Exhibit 99.7
------------
ASSET PURCHASE AGREEMENT
among
ONWARD HEALTHCARE, INC.,
ATC STAFFING SERVICES, INC.
and
ATC HEALTHCARE, INC.
Dated as of April 13, 2005
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xi
Table of Contents
Page
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ARTICLE I. TRANSFERS........................................................1
SECTION 1.01. Transfer of Assets.............................................1
SECTION 1.02. Instruments of Conveyance and Transfer.........................3
SECTION 1.03. Non-Assignable Contracts.......................................3
SECTION 1.04. Non-Assumption of Liabilities..................................4
ARTICLE II. CLOSING, PURCHASE PRICE, ETC.....................................4
SECTION 2.01. Closing........................................................4
SECTION 2.02. Purchase Price.................................................4
SECTION 2.03. Payment of the Purchase Price..................................4
SECTION 2.04. Allocation of Purchase Price...................................5
SECTION 2.05. Purchase Price Adjustment......................................5
ARTICLE III. REPRESENTATIONS AND WARRANTIES...................................6
SECTION 3.01. Representations and Warranties as to the Seller................6
SECTION 3.02. Representations and Warranties of the Buyer...................16
ARTICLE IV. COVENANTS.......................................................17
SECTION 4.01. Covenants of the Seller and the Parent........................17
SECTION 4.02. Confidentiality...............................................19
SECTION 4.03. Expenses......................................................19
SECTION 4.04. Post-Closing Cooperation......................................19
SECTION 4.05. Agreement Not To Compete; Non-Solicitation....................20
SECTION 4.06. Further Assurances............................................22
SECTION 4.07. Names Following Closing.......................................23
SECTION 4.08. Publicity.....................................................23
SECTION 4.09. Healthcare Employees..........................................16
SECTION 4.10. Master Contracts..............................................23
SECTION 4.11. Preparation of Certain Financial Statements...................23
SECTION 4.12. Certain Tax Matters...........................................23
SECTION 4.13. Collection of Receivables.....................................24
SECTION 4.14. Seller's Employees............................................24
SECTION 4.15. Dissolution and Liquidation of the Seller.....................26
SECTION 4.16. Exclusivity...................................................26
ARTICLE V. CONDITIONS PRECEDENT............................................27
SECTION 5.01. Conditions Precedent to Obligations of the Buyer..............27
SECTION 5.02. Conditions Precedent to Obligations of the Seller.............30
ARTICLE VI. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION....................30
SECTION 6.01. Survival of Representations and Warranties....................30
SECTION 6.02. Tax Indemnity.................................................31
SECTION 6.03. General Indemnity.............................................31
SECTION 6.04. Right of Setoff; Escrow.......................................32
SECTION 6.05. Conditions of Indemnification.................................32
SECTION 6.06. Limitations of Liability of Seller and Parent.................33
SECTION 6.07. Limitations of Liability of Buyer.............................33
SECTION 6.08. Remedies Cumulative...........................................34
ARTICLE VII. TERMINATION.....................................................34
SECTION 7.01. Termination...................................................34
SECTION 7.02. Procedure and Effect of Termination...........................34
ARTICLE VIII. MISCELLANEOUS...................................................35
SECTION 8.01. Specific Performance..........................................35
SECTION 8.02. Bulk Transfer Laws............................................35
SECTION 8.03. Expenses, Etc.................................................35
SECTION 8.04. Execution in Counterparts.....................................35
SECTION 8.05. Notices.......................................................35
SECTION 8.06. Amendments and Waivers........................................36
SECTION 8.07. Entire Agreement..............................................36
SECTION 8.08. Applicable Law................................................36
SECTION 8.09. Binding Effect; Benefits......................................37
SECTION 8.10. Assignment....................................................37
SECTION 8.11. Interpretation................................................37
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Schedules
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Schedule 1.01 Excluded Assets
Schedule 2.04 Purchase Price Allocation
Schedule 2.05(iii) Special A/R Accounts
Schedule 3.01(e) Seller's Financial Statements
Schedule 3.01(h) Seller's Properties and Contracts
Schedule 3.01(i) Liens on Seller's Property
Schedule 3.01(j) Litigation
Schedule 3.01(l) Software and Data
Schedule 3.01(n) Sufficiency of Assets
Schedule 3.01(p) Compliance with Laws and Contracts
Schedule 3.01(q) Taxes
Schedule 3.01(r) Employee Benefit Plans
Schedule 3.01(s) Related Party Transactions
Schedule 3.01(t) Governmental Authorizations and Regulations
Schedule 3.01(v) Broker's and Finders' Fees
Schedule 3.01(w) Seller's Creditors
Schedule 3.01(aa) Seller's Employees
Schedule 3.02(c) Effect of Agreements
Schedule 5.01(c) Consents
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Exhibits
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Exhibit A Xxxx of Sale
Exhibit B Escrow Agreement
Exhibit C Accounts Receivable Procedures
Exhibit D Joint Press Release
Exhibit E Consent of New York City Health and Hospitals Corporation
Index of Terms
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Page
A/R Proceeds Amount............................................................5
Ancillary Documents............................................................3
Assets.........................................................................1
Assumed Liabilities............................................................4
Balance Sheet Date.............................................................7
Xxxx of Sale...................................................................3
Business.......................................................................1
Business Property Rights......................................................10
Buyer..........................................................................1
Buyer Deficit..................................................................6
Buyer Group...................................................................31
Closing........................................................................4
Closing Date...................................................................4
Code..........................................................................13
Combined Business..............................................................1
Confidential Information......................................................19
Contemplated Transactions.....................................................16
Contracts......................................................................2
Damages.......................................................................31
Defaulting Party..............................................................34
Employee Benefit Plans.........................................................3
ERISA.........................................................................13
Escrow Agreement...............................................................5
Expenses......................................................................35
GAAP...........................................................................7
Healthcare Employee...........................................................16
HHC...........................................................................28
Holdback.......................................................................5
Key Employee..................................................................27
Liens.........................................................................10
Line Manager..................................................................28
Measurement Date...............................................................5
Parent.........................................................................1
Per Diem Nurse/Allied Staffing................................................22
Permits.......................................................................14
Purchase Price.................................................................4
Related Party.................................................................14
Returns.......................................................................12
Seller.........................................................................1
Seller Deficit.................................................................6
Seller Financial Statements....................................................7
Seller Group..................................................................32
Special A/R Proceeds Amount....................................................5
Target A/R Amount..............................................................5
Taxes.........................................................................13
Taxing Authorities............................................................13
Termination Date..............................................................34
Territory.....................................................................22
Travel Nurse/Allied Staffing..................................................22
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of April 13, 2005, among ONWARD
HEALTHCARE, INC., a Delaware corporation (the "Buyer"), ATC STAFFING SERVICES,
INC., a Delaware corporation (the "Seller") and ATC HEALTHCARE, INC., a Delaware
corporation (the "Parent").
RECITALS
A. The Seller conducts the business of staffing healthcare professionals
for hospitals and other facilities (the "Business").
B. In addition to providing similar services to those of the Business, the
Buyer conducts the business of staffing physicians for hospitals and other
healthcare facilities (collectively with the Business, the "Combined Business").
C. The Seller desires to sell to the Buyer, and the Buyer desires to
purchase from the Seller, substantially all the assets of the Business, and the
parties desire that the Buyer assume none of the liabilities of the Seller
except those liabilities explicitly assumed by the Buyer, all on the terms and
subject to the conditions set forth in this Agreement.
D. The Parent controls the Seller and desires to provide representations,
warranties, covenants and indemnities as set forth in this Agreement.
In consideration of the premises and the mutual covenants herein contained,
the parties hereby agree as follows:
ITEM
TRANSFERS
(b) Transfer of Assets. .2.1. On the terms and subject to the conditions
hereinafter set forth, at the Closing (as hereinafter defined), the Seller shall
sell, convey, transfer, assign and deliver to the Buyer and the Buyer shall
purchase from the Seller, for the aggregate purchase price set forth in Article
II hereof, all the then-existing assets and properties (of every kind, nature
and description, tangible or intangible and wherever situated, whether or not
carried on the books of the Seller) of the Seller, except those assets excluded
pursuant to paragraph (b) below (said assets and properties so to be sold,
conveyed, transferred, assigned and delivered being hereinafter collectively
called the "Assets"), including, without limitation:
(a) all tangible personal property, inventories, equipment, supplies,
tools, fixtures, leaseholds, spare parts and supplies, wherever situated;
(b) all accounts receivable of the Seller as of the Closing Date;
(c) all intangible personal property of any kind or character, whether
evidenced in writing or not, including but not limited to all receivables,
deferred charges and prepaid expenses, bonds, claims, and causes of action
(whether fixed or contingent);
(d) all patents, trademarks and trade names, trademark and trade name
registrations, service marks and service xxxx registrations, copyrights and
copyright registrations, URLs and URL registrations, the applications therefor
and the licenses and franchises with respect thereto, together with the goodwill
and the business appurtenant thereto; all trade secrets, technology (including
technology with respect to which the Seller is a sublicensee, in such case only
insofar as permitted under the applicable sublicense agreement), processes,
inventions, designs, drawings, blueprints, specifications, patterns, royalties,
privileges, permits and all other similar intangible personal property;
(e) all technical materials and guidelines, brochures, sales literature,
promotional material and other selling material;
(f) all databases, customer lists, personnel lists, lead lists and any
other data or information pertaining to the Assets or the Business in whatever
form or medium ("Data");
(g) all papers, documents, instruments, books and records, files,
agreements, books of account and other records by which the Assets might be
identified or enforced, or otherwise pertaining to the Assets or the Business
that are located at the offices or other locations (including, without
limitation, customer invoices, customer lists, vendor and supplier lists, drafts
and other documents and materials relating to customer transactions);
(h) the rights of the Seller under the contracts, understandings,
agreements, licenses, leases, sales orders, purchase orders and other
commitments, whether oral or written (collectively, "Contracts") set forth in
Schedule 3.01(h) of the Seller Disclosure Schedule;
(i) all computer software programs, the source and object codes for such
software programs (to the extent such programs were created in-house) and all
documentation and training manuals related thereto; and
(j) all other assets and rights of every kind and nature, real or personal,
tangible or intangible, that are owned or claimed by the Seller and that are
necessary to, or used by the Seller in connection with, the Business, whether or
not such assets are reflected in the balance sheet and other financial
statements of the Seller. Without limiting the generality of the foregoing, the
Assets shall, except as set forth in paragraph (b) below, include all assets set
forth on the February 28, 2005 balance sheet of the Seller in respect of the
Business, and all such assets as may be acquired by the Seller in respect of the
Business after said date and that would be included on a balance sheet prepared
in like manner from such accounting records as of the Closing Date, except any
such assets that may be or have been disposed of after said date in the ordinary
course of business on a basis consistent with past practice.
.2.2. Anything herein contained to the contrary notwithstanding, the
following assets and properties of the Seller are specifically excluded from the
Assets and shall be retained by the Seller:
(a) all cash on hand of the Seller as of the Closing Date;
(b) the rights of the Seller under any contracts, understandings,
agreements, licenses, leases, sales orders, purchase orders and other
commitments (A) not listed on Schedule 3.01(h) of the Seller Disclosure Schedule
and (B) listed on Schedule 3.01(h) of the Seller Disclosure Schedule under the
heading "Contracts Not to Be Assigned";
(c) all rights and funds in connection with any "employee benefit plan," as
defined in Section 3(3) of ERISA (including any "multiemployer plan" as defined
in Section 3(37) of ERISA) and any profit-sharing, bonus, stock option, stock
purchase, stock ownership, pension, retirement, severance, deferred
compensation, excess benefit, supplemental unemployment, post-retirement medical
or life insurance, welfare or incentive plan, or sick leave, long-term
disability, medical, hospitalization, life insurance, other insurance plan, or
other employee benefit plan, program or arrangement, whether written or
unwritten, qualified or non-qualified, funded or unfunded, for the benefit of
current or former employees of the Seller (collectively, the "Employee Benefit
Plans");
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(d) the minute books, stock records and related company records of the
Seller; and
(e) all rights to refunds for Taxes (as defined herein) accrued prior to
the Closing Date.
(f) The items listed on Schedule 1.01 of the Seller Disclosure Schedule.
(c) Instruments of Conveyance and Transfer. Subject to Section 1.03 below,
on the Closing Date, the Seller shall execute and deliver to the Buyer (a) a
xxxx of sale in the form of the Xxxx of Sale, Assignment and Assumption
Agreement attached hereto as Exhibit A (the "Xxxx of Sale") and (b) such other
documents of transfer that the Buyer may reasonably request, transferring to the
Buyer the properties and assets to be acquired by the Buyer under the terms of
this Agreement (together with the Xxxx of Sale, collectively the "Ancillary
Documents").
(d) Non-Assignable Contracts. Nothing in this Agreement shall be construed
as an attempt or agreement to assign (i) any Contract that is non-assignable
without the consent of the other party or parties thereto unless such consent
shall have been given or (ii) any contract or claim as to which all the remedies
for the enforcement thereof enjoyed by the Seller would not pass to the Buyer as
an incident of the assignments provided for by this Agreement. In order,
however, that the full value of every Contract and claim of the character
described in clauses (i) and (ii) above and all claims and demands on such
Contracts may be realized, the Seller will use their commercially reasonable
efforts to obtain written assignment and, failing that, shall for the period of
one year commencing on the Closing Date, at the request and expense and under
the direction of the Buyer, in the name of the Seller or otherwise as the Buyer
shall specify and as shall be permitted by law, take all action and do or cause
to be done all things (other than the maintenance of personnel) as shall in the
opinion of the Buyer be reasonably necessary or proper (x) in order that the
rights and obligations of the Seller under such Contracts shall be preserved and
(y) for, and to facilitate, the collection of the moneys due and payable, and to
become due and payable, to the Seller in and under every such Contract and claim
and in respect of every such claim and demand, and the Seller shall hold the
same for the benefit of and shall pay the same over promptly to the Buyer.
(e) Non-Assumption of Liabilities.
.5.1. Notwithstanding any other provision of this Agreement or any
ancillary agreement, and regardless of any disclosure to the Buyer, the Buyer
shall not assume any liability, obligation or commitment of the Seller other
than the Assumed Liabilities (as defined in Section 1.04(b) below), including
any liability, obligation or commitment of the Seller, other than the Assumed
Liabilities, based upon, arising out of or resulting from any fact,
circumstance, occurrence, condition, act or omission existing on or occurring on
or prior to the Closing, each of which shall be retained and paid, performed and
discharged when due by the Seller. Without limiting the generality of the
foregoing, it is intended that the Buyer shall acquire the Assets free and clear
of all Liens (as defined in Section 3.01(i)).
.5.2. Upon the terms and subject to the conditions of this Agreement, the
Buyer hereby assumes and agrees to pay, perform and discharge when due all
liabilities and obligations of the Seller ("Assumed Liabilities") arising from
and after the Closing Date with respect to the Business that arise under the
terms of any Contract that shall be assigned to the Buyer as contemplated by
Section 1.01(a)(vii) hereof.
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ITEM
CLOSING, PURCHASE PRICE, ETC.
(b) Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Ropes & Xxxx LLP, 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., New York Time, on April 22,
2005 (the "Closing Date") unless another date, time or place is agreed to in
writing by the parties hereto.
(c) Purchase Price. On the terms and subject to the conditions of this
Agreement, at the Closing, the Seller shall sell, assign, transfer, convey and
deliver to the Buyer, and the Buyer shall purchase from the Seller all the
right, title and interest of the Seller in, to and under the Assets, for an
aggregate purchase price payable as set forth in Section 2.03 hereof in the
amount of $20,000,000 (the "Purchase Price"), subject to adjustment as provided
in Section 2.05 below.
(d) Payment of the Purchase Price. On the Closing Date, subject to the
terms and conditions of this Agreement and the Ancillary Documents, and to
adjustment as provided in Section 2.05 below, in full consideration for the
sale, assignment, transfer, conveyance and delivery to the Buyer of the Assets:
.4.1. the Buyer shall pay to the Seller an amount equal to $18,750,000,
plus such amount set forth on Schedule 2.03 as reimbursement for certain
pre-payments made by the Seller, in cash by wire transfer to the accounts
specified by the Seller, and
.4.2. the Buyer shall cause $1,250,000 in cash (the "Holdback") to be
deposited in an escrow account pursuant to the Escrow Agreement (the "Escrow
Agreement") among the Buyer, the Seller and a mutually agreeable Escrow Agent
(the "Escrow Agent"), in form and substance as set forth in Exhibit B hereto.
Pursuant to the terms of the Escrow Agreement, the Escrow Agent shall hold the
Holdback to secure, in part, the indemnification of the obligations of the
Seller pursuant to Article VI hereof and the purchase price adjustment
provisions of Section 2.05 hereof.
(e) Allocation of Purchase Price. The Purchase Price and any other item
required to be treated as additional Purchase Price among the Assets in
accordance with Treasury Regulation Section 1.1060-1 (or any comparable
provisions of state or local law) or any successor provision shall be allocated
between Seller and Buyer as set forth on Schedule 2.04 of the Seller Disclosure
Schedule. The Buyer and the Seller shall cause to be filed any and all forms
(including Form 8594), statements and schedules with respect to such allocation.
Notwithstanding any other provisions of this Agreement, the foregoing treatment
shall survive the Closing Date without limitation.
(f) Purchase Price Adjustment.
.6.1. For purposes of this Section 2.03,
(a) a "Measurement Date" means the last business day of each two-week
period commencing on the Closing Date and ending 360 days after the Closing
Date.
(b) the "A/R Proceeds Amount" means, with respect to any Measurement Date,
the sum of amounts collected in cash by the Buyer on account of the Seller's
accounts receivable sold, assigned, transferred, conveyed and delivered to the
Buyer hereunder on the Closing Date (excluding any Special A/R Proceeds Amount)
during the period starting on the Closing Date and ending on the Measurement
Date.
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(c) the "Special A/R Proceeds Amount" means, with respect to any
Measurement Date, the sum of amounts collected in cash by the Buyer on account
of the Seller's accounts receivable listed on Schedule 2.05(iii) of the Seller
Disclosure Schedule during the period starting on the Closing Date and ending on
the Measurement Date.
(d) a "Target A/R Amount" means, with respect to any Measurement Date, the
sum of (i) $8,856,258 and (ii) the aggregate amount of any payments received by
the Seller in accordance with Section 2.05(b)(i)(A) prior to the Measurement
Date.
.6.2. On any Measurement Date, including the final Measurement Date, (i)
the Buyer shall issue written instructions to the Escrow Agent to pay to the
Seller from the Holdback the sum of (A) the greater of 0 and an amount by which
the A/R Proceeds Amount exceeds the Target A/R Amount and (B) the Special A/R
Proceeds Amount and (ii) to the extent the amount of the Holdback on any
Measurement Date is less than the amount payable pursuant to subclause (i)
hereof (the "Buyer Deficit"), the Buyer shall pay an amount equal to the Buyer
Deficit to the Seller, net of any amounts drawn from the Holdback by the Buyer
(including amounts in respect of disputed claims) and/or otherwise set off
pursuant to Section 6.04.
.6.3. On the final Measurement Date, in the event that the Target Accounts
Receivable Amount exceeds the A/R Proceeds Amount, then (i) the Buyer shall draw
from the Holdback an amount by which the Target A/R Amount exceeds the A/R
Proceeds Amount and (ii) to the extent the amount in Holdback on the final
Measurement Date is less than the amount payable pursuant to subclause (i)
hereof (the "Seller Deficit"), the Seller shall pay an amount equal to the
Seller Deficit to the Buyer. Parent acknowledges and agrees that it and the
Seller shall be jointly and severally liable to the Buyer for any amounts due
and payable pursuant to this clause (c).
.6.4. The payments contemplated by Sections 2.05(b)(ii) and 2.05(c)(ii)
above will be made in cash by wire payable to the Seller or Buyer, as the case
may be, within five (5) business days of any Measurement Date.
.6.5. The Buyer agrees to use commercially reasonable efforts during the
period commencing on the Closing Date and ending on the date that is 360 days
after the Closing Date (or such longer period as is expressly contemplated in
Exhibit C hereto) to collect all amounts due with respect to Seller's accounts
receivable sold, assigned, transferred, conveyed and delivered to the Buyer
hereunder on the Closing Date (excluding accounts receivable of the Seller
listed on Schedule 2.05(iii) of the Seller Disclosure Schedule) and to allocate
amounts collected in respect of such accounts receivable, all in accordance with
the process set forth in Exhibit C hereto. It is understood that neither the
Seller nor Parent shall have any contact or make any arrangements with any party
that is obligated to make payments of such accounts receivable, except to the
extent and in the manner expressly set forth in Exhibit C hereto.
ITEM
REPRESENTATIONS AND WARRANTIES
(b) Representations and Warranties as to the Seller. The Seller and the
Parent, jointly and severally, represent and warrant to the Buyer as follows:
.2.1. Organization, Qualifications and Corporate Power; Subsidiaries. (a)
The Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified to do
business as a foreign corporation in each other jurisdiction in which it owns or
leases any real property or in which the nature of the Business makes such
licensing or qualification necessary. The Seller has all requisite power and
authority to own, operate and lease the Assets, to carry on the Business as it
is now being conducted and to execute and deliver this Agreement and the
Ancillary Documents, and to perform its obligations hereunder and thereunder.
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(b) The Seller does not own of record or beneficially, or have any right or
obligation to acquire, directly or indirectly, (A) any shares of outstanding
capital stock or securities convertible into or exchangeable for capital stock
of any other corporation or (B) any participating interests in any partnership,
joint venture or other non-corporate business enterprise.
.2.2. Authorization of Agreements; No Violation. The Seller has all
requisite power and authority to execute and deliver this Agreement and the
Ancillary Documents and to perform its obligations hereunder and thereunder. The
execution and delivery by the Seller of this Agreement and the Ancillary
Documents and the performance by the Seller of its obligations hereunder and
thereunder, have been duly authorized, and will not violate any provision of
law, any order of any court or other agency of government, the organizational
documents of the Seller, any judgment, award or decree or any provision of any
indenture, agreement or other instrument to which the Seller is a party, or by
which the Seller or any of its properties or assets is bound or affected, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any Lien upon any of the properties
or assets of the Seller, or result in any suspension, revocation, impairment,
forfeiture or non-renewal of any Permit (as hereinafter defined).
.2.3. Validity. This Agreement has been duly executed and delivered by the
Seller and constitutes, and the Ancillary Documents, when executed and delivered
by the Seller as contemplated hereby, will constitute, the legal, valid and
binding obligations of the Seller, enforceable against the Seller in accordance
with their respective terms.
.2.4. Governmental Approvals. No approval, authorization, consent or order
or action of or filing with any court, administrative agency or other
governmental authority (i) is required for the execution and delivery by the
Seller of this Agreement or the Ancillary Documents, or the consummation by the
Seller of the transactions contemplated hereby or thereby or (ii) is necessary
in order that the Business may be conducted immediately following the Closing
Date substantially in the same manner as heretofore conducted.
.2.5. Financial Statements. The Seller has previously delivered to the
Buyer (i) the unaudited balance sheets of the Seller as of February 28, 2005
(the "Balance Sheet Date"), and the related unaudited statements of income and
cash flows for the twelve (12) months then ended, certified by the Chief
Executive Officer and Chief Financial Officer of the Seller, as set forth in
Schedule 3.01(e) of the Seller Disclosure Schedule and (ii) a detailed accounts
receivable aging report as of the Balance Sheet Date (collectively, the "Seller
Financial Statements"). The Seller Financial Statements (A) are complete and
correct in all material respects, (B) were prepared from the books and records
of the Seller and (C) fairly present the financial position of the Seller as of
the respective dates specified therein and the income, cash flows and
stockholders' equity for the respective periods then ended, and are all in
conformity with generally accepted accounting principles applied on a consistent
basis ("GAAP") (subject to normal year-end adjustments and the absence of
footnotes).
.2.6. Absence of Undisclosed Liabilities. Except as and to the extent
reflected in the Seller Financial Statements, the Seller has no liabilities or
obligations of any kind or nature, whether known or unknown or secured or
unsecured (whether absolute, accrued, contingent or otherwise, and whether due
or to become due), including without limitation any tax liabilities due or to
become due, or whether incurred in respect of or measured by the assets, sales,
income or receipts of such Seller for any period.
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.2.7. Absence of Certain Changes or Events. Since the Balance Sheet Date,
except for the transactions contemplated hereby, the Seller did not, with
respect to the Business:
(a) incur any obligation or liability (whether fixed, absolute, accrued,
contingent, known or unknown, or otherwise, of any kind or nature whatsoever),
except normal trade or business obligations incurred in the ordinary course of
business and consistent with past practice and except in connection with this
Agreement and the transactions contemplated hereby;
(b) discharge or satisfy any material Lien or pay, cancel or compromise any
obligation, liability (fixed or contingent), debt or claim, in each case of any
kind or nature whatsoever, other than in the ordinary course of business and
consistent with past practice;
(c) mortgage, pledge or subject to any Lien, any of the Assets;
(d) transfer, lease or otherwise dispose of any of the Assets except for a
fair consideration in the ordinary course of business and consistent with past
practice or, except in the ordinary course of business and consistent with past
practice, acquire any assets or properties to be used by or in connection with
the activities of the Business;
(e) waive or release any rights of material value related to the Business,
except in any case for a fair consideration in the ordinary course of business
and consistent with past practice;
(f) transfer or grant any rights under any concessions, leases, licenses,
sublicenses, agreements with respect to any patents, inventions, trademarks,
trade names, service marks or copyrights or know how related to the Business,
except in the ordinary course of business and consistent with past practice;
(g) suffer any adverse change in any of its operations or in its financial
condition or in its assets, properties, business or prospects, which adverse
change is material or could reasonably be expected to be material to the
Business;
(h) surrender, had revoked or otherwise terminated or terminate any
license, Permit or other approval, authorization or consent from any court,
administrative agency or other governmental authority relating to the conduct of
the Business;
(i) make or grant any general wage or salary increase or enter into any
employment contract with any officer or employee or with a collective bargaining
representative for a period of employment of more than thirty (30) days;
(j) make any capital expenditure or enter into any commitment therefor;
(k) introduce any change with respect to the operation of the Business,
including its methods of accounting; or
(l) enter into any agreement or commitment to take any action described in
this Section 3.01(g).
.2.8. List of Properties, Contracts and Other Data. Annexed hereto as
Schedule 3.01(h) of the Seller Disclosure Schedule is a list setting forth with
respect to the operations of the Business the following:
(a) all leases of personal property to which the Seller is a party relating
to the Business, either as lessee or lessor;
(b) all foreign-trained nursing contracts;
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(c) (A) all patents, trademarks and trade names, trademark and trade name
registrations, service marks and service xxxx registrations, copyright
registrations which are unexpired as of the date hereof and used in connection
with the operations of the Business, all applications pending on said date for
patents or for trademark, trade name, service xxxx, URL's or copyright
registrations, and all other proprietary rights, owned or held by the Seller or
an affiliate thereof and used in connection with the operations of the Business,
and (B) all licenses and sublicenses granted by or to the Seller and all other
agreements to which the Seller is a party which relate, in whole or in part, to
any items of the categories mentioned in (A) above or to other proprietary
rights used by the Seller in connection with, the Business, whether owned by the
Seller or any affiliate thereof;
(d) all contracts, understandings and commitments (including, without
limitation, powers of attorney, mortgages, indentures and loan agreements or
obligations for borrowed money including, without limitation, guaranties)
relating to the Business, whether oral or written, to which the Seller is a
party or to which the Seller or any of its assets or properties are subject and
which are not specifically referred to in (i) through (iii) above; and
(e) all agreements with third party payers. True and complete copies of all
documents and complete descriptions of all oral understandings (if any) referred
to in Schedule 3.01(h) of the Seller Disclosure Schedule and requested by the
Buyer have been provided or made available to the Buyer and their counsel.
Except as disclosed in said Schedule, there is no claim that any contract
referred to in the Schedule is not valid and enforceable in accordance with its
terms for the periods stated therein, and there does not exist under any such
contract any existing default or event of default or event which with notice or
lapse of time or both would constitute such a default by Seller, or to the
knowledge of Seller, any other party thereto. Each contract listed in Schedule
3.01(h) of the Seller Disclosure Schedule is valid and enforceable and, to the
knowledge of the Seller, there are no circumstances existing on the date hereof
which would result in any such contract becoming invalid or unenforceable.
Schedule 3.01(h) of the Seller Disclosure Schedule identifies each contract to
which the consent of the other party thereto will be required to assign such
contract to the Buyer as contemplated by this Agreement. Except as set forth on
Schedule 3.01(h) of the Seller Disclosure Schedule or otherwise provided in
writing prior to or on the Closing Date, during the last twelve months, neither
Seller nor any affiliate of the Seller has been notified and has no reason to
know that a customer (or group of related customers) has terminated or intends
to terminate a services contract with the Seller in the event of the
consummation of this transaction or otherwise, that accounted for more than
$50,000 of Seller's revenues during fiscal year 2005 of the Seller. The Seller
further represents that the foreign-trained nursing contracts referred to in
Schedule 3.01(h) are the only contracts to be assigned to the Buyer to which the
Parent is a party.
.2.9. Title to Properties, Absence of Liens and Encumbrances. Except to the
extent set forth on Schedule 3.01(i) of the Seller Disclosure Schedule, the
Seller has good and marketable title to all the Assets, free and clear of all
liens, charges, pledges, security interests or other encumbrances of any nature
whatsoever (collectively, "Liens"). All leases of personal property of each
Seller to be assigned to the Buyer hereunder are valid and binding in accordance
with their respective terms and there is not under any of such leases any
existing default, or any condition, event or act which with notice or lapse of
time or both would constitute such a default, nor would consummation of the
transactions contemplated hereby result in a default or any such condition,
event or act, which, in any such case, would have a material adverse effect on
the Business.
.2.10. Litigation.
(a) Schedule 3.01(j) of the Seller Disclosure Schedule sets forth a
complete list and an accurate description of all claims, actions, suits,
proceedings and investigations pending or, to the knowledge of the Seller,
threatened, by or against the Seller or relating to any operations of the
Business. No such pending or threatened claims, actions, suits, proceedings or
investigations, if adversely determined, would, individually or in the
aggregate, have a material adverse effect on the Business or its properties. The
Seller has no knowledge of any basis for any other such claim, action, suit,
proceeding or investigation which, if adversely decided, would have such a
material adverse effect on the Business or its properties.
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(b) There are no actions, suits, proceedings or claims pending before or by
any court, arbitrator, regulatory authority or government agency against or
affecting the Parent or any of its subsidiaries (including the Seller) that
could reasonably be expected to or would enjoin or prevent the consummation of
the transactions contemplated by this Agreement and the Ancillary Documents.
(c) There are no claims asserted or threatened against the Seller with
respect to the conduct of the Business alleging any material breach of any
Contract or alleging any healthcare malpractice or negligence.
.2.11. Patents, Trademarks, Etc. The patents, trademarks and trade names,
trademark and trade name registrations, service xxxx registrations, URLs and URL
registrations, and copyrights, the applications therefor and the licenses and
sublicenses with respect thereto (collectively, "Business Property Rights")
listed in clause (i) of Schedule 3.01(h) of the Seller Disclosure Schedule,
constitute all Business Property Rights of the Seller or the Parent. The Seller
owns or has valid rights to use all such Business Property Rights without
conflict with the rights of others. No person has made or, to the knowledge of
the Seller, threatened to make, any claims that the operations of the Business
are in violation of or infringe upon any patent, trademark, trade dress,
copyright, trade secrets or any other proprietary or trade rights of any third
party.
.2.12. Data:
(a) The Data and applications, computer software programs and databases
used by the Seller in the conduct of the Business (other than programs and
databases that are generally commercially available) are described in reasonable
detail to provide the Buyer with an understanding of the Data in Schedule
3.01(l) of the Seller Disclosure Schedule along with all software used to create
or necessary to access all the Data. Except as set forth in Schedule 3.01(l) of
the Seller Disclosure Schedule, the Seller owns outright all of the Data used by
it in the Business. None of the Data or related software used or maintained by
the Seller, and no use thereof, infringes upon or violates any patent,
copyright, trade secret or other proprietary right of any other person and, to
the knowledge of the Seller, no claim with respect to any such infringement or
violation is threatened. The Seller has taken all steps reasonably necessary to
protect its right, title and interest in and to the Data owned by the Seller,
including, without limitation, the use of written agreements containing
appropriate confidentiality provisions with all third parties having access to
the source code or other underlying information relating to the Data.
(b) The Seller possesses or has access to the original and all copies of
all documentation, including, without limitation, all source code for the
software to be transferred as related to the Data and all rights to hold and
transfer the Data owned or used by it. The Seller has provided the Buyer with
full and complete access to all such Data in either (A) a readable printed
format acceptable to the Buyer or (B) an electronic format accessible by the
Buyer using generally available computer software programs. Upon consummation of
the transactions contemplated by this Agreement, the Buyer will own all the Data
owned by the Seller immediately prior to the Closing, free and clear of all
claims, liens, licenses, encumbrances, obligations and liabilities and, with
respect to all agreements for the lease or license of the Data and the related
software to be transferred which require consents or other actions as a result
of the consummation of the transactions contemplated by this Agreement in order
for the Buyer to use and perform operations on such Data and any related
software after the Closing Date, the Seller will have obtained such consents or
taken such other actions so required.
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(c) The Seller maintains policies and procedures regarding data security
and privacy that are commercially reasonable and, in any event, in compliance
with all applicable laws. To the knowledge of the Seller, there have been no
security breaches relating to, violations of any security policy regarding or
any unauthorized access of the Data used in the Business. The use and
dissemination of any and all data and information concerning individuals by the
Business is in compliance with all applicable privacy policies, terms of use,
and laws. The transactions contemplated to be consummated hereunder as of the
Closing will not violate any privacy policy, terms of use, or Laws relating to
the use, dissemination, or transfer of any such Data or information.
.2.13. Accounts Receivable. The accounts receivable of the Seller as
reflected in the Seller Financial Statements, to the extent uncollected on the
date hereof, and each such accounts receivable reflected on the books of the
Seller on the date hereof, is (i) valid and existing, arose from bona fide
transactions in the ordinary course of business, represent monies due, and the
Seller has made reserves reasonably adequate (subject to adjustment for
operations and transactions through the Closing Date in the ordinary course of
business consistent with past practices) for such accounts receivable not
collectible in the ordinary course of business; and (iii) subject to the
reserves described in clause (i), not subject to any refunds, discounts, rights
of setoff or other adjustments, defenses, assignments, conditions or Liens.
.2.14. Sufficiency of Assets. Except as set forth in Schedule 3.01(n) of
the Seller Disclosure Schedule, the Assets (i) constitute all of the assets,
tangible and intangible, of any nature whatsoever, necessary and adequate to
operate in all material respects the Business in the manner presently operated
by the Seller and (ii) include all of the operating assets of the Seller.
.2.15. Condition of Assets. All tangible personal property, fixtures,
machinery and equipment comprising the Assets are (i) in a reasonable state of
repair (ordinary wear and tear excepted) and operating condition and are
suitable for the purposes for which they are being used and (ii) substantially
conform with all applicable ordinances, codes, regulations and requirements the
violation of which would have a material adverse effect on the Seller or the
Business taken as a whole, including without limitation all applicable
ordinances, codes, regulations and requirements relating to the environment or
occupational safety, and no law presently in effect or condition precludes or
restricts continuation of the present use of such properties.
.2.16. Compliance With Laws and Contracts. Except as set forth in Schedule
3.01(p) of the Seller Disclosure Schedule, the conduct of the Business by the
Seller does not violate any federal, state or local laws, statutes, ordinances,
rules, regulations, decrees, orders, permits or other similar items in force on
the date hereof, including without limitation, Permits (as hereinafter defined)
that are applicable to the Business (such laws, statutes, ordinances, rules,
regulations decrees, orders, permits or other similar items being hereinafter
called the "Applicable Laws"). The Seller is not in material breach of any
Contract.
.2.17. Taxes.
(a) Except as set forth in Schedule 3.01(q) of the Seller Disclosure
Schedule, the Seller has (A) duly and timely filed all returns, declarations,
reports, estimates, claims for refunds, information returns and statements
("Returns") required to be filed by it in respect of any Taxes (as hereinafter
defined), all of which Returns (including all informational Returns) were
correct as filed and correctly reflect the facts regarding the income, business,
assets, operations, activities and status of the Seller as well as any Taxes
required to be paid or collected by the Seller; (B) timely paid or withheld all
Taxes that are due and payable or asserted by any Taxing Authority (as defined
herein) to be due by the Seller; (C) established, consistent with past practice,
an adequate reserve on its books and records for the payment of all Taxes with
respect to any taxable period (or portion thereof) ending on or prior to the
Closing Date; and (D) complied with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes and has timely withheld from
employee wages and paid over to the proper governmental authorities when due all
amounts required to be so withheld and paid over.
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(b) For purposes of this Agreement, "Taxes" shall mean (A) any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license, withholding on
amounts paid or received, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit taxes, custom
duties or other taxes, governmental fees or other like assessments or charges of
any kind whatsoever, together with any interest or any penalty, fines, addition
to tax (whether or not disputed) or additional amount imposed on the Seller by
any governmental authority responsible for the imposition, administration or
collection of any such taxes (domestic or foreign) ("Taxing Authorities"), (B)
liability for the payment of any amounts of the type described in (A) as a
result of being a member of an affiliated, consolidated, combined or unitary
group, or being a party to any agreement or arrangement whereby liability for
payments of such amounts was determined or taken into account with reference to
the liability of any other person for any period prior to the Closing Date and
(C) liability with respect to the payment of any amounts described in (A) as a
result of any express or implied obligation to indemnify any other person.
(c) The Seller has not incurred any Tax liabilities other than Tax
liabilities arising in the ordinary course of business since the date of the
most recent Seller Financial Statements.
(d) The Seller is not a party to any agreement, contract, plan or
arrangement that would result, individually or collectively, in the payment of
any amount that would not be deductible by the Buyer by reason of Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code") or would be
subject to Section 4999 of the Code.
(e) None of the assets of the Seller is property required to be treated as
being owned by any other person pursuant to the "safe harbor" leasing provisions
of Section 168(f)(8) of the Internal Revenue Code of 1954 as in effect prior to
the repeal thereof. No agreement or consent pursuant to Section 341(f) of the
Code has ever been made with respect to any assets or properties of the Seller.
.2.18. Employee Matters.
(a) Schedule 3.01(r) of the Seller Disclosure Schedule contains a true and
complete list of all Employee Benefit Plans of the Seller and employment
agreements and the Seller has made available to the Buyer true and complete
copies of each material Employee Benefit Plan and employment agreement of the
Seller.
(b) There does not now exist, nor do any circumstances exist that would
reasonably be expected to result in, any liabilities under (A) Title IV of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), (B)
Section 302 of ERISA, or (C) Sections 412 and 4971 of the Code, in each case,
that could reasonably be expected to result in any liability.
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(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions hereunder will (either alone or in conjunction
with any other event such as a termination of employment) (A) result in any
payment following the Closing becoming due to any of Seller's employees under
any Employee Benefit Plan, (B) increase any benefits otherwise payable under any
Employee Benefit Plan or (C) result in an acceleration of the time of payment,
funding or vesting of any such benefits.
(d) Each Employee Benefit Plan has been operated and administered in all
material respects in accordance with its terms and applicable law, including but
not limited to ERISA and the Code.
(e) There are no pending, threatened or anticipated claims by or on behalf
of any Employee Benefit Plan, by any employee or beneficiary covered under such
Employee Benefit Plan, or otherwise involving any such Employee Benefit Plan
(other than routine claims for benefits).
(f) There is no and has not been within the last three years, any (A)
unfair labor practice, labor dispute (other than routine individual grievances)
or labor arbitration proceeding pending or, to the Seller's knowledge,
threatened against the Seller relating to the Business, except as could not
reasonably be expected to have a material adverse effect on the Business, (B)
activity or proceeding by any labor union or representative thereof to organize
any of the Seller's employees, including any union organizing effort or
representation petition before the National Labor Relations Board or any state
labor board, or (C) lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to such employees.
(g) None of the Seller's employees have, or within the last three years
have been, a member of a bargaining unit covered by a collective bargaining
agreement to which the Seller is a party.
.2.19. Related Party Transactions. Except as set forth in Schedule 3.01(s)
of the Seller Disclosure Schedule, there are no existing arrangements or
proposed transactions between the Seller or its subsidiaries and (i) the Parent,
any officer, manager or member of the Seller or its subsidiaries or any member
of the immediate family of any of the foregoing persons (such officers,
managers, members and family members being hereinafter individually referred to
as a "Related Party"), (ii) any business (corporate or otherwise) which a
Related Party owns, directly or indirectly, or in which a Related Party has an
ownership interest, or (iii) between any Related Party and any business
(corporate or otherwise) with which the Seller or its subsidiaries regularly
does business.
.2.20. Governmental Authorizations and Regulations.
(a) Except as set forth in Schedule 3.01(t) of the Seller Disclosure
Schedule, the Seller has all governmental licenses, franchises and permits
("Permits") required under applicable law for the conduct of the Business as
currently conducted. Schedule 3.01(t) of the Seller Disclosure Schedule lists
all material Permits held by the Seller.
(b) The Business is being conducted in compliance with all Permits. The
Seller has not received any notice of any alleged violation of any of the
foregoing Permits.
(c) Neither the Seller nor any of its properties, operations or businesses
is subject to any court or administrative order, judgment, injunction or decree.
To the knowledge of the Seller and the Parent, no action has been taken or
recommended by any governmental or regulatory official, body or authority,
either to revoke, withdraw or suspend any certificate of need or any license to
operate the business of the Seller.
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.2.21. Absence of Certain Business Practices. No employee or agent of the
Seller, nor any officer, manager or member of the Seller, acting alone or
together, has (i) received, directly or indirectly, any rebates, payments,
commissions, promotional allowances or any other economic benefits, regardless
of their nature or type, from any customer, supplier, physician, health care
employee, governmental employee or other person with whom the Seller has done
business directly or indirectly; or (ii) directly or indirectly, given or agreed
to give any gift or similar benefit to any customer, supplier, physician, health
care employee, governmental employee or other person who is or may be in a
position to help or hinder the business of the Seller (or assist the Seller in
connection with any actual or proposed transaction) which, in the case of either
clause (i) or clause (ii), (A) would reasonably be expected to subject the
Seller to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (B) if not given in the past, would reasonably be
expected to have an adverse effect on the Business or (C) if not continued in
the future, would reasonably be expected to have an adverse effect on the
Business.
.2.22. Credentials, Licenses and Authorizations. To Seller's knowledge, (A)
each Healthcare Employee holds all the requisite credentials and licenses to
practice lawfully in his or her healthcare discipline in the state in which he
or she is presently employed by the Seller; (B) each Healthcare Employee and
employee of the Seller employed in the conduct of the Business is legally
authorized to work permanently in the United States without restriction; and (C)
no complaints or proceedings are pending or threatened concerning the right of
any Healthcare Employee to practice lawfully in his or her healthcare discipline
in the state in which he or she is presently employed, nor concerning the legal
authorization of any Healthcare Employee or employee of the Seller employed in
the conduct of the Business to work permanently in the United States. The Seller
has delivered or has caused to be delivered to the Buyer all documentation
reasonably satisfactory to the Buyer evidencing the matters referred to in this
subsection.
.2.23. Broker's or Finders' Fees. Except as set forth on Schedule 3.01(w)
of the Seller Disclosure Schedule, all negotiations relative to this Agreement
and the transactions contemplated hereby have been carried out by the Seller
directly with the Buyer, without the intervention of any persons on behalf of
the Seller in such a manner to give rise to any claim by any person against
either Buyer for a finder's fee, brokerage commission or similar payment.
.2.24. Seller's Creditors. Schedule 3.01(x) of the Seller Disclosure
Schedule sets forth all of the Seller's creditors, including without limitation,
the Seller's secured, general unsecured and other trade creditors and amounts
owed to each such creditor as of the Closing Date. As of the Closing Date, no
consent from any such creditor or any creditor of the Parent is necessary in
order for the Seller to sell, transfer and assign the Assets to the Buyer free
and clear of all Liens, except such as have been obtained and are in full force
and effect.
.2.25. Solvency.
(a) Seller is not now insolvent and will not be rendered insolvent by any
of the transactions contemplated in connection with this Agreement, including
the payoff of any indebtedness of the Parent or the Seller out of the proceeds
received by the Seller hereunder (collectively, the "Contemplated
Transactions"). As used in this section and for purposes of Section 5.01(d),
"insolvent" means that the sum of the debts and the other probable liabilities,
subordinated, contingent or otherwise, of the Seller exceeds the present fair
saleable value of Seller's assets.
13
(b) Immediately after giving effect to the consummation of the Contemplated
Transactions: (A) the Seller will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; (B) Seller will not have unreasonably small capital with
which to conduct its present business or the business as proposed to be
conducted after the Closing Date; and (C) Seller will have assets (calculated at
fair market value) that exceed its debts and liabilities, subordinated,
contingent or otherwise.
.2.26. Other Information. None of the information furnished by the Seller
or Parent to the Buyer in this Agreement, the exhibits hereto, the schedules
identified herein (including the Seller Disclosure Schedule), or in any
certificate or other document to be executed or delivered pursuant hereto by the
Seller at or prior to the Closing Date, is false or misleading or contains any
misstatement of material fact, or omits to state any material fact required to
be stated in order to make the statements therein not misleading in light of the
circumstances under which they were made.
.2.27. Healthcare Employees. Attached hereto as Schedule 3.01(aa), is a
true and complete list of the healthcare employees of the Seller (each, a
"Healthcare Employee") including their name, address and other information so as
to identify each such Healthcare Employee to the Buyer.
(c) Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller as follows:
.3.1. Organization, Corporate Power, Etc. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Buyer has all requisite corporate power and authority to acquire,
own, lease and operate its properties and to execute and deliver this Agreement
and the Ancillary Documents and to perform its obligations hereunder and
thereunder.
.3.2. Authorization of Agreements. The execution, delivery and performance
by the Buyer of this Agreement and the Ancillary Documents, and the consummation
by the Buyer of the transactions contemplated hereby and thereby, have been duly
authorized by all requisite corporate action. This Agreement has been duly and
validly executed by the Buyer and constitutes the legal, valid and binding
obligations the Buyer, enforceable in accordance with its terms. The Ancillary
Documents, when duly executed and delivered in accordance with this Agreement,
will constitute the legal, valid and binding obligation of the Buyer,
enforceable in accordance with its terms.
.3.3. Effect of Agreements. Except as set forth on Schedule 3.02(c) hereto,
the execution and delivery by the Buyer of this Agreement and the Ancillary
Documents, and the performance by the Buyer of its obligations hereunder and
thereunder, will not violate any provision of law, any order of any court or
other agency of government, the Certificate of Incorporation or Bylaws of the
Buyer or any judgment, award or decree or any indenture, agreement or other
instrument to which the Buyer is a party or by which the Buyer or its properties
or assets are bound or affected, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under, any such
indenture, agreement or other instrument, or result in the creation or
imposition of any Lien upon any of the properties or assets of the Buyer.
.3.4. Litigation Relating to Transaction. There are no actions, suits,
proceedings or claims pending before any court, arbitrator or government agency
against or affecting the Buyer which might enjoin or prevent the consummation of
the transactions contemplated by this Agreement or the Ancillary Documents.
14
.3.5. Governmental Approvals. No approval, authorization, consent or order
or action of or filing with any court, administrative agency or other
governmental authority is required for the execution and delivery by the Buyer
of this Agreement or the Ancillary Documents or the consummation by the Buyer of
the transactions contemplated hereby or thereby.
.3.6. Broker's or Finder's Fees. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried out by the
Buyer directly with the Seller without the intervention of any persons on behalf
of the Buyer in such a manner to give rise to any claim by any person against
the Seller for a finder's fee, brokerage commission or similar payment.
ITEM
COVENANTS
(b) Covenants of the Seller and the Parent.
.2.1. The Seller and the Parent agree that, at all times between the date
hereof and the Closing Date, unless the parties hereto shall otherwise agree in
writing, the Seller shall:
(a) carry on the Business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted;
(b) use its reasonable best efforts, but only to the extent consistent with
past practice, to (A) preserve intact their respective business organizations
and goodwill, (B) maintain its rights and franchises, (C) retain the services of
its officers and employees, (D) preserve intact its relationships with
customers, suppliers and others having business dealings with it and (E) keep in
full force and effect insurance comparable in amount and scope of coverage to
the insurance now carried by the Seller;
(c) maintain all its assets and properties deemed reasonably necessary for
the conduct of the Business in good repair, order and condition, reasonable wear
and tear excepted;
(d) maintain its books of account and records in the usual, regular and
ordinary manner, on a basis consistent with past practice, and use its best
efforts to comply with all laws applicable to it and to the conduct of the
Business and perform all its material obligations without default;
(e) not change the character of the Business in any material manner;
(f) not enter into any collective bargaining agreement or individual
employment agreement;
(g) not take any of the actions specified in clauses (i) through (xii) of
Section 3.01(g).
.2.2. Between the date of this Agreement and the Closing Date, the Seller
and Parent will afford the representatives of the Buyer reasonable access during
normal business hours to the offices, facilities, books and records of the
Seller and Parent and the opportunity to discuss the affairs of the Seller with
officers and, with the prior consent (not to be unreasonably withheld) of the
Seller or Parent, as applicable, employees of the Seller or Parent familiar
therewith.
.2.3. Between the date of this Agreement and the Closing Date, the Seller
shall not, except as required by GAAP, (i) utilize accounting principles
different from those used in the preparation of the financial statements
referred to in Section 3.01(f), (ii) change in any manner its method of
maintaining its books of account and records from such methods as in effect on
the Balance Sheet Date, or (iii) accelerate booking of revenues or the deferral
of expenses, other than as shall be consistent with past practice and in the
ordinary course of business.
15
.2.4. Between the date hereof and the Closing Date, the Seller shall, with
the Buyer's assistance and cooperation, but at the expense of the Seller,
promptly apply for or otherwise seek and use its commercially reasonable efforts
to obtain all authorizations, consents, waivers and approvals as may be required
in connection with the transactions contemplated hereby, including but not
limited to, the assignment of the Contracts of which the Seller is the
beneficiary to be assigned to the Buyer pursuant to Section 1.01(a)(vi) hereto.
.2.5. Between the date hereof and the Closing Date, the Seller will not
enter into any transaction or make any agreement or commitment, or permit any
event to occur, which would result in any of the representations, warranties or
covenants of the Seller contained in this Agreement not being true and correct
at and as of the time immediately after the occurrence of such transaction or
event.
.2.6. Each of the Seller and the Parent shall promptly advise the Buyer in
writing if it becomes aware of any inaccuracy in any representation or warranty
made in this Agreement.
(c) Confidentiality. .3.1. The Seller and the Parent shall keep
confidential, and shall instruct their respective officers, managers, employees
and advisors to keep confidential, the Buyer's Confidential Information
(including Confidential Information relating to the Combined Business). The
Seller and the Parent shall not, and shall instruct their respective officers,
managers, employees and advisors not to use such Confidential Information for
its own benefit or for the benefit of any other person.
.3.2. The Buyer shall keep confidential, and shall instruct its officers,
managers, employees and advisors to keep confidential, (i) prior to the Closing
Date, the Seller's Confidential Information relating to the Business, and (ii)
the Parent's Confidential Information. The Buyer shall not, and shall instruct
its officers, managers, employees and advisors not to use any such Confidential
Information for its own benefit or for the benefit of any other person. It is
understood and agreed that from and after the Closing Date, the provisions of
this clause (b) shall not apply to or restrict in any manner Buyer's use of any
Confidential Information of the Seller or Parent relating to any of the Assets.
.3.3. For purposes of this Agreement, "Confidential Information" means any
confidential or proprietary information, including, but not limited to, any
marketing or business plan, financial or personnel matters, contracts, present
or future customers, employees, employee lists, investors or business, which is
the kind of information that, by its nature, would be treated as confidential
including, but not limited to, any material in written or electronic form marked
as "Confidential"; provided, however, that Confidential Information shall not
apply to information received by any party hereto which such party demonstrates
(i) was, is or becomes generally available to the public other than as a result
of a breach of this Section 4.02; (ii) was or is developed by such party
independently of and without reference to any Confidential Information of the
disclosing party; or (iii) was, is or becomes available to such party on a
nonconfidential basis from a third party not bound by a confidentiality
agreement or any legal, fiduciary or other obligation restricting disclosure. A
party may also disclose Confidential Information to the extent required by an
order of a court of competent jurisdiction, administrative agency or
governmental body, or by any law, rule or regulation, or by subpoena, summons or
other administrative or legal process. Neither Seller nor Parent shall disclose
any Confidential Information of Seller or Parent relating to any of the Assets
in reliance on the exceptions in clauses (ii) and (iii) above.
16
(d) Expenses. Except as set forth in Sections 4.04 and Article VI, all
costs and expenses incurred in connection with this Agreement and the Ancillary
Documents and the transactions contemplated hereby and thereby shall be paid by
the party incurring such expense.
(e) Post-Closing Cooperation. .5.1. The Buyer, Seller and the Parent shall
cooperate with each other, and shall cause their officers, managers, employees,
agents, auditors and representatives, as applicable, to cooperate with each
other after the Closing Date in connection with the orderly transition of the
Business from the Seller to the Buyer. After the Closing Date, upon reasonable
written notice, the Seller and the Parent shall furnish or cause to be furnished
to the Buyer and its officers, employees, counsel, auditors and representatives
access, during normal business hours, to such information and assistance
relating to the Business as is reasonably necessary for financial reporting and
other accounting matters, including, but not limited to, updated accounts
receivable reports and preparation of audited financial statements for periods
prior to the Closing Date.
.5.2. After the Closing, upon reasonable written notice, the Buyer and the
Seller shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the Assets (including, access to books and records)
as is reasonably necessary for the filing of all Returns, and making of any
election related to Taxes, the preparation for any audit by a taxing authority,
and the prosecution or defense of any claim, suit or proceeding related to any
tax return. The Seller and the Buyer shall cooperate with each other in the
conduct of any audit or other proceeding relating to taxes involving the
Business.
.5.3. For a period of five (5) years after the Closing Date, upon written
consent of the Buyer (which consent shall not be unreasonably withheld), Parent
and Seller and their representatives shall have reasonable access during normal
business hours and following reasonable advance notice to all of the books and
records of Seller transferred to Buyer to the extent such access may reasonably
be required by Parent or Seller in connection with matters relating to or
affected by the operation of Seller prior to the Closing Date or any Excluded
Liabilities.
.5.4. Each party shall reimburse the other for reasonable out-of-pocket
costs and expenses incurred in assisting the other pursuant to this Section
4.04. Neither party shall be required by this Section 4.04 to take any action
that would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations (or, in the case of the Buyer, the
Business). Any information relating to the Business received by the Seller
pursuant to this Section 4.04 shall be subject to Section 4.03.
.5.5. In furtherance of Section 1.03 hereof, after Closing, for a period of
not more than one (1) year, the Seller, Parent and Buyer shall use commercially
reasonable efforts to cooperate in obtaining for the benefit of the Buyer
further consents to assignments of Contracts, which consents were not obtained
prior to Closing. For the avoidance of doubt, it is understood that
notwithstanding anything to the contrary contained in this Agreement, the
Contracts for which consents to assignments were not obtained prior to Closing
constitute Assets.
17
(f) Agreement Not To Compete; Non-Solicitation. .6.1. The Seller
understands that the Buyer would not have entered into this Agreement absent the
provisions of this Section 4.05 and, therefore, the Seller and the Parent shall
not directly or indirectly:
(a) for a period of three (3) years from the Closing Date, in the Territory
engage in the business of Per Diem Nurse/Allied Staffing services or provide any
management, consulting, financial, administrative or other services to any Per
Diem Nurse/Allied Staffing business, including participating directly or
indirectly as an officer, director, stockholder (excluding a less than 5%
stockholder in a publicly held corporation), member, operator, sole proprietor,
independent contractor, consultant, franchisor, franchisee, owner, employee,
agent, representative or partner of, or having any direct or indirect financial
interest (including the interest of a creditor) in, any Per Diem Nurse/Allied
Staffing business;
(b) for a period of two (2) years from the Closing Date, in the Territory
engage in the business of Travel Nurse/Allied Staffing or provide any
management, consulting, financial, administrative or other services to any
Travel Nurse/Allied Staffing business, including participating directly or
indirectly as an officer, director, stockholder (excluding a less than 5%
stockholder in a publicly held corporation), member, operator, sole proprietor,
independent contractor, consultant, franchisor, franchisee, owner, employee,
agent, representative or partner of, or having any direct or indirect financial
interest (including the interest of a creditor) in, any Travel Nurse/Allied
Staffing business;
(c) for a period of three (3) years from the Closing Date, (A) solicit,
recruit or hire (including engaging as independent contractors) any employees of
the Buyer who are not Per diem Nurse/Allied Staffing or Travel Nurse/Allied
Staffing employees of the Buyer (including employees of the Combined Business),
(B) solicit, recruit or hire (including engaging as independent contractors) any
employees of the Buyer who are Per diem Nurse/Allied Staffing or Travel
Nurse/Allied Staffing employees of the Buyer assigned within the Territory,
except that for purposes of these clauses (A) and (B) that solicitation pursuant
to general advertising, will not constitute a violation of this clause (iii),
(C) solicit, induce or attempt to induce any customer, supplier, licensee or
other Person to cease doing business with the Buyer or in any way interfere with
the relationship between any such customer, supplier, licensee or other business
entity and the Buyer, except that for purposes of this clause (C) acts of
solicitation by the Seller or Parent of or either of them entering into
contracts with the Buyer's customers outside of the Territory shall be permitted
or (D) assisting any person in any way to do, or attempt to do, anything
prohibited by clauses (A), (B) or (C) above;
(d) for a period of three (3) years from the Closing Date, solicit any
customer or prospective customer of the Buyer (including those that have become
customers of the Combined Business) to purchase any services in the Territory
sold by the Combined Business from anyone other than the Buyer and its
affiliates, or assist any person in any way to do, or attempt to do, anything
prohibited by this clause (iv); and
(e) on the Closing Date Seller shall deliver to Buyer a list of assignments
of healthcare personnel placed through the New Jersey Hospital Association
Registry (the "NJHAR") in healthcare facilities within the State of New Jersey,
and for a period of three (3) years from the Closing Date, Seller shall provide
to Buyer on a monthly basis, the details of any and all updates to assignments
of healthcare personnel placed through the NJHAR. Such reports shall contain all
information agreed to between the Seller and the Buyer, but shall contain at a
minimum the names of each healthcare facility where the Seller or its affiliates
have assigned healthcare personnel through the NJHAR during the immediately
preceding month and the total number of such personnel so assigned within that
month. The above, to the contrary notwithstanding, Seller shall not make any
placements through the NJHAR in the excluded Territory after the Closing date
and in accordance with Section 4.05(a)(ii) above.
