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Exhibit 2(c)
AMENDMENT NO. 2 TO
STOCK PURCHASE AGREEMENT
AMENDMENT NO. 2 made as of June 30, 1999 ("Amendment No. 2"), by and
among NovaCare, Inc., a Delaware corporation ("Parent"), NC Resources, Inc., a
Delaware corporation (the "Seller"), Hanger Orthopedic Group, Inc., a Delaware
corporation ("Hanger"), and HPO Acquisition Corp., a Delaware corporation (the
"Purchaser"), to the Stock Purchase Agreement, dated as of April 2, 1999, by and
among the Parent, the Seller, Hanger and the Purchaser, as amended (the "Stock
Purchase Agreement").
W I T N E S S E T H:
WHEREAS, the parties hereto have entered into the Stock Purchase
Agreement pursuant to which, among other things, the Seller shall sell to the
Purchaser, and the Purchaser shall acquire from the Seller, all of the issued
and outstanding shares of common stock, $.01 par value per share, of NovaCare
Orthotics and Prosthetics, Inc., a Delaware corporation (the "Company"); and
WHEREAS, the parties hereto desire to further amend the Stock
Purchase Agreement as hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Defined Terms. All capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed thereto in the Stock
Purchase Agreement.
2. Amendments to Stock Purchase Agreement. Notwithstanding anything
to the contrary contained in the Stock Purchase Agreement:
(a) The Parent, on the one hand, and the Purchaser, on the other
hand, shall each be responsible for one-half of any Damages arising out of or
relating to any claim brought against the Company or any Group Member for
additional payments pursuant to the Agreement of Purchase and Sale among
Sabolich, Inc., an Oklahoma corporation, Sabolich Prosthetics Center of Wichita,
Inc., a Kansas corporation, Sabolich Tri-State Prosthetics, Inc., an Oklahoma
corporation, Sabolich of Florida, Inc., an Oklahoma corporation, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and NovaCare Orthotics & Prosthetics East, Inc., a Delaware
corporation, dated as of July 28, 1994. Any such claim shall otherwise be
subject to the provisions of Section IX of the Stock Purchase Agreement.
(b) The Purchaser, the Company and the Group Members may use the
name "NovaCare" in conjunction with the name "Hanger" or in a reference to
themselves
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for a period of six months after the Closing Date; provided, that (i) such usage
shall be limited to "NovaCare Orthotics & Prosthetics Becoming Hanger
Prosthetics & Orthotics" and/or "NovaCare Orthotics & Prosthetics/Hanger
Prosthetics & Orthotics" and (ii) the Purchaser, the Company and the Group
Members shall not hold themselves out to the public as being affiliated with the
Parent. The Purchaser will indemnify the Parent from any and all liabilities
arising out of the use of the "NovaCare" name as provided herein.
(c) The Purchaser shall pay the Parent $86,700 with respect to the
Parent's license agreement with Microsoft Corporation ("Microsoft"). The
Purchaser, the Company and the Group Members shall have no further liability
with respect to, and shall be indemnified by the Parent against any and all
liabilities arising out of, such license agreement. In the event Microsoft does
not formally convey to Purchaser a license to use Microsoft software, as
currently on such machines, in a timely fashion following the Closing, Parent
shall reimburse Purchaser in full such $86,700 within 30 days from any such
refusal by Microsoft to so convey such license.
(d) Clause (ii) of Section 1.02(a) of the Stock Purchase Agreement
is hereby amended by changing the dollar amount in such clause (ii) from "Ten
Million Dollars ($10,000,000)" to "Fifteen Million Dollars ($15,000,000)".
(e) Clause (ii) of Section 1.02(b) of the Stock Purchase Agreement
is hereby amended by deleting clause (ii) of Section 1.02 thereof in its
entirety and substituting therefor the following:
"(ii) If, on the Closing Date, Adjusted Working Capital is less than
Ninety-Three Million Nine Hundred Eighty-Two Thousand Dollars
($93,982,000.00), then the cash portion of the Purchase Price payable
pursuant to Section 1.02(a) shall be reduced by the amount of such
deficiency (the "Working Capital Deficiency") in Adjusted Working Capital.
If, on the Closing Date, Adjusted Working Capital is greater than
$93,982,000.00, then the cash portion of the Purchase Price payable
pursuant to Section 1.02(a) shall be increased by the amount by which
Adjusted Working Capital exceeds $93,982,000.00 (the "Working Capital
Excess"). Adjusted Working Capital shall be comprised of cash in an amount
of not less than Two Million Dollars ($2,000,000.00), accounts receivable,
inventory, other current assets, accounts payable, accrued payroll and
accrued expenses to third-parties (excluding all inter-company obligations
(other than accrued payroll), accrued but unpaid Taxes and the current
portion of the Acquired-company Notes) of the Company calculated in
accordance with this Agreement and GAAP applied on a basis consistent with
the Company's prior practice (except that accrued payroll shall be
included even if not consistent with the Company's prior practice). The
Adjusted Working Capital shall be initially based upon an estimated trial
balance to be prepared by the Company and presented to the Purchaser as of
the end of the last full month immediately prior to the month in which the
Closing Date occurs. This trial balance shall be attached hereto as
Schedule 1.02(b). At the Closing, the Company shall present to the
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Purchaser the Company's initial calculation of its Adjusted Working
Capital as of the Closing Date."
3. Miscellaneous.
(a) The parties hereto further agree that all notices, requests or
instructions under this Amendment No. 2 or any other agreement made between the
parties hereto in connection with the Stock Purchase Agreement shall be in
writing and delivered personally, sent by telecopy or sent by registered or
certified mail, postage prepaid, return receipt requested, or by FedEx or other
recognized overnight courier, to the address set forth in Section 11.01 of the
Stock Purchase Agreement.
(b) Except as specifically amended herein, the Stock Purchase
Agreement shall remain in full force and effect in accordance with its terms.
(c) This Amendment No. 2 shall be binding upon the parties hereto
and their respective successors and assigns.
(d) This Amendment No. 2 may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 2 to be duly executed on the date first above written.
NC RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
NOVACARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
HANGER ORTHOPEDIC GROUP, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
HPO ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer