyance of all or substantially all of the
assets or business of the Corporation, shall not constitute a liquidation,
dissolution or winding up of the Corporation.

 

(5) Redemption.

 

(a) Mandatory Redemption. At the earlier of (such earlier date, the “Mandatory
Redemption Date”) (i) the fifth anniversary of the Original Issue Date, or (ii)
a Change of Control (as defined below), the Corporation, to the extent that it
has funds legally available therefor shall redeem all of the outstanding shares
of the Series A Preferred Stock for cash at a redemption price per share of
Series A Preferred Stock (the “Redemption Price”) equal to $1,000.00 (as may be
adjusted in accordance with Section 7) plus all accrued and unpaid dividends
thereon up to and including the Mandatory Redemption Date.

 

A “Change of Control” means, after the Original Issue Date, in one or a series
of related transactions:

 

(i) (A) the acquisition by any person, including any syndicate or group deemed
to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), of “beneficial ownership” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be
deemed to have beneficial ownership of all shares of voting stock that such
person or group has the right to acquire regardless of when such right is first
exercisable), directly or indirectly, of stock of the Corporation entitling that
person to exercise more than 50% of the total voting power of all stock of the
Corporation entitled to vote generally in the election of the Corporation’s
directors; and (B) following the closing of any transaction referred to in (A),
neither the Corporation nor the acquiring or surviving entity has a class of
common securities (or American Depositary Receipts representing such securities)
listed on the New York Stock Exchange (the “NYSE”), the NYSE Amex Equities (the
“NYSE Amex”), or the NASDAQ Stock Market (“NASDAQ”), or listed or quoted on an
exchange or quotation system that is a successor to the NYSE, the NYSE Amex or
NASDAQ; or

 

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(ii) the sale, lease or conveyance of all or substantially all of the assets or
business of the Corporation.

 

(b) Optional Redemption. At any time before the Mandatory Redemption Date, the
Corporation, at its option, may redeem shares of the Series A Preferred Stock,
in whole or in part, for the Redemption Price. If less than all of the
outstanding shares of Series A Preferred Stock are to be redeemed, the shares of
Series A Preferred Stock to be redeemed may be selected by any equitable method
determined by the Board provided that such method does not result in the
creation of fractional shares.

 

(c) Procedure for Redemption.

 

(i) Upon the Corporation’s written notice as to the effective date of the
redemption, accompanied by payment in immediately available U.S. funds of the
amount of the full Redemption Price through such effective date to which each
record holder of shares of Series A Preferred Stock to be redeemed is entitled,
shares of the Series A Preferred Stock shall be redeemed and shall no longer be
outstanding shares of stock of the Corporation and all rights of the holders of
such shares will terminate. Such notice shall be given by first class mail,
postage pre-paid, to each record holder of the shares of Series A Preferred
Stock to be redeemed at the respective mailing address of such holder as the
same shall appear on the stock transfer records of the Corporation. No failure
to give such notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any shares of Series A
Preferred Stock except as to the holder to whom notice was defective or not
given.

 

(ii) In addition to any information required by law or by the applicable rules
of any exchange upon which Series A Preferred Stock may be listed or admitted to
trading, such notice shall state: (A) the redemption date; (B) the Redemption
Price; (C) the place or places where the shares of Series A Preferred Stock are
to be surrendered (if so required in the notice) for payment of the Redemption
Price in immediately available U.S. funds (if not otherwise included with the
notice); and (D) that dividends on the shares to be redeemed will cease to
accrue on the redemption date if payment accompanies the notice or, if not, on
the date funds are set aside for payment. If less than all of the shares of
Series A Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series A
Preferred Stock held by such holder to be redeemed.

 

(iii) If notice of redemption of any shares of Series A Preferred Stock has been
given and if the funds necessary for such redemption have been set apart by the
Corporation for the benefit of the holders of any shares of Series A Preferred
Stock so called for redemption, then, from and after the date funds have been
set apart for payment of the Redemption Price, dividends will cease to accrue on
such shares of Series A Preferred Stock, such shares of Series A Preferred Stock
shall no longer be outstanding and all rights of the holders of such shares will
terminate, except the right to receive the Redemption Price therefor. If the
Corporation shall so require and the notice of redemption shall so state,
holders of Series A Preferred Stock to be redeemed shall surrender the
certificates representing such Series A Preferred Stock, to the extent that such
shares are certificated, at the place designated in such notice and, upon
surrender in accordance with said notice of the certificates representing shares
of Series A Preferred Stock so redeemed (properly endorsed or assigned for
transfer, if the Corporation shall so require and the notice shall so state),
such shares of Series A Preferred Stock shall be redeemed by the Corporation at
the Redemption Price. In case less than all of the shares of Series A Preferred
Stock represented by any such certificate are redeemed, a new certificate or
certificates shall be issued representing the unredeemed shares of Series A
Preferred Stock without cost to the holder thereof. In the event that the shares
of Series A Preferred Stock to be redeemed are uncertificated, such shares shall
be redeemed in accordance with the notice and no further action on the part of
the holders of such shares shall be required.