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.6.2. For purposes of this Section 4.05,
(a) "Per Diem Nurse/Allied Staffing" means the recruitment of and placement
of registered nurses, licensed practical nurses, certified nursing assistants,
respiratory therapists, physical therapists, physical therapy assistants,
occupational therapists, certified occupational therapy assistants, speech
language pathologists, radiology technology services, including services
provided by radiology technologists, mammographers, cat scan technologists, MRI
technologists, ultrasound technologists, nuclear medicine technologists,
dosimetrists, radiation therapists, vascular technologists, medical
technologists and/or surgical technologists on a per diem pay rate basis for
temporary assignments at a customer's facilities;
(b) the "Territory" means (1) anywhere within the State of Connecticut; (2)
anywhere within the following counties of the State of New York: Bronx, Kings,
New York, Orange, Queens, Richmond, Rockland, Westchester, Nassau and Suffolk;
(3) anywhere within the following counties of the State of New Jersey: Bergen,
Essex, Hudson, Hunterdon, Xxxxxx, Middlesex, Monmouth, Xxxxxx, Passaic,
Somerset, Sussex, Union, Xxxxxx; and (4) with any of the hospitals and/or
healthcare facilities located within Ocean County New Jersey in which Seller has
conducted business within the past two years and which are listed on Schedule
4.05 of the Seller Disclosure Schedule; and
(c) "Travel Nurse/Allied Staffing" means recruitment of and placement of
registered nurses, licensed practical nurses, certified nursing assistants,
respiratory therapists, physical therapists, physical therapy assistants,
occupational therapists, certified occupational therapy assistants, speech
language pathologists, radiology technology services, including services
provided by radiology technologists, mammographers, cat scan technologists, MRI
technologists, ultrasound technologists, nuclear medicine tecnologists,
dosimetrists, radiation therapists, vascular technologists, medical
technologists and/or surgical technologists on assignments for a specific term
at a customer's facilities.
.6.3. Notwithstanding any other provision of this Agreement, it is
understood and agreed that the remedy of indemnity payments pursuant to Article
VI and other remedies at law would be inadequate in the case of any breach of
the covenants contained in this Section 4.05. the Buyer shall be entitled to
equitable relief, including the remedy of specific performance, with respect to
any breach or attempted breach of such covenants.
(g) Further Assurances. From time to time, as and when requested by any
party, each party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions as such other party may reasonably deem
necessary or desirable to consummate the transactions contemplated by this
Agreement, including, in the case of the Seller, executing and delivering to the
Buyer such assignments, deeds, bills of sale, consents and other instruments as
the Buyer or its counsel may reasonably request as necessary or desirable for
such purpose.
(h) Names Following Closing. Following the Closing, neither the Seller nor
the Parent shall thereafter use any trademarks and trade names acquired by the
Buyer hereunder or names confusingly similar thereto, including, but not limited
to, the names "ATC Staffing Services" and "All Care" or variations thereof and
further, that such names shall not be used, in perpetuity, by the Seller or the
Parent or their successors or assignees, within the Territory.
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(i) Publicity. The parties will consult with each other and will mutually
agree upon any press release or other public announcement pertaining to the
transactions contemplated hereunder or this Agreement and shall not issue any
such press release or make any such public announcement prior to such
consultation and agreement, except as may be required by applicable law, in
which case the party proposing to issue such press release or make such public
announcement shall use its best efforts to consult in good faith with the other
party before issuing any such press release or making any such public
announcement. The parties have agreed that the Seller and Parent may issue the
press release attached hereto as Exhibit D promptly following the execution and
delivery of this Agreement.
(j) Master Contracts. If the Seller or the Parent amends any provision of a
master contract that is incorporated into any Contract such party shall cause
the third party thereto to agree and acknowledge that any amendments,
modifications or waivers to such master contract shall only pertain to the
particular attachment subject of such amendment, modification or waiver. If the
Seller or the Parent assigns any such attachments or any rights under any such
master contracts to any third party, such party shall cause such third party to
agree to the same restriction as provided in the immediately preceding sentence.
(k) Preparation of Certain Financial Statements. .11.1. The Seller and the
Parent each agrees to provide the Buyer's independent accountants with all
financial information, other than information held by the Buyer, and data
reasonably necessary to enable its independent accountants to prepare and review
the audited consolidated balance sheets of the Business for the 12-month periods
ending as of February 28, 2003, February 28, 2004, February 28, 2005, and the
period from March 1, 2005 through the Closing Date, and in each case the related
statements of income, shareholders' equity and cash flows for the years then
ended.
.11.2. The Seller and the Parent each agrees that, if requested by the
Buyer as being necessary to prepare the audited financial statements as
contemplated by paragraph (a) above, the Seller or the Parent, as applicable,
shall provide to the Buyer's independent accountants a management representation
letter in a form reasonably acceptable to the independent accountants covering
the periods referred to above.
(l) Certain Tax Matters.
.12.1. Tax Treatment of Transaction. For all federal, state, local and
foreign income and franchise Tax purposes, each of the parties hereto agrees to
treat the acquisition of the Assets by the Buyer, pursuant to the terms and
conditions of this Agreement, as a taxable sale of the assets of the Seller to
the Buyer solely in exchange for cash (and the liabilities assumed by the Buyer
from the Seller).
.12.2. Responsibility for Taxes. The Seller shall be responsible for and
shall pay (i) its respective Taxes for all periods ending before, on or after
the Closing Date and (ii) any and all Taxes incurred by or imposed upon any of
the parties hereto as a result of the consummation of any of the transactions
contemplated by this Agreement.
.12.3. Tax Returns. The Seller shall file (or cause to be filed) on a
timely basis, for all taxable periods ending on or before the date of the
liquidation of the Seller, all federal, state and local Returns required to be
filed after the Closing Date with respect to the Seller. The preparation of such
Returns and the positions taken thereon shall be consistent in all material
respects with the Seller's past tax accounting principles. The Buyer shall have
the right to review and approve (not to be unreasonably withheld) the Seller's
Returns that relate to the Assets and assessments and the right to contest any
assessment for which the Buyer may be adversely affected or bears any economic
responsibility. The Seller shall cooperate with the Buyer in connection with any
potential or actual contest.
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.12.4. Prorations. The Seller shall bear all real property, personal
property and ad valorem tax liability with respect to the Assets if the lien or
assessment date arises prior to the Closing Date irrespective of the reporting
and payment dates of such taxes. All other real property taxes, personal
property taxes, or ad valorem obligations and similar recurring taxes and fees
on the Assets shall be prorated between the Buyer and the Seller as of 12:01
a.m. eastern standard time on day following the Closing Date.
.12.5. Other Tax Compliance Matters. The Seller shall deliver (or cause to
be delivered) on a timely basis correct and complete Form W-2s and Form 1099s
and all other similar forms or reports required to be delivered to employees,
independent contractors or other similar parties pursuant to the Code or the
regulations thereunder.
(m) Collection of Receivables. In the event the Seller or Parent receives
any monies, drafts, checks and other instruments of payment with respect to
Receivables of the Business, and such payments are not directly attributable to
the Seller's or the Parent's lockbox, the Seller or Parent shall promptly (but
in no case later than 3 business days after receipt thereof) remit such amounts
to the Buyer in the identical form received, provided that payments applying to
both Receivables and other amounts of the Seller or Parent and accounts
receivable and other amounts of the Buyer shall be deposited in the Buyer's
account and funds in the amount not attributable to the Receivables and accounts
receivable and other amounts of the Buyer shall be promptly remitted to the
Seller. The Buyer shall promptly notify the Seller of any such amounts so
received. In the case of payments made to the Seller's or Parent's lockbox, such
amounts as are required shall be deposited in the Seller's lockbox until
collection thereof , at which time (but in no case later than 5 business days
after collection thereof), the Seller shall remit to the Buyer all such amounts
as are properly attributable to Receivables, accounts receivable and other
amounts of the Buyer. The Seller shall promptly notify the Buyer of any such
amounts so received. On a monthly basis for the twelve (12) months following the
Closing Date and thereafter as needed, the Buyer, Seller and Parent agree to
cooperate in reconciling the respective accounts receivable and other amounts,
ascertaining compliance with this Section 4.12, and addressing joint customer
issues.
(n) Seller's Employees.
.14.1. Salaries and Benefits.
(a) The Seller and Parent shall be responsible for (A) the payment of all
wages and other remuneration due to the Seller's employees (including the Key
Employees and the Healthcare Employees, as defined herein) with respect to their
services as employees of Seller through the close of business on the Closing
Date, including all pro rata bonus payments, commissions and all vacation pay
earned prior to the Closing Date; (B) the payment of any termination or
severance payments and the provisions of health plan continuation coverage in
accordance with the requirements of COBRA and Sections 601 through 608 of ERISA;
and (C) any and all payments to employees required under the WARN Act.
(b) Seller and Parent shall, jointly and severally, be liable for any
claims made or incurred by its employees and their beneficiaries through the
Closing Date under any employee benefit or retirement plan or unemployment or
workers' compensation benefits statutes, regulations or other arrangements. For
purposes of the immediately preceding sentence, a charge will be deemed
incurred, in the case of hospital, medical or dental benefits, when the services
that are the subject of the charge are performed and, in the case of other
benefits (such as disability or life insurance), when an event has occurred or
when a condition has been diagnosed that entitles the employee to the benefit.
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.14.2. Seller's Retirement and Savings Plans.
(a) All employees of the Seller who may be hired by the Buyer as of the
Closing Date and who are participants in the Seller's or Parent's retirement
plans, if any, shall retain their accrued benefits under such retirement plans
as of the Closing Date, and the Seller (or the Seller's or Parent's retirement
plans) shall retain sole liability for the payment of such benefits as and when
such employees become eligible therefor under such retirement plans. All such
employees of the Seller shall become fully vested in their accrued benefits
under the Seller's and Parent's retirement plans as of the Closing Date, and the
Seller and Parent will so amend any such retirement plans if necessary to
achieve this result. The Seller and Parent shall cause the assets of any such
retirement plan to equal or exceed the benefit liabilities of such retirement
plan on a plan-termination basis as of the Closing Date.
(b) Each of the Parent and the Seller will cause its savings plans, if any,
to be amended in order to provide that Seller's employees (including the Key
Employees and the Healthcare Employees as defined herein) shall be fully vested
in their accounts under such savings plan as of the Closing Date and all
payments thereafter shall be made from such savings plan as provided in such
savings plan.
.14.3. No Transfer of Assets. Neither the Seller nor the Parent shall make
any transfer of pension or other employee benefit plan assets to the Buyer.
.14.4. General Employee Provisions.
(a) The Seller, the Parent and the Buyer shall give any notices required by
any Applicable Laws and take whatever other actions with respect to the plans,
programs and policies described in this Section 4.13 as may be necessary to
carry out the arrangements described in this Section 4.13.
(b) The Seller, the Parent and the Buyer shall provide each other with such
plan documents and summary plan descriptions, employee data or other information
as may be reasonably required to carry out the arrangements described in this
Section 4.13.
(c) If any of the arrangements described in this Section 4.13 are
determined by the Internal Revenue Service or other governmental body to be
prohibited by law, the Seller, the Parent and the Buyer shall modify such
arrangements to as closely as possible reflect their expressed intent and retain
the allocation of economic benefits and burdens to the parties contemplated
herein in a manner that is not prohibited by law.
(d) The Seller shall provide the Buyer with completed I-9 forms and
attachments, and employee credentials, licenses, and employee medical and
exposure records with respect to the Key Employees and the Healthcare Employees
(as defined herein), except for such employees as the Seller certifies in
writing to the Buyer are exempt from such requirement.
(e) The Buyer shall not have any responsibility, liability or obligation,
whether to the Seller's current employees as of the Closing Date, former
employees or their beneficiaries, with respect to any claim in respect of
employment by the Seller through the Closing Date, including but not limited to
any employee benefit plans, practices, programs or arrangements (including the
establishment, operation or termination thereof and the notification and
provision of COBRA coverage extension) maintained by Seller or Parent.
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(o) Dissolution and Liquidation of the Seller. For a period of two (2)
years following the Closing Date, the Seller shall maintain its corporate
existence.
(p) Exclusivity. The Seller and the Parent shall not, and shall not direct,
authorize or permit any of the officers, employees or representatives of the
Seller (and they shall be responsible for non-compliance with the following
provisions by any of the foregoing) to, directly or indirectly, (i) initiate,
solicit or encourage (including by way of providing information) any prospective
acquiror or the invitation or submission of any inquiries, proposals or offers
or any other efforts or attempts that constitute, or may reasonably be expected
to lead to, any proposed acquisition of the Seller or the Seller's Business or
engage in any discussions or negotiations with respect thereto or otherwise
cooperate with or assist or participate in, or facilitate any such inquires,
proposals, discussions or negotiations or (ii) accept any proposed acquisition
of the Seller or the Seller's Business or enter into any agreement or agreement
in principle providing for or relating to such proposed acquisition or enter
into any agreement or agreement in principle requiring the Seller to abandon,
terminate or fail to consummate the transactions contemplated hereby or breach
its obligations hereunder. On the date hereof the Seller and the Parent shall
immediately cease and cause to be terminated any existing solicitation,
initiation, encouragement, activity, discussion or negotiation with any parties
conducted heretofore by the Seller or the Parent or any of their representatives
with respect to any such any proposed acquisition of the Seller or the Seller's
Business.
