Item 1.01.
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Entry into a Material Definitive Agreement.
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On March 6, 2017, Volt Information
Sciences, Inc. (Volt), Volt Delta Resource Holdings, Inc. (the Seller), a wholly owned subsidiary of Volt, Maintech Holdings, LLC (Buyer) and MTECH Holdings, LLC entered into a Stock Purchase Agreement (the
Sale Agreement) pursuant to which, among other things, Buyer acquired all of the issued and outstanding capital stock of Maintech, Incorporated (Maintech) from the Seller on
a
cash-free, debt-free basis
(the Acquisition). Buyer is a newly-formed holding company and affiliate of Oak Lane Partners, LLC, whose management team has significant experience in the technology infrastructure support industry.
Under the terms of the Sale Agreement, the purchase price for the Acquisition was $18.3 million, subject to a $100,000 holdback (the
Holdback), deductions for outstanding debt and certain expenses and a customary closing working capital adjustment, which resulted in a net amount of $13.9 million paid to Seller at closing. Such amount is subject to potential
adjustment following closing pursuant to (i) a customary post-closing working capital adjustment and (ii) the release to Volt of the Holdback in the event that certain conditions are satisfied. In the Sale Agreement, the Seller and Buyer
made certain customary representations and warranties and agreed to certain customary covenants. In addition, pursuant to the terms of the Sale Agreement, the Seller agreed to certain
non-competition
and
related covenants, in each case, as further described in the Sale Agreement. The Sale Agreement also includes mutual indemnification obligations between Buyer and Seller, including with respect to breaches of representations, warranties, covenants
and agreements made by such parties in the Sale Agreement. As a result of the Acquisition, Maintech became a wholly-owned subsidiary of Buyer.
In addition, in connection with the Acquisition, certain ancillary agreements were entered into, including, among others, a Transition
Services and Asset Transfer Agreement, dated March 6, 2017 (the Transition Services Agreement), by and between Volt and Maintech pursuant to which Volt agreed to provide certain transition services to Maintech in order to facilitate
the transition of Maintech to Buyer pursuant to the Sale Agreement. Under the Transition Services Agreement, Volt has agreed to provide certain accounting, benefits, payroll, and other transition-related services to Maintech for up to six
(6) months following the closing of the Acquisition. During such period, Maintech will arrange to transition the services it receives pursuant to the Transition Services Agreement to its own personnel and/or other service providers. In
consideration of the services contemplated to be delivered by Volt pursuant to the Transition Services Agreement, Maintech will pay Volt agreed upon, customary amounts on a monthly basis. In addition, the Transition Services Agreement provides for
the transfer of specified assets and liabilities relating to the business of Maintech from affiliates of Volt to the Buyer or its designee(s) following the closing of the Acquisition.
The foregoing summary of the Sale Agreement, the Transition Services Agreement and the transactions contemplated thereby do not purport to be
complete and are subject to, and qualified in their entirety by, the full text of the Sale Agreement and the Transition Services Agreement attached hereto as Exhibit 2.1 and Exhibit 10.1, respectively, which Exhibits are incorporated herein by
reference.
The Sale Agreement and the Transition Services Agreement have been provided solely to inform Volts shareholders and
investors of their terms. They are not intended to provide any other factual information about Volt, the Seller or Maintech. The representations, warranties and covenants contained in the Sale Agreement and the Transition Services Agreement were
made only for purposes of such agreements and as of specific dates, were made solely for the benefit of the parties to the Sale Agreement and the Transition Services Agreement and may be intended not as statements of fact, but rather as a way of
allocating the risk to one of the parties if those statements prove to be inaccurate. In addition, such representations, warranties and covenants may have been qualified by certain disclosures not reflected in the text of the Sale Agreement or the
Transition Services Agreement, and may apply standards of materiality in a way that is different from what may be viewed as material by shareholders of, or other investors in, Volt. Such shareholders and investors are not third-party beneficiaries
of the Sale Agreement or the Transition Services Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Volt, the Seller or
Maintech or any of their respective subsidiaries or affiliates.