 

(iv) The deposit of funds with a bank or trust company for the purpose of
redeeming Series A Preferred Stock shall be irrevocable except that:

 

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(A) the Corporation shall be entitled to receive from such bank or trust company
the interest or other earnings, if any, earned on any money so deposited in
trust, and the holders of any shares redeemed shall have no claim to such
interest or other earnings; and

 

(B) any balance of monies so deposited by the Corporation and unclaimed by the
holders of the Series A Preferred Stock entitled thereto at the expiration of
two years from the applicable redemption date shall be repaid, together with any
interest or other earnings thereon, to the Corporation, and after any such
repayment, the holders of the shares entitled to the funds so repaid to the
Corporation shall look only to the Corporation for payment of the Redemption
Price without interest or other earnings.

 

(6) Voting Rights. Holders of the Series A Preferred Stock will not have any
voting rights, except that, so long as any shares of Series A Preferred Stock
remain outstanding, the Corporation shall not, without the affirmative vote of
the holders of at least 85% of the Series A Preferred Stock outstanding at the
time voting as a separate class, (A) amend, alter or repeal the provisions of
the Charter (by amendment, merger or otherwise) in such a way that would
materially and adversely affect the powers, special rights, preferences, or
privileges of the Series A Preferred Stock or the holders thereof, or (B) create
or authorize the creation of (by amendment, merger, or otherwise) or issue or
incur any obligation to issue any Series A Preferred Stock (other than as
provided in Section 3(c)) or any Senior Stock or Parity Stock (or other
securities, including notes, debentures or bonds, convertible into or
exchangeable for Senior Stock or Parity Stock), which by their terms shall be
redeemable at any time when any shares of Series A Preferred Stock are issued
and outstanding.

 

(7) Adjustment for Stock Splits and Reverse Stock Splits. If outstanding shares
of the Series A Preferred Stock shall be divided into a greater number of shares
of Series A Preferred Stock or into other securities of the Corporation
convertible into or exchangeable for shares of Series A Preferred Stock, then
the Liquidation Price and Redemption Price, each as in effect immediately prior
to such division, shall, simultaneously with the effectiveness of such division,
be proportionately reduced. Conversely, if outstanding shares of the Series A
Preferred Stock shall be combined into a smaller number of shares of Series A
Preferred Stock or into other securities of the Corporation convertible into or
exchangeable for shares of Series A Preferred Stock, then the Liquidation
Preference and Redemption Price, each as in effect immediately prior to such
combination, shall, simultaneously with the effectiveness of such combination be
proportionately increased. Any adjustment to the Liquidation Preference or
Redemption Price under this Section 7 shall become effective at the close of
business on the date the subdivision or combination referred to herein becomes
effective.

 

(8) Exclusion of Other Rights. The shares of Series A Preferred Stock are not
convertible into or exchangeable for any other property or securities of the
Corporation. The Series A Preferred Stock shall have no preemptive or
subscription rights. The Series A Preferred Stock shall not have any preferences
or other rights other than those specifically set forth herein.”

 

SECOND: The Series A Preferred Stock has been classified and designated by the
Board under the authority contained in the Charter.

 

THIRD: These Articles Supplementary have been approved by the Board in the
manner and by the vote required by law. No stockholder of the Corporation has
any voting rights with respect to these Articles Supplementary.

 

FOURTH: The undersigned acknowledges these Articles Supplementary to be the
corporate act of the Corporation and, as to all matters or facts required to be
verified under oath, the undersigned acknowledges that, to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties of
perjury.

 

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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to
be signed in its name and on its behalf by its President and Chief Executive
Officer and attested to by its Secretary on this ___ day of ______, 2012.

 

ATTEST:   BARRETT BUSINESS SERVICES, INC.           By:      By:               

Name:

Title:

   

Name:

Title:

         

  

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