ITEM
CONDITIONS PRECEDENT
(b) Conditions Precedent to Obligations of the Buyer. The obligations of
the Buyer under this Agreement are subject to the satisfaction at or prior to
the Closing Date of each of the following conditions (any of which may be waived
in writing by the Buyer, in whole or in part):
.2.1. Accuracy of Representations and Warranties. The representations and
warranties of the Seller and the Parent contained in this Agreement or in any
certificate or document delivered to the Buyer pursuant hereto shall be true and
correct on and as of the Closing Date as though made at and as of that date, and
the Seller and the Parent shall have delivered to the Buyer a certificate to
that effect.
.2.2. Compliance with Covenants. The Seller and the Parent shall have
performed and complied with all terms, agreements, covenants and conditions of
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and the Seller and the Parent shall have delivered to the Buyer a
certificate to that effect.
.2.3. Consents. The Buyer shall have received copies of consents and other
documents, including but not limited to consents set forth on Schedule 5.01(c)
of the Seller Disclosure Schedule, reasonably satisfactory to the Buyer
evidencing the release of any and all Liens on the Assets and the consent by all
holders of continuing indebtedness of the Seller (including holders of
indebtedness of the Parent for which the Seller has provided guarantees or other
similar support or security) for the sale, transfer and assignment of the Assets
to the Buyer, and such consents and other documents shall be in full force and
effect.
.2.4. Solvency Certificate. The Buyer shall have received a certificate,
dated the Closing Date, and signed by the Chief Executive Officer and Chief
Financial Officer of the Seller, in form and substance reasonably satisfactory
to the Buyer, together with such other evidence reasonably requested by the
Buyer, confirming that the Seller shall not be rendered insolvent after giving
effect to the Contemplated Transactions.
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.2.5. Oncall Staffing Termination Agreement. The Buyer shall have received
(i) executed copies of a termination agreement and any other ancillary
agreements (collectively, the "Oncall Termination Agreements") related to the
termination of the franchise operations of the Business of Oncall Staffing, Inc.
("Oncall"), and other documentation, all in form and substance satisfactory to
the Buyer and (ii) a certification by the Seller that all the transactions
contemplated under the Oncall Termination Agreements have been consummated in
compliance with the terms thereof (without giving effect to any amendment,
waiver or supplement to such agreements without the written consent of the
Buyer).
.2.6. Employees.
(a) The employment agreements entered into between each of Xxxxxxx XxXxxxxx
and Xxxxx X'Xxxxxx (each, a "Key Employee") with the Buyer, on or before the
date hereof shall, as of the Closing Date, continue to be in full force and
effect, shall not have been otherwise terminated, and the Key Employees shall
not be in breach of such employment agreements.
(b) The Seller shall have delivered to each of Xxxxxx Xxxx, Xxx Xxxxx and
Xxxxx Arbiblit (each, a "Line Manager"), the Buyer's written offer of employment
in the form previously furnished to the Seller, and shall have cooperated with
the Buyer in its efforts to hire such Line Manager, and such Line Manager shall
have accepted in writing employment with the Buyer as of the Closing Date, such
acceptance not having been rescinded or otherwise terminated on or prior to the
Closing Date.
(c) Each Line Manager shall have executed and delivered confidentiality
agreements and noncompete agreements for the benefit of the Buyer, in form and
substance reasonably acceptable to the Buyer, and such confidentiality agreement
and noncompete agreements shall be in full force and effect as of the Closing
Date.
(d) It is specifically understood, acknowledged and agreed by the parties
hereto (x) that the obligations of the Seller in this Section 5.01(b) and in any
other provision of this Agreement are not intended to be for the benefit of any
Key Employee, Line Manager or Healthcare Employee, their beneficiaries or any
third party and (y) that the Buyer's employment of any Key Employee, Line
Manager or Healthcare Employee is an "at-will" employment arrangement.
.2.7. Assignment of Contracts. The Seller shall have obtained all the
authorizations, consents, waivers and approvals required in connection with the
valid and binding assignment of those Contracts to be assigned to the Buyer
pursuant to this Agreement and set forth in Schedule 3.01(h) of the Seller
Disclosure Schedule that are Active Contracts that (i) account for at least
$25,549,376.20 of Seller's revenues in the aggregate during the prior 12-month
period ending on February 28, 2005 and (ii) are listed on Schedule 3.01(h) of
the Seller Disclosure Schedule as a contract under which the Seller has an
actively working foreign trained healthcare employee. An "Active Contract" is
any written Contract with a third party under which the Seller has invoiced such
third party within ninety (90) days of the date hereof and has an actively
working Healthcare Employee; provided, that, it shall be sufficient for purposes
of satisfying the requirement for a written Contract with respect to New York
City Health and Hospitals Corporation ("HHC") that HHC shall have executed and
delivered to the Buyer the consent attached as Exhibit E hereto.
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.2.8. Ancillary Documents. The Seller shall have executed and delivered the
Ancillary Documents to which it is a party, and the Ancillary Documents shall be
in full force and effect as of the Closing Date
.2.9. Escrow Agreement. The Seller shall have executed and delivered the
Escrow Agreement, and the Escrow Agreement shall be in full force and effect as
of the Closing Date.
.2.10. Supporting Documents. On or prior to the Closing Date, the Buyer and
its counsel shall have received copies of the following supporting documents:
(a) (A) copies of the certificate of incorporation of each of the Seller
and Parent and all amendments thereto, certified as of a recent date by the
Secretary of State of the State of Delaware, (B) a certificate of said Secretary
dated as of a recent date as to the good standing of each of the Seller and
Parent and listing all documents of the Seller and Parent on file with said
Secretary and (C) a tax certificate of the tax authority of the State of
Delaware dated as of a recent date as to the good standing of each of the Seller
and Parent; and
(b) a certificate of the secretary of each of the Seller and the Parent
dated as of the Closing Date and certifying: (A) that attached thereto is a true
and complete copy of the certificate of incorporation of such person as in
effect on the date of such certification; (B) that attached thereto is a true
and complete copy of resolutions adopted by the board of directors of such
person authorizing the execution, delivery and performance of this Agreement and
the Ancillary Documents, and the transactions contemplated hereby and thereby
and that all such resolutions are still in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated by this
Agreement and the Ancillary Documents; (C) that the certificate of incorporation
of such person has not been amended since the date of the last amendment
referred to in the certificate delivered pursuant to clause (i)(B) above; and
(D) as to the incumbency and specimen signature of each officer of such person
executing this Agreement and any certificate or instrument furnished pursuant
hereto, and a certification by another officer of such person as to the
incumbency and signature of the officer signing the certificate referred to in
this paragraph (ii).
.2.11. No Material Adverse Change. There shall not have occurred, since the
date hereof until the Closing Date, any material adverse change (i) in the
financial condition or results of operations or prospects of the Business or
(ii) in the ability of the Seller to conduct the Business in a manner consistent
with past practice, and the Seller and the Parent shall have so certified to the
Buyer in writing.
.2.12. Change of Name. On or before the Closing Date, the Seller, Parent
and any other subsidiary of the Parent shall amend its certificate of
incorporation and take all other action necessary to change its name or any name
under which the Business has been operated to one sufficiently dissimilar to
names being used in the operation of the Business to avoid confusion, as
determined by the Buyer in its reasonable judgment. Such changes shall
specifically include, but shall not be limited to, the termination of all "doing
business as" (d/b/a) filings or other common usage of the names "ATC Staffing
Services" and "All Care" and all variations thereof.
.2.13. All Proceedings To Be Satisfactory. All proceedings to be taken by
the Seller in connection with the transactions contemplated hereby and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Buyer and their counsel, and the Buyer and said counsel shall
have received all such counterpart originals or certified or other copies of
such documents as it or they may reasonably request.
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.2.14. Consents and Regulatory Approvals. The Buyer shall have been
furnished with the written consents, permits, licenses, authorizations and
approvals in forms acceptable to the Buyer of any and all persons, including
without limitation government agencies, authorities and third parties (other
than third party consents related to the assignment of Contracts pursuant to
Section 5.01(f) hereof), required to be obtained prior to the consummation of
the transactions contemplated hereby and required to be obtained in order that
the Buyer may conduct the Business immediately following the Closing Date.
(c) Conditions Precedent to Obligations of the Seller. The obligations of
the Seller under this Agreement are subject to the satisfaction at or prior to
the Closing Date of each of the following conditions (any of which may be waived
in writing by the Seller, in whole or in part):
.3.1. Accuracy of Representations and Warranties. The representations and
warranties of the Buyer contained in this Agreement or in any certificate or
document delivered to the Seller pursuant hereto shall be true and correct on
and as of the Closing Date as though made at and as of that date, and the Buyer
shall have delivered to the Seller a certificate to such effect.
.3.2. Ancillary Documents. The Buyer shall have executed and delivered the
Ancillary Documents to which it is a party, and the Ancillary Documents shall be
in full force and effect as of the Closing Date.
.3.3. Escrow Agreement. The Buyer shall have executed and delivered the
Escrow Agreement, and the Escrow Agreement shall be in full force and effect as
of the Closing Date.
.3.4. Legal Actions or Proceedings. No legal action or proceeding shall
have been instituted or threatened seeking to restrain, prohibit, invalidate or
otherwise affect the consummation of the transactions contemplated hereby.
.3.5. Consents and Regulatory Approvals. The Buyer shall have been
furnished with the written consents, permits, licenses, authorizations and
approvals of any and all persons, including without limitation government
agencies, authorities and third parties, required to be obtained prior to the
consummation of the transactions contemplated hereby and required to be obtained
in order that Buyer may conduct the Business immediately following the Closing
Date.
ITEM
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
(b) Survival of Representations and Warranties. The representations,
warranties and covenants made by any party hereto in this Agreement or in any
certificate or other Ancilliary Document delivered in connection with the
Closing, shall survive until the date that is two (2) years following the
Closing; provided, that all representations and warranties relating to due
organization and due authorization, execution and delivery and Sections 4.02,
4.03, 4.04(a), (b), and (d), 4.06, 4.07, 4.10 and 4.11 shall survive Closing
indefinitely; provided further, that the provisions set forth in Sections
4.04(c), 4.05, and 4.14 shall survive until the last day that each such covenant
or agreement is to be performed. The Buyer's and the Seller's rights to make
claims with respect to any covenant, representation or warranty shall expire on
the expiration of such covenant, representation or warranty.
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(c) Tax Indemnity. .3.1. The Seller and the Parent jointly and severally
agree to indemnify, defend and hold the Buyer harmless from and against:
(a) any and all Taxes incurred by, imposed upon or attributable to the
Seller, for all periods (or portions thereof) ending on or prior to the Closing
Date, including reasonable legal fees and expenses incurred by any party hereto
and relating to such Taxes; and
(b) any and all Taxes incurred by, imposed upon or attributable to the
Seller or the Buyer, arising out of the consummation of any of the transactions
contemplated hereby, including reasonable legal fees and expenses incurred by
any party hereto and relating to such Taxes.
.3.2. For purposes of this Section 6.02, any interest, penalty or
additional charge included in Taxes shall be deemed to be a Tax for the period
to which the item or event giving rise to such interest, penalty or additional
charge is attributable, and not a Tax for the period during which such interest,
penalty or additional charge accrues.
.3.3. The indemnity provided for in this Section 6.02 shall be independent
of any other indemnity provision hereof and, anything in this Agreement to the
contrary notwithstanding, shall survive until the expiration of the applicable
statutes of limitation, including any extensions thereof, for the Taxes referred
to herein and any Taxes, legal fees and expenses subject to indemnification
under this Section 6.02 shall not be subject to indemnification under Section
6.03.
(d) General Indemnity. .4.1. Subject to the terms and conditions of this
Article VI, the Seller and the Parent jointly and severally agree to indemnify,
defend and hold the Buyer, its subsidiaries and affiliates and their respective
officers, directors, employees, agents and representatives (collectively, the
"Buyer Group") harmless from and against all demands, claims, actions or causes
of action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorneys'
fees and expenses (collectively, "Damages"), asserted against, resulting to,
imposed upon or incurred by the Buyer Group by reason of or resulting from:
(a) a breach of any representation, warranty or covenant of the Seller or
Parent contained in or made pursuant to this Agreement or made in any
certificate delivered to the Buyer from or on behalf of the Seller or Parent
pursuant to the terms of this Agreement;
(b) any liabilities or obligations of, or claims against or imposed on the
Seller or the Parent (whether absolute, accrued, contingent or otherwise and
whether a contractual, or any other type of liability, obligation or claim) not
assumed by the Buyer pursuant to this Agreement;
(c) the Oncall Termination Agreements and the transactions contemplated
therein; and
(d) any liabilities or obligations (whether absolute, accrued, contingent
or otherwise, including attorney's fees and disbursements) in respect of (A) any
of the actions, suits or proceedings or threatened actions, suits or proceedings
described in Schedule 3.01(j) of the Seller Disclosure Schedule, or (B) any
action, suit or proceeding commenced after the Closing Date based upon an event
occurring or a claim relating to the period on, or prior to, the Closing Date.
.4.2. Subject to the terms and conditions of this Article VI, the Buyer
hereby agrees to indemnify, defend and hold the Seller, the Parent and their
respective officers, managers and employees (collectively, the "Seller Group")
harmless from and against all Damages asserted against, resulting to, imposed
upon or incurred by the Seller Group, by reason of or resulting from:
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(a) a breach of any representation, warranty or covenant of the Buyer
contained in or made pursuant to this Agreement;
(b) the failure of the Buyer to pay, perform and discharge when due the
liabilities and obligations assumed by the Buyer pursuant to this Agreement; and
(c) any liabilities or obligations (whether absolute, accrued, contingent
or otherwise, including attorney's fees and disbursements) relating to the
Business and incurred after the Closing Date based upon an event occurring or a
claim relating to the period after the Closing Date.
(e) Right of Setoff; Escrow. In the event that amounts are owed for
indemnification pursuant to this Article VI by the Seller or Parent, upon notice
to Seller specifying in reasonable detail the basis therefor, the Buyer may:
.5.1. set off such amounts against the payments owed by the Buyer to the
Seller pursuant to Section 2.05, or
.5.2. solely with respect to Damages and related costs resulting from the
assertion of liability by creditors listed on Schedule 3.01(x) of the Seller's
Disclosure Schedule, give notice of a claim under the Escrow Agreement in such
amount. Neither the exercise of nor the failure to exercise such right of setoff
or to give a notice of a claim under the Escrow Agreement will constitute an
election of remedies or limit the Buyer in any manner in the enforcement of any
other remedies that may be available to it.
(f) Conditions of Indemnification. The respective obligations and
liabilities of the Seller Group, on the one hand, and the Buyer Group, on the
other hand (the "indemnifying party"), to the other (the "party to be
indemnified") under Sections 6.02 and 6.03 hereof with respect to claims
resulting from the assertion of liability by third parties shall be subject to
the following terms and conditions:
.6.1. within 20 days after receipt of notice of commencement of any action
or the assertion in writing of any claim by a third party, the party to be
indemnified shall give the indemnifying party written notice thereof together
with a copy of such claim, process or other legal pleading, and the indemnifying
party shall have the right to undertake the defense thereof by representatives
of its own choosing;
.6.2. in the event that the indemnifying party, by the 30th day after
receipt of notice of any such claim (or, if earlier, by the tenth day preceding
the day on which an answer or other pleading must be served in order to prevent
judgment by default in favor of the person asserting such claim), does not elect
to defend against such claim, the party to be indemnified will (upon further
notice to the indemnifying party) have the right to undertake the defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party, subject to the right of the indemnifying party to
assume the defense of such claim at any time prior to the settlement, compromise
or final determination thereof, provided that the indemnifying party shall be
given at least 15 days prior written notice of the effectiveness of any such
proposed settlement or compromise;
.6.3. anything in this Section 6.05 to the contrary notwithstanding, (i) if
there is a reasonable probability that a claim may materially and adversely
affect the indemnifying party other than as a result of money damages or other
money payments, or (ii) if the settlement involves only the payment of money
damages or other money payments and the indemnified party does not inform the
indemnifying parting in writing within 15 days after receipt of written notice,
with such notice specifying in detail the nature of the claim and payments to be
made, that the indemnified party objects to the settlement because the
indemnified party's business and operations will be materially jeopardized or
impaired as a result of the settlement, the indemnifying party shall have the
right, at its own cost and expense, to compromise or settle such claim, but
(iii) in the case of a settlement under clauses (i) or (ii) herein, the
indemnifying party shall not, without the prior written consent of the party to
be indemnified, which consent shall not be unreasonably withheld, settle or
compromise any claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the party to be indemnified a release from all liability in respect
of such claim; and
28
.6.4. in connection with any such indemnification, the indemnified party
will cooperate in all reasonable requests of the indemnifying party.
(g) Limitations of Liability of Seller and Parent. Seller and Parent shall
have no liability with respect to claims under Section 6.03(a)(i) until the
total of all Damages with respect to such matters exceeds $100,000. However,
this Section 6.05 will not apply to claims under Sections 6.03(a)(ii) through
(iv) or to matters arising in respect of Sections 3.01(i), (m), (q), (s), (w),
(x) or (y), or to any breach of Seller's or Parent's representations and
warranties of which the Seller or Parent had knowledge at any time prior to the
date on which such representation and warranty is made or any intentional breach
by the Seller or Parent of any covenant or obligation, and Seller and Parent
jointly and severally will be liable for all Damages with respect to such
breaches by the Seller or Parent.
(h) Limitations of Liability of Buyer. The Buyer shall have no liability
with respect to claims under Section 6.03(b)(i) until the total of all Damages
with respect to such matters exceeds $100,000. However, this Section 6.06 will
not apply to claims under Sections 6.03(b)(ii) and (iii), or to matters arising
in respect of Section 3.02(f) or to any breach of Buyer's representations and
warranties of which Buyer had knowledge at any time prior to the date on which
such representation and warranty is made or any intentional breach by Buyer of
any covenant or obligation, and Buyer will be liable for all Damages with
respect to such breaches by the Buyer.
(i) Remedies Cumulative. The remedies provided herein shall be cumulative
and shall not preclude assertion by any party hereto of any other rights or the
seeking of any other remedies against the other parties hereto.
ITEM
TERMINATION
(b) Termination. This Agreement may be terminated at any time prior to the
Closing on the Closing Date:
.2.1. by the mutual consent of the Seller and the Buyer; or
.2.2. by the Buyer, on the one hand, or the Seller, on the other hand, if
the Closing shall not have occurred on or before April 26, 2005 (the
"Termination Date"), or such later date as may be agreed upon by the parties
hereto, provided, however, that the right to terminate this Agreement under this
clause (b) shall not be available to any party (a "Defaulting Party") whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in the failure of the Closing to occur on or before such date. If the
Closing shall not have occurred, or this Agreement shall not have been
terminated in accordance with this Section 7.01, by May 3, 2005, this Agreement
shall automatically terminate on said date, provided, however, that such
termination shall not affect the liability hereunder of any Defaulting Party.
29
(c) Procedure and Effect of Termination. In the event of termination of
this Agreement and abandonment of the transactions contemplated hereby by any or
all of the parties pursuant to Section 7.01 above, written notice thereof shall
forthwith be given to the other parties to this Agreement (other than in the
event of an automatic termination as provided in such Section) and this
Agreement (except for this Section and Sections 7.01 and 8.03, which shall
continue) shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided in this Agreement:
.3.1. the parties hereto will promptly redeliver all documents, work papers
and other material of any other party relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof, to the party
furnishing the same;
.3.2. no party shall have any liability or further obligation to any other
party to this Agreement pursuant to this Agreement except as provided in this
Article VII; and
.3.3. proprietary information will be held in confidence and all records
and documentation previously delivered by the Seller to the Buyer will be
returned to the Seller.
ITEM
MISCELLANEOUS
(b) Specific Performance. The Seller acknowledges that the acquisition of
the Assets is a vital, necessary and unique part of the Buyer's strategic plan
and that any breach of this Agreement by the Seller could not be adequately
compensated by monetary damages. Accordingly, if the Seller breaches its
respective obligations under this Agreement, the Buyer shall be entitled, in
addition to any other remedies that it may have, to enforcement of this
Agreement by a decree of specific performance requiring the Seller to fulfill
its respective obligations under this Agreement.
(c) Bulk Transfer Laws. The Buyer hereby waives compliance by the Seller
with any applicable bulk transfer laws, including, without limitation, the bulk
transfer provisions of the Uniform Commercial Code of any state, or any similar
statute, with respect to the transactions contemplated hereby.
(d) Expenses, Etc. .4.1. All costs and expenses, including fees and
disbursements of counsel, advisors, accountants and consultants, incurred in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the closing of the transactions contemplated hereby (collectively,
"Expenses"), shall be paid by the party incurring such Expenses, whether or not
the transactions contemplated by this Agreement are consummated.
.4.2. The Seller, on the one hand, and the Buyer, on the other hand, will
indemnify the other and hold it or them harmless from and against any claims for
finders' fees or brokerage commissions in relation to or in connection with such
transactions as a result of any agreement or understanding between such
indemnifying party and any third party.
30
(e) Execution in Counterparts. 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.
(f) Notices. All notices which are required or may be given pursuant to the
terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and delivered or mailed by registered or certified
mail postage prepaid, as follows:
If to the Parent or Seller, to it at:
ATC Staffing Services, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx X000
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, CFO
Facsimile: 000-000-0000
with a copy to:
ATC Healthcare, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx X000
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, President
Facsimile: 000-000-0000
and
DKW Law Group LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Facsimile: 000-000-0000
If to the Buyer, to it at:
Onward Healthcare, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Ropes & Xxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
or such other address or addresses as such party shall have designated by notice
to the other parties in writing.
(g) Amendments and Waivers. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. By an
instrument in writing the Buyer and Seller may waive compliance by the other
party with any term or provision of this Agreement that such other party was or
is obligated to comply with or perform.
31
(h) Entire Agreement. This Agreement, its Exhibits and the Sellers
Disclosure Schedule including, without limitation, the Ancillary Documents and
the documents executed on the Closing Date in connection herewith among the
Seller and the Buyer, constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof.
(i) Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(j) Binding Effect; Benefits. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns. Notwithstanding anything contained in this Agreement to the contrary,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
(k) Assignment. Neither this Agreement nor any of the parties' rights
hereunder shall be assignable by any party hereto without the prior written
consent of the other parties hereto, except, in the case of the Buyer, (i) to
any person who shall acquire substantially all of the assets of the Buyer or a
majority of the voting securities of the Buyer, whether pursuant to a merger,
consolidation, sale of stock or otherwise, or (ii) to or for the benefit of any
person holding a financial obligation of the Buyer issued in connection with a
financing or in connection with any renewal, extension, modification, amendment,
refinancing, refunding or replacement of any such financial obligation.
(l) Interpretation. For purposes of this Agreement, (i) a party shall be
deemed to have "knowledge" of a particular fact or matter if (A) in the case of
the Seller or Parent, any of Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx Xxxxxx or
Xxxxxxx XxXxxxxx have actual knowledge of such fact or matter and (B) in the
case of the Buyer, any of Xxxxx X. Xxxxx or Xxxxx Xxxxxxxx have actual knowledge
of such fact or matter or (ii) a prudent individual could reasonably be expected
to discover or otherwise become aware of such fact or other matter in the course
of conducting a reasonably comprehensive investigation.
[Signature Pages to Follow]
32
IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly executed
and delivered by the parties hereto as of the date first above written.
The Buyer:
----------
ONWARD HEALTHCARE, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------
Name: Xxxxx Xxxxx
Title: CEO
The Seller:
----------
ATC STAFFING SERVICES, INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------
Name: Xxxxx Xxxxxxxx
Title: CEO
The Parent:
-----------
ATC HEALTHCARE, INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------
Name: Xxxxx Xxxxxxxx
Title: CEO
33
